Assessment of upgraded infrastructure of Richtersveld community to municipal standards; with Deputy Minister

Meeting report

Mr M Nhanha (DA, Eastern Cape) said some praise words in isiXhosa, which the Chairperson playfully brushed off and kindly requested for the House rules to apply. He welcomed the Deputy Minister of COGTA, and said his presence was appreciated as his attendance was not mandatory.

Deputy Minister's opening remarks

Mr Zolile Burns-Ncamashe, Deputy Minister, Cooperative Governance and Traditional Affairs (COGTA), said Section 39(3) of the Constitution of South Africa recognised customary law in the same way that it recognised the English common law and the Roman-Dutch law. Promoting one’s tradition was encouraged, hence sections 212 and 166(e) of the Constitution respectively directed its application and recognition by the courts. By addressing the Chairperson by his clan name, he would not be acting inappropriately but he would be affirming his identity, which was crucial, especially in the month of May, which was dedicated to the African continent.

He said that the Committee’s oversight function was understood and not taken lightly. He also understood that COGTA had a duty to present its work to the Committee. The purpose of the presentation was to brief the Committee on assessing the upgraded infrastructure of the Richtersveld Community (RVC) to municipal standards, to complete the Deed of Settlement, and the Departmental officials would present comprehensively on that. He then requested to be excused to attend the Cabinet meeting.

COGTA update on upgraded RVC infrastructure

Mr Abinaar Ramadie, COGTA: Local Government (LG) Operations and Support Unit, Northern Cape, briefed the Committee on the assessment of the upgraded infrastructure of the RVC to municipal standards to complete the deed of settlement (DoS).

Background

He said that the DoS (Case Number LCC151/1998) project arose from the land claim lodged by the RVC. The court order stipulated all the aspects that needed to be addressed and matters that needed to be complied with, to execute the DoS. The contents of the DoS were divided into two main categories of execution:

• Establishment of entities such as the Communal Property Association (CPA), the business entities described in the DoS, and the subsequent transfer of land and assets to the CPA.

• Township establishment: transferring land and assets to the municipality and state, and handing over of municipal functions from Alexkor Ltd to the Richtersveld Local Municipality (RLM).

The delay in the process of executing the DoS was due to a variety of factors:

• Changes in management at the local municipality;
• Changes in the management at Alexkor; and

• The non-functional CPA management.

Consequently, on 22 November 2017, the Committee was briefed by the Department of Public Enterprises (DPE), National Treasury (NT), the Department of Rural Development and Land Reform (DRDLR) and COGTA on the progress of the execution of the DoS.

The Committee had expressed concerns about the pace of execution and the impact of the delay on the socio-economic well-being of the people of Richtersveld, and resolved that COGTA should urgently convene a meeting with the relevant stakeholder departments and agencies to draw up a programme of action, responsibilities and timelines to bring a speedy conclusion to the process of handing over Alexander Bay Town to the RLM.

Implementation process of Select Committee directive

In pursuance of the Committee’s instruction, a project steering committee (PSC) was established and chaired by the Director-General (DG) through the Northern Cape Provincial office. The objective of the PSC was to oversee the entire handover process to its completion. The Richtersveld-Alexander Bay handover task team was established, to act as an implementation agent of the handover process, and reported to the PSC. The terms of reference for the task team were derived from the resolutions of the PSC and the contents of the DoS. A memorandum of understanding (MoU) to that effect was signed.

The Municipal Infrastructure Support Agent (MISA) had the following role in the task team;

• Being the facilitator of the technical process;
• Assuming the chairperson and secretarial roles; and
• Technical and legal support pertaining to the spatial planning aspects of the process.

The MISA chairperson was also the link between the task team and the PSC.

MOU outputs

The outcomes of the MOU identified the following areas of implementation, as part of the execution of the Deed of Settlement:

• A service agreement was to be signed between Alexkor and the RLM regarding the provision of services to the established Alexander Bay township.
• The upgrading, by Alexkor, of relevant municipal engineering services to municipal standards. The municipality was expected to submit the policy or written standards on municipal infrastructure, or submit an independent assessment of the condition of the already upgraded infrastructure versus the proposed ideal condition.

• The transfer of certain properties within the established Alexander Bay township from Alexkor to the Northern Cape Provincial Administration.
• A list of all equipment used by Alexkor in the maintenance and upkeep of the Alexander Bay village was to be transferred to the RLM, together with the agreed terms and conditions.

Progress on the services transfer process

• The township establishment was concluded and handed over to the Richtersveld.
• The RLM land use scheme was developed, adopted, and gazetted in 2022.
• The RLM and Namakwa district municipality spatial development frameworks (SDFs) are currently in review.
• The Karoo Regional SDF has been approved.
• The provincial SDF was adopted and gazetted in 2020.

The technical transfer specifically referred to the handing over of municipal engineering services from Alexkor to the RLM, and included all the normal municipal services of water, sanitation, electricity (energy), roads and stormwater, cemeteries, solid waste removal, water, and wastewater treatment works, parks, community facilities such as schools, parks, sports fields, and community halls.

An In-principle agreement had been reached on municipal engineering services between Alexkor and the RLM. The delay of execution was caused by Alexkor’s reported financial distress during the 2019/20 period. Changes in the management of the company caused further delays.

Regarding the transfer of properties designated for state use (schools, police stations, and hospitals), the Department of Basic Education (DBE) had entered an agreement with Alexkor regarding the transfer of school buildings only.

Consultations were ongoing around the possibilities of utilising buildings for alternative uses and zoning them accordingly. The hospital and the residential properties around the schools were being considered for alternative use.

Regarding the compilation of the final list of erven, as contained in the Surveyor General and Deeds Office records, MISA had completed the final list of formal erf numbers. Problematic erven had been identified and the land use record had been updated. The transfer process to the municipality primarily required a functional CPA to conclude certain agreements and commitments as the custodian of the assets bestowed on it by the DoS.

Upon the recommendation of the PSC, the Department of Agriculture, Land Reform, and Rural Development (DALRRD) had placed the CPA under judicial administration from February 2020 to February 2023, to stabilise it and prepare for a more responsive receipt of transferred assets and responsibilities.

During the judicial administration, the administrator appointed by the Department provided support to the CPA in terms of financial management and governance. The CPA was now regularised and had thus been empowered to take full control of its affairs and execute its fiduciary and governance responsibilities since February 2023. Compliance with its Constitution and the CPA Act had improved. a membership update had been conducted, and it currently had duly elected members and an executive committee.

The Department had recently paid a R12 million bill to the RLM on behalf of the CPA.

Recommendations

It was recommended that the Committee note the progress made on the technical transfer of services from Alexkor to the RLM. The remaining tasks and challenges were to be addressed through the transfer process. The established PSC, led by the Northern Cape Premier’s office, would be requested to oversee the completion of the transfer process.

[See presentation for further details]

Discussion

Ms L Bebee (ANC, Kwa-Zulu Natal) said it was evident that the completion of the DoS required the active participation of relevant stakeholders. How often did key stakeholders meet to ensure that progress was made in implementing the DoS? What was the time frame for resolving the unaddressed issues, and was there a need to collaborate with other departments?

Mr Nhanha commended COGTA for its progress on the technical transfer of services to the RLM. The Richtersveld CPA required more support to function optimally. The presence of a mechanism that detected early signs of problems within the CPA was a good idea. However, it was not sufficient. The Department should consider having proactive initiatives, like training the CPA in conflict management, dispute resolution, etc. A long overdue visit to the RVC and related entities should be organised for the Committee to engage directly with the Committee. Since the Department had pulled out of its involvement with the Northern Cape government, the Committee would need to find a way to engage with the Northern Cape Premier’s office to reach a common understanding.

Ms T Modise (ANC, North West) asked if COGTA owed the RVC any money in connection with the DoS. How did COGTA spend the money? If there were remaining funds, how would they be utilised? Was the land which comprised a diamond mine rehabilitated?

Ms M Mokause (EFF, Northern Cape) said the Committee and the Northern Cape provincial government should visit the RVC  to support the resettlement and meet with the parties involved to avoid receiving conflicting information. The visit was long overdue, and the Committee was disappointed the RVC failed to give the community what was due to them.

Ms W Ngwenya (ANC, Gauteng) asked if the R12 million bill COGTA had paid on behalf of the CPA to the RLM covered all the costs of the CPA. Did the RLM  have the capacity to deliver services to its community with the infrastructure handed over to it? Who did the CPA report to, and who oversaw its performance? Were other stakeholders, such as the South African Police Service (SAPS), involved in the transfer of the properties of state (e.g. police stations)? What were the unfulfilled areas of implementation as per the MOU, if any?

The Chairperson said the presentation was comforting, as it showed a lot of progress and reflected the work that COGTA had put in. What was the rationale behind COGTA's decision to hand over the process of transferring technical services to the Northern Cape Premier's office? Would that not create a regression in the process? If not, what informed COGTA that there would be progress leading to the completion of that process?

Were there exploitable mineral resources in Alexander Bay? If so, would the community play a meaningful role in exploiting those minerals? With doubts raised on the credibility and legitimacy of the CPA as the ultimate custodian of the assets bestowed on it by the DoS, could COGTA assure the Committee that it would provide "checks and balances" once the process was complete, and that there would be no issues that divided the community?

What measures had been put in place to ascertain the existence of controls and systems to ensure that once the community assumed the leadership of managing the assets transferred to it, there would be clear leadership plans that abided by standard operating procedures linked to other similar projects in the country?

COGTA's responses

Mr Ramadie said the work relating to the DoS involved various departments and entities, and some questions were relevant to those stakeholders. The DALRRD was responsible for the CPA’s oversight, management and financing functions. As the CPA played a key role in the execution of the DoS, COGTA apprised the DALRRD of the progress of the CPA. Although it was not its responsibility, COGTA acted in the interests of various departments by requesting a progress report on the CPA matter.

The DALRRD had assured COGTA that it had established a system to monitor various CPAs nationally, including the Richtersveld CPA. The system would also establish mechanisms to stabilise dysfunctional CPAs. The DALRRD had placed the CPA under judicial administration from February 2020 to February 2023, through a court order from the Northern Cape High Court, to prevent any litigation against it. That process assured COGTA that the CPA was supported.

CPAs were very complex in nature due to the different interests at play. With the presence of various mining resources and several mining companies being established by the DoS, the CPA's stability was further complicated. However, COGTA and the DALRRD would continue to monitor the functionality and stability of the Richtersveld CPA, and would provide the Committee with a progress report on its status. He suggested it would be ideal for the DALRRD to be invited to the next briefing.

In 2017, the Committee gave COGTA the responsibility to lead the process of resolving the issue arising from the transfer of services to the RLM. Between 2018 and 2019, COGTA had met quarterly to determine the work that needed to be assigned to various players and compile a report to the PSC, which was led by the Northern Cape Premier's office. To accelerate the process of transferring services to the RLM, the Northern Cape provincial government resolved to take over from COGTA and coordinate the project from June 2019. During that time, a MISA engineer had already been assigned to coordinate the task team. COGTA owed its progress on the project to the Committee's guidance. Following the handover to the Northern Cape Premier's office, the mandate as set out by the Committee would now be fully realised through COGTA.

The Committee was requested to engage with the Northern Cape Premier's office for an extensive explanation as to why it had resorted to taking over the process of transferring services to the RLM. However, the Northern Cape Premier's office and COGTA continued to collaborate on some work on several occasions between 2020 and 2021.

He said COGTA  would revert in writing to the Committee on the following matters:

• Had the RLM billed the CPA R12 million?
• Did Alexkor and other entities owe the RLM, RVC and CPA any money?
• Were other stakeholders  such as the SAPS involved in the transfer of the properties of state?

There had been discussions with the Department of Public Works and Infrastructure (DPWI), as it managed buildings utilised by various departments.

The RLM was able to deliver services through the support of the Department of Water and Sanitation (DWS), the Department of Environmental Affairs and Tourism (DEAT), and National Treasury (NT). However, like other municipalities, it faced poverty and unemployment issues. COGTA wanted to ensure that when the RLM took over the services of Alexander Bay, the services of that community did not become a burden and affect the municipality's service delivery capacity. The aim was for the transfer to enhance the RLM's capacity and provide the Alexander Bay community with optimal services.

A process plan which outlined unaddressed issues and challenges had been compiled, but COGTA had failed to address those issues by 2020/21. However, it was still committed to doing the work it had set out to do.

COGTA did not doubt the credibility and legitimacy of the CPA as the ultimate custodian of the assets bestowed on it by the DoS, but it was merely stating that with the custodian of the assets being dysfunctional, it was unlikely that the benefits of the DoS would accrue to the Alexander Bay community. The DPE and the DALRRD could outline how various entities and communities benefited from the DoS. 

The Committee would benefit greatly from engaging with Alexkor, the DPE, COGTA, the DALRRD and the Northern Cape provincial government simultaneously, to get a clear understanding of the roles and responsibilities of each stakeholder as outlined in the DoS.

Mr Allan Zimbwa, Deputy Director-General (DDG): Technical Support Services, MISA, said he had noted the comments of the Committee. He expressed COGTA's eagerness to visit Alexkor and the RVC. The presentation would be revised, and the slides omitted from the presentation would be included. COGTA would respond to the Committee in writing within seven days after consulting on matters that had not been fully addressed. The Committee's concerns on the transfer to the Premier's office would be escalated to COGTA's Director General and the Ministry.

The Chairperson said COGTA needed to ensure the completion of the handover of the Alexander Bay Township to the RLM. The transfer taking place under the administration of the Premier's office should not be left unattended, as COGTA was still responsible for ensuring its completion.

He thanked COGTA for the presentation, and said it had kept the Committee informed, and invited the Committee to exercise its oversight function.

Committee minutes

The Committee considered and adopted the minutes of 22 March and 26 April.

The meeting was adjourned.