DPWI / PMTE Q3 2022/23 Performance; with Deputy Minister

Meeting report

DPWI quarterly performance reports

The quarterly performance reports of the Department of Public Works and Infrastructure (DPWI) were presented by Mr Lwazi Mahlangu-Mthembu, Information Officer; Mr Mandla Sithole, Chief Financial Officer (CFO), and Ms Juanita Prinsloo, Chief Director: Financial Planning and Reporting, Property Management Trading Entity (PMTE).

The Department reported that in Quarter 3, it had achieved ten of its 29 targets, and nine had been partially achieved. The Expanded Public Works Programme (EPWP) is currently on track to achieve its five-year target. At the end of the quarter, a total of 803 468 work opportunities were reported, which was a 78.5% attainment of the annual target.

The total expenditure at the end of the second quarter was R7.6 billion, representing 42% of the total annual budget. At the end of the third quarter, expenditure reached R 11.8 billion, representing 68% of the annual budget. Spending was in line with the prior financial year, but it was projected that the infrastructure budget would not be fully spent.

The PMTE had a negative cash flow of R232 million at the end of the third quarter on budgeted items consisting of a cash surplus of R1.6 billion for operating activities, and a cash outflow of R1.8 billion from investment activities. This did not include the expenditure on municipal services. If that was added, the net cash flow was reduced to a negative R1.3 billion. This was compared with the end of the second quarter, when the cash flow was a negative R72 million.

44% of the R2.1 billion compensation of employees (CoE) budget was spent at the end of the second quarter, and this had increased to 70% at the end of the third quarter. Although recruitment was actively filling positions, there were still 499 vacancies as officials left the Department due to natural attrition. The expenditure was below the time-lapsed guideline, and the budget would not be spent by the end of the financial year.

Q4 performance report

In the fourth quarter, 20 of the 39 targets were achieved, and eight were partially achieved. Programmes 2, 3, 5, 6 and 7 had recorded a 100% target achievement.

The total expenditure at the end of the period was R16 billion, which represented 95% of the total reduced budget. This was below the targeted expenditure of 100%, as per the annual performance plan, but was an improvement compared to the prior year. The major reason for underspending was infrastructure, as only 64% of this budget was spent, although the expenditure for March was double that of the average for the rest of the year. The slow spending on the infrastructure budget remained a concern, and all efforts were being put in place to continuously improve this.

93% of the R2.1 billion CoE budget was spent. There were 510 vacancies, and R144 million was not spent at the end of the financial year. Internal promotions had caused a constant vacancy rate, although recruitment had been effectively implemented.

100% of the R430 million municipal services budget was spent. This budget’s spending depended on the consumption of utilities, which fluctuates monthly. The budget had been reduced by R39 million.

The maintenance performance was at 100% expenditure against a budget of R2.2 billion. Reallocations were done during September, and an amount of R814 million had been added, based on inputs from the regions. As reported previously, the increase was mainly due to repair projects that were late for implementation in previous years. The budget had been fully spent.

Discussion

Ms A Siwisa (EFF) said that the report still reflected the problem areas that had already been reflected on in the past few years, such as the delay in disciplinary cases being completed. The Department should be at a stage where they could deal with unfinished cases diligently. She asked for the cause of the delays and how the Department planned on intervening to resolve the matter, as it had to comply with completing the cases within 90 days.

Unfilled senior positions in the Department hindered service delivery regardless of the available funds in the Department. What were the reasons for the positions still being vacant?

She asked for the cause for the decrease in funds allocated for programmes 3 and 5, as stated in the report, and which provinces had been affected by the budget cuts, as programme 3 was related to the EPWP projects.

The Department had previously stated that they would acquire their own equipment for projects, as contractors had been overcharging the Department in this area. She asked for an update on the matter as to when the Department would acquire the equipment.

She asked about the criteria used to identify potential beneficiaries for allocating the Department's bursaries, and how many of the beneficiaries were active employees in the DPWI.

Over the years, the Committee had been told that the Covid-19 pandemic had been the main contributing factor to slow service delivery and vacant position in the Department. However, the construction project management programme had a target of 125 projects, but only 43 had been completed. Ms Siwisa asked the Department for specifications on the site locations of the completed projects, as there had been issues in the past where projects had been said to have been completed but when Members visited the project site, they found that they were not completed, contrary to the report.

She asked for a written report with specifications on the 100 unutilised vacant state-owned properties and details of the sites being handed over for construction.

Ms M Hicklin (DA) said that without the filling of vacant positions, the Department would continuously struggle to achieve its annual performance plan (APP) targets and key performance indicators (KPIs). She added that citizens would suffer greatly over time without continuous monitoring in the Department and the upskilling of managers in the EPWP infrastructure programme.

She said that corruption in the Department needed to be dealt with, as Parliament had no faith in its capabilities to deal with fraud and corruption within the Department. Fraud eradication needed to be at 100% otherwise, the KPIs were meaningless.

She raised concern at the slowness of bills being amended and processed in the Department.

What was being done to upskill those in project management to ensure that projects were managed correctly, as the Department could not continue to look at outsourcing project managers from consulting companies?

Ten sites of the utilised state-owned properties had been allocated for gender-based violence and femicide (GBVF) shelters. Ms Hicklin said ten sites were insufficient for the GBV surge in the country.

The immovable asset register (IAR) has been implemented in Limpopo, North West, Gauteng, the Eastern Cape and KwaZulu-Natal. She requested the Department to provide an IAR register so that the Committee was informed of the physical inspections completed in the stated provinces, as some land parcels had not yet been inspected.

She asked for clarity as to why the PMTE had not done the collection of municipal bills.

Ms S van Schalkwyk (ANC) raised concern about the timeline of the disciplinary cases being dealt with within the Department, as some had been reported to have lasted up to three years. She asked whether or not the Department had a well-capacitated legal department to deal with the disciplinary cases, and how they were reducing the length of the cases, as there was no one to perform the respective duties when one had a disciplinary case occurring.

She commended the Department on the targets being achieved for the employment of designated groups, and their initiative in engaging different departments, such as the Department of Women, Youth and Persons with Disabilities, to address the problems faced. However, she raised concern about the recurring factor of vacant positions within the Department at a time when the country had a high unemployment rate.

What were the impacts on the EPWP projects due to the under-expenditure on payment of management fees within the programme? What plans were in place to remedy the impact of load-shedding?

Mr W Thring (ACDP) had raised concern about the Department's vacant positions and the effect on service delivery. He also referred to the under-spending on the Department's programmes and how this was inexcusable due to the county’s unemployment rate and the complaints received due to poor service delivery within the Department concerning the maintenance of buildings and matters relating to fraud.

Lastly, he said that the state of the Department's overdraft could be attributed to the debt in the national account, which had taken a toll on expenditure and service delivery in departments such as education, health, etc. He asked the Department how they planned on eliminating the overdraft.

The Chairperson raised the issue of the refurbishment and maintenance of brick houses, and the challenge of asbestos. The Department had stated that they would deal with the asbestos issue, but no maintenance had been done to mitigate this.

She requested clarity on the funds allocated to bursaries for infrastructure-related studies -- whether or not the bursaries had been allocated already, or if this was still in progress.

DPWI's responses

Ms Molatelo Mohwasa, Acting Deputy Director-General (DDG): Property and Construction Industry Policy and Research, said the bursary programme was intended to fund matriculants. A list would be submitted to the Committee.

The Department had a reactive approach to dealing with maintenance. However, term contractors had been employed to do routine maintenance on their smaller facilities for components such as lifts, ventilation systems, fire equipment and plumbing. For the larger facilities, the Department had implemented a total facilities management programme, where a large company was based on site to manage maintenance issues as they arise.

The Department had identified more than 80 properties for the GBVF sites, but the majority of them were deemed unsuitable for occupation, which had reduced the list to about 35 approved properties. A  facilities management team had been sent to refurbish the properties, and a memorandum of understanding (MOU) was signed with the Department of Social Development (DSD) to take over the properties.

The Department had a long-term and short-term programme to deal with the impact of load-shedding. The long-term programme involved an integrated renewable energy and resource efficiency programme for buildings to be self-sufficient concerning loadshedding. The short-term programmes looked at the use of generators which was aimed at smaller facilities.

Ms CJ Abrahams, Chief Director: EPWP Partnership Support, said the Q3 reports stated there was non-alignment with the plan and agreement with the Independent Development Trust (IDT). The Department involved itself in a managerial or oversight role to ensure that what had been agreed to, was actioned.

Low spending in the technical support contracts was due to the fact that the Department provided technical support to public bodies that were struggling with technical capacity. The delay was not due to an EPWP challenge.

Mr Sithole said that the budget decrease in programme 3 was due to a lack of funding, as there was no funding available for the programme. The funds had been sourced from other programmes.

Municipal services clients were not paying for services for many reasons, but cutting services from a municipality posed potential issues for other service delivery matters within a municipality. There were measures and interventions in place to address the matter. The Department had engaged with Treasury, which had arranged meetings with the clients in question. There were still follow-up meetings being conducted.

Mr Mzwandile Sazona, Chief Director: Prestige Policy, said there had been discussions between the Department and Parliament on who was responsible for procuring the houses in Acacia Park. Once the issue was resolved, procurement would commence with the service provider to work on site.

Ms Nana Mhlongo, DDG: Policy Research and Regulations, said that the delays in the passing of the two bills had been due to input procedure. Concerning the Public Works Bill, the Department had revised the draft, made their input, and a submission had been made to the Director-General’s Office, after which a sector workshop would follow to finalise the draft based on the recommendations, and its submission to Cabinet.

The Construction Industry Development Board (CIDP) had made proposals, as two inputs had been received from the Office of the Chief State Law Advisor. The Department had been advised to consult with the Department of Justice and Constitutional Development, which had been done already. Upon consultation, National Treasury had raised concern about the levy clause, suggesting that it may require the provision of a money bill. The Department was in the process of discussing whether the clause should remain on the bill, given the implications. Once resolved, the bill could be introduced to the Cabinet.

Further discussion

Ms Hicklin said she had submitted questions regarding two properties in Tshwane that could be used as GBV hubs in the community. She requested the person's email address to whom she could direct information on the properties.

Ms Siwisa requested a list of the 100 unutilised vacant properties so the Department and Members of the Committee could do an oversight visit to the sites. The suggested date for the provision of the list was 31 May.

Ms Bernice Swarts, Deputy Minister of Public Works and Infrastructure, said that the EPWP needed a change in strategy on how it was implemented, how the projects were implemented and who was used to implement the projects.

She said there was a need to digitise the asset registry so one could easily identify the sites of projects and keep track of their progress.

Committee minutes

The Committee adopted the minutes from the previous meeting.

The Chairperson adjourned the meeting.