Prestige Portfolio and parliamentary villages: DPWI briefing; SIU Investigation; with DPWI Deputy Minister

Meeting report

Deputy Minister's opening remarks

Ms Bernice Swarts, Deputy Minister of Public Works and Infrastructure (DPWI), said since her and the Minister’s arrival at the Department, they received a briefing on the role of the Prestige Portfolio. They learned it was responsible for the President, the Deputy President, Ministers and Directors-General. However, she did not understand why the portfolio was responsible for maintaining the parks, when the Department had a maintenance branch. She also questioned why Prestige was responsible for construction when there was the construction project management (CPM) department. Prestige lacked the capacity to be responsible for such big programmes.  

There had been more than 600 vacancies when she and the Minister arrived. The position of the DG has since been advertised and, interviews conducted, and names have been submitted to the Department of Public Service and Administration (DPSA). This also included Deputy Directors-General (DDGs) for maintenance and corporate services. Only two positions had been re-advertised of DDGs that had not yet gone through the interview phase. The process had stalled due to the cost containment ruling imposed by National Treasury. The aim was to ensure that these positions were filled.

The Chairperson said that the Committee must note the issue of the DPSA turnaround times on processing critical vacancies.

DPWI on Prestige portfolio

Mr Mzwandile Sazona, Chief Director: Prestige Policy, DPWI, reported on the Prestige portfolio's objectives and core function. These included customer and stakeholder relationship management, accommodation and facilitation of maintenance, the provision and supply of furniture, and movable event infrastructure.

Prestige was responsible for the provision of infrastructure for Presidential events in terms of the Presidential Handbook and Funeral Policy. It also provided for funerals, Cabinet lekgotlas, international, continental and regional summits, state visits, national awards and credentials.

A total of 14 funerals at the cost of R3.9 million were reported. Funerals between 2020 and 2021 were done under the COVID-19 regulations, where the number of mourners was limited to 50 and 100.

Funerals for Inkosi uNozuko from the Eastern Cape and Chief Buthelezi had been implemented by the Eastern Cape and the KwaZulu-Natal governments, respectively, through the intergovernmental relationship framework. The provincial governments had paid for these funerals, but Prestige had made commitments not claimed by the provinces.

In terms of an analysis of the funerals, the cost determiner in a funeral is the number of mourners catered for. The more mourners, the more infrastructure required. The other cost driver is the use of temporary structures rather than fixed structures. The Department has developed a standard infrastructure and cost norms document for funerals. The Department has put in place more control measures to manage cost and overpricing. The Department has done away with term contracts as this eliminates competition. It entrenches a sense of entitlement from service providers and control got compromised because of proximity to certain staff members. One of the challenges with funerals is little time to organise the event. Changes that are made at the last minute compromise quality and lead to cost escalation.

There were three Parliamentary Villages -- Acacia Park, Pelican Park and Laboria Park. The Department was renovating 245 units in all three Parks, and the project would be completed by January 2024. It had appointed the Independent Development Trust (IDT) to commence with the demolition of the asbestos houses, and to build 115 units.

The term of the board had ended in November last year. Since then, the Department has tried to convene general meetings of the three residence committees’ residents to elect new residence committees, but all that has failed. The challenge with not having a board was that financial statements remained unaudited.

Regarding the maintenance of ministerial residences in Cape Town, the Department has initiated a review of ministerial residences with the view to consolidate and restructure the residential accommodation in Pretoria and Cape Town to achieve efficiencies. It is currently conducting feasibility study which will be completed in January 2024. The Department had presented among other things, the maintenance costs of ministerial residences to SCOPA in 2018. The costs were R19.2 million in 2018, but in the 2022/23 financial year (FY), the maintenance costs had been R5.4 million, or 0.49% of the R1.1 billion value of the assets. The Department had procured a new facilities management company in 2022. The residences in Pretoria cost R16.2 million in 2018, while in the 2022/23 FY, it was R13.2 million.

See attached for full presentation

Special Investigation Unit briefing

Adv Andy Mothibi, Head: Special Investigating Unit (SIU), outlined the ongoing investigations into the State Funerals Proclamation R20 of 2018, and Proclamation R83 OF 2022. He also outlined the finalised investigations on Proclamations R54 of 2014 and R44 of 2015 into renovating state-owned houses: Prestige Cape Town. He also presented on Prestige projects involving furniture, houses, Walmer Estate, and the Union Building Proclamation R54 of 2014 and R44 of 2015.

State funerals

The Department had requested the SIU to investigate possible fruitless and wasteful expenditure relating to services provided during state funerals. The SIU noted that the DPWI had appointed a service provider to manage the three funerals of Ms Winnie Mandela, Dr Zola Skweyiya, and Mr Billie Modise, and found that the service provider made excessive pricing for these events. On 18 April 2023, the Special Tribunal ordered Croatia Events/Giant Creative and Events to repay the Department an overpayment of R10 743 427.34 and interest on the same amount, calculated at 7% from 1 January 2019. The Department was in the process of implementing the court order.

The Department had also requested the SIU to investigate possible fruitless and wasteful expenditures relating to the funerals of Prof Keorapetse Kgositsile and Minister Edna Molewa. Although the investigation was not yet finalised, the following had been identified:

• The procurement process followed to establish a panel of service providers was in possible contravention of section 217 of the constitution and section 38 of the Public Finance Management Act (PFMA), respectively.
• The public liability insurance certificate submitted was for a cancelled insurance. The insurance was taken out on 1 December 2016 and had been automatically cancelled on the same date due to non-payment.
• The invitation to bid was on 31 March 2017.
• Possible excessive pricing and double invoicing of about R 8 million had been possible.
• Unqualified officials (interns) were allowed to perform the procurement process.
• Payment had been above the tendered amount.

The SIU’s observations on state funerals were:
 

• There had been no market analysis and consideration of section 217 of the Constitution, prior to the procurement of state funeral service providers.
• Procurement functions were executed by junior officials, who were not always sure about the proper
• procurement process.
• The Department did not have a documented procurement process that needed to be followed in respect of state events.
• A signed service level agreement (SLA) did not properly regulate the relationship between the service provider and the Department.
• The service provider that was awarded the tender, Croatia Events, had changed directors about three times.

Thirdly, Proclamation R83 of 2022 concerned official and residential accommodation, refurbishment of residences of sessional officials, external renovations to the Marks Building, and sixth-floor refurbishments to 90 Plein Street. The SIU had made the following observations after conducting its analysis:

• Engagements with the DPWI were required to address aspects around the roles of all consultants involved and the appointment of the quantity surveyor.
• There was no clear indication of the approval of minutes for monthly technical and progress meetings.
• The quantity surveyor had raised concerns about the increased contract cost from 2016 to 2017.
• Excessive additional funding and extensions of time were approved on various projects, which caused delays in completing the projects within the prescribed timeframes.
• Red flags had been identified with respect to the additional scope of the projects and the authorisations of internal procurement processes.

Fourthly, as for Proclamation R54 of 2014 and R44 of 2015, which involved investigation into the renovation of state-owned houses (Prestige Cape Town), the SIU noted that the investigation into the Prestige Portfolio was initiated because of a letter dated 5 March 2013, in which the former DPW Minister, Minister Nxesi, had asked the SIU to request an “Investigation into the renovation of State-Owned Houses: Prestige Cape Town”.

The SIU said that 15 investigations had been finalised, with some investigations dating back a number of years, with one successful criminal referral of Mr Ridwaan Rajah of Good Hope Plasterers CC. Two civil litigations had been concluded involving a total of R5.7 million. The defendants had been approached to ascertain whether a settlement agreement could be reached. The process was ongoing.

Of these Proclamations, the SIU had picked up irregular expenditure amounting to over R1 billion; fruitless and wasteful expenditure of R2.6 billion; and potential fruitless and wasteful expenditure detected amounting to R5.7 billion.

[See the presentation for details]

Discussion
 
Mr A Lees (DA) said that the Department needed to look at how the boards of the Parks were established, and felt that there was no need for restructuring. He had lived in Acacia Park for 15 years and had received a notice of a meeting only once. Regarding the approval of the financial statements, R11 million was transferred to the board annually by the Department, but what was that money for? Would it not be wise to do away with parliamentary villages altogether, and expect Members to sort out their own accommodation instead of building houses? Was this something under consideration?

He was intrigued by slide 10 of the DPWI, and asked if the photography reflected how the National Assembly would look once completed after the renovations. Was it not time to get rid of everything that made Parliament look like a prison? What was the plan to make it more secure?

Ms T Siweya (ANC) asked about the outcomes of Ms Winnie Mandela’s funeral and how far the DPWI had got in implementing the court order. On slide 40 of the SIU presentation, why was no action taken, and how far was the matter?

The SIU had emphasised project management, supply chain and procurement -- what had the DPWI done since these issues were brought to its attention? Were there any internal interventions that could be identified to address these issues?

DPWI's response
 
Ms Nyeleti Makhubele, Acting Director-General, DPWI, said the Department had not seen the SIU report, and asked if it could be submitted to the Department. It would provide a comprehensive response to the SIU. On project management issues, when the DPWI did projects for Prestige, the DPWI now used its own project managers, but it still ran into challenges. These challenges were more industry-related than internal or individual.

Regarding supply chain management (SCM) issues, Members would have seen from the presentation about the tax clearance certificates, that the systems had since changed within National Treasury. A tax clearance certificate was now a live document -- it was no longer static. This meant that during procurement, the DPWI was able to review live on the system if a service provider was tax-compliant, and it was not allowed to pay service providers that were not tax-compliant.

The DPWI did not usually have sufficient time to plan for funerals. One of the challenges experienced with preparing and planning funerals was that the DPWI had a panel of service providers, but the pricing was problematic. The pricing regime was being reviewed so that a service provider was paid for what was due. There had been a significant reduction in the amounts paid to service providers for the events that the DPWI had to run. Due to stringent controls and interventions, it had moved from more than R30 million for a funeral to figures of less than R1 million.

Mr Sazona said the R11 million transferred from the Department to the Parliamentary Villages Board was for the bus services. This amount had been increasing over a period. When he started at the DPWI, it had been about R8 million, and two years ago, it had been R11 million. However, this money had decreased because the services procured for the past two years had been far less than R11 million. The money was not always utilised -- there had been a surplus at times -- and the board’s account had an excess of R43 million. Once the Parliamentary Villages Board had been constituted, it would have to decide how the money would be spent, or returned to the fiscus.

Regarding the Parliamentary Villages and giving MPs subsidies instead of Parliamentary Village housing, this matter had been raised with the former Minister, who had advised the Chief Whips Forum and the Executive Authority of Parliament that it was not within the ambit of the DPWI to discuss subsidy issues. The Independent Commission on the Remuneration of Public Office Bearers had to adjudicate this matter.

Regarding the razor wire around the Parliamentary precinct, he mentioned the security enhancement project currently underway in his presentation. This would be implemented in two phases, and the first phase was to upgrade the perimeter fence of Parliament. Discussions were ongoing with Parliament to approach the appointed contractor to come on-site and hand over the project.

Further discussion

Ms A Beukes (ANC) said there had been a meeting with the Department in July 2020 at which the DPWI had outlined the implementation of improved controls to prevent irregularities. One of those controls was to review the procurement strategy. The presenter had said it had not been done yet. Why was it not finalised, and what was the challenge? Was the plan to do it internally, or would it be outsourced? Secondly, the officials had said that the DPWI would consider appointing a panel of service providers instead of a single service provider, but what was the impact of that panel on the monitoring, pricing and performance?

On 23 November 2022, it had been agreed that another meeting would be convened in early 2023, but the challenge had been the unavailability of MPs. What would be done to expedite that process so that it did not affect the submission of financial statements to the AGSA?

On the recommendation of the SIU, urging training in the procurement unit of the Department, did the DPWI agree that the training was needed, because that would mean that there had been a lack of skills or capacity in that unit? It could also mean a staff shortage -- but what was the actual challenge?

The SIU had also identified challenges in approving monthly technical and progress meetings. How did this impact the SIU’s investigation, and why was the DPWI not convening these meetings? Lastly, she had hoped to see the implementation of consequence management in the SIU’s presentation. She asked what had happened to the people who had occupied the current vacancies at the Department.

Ms S Somyo (ANC) felt there was a significant gap in accountability at the Accounting Officer (AO) level. Her comment was related to the failure to account for the financials of the Parliamentary Villages. The responsibility of chairing that board lay with the Director-General of the Department. Money continued to be spent, but there was no accountability, and there had been reference to the absence of the board. In Acacia Park, there was a committee chaired by the Reverend April, and it had been knocking on the DPWI’s door for various issues, but to no avail. Thus, the statement about failing to meet when a committee existed in Acacia Park was an anomaly. The Reverend April would be shocked to see this report, because he was always available.

The investigations of the SIU resulted from the audit outcomes. The AGSA had cited various areas of deficiencies, and the DPWI had finally approached the SIU to assist in investigating those deficiencies. This was also the responsibility of the AO, so the DPWI could not say that the DG was not aware of the outcomes of various investigation outcomes of the SIU. It had already been six months since the court had made a judgment -- and the AO was unaware of that judgment. This was unfair to those judged by the court, and they should not be paying fines or penalties resulting from the failure of the AO to implement a court judgment. These actions prevented certain outcomes from being met, which was unfair to service providers. The AO should be held responsible for that irregularity.

The Beitbridge approach was frightening and would haunt the Department if the AO continued to behave this way. Prestige could be reviewed as often as possible, but nothing would change it if this behaviour continued. The AGSA had identified systemic issues that must be rectified immediately.

The lack of permanent people in critical positions was problematic, because it affected accountability. The accountability levels should be anchored in stability. 

Mr Lees expressed his concern about the Commission for the Remuneration of Office Bearers, particularly because, in the interim, a lot of money would be spent on demolishing the houses which, in the end, may not be required. He understood that the responsibility lay elsewhere, but the continued rebuilding of these houses may be a wasteful exercise.

He hoped that the new security fence had been authorised by people who understood the importance of security as a national key point.

Mr Somyo indicated that South Africa bought a piece of land in India to build a new building for a South African High Commission, that had been fallow for decades, as it had not been utilised. There were threats of withdrawal by Indian authorities of the special tariff grace period that had been authorised at the time. This would affect the coffers of the country adversely. Secondly, one should review the derelict nature of the building that houses the High Commission in Canada.  

Mr B Hadebe (ANC) said he had been told that the Acacia Park land which informal dwellers had invaded, belonged to the DPWI. Informal sectors were growing in and around the area where the SA Army was, and the South African Police Service (SAPS) was heavily guarding Acacia Park village. When he started as an MP, there had been only one informal settlement in that area, but now they were growing. Was the DPWI doing anything about this? This spoke to the safety of MPs and their families.

The Chairperson said that he had raised this matter when the Passenger Rail Agency of SA (Prasa) appeared before the Committee when it was dealing with informal settlements on the rail tracks. Prasa had said they were not on the railway, and they had no jurisdiction over it. The government spends billions on relocating people from critical infrastructure to other places. This had a material impact and effect on the precinct, and who would foot the bill when those people had to be relocated? Over a year and a half, this matter had been raised on the radio several times, but to no avail.

He felt that he should have disclaimed at the inception of the meeting that a funeral he was actively involved in had been included in the DPWI presentation, which was that of Prince Mangosuthu Buthelezi. He was pleasantly surprised that the stage issue had been raised, with a cost factor involved. In the meeting with the KwaZulu-Natal DG and other stakeholders, he had been categoric that he would not be placed in a position of corruption later regarding the funeral. The reason was that for the stage to have a cost factor was part of indecisiveness, as moving that stage had taken less than five minutes. He had been present, and it was moved at the behest of the Minister of Police. It was a decision agreed upon. This was how corruption sneaked into these state funerals; there was no way the stage shifting that took less than five minutes could be factored in as a cost. He would look out for the cost breakdown.

How many people were running the Prestige portfolio, and who was responsible for running Pretoria and Cape Town?

Regarding the Parks, he said the maintenance at Acacia Park was extremely bad. After renovations were said to have been completed, he had asked what renovations had occurred, because the houses had started falling apart immediately -- they were much better before the renovations. Money had been spent, but there was no value for money. Members had been moved to transit apartments in Acacia Park from Pelican Park for these renovations, but they were raising similar issues.

An investigation must be conducted on the Prestige Portfolio, including but not limited to renovations that were done occasionally, because it was unclear what the contractors were doing. What was the contract value of the TEFLA service provider? How much did it cost the state? Nothing seemed to be functioning well in these parliamentary villages. The Department must make recommendations in the interest of the state saving money. A cost analysis could present the savings that could be made, unless the DPWI benefits from this situation. There had been a lapse in rent collection, but it was now chasing Members towards the end of the term. Public money had been spent, and the people living in these villages were saying there was no value for money. The SIU needed to investigate the entire Prestige Portfolio, including the lifestyle audits of those involved.

Mr Lees lamented that the air conditioner in building M46 had not been working for several years now, and the failure to fix it had been attributed to a lack of resources. He asked if there was any plan to carry out these repairs.

Ms Makhubele said that when the Minister and Deputy Minister visited the Department, there had been over 600 vacant positions. However, the previous DG had vacated the Director-General position after a lengthy and complicated disciplinary process, and he had eventually opted for early retirement. Several Acting DGs had been appointed to oversee the Department during the suspension of the incumbent.

Regarding the heads of the Property Management Trading Entity (PMTE) and supply chain management (SCM), these were contract positions -- they were not permanent. The facilities management was previously handled under property management, but in 2016/17, the Department decided to create this as a standing branch. The position was first filled as a contract, and the incumbent had resigned. However, it was currently being filled. The DDG: Corporate Services, position was vacant because of a retirement.

After the DPWI had received the judgment for the R10 million, the service provider had submitted a counter-claim which was currently being assessed and investigated.

The land issue in India fell under the ambit of the Department of International Relations and Cooperation (Dirco). The DPWI would contact Dirco to enquire about the property, and a report could be furnished to SCOPA.

Regarding the land invasions around Acacia Park, that land belonged to the Department. This had been noted, and the teams were attempting to secure consultation with the State Attorney for eviction processes. Unfortunately, Cape Town had seen many land invasions, and the DPWI was on the back foot. The first consultation with the State Attorney would be in the first week of November.  

Concerning the investigations into the entire Prestige Portfolio, the DPWI viewed the SIU as a strategic partner, and would be pleased to assist with such a proclamation. It had been done before, and many problems had been found and rectified, while others were still being processed.

Ms Thembeka Kolele, Acting Chief Director: Construction Management, DPWI, responded to the Chairperson's complaint about the sewer blockage in Acacia Park, and said there was a wetland outside the precinct, and when there were heavy rains, the water level of the pond rises, and the water flows into Acacia Park. A report had been commissioned with the DPWI engineers, and consultations with the City of Cape Town (CoCT) had been held to consider rerouting the outlet in Acacia Park. Once the CoCT approved the report, the DPWI would reroute the sewer line to an area in Goodwood that had been identified. In the meantime, contractors were pumping the pond to lower the levels to reduce the backflow into E block of Acacia Park. Sewer trucks had been cleaning out the sewer in the corner of E block, and although this was not ideal as a temporary measure, it would assist until the CoCT approved the rerouting.

The current value of the contract with TEFLA was about R510 million for the 960 facilities in Prestige.

The DPWI was currently putting together a facilities management service provider that would take over the work done in the precinct. The infrastructure in M46 and the 90 Plein Street building was virtually obsolete. The procurement of the service provider was at an advanced stage. Once the security clearance was concluded, the service provider would come on board and renovate the Marks Building and the 90 Plein Street building.

Mr Hadebe was not pleased that the land invasion matter was being addressed only after four years. There was the SAPS, the Army base in the area, and park managers, yet the DPWI was still consulting on obtaining an eviction order. This meant nothing had been done for the past four years. Park managers drove in and out of the village daily, but nothing had been done. This could have been addressed immediately. Last week, the informal settlers had brought a car into the middle of the street, and stripped and cut it into small pieces.

He asked for a quarterly updated report on this situation.

The Chairperson proposed that this report be submitted to the Committee on 20 November as the term was almost ending. Perhaps it was time people were held personally liable.

Mr Somyo asked about the status of the decision of the Tribunal. Any delays in implementing these decisions affected the ability to resolve challenges. The DPWI must act swiftly on implementing these decisions. Secondly, it would assist the Committee if a report on the entire Prestige Portfolio could be submitted to the Committee with details of the individuals residing in those properties. People often lived in houses they were not supposed to live in. There was a need for a verification process to pick up on the total number of people who lived in these houses, and they must be thoroughly verified.

The Chairperson asked about the structure of Prestige management in the two major jurisdictions and the rent collection by the DPWI, as there was a high rate of unpaid rent by the occupants despite the fact that they pay a nominal rent.

Mr Sazona said Prestige was a small unit, with its own director in Pretoria and a vacant post for a director in Cape Town. He was the chief director overlooking those two directors. There were staff in Cape Town and Pretoria responsible for procuring interior décor, and administrative staff, some of whom were managing the parks. In Cape Town, the full staff complement was 16 and in Pretoria, there were 14 officials. Sister branches did the technical work, maintenance and project management.

Regarding the collection rate, they were sending monthly statements to members of the executive for their rates. There was a campaign to get some of the members to pay via stop orders, as some were paying while others were not paying at all. This information could be submitted to the Committee in detail.

Regarding the board, they had requested the Member Support Forum, the Chief Whips Forum and the Office of the Secretary to Parliament, to assist in getting through to Members to constitute a residents' committee. The Office of the Secretary to Parliament had promised to assist, but the term of the board ends on 23 November, so one could not set up a board now.

Regarding the Acacia Park Residents' Committee, this committee’s term of office expired last year. It continued operating to close the gaps that may arise from the absence of such a committee.

The State Assessment and Referral Agency (SARA) had approved the fence, which would be an extension of the existing fence, to ensure it was higher. There were contentions with SARA on the fence that had to be installed. A methodology had been developed, and SARA had approved it. A site handover would soon take place.

On the panel of service providers versus a single supplier and the effects on overpricing and performance, the DPWI had currently done away with a term contract. A term contract had a sense of entitlement, because it developed relationships with officials, leading to over-pricing and undermining the controls put in place. A panel of service providers would assist in ensuring no deviations from the targeted period and from addressing SCM issues. The DPWI was now utilising SCM processes on the supplier database system for contract values under R500 000. The biggest challenge was the turnaround time of these companies' security clearances. If they were on the panel of service providers, they could be pre-security cleared.

The DPWI was currently upgrading the external fence behind the National Council of Provinces (NCOP) building. The current height of the fence was 1.5 metres, and the security report from the SAPS stated that the fence must be increased to three meters. The consultation process had increased it to 2.7 metres high. About five entrances of the precinct would also be changed, with the building of guard houses and bollards that would come from the ground to prevent unauthorised vehicle access. The security around the perimeters of Parliament would also be upgraded, according to the security report provided by SAPS. A site handover was done on 13 October, the contractor was on-site, and the Parliamentary Protection Service (PPS) had approved where the site would be located.

There were 55 houses in Pretoria, and 49 of them were occupied. There were 73 houses in Cape Town, of which 69 were occupied with four were vacant. The number of Ministers was 65, and there was a gap, but most of the members of the executive in Pretoria were staying in their private residences. In Cape Town, there were 65 members of the executive, but 69 of the houses were occupied.

SIU's responses

Adv Mothibi replied on the status of the tribunal, and said that the Constitutional Court had confirmed it in March. It had also been affirmed that its decisions were binding, like High Court decisions. Its decisions could be appealed, but the court's decisions must be executed in the absence of an appeal. The SIU could reach out to the Department for the execution of a court order.

The SIU would assess the suggestions of a portfolio investigation on Prestige, and the focus would be on value for money. The SIU would work closely with the Office of the DG to kickstart a consideration for this investigation.

The investigation would look at the aspects of the project in light of the allegations received, and if there were any variations, these were expected to be documented. The SIU expected the project management processes to properly document and minute these variations. It would not impact the investigation negatively, but would affect the project management so that the finding would be ineffective. If minutes were not kept, everyone was implicated, but if they were kept, they could be assessed and those responsible investigated as to the decisions that they had taken.

The Chairperson asked who had to convene the parliamentary village members' board meetings. The continued absence of this structure had a material impact.

A DPWI official said the board started with setting up the residents' committee, and called for the residents of the villages to be part of it. The chairperson of that committee would sit on the board appointed by the Minister. The committee would require the Speaker to encourage Members to attend the residents' meetings.

The Chairperson emphasised that the Committee was not pleased with the state of affairs in this portfolio. There were too many moving parts and areas of obscurity. Members did not get the sense that the centre was holding, so the accountability was being compromised. He felt that there was an ad hoc approach to managing the Prestige Portfolio, and recommended that it be revisited in all its material facets. The DPWI could consult relevant legislation and their overlaps. If it meant a legislative amendment must be introduced to clarify those spaces, the Department should do so.

The deadline for all matters that must be responded to in writing was Friday next week.

Deputy Minister's concluding comments

Deputy Minister Swarts said the DPWI was being run like other departments, but it should not be. If it was not run like a Project Management Unit (PMU), it was the custodian of the bulk infrastructure rollout. How it was run did not reflect the type of bulk infrastructure rollout it had in its annual performance plan (APP) each year. The amount of work it had in its APPs, and how the rollout was done, did not align. This Department should be run like WBHO Construction, or Murray and Roberts.

Secondly, if the ARCHIBUS integrated workplace management system continued to exist, and the ICT at the DPWI was not integrated, the Department would always have challenges with its audit and performance. This also included the SAGE software system. ARCHIBUS and SAGE did not assist the Department at all.

The DPWI needed to build internal capacity, as it still used external professionals for quantity surveyors and engineers. Until the DPWI had its own internal capacity, its challenges would not stop. There were few project managers, which meant one project manager overseeing several projects in various provinces. To circumvent these challenges, they needed an integrated ICT system or an App that was live. The outcomes of the AGSA’s report also alluded to this shortage of project managers and the incomplete projects because of this.

The DPWI EXCO, chaired by the Acting DG, had recently approved the DPWI need for a PMU, a 10-key method, the use of NEC 3 engineering and construction contracts, and the Construction Industry Development Board (CIBD). With the number of projects that DPWI had, it was impossible to go through a six-month tender process. With a PMU, the DPWI could use its own internal expertise, and the PMU had to be stationed within the DPWI. The DPWI had candidates who were not yet qualified, but with a PMU, those people could gain skills and enhance the Department's internal capacity.

The AGSA had raised concerns about the structure of Prestige, and this needed to be resolved pronto. The policy and legal branches had been requested to develop a document that service providers and contractors must adhere to when contracting work from the DPWI.

The Chairperson welcomed the inputs, and said the Committee would still have a hearing on the Department’s audit outcomes on all substantive matters.

The meeting was adjourned.