DPWI & PMTE Q3 2023/24 Performance

Meeting report

Department of Public Works and Infrastructure (DPWI) Quarter 3 performance
Mr Sifiso Zikalala, Minister of Public Works and Infrastructure, apologized for the late submission of the report to the Committee, citing technical issues that caused delays. He said Mr Sifiso Mdakane, DPWI Director General (DG), was ready to lead the presentation.

The performance report for the third quarter of 2023/24 was presented by Mr Lwazi Mahlangu, Acting Deputy Director-General (DDG): Governance, Risk and Compliance, and Mr Mandla Sithole, DPWI CFO. The presentation covered the Department's mandate, achievement of performance targets and financial metrics.

Mr Mahlangu highlighted concerning trends in DPWI performance, noting a decrease in target achievement from 52% to 45% in Quarter 3 compared to Quarter 2. He provided an overview of DPWI performance statistics, emphasizing achievements and areas needing improvement. Challenges included disparities between set targets and actual performance levels. Efforts to address these included perception rate surveys, compliance matters, vacancy filling and process automation initiatives. He outlined efforts in intergovernmental coordination, professional services, and managing work opportunities. He discussed initiatives in property and construction policy revision.

Mr Sithole provided insights into budget allocation and expenditure, noting improvements in spending trends and concerns over underspending in certain areas. Efforts to address these issues included ongoing initiatives and engagement with stakeholders. He emphasized the importance of Treasury's involvement in resolving disputes and enhancing revenue recovery (see document).

Discussion
Ms A Siwisa (EFF) expressed concern about the report, stating that last week's report on some on-lists and properties from the Property Management Trading Entity (PMTE) was alarming. There were a few items in the Quarter 3 report that were concerning, such as receiving this report late last night, which was unfair. PMTE administration had 534 vacancies and an under expenditure of 50%, which was not a good sign. She raised questions about the role of the PMTE and why most sister departments preferred to do their own maintenance. She asked about the parliamentary village boards and their financial statements.

Ms Siwisa inquired about the progress made in the procurement of standard items. She linked the construction project management delays to the vacancies and the negative effect this had. She expressed concern about the in-house contractor and asked if any work had been done by the in-house contractor during his DPWI employment. Delayed handing over of construction sites meant that service delivery would be affected, which was undesirable.

Ms Siwisa asked about contractors who were behind schedule and could not honour their timeframes. Would they be given another opportunity to work for DPWI? She raised concern about the sustainability of completed contracts and the need for repairs after a few years. National Treasury's decision to cut the PMTE budget indicated that PMTE did not know its role and that its work was either taken over by sister departments or private owners. She feared that PMTE would be phased out due to its declining relevance in DPWI.

Ms L Mjobo (ANC) welcomed the report. She expressed concern about the lack of improvement in DPWI's employment of people with disabilities and asked if DPWI had anyone in a senior position with a disability. She also had concerns about non-compliance of municipalities with the Division of Revenue Act (DoRA) and urged DPWI to apply Parliament's recommendations. Finally, she expressed reservations about the DPWI decision to replace curtains with blinds in parliamentary villages, citing the poor conditions there and the Department's lack of service. DPWI should do better about improving the living conditions and renovations.

Mr I Seitlholo (DA) was dissatisfied with DPWI's late submission of the presentation and lack of improvement despite previous Committee recommendations. He raised concerns about the vacancy rate in PMTE and DPWI's lack of strategy to mitigate it. He questioned the non-availability of panels. He also referenced the Parliamentary Villages. He requested clarity on the drafting of the Public Works Bill and the collapsing of other policies into it. He expressed frustration about the repetition of the same material and the Committee's commentary being perceived as simply ticking the boxes of fulfilling a mandate.

The Chairperson appreciated the presentation but echoed the sentiments of the Members about DPWI's late submission of presentations. He questioned the presentation's origin, as it appeared to have been prepared for the Minister's meeting with top management (MINTOP), not for the Portfolio Committee.

The Chairperson pointed to DPWI's underspending on municipal services and questioned if it was paying rates and service charges where it was supposed to. He expressed disappointment at DPWI underspending on compensation of employees, despite having filled the PMTE Head position. He raised concern about PMTE's low expenditure on client capital and stated that if PMTE did not provide proper accommodation and maintenance services to client departments, those departments would demand that budget to provide for themselves, rendering PMTE redundant.

DPWI responses
Mr Mdakane, Director General, responded that DPWI was working hard to satisfy all the concerns raised by the Committee members. DPWI had made progress in filling Senior Management Service (SMS) positions and was currently conducting interviews for those positions. DPWI had sent a request to the Department of Public Service & Administration (DPSA) to finalize the vacant positions but had not received a response yet. The challenges faced in recruitment were due to the austerity measures.

DPWI was following the same process for advertising positions and he assured the Committee that DPWI was pushing hard for real recruitment and hoped to see a difference in the next report.

The Director General acknowledged the delays on site which DPWI was working to address. He cited recent efforts by DPWI and the Minister to deal with delayed projects, such as police stations.

Mr Seitlholo interjected to seek clarity on DPWI's actions against contractors who fail to complete projects. He expressed frustration over the lack of transparency in DPWI actions and requested concrete steps to address incomplete projects.

Mr Mdakane provided insights into DPWI's actions, including efforts to finalize contracts for new maintenance projects promptly to avoid delays in maintenance. It was important to align new maintenance projects with proper Total Facilities Management (TFM) contracts.

There were efforts and engagements with relevant stakeholders, including the Department of Women, Youth and People with Disabilities, to improve representation of people with disabilities within DPWI.

There were ongoing consultation sessions with key internal stakeholders to enhance the current draft of the Public Works Bill.
He apologized about the error in the presentation where it addressed MINTOP and not the Committee.

Mr Livhuwani Ndou, DPWI Deputy Director General Policy and Research, noted the challenges with municipal invoicing for property rates and outlined DPWI's proactive approach in urging municipalities to issue correct and timely invoices. DPWI was committed to prioritizing valid invoices for payment. There were ongoing efforts to streamline processes and improve expenditure efficiency.

Mr Sithole provided further clarification on the Public Works Bill, emphasizing its significance in providing a framework for public works functions across organs of state. Efforts were underway to consolidate and review the 57 pieces of legislation administered by DPWI. There had been the formation of work streams to address various thematic areas and he expressed confidence in the development of a comprehensive draft bill.

Mr Siza Sibande, Head of the PMTE, acknowledged the comments from Members and provided insight into ongoing efforts to address challenges within PMTE. The plan was to review internal business processes and focus on PMTE becoming self-reliant to better serve clients and leverage its property portfolio for government services.

Mr Sibande discussed initiatives to improve the construction sector and enhance office accommodation, including the establishment of project management units (PMUs) and new programs to enhance oversight. The lack of expert oversight was a challenge and there were interventions to improve project implementation and hold contractors accountable. It was leveraging public-private partnerships (PPPs) to optimize asset value and improve maintenance. He expressed confidence in DPWI's ability to present tangible results within six months.

Mr Nkosana Kubeka, DPWI Deputy Director General: Small Harbours, Coastal Properties Development and Special Projects, elaborated on measures to address delays in project handovers and contractor performance. Controls had been implemented to ensure contractors comply with work permit requirements before assuming site handover. DPWI had taken proactive steps to address challenges with contractors with a process for managing non-performing contractors, including issuing warnings and termination where necessary. There were procurement initiatives to establish replacement contractor panels.

Deputy Minister comments
Ms Bernice Swarts, Deputy Minister of Public Works and Infrastructure, highlighted efforts to address challenges in the construction sector, including the adoption of project management units (PMUs) and turnkey methods to improve project implementation efficiency. It was important to utilise internal capacity and reduce dependency on consultants. On contractor management, there were plans to establish panels of contractors and consultants to expedite replacements for abandoned projects. She acknowledged the need to strengthen contractual clauses to hold contractors accountable for abandoning sites.

The Deputy Minister discussed efforts to align the DPWI Annual Performance Plan (APP) with the budget and key priorities to improve performance alignment. There were initiatives to streamline the procurement process for state events and equipment and enhance recruitment practices to increase representation of people with disabilities. She assured the Committee of ongoing efforts to address abandoned projects and hold accountable the companies responsible for such actions, including potential blacklisting.

Minister’s closing remarks
Minister Sihle Zikalala said the Department had taken steps to address project delays and enhance project management. War rooms had been established and bilateral meetings with client departments were underway to improve coordination and monitor progress. There were plans to create a public-private partnership (PPP) unit within DPWI along with efforts to strengthen contractual clauses to hold contractors accountable for abandoning sites. The Minister said there were engagements with the Ministry of Finance and regulatory bodies to establish the PPP unit.

The Chairperson urged the Department to improve in sending documents ahead of meetings. The meeting concluded with the adoption of minutes from a previous meeting and an announcement about upcoming meetings.