Meeting report

Election of the Chairperson

The Committee Secretary, Ms Nola Matinise, welcomed the Committee to the meeting.

Ms C Phiri (ANC) was nominated as the Chairperson.

Mr M Dlelanga (ANC) moved to adopt the nomination, and Mr S Mahlangu (ANC) seconded the nomination.

Ms Priri accepted the nomination and the position of Chairperson for the Portfolio Committee on Public Works and Infrastructure.

The Chairperson welcomed the Committee to the meeting and expressed her gratitude to Members for placing their trust in her to act as the Chairperson of the Committee. She indicated that the Committee was not going to work as parties, but as a team, a family. South Africa wanted service delivery and infrastructure and the Committee is aimed and focused on delivering that to the people.

She thanked the staff for their support and preparation.

On behalf of the Committee, she thanked South Africans for participating in the elections and electing the 7^th Administration. As a Department, it was critical to ensure that economic development and poverty were addressed.

She allowed the Minister to address the Committee and to introduce his team.

Minister’s Opening Remarks

Mr Dean Macpherson, Minister of Public Works and Infrastructure, congratulated the Chairperson on her position and greeted the Deputy Minister. He welcomed Mr Sifiso Mdakane, Director-General, Department of Public Works and Infrastructure (DPWI). He also welcomed all Members from the various political parties. He told the Committee that he wanted to be a Minister who was available and accountable and wanted Parliament to hold him accountable and to address issues and collectively address any challenges. The previous week felt like a rollercoaster when President Ramaphosa appointed him Minister.

Minister Macpherson told the Committee that he did not want to say too much because he was going to outline some more points and visions in the upcoming budget vote. His primary goal was to turn SA into a construction site with the primary goal being to ensure economic growth and infrastructure.

The Department needed to have public assets that would be used for public good as it was important and something that it had to work hard to do, to ensure that the state and communities got the best out of its assets. He wanted a Department that was transparent, trustworthy, and one that delivered.

He wanted to take South Africa into confidence considering that South Africa was the victim of the most horrendous attack, through the Department’s cyber security systems and it lost around R300 million over ten years. The Deputy Minister initiated it in his former capacity as the Minister. The Department did the right thing to get that moving, suspend officials, and allow law enforcement to seize that equipment. The Department still has a long way to go to build the trust of South Africans and it is only going to be able to do that by being transparent and that is why it is going to account, question, and not hide away from the public eye.

The Minister told the Committee that the Department would account and be a Department for South Africa to look at and be proud of, and not be the budget joke or the punching bags, but rather the driver of the economy. Everyone wants the Department to be one that is fully recognised as the economic leader that it should be, and that it must play a bigger role in driving the economy forward.

He asked the Committee to digest the reports presented in the meeting, encouraged the Committee to give its input, and said that he looked forward to hearing from them and working with all the Members. Having the Committee’s input on the budget was another thing that he was looking forward to. However, he disclosed to them that he was not involved in drawing up the budget. In the APPs, the Department will discuss certain issues around providing support to tighten up controls and to address the vacancies in the Department, etc.

He said that he had an open-door policy and was always available. Encouraging cooperation between the Members, and the Committee and the Department, Minister Macpherson said that he was hopeful and positive about the future and working together.

Having said that, he handed over to the Deputy Minister for remarks.

Deputy Minister’s Opening Remarks

Mr Sihle Zikalala, Deputy Minister of Public Works and Infrastructure, welcomed the Committee to the meeting and assured the Committee that the DPWI was going to be a Department that was accountable and transparent, not only to Parliament but to the people of South Africa. He said it had a strategic framework in line with the 2030 National Development Plan (NDP) and was on its way to reaching its targets. The Department has to be efficient, effective, and transparent in their work.

Mr V Reddy (MK) asked the Chairperson to allow the Committee an opportunity to introduce themselves, and all the Members introduced themselves to the Committee. Whereafter, they continued to the next item on the Agenda.

Briefing by the Department of Public Works and Infrastructure on the Annual Performance Plan (APP) 2024/25

Mr Mdakane took the Committee through the presentation.

He took the Committee through the structure of the Department’s Programmes saying that the Department was split into two entities, being: Main Vote and Property Management and Trading Entity (PMTE). The main Vote consisted of Inter-Governmental Coordination; EPWP; Property and Construction Industry Policy; Infrastructure South Africa; and Prestige Management. The PMTE consisted of Real Estate and Investment Services; Construction Project Management; Real Estate Management; Real Estate Information and Registry; and Facilities Management. The two entities shared administration services, being: Corporate Services; Governance, Risk and Compliance; and Finance and Supply Chain Management.

He guided the Committee through the strategic map, pointing out the national priorities, the DPWI’s impact, expected outcomes, and where the stakeholders and role players were in each strategy.

Mr Mandla Sithole, Chief Financial Officer (CFO), DPWI, took the Committee through the budget and where the budget was being allocated. The Department had a total budget of R17.6 billion, which was a significant decrease from the previous year, and this meant that it faced a significant shortfall.

(see attached presentation for details).

Briefing by the Department of Public Works and Infrastructure on the 4 Entities (Inter-Governmental Relations (IGR), Agrément South Africa (ASA), Council for the Built Environment (CBE), and Independent Development Trust (IDT)

Mr Adam Mthombeni, Deputy Director-General: Intergovnmental Relations, took the Committee through all the entities.  

He provided the Committee with information on the four entities that worked with the DPWI. The four entities were Inter-Governmental Relations (IGR), Agrément South Africa (ASA), Council for the Built Environment (CBE), and Independent Development Trust (IDT). He guided the Committee through the entities’ APPs, going through each programme, and the Budgets.

(see attached presentation for details).

The Chairperson allowed the Committee an opportunity to engage with the presentations.

Discussion

Mr Reddy pointed out his concern with the budget cuts.

With such a short amount of time, he said that the Committee did not have enough time to grasp what the Department was all about. Some of the Members who were present have been on the Committee previously. However, some of them were new to the Committee. He proposed that they hold a workshop, together with the Department, to unpack all of the issues and go through all the programmes. Noting that the Minister had made valid points, he emphasised the need for the Department and the Committee to work together.

He shared his concern with the EPWP budget, saying that the programmes were not managed adequately in the past, and stated that the Committee and the Department should work together to prevent the EPWP from failing.

Mr E Marais (DA) said that he liked the idea that the Minister was committed to moving the Department in a new direction and that it was committed to improving the economy.

He highlighted his shared concern about the EPWP budget cuts, saying that the budget cuts were quite enormous across the whole Department, especially in that area.

There was a disagreement between Mr Reddy and Mr M Dlelanga (ANC).

Mr Dlelanga highlighted the three main challenges that the country was facing: poverty, inequality, and unemployment.

On the EPWP programme, he asked what the Department’s plan was in terms of this programme and combatting unemployment.

On the issue of unemployment, he pointed out that the Department has to focus on improving and investing in infrastructure development and encouraged the Department to focus on this area.

On the entities, he asked whether the Department was happy with the entities’ performances. If it was unhappy, what plan’s did the Department have to address the challenges?

On the IDT, the Department pointed out that it planned to repurpose it. What plans did it have in place to do so? What informed the decision; and when did the Department plan to finish the programme?

Mr T Mashele (ANC) said that Members did not have enough time to go through all the presentation and although the APP had been accepted, he assured the Department that they would engage with it. As the Committee, they were going to hold the Department accountable on the priorities and outcomes thereof.

Mr KP Sithole (IFP) asked for more information on the EPWP matter because the CEO had mentioned the R28 billion, and he asked the Department to give them clarity on that.

On the issue of other Departments owing money to the DPWI, he asked what mechanisms the Department had in place to collect the money from those Departments.

He highlighted the issue of transformation and asked the Department to give the Committee a breakdown of the gender and diversity structure within the Department.

The Chairperson had a few questions and comments before she handed over to the Department to answer.

She said that they had to work according to the law in that they had to agree on the budget before the Budget Vote at the end of that week. They had to work together and hold each other accountable.

She said that the Department could not go through its presentation thoroughly due to time constraints and urged the Department to come to the Committee at the next opportunity with plans going forward, and how it was going to address the current issues.

Response

The Minister told the Committee that the Department was not bankrupt but that it had some serious financial issues. It had to create much-needed cash generation in the short and medium term.

He said that he and the Deputy Minister had a conversation earlier and they agreed that the EPWP was a concerning matter that had to be looked into. The EPWP was being abused by government and the Department had to look into how the EPWP could be re-imagined with an exit strategy for people in the programme. The Department did not want people to sit in the programme for ten years and walk away with no skills. It wanted people to walk out of the programme with skills to enable them to climb up the opportunity ladder.

He thanked Mr Marais for his support of the idea of turning the product into construction. It was going to take a lot of time, construction, and creative thinking. However, it was entirely possible, particularly with Infrastructure South Africa (ISA). ISA has already done excellent work with other entities, and the Department had to strengthen it to make it a focal point for infrastructure development. He pointed out that he had an upcoming meeting with them that Friday to continue the conversation. 

On the EPWP, he said that he shared the same concerns about the budget cuts. The Department was going to have a conversation with the Minister of Finance to think of possible ways in which it could get back the R700 million, as a starting point. He was going to raise the matter with National Treasury as it was an important lifeline for many South Africans.

It would be dishonest to say that the Department was happy with the performance of the entities, but it had to have interventions where there were government failures. There were failures within government and government entities, and where there were government failures, it was important to them to have interventions. Possible ways to improve the existing entities for them to deliver better services to the communities had to be investigated.

The Minister reiterated that he appreciated open and honest discussions, saying he was a forthright person and wanted to tackle issues quickly and find tangible, quick solutions. He said that he was not going to agree with every issue and that he did not necessarily agree with, for example, the EPWP budget. He agreed to the budget to get things moving forward. However, collectively, they needed to look into how they were going to shape the APPs and budget to move the Department and the country forward during the 7^th Administration. He appreciated the honest input moving forward. 

He said that the Council for the Built Environment (CBE) would be able to provide a breakdown of the gender and diversity structure within the Department.

On the R28 billion the CFO alluded to, he said that the Department had to upgrade and maintain what it had. The money did not exist, therefore it had to find ways to generate more money and how to dispose of what it did not need, to ensure that it created a space people wanted to work in. He pointed out that it had R155 billion in assets. The question was about how it could utilise the assets to use public assets for the public good.

Regarding the Department's plans to collect its debts, he said that he did not want to employ debt collectors to do the work. He said that the DPWI could invite the Departments to the Committee meetings and ask them why they have not paid back the money. There were complex issues but it should be able to collect what was owed to them.

Mr Mdakane said that all the questions that were raised were noted.

On sustainability, he said the DPWI had to appreciate the fact that it was a custodian of government properties and did that in understanding the issue of the economy.

On the professional bodies, he said the entities have been hard at work and shown serious interventions in the past.

On the R28 billion that the CFO pointed out, he said that the Department was in urgent need of the funds, not just to develop infrastructure, but to maintain existing infrastructure.

The Committee has always held the Department accountable and wanted to engage with the recommendations in the quarterly reports.

The Chairperson allowed an opportunity for a follow-up. There were time constraints and they had to adhere to the Committee rules. They had to record the meeting and it had to be streamed.

Ms. Tebogo Malaka, Acting Chief Executive Officer, IDT, assured the Committee that the IDT was not on the verge of collapse.

The Deputy Minister asked the Committee not to be soft on the Department, as it was here to be held accountable and to account for its actions.

On the APP, he said that the DPWI took a lot of time to develop the APP and there were a lot of factors that had to be considered before actual implementation was going take place. It was not a matter of holding workshops, but a matter of identifying the specific programmes to identify the key issues, and then coming to the Committee to present the solutions. The Department had an asset optimisation strategy in place.

He pointed out that the DPWI had money owed to it by municipalities and Departments.

He said that the presentation did not accurately represent what was in the Report. For example, regarding the issue of IDT and its being on the verge of collapse a few years ago, the fact that it was on collapse was incorrect.

There were many challenges, but the work was being done. Work still had to be done in terms of transformation, as the industry was lacking in terms of employing women. The Department has a Memorandum of Understanding ( MoU) with the University of Johannesburg (UJ) and The University of Pretoria (UP), where it employs young people from the universities.

On the building that collapsed in George and the people who died, he pointed out that a majority of the labourers were foreigners and brought into South Africa as cheap labour. The entities involved were investigated, and the DPWI found nothing. The investigation was opened up again and it was an ongoing investigation.

The Chairperson asked if there were any follow-up questions.

She handed over to the Committee Secretary, Ms Matinise, who then took the Committee through the last item on the Agenda.

Report of the Portfolio Committee on Public Works and Infrastructure on Budget Vote 13: Public Works and Infrastructure

 Mr Shuaib Denyssen, Committee Content Advisor, Portfolio Committee on Public Works and Infrastructure, guided the Committee through the Report.

He highlighted the recommendations made to the Minister and the Department, as follows:

1. Progress was made on the implementation of Phase IV and the introduction of Phase V of the EPWP. Detail on the unique features of the fifth iteration of the EPWP to ensure that beneficiaries are skilled and certified to enter the employment terrain of the formal economy.
2.  Progress with integrating the Infrastructure Development Coordination function that funds the Infrastructure South Africa (ISA) through Programme 4.
3. The Total Facilities Management and the Refurbish Operate and Transfer programmes (ROT), are to be operated as public-private partnership solutions for leasing, accommodation, and maintenance of functional accommodation for service delivery Departments.
4. Progress with constructing government service precincts as one-stop service delivery points in large towns and cities.
5. Update on plans to ensure the continued viability of the Independent Development Trust, given its sustained operational and financial challenges over the last few years. Information required includes rescheduling and drafting legislation to ensure that it operates and functions on the GTAC model as a social infrastructure delivery agency.
6. Progress made with updating and completing a reliable and accessible Immovable Asset Register, and any financial implications.
7. Progress was made in the assessment of compliance with the nine Provincial Immovable Asset Registers.
8. Progress with the implementation of Regulation 135 and the Leasing Portfolio.
9. Progress with the continued operationalisation of the PMTE to ensure that the debt collection strategy results in a reduction of the overdraft, it turns the value on the Immovable Asset Register into revenue and starts trading as a fully operationalised Property Trading Entity.
10. Report on the R6.0 million allocation towards bursaries for infrastructure-related studies with relevant details of beneficiary organisations, number of bursary holders, and tracking of the throughput rate of beneficiaries.
11. Progress in the filling of vacant positions, particularly those at senior management
12. level, (i.e. the Director-General and the Head of the PMTE. The report to include progress to date on the filling of vacant specialist areas, such as property lawyers, engineers, economists, and quantity surveyors.
13. The continued monitoring of the Supply Chain Management (SCM) and procurement processes and efforts to integrate systems for a more seamless financial operation and management system between the Head Office and the eleven Regional Offices. Internal controls of the shared services, the budget, and the timely payment of invoices within 30 days of its receipt.
14. Report on consequence management as well as progress in preventing fraud and corruption.
15. Update on matters related to the Kosi Bay Border project with the KwaZulu Natal Provincial government and the broader border maintenance project.

The Chairperson said that these were the recommendations to the Executive, and she asked if the Committee had any additions to the recommendations.

Discussion

Ms MP Kobe (Action SA) said that the Committee should think about reframing the language behind when they spoke of the EPWP. Every year, when it wants to increase the budget, hard work is referred to as ‘social help’. There was a need to bring in private-public partnerships and a need to integrate young people into the game. EPWP needed to empower young people and to make employment long-term and constructive. Young people did not have to rely on the EPWP and rethink what the EPWP was and its role in the economy. The language needed to be tailored about what the EPWP means and focus on employing young people.

The Deputy Minister welcomed the recommendations, and said that the Department was going to work on the implementation thereof.

The Minister said that the EPWP could not be a trap that people fell into and reiterated that he was committed to it. However, there is a need to reimagine what the EPWP should look like and the DPWI was going to look into all the recommendations. He said that it was going to take the recommendations seriously and set up programmes to monitor the targets that have been set. It needed to see progress on the targets it set for itself and by the Committee. All the recommendations were things that it needed to solve.

He pointed out that National Treasury also owed the Department money.

He said that Department needs to start on the right foot to move forward correctly.

The Chairperson asked for the adoption of the Report.

Mr M Dlelanga (ANC) moved for the adoption.

Mr T Mashele (ANC) seconded.

The Report was adopted, and the Chairperson thanked the Committee and the Executive for their engagement.

See report here https://pmg.org.za/tabled-committee-report/5881/

The meeting was adjourned