DPWI proposed legislation; with Minister and Deputy Minister

Public Works and Infrastructure

04 September 2024
Chairperson: Ms C Phiri (DA)
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Meeting Summary

Mr Dean Macpherson, Minister of Public Works and Infrastructure, said the new draft and proposed legislation that had been before the Department needed to be well researched and crafted to prevent further reviews and delays, and would be aligned with the agenda of the 7th Parliament in terms of economic growth and job creation. He made the comments when the Department of Public Works and Infrastructure was briefing the Portfolio Committee on outstanding legislation. He said the Department would be holding a strategy policy workshop to see what needed to be tightened up and aligned with the medium-term development plan, followed by public participation. He indicated turning South Africa into an infrastructure site for economic growth and job creation was important.

Deputy Minister Sihle Zikalala said it was important to transform the built environment industry, especially for those who were oppressed, such as women, who bore the brunt. The Public Works Bill was the overarching legislation to guide the Department, which would keep the Committee informed on progress with the Construction Industry Development Board (CIDB) Bill, the Council for the Built Environment (CBE) Act, and the process for the establishment of Infrastructure South Africa (ISA) as an entity on its own. The review of these pieces of legislation had started during the 5th and 6th Parliament, and now they were being expedited.

The Department provided the Committee with details of the various pieces of legislation and the progress on the reconfiguration of the Independent Development Trust (IDT). The council of the CBE had recommended that the entity approach the Minister to review the CBE Act and Acts of the CBE professionals. The proposed review was based on some gaps identified in discharging the mandate of the CBE and its councils.

Members commented that they did not understand why the Committee would have to review all the pieces of legislation it had dealt with in the past, as the Minister had implied they had not been well-researched and drafted. Members also asked for a definite timeline for the legislative process, and enquired how the Public Works Bill would deal with the overlaps between ISA and the IDT, because there had been a proposal to disband the IDT as it needed more money from the Department.

Meeting report

Minister's overview

Mr Dean Macpherson, Minister of Public Works and Infrastructure, said there were several pieces of draft legislation that were before the Department, and the process would start to ensure that both the draft and proposed legislation were aligned with the policies of the 7th administration in terms of economic growth and job creation. New inputs and changes needed to be made to the draft legislation. There were outstanding issues that had to be dealt with to ensure regulations and legislation in the built environment were aligned with the agenda of the 7th Parliament. 

He indicated that China had a strong desire to work with South Africa on infrastructure development, and two possible projects could unlock R8 billion in infrastructure. There were still feasibility studies that needed to be done on green hydrogen. Important projects were there for South Africa, but the draft legislation had to be finalised first. Already, there was work in progress to better what had been done previously.

He said the new legislation should be well-researched and drafted so that there were no delays and further reviews. The Department would be holding a strategy policy workshop to see what needed to be tightened up and aligned with the medium-term development plan (MTDP), and thereafter there would be public participation. He concluded by saying there was a need to turn SA into an infrastructure site for economic growth and job creation.

Deputy Minister's introductory remarks

Mr Sihle Zikalala, Deputy Minister, said Women’s Month in August had been closed with the revival of the "Women in Construction" campaign. It was important to transform the industry, especially for those who were oppressed, such as women, who bore the brunt. The policy legislation to be reviewed had been started by former Minister Stella Sigcau. The Public Works Bill was the overarching legislation that guided the Department. He said the Department would be presenting the Construction Industry Development Board (CIDB) Bill and the Council for the Built Environment (CBE) Act, and the process for the establishment of Infrastructure South Africa (ISA) as an entity of its own. The review of these pieces of legislation had started during the 5th and 6th Parliament, and now they were being expedited.

DPWI briefing on proposed legislation

Mr Livhuwani Ndou, Acting Deputy Director-General (DDG): Policy Research and Regulation, provided Members with details of the various pieces of legislation. He reported that the revised draft Public Works Bill had been divided into different thematic areas that the appointed work streams were focusing on for further enhancement, and finalisation of the socio-economic impact assessment system (SEIAS) report. Two workshops were conducted and reports produced for the consideration by the drafter and the Office of the State Law Advisor. The revised draft Public Works Bill has been considered by the executive authority. It would be tabled at the Forum of South African Directors-General (FOSAD) Economic, Investment, Employment and Infrastructure Development (EISEID) cluster and Cabinet cluster to request approval for public comments, and for it to be gazetted for comments from the public. The comments would be consolidated, the Bill would be revised and submitted for the parliamentary processes. It was anticipated that by the end of the current financial year, the executive authority would be introducing this Bill for parliamentary process.

The Department of Public Works and Infrastructure (DPWI), in partnership with the CIDB, had embarked on the process to amend the CIDB Act of 2000 as follows:

  • To insert new and amend certain definitions;
  • To provide a clear delineation between the Board as a regulator and its oversight body;
  • To provide for transformation and development in the construction industry;
  • To extend the application of the Register of Contractors to procurement in the private sector;
  • To provide for the Register of Professional Service Providers;
  • To empower the Minister to make regulations prescribing the requirements for registration of professional service providers, application fees and categories of registration of service providers; and
  • To provide for offences and penalties.

The Amendment Bill had been gazetted for public comments on 3 May 2024, and further consultations across all nine provinces to enhance the current provisions had been underway.

Regarding the CBE Act's review, on 11 December 2023, the 6th term Council of the CBE recommended that the entity approach the Minister of the DPWI to review the CBE Act and Acts of the Council for the Built Environment Professions (CBEPs). The proposed review was based on some gaps that were identified in discharging the mandate of the CBE and for its councils, respectively. The CBE had conducted its preliminary research to strengthen its problem statement and the various policy options that could be pursued to remedy the gaps. The conclusion arrived at by the CBE was to review the CBE Act and CBEP Acts, respectively. As a result, various engagements to develop a proper action plan informed by the National Policy Development Framework adopted by Cabinet on 2 December 2020 had been considered. The formal request to the executive authority to consider this review process was based on the draft concept document produced that was being finalised. It was anticipated the executive authority would be provided with a comprehensive proposal before the end of the second quarter of the current financial year. The CBE and Department also formulated a technical task team to fast-track all the technical aspects and develop an action plan with clear milestones for approval by the executive authority.

Mr Ndou said the development of the concept document that was currently underway had, amongst other things, identified the following gaps warranting a review:

  • Lack of clarity on the role of the CBE as regulator;
  • Lack of specificity of the functions, powers and duties of the council; and
  • Lack of consequence management for failure to comply with the obligations set out in the Act/s, which had no offences and penalty clauses.

Regarding the flow of the Infrastructure Development Act (IDA) amendment process, the amendment of IDA was meant to give effect to Infrastructure SA as a public entity. The draft business case had been developed to establish ISA as a public entity. Subsequent to this, the draft IDA Bill, together with the objectives of the Bill, had been developed. Initial consultations with the Department and state-owned companies (SOCs) with an infrastructure development mandate had been conducted. A preliminary engagement with the Office of the Chief State Law Advisor has been conducted for pre-certification of the draft amendment Bill. The draft Bill, together with the business case, would be presented to the executive authority for further guidance on the shape and form that ISA should take. Further engagement between the executive authority of the Department and Department of Finance would follow in due course as part of the finalisation of establishing ISA as a public entity. It was anticipated that the draft Amendment Bill would be presented to Cabinet for approval to gazette it for public comment and further public consultations during the fourth quarter of the current financial year.

Mr Adam Mthombeni, DDG: Inter-Governmental Relations, briefed the Committee on the IDT reconfiguration process. During the 2021/22 financial year, the executive authority appointed a team led by the Government Technical Advisory Centre (GTAC) and National Treasury to work on reconfiguring the IDT. The business case noted the state was continuing to experience huge capacity deficits to meet the demand for public infrastructure delivery, which was reflected in project cost and time overruns, as well as quality concerns, and this was compounded by widespread capital underspending. The business case further indicated that the IDT remained a valuable asset of the state for public infrastructure and related service delivery, and its capability, experience, and institutional memory were intangible assets on which the state needed to build.

The business case had recommended the IDT should be reconfigured in one of the available forms located outside of the public service and within the public sector, and be listed in Schedules 2 or 3B of the Public Finance Management Act (PFMA). The various applicable provisions of the PFMA were constructed so that a Schedule 3B national government business enterprise would have more autonomy than a Schedule 3A national public entity. Of particular importance to the reconfigured IDT was the greater flexibility that it would have as a Schedule 3B in a number of areas, including supply chain management (SCM). It was recommended that it was possible to establish a national government business enterprise without the requirement of enabling legislation, and by simply following the provisions of the Companies Act.

Mr Mthombeni said if National Treasury endorsed such an approach, this would obviously impact on how quickly the new entity could be established, and this was a further compelling reason to select the option of a government business enterprise (Schedule 3B). The IDT would have to be reconfigured into a government business enterprise, and the trust dissolved. The IDT would be established in terms of the Companies Act, and the assets of the trust would have to be transferred to the new company. The business case was subsequently submitted to the Presidential State-owned Enterprises Council (PSEC) in March 2023. The presentation to PSEC included a detailed analysis of the state of the IDT. In March 2024, the PSEC had appointed a service provider to make a detailed assessment of the state of the IDT, and as at 22 August, the assessment of the state of the IDT by the service provider was still underway.

See attached for full presentation

Discussion

Mr S Mahlangu (ANC) remarked he did not understand why the Committee would have to redo all the pieces of legislation it had dealt with in the past, because the comments from the Minister had implied all those pieces of legislation had not been well researched and drafted. He asked how the sector was going to function without the overarching framework, and how the Public Works Bill was going to govern the entities.

Mr Ndou responded that amendment of the Public Works Act had been an overarching process, because so many stakeholders and provinces had been consulted, and it had been benchmarked with sister departments like Basic Education and Health, because they had concurrent functions. The Department was also making use of the Intergovernmental Relations Framework Act. Input from all of these entities would be factored into the Act. This legislation was applicable, and had been able to bring about standardisation. The Division of Revenue Act (DORA) would be used for the transference of funds and other grants.

Mr S Gama (MK) commented that he could not get a sense of the milestones of when the Public Works Bill would be finalised. He wanted to understand what the CIDB was all about, because his concern was around the council that was overseeing the CIDB, even though it had been a regulator, and suggested the functions of the CIDB should be included in the Act if it had been a regulator.

Mr Bongani Dladla, Chief Executive Officer (CEO), CIDB, said there was no council, but it was an issue of language and the entity was a 100% regulator.

Mr L Mokoena (EFF) said he had been disturbed by the remarks of the Minister, who had said some pieces of legislation would have to be reviewed, and asked for presentations to be made to the Committee about the changes that would be made. He also wanted to know why South Africa was no longer engaging with the Asian Infrastructure Investment Bank (AIIB).

Mr V Reddy (MK) could not understand why the Minister had indicated the policies would have to be reviewed, because all the work presented by the DDG had been based on research. He said the policies to be reviewed should be presented to the Committee to see which areas needed reviews. He suggested unused public buildings that had been left unrehabilitated and were posing a danger to the communities should be used according to the needs of those communities. He also proposed the Committee should visit all the entities reporting as it was not a good idea to have people in acting positions, because it was the job of the Committee to exercise oversight over the activities of the entities.

Mr Ndou said the matter of assets had been taken to the Cabinet to see how the Department could enhance them. A strategy was put in place to address the issue of the asset register. He added that the proposal for oversight visits to entities and projects had been noted.

Mr M Dlelanga (ANC) commented that the Department was clear about what needed to be done and that the Committee should assist it in achieving its goals. The Department should also assist the Committee with a list of redundant bills, and clarify the mandate of the Property Management Trading Entity (PMTE) in the Public Works Bill. He suggested that the Department should find a way to develop standards for the development of townships and cities in order to close the spatial planning gap. He also proposed that the Public Works Bill should be aligned with the role of ISA.

Ms M Kobe (Action SA) commented that the procurement process should not be a barrier to women, and suggested the CIDB Act should look at contentious issues and streamline efforts and processes. All processes should make sense to the ordinary person.

Ms N Nkosi (ANC) commented that with the growing China-Africa cooperation, the Department should ensure the Public Works Bill laid the ground for future economic growth and job creation. She wanted to find out how the CIDB and CBE Acts were going to monitor the private sector, and asked what the timelines were for the completion of the CBE and CIDB legislation.

Mr N Nxumalo (MK) asked what difference the amendments to the Public Works Bill the Minister had spoken about would make, compared to what had happened in the past. How would these amendments enable the Department to work with the Department of Cooperative Governance and Traditional Affairs (Cogta) to avoid the hijacking of buildings so that they could be used for housing to alleviate the backlog?

Ms N Makasi (ANC) commended the commitments of the officials involved in the processes that would be followed to complete the outstanding bills. She asked that the Minister be invited to the Committee to present his views on the draft legislation that would be reviewed. She also wanted to know how the IDA legislation was going to enable ISA to do its work, and for an update on the IDT's projects.

Mr W Thring (ACDP) asked how the Public Works Bill would deal with the overlaps between the ISA and the IDT, because there had been a proposal to disband the IDT as it needed more money from the Department. He remarked that the process of having a concrete immovable register had not been followed through thoroughly, so there had been the issue of hijacked buildings. He commented that the DPWI had the largest property portfolio, and it should make profit from it.

The Chairperson asked the Committee Researcher to make a few remarks about the presentation, particularly about the Public Works Bill.

Ms Inez Stephney, Committee Researcher, said the information she was presenting came from the DPWI's 2024/25 annual performance plan. She said the proposed Public Works Bill was based on the 1997 and 1999 White Papers. On issues to be prioritised during the 2024/25 period, the Department would:

  • Finalise the Public Works Bill for consultation, take it through the consultation process, and make amendments in accordance with the comments received.
  • Develop the Public Works General Laws and Repeal Bill and present it to Cabinet for consultation; and
  • Incorporate comments and present the Construction Industry Development Board Act, 2000 (Act 38 of 2000) Amendment Bill, because it has been taken through the consultation process, comments incorporated and presented to Parliament.

She said the Department had argued that the indicator of the Public Works Bill was responding to the transformed built environment outcome through the development of a single piece of legislation on the role of DPWI as the lead infrastructure department. During the 2024/25 financial year, the Department aimed to:

  • Review and implement the procurement framework for the property and construction industry;
  • Restructure the Expanded Public Works Programme (EPWP) coordination strategy to guide how the Department monitors, evaluates, and reports on EPWP performance by implementing bodies across the country. Furthermore, the EPWP coordination strategy was intended to ensure the functionality of coordination mechanisms, and direct the process of developing the five-year implementation plan;
  • Enable the mainstreaming of the EPWP across the built environment sector in all three spheres of government;
  • Put into place the EPWP massification and exit plan; and
  • Draft the Public Works and Infrastructure Bill.

Mr Ndou referred to the APP issues raised by the researcher, and said the draft Bill was there, including everything the Department had worked on during the 6th Parliament, and it was work that needed to be completed and implemented. The draft Bill had been dealing with technical matters.

The Chairperson asked the Members to provide assistance on how to make the entities work, because most of them were under siege. She said the Deputy Minister had explained there had been no clash between the Department, the ISA and other entities. More information was needed from the entities on how the Committee could assist.

Deputy Minister Zikalala, responding to remarks from Members about statements by the Minister, said in any institution there were systems. In the absence of them, chaos usually erupts. The presentations made to the Committee were usually signed by the Director-General (DG), Deputy Minister and the Minister. The presentations should carry the signature of the accounting officer, even if the Deputy Minister and Minister were absent when the presentations were made to Parliament. Even in Cabinet, presentations went with the memo.

He was coming to the meeting for the second time, but was finding it difficult to convey a message from the Committee to the Minister because he was not a messenger. The Committee had to talk directly to the Minister.

He emphasised the policies of the Department were well researched, as there were qualified and knowledgeable people at the management level. Those who made presentations to the Committee had post-graduate qualifications, and had employed research methodology, so what had been presented was well researched and crafted. The presentations had been based on the SEIAS, and had been seen by the Minister.

He said the view of the Department had been that the IDT should become self-sustainable. As a result, a turnaround strategy had been put in place to ensure this was achievable in terms of building capacity and having a structure in the Western Cape.

The Chairperson said there was no confusion regarding what the Deputy Minister had said. Some of the statements made by Members would destroy the decorum of the House. That was why she did not entertain the hands raised by the Members when the Minister was speaking. However, she noted that what had been discussed by the Committee should be implemented. It was not a good idea to discuss legislation without the presence of the Minister, but the Minister had been part of the meeting even though he was out of the country with the President.

Mr Reddy said that because of time constraints, it was not possible to address all the matters raised by the Members. He suggested that there should be a two-day workshop to bring everyone up to speed about what had been happening in the Department.

The Chairperson then invited the heads of the entities to say a few words before the meeting was adjourned.

Mr Dladla said the inputs and comments made by Members, and those received from across the country, were augmenting what needed to be done. He indicated he would like the Committee to speed up the CIDB Bill, fast-track matters of development, and impose fines where there had been deviations.

Ms Tebogo Malaka, CEO, IDT, said support from the Committee was needed for the implementation of the turnaround strategy.

Ms Mameetse Masemola, CEO, ISA, said what was important was to fast-track the IDA to give ISA the power to harmonise projects that needed funding. The business cases for the IDA had been prepared and would be taken to the executive authorities for alignment.

Mr Richard Somanje, CEO, Agrément South Africa, said the entity had started in 1969, and would begin to review its Act during the course of the year.

Dr Msizi Myeza, CEO, CBE, said they were regulating an industry that had been evolving, and the regulations were not up to date. The CBE did not have the powers to hold professionals and bodies accountable for what they were doing. The Act did not cover the issue of regulations. There had been no legislation that would allow the entity to intervene in matters of governance.

George building collapse report

The Chairperson said the report on the George building collapse was needed from the Department in order to prevent a recurrence of such an event. The legislation had to assist the entity that was responsible for such buildings. Deputy Minister Zikalala said it was important to invite the Department, the Department of Employment and Labour, and the South African Police Service (SAPS) for a meeting with the Engineering Council of SA, which was ready with its report.

The Committee adopted its Committee programme and one set of minutes dated 28 August.

The meeting was adjourned.

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