EPWP performance; with Ministry

Meeting report

Minister’s opening remarks
The Minister of Public Works and Infrastructure, Mr Dean Macpherson, introduced the delegation:
Mr Sifiso Mdakane, DPWI Director General
Mr Ntokoza Chonco, DPWI Acting Deputy Director General: EPWP
Ms Thembakazi Maluleke, DPWI Director: EPWP Reporting and Data Managment
Mr Lesoetsa Kopano, DPWI Director: EPWP Finance
Ms Tebogo Malaka, IDT CEO

The Minister said that EPWP is a programme that has been important to millions of South Africans as it has provided social relief and opportunities that people may never have gotten. It has been widely rolled out and is one of the successes of government in providing work opportunities in an economy that has not grown over the last 10 years and has also seen the unemployment rate and poverty rise.

It is important that the shortcomings of the programme be assessed and reformed to better meet the needs of South Africans to develop greater skills, greater transparency, and better pay. This is why in the last week he launched the EPWP listening tour in the Eastern Cape where the Ministry went and listened not only to recipients but also those communities that feel that the programme is not working for them. Although it was acknowledged by recipients that the programme has worked there, there is also a great feeling of distrust in the lack of transparency and abuse in how work allocations are made, and the involvement of political parties and councilors in the allocations. He was told by a woman that she had to provide sex for job opportunities.

The DPWI was also informed that single individuals can take R30 000 a month out of the programme for themselves while others cannot obtain opportunities. Further, certain individuals have also never obtained opportunities due to race and political affiliation. The abuse occurring is therefore clear and the question needs to be asked: Do we want to see people being grass cutters, flag wavers or pothole patchers for the rest of their lives? Collectively it can be agreed that the answer is no because we want to see people live lives of dignity. People should be able to bring dignity to their families and EPWP has the potential to do that. Thus, the Department has started a conversation around what a reformed and renewed EPWP programme would look like that partners with the private sector and can leverage the money made available to the Department. He thinks that there are good examples all around the world and in South Africa where there is the Presidential Employment Stimulus Programme.

The vision is to see people grow greater skills and can climb up the opportunity ladder by being a part of the EPWP. He would like to see transparency in how allocations are made and how it can leverage the money budgeted for this programme with the private sector to increase the value. However, the truth of the matter is that EPWP has suffered a R700 million budget cut over the last financial year from R2.9 billion to R2.2 billion. This will hurt the programme and its deliverables. It would, therefore, be unfair to expect the DPWI to do more with less. If we want to do more, we need more, which is why the Department has to start getting innovative with the programme and the available resources.

The Department will lobby hard for an increase in funding available for the programme, but important social programmes like EPWP cannot be cut through funding shortfalls because it will only get worse. The listening tour will be rolled out across the country and he invites any person to come and join them. He does, however, admit that he is a bit nervous as these meetings could go one way or another. However, communities have engaged with the Department because they understand the value of the programme. He admitted at times he was quite emotional because of the dire positions people are faced with. One woman who had cerebral palsy had been excluded from work opportunities because of her disability and others were excluded because of their race. This programme can and should evolve into a programme that inspires hope and not despair. Further, many serious allegations will be investigated. He will personally intervene in some issues that were raised directly with him. He requested that the Portfolio Committee provide their input following the presentation on how the Department can improve. Additionally, how can the programme be reimagined and reinspired for the next 20 and 30 years and going forward?

EPWP: Progress in Implementation of Phase 5
Mr Ntokoza Chonco said the purpose of the presentation is to address three focus areas, which are the restoration of the dignity of indigent members through vocational and further education and training skills development and certification; EPWP incentive grant per province and municipality; and the role played by IDT;

EPWP is a social intervention designed to help people put food on the table. The programme is necessary because South Africa has a high unemployment rate and people need to be skilled to go out and obtain employment.
Slide 8 - 13
EPWP has achieved a lot over several years although there were challenges in Phase 4 and they did not meet their target. EPWP has four sectors and each one of these sectors is important. The purpose of EPWP is to develop skills to assist people obtain employment.

Areas that need to be improved for Phase 5 are improved coordination, effective and fair recruitment to reach all target groups, the exit strategy and massification to reach more unemployed people including youth. EPWP is open to everyone as long as the individual is not benefitting from any other social grant

Slides 14 - 27
- Restore dignity through vocational training and further education and training
- Develop skills so participants stand a chance of being employed after exiting the programme
- Training interventions take two forms: accreditation or non-accredited skills development and second, capacity-building of a portable skill like job readiness;
- There is no budget from National Treasury for EPWP training initiatives; it is externally sourced funding by DPWI such as the National Skills Fund and public body training funds;
- The purpose of EPWP training is for people to leave having obtained a skill and this is the purpose of the exit strategy.
- Some of the risks associated with training are funding and people dropping out, especially in the artisan sector
- DPWI has also already submitted a 2025/26 funding proposal to the different SETAs.

Slides 27 - 33: Review of EPWP conditional grants
- The Integrated Grant for Provinces and Municipalities and the Social Sector Incentive Grant are being reviewed and combined to become one grant due to non-compliance, lack of proper coordination, and DPWI does not have full control on the ground.
- DPWI will have more control of a certain portion of the grant.
- Other proposed changes: 1. increased eligibility and compliance requirement 2. creating a subsidy mechanism for a new EPWP programme. This means one looks at the baseline of the grant, and for example, if it is a 60/40 split then 60% will be transferred to the municipality and the remaining 40% of the subsidy grant)will be controlled by National DPWI

Slides 42 - 48
- IDT is a partner and entity of DPWI and deals with the non-state sector
- The data collection of EPWP needs to be improved as the government website being hacked and overall the system is vulnerable
- The priorities of the Minister is to reform EPWP by emphasising skills development for participants to increase employability and co-funding by bringing in the private sector.

Deputy Minister Sihle Zikalala said the presentation was detailed. It deals with the questions raised by the Portfolio Committee, especially creating dignity in EPWP work. When conceptualising Phase 5 which was launched by the President earlier in the year in the Eastern Cape, DPWI thought it should identify a few areas that could be implemented throughout the country. The four areas are:
• Waste management with the concept of one township, one waste management centre. Participants will start as waste pickers and graduate into a cooperative. 
• Brick paving especially in your small cities, and towns.
• Maintenance of public facilities. This was started in the Eastern Cape around Mthatha, and it was a good pilot using EPWP workers to clean government facilities. There are facilities where no maintenance is carried ou.
• Energy where people will be able to fix electricity. Another element is that whatever is done in the EPWP must not conflict with what is defined as permanent employment because that will then require engagement with NEDLAC. 

The Deputy Minister said the last point relates to disadvantaged municipalities. The allocation has been based on the more municipalities report, the more they get allocated. However, smaller municipalities with no capacity will not be able to report and they will not be able to get resources going forward. Therefore, the suggestion of the 60/40 split is to ensure that the 40 is used to intervene in these smaller municipalities where it is needed.

Discussion
The Chairperson said she is glad that both Executives are present as it shows that EPWP is important and that DPWI wants this programme to be successful. The Portfolio Committee will join the DPWI in lobbying for more funds to be added to EPWP.

Mr M Dlelanga (ANC) affirmed that the Committee will work with DPWI to maintain and sustain the programme for the benefit of the ordinary people. He encouraged DPWI to work on the safety valves to avoid the abuse of the programme. He asked why DPWI failed to meet the first quarter target and how they are going to correct this. Why does National Treasury not grant a budget for training and skilling? Is this because DPWI is raising funding for the programme? He asked for the reasons for the dropout rate in the skilling programme. Does DPWI envisage resolving this through more rigorous selection criteria? On the grant combination and 60/40 separation, is DPWI confident that it will work based on the capacity of the state and the municipalities not being the same.

He is glad DPWI is involving its entity Independent Development Trust (IDT) in work that it is doing. This is because when he reading the legacy report, he felt that IDT must be given more work and responsibility. 

Mr E Marais (DA) noted the funding model and the budget cut. He would like to ask if for example there was an agreement between the Department and COGTA that for every 80 cents given by DPWI, the municipality puts 20 cents in that EPWP budget. With this 80/20 ratio or 2/3rds perhaps then the municipality will think more carefully about the money because for R1 added to the budget, DPWI gives them R2. If he were the municipal manager or the mayor or the CFO, he would tap into that. At the same it is all about responsibility and accountability because the moment you put money into a project from your own funds, on a municipal level, control would be stricter. This is because it is not money received from one’s budget that is funding this model. He clarified that he does support the project, but to be successful it is all about control and coordination.

In his constituency, he saw EPWP workers cleaning the road. This is an action usually taken by municipalities to ensure they have work for the day. Although there may be illiterate people that may fall into this category, the purpose of the programme is to enhance the skills of the people as well. They must be used in a much more productive manner. He gave the example of a small town, Prince Albert, where two EPWP workers assigned to a museum working on their computer skills putting everything in the museum on a computer system. This is fantastic because ultimately they were developing two skills working in a museum and developing their IT skills.

That funding model could contribute to coordination and strict controls, if an institution or municipality are also part of the funding, then there is a difference in the way it is approached and they are more eager to put controls in place. 

On slide 11 the term ‘fair recruitment’ is where a serious problem lies in municipalities. There is manipulation by the political parties or the person in charge of the municipality with the recruitment process. These people give the EPWP jobs to their friends and families. Slide 15 is very important because ultimately the purpose of the programme is for people to complete the programme in order to receive certification.

DPWI must strive at least for more than 2% training and try to increase it each year. One year it moves from 2% to 2.5% and the following year to 3% until 5% is reached, which should then become the norm.

On artisan training and the dropout rate, where 400 learners were approved and 86 dropped out, this makes the dropout rate 22%. The same rate occurs in the education sector, people at high school level drop out and the first thing the Minister of Education does is to bring the students to matric. If it can be figured out when the dropouts start then the project in the long run could also be more successful.

It is quite worrying that the Northern Cape grant expenditure is only 25% of the allocation; noting it was 41% for Kwazulu Natal.

On consequence management, he stated that often people who are supervisors do not carry out their duties and responsibilities. He pointed to Slide 36-37 on the review of EPWP grants going forward which is important. On brick paving of roads and pavements, he has noted that if you come back after a month half of the bricks have been stolen. Tarring of the roads and pavements means it cannot be stolen.

Circling back to the Minister’s vision, a way must be found for EPWP workers to help enhance infrastructure development throughout South Africa. He proposed that as a collective they should have a brainstorming session to see how they can go forward with that idea. He agreed with the Deputy Minister on smaller municipalities having problems with capacity. However, if a small municipality like Prince Albert can do it then other small municipalities can do it as well.

He concluded that the most important aspect for him is the funding model and if DPWI can receive assistance from the private sector that would be good but it would be better to get assistance inter-departmentally such as between the Department of Cooperative Governance and Traditional Affairs (COGTA) and DPWI.

The Chairperson reiterated that members focus on questions that can receive responses from DPWI today. It is important that the role of EPWP must be explained and how DPWI is going to manage standardisation. How is DPWI going to allocate to the beneficiaries? Further, there is a problem with how DPWI allocates funds, based on the remark made by the Minister. How is DPWI going to monitor implementation in different municipalities? Focus your questions on how DPWI plans to close the gaps and loopholes. Focus on how DPWI and IDT will rectify the problems raised in the presentation rather than on the municipalities.

Mr E Bath (DA) said that based on the listening tour spoken about by the Minister many problems need to be addressed. These include the political patronage and corruption, limited skills development as an outcome, and failure to meet the needs of the community. What has caused this and is DPWI considering these causes in the reformed agenda for EPWP?

The second question concerns the rationale of how the grants are allocated to the provinces. The presentation shows a large variation between provinces and he would like to understand how the funds are allocated. He further noted that in the slides performance is measured by what is spent and he would like to question whether this is a good way to measure performance. Instead should DPWI not be looking at the tangible outcomes of the money spent? It is not so much about how much money is spent but what is the outcome. What difference is being made?

He is glad that the Director: EPWP Reporting and Data Management, Ms Thembakazi Maluleke, is here because he would like to suggest that in terms of transparency, DPWI needs to see what the tangible outcomes of the programme are. In conclusion, he asked if the EPWP has looked into phasing incarcerated members of the public into the programme to upgrade and maintain correctional facilities.

Ms M Kobe (ActionSA) appreciated the presentation as it provides insight into how the EPWP performs from a departmental perspective before it is taken all the way down to the municipalities. She noted that all the performance targets are at 50% and below. This makes it difficult to motivate for more money when the performance is so low. She asked why the performance is at an average of 34%. It is difficult to speak about a R700 million budget cut but DPWI cannot utilise the money to perform effectively.

The social sector can match the training opportunities with the work opportunities. However, she finds that there is a skills deficiency in infrastructure within DPWI where there are massive work opportunities but the training opportunities are not matching up to this. This then excludes people who are not being trained when they exit the programme.

She asked what incentives are departments thinking of utilising to encourage the private sector to join. The DPWI stated that this is not a labour relations matter or an economic issue but it is a social function to bridge the gap and assist in getting people to participate. She asked if DPWI is effectively using what it already has like collaborating with the Construction Industry Development Board (CIDB) to ensure the entities and companies initiating social responsibility are absorbing these people and giving them a chance to make use of these opportunities. She suggested that DPWI use the CIDB so they could grade companies better who are absorbing people from the EPWP.

On the training dropout rate, DPWI mentioned people not having a passion but she thinks a large factor could be socio-economic issues, especially in areas with high poverty rates.

Ms Kobe asked if the EPWP training participants are given an allowance and do they have money to purchase a meal at training school. The National Student Financial Aid Scheme (NSFAS) is doing a good job and perhaps DPWI could utilise something similar to ensure that people are not attending the training whilst being hungry.
 
The reporting failure is a grave concern because there is no transparency in the recruitment process. DPWI has stated that it has information on the contracts and the people. If DPWI has the details why has it not properly categorised them?

On inter-governmental relations, she is aware that the Minister has been doing a listening tour but in engaging with municipalities what has DPWI found and deduced about the municipal inability to perform their functions? How is DPWI faring in ensuring that the EPWP works well from national level down to the municipalities?

In conclusion, she would like to discuss the digitisation and transformation agenda of DPWI. There is a need to digitise and transform DPWI. She commended DPWI on wanting to use a mobile application but is DPWI going to depend on the participants to feed the information into the application? How will DPWI monitor and ensure that the information is accurate?

Mr S Gama (MK) noted that the Minister was in Gqeberha for the listening tour and that he asked if the Minister would be continuing or discontinuing the EPWP. He would like the Minister to share with the Committee what his thoughts are around this process to ensure the Committee has a better understanding.

The Chairperson apologised for interrupting Mr Gama. The Minister said in his opening remarks that he would like the Committee to assist him in obtaining more funds for EPWP which means he would like the programme to continue not discontinue. She will not allow the Minister to respond to that comment because Mr Gama was not present when the Minister spoke about this. Nor should the Director General respond to Ms Kobe’s comment about digitisation as the DPWI website is bad and he should not respond until the website issues have been rectified.

Ms N Nkosi (ANC) said that the budget to train people is large but requires participation for people to complete the training. She requested DPWI has a plan is in place to ensure that everyone is participating to prevent the concerning dropout rate. She asked the rationale for the budget cut by National Treasury and the impact it will have on the programme. For artisans, the success rate is quite low and she asked how this will be turned around. Perhaps the selection criteria for the programme should be reviewed as a lot of money is being spent therefore. DPWI needs to ensure that people complete the programme.

Ms N Makasi (ANC) asked if the duration of the participation in the programme which is currently three months could be extended to six or 12 months because of the need and impact of the programme. How do the budget cuts and lack of funding affect the programme? Is DPWI confident that it will be able to raise enough resources to sustain the programme? She asked how strong the collaboration between DPWI and the Small Business concerning qualified artisans. She asked how strong the relationship is with the Department of Small Business Department Development to ensure that DPWI continues to train these artisans so they can open small and medium enterprises.

She asked about the recruitment process to ensure that the correct people are attracted to reduce the dropout rate. She referred to the targets for youth, women, and people with disabilities. However, there is no mention of males and it could be said that the EPWP does not accommodate men. She noted that two provinces reflected more than 300 beneficiaries for vocational training compared to others that only had 15. Is it a matter of a budget allocation to the province or high interest amongst the people? It does not paint a great picture that some provinces have many whilst others have fewer.

Mr S Mahlangu (ANC) asked how DPWI intends to resolve the challenges in coordinating the EPWP from national to municipal level. What are its plans to ensure that the EPWP does not fail? Why was the budget cut and how will DPWI resolve this to ensure that the budget is not cut once again in the next financial year?

On the provincial progress reports on the grants provided, is remedial action taken by DPWI if provinces do not meet their targets? Does the participant’s contract contain a clause about dropping out? He recalled when he partook in a learnership with the Department of Water and Sanitation, there was a clause in the contract which required the participants to repay the money should they drop out of the learnership.

One of the responsibilities of the IDT is social facilitation. How is IDT ensuring that the community is benefiting from the EPWP? In the construction industry foreigners benefit without proper documentation. How will IDT ensure that the people participating in the projects are South Africans and the community strictly benefits from these projects? In conclusion, he said that DPWI should not individualise itself as they are a collective.

Mr Gama said that it was inappropriate for the Chairperson to interject when he was speaking previously. He had reported that he was going to be 20 minutes late to the meeting. He compared the EPWP ‘employment opportunities’ to full-time employment, and said that ‘employment opportunities’ only made a small dent to the high unemployment rate. Are there any other ideas of how DPWI could accelerate infrastructure programmes so it could absorb more people?

South Africa has an unemployment rate of 32.6%. The situation has been worsening and the GINI coefficient of 0.67 places South Africa as the most unequal society in the world. DPWI has spoken about 5 million jobs in its 5-year plan but those are ‘employment opportunities’, not full-time employment. The COGTA Minister spoke about 4 million jobs that would be created but it was not clear from where these would come. If DPWI accelerated some of the infrastructure projects, it would increase jobs. However, the rate at which you can accelerate is dependent on factors such environmental impact assessments. How does DPWI hope to collaborate with other departments to do its work more effectively and efficiently?

The Chairperson stated that with the power invested in her by the Committee, her role is to guide the Committee. The Committee deals with the matters on the agenda and when you are late do not bring up other issues. If you are late allow yourself to be guided by the Chairperson. She asked Mr Dennyson to address the meeting before she Minister and her team respond.

Mr Shuaib Dennyson, Committee Content Advisor, said that one of the most important tasks of the Committee is always to be up to date on what is going on with EPWP. This Committee carries out an oversight role over DPWI which is a coordinating department. The challenge is indeed in coordinating the three spheres. The presentation covered most of the important aspects It has been recognised that in municipalities, provinces, and departments where EPWP programs are run, the allocation of beneficiaries is not carried out according to DPWI uniform standards. The challenge is how DPWI will enforce the uniform standards. Can DPWI touch on that in its response?

Secondly, DPWI is selling itself short. There are very successful training programmes and success stories coming out of EPWP. Some people came out of the programme and remained employed because of the qualifications received through EPWP. He emphasized the importance of DPWI coordinating which has to do with setting a standard and finding a way to enforce it.

One of the Members already suggested incentivising people on the ground to follow DPWI uniform standards and regulations. Instead of using a stick and taking funding away from them, incentivise by suggesting DPWI will provide a certain amount and the other party provides a portion too and in this way, they will participate.

He commended the Committee for how well they cooperated in the discussion. The Committee would like to bring the Minister and the team back to speak a bit more about those two components: enterprise development and training. He suggested that the Committee bring the Ministers of Labour, Basic Education, and Higher Education and Training as well because there may not be sufficient understanding about the coordination powers of EPWP.

The Chairperson asked if IDT has standardised regulations for all three spheres in implementing its programme. Can IDT explain how it ensures that all its stakeholders follow these regulations? If the regulations are not followed, how will IDT as implementing agent enforce them?

DPWI response
The Minister stated that he will save his comments for last to round up.

Mr Lesoetsa Kopano, DPWI Director: EPWP Finance, replied that DPWI is confident that the combination of the two conditional grants will work. Currently departments are receiving funding from both those grants. If they combine the grants, it will reduce the administrative burden on the departments receiving the grants as well as DPWI.

The poor expenditure in provinces like the Northern Cape and North West is mainly attributed to the delays in starting the implementation of projects. Some public bodies plan their projects to begin somewhere mid-year. However, if the project is planned, to start within three months of the year, the financial performance will be seen. DPWI is continually engaging with public bodies to ensure that they report their expenditure timeously.

The budget cut was imposed during the adjustments in the last financial year. The DPWI unsuccessfully engaged National Treasury by extensively demonstrating what the budget cut would do to the programme. Ultimately, due to the budget cut, approximately 145 work opportunities were lost. This should translate to about 70 full-time equivalents.

National Treasury indicated that one of the reasons for the budget cut is due to budget pressure. The decision was taken by Cabinet to implement budget cuts across all grants. Despite DPWI writing a detailed letter to National Treasury citing the areas that would be negatively impacted due to the budget cut, it was unsuccessful as the budget was cut. What steps DPWI will take in future to ensure no budget cuts is a difficult question as it is not a factor which DPWI has much control over. However, they implore the Portfolio Committee to demonstrate the importance of EPWP as there is such a high unemployment rate.

The reason some provinces receive a higher allocation than others is due to the model used to allocate a budget to public bodies. The allocation is based on the number of full-time equivalents that each provincial department and municipality is creating and reporting. This means that the provincial departments that created the most work opportunities and full-time equivalents are likely to receive a higher allocation than others. They are able to create more because they are not only dependent on the conditional grant transferred by DPWI but they also allocate their own significant portion to the budget to ensure there is an increased number of EPWP participants.

Ms Thembakazi Maluleke, DPWI Director: EPWP Reporting and Data Management, focused on the questions about performance of EPWP. The programme achieved 34% in the first three months of the financial year against the annual target of 1,004,000 work opportunity targets. This implies that the programme is doing well. It can be said that DPWI has started Phase 5 on a good note. The second quarter performance was officially released yesterday and the performance for the second quarter is at 70%. Thus, DPWI is doing quite well. There is no shortfall in achieving Quarter 1 and 2 EPWP targets. DPWI is well on its way to achieving the annual target of one million work opportunities. On not achieving targets, DPWI has data capturers in place and recently a new cohort has been appointed to verify the information reported in the system. Therefore, there are measures in place to ensure that the Department achieves or even exceeds the targets set for the programme.

On assets and services, DPWI has advanced the system to not only focus on the number of work opportunities created but also on the assets and services created through those work opportunities. DPWI therefore does have information on the assets created across all sectors from the environment and culture sector, infrastructure sector, social sector, and non-state sector. This information is available as it does track the assets created through EPWP as it is an important indicator of how the programme is running.

She noted that there was an interest in how the mobile application is going to work. DPWI has decided to improve the quality of the information reported in the system for the numbers and reliability of the information reported. They want to ascertain if the work opportunities created and reported in the system are those of the individuals who are working on-site. To advance the system DPWI has created a facial recognition biometrics application. The reason this was chosen was to cut costs on infrastructure. Although there are more advanced biometrics applications that would require more expensive infrastructure, due to budgetary constraints, DPWI opted for the mobile application. The mobile application is currently in testing. The Department was recently on-site to confirm this and so far it has been successful. DPWI is hopeful that by 1 April 2025, the mobile application could be rolled out to at least one of the most important programmes in the Department, which is the NPO and DPWI implemented projects.

Director-General Sifiso Mdakane spoke to training and dropouts. Certain provinces have more participants than the others simply due these provinces deciding to put more money into EPWP resulting in more numbers. When the Department decides to interact with the National Skills Fund, these provinces are also able to produce more numbers and be responsive in putting forward participants that are ready and willing to be part of the programme. On dropouts, certain people are taken into the programme yet they have no passion and the only reason they are there is to collect money to put food on the table. Therefore, DPWI needs to ensure that the right people are accepted into the programme. When selection for the programmes takes place, participants are not interviewed. Participants are simply placed in the programme but they are in the programme for other reasons. This factor contributes to the dropout rate.

Another area that affects the dropout rate is DPWI has not included in the contract that the participant is expected to pay back the training money as they are dealing with the poor. Another factor that contributes to the dropout rate is when participants obtain employment elsewhere. DPWI has not carried out a proper analysis of when the dropouts occur. He noted the suggestion by the Portfolio Committee to conduct a proper analysis of why and when the dropouts occur and report back. DPWI’s relationship to EPWP is that it mainly deals with coordination.

There is currently a discussion between the Presidency and Treasury which involves a joint assessment of public employment programmes (PEPs). However he still has to brief the Minister on what DPWI might be facing as a result of this. Towards the end of Phase Four there was a discussion happening, although he joined DPWI only in November 2023 there was already a strong view from the Presidency and Treasury officials that the coordination function of EPWP should be moved from DPWI to the Presidency. He is not preempting what this exercise is going to do and he has not yet briefed the Minister. However, he will keep the Committee informed so that as a collective it can deal with that particular issue that might affect the EPWP.

Ms Tebogo Malaka, CEO of IDT, spoke about social facilitation. When entering into communities, IDT engages with members of the community themselves. When meetings are held it requests that a community liaison officer is appointed within that community to ensure that communication flows properly among community members, IDT officials and DPWI staff. If the situation calls for it, IDT also engages the ward councilors and traditional council.

On whether documents are properly vetted, the DPWI reporting system is linked to the Department of Home Affairs so ID numbers are uploaded to be verified by Home Affairs. IDT ensures that only members of that particular community are employed thus only allowing that community to benefit from the project.

IDT is responsible for implementing the non-state sector part of EPWP and DPWI norms and standards and regulations are used for implementation. IDT’s role relates to the appointment of the NPOs. The framework provided by Public Works is in line with the memorandum of understanding (MOU) signed with DPWI. IDT is assisting with the review to check where the gaps are and where improvements can be made. 

The budget cut for the non-state sector affected the number of NPOs that could be appointed. IDT had to decrease the number of NPOs to ensure it is in line with the budget allocated for the financial year.

Director-General Mdakane said that most of the questions have been answered but he will touch on the answers that can be elevated. He agreed about considering incarcerated members of the community as an area that DPWI can look into. Those who are repeat offenders might create an issue. This is something about which DPWI would come back to the Committee at a later stage.

On consequence management, one of the advantages of the listening tour is that some things one might not know until directly interacting with the community. One will find people saying things that might have been understood differently from a report. The campaign will assist in unearthing things and also monitoring. He thinks it will help in terms of who is the supervisor. Incentives that might be considered for the private sector to participate, he likes the idea. It is something DPWI might tap into. Another big issue is engaging other departments like the Department of Labour, which has quite a lot of money for training and especially the Unemployment Insurance Fund (UIF).

He is happy that DPWI has made an application to the SETAs. DPWI has engaged the Department of Labour, so all that is left to do is encourage this arrangement to get more support for training.

He appreciated the point raised about using infrastructure development to create other opportunities. He cited one example of an infrastructure support grant (ISG) where graduates were trained and paid by the National Treasury. They were required to clean stormwater drains. The way the contracts were crafted in uMhlathuze in Richard's Bay, there were a total of 13 contractors that were appointed across the city. DPWI took the single contract and packaged it in a manner that resulted in 13 contracts. Before this, there was a single contractor that only had a few workers but ended up taking most of the money.

DPWI segmented each of the 13 contracts where the contractor had to appoint a minimum of number of people, and a salary cap was put in place because DPWI did not want to fight with the Labour Department. Consequently, from those 13 contracts, DPWI managed to create about 113 jobs over the 36-month period. But for this to work, DPWI had to engage with National Treasury on how the contracts were structured. What Mr Gama suggested is something DPWI is already looking into in awarding of contracts.

Follow-up questions
Mr Marais stated that the Portfolio Committee to offer solutions to put on the table. The aim should be to create something more workable. Most Committee members, if not all, support the project. He had said that the municipalities should also contribute a portion because then there is a buy-in. The solution should be to work on a sliding scale with Grade 1 and 2 municipalities contributing 10% and the Department 90% and it moves up the scale with a larger contribution up to Grade 6 municipalities.

Ms N Makasi (ANC) said that she thinks the Department should consider inserting a dropout clause in the training contract. Other programmes that are out there commit the participant to pay a penalty if they drop out. This would prevent people from joining solely because of the money but commit to completing the programme. Such a clause ensures that participants are not there to waste the money of government.

Mr N Nxumalo (MK) asked if they have the figures for how much it costs DPWI to have people drop out of the learning programme. The public needs to know how much is wasted. We cannot allow a situation where money is used and no results are achieved.

Mr Nxumalo asked if it is still a proposal or if the Department of Small Business Development is involved and participating in the EPWP. If they are involved, at what level are they involved?

Ministry & Department response
Deputy Minister Zikalala addressed the subject of dropouts, saying while he agrees with Mr Chonco, the state still lost money training someone for a week or more. The suggestions by Mr Mahlangu, Ms Makasi and Mr Nxumalo are correct. DPWI must have a clause that ties these beneficiaries to this responsibility. However, at the lower skills level, it will be impossible to do that because these are people who come in just to clean the street and the next day they obtain employment elsewhere and leave. But once participants are accepted into these certified or accredited courses it will be important to take the route that is suggested. 

The Deputy Minister said that EPWP is not the only programme to face budget cuts and DPWI is not the only department that suffered budget cuts. These budget cuts occur because of the state of the economy. There is shrinking revenue in the state for many reasons, which ultimately affects this programme.

On brick paving, the Deputy Minister said that he has not experienced people stealing the bricks. Perhaps Mr Marais has hardcore criminals in his locality because when the bricks are laid there will always be concrete on the side which will keep everything intact. This is a good project because it is a labour intensive exercise.

He pointed out that the EPWP was first implemented in 2004 modelled on the Zibambele community project by the Department of Transport in KZN under the MEC. That contract was then elevated. The situation was that there were poor people who did not qualify for a social grant because they were not old and there was no R350 SRD grant at the time. Therefore, the purpose was to give these people something to cushion them. They worked three times a week to earn money. However, they must then be trained. When the programme was elevated to the national level, the element of training came into place. Therefore, you cannot take incarcerated people because the purpose of the programme does not allow for that.

On the funding model suggested by Mr Marais, the Deputy Minister stated that the Department should consider it even if it is 10% to ensure commitment on the side of the municipality. This is because people are more invested if they have to pay.

On private sector participation, DPWI engages the private sector to come on board, not to fund us but to help communities. For example, the private sector with experience in recycling has come in and mentored participants on the required skills and use of equipment. It then becomes an effective partnership for the exit of EPWP.

The Deputy Minister said that he must say that South African infrastructure challenges with EIAs and all the requirements of that nature are now being resolved. Foreigners are not in this programme because the employment is localised so there is no threat of foreigners. The threat that is there are ghost employees. This is a real issue that affects the programme. This occurs because councillor or whoever simply collects the IDs and claims money from that. This is corruption and needs to be dealt with and he thinks the Minister referred to that earlier. However, he agrees that the Department is not perfect. They are here to take ideas from the collective and DPWI is prepared to take them.

Minister Macpherson echoed the Deputy Minister saying that DPWI is here to learn and collaborate. He does however want to sound one warning about what the Acting DDG stated earlier. If there is a move or discussion taking place currently that EPWP should be moved to the Presidency under the Presidential Employment Stimulus Programme that would spell disaster for millions of unemployed, unskilled South Africans. It should be resisted at all costs because people who are doing low-skilled jobs and can upskill over time cannot be equated to people who become teacher assistants or clinic assistants. This would spell disaster. It is something that, regardless of our political affiliations, everyone should be united in keeping the concept, proposal, and structure of EPWP and what it represents for millions of unskilled South Africans.

He will try to touch on some of the points that have been raised by Committee members. It has to be realised that for as long as the economy is stagnant, budget cuts are going to continually take place. Therefore, people have to work on growing the economy, do away with what does not work, and implement what can work to grow the economy. If people want the budget allocations to increase in any department, but more importantly ours, to be able to do the work that we do then this must be carried out. I fully support the idea on more vigorous selection criteria to avoid dropouts as well as having a partnership and funding commitment from municipalities into EPWP based on what he has seen in his hometown of eThekwini as an example.

About R100 million was made available to eThekwini and the municipality added funds on top of that. However, the municipality had to withdraw the funds and then wanted to blame the Department for the funding shortfall it had created. Therefore, there needs to be an upfront position on what the contribution by the municipality and DPWI is going to be. This contribution is then followed through for a three-year period and at an absolute minimum.

He thinks that there needs to be more transparency in the way appointments are made. We are in the age of technology and more South Africans have access to the Internet or cell phones and should be able to receive an SMS saying, “Mr MacPherson, you have qualified for the EPWP please report to the office” instead of placing this task in the hands of people who can abuse it for their own means.

A more lottery-based system should be developed to ensure true fairness and true opportunity for people. It also prevents people from repeatedly joining the programme, which has often been heard about and takes the opportunity away from people who never had the chance to be on the programme. DPWI needs to move to having dashboards in place allowing the public to see per province, per town, and per ward what EPWP opportunities are currently underway. Additionally, it should show what budget has been spent, and what the matrix of progress is to ensure completion.

DPWI wants training and opportunity to become the key pillar of this programme so that people leave better off than when they first arrived. He heard a story of someone who has been with EPWP for 10 years. He does not know how that is possible, but that is not a life of dignity. Being paid R120 a day for 10 years is not a life of dignity and it is something that the Department should consider.

The Minister addressed Ms Kobe stating that the Department is working with municipalities on the listening tour. This is why all the mayors have been invited and the executive mayor of Gqerberha attended and honest conversations were had on EPWP. The EPWP is not being optimally used and the mayors were able to hear exactly what the Minister of Public Works and Infrastructure heard as well.

Further, with regards to extending the length of the programme,or paying more is theoretically possible, but would fundamentally change the nature of the programme to become more full-time and be subjected to the minimum wage. This is a conversation that should, be had but again, that requires more money. If the length of time individuals spend in the programme should be extended to earn more money then partnerships with the private sector should occur. He further, would like to state on record as it is an important point that no one has said that EPWP is going to be phased out or done away with. It cannot on the one hand be said that the programme should be reformed and on the hand make plans to do away with the programme. Both of these cannot be true.

The Minister assured Mr Gama that no one has said that EPWP must be got rid of. He does agree with Mr Gama about accelerating infrastructure projects to absorb more people. But again this requires a growing economy and we need to be able to work with the private sector to be able to leverage more money into the Department’s R4.5 trillion infrastructure projects. The full pipeline across the country is also going to require major reforms in state-owned entities (SOEs). The country has too many SOEs that are a handbrake on the economy instead of a booster rocket. They are looking forward to reforms. In important SOEs it has been seen what it has done for the country’s electricity production by reforming. It is now time to turn our attention to Transnet and to turbocharge that SOE.

He made the point that DPWI needs to take a look at the code of good practice for EPWP as it was last gazetted in 2011. This looks at working conditions and work hours, amongst other things. It is fundamentally important that it is updated so it is more in line with 2024.

In closing, the Minister that it cannot be taken away that EPWP has done a lot of good for a lot of people in this country. It is now time to take it to the next level to see what more it can do in a space that provides more skills, more opportunities and becomes a hand-up and not just a handout. The Department is committed to doing that and as they start to work through these plans and programmes it be presented to the Committee. He requested that everyone stand united against any attempt to absorb EPWP into any other department, forum or structure that would allow it to lose its core fundamental mandate, which is to assist poor, unskilled South Africans to be able to get through during difficult times.

Closing remarks
The Chairperson appreciated the spirit of everyone joining hands in defence of the programme. She requested that it be so in all other presentations as well and she hopes this is the start of all the presentations Minister of Public Works and Infrastructure and Director-General that is going to be brought by them, that the Department and the Committee are going to work together. In the beginning, everyone expressed the sentiment that they were going to assist each other. It is not you and us, but it is us together. Everyone will have to move forward and assist each other to deliver the services that South Africans are supposed to get.

Ms Kobe stated that before the Department team leaves it would be good for the Committee to thank and acknowledge them for trying to establish the board for parliamentary villages. This is a step in the right direction and it also speaks to the legacy the Committee is trying to leave.

Committee programme
Committee Secretary, Ms Nola Matinise, went through the revised programme.
- The Committee was to meet on 6 November 2024 but this has been postponed because of constituency week. This item has had to be taken off the programme for this year and will be reconsidered next year because there is no other time due to competing priorities.
- On 13 November 2024, there will be a briefing by DPWI, DBSA and Parliament on the status quo on the National Assembly and Old Assembly rebuild. The NCOP Chairperson is unable to attend the meeting as she will be attending the Pan African Parliament. The Office of the Speaker and the Office of the Secretary of Parliament have not confirmed attendance. They have been trying to liaise with them about confirmation. Nothing has been heard as of yet but the meeting is still on the cards.
- The Committee will consider and adopt its Budgetary Review and Recommendations Report (BRRR) on 13 November. It had to be postponed as the 2023/24 Annual Report had not been tabled but the Minister committed to table it this week.
- This will be followed by the George oversight visit for which an application was submitted to the House Chairperson. They are just awaiting the final confirmation as the financials have been reworked this morning. The hope is that by the end of this week, people should know what exactly is happening. The George oversight visit dates have also been changed because a Committee week has been inserted into the programme. The Committee week is now 18 to 23 November. The George oversight visit will take place 18 and 19 November. Members will be traveling on 17 November and returning on 20 November.
- There was supposed to be a meeting on 20 November with the Governance Risk and Compliance (GRC) branch of the Department on the corruption allegations and the SIU investigation. As members will be traveling back from George, this meeting has been moved to 21 November.
- The capacity building workshop feedback session will be scheduled 22 November which was initially set for 15 November but a House sitting will take place on that day.
The Committee will also consider and adopt Committee reports on Gauteng oversight visit and capacity building.
- On 27 November, there will be a briefing by DPWI and PMTE on 2024/2025 Quarter 1 performance. She will check if the Department is ready to present Quarter 2 as well r as well then perhaps they could merge those two.
- During the very last week the Committe will embark on an oversight visit to the Eastern Cape where they will be looking at the EPWP small harbour development in Port St Johns and the Mthatha project. The Department will provide a brief synopsis of what the projects entail; how far the Mthatha project is on the courts and Port St Johns.

The Chairperson noted that the George oversight visit is subject to approval by the Chair of Chairs. If the Committee does not receive approval, the Committee will have have a physical meeting.

Mr Bath appreciated Ms Matinise as she is very hands-on with the programme. His request is that as soon as the programme is finalised could it be circulated.

The Committee adopted the programme.

Committee Report on DPWI & PMTE 2023/24 Quarter 4 performance
Mr Dennyson presented the Committee Report on the DPWI 2023/24 Quarter 4 performance. The meeting took place on 11 September and the Committee always does a comparison of the first, second and third quarter performance when looking at the fourth quarter performance.

A long outstanding matter that stood out is how DPWI utilises the budget to effect what it plans in its five programmes. There is under expenditure in every programme for the compensation of employees budget. This is due to unfilled positions or delays in filling positions which also triggers under expenditure as equipment required for these jobs is not bought. Thus there is serious underspending in all five programmes. Since people are not appointed DPWI cannot properly do what is expected. The targets will show that it is being done but the money for that will not be spent. This is prevalent in the report for each programme. The Committee observations made are the previous quarters also showed slow spending under compensation of employees, goods and services, and transfers and subsidies. The accounting officer explained it was due to non filling of vacancies in all five programmes. Vacancies at the end of Quarter 4 stood at 164 personnel of a total staff complement of 853, which is 19%.

In PMTE there has been underspending over the past three years and that is again compensation of employees. In Quarter 4, the expenditure is 98% against a low rate of programme achievement at 48%. Therefore, keep an eye on that which indicates taxpayers’ money is being inefficiently used. The construction mafia and illegal activities continue to impact negatively on the financial performance. If projects continue being halted the way it does then allocated funds will remain unspent and the KPIs are not achieved or reported on.

The final observation was the Committee expressed concern about the decrease in the EPWP budget allocation. How does one achieve the NDP employment targets by 2030? Those are the observations. For the quarterly performance report, no recommendations are made because the Committee follows a process of continuous assessment from quarter one to four. At the time of the Annual Report, a draft report is ready for the BRRR based on all those observations and recommendations are made in the BRRR.

The Chairperson noted that the Committee has not adopted BRRR due to the late tabling of the DPWI Annual Report. How does that make the Committee look? Besides questioning the Department, the Committee needs to check what must be done. It is not the fault of the Committee if the Annual Report is not tabled. There is nothing that we can do. But how best can the Committee avoid such challenges? Today's meeting gave us hope. It shows that there is unity in the Department. They must assist the entities in dealing with their audits as it is IDT and PMTE that have delayed the tabling of the Annual Report.

Mr Marais said that he does not know if the Chair of Chairs should be informed but somebody should be informed. When this is done, the truth should be stated: It was because of ‘ABC’ that the report was not tabled on time.

The Committee Secretary stated that immediately when the Committee received the letter from the Minister indicating that the Department would not be able to meet the Annual Report deadline, a formal letter was written to the House Chair, informing him and apologising that the BRRR deadline. Unfortunately, we are not able to consider and adopt the BRRR without the formal Department Annual Report being tabled in Parliament. The Committee awaits the Annual Report tabling. This is why the BRRR consideration has been scheduled for 13 November.

The Chairperson asked the Committee to adopt the Quarter 4 performance report. This was done and there were no members who did not agree. She thanked the Committee for a fruitful meeting.

The Committee considered and adopted the minutes of 18 September 2024 meeting.

The meeting is adjourned.