GIAMA Report and Disposal Strategy Report: Department briefing

Meeting report

PUBLIC WORKS PORTFOLIO COMMITTEE
1 June 2005
GIAMA REPORT AND DISPOSAL STRATEGY REPORT: DEPARTMENT BRIEFING

Chairperson: Mr F Bhengu (ANC)

Documents handed out:
Department Power Point presentation on Government-wide Immovable Asset Management policy and legislation
Department report on Government-wide Immovable Asset Management policy and legislation
Department Power Point presentation on Disposal Strategy
Department Report on Disposal Strategy
Department Report on Facilities Management Contract

SUMMARY
The Department of Public Works briefed the Committee on its Government-wide Immovable Asset Management (GIAMA) policy and legislation. The Committee raised concerns about the absence of immovable asset registers in the provinces. They felt that there were individuals abusing facilities and claiming illegal ownership of state-owned properties. A system of declaring occupancy needed to be implemented. The Department of Land Affairs’ vesting process needed to be speeded up in order for asset registers to be completed.

The Department than presented their disposal strategy for state-owned immovable assets. The Committee felt that all provinces needed a single clear definition of "disposal".

The Department also outlined the Facilities Management contract for Parliament, and responded to issues that had been raised in Parliament concerning shoddy work and mismanagement. The public viewed the contractor, WSP Sidibene, with suspicion and there were concerns about the tendering process for the upcoming contract.

MINUTES

Government-wide Immovable Asset Management Policy and Legislation
Dr S Phillips (Department Chief Operating Officer) presented background on the need for the GIAMA Act. The Government had a large immovable asset portfolio, which had a significant impact and long-term implications for the country. The main purpose of the Act was to create a uniform and standardised management policy. The Cabinet had mandated the Department to develop such legislation. A Bill was currently in the process of being drafted and would be binding on all organs of State to promote Government’s objectives. The objectives included the most efficient and effective use of immovable assets in a transparent and fair manner.

The practical outcome of the Act would be for each organ of State using an immovable asset to produce an asset management (IAM) plan as user and/or custodian. The IAM plans would form part of the strategic planning and budget process of Government.

In situations where the user and custodian of the asset had different interests, the Treasury would receive and process both plans formulating one representing both interests.

The Department had consulted with all National and Provincial Departments on the draft GIAMA policy and their comments were to be incorporated in the revised policy and the GIAMA Bill. The Bill would be published for general comment in July 2005.

The Bill was only to be applicable to National and Provincial Government. Due to the complexity of the legislation governing Local Government and varying levels of autonomy of Public Entities, Department would embark on a more extensive consultation process before submitting legislation applicable to such organs of State.

Subject to Cabinet approval, the Minister of Public Works would be introducing the draft legislation in Parliament in September 2005.

Discussion
Mr Blanché (DA) felt that immovable assets should be closer to mass public transport centres. Facilities had generally been situated in city centres, which had been hard to reach. The Department should co-ordinate closely with local authorities and provinces in planning for future urban development.

The Chairperson noted that the Committee had made a commitment to bring legislation before the House and there was some urgency in completing the Bill. He agreed with Mr Blanché about involving local government and was concerned that the proposed legislation was applicable to only National and Provincial government.

Dr Phillips cited an example in Tshwane where detailed consultation had resulted in improved and safer accommodation for civil servants as well as government facilities being made more accessible to the public along public transport routes.

Mr A Meyering (Director of Property Owner Activities) responded to the question of the timeframe for legislation, noting that the State Law Advisors dictated it. The Department had tried to pre-empt any questions but there would still be a six-week delay in the certification of the Bill. September was the last opportunity for the Bill to be tabled for the current year and everything was being done to achieve that.

Mr E Magubane (ANC) raised the issue of the asset register. Immovable assets were scattered all over the country and there had been many instances of vandalism, no rent being paid and no permission to occupy them being granted. The Department would have to speed up the asset register.

Dr Phillips responded that there was an asset register, which was used on a daily basis to pay municipal rates. In discussion with the Auditor General a minimum of information required to avoid audit queries had been prioritised. The Department was engaged in a three-year process to improve the asset register on each property. A budget had been approved for the Department to employ young people to visit every property, update the register, and fill in more fields of information.

The Department was also working closely with the Department of Land Affairs to address the vesting issue.

Ms C Ramotsamai (ANC) insisted that provinces did not have registers and had expressed the need for assistance. The vesting process was a national responsibility and its slow pace was causing the provinces delays.

Ms T Nwamitwa-Shilubana (ANC) felt that immovable assets in the former ‘homeland’ areas were being lost. They belonged to the government and needed to be included in the register.

Mr S Opperman (DA) wanted clarification on the asset register as he had been informed that the Treasurer had stopped Mpumalanga Province from carrying out the task.

In the Mpumalanga instance, Dr Phillips felt that it was likely the Treasurer had wanted a new computer system for asset management. This should not however have prevented the province from compiling a register manually.

Mr S Siboza (ANC) agreed that there had been no evidence of asset registers during visits to provinces. He suggested the Department set aside a period where people would be able to come forward and declare that they were occupying government property or knew of properties that were being illegally occupied. A team of investigators would then investigate cases and guilty parties would be prosecuted. This would assist in the process of completing asset registers. He cited an example in the North West Province where properties that had been used for Intelligence purposes were not known about.

Dr Phillips agreed that the process of declaring occupancy or ‘ownership’ of state properties was a very good suggestion and the Department of Land Affairs had planned to implement this strategy as part of its vesting process.

Mr Blanché wanted to see the legislation include the devolution of immovable assets to lower levels of Government so that city and town planning was more appropriately carried out to fulfil local needs.

Dr Phillips pointed out that that was only possible where function and asset were linked. In the case of Justice, for example, that could not devolve to local authorities.

Dr Phillips responded that in terms of the Constitution, the National Department of Public Works was only responsible for assets that served a national function. Provinces were responsible for provincial office accommodation, clinics, hospitals and schools and should maintain an asset register for these assets. The national Department was responsible for the national asset register of military, correctional, justice and South African Police Services facilities.

He added that that had been clarified with provinces and all had agreed to work towards completing provincial asset registers. The Department had been involved in ongoing discussion and meetings with provinces to assist in the process.

Dr Phillips agreed that it was a problem that provinces did not have asset registers. The Department was certainly able to provide the Committee with the national asset register.

Responses from the Department of Land Affairs were that provinces were not providing adequate documentation for the vesting process to be completed. The Land Affairs Department had also been involved in forums with provinces and the Department to improve the quality of submissions.

Mr Meyering added that the National Department of Public Works had gathered information about all immovable assets between 1996 and 1999. In 1999, all provinces were supplied with that information, but had not updated the lists. This issue was being addressed.

Ms Nwamitwa-Shilubana commented on new buildings being created with state funds. In some rural areas, those buildings could not maintained at a local level. She asked if there was a monitoring system to check on those situations.

Dr Phillips acknowledged that apart from the Auditor-General and provincial departments of local government there was currently no other monitoring process.

The Chairperson concluded the discussion noting that where municipalities were unable to maintain Community Centres, monitoring needed to take place and an inter-governmental assistance plan formulated.

The Chairperson requested that the Department provide the Committee with copies of the 1999 CD of provincial asset registers. He felt that it was in the financial interests of some individuals not to declare assets and that had to be addressed.

He cited an example of a visit to the Jozini Military Base in KZN and another facility in Port St Johns where there had been many discrepancies of ownership and occupancy of state-owned facilities. In certain instances people seemed to think that if they occupied the property for long enough, they would eventually be granted ownership. There were also cases of people selling those properties. He concluded that there was a great deal of practical work to be done around those assets over and above creating a register.

He concluded that the idea of declaring properties was crucial and the Department should seize the initiative and not wait for that to be done by the Department of Land Affairs.

Disposal strategy
Dr Phillips presented background to the disposal strategy and outlined the disposal process. He explained that all arms of government were given the opportunity to decide if the asset could be made use of before deciding to dispose of the facility.

After obtaining approval from the relevant Provincial State Land Disposal Committee and following an adjudication process, the disposal programme was divided into three categories all running simultaneously. Phase 1 referred largely to residential and vacant stands, phase 2 involved largely vacant foreign properties and phase 3 were mixed types of properties.

Discussion
Mr Siboza said there was a need for clarity on how the Department defined disposal in relation to how the broader public defined the term. He suggested that in the proposed meeting with provinces the definition be explained as broader than selling. It was very important to develop a common understanding and disposal strategy in all provinces.

Dr Phillips agreed that the definition of disposal included selling, donating and leasing out properties.

Mr Opperman felt that the income from disposals could be used to help the maintenance financial backlog in the Department.

Dr Phillips explained that the income was not sufficient and the Treasury was not in favour of linking the two. Maintenance rather needed to be adequately funded.

Facilities Management Contract
Problems with the performance of the current contractor working in Parliament had been raised in Parliament and the Speaker had said the matter was the responsibility of the Public Works Committee. The Committee had therefore asked the Department to explain some of the issues that had been raised.

Dr Phillips explained that WSP Sidibene had received the contract after an open tender process in 2002. When additional work had been identified, a new tender process had been established. The appointment for the new tender would be 1 November 2005.

He also informed the Committee that Mr Bongani Gxilishi had been newly appointed to the position of Deputy Director-General for the Expanded Public Works Programme (EPWP).

Discussion
The Chairperson asked if the additional work Parliament had wanted done had been given to the same contractors or given out as a new tender. He asked if the contract had had an addendum allowing for that extension.

Dr Phillips responded that the nature of the contract had allowed for variations.

Ms N Mdaka (UDM) wanted clarity on the phrases "retendering in progress" and the "request for qualification".

Mr F Johnson (Department Regional Manager) explained the Department’s two-pronged approach where a qualification process was followed by a request for proposals. The tendering process was costly and in the past smaller contractors had felt unfairly excluded from the contract after spending a large amount of money.

This new approach enabled service providers the opportunity to first submit their levels of skill and competency. After a process of evaluation, a short list of candidates was compiled who were then required to submit proposals.

The Chairperson explained that there had been public confusion and suspicion regarding the current service provider and the rumoured extensions to the existing contract. Public hearings around the need for transparency regarding the company and the contract had been requested. The Committee had first wanted information from the Department.

Mr Johnson said that WSP was an international facilities management company working with local partners to fulfil the contract.

Dr Phillips requested that the Department be told of any corruption, as this would not be tolerated. In his opinion however the process had followed correct procedure and he knew of no wrongdoing.

The Chairperson said that if the public wished to voice their opinion to the Committee they would be welcome to do so and the Department would be invited to that forum.

Mr Blanché wanted details of the first portion and the extended portion of the contract. He added that the elevators in the Marks Building had been out of service for two years and perhaps the Facilities Management Company had not succeeded in carrying out its job properly. Mr Johnson explained that the lift service had fallen under a separate contract but was now to be added to the main one.

The contract was divided into three portions. The first was the facilities management portion, which included cleaning, pest control, the garden service and day-to-day maintenance. The second category was to cover projects within the environment, which would include work such as committee room repairs.

The third and major portion of the contract was the Annual Building Programme aimed at bringing the buildings up to a certain standard. The scope of the contract would remain the same for the next tender round.

The Chairperson enquired whether the Department had been monitoring the work as complaints about poor work had been raised in the House. In addition, work seemed to cease during recess periods.

Mr Johnson responded that the contract was performance based. The Department had laid down times for output and had conducted random checks. The Department held monthly meetings with Parliament where the work needing to be carried out was discussed.

He would ensure that the Department looked into the issue of worker absence during recess periods. Work such as painting was an inconvenience for Members and should be done during breaks.

The Chairperson asked if the same contractors were responsible for work in the parks. Mr Blanché proposed that the Department have a permanent section responsible for the maintenance work rather than contracting outside companies.

Mr Siboza agreed with that suggestion. Parliament would be able to provide permanent jobs with employee benefits. He wondered if there might have been good reasons for tendering the work out instead.

Dr Phillips responded that the types of activities discussed needed to be run as an efficient and effective business. Outsourcing had been implemented a few years back to improve service delivery as the in-house experience had not worked well.

He added that outsourcing was however only effective if the Department managed the contract very well and this area would be given attention.

The meeting was adjourned.