Public Finance Model Outstanding Issues: Department briefing

CORRECTIONAL SERVICES PORTFOLIO COMMITTEE
15 August 2006
PUBLIC FINANCE MODEL OUTSTANDING ISSUES: DEPARTMENT BRIEFING

Chairperson: Mr D Bloem (ANC)

Documents handed out:
Presentation on the Development of the “New Generation” Correctional Facility Prototypes

SUMMARY
The Committee was updated on outstanding issues related to the Public Finance Model for building new generation prisons. It expressed dissatisfaction at the Minister of Correctional Services’ absence. It also indicated that while a hasty decision on the financing model would not be taken, it was growing impatient with the lack of progress as far as the construction of the facilities were concerned. Members were concerned about whether the prototype design made provision for inmates’ health needs as well as whether security issues were sufficiently catered for. The Department assured Members that once the feasibility studies had been completed, progress would be much faster and urged them not to continue repeatedly raising the same questions. At a planning session that followed the Department’s briefing Members raised concern regarding the lack of funds for international study tours. Some felt that this would affect their ability to adequately engage with the issues around the new generation facilities.

MINUTES
The Chairperson reminded the Committee that at the meeting held on 6 June 2006 it had been decided that the Department of Correctional Services (DCS) would return at a later stage to provide clarity on some outstanding issues. He reiterated the seriousness with which the Committee took issues related to the building of the new generation prisons and emphasised that the Committee would only take a decision once Members were satisfied that that the DCS had selected the best possible financing route.

The Chairperson expressed his dissatisfaction at Mr Ngconde Balfour, the Minister of Correctional Services’ absence. The meeting, which had originally been scheduled for the previous week had been rescheduled at the Minister’s request because he had wanted to be present at the briefing. The Chairperson consulted with Mr J Selfe (DA) and Ms S Seaton (IFP) who had agreed that the meeting could be postponed. The Committee needed an explanation for the Minister’s absence as well as for why there were only two officials from the Department present to address the serious matters to be discussed.

Mr Teboho Motseki, (DCS, Deputy Commissioner) said that during the meeting of 1 June the DCS had given a comparison of the three financing models available to them. To his knowledge it had been decided that four issues raised at this meeting would be addressed at a later stage. Two of these questions have since been addressed.

He added that the Minister had intended to attend the meeting. Due to unforeseen circumstances however the Minister was unable to be present but was confident that the DCS delegation would be able to give the Committee some clarity.

The Chairperson urged DCS officials to convey to the Minister that Members were not pleased. In future the Committee would carefully consider whether meetings would be postponed upon his request. Even Mr Patrick Gillingham, the Chief Financial Officer (CFO), was absent after having made a commitment to attend the meeting He reminded the delegation that one needed to motivate a change in the date or the agenda of a meeting to the Speaker’s office for approval.

Ms Seaton (IFP) felt that the situation warranted a letter from the Chairperson (on behalf of the Committee) to the Minister (copying the Speaker). Early in the process the CFO as well as the Commissioner had assured the Committee that they would be present. She felt that a letter containing the Committee’s concerns would be the appropriate response.

At this point the Chairperson received a note from the Minister, which said that he would excuse himself from the urgent Cabinet committee meeting which he was attending and that he would then provide the Committee with a ‘tangible reason’ for why he could not attend its meeting. The Chairperson said that the Committee would wait on the Minister’s explanation.

Ms W Ngwenya (ANC) said that she believed that the Minister knew that they were there to work for the Government. She said that it was unfortunate that the Minister’s apology arrived at that time and had not been tendered prior to the meeting. She felt that the Minister failed to take the Committee seriously.

Mr Motseki said that the DCS regretted that Mr Gillingham could not be present. National Treasury had changed the guidelines according to which departments should report expenditure. Mr Gillingham was preparing himself for an urgent meeting with them, which was to take place the following day.

The Chairperson emphasised that the meeting had been scheduled before National Treasury’s. The DCS should be aware that “Parliament must come first”.

Mr Motseki noted the Committee’s comments.

Mr Motseki identified the following four issues as the ones that had been isolated to be addressed at a later stage:
-the per capita cost per prisons and the related problem of overcrowding;
-the new design model;
-the transactional advisors’ report on the refinancing of the facilities;
-the cost incurred as a result of the work that had already been done.

Some of these issues had already been addressed in previous meetings. Mr Motseki explained that greater clarity would only be provided regarding the per capita cost once the feasibility studies had been completed.

DCS New Generation Prototype Design Presentation
Ms Mthabela (Deputy Regional Commissioner: Gauteng) was the deputy commissioner for offender control at the time of the actual design of the model and was part of the task team that had completed the prototype. She was best equipped to deliver the presentation that gave an overall view of a typical prototype and talked the Committee through the layout of the prototypical facility explaining that the facility could be completed in stages. Rehabilitation needs, humane incarceration ideals and local space norms and standards guided the development of the prototype.

Deputy Commissioner Motseki’s response to other outstanding issues
Mr Motseki indicated that the per capita cost could only be sufficiently dealt with once the feasibility studies had been completed. Mr Selfe had suggested that the impact of overcrowding should be excluded from the Department’s calculations of the day-to-day per capita costs. Mr Motseki said that overcrowding was a reality in the correctional facilities. Not including this reality in the calculations would be an “artificial exercise”.

He was certain that the work the transactional advisors would be doing would indicate figures for when facilities operated optimally. Their calculations would reflect the cost to both the state and the private facility. He agreed with Mr Selfe that only the feasibility study could indicate what the accurate calculations were.

He felt that the question around the costs that had already been incurred had been answered already. He recalled that Ms Jenny Schreiner as well as Mr Gillingham had addressed it. They had indicated that building would continue where earthworks had already been done. New earthworks would not be commissioned since that would constitute fruitless expenditure.

Mr Motseki commented that he noticed that many questions that had already been asked kept recurring. The same questions were asked from one meeting to the next despite the fact that they had already been answered.

Discussion
Mr J Selfe (DA) recalled that the original idea was that officials, e.g. social workers should be situated within the modules so as to limit inmate movement within the facility. In addition, lack of rehabilitation was often attributed to the absence of facilities for social workers. He noted that the prototype did not indicate that any such facilities would be present within the new generation facilities.

Ms Mthabela pointed out that the unit managers’ offices would consist of several offices that could be used for one-on-one counseling, etc. Group sessions would be conducted in the communal spaces (day-rooms) within the modules. The Department wanted to limit the movement of inmates from the units to the administration block to see social workers, psychologists, etc. Inmates would only leave the units to receive visitors, attend classes, etc.

Mr Selfe wondered whether the cell-space per inmate conformed to international standards.

Although Ms Mthabela was not sure about whether international standards were met she hoped that specified standards had been adhered to.

Mr Selfe said that his amateur, rough calculation (using the scale attached to the presentation) indicated that there would be 2,8m/2 per inmate, while current standards required an inmate to have 3,44m/2. He felt that it would be unfortunate if the new generation facilities did not conform to the standards the Department itself had set.

Mr Motseki refrained from commenting on the figures but said that the Department would send a written reply detailing the exact figures.

Mr E Xolo (ANC) reminded Members that at the correctional facility in Middeldrift they had witnessed 79 inmates sharing one cell (with only 1 toilet). He wondered whether the new designs incorporated sufficient ablution facilities. He reminded all present that even prisoners were entitled to a better life.

Ms Seaton thought that the layout of the new facilities was aesthetically pleasing but cautioned that having dining, bathroom and sleeping facilities in one cell, shared by 10 inmates, posed a major health risk.

Ms Mthabela said that the toilet was in the cell so that inmates would have access to it during the night when gates were locked. She hoped that the toilets would be “covered”. Ablution facilities would be separate but she was not sure about the exact number of toilets and showers that would be provided.

Mr N Fihla (ANC) thought that the design was beautiful but wondered what measures had been put in place to secure the entry points. He warned that offenders had become very sophisticated and that inmates’ contact with the outside world proved to be a risk.

Ms Mthabela explained that it took the Department three to four years to put their plans in place. By the time their intentions came to fruition criminals were often ten steps ahead of them. The new generation facilities would have control gates at the entrance, through the “street”, towards the “zone” as well as in every unit. If something or someone got into the unit undetected it would be because officials had let them through. Delivery vehicles, etc would be thoroughly searched at the entry points. She hoped that by the time the facilities came into use the latest security measures would be in place.

Ms Ngwenya pointed out that during the Committee’s oversight visits they saw prisons where inmates’ beds’ were stacked one atop the other. She wondered what measures had been taken to ensure that the new facilities did not run the risk of also becoming grossly overcrowded.

Ms Mthabela pointed out that the number of offenders DCS received was out of the Department’s control. The Department hoped that a stage would be reached when facilities would accommodate only the number of inmates they were supposed to and no more.

At this point the discussion was interrupted to read a note that the Minister had sent. The Chairperson said that he would read it to the Committee so that they knew its contents. It read:

“Dear Chairperson,
I do apologise for the misunderstanding that happened this morning. My understanding was that today’s presentation would be a follow-up on the Public Finance Model (PFM) or the PPP (public/private partnership) presentation that was done. I also understood that I would be available when we discussed the oversight visit to the Eastern Cape rather than the presentation today. I do apologise for any misunderstanding.
Minister Balfour.”

Ms Ngwenya said that the Committee had already tired of the discussion around the new prisons. The topic appeared to be continuing indefinitely. Instead of plaguing the Department with the same questions over and over again, she only had one question: what were the timeframes the Department had in place for the completion of the new generation facilities?

Mr Motseki respected the Member’s frustration and assured her that the Department shared her concern. He wished that he were in a position to give definite time frames. The transactional advisors were contracted in 2004. Delays in the feasibility studies created uncertainty around the duration of some of the processes. Once the feasibility study had been completed and procurement processes were set in motion clearer answers could be given. At the moment it was difficult to provide exact dates.

The Chairperson said that the question of timeframes was very important to the Committee. The Committee needed to know when the Department intended to complete the process. He asked whether the Department of Public Works (DPW) or the Department of Correctional Services (DCS) would fund the building of the Kimberley, Leeuwkop, Klerksdorp and Nigel facilities.

Mr Motseki explained that National Treasury allocated funds to DCS. DPW was the project manager and had the legislated mandate to handle procurement. The DPW owned the property and managed it on behalf of the State but the budget was allocated to DCS.

Mr L Tolo (ANC) pointed out that the Committee kept asking the same questions because the Department‘s answers kept changing. In June the Committee had been told that contrary to newspaper reports the Department had not redirected R1, 2 billion that had been earmarked for the building of the facilities. At that time the Committee had wondered why this money could not be used to finance the building of the facilities instead of the Department seeking financing elsewhere. The presentation had indicated that facilities could be built in stages. He wondered why this would be necessary if funds were available.

Mr Motseki appreciated Mr Tolo’s comment. He wished that one could take one day to deal with all issues in one sitting. It was possible that misunderstandings took place. The facilities were scalable. They could be built a block at a time, as the funds became available. The feasibility studies would determine what the best financing route would be. The Department would base their decision on the outcome of the feasibility study.

Mr Tolo said that Mr Motseki’s response was not entirely satisfactory. The Department had said that there were problems with the facility in Polokowane and that they would approach the private sector for assistance. The Committee had felt that it would be better for the Department to use its own funds instead of acquiring loans. Now there was talk that the new prisons could be built little by little.

Mr Motseki noted that Mr Tolo was very passionate about the Polokowane facility. He pointed out that issues around design as well as procurement played a role in the process. Part of the Department’s specifications was that the facilities should accommodate 3000 inmates. The prototype design indicated that the building process could be done in stages. The DCS would inform the Committee about the financing model it decided to use.

Mr Xolo reminded the Department that the Committee traveled countrywide. He recalled witnessing that at Thoyandou the hygiene and health needs of inmates were not attended to. A shower was out of order for 3 to 4 days despite a plumber being on standby. When the Committee complained about the state of the shower an official had been stubborn and blatantly refused to do something about it. At Middeldrift water had been seeping through the floor near a cell that held 79 inmates for two weeks without anything being done about it. He wondered whether the new facilities would provide plumbers that would be available at anytime to ensure that health and hygiene were not compromised.

Mr Motseki said that if one chose to go the Public Private Partnership (PPP) route the contract would specify the number of inmates the facility could accommodate. The Public Finance Model (PFM) contracts would also specify the maximum number of inmates it could accommodate. He did not imagine that the situation the Member had described would occur at these facilities. The current state of correctional facilities was not desirable. Ms Seaton had at one point complained that the Department was quick to point a finger at DPW when it came to issues of maintenance. Mr Motseki reminded the Committee that DPW was in fact responsible for large-scale maintenance. He added that the Department appreciated it if the Committee pointed out issues it saw at facilities. The procedure that should be followed when reporting maintenance issues was quite protracted, but there were many issues that could quite easily be dealt with by DCS themselves. If the Committee’s report indicated some issues the DCS could act on them immediately.

Mr Selfe said that Mr Tolo referred to a briefing that was held on 2 May, which Ms Schreiner had attended as well. He added that contrary to what Mr Motseki stated he did not believe that he had answered the question related to the spending that had already been done. The Committee merely required a simple answer as far as how much money had been spent on the facilities so far.

Mr Selfe agreed with Mr Motseki that the real answer as far as per capita costs were concerned would lie in the report on the feasibility of the new prisons. He pointed out that on 6 June the Department had made a comparison of the per capita costs for PPP and its own prisons respectively. Presumably that calculation was made on the number of inmates divided into the total cost of running those prisons. If one wanted to compare apples with apples, one merely needed to downscale the number of inmates so that they represented 100% capacity and then repeat the calculation. He emphasised that the Committee should base their decision on information that was helpful and accurate.

Mr Motseki said that the outcome depended on the variables one took into account. The fairest comparison would come from the feasibility study.

The Chairperson reminded the Department that on 2 May they had informed the Committee that tenders would be invited immediately and that construction on the Kimberley facility would start in September. He asked whether construction was still scheduled to start in September.

Mr Motseki responded that it would be unfair to provide the Committee with just any date. The Department was sincere in its concern around the delays. In the previous meeting he had indicated that the Department hoped that the feasibility study for the last four prisons would be completed around 19 September. There would then be more certainty on these four facilities.

The Department was in the process of commissioning feasibility studies for the Nigel and Klerksdorp facilities and wanted this process to be completed as soon as possible. The Department and the transactional advisors would learn through experience and this would probably result in shorter timeframes. The Department would proceed with the Kimberley facility, which would be built using the conventional method.

The Chairperson said that the Committee would follow up on the progress that had been made.

Mr Xolo noted that the prototype design appeared to only address issues around construction. The Eshowe correctional facility in KwaZulu-Natal tried to address more than just inmates’ accommodation needs and used the land surrounding the facility to grow vegetables.

Mr Motseki could not recall the Committee discussing whether facilities would perform additional functions aimed at “self sustenance”. A number of facilities such as Leeuwkop and Groenpunt did take part in agricultural activities. Facilities also often provided each other with produce. In terms of the Department’s agreement with the National Treasury the Department had to take “care of a certain percentage of their budget themselves”. He agreed that this was a very important point and admitted that whether the new facilities would take part in such activities had not been considered when procuring the sites.

The Chairperson wondered whether Mr Motseki could guarantee that the Department had not yet made a decision as far as the financing model it would use for the building of the new facilities.

Mr Motseki said that the Department had taken a policy decision that said that taking an exclusively PPP route would not be desirable. The PFM route was more desirable and the Department had asked the transactional advisors to include this model in their study. The feasibility study would indicate which model was better in terms of value for money. The Department would then compare the policy decision against the outcome of the feasibility study and then make a decision. He added that the Department was confident that there was much merit in the PFM.

The Chairperson requested that the Department present the outcome of the feasibility study to the Committee as soon as it became available. Mr Motseki agreed that the Department as well as the transactional advisors would present the outcome to the Committee.

The Chairperson reminded the Department that Parliament had tasked the Committee with the scrutiny and investigation of the building of the eight new generation prisons. The Committee did not want to fall into the same trap it had fallen into with the already existing PPP prisons. To avoid this the Committee would continue asking the same questions. If it was decided to use the PFM the Committee wanted to be in a position to say that it was satisfied with the model and that it had investigated it thoroughly. Until such time the Members would continue asking questions since they would not agree to something they did not understand. He assured the Department that the Committee had nothing against it but that it wanted to see the process finalised.

Other Committee business
The Committee finalised its programme for the coming third term of Parliament.

The Chairperson said that the Committee would meet to deliberate upon the recommendations of the Report of the Judicial Inspectorate of Prisons. He added that instead of inviting all 52 Chairpersons of the parole boards, the Committee should invite representatives from each region.

Mr Selfe had no problems as far as what had been included in the programme. He was concerned about what had not been included however. The Committee on its oversight visit to the Eastern Cape had assured the province that meetings would be held to address their concerns around the filling of unfilled posts.

The Chairperson responded that the concerns had been addressed in a letter to the Department who advised that the Committee should table its report and recommendations in Parliament. The Department would then be able to appear before the Committee to discuss matters arising from the report. The Committee Secretary with the assistance of the Committee’s researcher had been requested to complete the report as soon as possible so that it could be tabled by 19 September.

Mr Fihla thought it necessary for the Committee to evaluate the visit to the Eastern Cape before the report was completed. The Chairperson agreed that an evaluation of the visit would be important.

Ms S Chikunga (ANC) suggested that the Committee should visit another country where similar new generation facilities had been built to acquire more insight into the experiences that had informed the Department’s decision.

The Chairperson responded that the section manager had informed him there were no funds available for Committees to undertake international visits. The R3, 4 million set aside for international travel had been exhausted, allegedly by a single Committee. Committees wanting to undertake international tours could prepare a proposal to use their R500 000 annual budget.

He said that the international travel budget had been discussed at the last chairpersons’ meeting. All chairpersons had expressed their concern.

The Committee Secretary reminded Members that the trip to the Eastern Cape, which lasted for 4 days, had costed R80 000. A trip to Australia for 5 members would cost R360 000. The catering that was done for every meeting that took place amounted to R600 per meeting.

Mr Fihla pointed out that the sport committees used an amount of money that far exceeded their allocation but still managed to undertake international visits. He proposed that the Committee should undertake one international visit and no provincial visits.

Ms Chikunga agreed with this suggestion. She added that one expected there to be more order at Parliament. She marveled at the fact that one committee could exhaust the entire international travel budget. She emphasised that the Department of Correctional Services claimed that they had used the PFM model, which was used in Australia. The Committee needed to visit this country to see if the Australian government had any pitfalls to report.

Mr Fihla suggested that the Committee should look into getting funding from outside. He recalled that IDASA had once funded a trip to Europe. He was concerned that with no exposure the Committee would not have any fresh ideas and would repeat the same questions over and over.

The Chairperson said that he did not agree with the Member’s last statement but that he would address it in the study group. He explained that Parliament had decided that private funding would not be allowed anymore since it was feared that it would compromise the Committee’s oversight duties. He said that he would nevertheless look into the possibility of an international visit being funded as well as whether the Committee could undertake a national visit and no provincial ones.

Ms Chikunga advised that one should also look into the possibility of having more than 5 Members going on the trip.

The Chairperson responded that the rules and regulations dictated that four Members from the ruling party and one Member from each of the other parties at a time could undertake a trip. All in all only six Members could go on a trip. He said that this issue was much discussed at the Chairpersons’ meetings and Members were very concerned.

The meeting was adjourned.