Department of Public Works Government Immovable Asset Management Bill: briefing & voting

Meeting report

PUBLIC SERVICES SELECT COMMITTEE

PUBLIC SERVICES SELECT COMMITTEE
09 May 2007
DEPARTMENT OF PUBLIC WORKS GOVERNMENT IMMOVABLE ASSET MANAGEMENT BILL: BRIEFING & VOTING

Chairperson: Mr R. Tau (ANC)

Documents handed out:
Department of Public Works presentation on GIAMA
Government Immovable Asset Management Bill [B1-2006]
Government Immovable Asset Management Bill (B1B-2006) as passed by National Assembly
National Assembly Amendments to Bill (B1A-2006)

Audio Recording of the Meeting Part1 & Part2

SUMMARY
The Department of Public Works briefed the Committee on the Government Immovable Asset Management Bill. The members raised concerns about the local sphere of government, which was not included in the Bill, and the issue of the asset register. The Committee adopted the Bill.

MINUTES
Department of Public Works briefing on Bill
The Director General of Public Works, Mr Manye Moroka, spoke about the Department’s intentions in implementing the Government Immovable Asset Management Bill, referred to as GIAMA. The Bill did not legislate for the local sphere of government as certain pieces of local government legislation and regulations still needed to be altered to accommodate GIAMA principles. There were processes in place that were trying to address the local sphere. His briefing highlighted the objectives, principles, roles and responsibilities governing the lifecycle management of immovable assets as embedded in GIAMA (see document).

Discussion
Mr L Van Rooyen (ANC) asked why the Bill is tagged as being a Section 75 (bill not affecting the provinces) instead of a Section 76 (bill affecting the provinces) bill. He noted the term "government wide" in the Bill's title which should include everything, yet the Department was focusing on national and provincial spheres of government only. He referred to the government's training entities that had huge assets. There now there seemed to be no control over these and that needed to be looked at. He wanted clarity on what the department meant by "life cycle management".

Mr P Moatshe (ANC) asked whether the register has been completed and if they knew the status of all the assets in the country. It had been mentioned that in the short term, the Act will have financial implications for the various departments, be it a custodian or user but that in long term it would have a savings effect for the state. He requested an explanation on that. He asked if the department could outline the assets or give a list of them.

Ms B Dlulane (ANC) noted that the presentation spoke about GIAMA being applicable to national and provincial governments only. She asked for an explanation. Referring to the slide dealing with responsibility of users, she wanted to know what the Department meant by “reduced demand for new immovable assets”.

Ms H Matlanyane was concerned that this bill was taking place now but there were assets said to have been disposed of in the past. She wondered what would be done to redress the immovable assets that had been disposed of from previously disadvantaged communities.

The Director General responded to the question on the inclusion of the third sphere of government, that is, local government. The reason they have not included local government yet in the GIAMA is that municipalities are governed by a separate body of legislation (the Municipal Systems Act and Municipal Finance Management Act). [The Integrated Development Plan (IDP) of each municipality should have an asset management strategy. However the regulations did not make immovable asset management mandatory nor specify the immovable asset management planning process. Such shortcomings could be remedied by additions to the regulations]. The Department of Provincial & Local Government agreed that the regulations must be harmonised with the Bill]. The Department of Public Works was engaging in a series of meetings with the Department of Provincial & Local Government to harmonise the regulations with the Bill.

He said that when it comes to public entities then the Act would apply to a limited extent. The Department could not dictate the terms on their keeping their assets, dispose them or make them available to government programmes. But if you look at the aspect that all public entities are accountable to various national department due to the national function then the act would apply, but only to a limited extent. The issue of period, that is, how long it will take for the implementation of the bill to fully take on the effect of its cost and all the necessary goals be achieved) will depend on the response they get from public entities and government departments. It was possible to do this in eighteen months.

With regard to the asset register, the Department could give what has been updated since it is an ongoing process. On the matter of the financial implications for user and custodian, the cost might be huge since some departments might not have an existing maintenance plan. However, ultimally, the costs would be reduced as there would be an improved management system. The Act seeks to bring uniformity in the managing of assets and eventually in their disposal so as to cut out any fraudulent processes that might occur.

Mr Buks Annandale, Director: Legal Services, Department of Public Works, answered the question on whether it was a Section 75 or 76 bill. He said that the Bill seeks to address national norms and standards as far as asset management is concerned. The Department had consulted the state law advisors and they agreed that it should be tagged as a Section 75 bill.

Mr Van Rooyen argued that he was still not convinced why the Bill should be tagged Section 75. Further the content of the Bill has financial implications for government in terms of maintenance. He also pointed out that it would be an unfunded mandate to the provinces.

The Director General replied that there were huge consultative engagements with national and provincial departments and they did not have objections to the fact that the Bill is Section 75, and they had no problem with the financial implications.

Ms Lydia Bici (Deputy Director General) added that this Bill also helps the provinces in terms of managing their assets cost effectively. The departments had to do this anyway so in terms of cost implications it did not cause a dent.  In addressing the life cycle management question, she said that every asset has a life cycle that is prolonged by constantly refurbishing it, until it reaches a stage where it cannot continue to provide the service it is meant to. At that stage the asset has to be disposed, so this life management cycle looks after the asset from the beginning until its end where you have to dispose of it. The user has a responsibility to produce the user asset management plan. If accommodation occupied by the user can meet service delivery objectives and functional performance then the user will not demand new accommodation within a shorter period because the one they have will still be able to provide and so this reduces the demand.

Ms Bici stated that to answer the question on the asset register, it would be best if the Department made a presentation for members on assets. The kind of assets government has are commercial assets (office buildings), functional assets (hospitals, prisons) and heritage assets (Union Buildings) and land etc.

The Chairperson mentioned that the issue of the asset register has been coming up for quite some time. He asked how the Bill balances the gap about managing assets. He also asked what has been done concerning assets outside of the Republic. The last question was how does one dispose of assets if one does not know what one has.  

The Director General referred to the presentation slide on guidelines and requirements that explained managing the asset register. They did know their assets and used them in collaborative ways. The assets owned or leased outside South Africa are managed the same way.

Mr Van Rooyen states that presentation slide ten mentioned many issues and wanted to know whether the Department had the capacity to do all of them. He also asked if risk management and such like was not too much of a specialised job for government employees. He also asked if this was a national or provincial function.

The Director General mentioned that once the President signs the bill into an act, then the accounting officer is the one responsible to ensure that there is enough capacity for the Act to be implemented successfully.

Ms M Oliphant (ANC) recommended that the Department provide information on the progress of the asset register for the various provinces.

The Chairperson said that the presentation on the Department's budget and strategic plan would be postponed until 21 May 2007 and asked if the Department could provide the promised presentation on the asset register on that day.

Voting on Bill
He proceeded to the motion of desirability but advised that the Department also include local spheres of government as well.

The Director General stated that once the consultative process was done with Department of Provincial and Local Government, then there will be an amendment clause which would include local government and also consider public entities.

The Chairperson asked members if they agreed to the Bill and it was unanimously adopted without amendment.

The meeting was adjourned.