Public Works Department Strategic Plan & Budget; Asset Register Progress

NCOP Public Services

27 May 2007
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Meeting report

SELECT COMMITTEE ON PUBLIC SERVICE (National Council on Provices)

PUBLIC SERVICE SELECT COMMITTEE
28 May 2007
DEPARTMENT OF PUBLIC WORKS STRATEGIC PLAN & BUDGET 2007/08; ASSET REGISTER PROGRESS

Chairperson:
Mr R Tau (ANC, Northern Cape)

Documents handed out:
Strategic Plan: South Africa Works because of Public Works 2007-2009 [see
www.publicworks.gov.za]
Asset Register Enhancement Project Progress
Department of Public Works Strategic Plan and Budget presentation

SUMMARY
The Director General of the Department of Public Works highlighted the Department's strategies and how the budget had been allocated. A progress report was provided on the enhancement of the Asset Register.

Members wanted more information about the success rate of the Extended Public Works Programme. Were there impact studies, particularly on the retention of skills? The Department acknowledged the concern about an this programme's exit strategy. Other concerns were the apparent absence of a maintenance programme for government buildings and the discrepancies in the asset register.

MINUTES
Department of Public Works (DPW) Strategic Plan and Budget Review
Mr Manye Moroka, Director-General: DPW, began by looking at the context of its Strategic Plan in complementing the President's State of the Nation Address of 2007, especially the focus on job creation. The DPW has committed itself to employing 5000 youth via the National Youth Service (NYS), whilst also ensuring that labour intensive methodologies be applied in all its building programmes. He also noted that it was important that the Department be viewed as being reliable by all spheres of government.

In reflecting on its mandate, the Department saw itself as:
- The "handy man" of the State
- The leader of the Extended Public Works Programme (EPWP) in efforts of poverty alleviation and job creation
- The regulator of the industries and associated professions falling under its jurisdiction
- The asset manager for and on behalf of the State

Mr Moroka discussed each of these in detail (see document). He spoke at length about the implementation of the National Infrastructure Maintenance Strategy (NIMS) approved by Cabinet in July 2006.

The presentation looked at how the DPW together with the Independent Development Trust (IDT) would enhance the human and institutional capacity of community-based, non-governmental organisations and local government operating in poor and marginalised communities.

In line with the key strategic pillars, the Department would focus on the transformation of the property sector in the forthcoming months to deal with the, amongst other, the deracialisation of this important sector in the country’s economy.

The Department would be assisting provincial and national departments in the implementation of the Government-wide Immovable Asset Management Act (GIAMA). It would continue engagement with Department of Provincial and Local Government and SALGA in bringing local government on board. 
 
He noted that the Department had been successful in turning around its financial management challenges and this trend would continue.

Mr Moroka outlined the key policy developments affecting the budget:
- Introduction of accommodation charges that commenced in 2006/07 financial year
- GIAMA – more systematic planning and prioritisation of accommodation and budgeting process
- Implementation of the National Infrastructure Maintenance Strategy
- The envisaged devolution of the Property Municipal Rates to the provinces had been delayed. This process would be finalised in the 2008/09 financial year.

Asset Register Enhancement Project Progress
Mr Moroka looked at the background of the project, its progress thus far, key focus areas, challenges, as well as a way forward (see document).

Discussion
Mr A Watson (DA, Mpumalanga) referred to the Asset Register presentation and asked why more than six hundred properties had been added after the audit of state-owned properties in Mpumalanga.

The DG replied that the measuring exercise exposed more properties. He assured them that the increased number reflected extra properties and improvements.

Mr M Mzizi (IFP, Gauteng) wanted to know if state owned properties were being maintained. As far as he could determine, the Department was not maintaining its properties. He gave an example of Limpopo, where a representative of the Department who came to the meeting there could not offer any answers to the questions asked. In Kwazulu Natal, the Provincial Department blamed everything on red tape. There was no maintenance of police stations, an example was Thokoza, where he claimed the structure was not going anywhere. He asked what exactly the budget was spent on. He wanted to know if there was a rollover. He referred to the first presentation and wanted to know who was fooling who, as no maintenance sites had been found on their oversight visits. Mr Mzizi wanted to know about the lack of capacity, and why there was always talk of red tape.

The DG replied that there was a problem with the transfer of funds from the government entity requesting property improvements to the DPW. Funds which were supposed to have been transferred in April, were transferred only in November, and this created a setback and the request for rollovers.

Mr Zingisile Ntsaluba (DPW CFO) agreed that the lack of maintenance was a government-wide phenomenon. Government had acknowledged that there was no maintenance programme. The cost implications ran into billions. This was a historical problem where the Department had built structures, but no maintenance plan had existed. Originally National Treasury had not been keen to assist in funding. However, there was an integrated infrastructure strategy to attend to this maintenance problem.

Rev Moatshe (ANC) stated that he was worried about the phrase, "Government’s desire to manage its immovable assets effectively and efficiently necessitates an accurate and comprehensive Asset Register." He was worried because of the word 'desire' in that sentence, meaning that it was not complete. He asked when it would begin. He also mentioned that the phrase "Asset Management depends on accurate and reliable information in an asset register" was not compatible with the previous statement, and that the two phrases seemed to contradict each other. He asked for an explanation.

He also said that he did not understand the meaning of "improvements that were demolished and the information was never updated in the Property Management Information System (PMIS)" and asked for clarity. He asked what had happened to the land where the demolished building was. There was also a question on why " [the] land extent [had been] incorrectly captured as square metres".

Mr Watson asked what "ownerless property" was.

The DG responded that the auditing of properties had been done because the records were not a reflection of what was really out there. An audit had been commissioned. Some of the properties fell under the DPW, but were not recorded in the Deeds Registry as such. The DPW needed to apply to court to have such properties declared ownerless properties so that they could be reassigned to the state and the DPW could begin managing them. He answered Rev Moatshe’s question stating that indeed the land extent had been captured incorrectly.

Mr K Molefe (DPW Director) added that it was better to be transparent, and not try and sugar coat problems. He admitted that there were discrepancies in the audit register, but that the Department was trying to fix them.

The Chairperson commended the Department for being honest. He said that the Committee had been battling to get this kind of information from the Department for years. He also asserted that there had been no direction previously.

The Chairperson said that his only query was how the Department was doing beyond the borders of the country.

The DG replied that properties outside South Africa would be covered.

Mr Ntsaluba noted that the Department of Foreign Affairs (DFA) was responsible for foreign-based properties. Mr Molefe added that there was a standing committee set up between DFA and DPW.

Ms M Oliphant (ANC, Kwazulu-Natal) congratulated the Department, especially on the asset register progress report. She said that the Extended Public Works Programme (EPWP) was a good programme and referred to people who participated in building road infrastructure in order to develop skills. The problem she had was with the payment of these workers. There seemed to be payment inconsistencies amongst the different provinces. She was concerned also that these workers were not being monitored. This was evident when she passed a road that was being worked on, and workers were asleep under trees. Only when vehicles passed, did they get back to work. She asked how the Department planned to deal with this.

She requested information on emerging contractors, who seem to be the previously advantaged, and asked why this was the case. Whilst visiting a school in Boipatong (Gauteng) she found no work had been done, but the contractors had been paid. No one had given any feedback about this case, and she asked if it had been followed up. Her last question was about transfers that were supposed to be made by client departments. DPW was unable to perform because there were no payments. So far these departments have blamed DPW; an example was the lack of progress in the School Building Programme.

Mr Bongani Gxilishe (Deputy Director General, DPW) replied that the role of the municipality was to allocate projects, and that Public Works only monitored these projects. On the matter of EPWP payments, there were a number of issues that affected payment - an example was affordability. People who are employed are paid according to their allocated task, and these rates are discussed. Mr Gxilishe said that the problem at Boipatong would be examined, and it was a problem with management.

An official from the DPW added that black contractors were not developing as fast as the Department would like them to, but there had been some improvement. There were thirty-five thousand contractors at entry level, and there needed to be a programme that involved the entire government in a project to develop contractors.

Mr Watson asked for more information on the EPWP, such as its successes and failures, and if its aim to alleviate poverty and create jobs, was working. He wanted to see what its success rate was. Was there on-the-job training, how many jobs had it created, and was there life after the job came to an end? In which departments was this programme taking place? The Committee needed this information for their oversight visits.

Mr Gxilishe agreed that there was a need for an exit strategy: how do we retain the skills that people had acquired. How do we engage them in the first economy.

Mr Mzizi wanted to know about the transfers of money. In 2005 he had complained about the Katlehong and Heidelburg Courts, and to date the courts had not been finalised.

The DG responded that the DPW was the owner of land, not Land Affairs. He had met with the Chief Operating Officer of the Department of Justice and a strategy was still being worked on to revive the process.

Rev Moatshe stated that it has been thirteen years since democracy, but it was only now that the Select Committee was getting a progress report on the Asset Register. He wanted to know why that is. For him, this signalled a problem, and the Committee must have oversight over this. Those doing audits must have been able to unearth wrongs done by those with necessary authority. He wanted to know if there was some kind of fraud that had taken place. What had been the Department's discoveries?

The Chairperson stated that the EPWP should receive similar status as the asset register, and requested a detailed report about this. He wanted the DG to provide some kind of idea of the district municipalities that are capacitated enough to administer, manage and report on the EPWP. The Chairperson said that there was a serious problem regionally when it came to capacity. An example was the Rustenburg Municipality and the disposal that occurred to some people in the region. He suggested that the Department should come again the following week.

The DG asked the Chairperson to note that the asset register presentation that day was not based on the final asset register as it had still to be completed.

Ms B Dlulane (ANC, Eastern Cape) said that she suspected provinces were not able to identify their assets. She wanted to know the role that the DPW played in updating the asset register. She mentioned the launch of projects where students were given certificates in line with EPWP.

Mr Gxilishe said that the issue of launching projects had been examined. He had been to some of the projects, including Soweto. It might be interesting if some of the members visited these projects. He also commented on the issue of the EPWP exit strategy, which was about working with municipalities. He believed it should be linked with other programmes on a local level.

The Chairperson thanked the DG and his team. He said he hoped the policy conference would have a direct impact on the work that was going to come out of it.

The meeting was adjourned.

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