Free State Provincial Government on its COVID-19 response plan

Cooperative Governance and Traditional Affairs

25 August 2020


Meeting Summary


Video: Portfolio Committee on Cooperative Governance and Traditional Affairs, 25 August 2020

In the virtual meeting, the Free State Provincial Government briefed the Committee on the governance structures and strategies to combat COVID-19 including its economic recovery plan, ensuring sufficient water and sanitation provision as well as its return to school programme.

Members raised concern about non-spending of COVID-19 funding at Free State municipalities, alleged corruption in COVID-19 tenders, gender based violence in the province, high costs for upgrading informal settlements in Harrismith. Members requested a list of COVID-19 tender beneficiaries in the Free State. The focus was to identify who benefitted from these whether small and medium enterprise beneficiaries, politically connected people or those not on the Central Supplier Database (CSD). Members emphasised the crucial importance of adhering to stipulated procurement processes as set by National Treasury.

Members asked about the return to school programme, the missing R200 million in asbestos audit findings, payments owed to some female-led construction companies, criteria used to determine applicants' eligibility to access relief fund, audit outcome for COVID-19 procurement, appointment of social workers, amount of budget reallocation to assist informal settlement, strategy to combat COVID-19 infections in the mining sector, requirements for Free State’s disaster management plan and centre, COVID-19 hotspots approach after reopening the economy, repair costs and progress of vandalised schools.

The Committee also received a report on the status of the four municipalities placed under Section 139 interventions in the Free State. Those municipalities were Mafube, Metsimaholo, Maluti-A-Phofung Local Municipalities and Mangaung Metropolitan Municipality.

Members asked about the status of Masilonyana Local Municipality and Mangaung Metro. There was concern about the Free State Government’s debt owed to Mangaung which was crippling the municipality’s financial sustainability. Members enquired about the role of municipalities in collecting debt. Questions were raised about Mafube Local Municipality’s audit disclaimer for three consecutive years, unlawful auction of farms in the province, illegal eviction of tenants from white-owned farms, aging infrastructure at Mafube and Maluti-A-Phofung Local Municipalities, Mafube pension fund litigation and if the National Council of Provinces was informed of Mangaung Metro being placed under administration in terms of section 139(5) of the Constitution within the seven day time period, the Administrator's authority at Mangaung prior to the terms of reference being approved.

Members expressed concern about the political infighting among ANC members at Free State municipalities which brought many of its municipalities to their knees and severely affecting service delivery for local communities. Members urged the governing party to take immediate interventions to address political infighting and restore stability and service delivery at those municipalities. A member questioned whether a premature withdrawal of the Section 139 intervention at those municipalities would be in the interests of the people. Among the concerns raised were the power struggle between administrator and municipal manager, the lack of administration at Maluti-A-Phofung, crisis at Mangaung Metro, poor financial status of Maluti-A-Phofung and Mafube and their financial recovery plans, and service delivery problems at Masilonyana Local Municipality.

The Committee raised a concern that only the Premier had made himself available to appear before the Committee. Thus far, premiers from the other provinces have not shown up at these oversight meetings. The Chairperson felt some Premiers were avoiding the Committee and agreed that it was a concern.

Meeting report

The Free State delegation informed the Committee that the Premier was not available to attend the meeting.

Mr B Hadebe (ANC) raised a concern that only the Western Cape Premier had made himself available to appear before the Committee. Premiers from the other provinces have not shown up at these oversight meetings.

The Chairperson noted the concern and commended the Western Cape Premier in making himself available to account to the Committee. She felt some Premiers were avoiding the Committee and agreed that it was a concern.

Free State Provincial Government (FSPG) on its COVID-19 response plan
Ms Mamiki Qabathe, Free State MEC for Social Development, appreciated the Committee’s dedication towards its oversight work.

She reminded the Committee to be mindful of the Free State’s borders with Lesotho. It was one of the major challenges the province faced in COVID-19 infections.

Mr Kopung Ralikontsane, FSPG Director-General, briefed the Committee on its COVID-19 response plan. The surge of COVID-19 infections for the Free State came in July. He emphasised the Free State’s established coordinating structures and the deployment of Ministerial champions to District Municipalities to tackle the COVID-19 spread. He provided a structure information chart.

Dr David Motau, Head of Free State Health Department, explained the province’s health approach in combating COVID-19 since its first case was confirmed on 16 March 2020. So far, Free State has had the highest percentage of testing population who are positive. It is targeting workers in identified sectors for testing in order to achieve an optimal outcome.

The mortality surveillance process was introduced in Free State in the early days of COVID-19. That means the province is testing for COVID-19 on all deceased patients to ensure that all COVID-19 cases were captured. It is one of the innovations of the Free State. The Minister of Health recommended this practice to other provinces.

He noted the challenges in implementing health interventions. There is an increase in the infection among health workers and it is taking steps to address that. The health system in the province was overburdened and COVID-19 exacerbated the incapacity.

A detailed overview of the status of quarantine sites was provided. The occupancy rate is low. Factors contributing to the low occupancy rate are that some COVID-19 patients could self-isolate at home, whereas some had to be hospitalised. He noted the stigmatisation of COVID-19 and thus people do not want to be identified as having COVID-19.

Information on infection rates from the Free State Correctional Centres was provided.

The province has established partnerships to provide food parcels as well as made provision for shelters.

The Director General outlined the Free State efforts towards water provision, social distancing, economic recovery initiatives as well as the return to school programme. Free State planned to use Expanded Public Works Programme funds to fund the need for screening at schools. The communication strategy for COVID-19 awareness was outlined.

The Free State would use this COVID-19 opportunity to align its operations with the District Development Model.

Ms H Mkhaliphi (EFF) enquired about the school return programme. She wanted the Free State Department of Health to elaborate on the issue because media shows that some conditions at schools are not good and thus make it difficult for learners to adhere to health protocols.

Ms Mkhaliphi said that a member of the public who had recently lost a family member reported that the Free State Department of Health was treating all deceased bodies as COVID-19 related. The family felt insulted as proper procedures should be followed for COVID-19 deaths. The issue was escalated to a local radio station and a health official had presented a rather clumsy explanation. She asked why the discussion had escalated which was actually an embarrassment for the MEC.

In the absence of the Free State Premier, she wanted the head of the Free State delegation to explain if the inquiry into the R200 million asbestos audit contract has been resolved. The Free State Government needed to resolve this to show constituents that this government is taking fighting corruption seriously.

She enquired about some debts owed to some construction companies owned or led by women in the province. She believed some of the projects done by these companies dated back to 2010. Ten years down the line, the Free State Government still owes some of those companies money.

Referring to August as Women’s Month, Ms Mkhaliphi asked about two criminal cases: case numbers 124/12/2019 and 144/12/2019. In both cases, the victims were females who were raped and murdered. Those two cases still had not been solved and she asked what measures the province has taken to tackle gender-based violence (GBV).

Ms Mkhaliphi requested Free State provide a list of the beneficiaries for providing PPE to provincial government. She asked why some suppliers were not on the Central Supplier Database but had been given tender contracts.

Mr B Luthuli (IFP) noted 424 applicants were declined access to the Department of Sport, Arts and Culture relief fund. He asked the criteria used by Free State determine the merit of the application. He asked if those declined were allowed to appeal and if not, why not. He asked about the financial loss incurred by the repairs to schools in the province.

Ms G Opperman (DA) asked when the audit on COVID-19 procurement would be available to the Committee given the allegations of irregular procurement and corruption in the process.

She wanted the Department of Health to explain the high fatality rate in the Lejweleputswa District Municipality as well as the high infection rate among teachers in that municipality.

She was impressed with Free State’s innovative idea. She asked if Free State had trained its current staff as data capturers. She asked the cost for this initiative, who financed the initiative and if it would go beyond COVID-19.

She asked for the status of the contracts for the Free State’s appointments of social workers. She asked if they were appointed permanently or only for COVID-19 purposes.

Mr K Ceza (EFF) questioned if the expenditure Free State had spent on building shacks was worthwhile as it cost R75 000 to build a shack which brought the total to R50.635 million.

Mr Ceza indicated that the Nketoana Local Municipality CFO was asked to provide information on how much of its budget has been spent to fight COVID-19, but there has been no response from the CFO. He asked Free State to provide information on the service providers, what services were provided and how much was spent on those services.

He remarked that the 147 informal settlements were a cause for concern. How much of the budget from big events was reappropriated to assist those impoverished people to provide access to water and sanitation.

He asked the basis on which the Free State adjudicated the decision to decline 424 artists a relief grant. He asked about the measures in place to ensure that those artists can get jobs and are brought to the forefront of the market.

Mr B Hadebe (ANC) thanked Free State’s impressive attendance at the virtual meeting. It showed that the province takes the accounting role very seriously.

Mr Hadebe commented on the perceived corruption in COVID-19 procurement. According to Instruction Note 8 issued by the National Treasury, it stated that all emergency procurement related to COVID-19 must be reported to the relevant treasury within 30 days and must contain the following information: description of item, supplier’s name, unit price, quantity, total price, savings achieved when compared to the price list in Annexure A. In the event it achieved savings through procurement, it needs to be reflected, otherwise a letter of motivation is required.

In the five months since  lockdown started, had every COVID-19 service/product procured by Free State followed those requirements? Mr Hadebe expressed disbelief that Free State Provincial Treasury would remark that there was nothing wrong with the procurement process when politically connected people have been exposed to have unduly benefitted.

Ms D Direko (ANC) asked about Free State’s strategy to combat COVID-19 in mining areas.

She told Free State that the Committee did not want to hear about surprises with its procurement so she asked it to confirm if the government had complied with the procurement process.

Mr Ceza asked for confirmation that a tender for a Harrismith informal settlement project was provided to the son of the current Free State Premier. He asked if proper processes were followed.

Mr Hadebe requested Free State provide a list of tenders noting who were beneficiaries. He asked if the companies that benefitted are associated with politically connected persons and if proper procedures were followed should that be the case. He emphasised the importance of promoting small and medium businesses in government tenders. He asked for the number of small and medium enterprises that have benefitted from those tenders.

Mr Hadebe asked all MECs present not to attempt to deceive the Committee. He gave the example of the previous meeting he had attended in the morning. The Department of Public Works and Infrastructure had attempted to mislead the SCOPA Committee on the Beitbridge Border Fence Project which was later discovered to be a predetermined contract. Now the outcome is that 14 department officials will face disciplinary proceedings.

The Chairperson pointed to the National COGTA budget allocation to municipalities for purchasing Personal Protective Equipment (PPE) on 6 May 2020. The allocated amount was not spent. She asked the Free State COGTA MEC to account for how this could be remedied.

The Chairperson asked about the required Provincial Disaster Management Plan as provided for in sections 38 and 39 of the Disaster Management Act. These plans are pivotal to the well-being and stability of the province. She wanted assurance from the MECs of Health and COGTA that those plans are in place. Should these plans not in place, she asked when those plans would be developed for implementation in the face of climate change and the increasing number of disasters brought about by climate change. She also asked it to clarify the capacity of its provincial disaster management centre. She remembered from a report that the building housing the Free State Disaster Management Centre was unsuitable. She asked what measures have been taken to relocate the disaster management centre to a suitable building.

The Chairperson raised concern about the continual natural disasters such as drought and their impact on agriculture and those that work in the farming sector. She asked if Free State had a plan in place to assist farmers and affected communities in events such as drought. Will allocating more resources be a strategy to cushion the negative impact be one of them?

The Chairperson asked what the Free State’s COVID-19 hot spot approach was due to the  gradual reopening of the economy at Level 2 Lockdown. She asked if its municipalities had COVID-19 vigilance measures in place and had incorporated them into their Integrated Development Plans (IDP). She wanted Free State to provide more details.

Ms Qabathe, MEC for Social Development, said the scope of the questions were not only confined to the MECs present but they will try respond with as much detail as their knowledge permits.

Ms Qabathe explained that the SASSA social relief grant is a national programme which is operated by SASSA on behalf of the National Department of Social Development (DSD). Free State was not involved in the Covid-19 relief grant process. The presentation included the SASSA statistics for Free State as the province got a report from SASSA. On why 35% of applicants were rejected, she explained that DSD had issued a statement which explained the requirements for verification of applicants. Those rejected were due to applicants being recipients of other grants or applicants did not provide their full information. There are a variety of reasons that could cause rejection. In the same statement, DSD also assured people that the high rejection rate is a concern and it will verify further if  there are applicants that should be getting the grant.

Ms Qabathe appreciated Mr Hadebe’s remark about corruption allegations in the public domain. She clarified that all procurement items, with the exception of the Free State Departments of Basic Education and Health, were procured directly from National Treasury's CSD which ensures that processes are fair and transparent. Free State companies are now participating and benefitting from the procurement process as the numbers  of Free State companies increased. The report from National Treasury shows that the number of women owned companies has also increased. Free State is very clear on its position that the province wants no corruption in the procurement process. So whatever procurement is flagged, Free State will need to account for that.

The Chairperson remarked that the Premier is the chairperson of the Free State Provincial Command Council (PCC) and all the MECs meet regularly to receive briefings. The Free State  delegation should be accounting and replying to the questions even though some departments were not present.

Ms Qabathe responded that the Chairperson’s comment was duly noted. She replied to the question about newly appointed social workers. 92 social workers were appointed in the province and the initial budget for these appointments was intended for three months only. Free State realised that COVID-19 would stretch beyond the three-month period and decided to appropriate Free State’s own revenue from other line functions to extend these social workers’ contracts to a year. Free State is also reviewing its budget and negotiating with National Treasury to explore the option of getting them to work on full time basis. Also the Free State is planning to open a rehabilitation centre very soon in Botshabelo and encourages them to apply to work there.

Mr Ralikontsane, FSPG Director General, replied to a question about recently dismissed teachers. The school governing board appointed those teachers and now the SGB cannot afford to pay them which caused them to lose their jobs. Further information would be provided by Mr Sam Mokgobo, Chief Director of Education.

On the asbestos audit, the Director General confirmed that the case was being investigated at the Zondo Commission and by the Public Protector. Free State is currently implementing Public Protector’s recommendations which included that the individuals involved be suspended. The Premier is looking into the disciplinary hearing. The Free State is also reviewing its internal processes. The DG assured the Committee that Free State has also appointed a firm to evaluate value for money in accordance with the Public Protector’s recommendations. The matter has been extensively addressed in addition to the involvement of the police and the Hawks.

The Director General assured the Committee that all PPE procured by Free State had had the supplier background thoroughly checked. The Provincial Treasury presented a report to the executive and PCC to explain those procurement processes. All mandatory requirements such as being on the Central Supplier Database, local content, all samples tested by health professionals have been adhered to. If a supplier gives a price which is slightly higher, the province has made provision for price negotiation with the ceiling price being National Treasury’s determined prices. All other documents such as tax compliance certificate and seven-day submission requirement have been adhered to.

The Director General explained that the reason some Free State companies were given tender contracts despite those companies usual field of operation was in non-health related products was because COVID-19 presented a business opportunity for quite a number of companies to diversify their existing business fields. Those companies have all been requested to register on the Central Supplier Database by the executive council. He informed the Committee that 82-85% companies are Free State based companies and the Executive was fine with the process. The Free State government did not compromise health standards and it was also the first province to suggest submitting a service provider information report to National Treasury for transparency purposes.

The Director General said that the FSPG works very closely with creative artists and athletes to give them opportunities during normal times. And it is also doing its best to assist during this COVID-19 pandemic. Some artists were disqualified from the relief support of the Department of Sport, Arts and Culture because they were not at all known to be in that space before COVID-19. Others have benefited from the national relief fund which might have resulted in them being declined for the artist and athlete grant. He asked if the Committee could provide a breakdown of those disqualified people so that the government could verify those information.  He further encouraged artists to harness technology and to make the best out of everything under this pandemic.

The Director General confirmed that 78 schools were vandalised and repair work to 48 schools had been completed. Criminals broke in to access school nutrition items, computers and gadgets.

They were aware of the condition of the building housing the provincial disaster management centre and are looking to relocate to a suitable building.

Ms MontsengTsiu, Free State MEC for Health, replied to Ms Mkhaliphi that she was not aware of this case because she was not the one that spoke on radio. The Health Department spokesperson had the interview with the local radio station. She has asked her personal assistant to find out more information and the spokesperson had replied he would provide a report to the Committee.

Ms Tsiu explained that Free State is using technology in hotspot areas. The provincial health department is working with mining houses to trace contacts. All mine workers were subject to a 14-day quarantine period before returning to work.

Dr Motau, Free State Health HOD, replied to the question on the poor performance in adhering to COVID-19 protocols when dealing with a deceased person’s body. Its protocols are aligned to National Institute for Communicable Diseases (NICD) and National Department of Health with the guidelines. These were used as to train health workers. The Free State was also one of the first provinces that initiated training undertakers to handle the bodies of COVID-19 deceased patients. The incident Ms Mkhaliphi described was regrettable.

On the high COVID-19 fatality rate at Lejweleputswa District Municipality, the provincial health department had done all in its power to avoid such things from happening. Before miners returned, the Free State Health department had meetings with mining houses in the Lejweleputswa and Xhariep District Municipalities to get a sense of the situation and it devised plans accordingly. However, as more miners were phased in, miners from other provinces sheltered at Lejweleputswa District Municipality which contributed to the spike in COVID-19 infections. However, as mining houses could not identify the origin of those mine workers from other provinces, all these cases had been counted under this municipality.

He highlighted that the stigma surrounding COVID-19 also resulted in increased infections. Most patients do not go to hospital and die at home due to stigma related to COVID-19. The province has delegated a team working with a World Health Organisation team to assist in admitting patients. As most patients are asymptomatic, the principle is to admit to hospital everyone who has tested positive.

The World Health Organisation has been very generous and appointed data capturers for free on a contractual basis. The Department in its own capacity is also appointing data capturers to monitor the programme.

Dr Motau spoke about Free State’s approach to dealing with COVID-19, saying that the province uses a district based model to report data jointly to the province. The Health Department has a war room that is ready 24/7 and has its own statistical modelling.

Ms Motshidisi Koloi, Free State MEC for Public Works and Human Settlements, replied that the measures taken in the informal settlements in Harrismith was to ensure social distancing.

Mr Tshepo Tsuaeli, Head of Department: Free State Public Works and Human Settlements, explained that the department only began to relocate people in the area due to the overflow of informal settlements which made it very difficult for emergency services to reach people. He clarified that the correct amount the Department paid per unit was R 22 380 not R75 000 as claimed.

He denied that the Free State department is doing business with the son of the current Premier.

In response to Ms Mkhaliphi’s question on the outstanding payment the department owed, he explained that the department only pays when there is practical completion of the project. In the case which she asked about, the retention amount was withheld and not paid to the contractor because the work had not been completed.

On the asbestos audit, Ms Koloi explained that it is still an ongoing process but the department has already implemented the remedial action and suspended the supplier chain director. He assured the Committee that the department is cooperating with law enforcement agencies such as SIU and the Hawks and responds to every single request of theirs.

Mr Thembeni Nxangisa, as Acting Free State MEC for Education, said that so far R12 million has been spent for the repair of those schools that had been vandalised.

During COVID-19 lockdown most municipalities were not able to generate revenue. The unspent budget was used by municipalities to pay their employees.

On the Integrated Development Plan (IDP), the Department’s approach has been to focus on core functions of municipalities and to create a habitable environment during COVID-19.

The decontamination programme was undertaken in all areas in municipalities.

Mr Sam Mokgobo, Chief Director: Free State Department of Education, assured the Committee that schools are all stabilised and disruptions were brought under control. The teaching and learning at schools is going well. The school governing body had to lay off some employees because of non-payment of school fees by parents, but the Education Department had provided additional support where it could. He said that any corruption allegations brought forward by teachers would be investigated by the department to see if there is sufficient evidence to demonstrate the allegation.

Mr Mokgobo said that the vandalism repair work had cost the Education Department R12 million. He asked the Committee to be mindful of the context under which vandalism took place. It was when the country was under strict lockdown. School infrastructure was damaged and the Department was attending to these matters. So far 48 school repairs have been completed. The Education Department is working towards the completion of all the outstanding schools.

Mr Mokete Duma, Acting HOD: Free State COGTA, replied that during the lockdown, most municipalities did not have sustainable income. The unused expenditure was used to augment payment of salaries for municipal employees. However, this amount would be reimbursed by municipalities since they start having revenue from 7 July. A detailed payment report would be sent to the Committee by 28 August.

The Chairperson added that this report needed to be sent to national COGTA as well.

Mr Duma confirmed that the Free State does have a provincial-specific disaster management plan. The building housing the disaster management centre has been identified and the programme is ready to be implemented. The report could be provided in due course.

Dr Motau confirmed there is a health plan for epidemics. He added that the Free State Health Department is working with Free State COGTA to ensure a synchronised effort in dealing with disasters.

The Chairperson remarked that section 38 of the Disaster Management Act required provinces to have such a health plan in place. She was not pleased with the response that the province is still working on the plan and that the plan is not in existence.

Dr Motau clarified that there is a disaster health plan for epidemics. However, as COGTA is the custodian of disaster management, the Free State Health Department is working with COGTA to improvement its framework.

Mr Ceza was dissatisfied with the response and wanted a more detailed breakdown of those artists and athletes that were declined the relief grant. He asked what measures Free State has in place to promote upcoming and new artists over those who are already established.

Mr Ceza asked for the criteria the department used to relocate households. He asked the government to be mindful of how people live under normal circumstances such access to activities and  livelihoods. He believed that these factors should be considered.

Ms Mkhaliphi requested Free State provide the Committee with a list of artists and athletes who have benefitted from the relief fund.

Ms Mkhaliphi did not think that Dr Motau provided a useful response about the family's concern about the handling of a family member's death. They complained about having being insulted by an MEC. She urged the Health MEC rather to speak to the affected family directly rather than questioning the validity of the information. They could have very well mistaken an official for the MEC. There is no clear explanation from Free State to confirm if the post-mortem report had ascribed the death to COVID-19. Secondly, the body was not covered in the material stipulated as per COVID-19 regulations. Either way, she believed it is a concern because the Free State Health Department failed to adhere to COVID-19 regulations.

Ms Mkhaliphi was not satisfied with the response about the 15 teachers fired at a primary school in the province. She did not believe that it could be business as usual when 15 teachers had lost their job during a pandemic. She requested the provincial education department to provide a full report.

She had just been asked via Twitter to ask the Director General to look into the lack of electricity  in Rheederpark. The company appointed to connect electricity in the area pulled out in 2019 leaving the community in the dark. She asked the Director General to give an explanation. 

She criticised the lack of direction from the Free State Social Development Department. On the R350 social relief grant, she believed that there is a bigger problem with the system. She had heard anecdotes about people being rejected for the R350 grant who had not been on UIF or any type of social assistance since 2016. There was no clear answer from the SASSA CEO when she had personally tried to seek clarity. All she got was that people must keep applying until the system accepts them.

Mr Luthuli was not satisfied with the response provided by Free State on the relief fund. Free State’s response that only SASSA would know the details was insufficient.

The Chairperson agreed with Mr Luthuli. The R350 social relief grant provided to people during this COVID-19 pandemic is a measure to bring dignity to South Africans. She raised concern on the operations for giving the R350. People had to wait in long queues outside of post offices to receive it. Given the pandemic and the weather, she asked if Free State had explored alternative mechanisms for people to get the money.

The Chairperson asked about provincial expenditure for renting quarantine sites. The cost for renting those private lodges and guesthouses must be really high, but there was no value for money because no one was occupying those venues. She asked for comment.

Referring to slide 25, the Chairperson expressed confusion at Free State ascribing inter-provincial travel as one of the challenges it experienced in the implementation of COVID-19 interventions. Restriction on inter-provincial travel was only lifted recently.

Mr Ralikontsane, FSPG Director General, confirmed that further investigations would be carried out to get to the bottom of the vandalism at schools in the province. The priority for the education department was to promote learning and teaching and restore order at schools.

The Director General said that Free State would submit a report on the criteria the government used to adjudicate the relief grant for artists, athletes and others that fall under this category.

The Director General replied that many quarantine sites identified at first were government building  and many COVID-19 patients felt uncomfortable to stay there. Free State subsequently had to upgrade the accommodation using private guesthouses and lodges to ensure sufficient quarantine beds as well as good quality quarantine conditions. Free State had spent about R 5.6 million to procure these. He clarified that a number of places used as quarantine sites are owned by government. The ultimate purpose was to keep people, especially health workers, as comfortable as possible during quarantine. The provincial department had anticipated a higher infection rate in the beginning because of the population from Lesotho. Free State had provided shelters for Lesotho nationals until the Lesotho Government agreed to repatriate its citizens. However, by that time, the government had already paid a large amount of money for sheltering and feeding those Lesotho nationals.

The Director General explained that even during hard lockdown, COVID-19 infections caused by inter-provincial travel was a cause for local transmission in the Free State. Transmission occurred due to funeral activities as well as in correctional service centres.

The electricity issue for Rheederpark in Welkom will be investigated. He would send the information on the contractor and the contract details to the Committee.

Mr Tsuaeli replied to the questions on the method used when relocating housing beneficiaries. He explained that Free State municipalities had presented plans for  relocated households to the National Department of Human Settlements. The National Department verified those households against the National Housing Deeds Registry, then municipalities were sent the beneficiaries list which the provincial department used to relocate beneficiaries. There was also social facilitation done by the municipalities with beneficiaries. The Provincial Department also has records of all signed confirmation letters by those beneficiaries.

Mr Duma, Free State COGTA HOD, replied about Matjhabeng Local Municipality. The FSPG discovered issues arising from a R250m deviation. Through Free State’s Section 106 intervention strategy, one of the issues was the way above norm quantities in the construction work. Free State appointed a team of engineers and a service provider to verify and investigate all construction authorised through that deviation. Hence, some projects were delayed in Matjhabeng due to the ongoing investigations. Free State was of the view that the investigations needed to be concluded and the correct quantities determined before further projects can take place at this municipality. 

Free State is in the process of verifying allegations levelled against Dihlabeng Local Municipality, These allegations were neither confirmed nor denied by the municipality.

Status of Section 139 municipalities
Mr Mokete Duma, Free State COGTA HOD, said that four municipalities have been placed under administration in terms of section 139 of the Constitution. Those municipalities were Mafube, Metsimaholo, Maluti-A-Phofung Local Municipalities and Mangaung Metropolitan Municipality. The rationale for placing these municipalities under administration was explained. A progress report for each of the municipality was presented. The overall view was that the government’s interventions have improved service delivery at those municipalities.

The Chairperson asked if Masilonyana Local Municipality was still under administration but Mr Duma stated that there was no administrator at that municipality.

The Chairperson remarked that Masilonyana Local Municipality had received a national government intervention from 2010 to 2011 and it was again placed under administration in 2017. The ultimate purpose of placing a local municipality under intervention was to help the municipality function as normal and to perform better in future.

The Chairperson asked if Mangaung Metro was placed under administration in terms of section 139(5) of the Constitution.

Mr Duma confirmed that the municipality was placed under a section 139(5) intervention involving a financial recovery plan.

Mr Ceza said his questions on Dihlabeng Local Municipality were explained sufficiently in the presentation. He raised concern about the debt owed to municipalities by governmental departments and businesses which amounted to a staggering R626 million. He asked about the roles that FSPG is mandated to play in helping municipalities recoup these debts. Mafube Local Municipality had received a disclaimer audit for three consecutive years.  Mr Ceza asked if action was taken against those who failed to submit financial reports.

Mr Ceza asked if Free State is aware of the following concerns:
- A confrontation where farmers unlawfully auctioned farms without knowledge of the beneficiaries;
- Fraud and corruption involving RDP houses in Vogelfontein, case number 284/07/2020;
- The illegal eviction of farm occupiers by private white farmers.

Mr Ceza said that the Auditor-General ascribed the power struggle between Mafube administrator and municipal manager as a cause for concern. What conflict resolution measures have been put in place to deal with the situation in Mafube Local Municipality.

Mr Ceza asked to be provided with the series of events in a chronological order for the intervention at Mangaung Metro. He wanted Free State to explain the effectiveness of the interventions.

Mr Ceza was of the impression that Maluti-A-Phofung Local Municipality was in crisis and urged proper interventions be put in place to ensure service delivery to the people.

Ms Mkhaliphi noted that Mangaung Metro was experiencing serious poor administration, corruption, a revenue collection and cash flow crisis and was subsequently placed under administration in 2019. Just last week, the executive mayor was removed from office. She described the chaos in the municipality as political instability and questioned the effectiveness of interventions. She disagreed with the presentation which stated that the situation was improving because she herself was on the ground witnessing the chaotic situation. In her opinion, there is a need to distinguish between political stability and service delivery stability. She believed that political infighting in the municipality destabilised its proper functioning. She asked whether or not the interventions had been effective.

She commented on the aging infrastructure in Mafube and Maluti-A-Phofung Local Municipalities and requested concrete time frames for improving aging infrastructure such as water meters.

She wanted clarity on the pension fund litigation brought against Mafube Local Municipality. Judging by the information in the public domain, the matter sounded very serious as the South African Revenue Service (SARS) was involved meaning workers at the municipality were in crisis.

She welcomed the report that the Hawks were involved in the investigation at Metsimaholo Local Municipality. However, she emphasised that the real problem is the infighting within the ANC and SACP that had caused municipal instability. She wanted the MECs to explain how those challenges would be addressed politically.

Ms Direko recalled a meeting last year where she was present and a serious tension broke out between the Municipal Managers and Administrators at Mafube Local Municipality and Masilonyana Local Municipality. She asked if the situation had been resolved. If not, she wanted to be provided with an update.

Mafube Local Municipality’s financial status is worrying and it shows budget cuts and low revenue collection. She asked what the administrator had done to help the municipality with that. A similar troubling financial status was observed at Maluti-A-Phofung Municipality. Ms Direko asked if a financial recovery plan has been devised. It is apparent that Maluti-A-Phofung Municipality was in deep crisis and faced major challenges. She noted the differing briefings on the status of the municipality. The MEC’s presentation stated the situation was improving while the Office of the Auditor-General had stated the opposite. Thus she asked if a premature withdrawal of the section 139(5) intervention would be in the interest of the municipality.

Ms Direko noted that Masilonyana Local Municipality had service delivery challenges but now it is no longer under national government’s administration. She asked if the concerns raised during previous meetings such as the shortage of water had been resolved.

The Chairperson asked if the NCOP was informed of Mangaung Metro being placed under administration within the seven-day time period. The municipality was placed under administration on 19 December 2019. She asked for the details of the NCOP’s response to that.

The Chairperson noted that the administrator for Mangaung Metro took office on 27 January 2020. Terms of reference were approved on 16 March 2020 which were then submitted to the municipality on 13 May 2020. The Administrator took office before the terms were approved. The Chairperson thus asked what authority the administrator had prior to the terms being approved.

The Chairperson commented on the financial recovery plan at the municipality. She noted that Mangaung Metro was owed over R630 million by FSPG in the past two financial years. Among the debt, was a R121.5 million debt for schools. She had the impression that the FSPG actually contributed to the financial instability of the municipality. She wanted the MEC to explain that.

MEC for Cooperative Governance, Traditional Affairs and Human Settlements, Mr Thembeni Nxangisa, confirmed that there was a bad working relationship between the Municipal Manager and the Administrator at the Mafube Local Municipality. Neither the Municipal Manager nor the Administratorwas part of the municipality anymore. A new cohort of task team members were appointed and the situation at the municipality was beginning to see light end of the tunnel. The municipality had just recently presented a comprehensive financial recovery plan. The municipality is also reporting to him monthly on the daily running of the municipality.

The political infighting at Mangaung Metro was duly noted by Free State. Although the infighting caused the removal of the mayor from office, it is the municipal council that must elect a new mayor. In the absence of an executive mayor, the deputy mayor must stand in as provided by the Constitution.

On the effectiveness of the intervention at Mangaung Metro, the presentation covered the municipality’s financial recovery plan. In addition, Mangaung is one of the non-delegated municipalities that directly accounts to National Treasury. The latest news received from the municipality was that it was able to pay debts, paid ABSA as well as debts owed to the Development Bank of Southern Africa. The municipality is no longer dependant on the equitable share to be financially sustainable. Fitch Rating Agency also gave the municipality a thumbs up.  Mr Nxangisa was optimistic that the municipality was moving in the right direction.

There was also political instability at Metsimaholo Local Municipality. The municipality had for a period of three years not appointed a municipal manager in terms of section 56 of the Constitution. In Free State’s view, the council was not functioning and it thus intervened to ensure service delivery on the ground. Since then, order has been restored and all political parties were unified in the interest of the local community. Although he was a proud ANC member, the intervention taken to address the municipality challenge was done in the capacity of the government. The rationale for the decision was the view of government and did not represent the view of any political party.

On the water shortage at Masilonyana Local Municipality, Mr Nxangisa acknowledged that water challenges affect the majority of municipalities in the province as the province often experiences drought. The Department of Water and Sanitation is attending to the water shortage at the municipality.

The MEC remarked that Maluti-A-Phofung Municipality is a very challenging municipality, but he assured the Committee that there is a functioning municipality despite those challenges. Those deep challenges that have  been identified are being attended to. Mr Nxangisa said that Free State has in place measures to deal with post-administration after the withdrawal of section 139 intervention. Free State will have a team invoking section 145 to support the municipality in the initial six months after the withdrawal.

On the salary payment of the Municipal Manager and CFO, the MEC replied that Mr Duma, Free State COGTA HOD, had instructed them to reverse the decision with immediate effect because it was wrong.

The MEC elaborated on the Department Provincial Strategic Plan (PSP) model which aims to attend to aging infrastructure. It is a programme that involved the Development Bank of Southern Africa, National Treasury, Free State Provincial Treasury, COGTA as well as Eskom. It is a coordinated process between governmental departments and the private sector. It is a huge investment in the municipality which could see a huge improvement in the municipal infrastructure. Service delivery is Free State’s key priority.

The MEC replied that he believed that Maluti-A-Phofung municipality is ready to function on its own despite challenges. FSPG is providing continual assistance and attention. These efforts have yielded promising outcomes.

Mr Duma replied that the aging infrastructure at Mafube Local Municipality has been improved. After the municipality was placed under administration, the project for water and sanitation was now 26% completed with R50 million budgeted for this project. An additional R10 million was allocated for the refurbishment of the waste water treatment plan. Through these projects, it is evident that progress has been made at this municipality.

Mr Duma replied that the report on the Municipal Manager and Chief Finance Officer salary payment had been sent to the Committee earlier.

Speaking about Free State’s interventions to combat corruption, Mr Duma said that the Hawks were looking at various municipalities in the province. The FSPG would cooperate with the Hawks' investigation. The basic principle adopted in the province is that a person is innocent until proven guilty. However, Mr Duma said that provincial government is advising municipalities on what steps to take for municipal managers facing criminal charges.

Mr Duma explained that the withdrawal of section 139 intervention at Mafube Local Municipality was partly caused by the tension between the administrator and municipal manager and the latter resigned. As for now, a new task team had been formed and immediate favourable outcomes have been achieved. The main challenge is the municipality’s revenue collection and the electricity supply agreement between rural tenants and the municipality.

On illegal evictions, Mr Duma explained that Free State COGTA, through its own Local Economic Development (LED) unit, had arranged workshops for municipalities to brief them about the Extension of Security of Tenure Act. The purpose of the workshop was to assist municipalities to determine its compliance with that Act. Further information could be obtained from the Department of Rural Development and Land Reform as well as the Department of Agriculture.

Mr Duma noted that the Department of Human Settlements would be better informed to advise on the Vogelfontein issue.

Mr Duma assured the Committee that FSPG informed the NCOP about Mangaung Metro within the seven-day requirement. At some stage, the Select Committee had visited the province to evaluate Free State’s decision on the municipality. The province did provide evidence that complies with the legislation. The decision was made at the executive council in December 2019 when Parliament was on recess, but Free State did inform the NCOP and there was an email confirmation to prove that the report had been sent and the email had been read.

Mr Duma replied to the question about the delay. The Administrator took office on 27 January and the terms of reference were approved on 16 March. As the challenges at Mangaung Metro were financial related, FSPG had to consult with both National Treasury and COGTA. The consultation with COGTA delayed the process.

Mr Duma recognised that FSPG indeed had contributed to the financial struggle of local municipalities. But since then a comprehensive payment plan was concluded for government departments to pay municipalities, so there has been improvements. On the other side, there was also debt owed by municipalities to provincial government. The Executive took the decision that the municipal debts owed to the provincial government needed to be balanced against the provincial debt. Moody's rating agency, Development Bank of Southern Africa, Standard Bank have all been assisting Free State municipalities to ensure their financial sustainability.

The Chairperson pressed on the legal standing of the administrator before the terms of reference were approved.

Mr Duma explained that there may not have been legal standing for the administrator during that time period but the MEC had engaged council which was informed of everything that was happening. From the time the administrator took office at Mangaung Metro until the time the terms of reference were submitted, the administrator had been busy with the diagnostic report trying to determine the issues that affected the municipality.

Mr Ceza said that the MECs still needed to explain how the province could assist municipalities to collect revenue, especially recouping debt from big businesses and government departments.

Mr Nxangisa replied that Free State had used a campaign to raise awareness and urging people to pay debt when it is due. Free State had created various online channels for people to be able to pay their rates and utilities online in the move to the fourth industrial revolution.

Mr Ceza interjected and said that he had asked how Free State assisted recouping debt owed by big businesses and government departments, not residents.

Mr Nxangisa replied that Mr Duma had explained extensively how the payment plan had been entered into between government and municipalities. So there is a formalised mechanism in place. On debt collection, he assured the Committee that municipalities had concrete plans such as incentive plans to collect debt. He highlighted that some communities had the ability to pay but chose not to pay. It is crucial that every sector of society pays where it is due. Overall, Free State COGTA had a comprehensive strategy to assist municipalities in debt collection and that strategy is not targeting only certain populations.

The Chairperson made her closing remarks and stressed the importance of keeping municipalities functional. She pointed out that the executive mayor of Maluti-A-Phofung municipality should be invited to the meeting so the Committee and the municipality could work together to figure out a solution.

MEC Nxangisa thanked the Committee for their inputs and sharp observations. He would ask the mayor to attend the next meeting.

Mr Ceza asked the MECs to explain in writing about serious allegations that an ANC local councillor owned vending stations that sell electricity at Maluti-A-Phofung municipality. Secondly, there was an allegation about the Maluti-A-Phofung Speaker who had been receiving 10% kickbacks from all water truck tender contracts. He requested confirmation on the matter. He asked about a third case involving a R20 million water contract. He pointed to the power cut due to the Maluti-A-Phofung municipality R5.3 billion debt owed to Eskom. This proved the point that the municipality was not operational. He also requested more information on Maluti-A-Phofung municipality's ongoing tension with King Letsitsa III.

The meeting was adjourned.