ATC100915: Report Oversight Visit to the Province of KwaZulu-Natal

Standing Committee on Appropriations

Report of the Standing Committee on Appropriations on its Oversight Visit to the Province of KwaZulu-Natal, dated 15 September 2010


The Standing Committee on Appropriations, having undertaken an oversight visit to the Province of KwaZulu-Natal on the 19-23 July 2010, reports as follows:


1. Introduction


In the 2009/10 Division of Revenue Act (DORA), the Expanded Public Works Incentive Grant to provinces and municipalities was introduced with the aim of creating labour-intensive employment opportunities and skills development in line with the Expanded Public Works Programme (EPWP) guidelines. In its observations during public hearings, the Standing Committee on Appropriations noted that the Province of KwaZulu-Natal (KZN) had been identified as leading province in implementing this programme. Notably, the EPWP in KZN is located under the Department of Transport and not under the Department of Public Works, as is the case in other provinces. Appropriate spending on the EPWP incentive grant, both by provinces and municipalities, is a matter that the Committee considers crucial. This view emanates from the fact that the creation of employment opportunities is one of the key priorities of the current government. Moreover, the President of the Republic of South Africa, Mr J G Zuma, has pronounced himself strongly on the need to maximize the benefit of the EPWP incentive grant to create employment opportunities -thereby significantly reducing poverty.   The Province of KwaZulu-Natal has demonstrated commendable spending patterns in respect of the EPWP Incentive Grant. 


Against this background, the Committee undertook a visit to the Province of KwaZulu-Natal in order to identify best practices that could be used to guide other provinces in this regard. During this oversight, the Committee visited various sites that were suggested by the Province of KwaZulu-Natal to obtain first-hand information on the implementation of the grant as well as to interact with beneficiaries at these sites.


Various sector departments were invited to be part of this visit. These included: eight provincial departments of Public Works, the National Department of Public Works, provincial departments of Transport and Public Works in KZN as well as the National Treasury.


2. Provincial Department of Transport of KwaZulu-Natal


The Provincial Department of Transport of KwaZulu-Natal (DoT) reported that one of the measures it used to drive spending on the grant was that it ensured that all contractors it dealt with for its projects made use of labour-intensive methods. It added that its agreements with the respective contractors took this into account. The labour-intensity element in its projects was thus enforced. The DoT reported that the focus of its efforts in implementing the programme was on Programme 2: Development and Maintenance of Road Infrastructure. Approximately 40 000 full-time equivalents (FTEs) jobs were created by the DoT.


The DoT had various institutional arrangements in place to ensure a smooth running of the programme. These included: the Provincial Steering Committee (PSC) which is convened by the DOT on a quarterly basis; a sector coordinating committee convened by sector departments; and a monitoring and evaluating provincial structure convened by the DOT.


The Provincial Steering Committee (PSC) was a platform for sharing and raising issues regarding the implementation of the EPWP. All sector departments were represented in this body by senior managers who had decision-making powers. It was reported that the non-state sector had recently joined the PSC as a stakeholder that implemented that the EPWP within Non-Governmental Organisations (NGOs) and Non-Profit Organisations (NPOs).   


As the coordinating department, the DoT established a monitoring and evaluation structure. Its role was that of consolidating and verifying reports from the various sector departments and then submitting them to the National Department of Public Works (NDPW). The exercise was noted to be time-consuming but necessary for the DoT to verify figures and identify errors. The Committee was informed that the structure met at the start of every quarter. 


The DoT provided support to public bodies in the following manner:

  • Web-based system training for all sectors;
  • Deployment of data capturers where there were capacity constraints;
  • Workshops on new developments within the EPWP; and
  • Guidance on procedure and requirements to participate in the EPWP.


The following challenges were reported in relation to the implementation of the programme:

  • Enforcing accountability across reporting public bodies;
  • Budget cuts which affected the implementation (and scaling up) of the EPWP; and
  • Technical challenges relating to the web-based system reporting tool.


A further challenge reported by the DoT was that once it submitted its quarterly reports, the province had to wait to be informed about how much it would get on the EPWP and further wait for the actual transfers. This, in turn, delayed the implementation (and spending) on projects.


3. Zibambele Project


The Zibambele Project was a labour-intensive road maintenance programme which was initiated by the DoT. A total of 40 000 contractors had been provided with employment opportunities as at July 2010. The programme started before the inception of the EPWP Phase 1. It was reported that beneficiaries on the programme earned R470 per month. Some participants had been part of the programme for longer than two years. Despite the fact that there had been replacements since the inception of the programme, it was reported that there was no clearly defined exit strategy and some participants had stayed on the programme for longer than two years. The DoT explained that, since the Zibambele programme had been in existence prior to the inception of the EPWP, its beneficiaries did not have to exit the programme after 24 months as was the case with the EPWP. There was also no age restriction for participants.


Participants received training at the point of entry into the programme. This training included instruction on safety-related issues. The DoT reported that participants were given protective clothing such as boots and gloves, and tools such as shovels, hacksaws, and so forth. The Zibambele Project was targeting women deliberately, but with the changes in the social fibre, men were being incorporated into the programme as well.


The Committee was concerned that generally, across most provinces, EPWP budgets were shrinking. If the budgets were not growing, this would reduce the number of decent work opportunities that were created through the EPWP. Questions were raised as to whether there were any efforts by the National Treasury to assist the under-performing provinces in this regard, with a view to ensuring that EPWP’s budgets grew.


Furthermore, the Committee was interested in the expenditure of what had already been allocated to the provinces. It noted that, before questions could be raised about the shrinking budgets, due regard needed to be given to existing expenditure patterns by the provinces and whether they warranted increased budgets.  


It was reported that the Ethekwini Municipality spent approximately R100 million on the EPWP while low-capacity municipalities were spending far less. A question was raised on how different municipalities were dealt with and whether there was a one-size-fits-all approach in terms of expected expenditure outcomes. Attention needed to be paid to the Msunduzi Municipality which was the seat of provincial government. The Committee was concerned about the use of the term “voluntary” in referring to the programme. In its view, this meant that municipalities could use their discretion and participate in EPWP activities only if they wanted to. It was the Committee’s considered view that all municipalities should be participating in rolling out the EPWP.


The Committee noted that, in the past, the Division of Revenue Act (DORA) had a clause that compelled departments to spend, at least, 4 per cent of their allocations for capacity building. This clause had since been removed.  The grants aimed at building capacity were not being adequately utilised by the departments, e.g. Financial Management Grant. The consequence of this was that there were capacity constraints across departments and provinces. Inevitably, this has affected service delivery. Furthermore, the Committee was of the view that if it was left to the respective provinces to decide on whether infrastructure projects should be machine or labour intensive, the EPWP would not achieve its objectives.  Labour-intensive projects were not necessarily sub-standard.  


Although the Province of KwaZulu-Natal was doing outstanding work in implementing the EPWP, the Committee noted that a lot more still needed to be done. For example, there was a need to ensure improved coordination between the Departments of Transport and the Public Works.


The Committee was concerned that the Provincial Department of Public Works had a 1 per cent achievement in placing disabled persons in work opportunities. In its view, disabled people also needed employment opportunities. Appropriate and creative means needed to be applied to accommodate them.


It was the view of the Committee that there was a lack of co-ordination and consistency in implementing the EPWP among the different provinces. However, other provinces could learn from the practice observed in the province ofKwaZulu-Natal.  The Committee added that the success of the programme depended on proper monitoring and evaluating of projects.


It was reported that seven days after the creation of FTEs, the provinces had to submit reports to the NDPW. This information had to be verified before any money could be disbursed. The National Treasury reported that the NDPW had funding to capacitate itself to implement the EPWP effectively.


It was reported that, for rural municipalities, the bar has been set lower and therefore expected expenditure outcomes were at the same level. The data on the performance of municipalities in this respect could be made available by the National Treasury.


One of the concerns was that the budget was not fixed. While the department could qualify for a given amount, it could be that the actual transfer of the money occurs outside of the financial year in question. This made budgeting difficult. The Committee noted that predictability needed to be worked into the processes of the incentive grant.


The cost-cutting measures in the province were not from the National Treasury but from the Provincial Treasury. The Treasury had identified areas where expenses needed to be reduced not only within the public works but in other areas as well. This was in October 2009 and ended on 31 March 2010. It was reported that the instruction was no longer in place.  Projects that were supposed to proceed to construction were put on hold and resumed in April 2010. EPWP targets were affected by these developments.


The National Treasury and the Committee had a responsibility to ensure that appropriated funds were used effectively, efficiently and economically. The recession was not an event but an occurrence that the country will have to deal with over time. To this end, the Minister of Finance had requested that all departments should indicate their areas of savings. It could therefore not be correct that the essence of the information carried in the Provincial Treasury circular had changed the need to be prudent in dealing with finances. 


The Chairperson thanked the Head of the Department of Transport, Mr initial Hlabisa, for the presentation made to the Committee and its guests. It was noted that the Province of KwaZulu-Natal was performing outstandingly in respect of the EPWP incentive grant. It had been the view of the Committee that other provinces would take the matter seriously and thus prioritise this engagement. It was noted the presentation by the Department would be utilised to guide other provinces.


The Committee visited the following projects as part of the oversight visit:

  • P100 in Ndwedwe Municipality (DoT project),
  • Zibambele road maintenance programme (DoT project),
  • Sanitation ablution block programme  (Ethekwini Municipality project),
  • King George Hospital (DPW project), and
  • Molweni Primary School (DPW project).


The Ethekwini Municipality reported that, in terms of the DORA for the 2009/2010 financial year, its grant allocation was R16,761 million. It had targeted 5,969 FTEs and achieved a higher figure of 7,253 FTEs. The eligibility threshold was 3,054 FTEs.  At the time of commencement of projects, the Ethekwini Municipality was uncertain about deposit amounts and was concerned that it had not received any manual or audit guidelines for the grant. Its first deposit was received on 21 January 2010 amounting to R9,723 million. The EPWP-II incentive manual was received on 19 February 2010 with the second deposit of R9,381 million received on 26 February 2010. The EPWP-II audit requirements were received on 7 April 2010.


The Ethekwini Municipality reported that 150 prefabricated ablution containers had been installed at 75 sites in informal settlements. This programme started in January 2009 with the objective to provide ablution facilities to 317 informal settlements across the city. The Committee was informed that 800,000 people were given access to water and sanitation through this project. A total of 2 000 jobs had been created to date with 100 permanent caretaker jobs as well as social facilitation and training. The total cost for each ablution facility was reported to be R200,000 per setup.


The City also implemented a project known as the Green Corridor which started in September 2009. Its aim was to facilitate economic development in the uMngeni valley from Drakensberg to Durban through adventure sports, outdoor recreation and tourism. To date, the project had created 10,580 person days, 328 permanent jobs within one year (Zibambele project) and had a project value of R6.2 million in year one. Elements of the project included the construction and maintenance of the 60 kilometer-long trails between KwaXimba and Inanda; hosting the Duzi Mfula annual cycling event; eNanda Adventures trail centre and picnic site at KwaQadi and Isithumba Adventure Sport Centre at KwaXimba.


4. Sites and Projects


4.1 Site 1: P100 Ndwedwe Construction Site


The Committee visited the African Renaissance Road Upgrading Programme (ARRUP). This was a road construction site with 33 kilometers to be surfaced by the end of the project. At the time of the visit, 16.08 km had been surfaced by emerging contractors from the Vukuzakhe Programme. The road surfacing was taking place in an agricultural area which meant that there was an extensive use of the road by heavy vehicles such as trucks. A total of 1 379 job opportunities had been created with 96 161 person days created. The Committee was informed that 45 contracts had been awarded to emerging contractors ranging between grade 1 and grade 6.  It was reported that the consultants responsible for the project met with the DoT on a monthly basis.


Community development projects implemented by the consultants included a total of 133 learnerships in construction and road works. Learners obtained drivers’ licences and computer skills which they paid for themselves. Some of the emerging service providers that trained the learners were Bafana Trading and Igagasi Training. Participants in the learnership received a stipend of R1600 while doing theory and R3200 when doing site experience. The learnership saw the participants obtain National Qualification Framework (NQF) Level 4 after which they could proceed to tertiary institutions if they so desired. It was reported that the DoT provided bursaries for interested persons. The Consultants also selected two top scholars from the two schools in the area and paid for their schooling throughout high school. Furthermore, consultations had taken place with the head masters of two schools to avail funding to scholars who wished to pursue studies in engineering. Approximately eleven students had been taken through tertiary education by the consultants.


Given the frequency of heavy vehicles on the road in question, the consultants reported that they had opted not to make use of paving as a way of surfacing the road. Construction costs per kilometre were reported to be approximately R5.5 million on a flat surface and approximately R12 million per kilometre on sloped surface. At the time of the visit, approximately R404 million had been spent on the project. The Committee was informed that of this amount, the consultant’s fee was capped at 18 per cent.


On visiting the site, the Committee interacted with the beneficiaries who were on learnership at the construction site. This was a group of ten women who were to graduate at the end of October 2010. While they were happy with the quality of skill they were obtaining from the training, they reported that one of their concerns was that they often worked far from their homes depending on where they were placed for practical experience. Furthermore, they were of the view that the stipend received was less than adequate.


The Committee was concerned about the absence of toilet facilities where the contractors were working. This, in the view of the Committee, had to do with the dignity of the workers. It was reported that there were toilet facilities at the site office which was about three kilometres from where the actual work was taking place. According to officials who were on site, there was a vehicle on site to shuttle the workers to and from the site office. The Committee was, however, adamant that the vehicle could not go to the site office every time someone needed to respond to nature. A further matter of concern was that the contractor responsible for the road construction was not on site and could thus not respond to the questions raised.



4.2 Site 2: Roadside Clean-up Operations


At this site, the Committee met four women who worked along the road. These were Zibambele women who were on the EPWP. Fundamentally, their duty was to ensure that there were no papers along the road. It was reported that these women worked two days per week from 09h00 to 16h00. They were supported by Filed Support Officers from the department who supervised their work. Beneficiaries at the site lamented that the stipend was not adequate. They further reported that exorbitant bank charges were making the stipend even less. The Zibambele women were reported to be participating in a saving scheme that had saved approximately R12 million at the time of the visit.


The Committee was concerned that none of the workers on site were wearing protective clothing nor were they using the tools that the DoT had reportedly issued them. A further concern was that there was no provision for toilet facilities in the area for the workers.



4.3 Site 3: King George Hospital


The King George Hospital is part of the hospital revitalisation programme and has a project by the Provincial Department of Public Works. The objective of the project is to provide communities with access to health care services and the technologically advanced tuberculosis (TB) facilities, surgical wards and a mortuary. These facilities would be constructed as part of the revitalisation programme. It was reported that planning for the project commenced in 1999. The approval was received in 2002 and completion was reported to be in 2013. The project was at 60 per cent completion at the time of the visit. The contract value was at R43.3 million and expenditure was at R36.7 million with a remaining contract period of 18 months.


The Committee was informed that interaction with the communities was done through three Community Liaison Officers (CLO) whose role was to report to the ward committee on progress made at the hospital. The project was being implemented in line with the guidelines of the EPWP and has created 397 job opportunities. Furthermore, nine candidates from the FET’s and Durban University of Technology were undergoing in-service training at this project. 


Out of 34 contracts, a total of 13 had been completed at a cost of R270 million. It was reported that local people employed on the project were paid an amount of R90 per day. Questions were raised on whether the amounts claimed by consultants as labour costs were the same amount that eventually got paid to the workers. It was the perception of the Committee that the real beneficiaries in the project were the contractors.    


The Provincial Department of Public Works was requested to submit to the Committee a detailed report on the number of beneficiaries in the project and the skills and traits obtained during participation. The report was to provide a breakdown of the 397 jobs created, outlining the areas they were in.


4.4 Site 4: Molweni Primary School


Mowleni is a village situated in ward 9 of Ethekwini Municipality and has a project by the Provincial Department of Public Works. Once completed, the project will provide the village with a modern double-storey school with resources for effective learning and teaching. The contract value was reported to be R23.5 million with expenditure to date of R13.6 million. It was reported that 55 per cent of the project was completed with a remaining contract period of 18 months. Interaction with the community was facilitated by one community member, Mr Initial Vilakazi. It was reported that the project did not have allowance for CLO’s in its bill of quantities as was the case in the KingGeorge Hospital project.


A total of 96 jobs had been created by the project which was being implemented in accordance with the EPWP guidelines. A total of three candidates, from the Durban University of Technology and other FETs, were undergoing in-service training at the school.



5. Findings 


The following findings have been identified by the Standing Committee on Appropriations during its oversight visits to the above-mentioned sites in the Province of KwaZulu-Natal:


  • Provincial Departments of Public Works from six provinces that had been invited were not represented by the relevant people. It was the view of the Committee that some provinces seemed to be less concerned about the poor performance of their respective provinces in respect of the EPWP.


  • While the Committee commended the work done by the Province of KwaZulu-Natal in respect of the EPWP, it observed a lack of co-ordination between the DoT and the Provincial Departments of public Works. Thus, improved co-ordination would further improve the performance of the Province of KwaZulu-Natal on the grant in question.


  • The absence of the contractor on site at the P100 road construction site was perceived as a sign that there was poor management of contractors by the DoT and the consultants involved.


  • The absence of toilet facilities at the P100 road construction site was seen as an infringement of a basic human right as stipulated in the Bills of Rights, the right to dignity.


  • The absence of Field Support Officers was leading to workers not wearing their protective clothing.


6. Recommendations


The Standing Committee on Appropriations, having conducted an oversight visits to the Province of KwaZulu-Natal and considered findings from this oversight visit, recommends the following:


6.1 The Department of Transport should coordinate regular engagements with the Provincial Department of Public Works with the view to co-ordinating projects to avoid duplication while ensuring consistency in the application of the Expanded Public Works Programme guidelines.


6.2 The Department of Transport should conduct regular visits to projects sites to ensure that contractors were adhering to applicable legislation such as the Health and Occupation Safety Act and that basic needs of workers were met as well as to ensure that specifications were being followed.


6.3 The National Treasury should investigate the extent to which bank charges could be reduced for the EPWP beneficiaries and submit a report to Parliament within three months after the adoption of this report by the House.   


6.4 The Provincial Department of Public Works should provide a detailed report on the King George Hospital revitalisation project to Parliament within three months after the adoption of this report by the House.



Report to be considered.


No related documents