ATC120320: Report oversight visit to the Free State, 22 – 27 January 2012, dated 20 March 2012

Public Works and Infrastructure

Report of Portfolio Committee on Public Works on its oversight visit to the Free State, 22 – 27 January 2012, dated 20 March 2012

 

1.         Introduction

 

The mandate of the Committee is to play an oversight role over the Ministry and the Department of Public Works and its entities. The Committee is guided by the Rules of Parliament promulgated in terms of the Constitution. The Committee exercises this oversight role to contribute towards the improvement of the quality of life of all South Africans. It scrutinises legislation and other policies that impact on the sphere of public works and facilitates interdepartmental and intergovernmental relations between all spheres of government. In conducting oversight, the Committee is sensitive to provincial interests at the national level. The Committee endeavours to do its work in line with international best practice relevant to its field of jurisdiction to ensure that government departments serve all South Africans as best as possible.

 

1.1               The objectives of the visit were to:

 

a)       verify the reports by the national Department of Public Works (NDPW) under the Expanded Public Works Programme (EPWP);

 

b)       verify the reports given by the NDPW under the Provision of Land and Accommodation Programme by checking whether the municipalities had complete asset registers and discuss the challenges that hindered progress within the NDPW with all stakeholders concerned with regard to the compilation of the asset register and the roll-out of the Government Immovable Asset Management Act (GIAMA);

 

c)       check whether there was synergy in the work of the four entities reporting to the Ministry of Public Works, namely the Construction Industry Development Board (CIDB), Independent Development Trust (IDT), AgrèmentSouth Africa (ASA) and the Council for the Built Environment (CBE). The four entities have different mandates but their work is geared towards the empowerment of the people of South Africa.

 

 

 

2.         Participants in the visit

 

Members of the Portfolio Committee on Public Works:

Hon M C Mabuza (ANC) Chairperson and leader of the delegation

Hon N D Ngcengwane (ANC) Whip of the Committee

Hon N M Madlala (ANC)

Hon N E Magubane (ANC)

Hon C Q Madlopha (ANC)

Hon P C Ngwenya-Mabila (ANC) 

Hon N T November (ANC)

Hon M W Rabotapi (DA)

Hon J Steenhuisen (DA)

Hon P B Mnguni (Cope)

Hon K P Sithole (IFP)

 

Support staff of the Portfolio Committee on Public Works

Ms I Stephney (Committee Researcher)

Ms A Busakwe (Committee Secretary)

Ms X Mnyute (Committee Assistant).

 

The Portfolio Committee on Public Works from the Free State Legislature was represented by Hon C Mokitlane of the Portfolio Committee on Public Works, and was accompanied by Mr H Viljoen (Committee Researcher) and Ms P Khunou (Committee Secretary).

 

The provincial Department of Public Works was led by Hon S Mabe, MEC for Public Works. Officials from the national Department, regional office of Public Works and the Ministry of Public Works were part of the oversight visit.

 

The local municipalities in the Free State under the four district municipalities were invited and requested to present on both their asset registers and the implementation of incentive grants under the EPWP II. The district municipalities had observer status to enable engagements with the local municipalities.

 

 

 

 

The following municipalities were able to engage with the Committee:

 

1. Metsimaholo Local Municipality
2. Nala Local Municipality
3. Mangaung Metropolitan Municipality
4. Dihlabeng Local Municipality
5. Maluti A Phofung Local Municipality
6. Mafube Local Municipality
7. Nketoana Local Municipality
8. Ngwathe Local Municipality

 

3.         Summary of the Report

 

The Portfolio Committee on Public Works received briefings from the Free State Department of Public Works and from the different local municipalities that were invited to be part of the meetings. The briefings were on phase two of the Expanded Public Works Programme, the roll out of the Government Immovable Asset Management Act (GIAMA) and the asset register. The oversight visit included site visits to EPWP II projects in the different EPWP sectors, namely infrastructure, social, environment and non-state sectors.

 

4.                   Committee findings

 

The report captures the findings of the Committee. It must be noted that it does not attempt to merely present what was reported to it by the provincial Department of Public Works in the Free State.  The captured findings are later drawn to conclusions that were made by the Committee that inform the recommendations made in this report for implementation by the relevant stakeholders.

 

4.1               Expanded Public Works Programme II

 

The biggest driver of the EPWP projects in the Free State was the national Department of Public Works, followed by the provincial Department of Public Works and then the municipalities.

 

 

 

 

4.1.1          People living with disabilities

 

The province was lacking in the understanding of defining people living with disabilities as a result the reports provided to the Committee showed no people with disabilities being recruited on EPWP II projects.

 

4.1.2                 Payment of stipends

 

The Committee found that there was no uniformity in the stipend rates paid in the different sectors and projects.

 

4.1.3                 Training

 

In most of the EPWP II projects training was provided. However, not all the training was accredited. The Committee could not verify the report that some of the project beneficiaries refused training opportunities as they were interested in only doing the jobs.

 

4.1.4                 Costs of implemented projects

 

The Committee noted that there were numerous variations on the projects implemented which led to the escalation of costs.

 

4.1.5                 Inconsistencies noted

 

The Committee questioned the upgrading of the 1,2 km Bultfontein airstrip that was valued at R2 million. The Committee could not understand why two products had to be used in the construction of a landing strip, which lead to high costs. In the process only 18 job opportunities were created for a landing strip which was going to benefit a few people. There were roads that benefited the majority of people that needed upgrading; money spent on it would perhaps have been more beneficial to a larger number of people. A report given to the Committee further stated that Nala Local Municipality prioritised the landing strip as its Local Economic Development (LED) project.

 

 

 

 

 

4.1.6                 Municipalities

 

4.1.6.1              Mangaung Metropolitan Municipality

 

The metro funded the bulk of its EPWP projects from the Urban Settlement Development (USD) Grant that it received from the National Treasury, while other projects were funded under the Development Bank of Southern Africa (DBSA). The metro did not have any EPWP projects funded from its capital budget. The metro reported that it was upscaling its institutional capacity in order to report correctly and that it was also getting assistance from the Department of Public Works in terms of reporting.

With regard to the intermodal taxi rank that was built at Bloemfontein city centre, the metro agreed that there were challenges that emerged that were being attended to by the metro.

 

4.1.6.2              Nketoana Local Municipality

 

The municipality did not have a dedicated official responsible for the EPWP and it was implementing EPWP II projects on an ad hoc basis. The municipality did not have a clear plan and strategy to implement the EPWP, and as a result it did not report properly on the programme. The municipality reported that it had a number of vacant positions.

 

4.1.6.3              Ngwathe Local Municipality

 

The municipality did not have any dedicated unit that was responsible for the Expanded Public Works Programme. The municipality had serious administration problems and the Acting Municipal Manager who started in his position on 1 December 2011 had no confidence in the credibility of the information he had on the EPWP II.

 

4.1.6.4              Maluti A Phofung Local Municipality

 

The municipality did not have any report on the EPWP II.

 

4.1.6.5              Nala Local Municipality

 

The Committee could not receive the presentation of the municipality as it was going to be presented by consultants who assisted the municipality.

 

 

4.1.6.6              Mafube Local Municipality

 

The municipality reported that it lacked capacity to implement the EPWP. It had several vacancies and found difficulty in filling them.

 

4.1.6.7              Metsimaholo Local Municipality

 

The municipality reported on the EPWP. The Committee noted that, as in most of the other municipalities, there was a total disregard for people with disabilities.

 

An amount of R563 000 that was deposited on 24 December 2011 by the national Department of Public Works for an incentive grant was not accounted for and could not be traced by the Chief Financial Officer until the day of the visit, namely 25 January 2012. This amount was only discovered by a junior Finance Officer after long deliberations between the Committee, the national Department of Public Works and the municipality.

 

4.1.6.8              Dihlabeng Local Municipality

 

The municipality was only going to benefit from the incentive grant payments for the period ending December 2011 as it had not reported previously.

                                                                                                                                                                                                                                                                                                                                                                              

4.2   Asset Register

 

The Committee wanted to check the progress made by the provincial Department of Public Works on the roll out of the Government Immovable Asset Management Act (GIAMA) and in the compilation of its Asset Register. What was of interest and one of the objectives of the visit was to see the progress made by the municipalities in compiling their asset registers.

 

4.2.1     Asset Register of the provincial Department of Public Works 

 

The presentation made by the Province on GIAMA and the Asset Register was found to be too general and did not contain many specifics. For example, the presentation excluded information on the disposal policy, office accommodation (whether leased or owned), and whether the Province received rates and taxes from the client departments. Furthermore, no mention was made of a maintenance plan or how the provincial Department of Public Works maintained immovable assets. The use of consultants on a long-term basis was a concern, especially since there did not appear to be a plan for skills transfer. The national Department of Public Works devolved assets to the Province, which did not appear in its immovable Asset Register. The Auditor-General suggested that reconciliations of the national and provincial Asset Registers be undertaken.

 

4.2.2     Asset Registers of the Municipalities

 

4.2.2.1  Mangaung Metropolitan Municipality

 

The metro did not have a presentation on the Asset Register.

 

4.2.2.2    Nketoana Local Municipality

 

The municipality was a medium capacity municipality. In terms of GRAP 17, it would be fully compliant by the end of the financial year. The total value of the municipality’s assets was R1.3 billion. The municipality reported that one of its major tasks was to unbundle its assets. It did not receive any qualification on the Asset Register in the current financial year. The municipality had policies in place e.g. procurement, maintenance and disposal policies, but still had challenges in terms of rates collection. Land was donated to schools by the municipality but the transfer of the land had not been finalised and the land was still registered under the municipality.

 

4.2.2.3    Ngwathe Local Municipality

 

The municipality did not have a presentation on the Asset Register.

 

4.2.2.4              Maluti A Phofung Local Municipality

 

The municipality did not have a presentation on the Asset Register.

 

4.2.2.5              Nala Local Municipality

 

The Committee could not receive the presentation of this municipality as it was going to be presented by consultants who assisted the municipality.

 

4.2.2.6  Mafube Local Municipality

 

The municipality reported that it was not yet fully compliant with Generally Recognised Accounting Practices (GRAP 17). The municipality reported an asset value of R187 million on its immovable assets and R14.1 million on movable assets. The municipality had performed asset verification, assets on the floor were traced to the register and its Asset Register was complete.

 

4.2.2.7  Metsimaholo Local Municipality

 

The municipality did not have a presentation on the Asset Register.

 

4.2.2.8              Dihlabeng Local Municipality

 

The municipality reported that the value of its immovable assets stood at R1.8 billion and the movable assets at R76 million. The immovable asset register was not complete. The municipality received a qualified audit opinion related to uncertainty of ownership, historical assets and that documentation older than 10 years was required for the completion of the Asset Register.

 

In the movable asset register, the municipality received a qualification due to descriptions, historical value, documentation older than 10 years and the unbundling process. The municipality reported that it had an asset management policy and a disposal policy that had been adopted by Council. The municipality did not have any illegally occupied or unknown immovable assets. The municipality was still struggling to keep its Asset Register updated and experienced challenges with the Asset Management IT system and with ensuring that all its assets were accounted for in the Asset Register.

 

5.         Conclusions

 

5.1        General:

a)       The provincial Department of Public Works reported that the surfacing material used for the Bultfontein landing strip (in the Nala local Municipality) consisted of two different materials, namely asphalt and bitumen. The Committee was concerned by this, especially the cost implications which were also raised by the Auditor-General.

b)       The Committee was awaiting a report on the events surrounding the construction of the Elizabeth Ross Hospital which happened over a period of approximately five years. The explanation given for this delay was the unavailability of funds for the completion of the project.

c)       The briefing packs with project profiles that were distributed by the provincial Department of Public Works did not provide enough information on the projects that were going to be visited by the Committee. The statistics that were presented in some of the presentations were found not to be accurate.

5.2        Expanded Public Works Programme II:

 

a)       The Committee noted with concern the poor planning by the provincial Department of Public Works and the municipalities in the implementation of the Expanded Public Works Programme II projects. This was highlighted through the reports on the delays caused by the rainy season and the unavailability of certain required materials which had to be brought in from other provinces. In most cases the delays led to increases in budget due to variations e.g. the issue of the Harrismith testing station and Elizabeth Ross Hospital.

b)       Some of the municipalities either did not have dedicated personnel responsible for the EPWP II or they were relying on consultants.

c)       The requirement of designated groups under the EPWP II was not always included or was implemented but on an ad hoc basis. EPWP II specifications should be included in tender documents and the officials of the provincial Department of Public Works should do proper monitoring of projects.

d)       A provincial EPWP summit was proposed where challenges facing participants in the EPWP programme could be addressed.

e)       The national Department of Public Works complained that the municipalities did not report on time. The municipalities were encouraged to improve their reporting in order to receive more of the incentive grant payments.

f)         The geo-technical reports and the Environmental Impact Assessment (EIA) reports do not seem to be reliable as contractors found challenges during the excavation phase in some of the projects.

g)       The contractors reported that they found it difficult to implement training aspects as required by the EPWP II due to the short duration of the projects.

h)       There was no consistency in the stipends paid to beneficiaries on most of the projects, as shown by the daily rate of R90 and R94 for two different projects on the same site.

i)         The Pheko ka Kopanelo project under the non-state sector was found to be performing well, and the Committee requested that the Premier and the MECs concerned should consider ensuring the continued sustainability of the project. It was suggested that this model might be extended to other municipalities.

 

5.3        Asset Register:

 

a)       The transfer of land and the issuing of title deeds to the new owners remained a challenge.

 

5.4        Use of consultants:

 

a)       The Committee noted with concern the reliance of the municipalities on consultants and the exorbitant consultant fees that they ended up paying.

b)       At the Zamdela offices in the Metsimaholo municipality it was found that the consulting engineer was also a contractor on the project.

 

5.5        Municipalities:

 

a)       When the Committee sent out invitations to the municipalities it clearly stated what was to be reported on and also informed them of the relevant political heads and senior officials who were to attend the meetings. This was not adhered to by most of the municipalities.

b)       Whilst the municipalities received assistance from both the national and provincial Departments of Public Works, they admitted to experiencing internal capacity constraints.

c)       The municipalities (especially low-capacity municipalities) reported that they did not have the required funding to implement more EPWP II projects.  

d)       Some of the municipalities admitted to not having dedicated personnel or a unit for the EPWP, and one municipality was found to have appointed consultants to manage its Project Management Unit (PMU).

e)       The Committee noted with concern that the Nala municipality was represented by consultants during the briefing session with the Committee.

f)         The Dihlabeng Municipality used large budgets on its EPWP II projects, but created very minimal job opportunities.

g)       The Committee observed serious management challenges during its visit to the Metsimaholo Municipality. For example, the incentive grant of R563 000 deposited by the national Department on 24 November 2011 into the municipality’s account could not be traced by the CFO on the date of the visit. The funds were later traced by a junior staff member at the conclusion of the meeting.

h)       The use of contractors from other provinces on local projects was noted with concern by the Committee.

 

 

 

 

 

 

 

 

 

 

 

 

6.         Projects visited by the Committee

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Maluti A Phofung LocalMunicipality	MAP paving of streets in Kestell   Infrastructure sector Project done according to the Municipal Infrastructure Grant (MIG) guidelines at a cost of  R29 million	Paving   Road markings   Storm water channels   77 local people were employed and 11 people were imported   Training was provided	The were no people with disabilities   A total of 36 people received training; seven of those were members of the project steering committee.   The people who benefited on the first phase of the project were carried over to the second phase instead of recruiting new people.	Bricks used for paving were bought inBloemfontein and not manufactured by the locals.   The contractor was not from the local area but from Pretoria

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Maluti A Phofung LocalMunicipality	Harrismith: new traffic and roads offices   Infrastructure sector	Construction of new offices, services and site works	Delays in the completion of the facility led to extra costs	Non-employment of people with disabilities
Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Maluti A Phofung LocalMunicipality	Mokgolokweng and Diyatalawa(residence of the local Chief and a community hall)   It was reported that there were five projects in the Mokgolokwengcommunity and the Committee could only visit the residence of the local chief and the community hall. The other three were a crèche, a school and a clinic   Infrastructure sector	The building of the residence for the local Chief was 2000 sq meter which was a joint project with the Department of Rural Development and Land Reform	The Committee could not engage with EPWP beneficiaries as there were none on site at the time of the visit.	The Committee was concerned that the community hall should not be rented at high costs to the local people.   A suggestion was made that the community hall should be used on a day-to-day basis to bring services to the people, where government departments e.g Home Affairs and Social Development could assist the villagers.

 

 

 

 

 

 

 

 

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Maluti A Phofung LocalMunicipality	Pheko Ka Kopanelo   Non -State sector	The project started in 2003 in partnership with the Independent Development Trust (IDT).   They had 300 beneficiaries spread among the villages. A total of 50 people from their beneficiaries were absorbed by the municipality for agriculture, while another 38 were permanently employed by the Department of Health   They had a food security programme in 16 villages.   They also cleaned graves in their locality   The project had a hospice for HIV positive people and had 23 home-based caregivers and had partnership with doctors from their locality. They also had a pharmacist who subsidised half of what were paid for the antiretroviral treatment.   They had a food gardening project and they were selling their vegetables on the streets, hospitals and to the municipality.   The project feed over 7 200 orphans on a daily basis from the local schools.	Funding and sustainability of the project   Access to the markets	The Committee was impressed with the work done on the project.   The project needed to be assisted in terms of funding and branding of their products.   Stipends they received were small, R60 per day and worked for 11 days in a month.
Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Maluti A Phofung LocalMunicipality	Elizabeth Ross Hospital   Infrastructure sector	Certain sections of the hospital were completed and handed over to the client department.	There were a number of challenges in the construction of the hospital that varied from funding, management issues and the escalation costs of the project due to variations.   The hospital was built over a period of close to six years and at the time of the visit there were still defects that needed to be attended to.	There were numerous irregularities that included mismanagement of funds and poor planning between the Department of Health and Public Works. The Committee was not convinced with the reports it received and would still like to obtain a written report on the whole project

 

 

 

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Mafube LocalMunicipality	Township revitalisation programme   Infrastructure sector   R9 million project, to pave 2.7Km of road. A 6 meter wide road with two layers and interlocking block paving.	The project created 6 145persons days of work for local labour over a period of 8 months.   On the job training and SETA accredited training were provided for 80 people. The best 10 candidates successful in training were going to be trained on unistandards.   The contractor was on CIDB grade 3 and preferred to stay small with no ambitions of taking bigger projects anytime soon.	9 contractors were taken outside of theMafube local municipality.   63 youth, 48 males and 36 females benefited from the project.	There were no disabled persons that benefited from the project

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Mafube LocalMunicipality	Cemetry cleaning project   The municipality was responsible for the day-to-day running of the project. The provincial Department of Public Works paid the beneficiaries from their persal system as temporary workers.	The project created work opportunities for local people.   20 people benefited from the project, while one person resigned and another one was absorbed by the municipality as a general worker.	None noted   The term of the project was short; it was only over a one year period from April 2011 – April 2012.	The project was a success

 

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Metsimaholo LocalMunicipality	Zamdela offices   Infrastructure sector   Construction of municipal offices	27 people benefited	Delays occurred due to weather conditions.	Poor planning due to delays caused by rain and unavailability of clay that was used for escavations.   The consulting engineer was also the contractor.   There were no women and people with disabilities employed

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Metsimaholo LocalMunicipality	Construction of school   Infrastructure sector	The main contractor was a woman		There were no project beneficiaries on site for verification of facts presented.

 

 

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Moqhaka LocalMunicipality	Boitumelo Hospital   Infrastructure sector   The project was divided into two contractors, contractor 10 and contractor 12	Renovations were made in the hospital and new facilities were built.   More than 100 jobs were created on both contractors.	Training was provided in the project.   Learnerships on plumbing and civil engineering were provided.   No people with disabilities benefited from the project.	There were cost escalations due to variations.   Poor planning as there were delays due to importing materials and extreme weather conditions.

 

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Moqhaka LocalMunicipality	Moqhaka local municipality project: paving of a road in Marabastad   Infrastructure sector	A road worth R 14.5 million was built.   Jobs were created for more than 54 people for a period of 12 – 14 months.	There were delays in the payment of contractors.	There were many old and unsafe buildings in the township that needed to be eradicated.   There were newly built houses that were left vacant.
Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Mangaung MetropolitanMunicipality	Centlec: National Youth Service Programme   Minimum requirements: 16 years of age and a grade 10 pass.	The learnership provided technical skills to the learners, including training in electrical engineering.   Learners received stipends of R1 100.	Learners complained that the stipends they received were not enough considering their circumstances and backgrounds.	There should be a Ministerial determination on the amount of stipends to be paid to learners.

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Mangaung MetropolitanMunicipality	Batho township revitalisation   Infrastructure sector	The project was on the second phase. This project was linked to the ANC centenary celebrations.   316 jobs were created	There were only two main contractors inMangaung metro	The Committee observed that there was no uniformity in the payment of stipends throughout the Free Stateprovince.

 

 

Municipality	Name of the Project and EPWP Sector	Achievements	Challenges	Committee observations
Mangaung MetropolitanMunicipality	Kamohelo School   Infrastructure sector	133 men, 11 women and 1 person with disabilities were employed.   Project beneficiaries were paid between R 3 000 and R4 000 per month.   The main contractor (Ruwacon (Pty) Ltd) had 15 sub contractors that included women and other previously disadvantaged persons	Delays due to rain and very low temperatures pose a challenge when casting concrete.

 

      Recommendations

 

7.1              The Minister of Public Works should ensure that the employment of women and people with disabilities is made compulsory on projects under the Expanded Public Works Programme II.

 

7.2           The Minister of Public Works should ensure that resolutions taken at the last

               national EPWP Summit with the municipalities are implemented.

 

7.3        The Minister of Public Works should ensure that the Free State provincial

Department of Public Works holds its own EPWP summit in the 2012/13 financial year in an attempt to address the challenges facing participants in the EPWP II.

 

7.4           The responsible officials for EPWP II monitoring at provincial level should

ensure that all EPWP II requirements and specifications are stated clearly on the bid documents and they should also perform proper monitoring on projects.

 

7.5        The Minister of Public Works should ensure that reconciliation of national and

                         provincial department asset registers is done.

 

7.6        A report must be submitted to the Committee by the provincial

Department of Public Works justifying the use of two materials and its cost implications at the Bultfontein landing strip (in the Nala local municipality).

 

Report to be considered