Defence Works Foundation on devolution of responsibilities from DPWI and funding issues

Meeting report

Chairperson’s introduction

The Chairperson welcomed the Committee Members and the Defence Force Formation (DWF) to the meeting. The DWF that was presenting today had been established in 2011. The aim of their establishment was to provide an appropriate, ready and sustained facility management capability to the Department of Defence (DOD). It would eventually replace the Department of Public Works and Infrastructure (DPWI) in so far as facilities of the DOD were concerned.

In February 2019, three departments came together -- Defence, Public Works and Infrastructure and National Treasury -- to provide feedback on the devolution of functions from the DPWI to Defence Works Formation. They reported to the Parliamentary Committee on Appropriations, and a few things were noted which emerged from the presentations they made.

The inter-ministerial task team had met, and cooperation had been established an agreement reached to continue with the infrastructure devolution function, transferring it from the DPW to the DOD. There were outstanding issues, such as due diligence on properties to be transferred and the finalisation of the immoveable assets register, which would involve municipalities in some cases; the funding for capacity creation within the DOD Defence Works Formation, and funding for the current shortfall in DOD lists portfolio, refurbishment and capital works.

Today the Committee would receive progress on the devolution.

Progress on transfer of infrastructure delivery functions from DPWI to DOD

Lt Gen Jabulani Mbuli, Chief of Logistics, South African National Defence Force (SANDF), said the purpose of the briefing was to discuss the DOD facilities as an enterprise risk, and to provide the status and progress on the infrastructure delivery function transfer from the DPWI to the DOD.

The Minister of Defence and Military Veterans (MOD&MV) had identified the continued deteriorating DOD facilities as the first enterprise risk for the DOD that may result in:

-Inability of the SANDF to provide support to the people in case of infrastructure destruction after natural disasters;

-Inability of the SANDF to carry out its secondary mandate to support government with infrastructure in post-conflict reconstruction and development; and

-Compromised combat readiness.

Based on the above risks, the MOD&MV had instructed the Chief of the SANDF to implement certain mitigation actions, such as to re-establish the DOD’s capability and capacity for infrastructure delivery to be able to provide support to the people after possible natural disasters, and to transfer infrastructure delivery functions back from the DPWI to the DOD.

CSANDF’s response to the MOD&MV

-CSANDF had established the DWF to perform the infrastructure delivery functions.

-Capacity of qualified artisans in all construction-related trades per region had been created. 894 artisans had received their Red Seal trade qualification in different construction trades.

-In-house capacity was able to execute less complex new construction, including maintenance and repairs to buildings.

-Complex infrastructure projects and skill transfer to the DWF built environment professionals were done with the assistance of Development Bank of Southern Africa (DBSA) over three years.

Prior to today’s meeting, on 10 June the MOD&MV had presented the progress report to the Portfolio Committee, which had appreciated the report and requested a follow-up meeting with the Department within three months.

The Department had to give feedback to the Inter-Ministerial Task Team regarding the legal framework to allow the takeover. It had to respond on its readiness and timelines for the function transfer, and to what extent it would utilise the reserve forces in the DWF. Capability and capacity issues had to be addressed, and the DOD would need to explain how differently the DOD was going to execute the function. For instance, was it going to do the job exactly the way the DPWI was doing -- by outsourcing.

Framework for DOD and DPWI relationship

The current DOD and DPW&I relationship was governed by an interdepartmental service level agreement (SLA), where Section 17 provides that the agreement can be terminated within 30 calendar days by written notice from either party.

Readiness for function transfer

Capacity at the artisan level had been reached, with over 890 qualified personnel. Continuous mentoring was still required to increase experience and productivity.   

Project and contract management knowledge and skills for the facility and construction programme needed to be enhanced through a memorandum of understanding (MOA) with the Development Bank of Southern Africa (DBSA).

Built environment professionals such as architects, engineers and quantity surveyors, were made available through the MOA with the DBSA.  This included the processes to obtain professional registration of their own graduated members within the built environment.

For funding, the DOD and National Treasury were engaging on continuous basis regarding a financial injection.   

Timeline of function transfer

The transfer was based on a phased approach, taking over specific functions over a period while establishing both capacity and capability, in the following stages:

-Municipal services – April 2020 (taken over). 

-Refurbishment and capital works: project status 1 – 4 – 1 April 2021.

-Planned maintenance –1 April 2021.

-Lease management and administration – April 2021

-Refurbishment and capital works: project status 5 – 8 to be co-managed by the DOD and DPWI until completion, due to already committed contractual obligations.

Targeted Projects

-Air Force Base in Durban already under construction at King Shaka Airport.

-Identification of land parcels in Durban North to build member accommodation to support the Air Force and Naval Base in Durban.

-Planning and design for military bases, design for new offices and accommodation within the Thaba Tshwane area and Magazine Hill  -- part of the DOD lease replacement strategy.

Discussion

Mr S Marais (DA) thanked the Defence Works Formation (DWF) for the presentation, and maintained that the DWF was an ideal place where young people could be employed, and trained in skills that they required not only while in the Force, but equipped with skills and qualifications after they left the Force. What was the plan of the Force in terms of training -- the national qualifications framework (NQF) levels, and technical level qualifications for the young people? Was it only in terms of property, infrastructure or vehicle maintenance and related needs and services? This could be an ideal situation, where mechanics and technical people for vehicle maintenance could be trained and equipped so that the Defence Force could look after its own vehicles instead of using the Cubans.

If there were no dedicated allocated budgets for DFW, then it became only a plan. Had agreement been reached on a dedicated budget within the DOD budget? Had there been any transfers from the DPWI? They had been responsible for maintenance till now, and if they had not been, that money should have been transferred to Department of Defence.

In terms of runways, there was news regarding civilian runways at King Shaka International Airport in Durban. To what extent would the Department make sure that all the technology was up to date and well maintained, especially for night landing and instrument landing? There was one aircraft that had been equipped for that purpose that had crashed in the Southern Cape a while ago. What was the situation and capacity in that area?

There was an old problem of municipal accounts, whereby an electricity account with the Department of Public Works had been closed on instruction from the DPW because it had been improperly transferred to the Defence Works Formation. This was happening in many other places. If electricity cables were stolen, who was responsible for their replacement? In the past it, was between DPW and Eskom, but had that been transferred to DWF as well? What happened in the case of Defence staff being without electricity for a while? It was now a situation that if f they did not have their own generators, there was no electricity for them and this could not be allowed.

The presentation stated that some work would be done so that an air force base could be established at King Shaka airport. In the past, there had been talk about the efficiency of the Ysterplaat Air force base and the fact that that property did not belong to the Defence Force or to the state, but to a private trust. There was talk of the property being used for urban housing. Had there been any discussion, especially now that Cape Town International airport would be upgraded, of Ysterplaat air force base being relocated across the runway from the Cape Town International terminals? If it was possible, now was the time to incorporate it into the development.

DOD’s response

Lt Gen Mbuli responded that at some point the Cubans would have to leave, but before then the Defence Works Formation would have to be prepared. The Defence Force had a lot of young people under its wings, and some of them had just come back from Cuba after undergoing skills training. Feedback would be provided for some of the things asked about, such as facilities in the Western Cape (Ysterplaat) and KwaZulu-Natal (King Shaka International).

Maj Gen Joseph Ledwaba, General Officer Commanding: Defence Works Formation, added that the artisans were trained in construction, electrical fittings and so on. Another level of training being provided to young people engaged by the Force was in Technology. All of them undergo training though the Further Education and Training (FET) colleges. There were also those who availed themselves of the opportunity of getting a degree within the environment. These were the levels of training availed to young people in the Force. There were those trained to become artisans, and others to become master artisans. Through this training, they could also supervise other artisans. Some would acquire a national diploma, while others obtained a degree. Those among them that had no prior experience were afforded the opportunity to obtain a portfolio of evidence.

He said that the budget for facilities was within the DOD budget.

Mr M Shelembe (DA) asked if there were staff from the DPWI that would follow the function to the DOD, or would there be a transfer of duties to the Defence Works Formation? If this was done, it could create opportunities for the Defence Force officials and workers.

Ms A Beukes (ANC) said according to the presentation, the DWF currently had the capacity to take over their duties from DPWI, but since it had taken a while, was the DWF still  in a position to finalise all processes and do what was expected from them, taking into consideration aging staff and retirements? What was the DWF doing to ensure that they would be ready when all was finalised? Was there a process to recruit young black people? This was the right time to popularise the DOD as an employer of choice for young people especially.

Lt Gen Mbuli responded on the issue of staff deployed by the DPWI. The former Minister of the then Department of Public Works had earlier said that the DPW did not have the professionals to run this function. They had found that officials at the post office had been issuing tenders. No officials from that Department would be seconded to DWF, so the DWF would be training mid-level engineers so there would be no impact. The Defence Force did not foresee any problems taking over the functions discussed previously.

Mr T Mmutle (ANC) referred to the capabilities required, and if they were to be measured and graded, at what level were they? The Committee understood that the migration of this responsibility to the DWF should be at the level that they could take on the projects currently run by DPWI. It also realised the delays had been caused because the Department was a funder, but did not necessarily have control over the project.

The Chairperson said that from April next year, the DWF would take over capital works projects one to four and refurbishments, and asked what areas were still going to be left with the DPWI. This would help the Committee understand what had and had not been devolved to the DWF and what remained under the control of DPWI. It would also help the Committee to effectively conduct oversight. It remained crucial so that the Committee did not get pushed from pillar to post and sit with a function that fell through the crack simply because it did not know whether it had been moved to the DWF or still remained with the DPWI. Would the Committee at some point get a document that spells out in clear terms what functions had been devolved to the DWF, and what had not? This was so that the DWF was not called to account where it had no mandate. At what point would the Committee get that clarity?

Maj Gen Ledwaba referred to the DWF’s management capabilities, and said it had brought in the Department of Monitoring and Evaluation, and signed an MOU with them. Managing infrastructure required qualified engineers who ultimately accessed the project and found faults. If it was a bridge, for instance, and the bridge cracked and fell on top of people, that engineer was held professionally liable. It was the same with the quantity surveyors if they fail to do their work diligently. The DWF also had some staff that had been trained and done their practicals with the Department Public Service and Administration (DPSA). That was more like the Cuban example, as this staff had been trained so they could execute their function. All of this was to provide the DWF with professional capability.

There should be no delay in the DWF executing its mandate. On the status of the projects, service providers had been appointed for three out of four, and the DWF was co-managing the projects with the DPWI. They were reaching the point where they could access the projects and tell the DPWI whether they were happy with the co-projects they were executing together or not. As time went on, they could also design projects as their capability increased.

The Chairperson said the DPWI had indicated there was a committee that brought the departments together -- a kind of project steering committee -- where they jointly decide on issues. It could not be true that a department on whose behalf they were acting would say absolutely nothing about what was happening, or raise accountability on delays or poor workmanship, if there was such. How was this different from what used to be the situation in the past? At some point, the Committee would expect a report stating what had been devolved to the DWF. Had documents been prepared, or was it just a mere gentleman’s agreement?

Maj Gen Ledwaba, in conclusion, said from projects one to four and five to eight, the DWF was fully responsible.

The Chairperson thanked the DWF for the presentation, and said he believed they were making progress, and that was appreciated. It had been nine years in the making, and the meeting that brought the three departments together had been able to clear a pathway to progress. The Committee understood that funding remained an issue, and the expansion of the structure and funding were still outstanding issues. The money would never be enough, and the moratorium on the expansion of structures was an issue in government as a whole. When the Department’s delivery model was understood, the reason why it wanted more staff added to the Department would be appreciated, because more money would be saved for the state.

Committee minutes

The minutes of 15 July and 19 August 2020 were adopted.

The meeting was adjoined.