Greater Taung & Ba-Ga Maidi Petitions

Meeting report

The Chairperson took the opportunity to commemorate World's AIDS Day (1 December). She said the disease affected every sex, race and society. It was worrisome that the number of infected people kept increasing. The challenge associated with HIV/AIDS was enormous, given the fact that it had no cure. Coupled with the challenge of AIDS was the COVID-19 pandemic. It was important to develop measures to bolster the safety of the nation.

The meeting aimed to address the petition raised by community members in the North West Province over the alleged irregularities involved in various road projects.

Petition presented by Mr Isaac Seitlholo

Mr I Seitlholo, the Democratic Alliance Member of Parliament for the Greater Taung constituency, thanked the Committee for allowing him to speak on important matters in relation to the Department of Public Works and Roads (DPWR) in the North West Province, with particular emphasis on the Greater Taung municipality. Trafficable roads were a vital need in the municipality, and this fell within the mandate of the provincial DPWR.

He had escalated the matter to the national DPW, because the provincial Department had been placed under administration for quite some time. The petitions dealt with two specific road projects that had been mired in controversies, allegations, blame shifting and lack of accountability. It would help in future discourse to invite community leaders in the municipality and other stakeholders to get a balanced view on the matter. Several efforts had been made to get clarity on the status of the matter from DPWR's MEC.

Based on the information on the provincial Department's website, none of the nine contractors that had bid for the project had been awarded the contract. It was troubling that the contractor, Level Trading Company, which eventually was awarded the contract, did not appear on the bidders' list. The residents of Matlapaneng had embarked on several protest actions in 2019 to demand the construction of the tarred road that had been promised to them by the provincial government since 2011. The community leaders and members, during an oversight visit, had alleged that the Department had not consulted them about the re-gravelling project, and there had been no public participation to ensure their inputs.

It was evident that the community wanted the road tarred to facilitate easier transport and trade, as opposed to re-gravelling. The Taung Daily News, in February 2020, had revealed that the road was inaccessible to residents, and the re-gravelled road had been washed away by floods, which further worsened the lives and wellbeing of the residents, despite approximately R40 million having been invested in the project.

The handover of the project had taken place on 16 July 2020 in a suspicious manner, to the dismay of the community. It was therefore important to get clarity from the provincial Department about the bidding process and the actual re-gravelling project. The provincial Department of Transport had also written a petition to the Secretariat of the Portfolio Committee on the matter, because the Department also awarded provincial road maintenance grants, of which 20% could be used to develop or construct roads from gravel to tarred surfaces.

The second petition dealt with road D306, which had been extended to include other roads within the Greater Taung municipality. The project spanned a distance of 10 km from Matsheng village through to Molelema village.

The road was meant to be upgraded from gravel to a tarred surface, but the contractor had paused the project in November of 2020. In a community meeting, held on 20th June 2020, community members had raised various allegations, including untimely payments and fraud in the tender process. On the other hand, the DPWR had said it had terminated the projects due to unreasonable financial demands from the contractor. The Department had also allegedly said the contractor had threatened to complete only 70% of the road if additional funds were not provided.

In contrast, the community liaison officer (CLO) alleged that the Department had missed two payments to the contractor amounting to R15 million for the three months from June to August. The CLO revealed that a total of R65 million had been allocated to the project, which was sufficient to successfully complete the project. It was therefore concerning that the contractor had requested additional funds. The CLO said that the contractor had paid salaries from his own pocket over the period that the DPWR had refused to pay him.

The community had indicated that the Department refused to hold meetings with them to provide reasons for the stoppage of the project. He added that Department had not provided a response to both petitions.

The Special Investigating Unit (SIU) had launched a probe into what had really happened to the D201 project. He urged the Department to provide answers to both petitions raised.

Response by DPWR

Road D201

Mr Molate Murdock Moremi, Administrator, Department of Public Works and Roads, North West Province, clarified what had transpired in relation to road D201.

The representatives of the community had approached the Department about the delay, and several meetings were held at the Office of the Speaker of the Greater Taung local municipality, with all villages affected by the road represented. All parties had agreed that the Department should re-gravel the road in the interim to make it trafficable, while waiting for the Department to fulfil other commitments in the area. It was worth mentioning that the Department had not changed the level of funds sufficient to implement the project promised to the community in 2011. It had issued the bill of quantity for the re-gravelling project to all shortlisted bidders.

Unfortunately, none of the bidders had met all the criteria set. The Department, due to rising pressure from the community, had to develop measures to fast-track the appointment of a contractor who could execute the project in line with the Department's specifications. The office of the Public Prosecutor had instructed the DPWR to implement the Contractor Development Programme with immediate effect, to salvage the situation.

The Department had resorted to a contractor, Level Trading Company, on its database. This had helped to bypass the lengthy procurement process. The contractor got to the site in 2020, but the floods in late 2020 and early 2021 had destroyed all progress made on the project. The community became dissatisfied with the project. The Department had held a number of meetings with the community with a view to resolving the problem and getting the contractor back on site. The meetings did not yield positive outcomes due to concerns raised by the community, and the Department had to take measures to salvage the situation.

In early 2021, the DPWR had approached the Treasury for additional funding to ensure the successful execution of the project. It had received the additional funding in the 2021/ 22 financial year and proceeded to finalise the designs for the upgrading of the road, and had advertised a tender to upgrade the road from gravel to a tarred surface. The tender for the road from Pampierstadt to Matlapaneng closed on 5 August, and the Department had awarded the bid in November.

Upgrading of 10km of roads from Molelema to Matsheng

Mr Moremi then addressed the situation with regard to Project PWR 239/14, which involved the upgrading of gravel roads to surface standard, of roads D209, D208, D206 and D222, D997, D220 and Z216, from Molelema to Matsheng, stretching approximately 10 km.

This project traversed a number of villages. The DPWR was the client; Afeng Consulting Engineers were the consultants, while Botong Construction JV Nkolele was the contractor. The project was based in the Dr Ruth Segomotsi Mompati District. The contract amount was R65 million, and the Department had spent R49 million on the project to date. The project, with a forecast duration of ten months, had started on 17 February 2020, with 25 January 2021 as the expected completion date. The project was terminated at 58% completion.

The Department had noted some arithmetic errors in the bill of quantities, and demanded that the contractor revise the bill of quantities to indicate balanced rate, and a detailed execution plan for the project within the approved cost, timeframe and scope of the project.

It was regrettable that the contractor had refused to comply with the instructions. The contractor had instead requested a variation to the tune of a 75% increase, which the Department considered illogical and unreasonable. In light of this, the Department had had no choice but to terminate the contract and award the remainder of the project to another contractor who could stick to the requirements of the Department. Major activities on the project include installation of culverts, roadbeds, coat and double seal, amongst others. The Department had targeted 22 jobs on the project with priority given to youths, women and people with disabilities. 16 youths and two women were among the workforce on the project.

Local sub-contractors were responsible for 80% of the work, including concrete drains, storm water culverts, reserve clearance, plant and equipment hire, and so on. The Department had made it clear that the prospective contractor would complete the remainder of the project at R6.5 million per kilometre, which was the standard competitive rate. It was important to note that the Department could not go beyond a deviation of 20% on the project.

Mr Moremi lamented that every effort to resolve outstanding matters with the aggrieved contractor had proved futile. The Department was currently defending an arbitration, initiated by the contractor. The Department would appoint a new contractor once the arbitration was finalised.

Discussion

Mr W Thring (ACDP) expressed concern at the decision of the Department to proceed with the contractor, despite the arithmetic errors in the bill of quantity. Was there any proof in writing or otherwise that the contractor had agreed and then later reneged on the agreement?

What was the difference in the amount that would have completed the project and the amount that would be paid to the new contractor to complete the remaining three kilometres? Was it more or less?

Ms S Van Schalkwyk (ANC) sought clarity on the status of the development contractor. Had the Department paid any money to him? What were the positions of the project manager and the social facilitators on this matter? Where were the various reports on the road projects? It was concerning that the D206 was only 58% complete, having spent over 75% of the budget. What progress had been made on the construction of the road in view of the various challenges?

The management of the D201 also posed a challenge. How did the Department aim to execute the project within the specified timeframe, given the fact that the contract was awarded in November 2021 and was expected to commence within 5 to 25 days of award? Would the contractors be on site over the holidays?

Ms S Graham (DA) described the affected roads as diabolical, as there were more potholes than roads. The Department should up its game if it was ever going to deliver trafficable roads to the communities in question. It was alarming that it was considering a temporary intervention to the road promised to the community. It should take a more positive approach and make the road a fully-fledged project. She doubted if the Public Protector would ever instruct the Department to deviate from supply chain management (SCM) processes. Had the contractor met all the requirements of the Construction Industry Development Board (CIDB) and SCM processes? How much work did they do and what amount was paid for the work done? The Department had secured additional funding for the project from the Treasury -- would it follow SCM processes with the appointment of a new contractor? She commented that the fact that the bill of quantity had arithmetic errors rendered the project flawed from the outset. The Department should not have entered a contract with such a company. The hike in the project cost was appalling, and brought the cost per kilometre to approximately R11 million, compared to the budgeted R6,5 million.

Ms A Siwisa (EFF) described the situation in the North West as a mess. She echoed the concern of previous speakers in relation to the deplorable condition of the roads in question. The DPWR should put measures in place to discourage people from cheating the system. Road maintenance and construction should not be rushed. There should be a cautious effort to ensure quality and durable projects that offer maximum benefits to the host communities. The Department should ensure value for money by awarding contracts to people with impeccable track records. She expressed concern regarding the particular contractor in question, and wondered why the Department had awarded the contract to him. This contractor allegedly had a negative track record with the DPWR for project execution. There were lots of roads under construction in the North West with no completion in sight, and there appeared to be no accountability on the part of the Department. The national, provincial and local Department appeared to be fraught with gross incompetence. There was no effective leadership and consequence management.

Ms M Hicklin (DA) urged the Department to consider alternative technology, such as plastic roads, in its quest to meet the demands of the various communities. She reiterated the concern of Ms Graham that the project was flawed from the inception. The contractor had acted unethically and the Department appeared to be complicit in the whole process. Had the Department taken the effort to prevent the contractor from doing any further business with government entities? Had it made any effort to recover the money from the contractor?  The Department should put measures in place to ensure effective leadership and accountability at all levels.

Ms L Shabalala (ANC) wanted to know if the matter was being addressed in the court. The Department needed to ensure effective consequence management. The Portfolio Committee should work closely with the North West Provincial Committee on Public Works to effectively address the matter. Further, the Committee should pay an oversight visit to the affected areas to get first-hand knowledge of the situation.

Mr Seitlholo asked if the Department had acted on the recommendation of the former Premier of the North West Province, Prof Job Mokgoro, who had recommended that the affected roads be considered a state of disaster. He expressed surprise at the criteria that had qualified the controversial contractor at the expense of the nine earlier bidders. What had the qualification of the contractor been in terms of the Construction Industry Development Board (CIDB) requirements? As the constituency head of the affected areas who did oversight twice a month, he expressed displeasure at the current status of the roads. It was concerning that the Department had failed to consult effectively with the host communities before implementing the re-gravelling project. Since 2011, the communities had clamoured for an upgrade from gravel to surface standard roads to facilitate transport and economic development. Mere re-gravelling would not meet the expectations of the host communities.

It was equally important to know how much of the Provincial Department of Transport’s road maintenance grant was used, or was being used, for the re-gravelling or upgrading from gravel to surface standard. It was important that the Committee know the new contractor appointed to handle the 24 km stretch on the D201 road. How much would the project cost, from re-gravelling to surface standard? The Department should also clear the air on various allegations of financial misappropriation in relation to the project.

He noted that the D206 project had been halted due to the failure of the Department to pay the contractor an amount of R25 million. Media reports claimed that the DPWR had been mute and failed to respond to pleas from the contractor to process payment. The dispute had started around 2 June 2020, when the Department realised they had made a gross error in relation to the bill of quantity. The Department had defaulted on the payment of two invoices. An invoice of R15 million had been submitted on 12 July, but was paid only on 28 December 2020. The contractor had made another submission on 24 August 2020. but got paid only on 30 April 2021. The Department had paid the invoices only after prolonged legal battles, which had led to the abandonment of site operations at a point. The Department could not close the site during the ten-month dispute, and needed to keep paying the personnel costs to keep the site alive. This cost had been covered by the contract, and the contractor had struggled financially to date. The Department should bring every responsible official to book, and desist from tarnishing the image of the contractor.

The Chairperson expressed his dissatisfaction at the manner in which the Department handled development contractors. While the Committee encouraged the development of local contractors, the Department had to ensure effective oversight to achieve value for money. Had the DPWR received regular reports from the project manager? Had it got regular updates from the social facilitator to know how the community felt about the project?

DPWR's response

Mr Moremi provided a detailed background to the problem in response to the concerns of Members. For a long time, the North West provincial government had had numerous challenges with its roads. The challenges with road D201 and similar roads dated back to over ten years. Politicians had promised roads to communities, but could not deliver due to financial constraints. The Department had held a number of consultative sessions with the communities with a view to resolving the problems. Despite this, a number of uprisings had occurred, which had prompted Departmental officials, the MEC for the DPWR and local municipalities to intensify measures to address the matter. The Department had been able to resolve 80 to 90% of the challenges to date.

Regarding stakeholder engagements, Mr Moremi said the Department had held numerous meetings with the office of the Speaker in Greater Taung and representatives of the affected communities. All parties had agreed to the temporary measure of re-gravelling to ensure the road became trafficable and facilitated access to services. The Department had advertised the tender, but none of the bidders had met the minimum requirements of the project. The Department had thus decided to adopt a quicker approach to the selection of the contractor in order to address the need of the affected communities.

The Public Prosecutor, in response to several complaints, had ruled that the Department should reinstate all the contractors on the Contractor Development Programme. This had really fast-tracked the appointment of the contractor for the re-gravelling project on the D201. The contractor had committed effectively to the project, but the torrential rains towards the end of 2020 and early 2021 had disrupted the progress made. The project was 80 to 90% complete by the time the flood started in 2020, with an estimated expenditure of R18 million out of the budgeted R21 million. The Department had an obligation to bring the contractor back on site to fix the road. However, the contractor could not continue with the project due to incessant threats from the community.

The SIU investigation was part of the intervention measures to salvage the road situation in the North West province. The Department would be forced to implement all the recommendations of the SIU, and all the responsible parties would be held accountable. The SIU investigations had started in May, and the Department anticipated a report at the end of January.

Speaking of the rift between Botong Construction JV Nkolele and the Department, Mr Moremi said the Department had cut ties with the contractor due to his illogical and irrational request, which it had found unacceptable, as the contractor had deviated completely off the initially agreed budget. The contractor had allegedly asked for a deviation of 75%, which was a far cry from the stipulated 20% by the Treasury.

He said the Department would evaluate the alternative technology recommended by Ms Hicklin.

The Department had followed procurement processes in the appointment of the new contractor to complete the D201 project. It would reveal the name of the contractor to the Committee at the appropriate time.

Mr Alfred Mafune, Director: Planning and Design, DPWR, said the conditions of the provincial road maintenance grants did not allow the Department to spend such grants on the D201 road. Of the R21.36 million budgeted for the D206, it had incurred R18 million, as opposed to hyped figures reported in the media. The communities affected by the roads were aware of the temporary re-gravelling measure of the Department, which was necessitated by insufficient funding to take the road from gravel to surface standard. It had held numerous consultative sessions with all stakeholders. It had taken the temporary approach in anticipation of a more permanent road when sufficient funds were available.

He alleged that the contractor had been unscrupulous in the bill of quantity submitted to the Department, and had intentionally aimed for a deviation in excess of R20 million. The struggle with the contractor had started when the Department refused the request to deviate beyond the acceptable limit. It had urged the contractor to review the bill of quantity, but the contractor had declined.  He said the Department was not indebted to the contractor in any way.

Mr Mtshutshisi Manci said that the Department had undertaken a public procurement process in the 2013/ 14 financial year, where it had invited contractors in the North West Province to express interest in being enrolled under the Contractor Development Programme. The bid was advertised in a regional newspaper in the North West, and over 200 contractors had applied. The contractors had been subjected to evaluation of their matric certificates, valid CIDB rating and company registration. They underwent psychometric and psychological assessments, interviews, written and oral assessments, financial and security screening, which gave a succinct picture of their experience in the construction industry. The Department had eventually accepted 64 contractors on the programme.

The contractor in question, the Level Trading Company, had a level 3 CIDB status when it joined the programme, but had gone ahead to acquire level 7 status at the moment, which showed the company had really benefited from the Departmental programme. The Level Trading Company was one of the two selected contractors from the region, which was why it was appointed for the project. The company had already completed 90% of the work before the floods, which had really destroyed the progress made because the elevation of the road could not handle the water line. This situation had angered community members, who had impounded the contractor's equipment and threatened further damage. The standing time cost the Department R3.3 million, which had placed the project in an even more precarious state financially.

The DPWR would ensure that the new contractor did everything to ensure the success of the road project. The community continued to insist on the upgrade of the road from gravel to surface standard, which the Department had not budgeted for at the time it came into the picture.

Discussion

Ms Siwisa was concerned about how the Department went about the consultative sessions. The sessions did not include members of the community, who could have made valuable inputs into the project. The circumstances surrounding the deviation and the termination of the contract were also suspicious. It was appalling that the road got flooded away after reaching 90% completion. Was there any evidence to support this claim? Had the Department or the contractor conducted a survey of the area before the start of the project? Was the possibility of torrential rains considered during the design and implementation processes? It was painful that the Department could not complete the road project, which had the potential to alleviate poverty and improve living standards of the host communities. It was obvious that the Department did not have a clear intention to ensure effective public participation in the project so it was therefore not surprising that the community had decided to stop it.

Ms Graham referred to the D201 road project, and asked if the Department had derived value for the R18 million spent on it? How much of work already done had to be redone, and what was the new tender amount? She noted that the Contractor Development Programme in the North West was fraught with various problems, especially financial mismanagement, hence the decision to terminate the programme.

She expressed concern about the reinstatement of the contractors to the Contractor Development Programme. The programme catered for contractors with a CIDB rating of one to five. At what point had the Department reinstated the contractors? What was the intervening period to upgrade the contractors from level 3 to level 7? Did the contractor in question have the capacity to handle a R21 million project? Why did the Department appoint a contractor who had miscalculated the bill of quantity by R24 million? It was now known that the R65 million project would eventually cost around R114 million.

Ms Hicklin also sought clarity on how the contractor had progressed from level 3 to level 7. What type of upskilling had taken place, and within what timeframe? Did the contractor conduct any environmental impact assessment (EIA) at the inception of the project and after the floods?

Department's response

Mr Moremi said that the deviation allowed contractors on the programme to participate in certain projects without necessarily competing with conventional contractors. The Department allocated work to the contractors on the basis of availability. The migration from lower to higher levels was a gradual progression.

This was not the first time the Department had experienced rains in the area. However, the floods at the end of 2020 and early 2021 had been severe, resulting from the El Nino weather pattern, which had destroyed most roads in the affected areas. The Department aimed to have a more permanent approach to the road. It would update the Committee on the status of the contractor and the contract amount once the project was formally finalised. Proper structures would be constructed when the tender was awarded to tar the road.

An EIA had been conducted in 2013, and it was found that the area had low elevation and was prone to flooding.

The contract would not commence this year. The contractor would be appointed later in 2021 and the project would commence in 2022.

The DPWR had decided to have consultative sessions with the community delegations due to the volatile nature of the communities.

Conclusion

The Chairperson thanked the Department for their presentations and responses, as well as Mr Seitlholo for bringing the petitions to the Committee. She said the Committee needed to pressure the Department to provide answers to the outstanding questions. All parties with oversight functions, including the provincial Portfolio Committee on Public Works and Roads, the Portfolio Committee on Transport, the National Council of Provinces (NCOP), the Standing Committee on Public Accounts (SCOPA) and Head of constituencies must ensure accountability on the part of the provincial DPWR. Politicians should desist from issuing empty promises to their communities. The work of the Portfolio Committee on Public Works would further bolster public trust in the government.

Mr Seitlholo urged the Committee to invite all stakeholders to future meetings to get a more balanced and objective view of the situation.

The Chairperson encouraged Mr Seitlholo to engage with community representatives at both the local and provincial levels.

Committee matters

The Committee considered and adopted its minutes dated 11 May 2021, 24 November 2021.

Ms Graham urged the Committee to pressure the DPWR to provide answers to all concerns raised by the Members. The roads in North West were diabolical, and urgent steps were required to salvage the situation.

It was also important that the Committee focus on the Jersey Barrier Wall in KwaZulu-Natal (KZN). A “construction mafia” had allegedly “hijacked” the project, and there was no value for money.

Ms Van Schalkwyk urged the Committee to attend the annual general meeting scheduled for 7 December between 10:00 and 12:00.

Ms Hicklin said the Committee needed to focus on the activities of the Council for the Built Environment (CBE), which was the overarching body of built environment professionals. The Committee should have effective oversight over the body.

Ms Shabalala sought clarity on the roles of the SIU, the Auditor-General (AG) and the NCOP to ensure accountability on the part of the provincial Department of Public Works and Roads in the North West. Why had the Department been placed under administration? Was it related to the matters involving the roads, or to other matters?

The Chairperson recommended that the Portfolio Committee on Transport also play its part in ensuring accountability on the part of the DPWR. The nation continued to face numerous challenges including HIV/ AIDS, gender-based violence and femicide (GBVF), and the new strain of COVID-19. Members should follow all health safety protocols and stay safe in the festive period. She thanked all MPs for their dedication during the year, which had culminated in outstanding success.

The meeting was adjourned.

The Chairperson took the opportunity to commemorate World's AIDS Day (1 December). She said the disease affected every sex, race and society. It was worrisome that the number of infected people kept increasing. The challenge associated with HIV/AIDS was enormous, given the fact that it had no cure. Coupled with the challenge of AIDS was the COVID-19 pandemic. It was important to develop measures to bolster the safety of the nation.

The meeting aimed to address the petition raised by community members in the North West Province over the alleged irregularities involved in various road projects.

Petition presented by Mr Isaac Seitlholo

Mr I Seitlholo, the Democratic Alliance Member of Parliament for the Greater Taung constituency, thanked the Committee for allowing him to speak on important matters in relation to the Department of Public Works and Roads (DPWR) in the North West Province, with particular emphasis on the Greater Taung municipality. Trafficable roads were a vital need in the municipality, and this fell within the mandate of the provincial DPWR.

He had escalated the matter to the national DPW, because the provincial Department had been placed under administration for quite some time. The petitions dealt with two specific road projects that had been mired in controversies, allegations, blame shifting and lack of accountability. It would help in future discourse to invite community leaders in the municipality and other stakeholders to get a balanced view on the matter. Several efforts had been made to get clarity on the status of the matter from DPWR's MEC.

Based on the information on the provincial Department's website, none of the nine contractors that had bid for the project had been awarded the contract. It was troubling that the contractor, Level Trading Company, which eventually was awarded the contract, did not appear on the bidders' list. The residents of Matlapaneng had embarked on several protest actions in 2019 to demand the construction of the tarred road that had been promised to them by the provincial government since 2011. The community leaders and members, during an oversight visit, had alleged that the Department had not consulted them about the re-gravelling project, and there had been no public participation to ensure their inputs.

It was evident that the community wanted the road tarred to facilitate easier transport and trade, as opposed to re-gravelling. The Taung Daily News, in February 2020, had revealed that the road was inaccessible to residents, and the re-gravelled road had been washed away by floods, which further worsened the lives and wellbeing of the residents, despite approximately R40 million having been invested in the project.

The handover of the project had taken place on 16 July 2020 in a suspicious manner, to the dismay of the community. It was therefore important to get clarity from the provincial Department about the bidding process and the actual re-gravelling project. The provincial Department of Transport had also written a petition to the Secretariat of the Portfolio Committee on the matter, because the Department also awarded provincial road maintenance grants, of which 20% could be used to develop or construct roads from gravel to tarred surfaces.

The second petition dealt with road D306, which had been extended to include other roads within the Greater Taung municipality. The project spanned a distance of 10 km from Matsheng village through to Molelema village.

The road was meant to be upgraded from gravel to a tarred surface, but the contractor had paused the project in November of 2020. In a community meeting, held on 20th June 2020, community members had raised various allegations, including untimely payments and fraud in the tender process. On the other hand, the DPWR had said it had terminated the projects due to unreasonable financial demands from the contractor. The Department had also allegedly said the contractor had threatened to complete only 70% of the road if additional funds were not provided.

In contrast, the community liaison officer (CLO) alleged that the Department had missed two payments to the contractor amounting to R15 million for the three months from June to August. The CLO revealed that a total of R65 million had been allocated to the project, which was sufficient to successfully complete the project. It was therefore concerning that the contractor had requested additional funds. The CLO said that the contractor had paid salaries from his own pocket over the period that the DPWR had refused to pay him.

The community had indicated that the Department refused to hold meetings with them to provide reasons for the stoppage of the project. He added that Department had not provided a response to both petitions.

The Special Investigating Unit (SIU) had launched a probe into what had really happened to the D201 project. He urged the Department to provide answers to both petitions raised.

Response by DPWR

Road D201

Mr Molate Murdock Moremi, Administrator, Department of Public Works and Roads, North West Province, clarified what had transpired in relation to road D201.

The representatives of the community had approached the Department about the delay, and several meetings were held at the Office of the Speaker of the Greater Taung local municipality, with all villages affected by the road represented. All parties had agreed that the Department should re-gravel the road in the interim to make it trafficable, while waiting for the Department to fulfil other commitments in the area. It was worth mentioning that the Department had not changed the level of funds sufficient to implement the project promised to the community in 2011. It had issued the bill of quantity for the re-gravelling project to all shortlisted bidders.

Unfortunately, none of the bidders had met all the criteria set. The Department, due to rising pressure from the community, had to develop measures to fast-track the appointment of a contractor who could execute the project in line with the Department's specifications. The office of the Public Prosecutor had instructed the DPWR to implement the Contractor Development Programme with immediate effect, to salvage the situation.

The Department had resorted to a contractor, Level Trading Company, on its database. This had helped to bypass the lengthy procurement process. The contractor got to the site in 2020, but the floods in late 2020 and early 2021 had destroyed all progress made on the project. The community became dissatisfied with the project. The Department had held a number of meetings with the community with a view to resolving the problem and getting the contractor back on site. The meetings did not yield positive outcomes due to concerns raised by the community, and the Department had to take measures to salvage the situation.

In early 2021, the DPWR had approached the Treasury for additional funding to ensure the successful execution of the project. It had received the additional funding in the 2021/ 22 financial year and proceeded to finalise the designs for the upgrading of the road, and had advertised a tender to upgrade the road from gravel to a tarred surface. The tender for the road from Pampierstadt to Matlapaneng closed on 5 August, and the Department had awarded the bid in November.

Upgrading of 10km of roads from Molelema to Matsheng

Mr Moremi then addressed the situation with regard to Project PWR 239/14, which involved the upgrading of gravel roads to surface standard, of roads D209, D208, D206 and D222, D997, D220 and Z216, from Molelema to Matsheng, stretching approximately 10 km.

This project traversed a number of villages. The DPWR was the client; Afeng Consulting Engineers were the consultants, while Botong Construction JV Nkolele was the contractor. The project was based in the Dr Ruth Segomotsi Mompati District. The contract amount was R65 million, and the Department had spent R49 million on the project to date. The project, with a forecast duration of ten months, had started on 17 February 2020, with 25 January 2021 as the expected completion date. The project was terminated at 58% completion.

The Department had noted some arithmetic errors in the bill of quantities, and demanded that the contractor revise the bill of quantities to indicate balanced rate, and a detailed execution plan for the project within the approved cost, timeframe and scope of the project.

It was regrettable that the contractor had refused to comply with the instructions. The contractor had instead requested a variation to the tune of a 75% increase, which the Department considered illogical and unreasonable. In light of this, the Department had had no choice but to terminate the contract and award the remainder of the project to another contractor who could stick to the requirements of the Department. Major activities on the project include installation of culverts, roadbeds, coat and double seal, amongst others. The Department had targeted 22 jobs on the project with priority given to youths, women and people with disabilities. 16 youths and two women were among the workforce on the project.

Local sub-contractors were responsible for 80% of the work, including concrete drains, storm water culverts, reserve clearance, plant and equipment hire, and so on. The Department had made it clear that the prospective contractor would complete the remainder of the project at R6.5 million per kilometre, which was the standard competitive rate. It was important to note that the Department could not go beyond a deviation of 20% on the project.

Mr Moremi lamented that every effort to resolve outstanding matters with the aggrieved contractor had proved futile. The Department was currently defending an arbitration, initiated by the contractor. The Department would appoint a new contractor once the arbitration was finalised.

Discussion

Mr W Thring (ACDP) expressed concern at the decision of the Department to proceed with the contractor, despite the arithmetic errors in the bill of quantity. Was there any proof in writing or otherwise that the contractor had agreed and then later reneged on the agreement?

What was the difference in the amount that would have completed the project and the amount that would be paid to the new contractor to complete the remaining three kilometres? Was it more or less?

Ms S Van Schalkwyk (ANC) sought clarity on the status of the development contractor. Had the Department paid any money to him? What were the positions of the project manager and the social facilitators on this matter? Where were the various reports on the road projects? It was concerning that the D206 was only 58% complete, having spent over 75% of the budget. What progress had been made on the construction of the road in view of the various challenges?

The management of the D201 also posed a challenge. How did the Department aim to execute the project within the specified timeframe, given the fact that the contract was awarded in November 2021 and was expected to commence within 5 to 25 days of award? Would the contractors be on site over the holidays?

Ms S Graham (DA) described the affected roads as diabolical, as there were more potholes than roads. The Department should up its game if it was ever going to deliver trafficable roads to the communities in question. It was alarming that it was considering a temporary intervention to the road promised to the community. It should take a more positive approach and make the road a fully-fledged project. She doubted if the Public Protector would ever instruct the Department to deviate from supply chain management (SCM) processes. Had the contractor met all the requirements of the Construction Industry Development Board (CIDB) and SCM processes? How much work did they do and what amount was paid for the work done? The Department had secured additional funding for the project from the Treasury -- would it follow SCM processes with the appointment of a new contractor? She commented that the fact that the bill of quantity had arithmetic errors rendered the project flawed from the outset. The Department should not have entered a contract with such a company. The hike in the project cost was appalling, and brought the cost per kilometre to approximately R11 million, compared to the budgeted R6,5 million.

Ms A Siwisa (EFF) described the situation in the North West as a mess. She echoed the concern of previous speakers in relation to the deplorable condition of the roads in question. The DPWR should put measures in place to discourage people from cheating the system. Road maintenance and construction should not be rushed. There should be a cautious effort to ensure quality and durable projects that offer maximum benefits to the host communities. The Department should ensure value for money by awarding contracts to people with impeccable track records. She expressed concern regarding the particular contractor in question, and wondered why the Department had awarded the contract to him. This contractor allegedly had a negative track record with the DPWR for project execution. There were lots of roads under construction in the North West with no completion in sight, and there appeared to be no accountability on the part of the Department. The national, provincial and local Department appeared to be fraught with gross incompetence. There was no effective leadership and consequence management.

Ms M Hicklin (DA) urged the Department to consider alternative technology, such as plastic roads, in its quest to meet the demands of the various communities. She reiterated the concern of Ms Graham that the project was flawed from the inception. The contractor had acted unethically and the Department appeared to be complicit in the whole process. Had the Department taken the effort to prevent the contractor from doing any further business with government entities? Had it made any effort to recover the money from the contractor?  The Department should put measures in place to ensure effective leadership and accountability at all levels.

Ms L Shabalala (ANC) wanted to know if the matter was being addressed in the court. The Department needed to ensure effective consequence management. The Portfolio Committee should work closely with the North West Provincial Committee on Public Works to effectively address the matter. Further, the Committee should pay an oversight visit to the affected areas to get first-hand knowledge of the situation.

Mr Seitlholo asked if the Department had acted on the recommendation of the former Premier of the North West Province, Prof Job Mokgoro, who had recommended that the affected roads be considered a state of disaster. He expressed surprise at the criteria that had qualified the controversial contractor at the expense of the nine earlier bidders. What had the qualification of the contractor been in terms of the Construction Industry Development Board (CIDB) requirements? As the constituency head of the affected areas who did oversight twice a month, he expressed displeasure at the current status of the roads. It was concerning that the Department had failed to consult effectively with the host communities before implementing the re-gravelling project. Since 2011, the communities had clamoured for an upgrade from gravel to surface standard roads to facilitate transport and economic development. Mere re-gravelling would not meet the expectations of the host communities.

It was equally important to know how much of the Provincial Department of Transport’s road maintenance grant was used, or was being used, for the re-gravelling or upgrading from gravel to surface standard. It was important that the Committee know the new contractor appointed to handle the 24 km stretch on the D201 road. How much would the project cost, from re-gravelling to surface standard? The Department should also clear the air on various allegations of financial misappropriation in relation to the project.

He noted that the D206 project had been halted due to the failure of the Department to pay the contractor an amount of R25 million. Media reports claimed that the DPWR had been mute and failed to respond to pleas from the contractor to process payment. The dispute had started around 2 June 2020, when the Department realised they had made a gross error in relation to the bill of quantity. The Department had defaulted on the payment of two invoices. An invoice of R15 million had been submitted on 12 July, but was paid only on 28 December 2020. The contractor had made another submission on 24 August 2020. but got paid only on 30 April 2021. The Department had paid the invoices only after prolonged legal battles, which had led to the abandonment of site operations at a point. The Department could not close the site during the ten-month dispute, and needed to keep paying the personnel costs to keep the site alive. This cost had been covered by the contract, and the contractor had struggled financially to date. The Department should bring every responsible official to book, and desist from tarnishing the image of the contractor.

The Chairperson expressed his dissatisfaction at the manner in which the Department handled development contractors. While the Committee encouraged the development of local contractors, the Department had to ensure effective oversight to achieve value for money. Had the DPWR received regular reports from the project manager? Had it got regular updates from the social facilitator to know how the community felt about the project?

DPWR's response

Mr Moremi provided a detailed background to the problem in response to the concerns of Members. For a long time, the North West provincial government had had numerous challenges with its roads. The challenges with road D201 and similar roads dated back to over ten years. Politicians had promised roads to communities, but could not deliver due to financial constraints. The Department had held a number of consultative sessions with the communities with a view to resolving the problems. Despite this, a number of uprisings had occurred, which had prompted Departmental officials, the MEC for the DPWR and local municipalities to intensify measures to address the matter. The Department had been able to resolve 80 to 90% of the challenges to date.

Regarding stakeholder engagements, Mr Moremi said the Department had held numerous meetings with the office of the Speaker in Greater Taung and representatives of the affected communities. All parties had agreed to the temporary measure of re-gravelling to ensure the road became trafficable and facilitated access to services. The Department had advertised the tender, but none of the bidders had met the minimum requirements of the project. The Department had thus decided to adopt a quicker approach to the selection of the contractor in order to address the need of the affected communities.

The Public Prosecutor, in response to several complaints, had ruled that the Department should reinstate all the contractors on the Contractor Development Programme. This had really fast-tracked the appointment of the contractor for the re-gravelling project on the D201. The contractor had committed effectively to the project, but the torrential rains towards the end of 2020 and early 2021 had disrupted the progress made. The project was 80 to 90% complete by the time the flood started in 2020, with an estimated expenditure of R18 million out of the budgeted R21 million. The Department had an obligation to bring the contractor back on site to fix the road. However, the contractor could not continue with the project due to incessant threats from the community.

The SIU investigation was part of the intervention measures to salvage the road situation in the North West province. The Department would be forced to implement all the recommendations of the SIU, and all the responsible parties would be held accountable. The SIU investigations had started in May, and the Department anticipated a report at the end of January.

Speaking of the rift between Botong Construction JV Nkolele and the Department, Mr Moremi said the Department had cut ties with the contractor due to his illogical and irrational request, which it had found unacceptable, as the contractor had deviated completely off the initially agreed budget. The contractor had allegedly asked for a deviation of 75%, which was a far cry from the stipulated 20% by the Treasury.

He said the Department would evaluate the alternative technology recommended by Ms Hicklin.

The Department had followed procurement processes in the appointment of the new contractor to complete the D201 project. It would reveal the name of the contractor to the Committee at the appropriate time.

Mr Alfred Mafune, Director: Planning and Design, DPWR, said the conditions of the provincial road maintenance grants did not allow the Department to spend such grants on the D201 road. Of the R21.36 million budgeted for the D206, it had incurred R18 million, as opposed to hyped figures reported in the media. The communities affected by the roads were aware of the temporary re-gravelling measure of the Department, which was necessitated by insufficient funding to take the road from gravel to surface standard. It had held numerous consultative sessions with all stakeholders. It had taken the temporary approach in anticipation of a more permanent road when sufficient funds were available.

He alleged that the contractor had been unscrupulous in the bill of quantity submitted to the Department, and had intentionally aimed for a deviation in excess of R20 million. The struggle with the contractor had started when the Department refused the request to deviate beyond the acceptable limit. It had urged the contractor to review the bill of quantity, but the contractor had declined.  He said the Department was not indebted to the contractor in any way.

Mr Mtshutshisi Manci said that the Department had undertaken a public procurement process in the 2013/ 14 financial year, where it had invited contractors in the North West Province to express interest in being enrolled under the Contractor Development Programme. The bid was advertised in a regional newspaper in the North West, and over 200 contractors had applied. The contractors had been subjected to evaluation of their matric certificates, valid CIDB rating and company registration. They underwent psychometric and psychological assessments, interviews, written and oral assessments, financial and security screening, which gave a succinct picture of their experience in the construction industry. The Department had eventually accepted 64 contractors on the programme.

The contractor in question, the Level Trading Company, had a level 3 CIDB status when it joined the programme, but had gone ahead to acquire level 7 status at the moment, which showed the company had really benefited from the Departmental programme. The Level Trading Company was one of the two selected contractors from the region, which was why it was appointed for the project. The company had already completed 90% of the work before the floods, which had really destroyed the progress made because the elevation of the road could not handle the water line. This situation had angered community members, who had impounded the contractor's equipment and threatened further damage. The standing time cost the Department R3.3 million, which had placed the project in an even more precarious state financially.

The DPWR would ensure that the new contractor did everything to ensure the success of the road project. The community continued to insist on the upgrade of the road from gravel to surface standard, which the Department had not budgeted for at the time it came into the picture.

Discussion

Ms Siwisa was concerned about how the Department went about the consultative sessions. The sessions did not include members of the community, who could have made valuable inputs into the project. The circumstances surrounding the deviation and the termination of the contract were also suspicious. It was appalling that the road got flooded away after reaching 90% completion. Was there any evidence to support this claim? Had the Department or the contractor conducted a survey of the area before the start of the project? Was the possibility of torrential rains considered during the design and implementation processes? It was painful that the Department could not complete the road project, which had the potential to alleviate poverty and improve living standards of the host communities. It was obvious that the Department did not have a clear intention to ensure effective public participation in the project so it was therefore not surprising that the community had decided to stop it.

Ms Graham referred to the D201 road project, and asked if the Department had derived value for the R18 million spent on it? How much of work already done had to be redone, and what was the new tender amount? She noted that the Contractor Development Programme in the North West was fraught with various problems, especially financial mismanagement, hence the decision to terminate the programme.

She expressed concern about the reinstatement of the contractors to the Contractor Development Programme. The programme catered for contractors with a CIDB rating of one to five. At what point had the Department reinstated the contractors? What was the intervening period to upgrade the contractors from level 3 to level 7? Did the contractor in question have the capacity to handle a R21 million project? Why did the Department appoint a contractor who had miscalculated the bill of quantity by R24 million? It was now known that the R65 million project would eventually cost around R114 million.

Ms Hicklin also sought clarity on how the contractor had progressed from level 3 to level 7. What type of upskilling had taken place, and within what timeframe? Did the contractor conduct any environmental impact assessment (EIA) at the inception of the project and after the floods?

Department's response

Mr Moremi said that the deviation allowed contractors on the programme to participate in certain projects without necessarily competing with conventional contractors. The Department allocated work to the contractors on the basis of availability. The migration from lower to higher levels was a gradual progression.

This was not the first time the Department had experienced rains in the area. However, the floods at the end of 2020 and early 2021 had been severe, resulting from the El Nino weather pattern, which had destroyed most roads in the affected areas. The Department aimed to have a more permanent approach to the road. It would update the Committee on the status of the contractor and the contract amount once the project was formally finalised. Proper structures would be constructed when the tender was awarded to tar the road.

An EIA had been conducted in 2013, and it was found that the area had low elevation and was prone to flooding.

The contract would not commence this year. The contractor would be appointed later in 2021 and the project would commence in 2022.

The DPWR had decided to have consultative sessions with the community delegations due to the volatile nature of the communities.

Conclusion

The Chairperson thanked the Department for their presentations and responses, as well as Mr Seitlholo for bringing the petitions to the Committee. She said the Committee needed to pressure the Department to provide answers to the outstanding questions. All parties with oversight functions, including the provincial Portfolio Committee on Public Works and Roads, the Portfolio Committee on Transport, the National Council of Provinces (NCOP), the Standing Committee on Public Accounts (SCOPA) and Head of constituencies must ensure accountability on the part of the provincial DPWR. Politicians should desist from issuing empty promises to their communities. The work of the Portfolio Committee on Public Works would further bolster public trust in the government.

Mr Seitlholo urged the Committee to invite all stakeholders to future meetings to get a more balanced and objective view of the situation.

The Chairperson encouraged Mr Seitlholo to engage with community representatives at both the local and provincial levels.

Committee matters

The Committee considered and adopted its minutes dated 11 May 2021, 24 November 2021.

Ms Graham urged the Committee to pressure the DPWR to provide answers to all concerns raised by the Members. The roads in North West were diabolical, and urgent steps were required to salvage the situation.

It was also important that the Committee focus on the Jersey Barrier Wall in KwaZulu-Natal (KZN). A “construction mafia” had allegedly “hijacked” the project, and there was no value for money.

Ms Van Schalkwyk urged the Committee to attend the annual general meeting scheduled for 7 December between 10:00 and 12:00.

Ms Hicklin said the Committee needed to focus on the activities of the Council for the Built Environment (CBE), which was the overarching body of built environment professionals. The Committee should have effective oversight over the body.

Ms Shabalala sought clarity on the roles of the SIU, the Auditor-General (AG) and the NCOP to ensure accountability on the part of the provincial Department of Public Works and Roads in the North West. Why had the Department been placed under administration? Was it related to the matters involving the roads, or to other matters?

The Chairperson recommended that the Portfolio Committee on Transport also play its part in ensuring accountability on the part of the DPWR. The nation continued to face numerous challenges including HIV/ AIDS, gender-based violence and femicide (GBVF), and the new strain of COVID-19. Members should follow all health safety protocols and stay safe in the festive period. She thanked all MPs for their dedication during the year, which had culminated in outstanding success.

The meeting was adjourned.