Department of Public Works on funding of turn-around strategy

Public Works and Infrastructure

09 June 2015
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Department of Public Works (DPW) told the Committee that corruption, mismanagement and poor performance had led to the DPW failing to deliver on its mandate. The turnaround strategy – the Seven-Year Business Improvement Plan -- had been launched in January 2012, with the core of the strategy being zero tolerance for fraud and corruption, and improving business. Prior attempts at change had failed due to leadership instability and ineffective change management.

In 2011, following adverse audit findings, the then new Minister’s engagements with the Department had confirmed that it was in a dire state, with areas of dysfunction. High levels of fraud and corruption were evident in the findings of the Special Investigation Unit and the Public Protector. They had pointed to the need for fundamental reorganisation, and immediate interventions to stabilise the Department.

The Seven-Year turnaround strategy involved:

  • Stabilisation – focused on immediate challenges. Stabilised areas created the potential for more fundamental change.
  • Efficiency enhancement systematic improvements, with a redesign of processes, systems and structural elements, and a focus on key strategic areas to improve efficiencies and effectiveness.
  • Sustainability and growth – a policy review, involving refreshing the mandate of the DPW family, and the Public Works Act.

Members asked about the difficulties which the DPW had in accounting for government properties in municipalities, and questioned the effectiveness of Operation Bring Back in helping the Department to retrieve its misappropriated properties. They asked about the Department’s role in inner city regeneration projects, and wanted to know which towns had been targeted for small harbour development. Concerns were expressed over the responsibility for security at the parliamentary villages, and the poor quality of some DPW buildings was also highlighted. Members asked whether the Department had the capacity to manage the Property Management Trading Entity successfully, and wanted to establish when acting positions would be filled permanently. 

Meeting report

Department of Public Works turnaround strategy

Mr Dhaya Govender, Head of the Business Improvement Unit, DPW, said its key mandate was to be the custodian and manager of the state’s immovable assets. Corruption, mismanagement and poor performance had led to the DPW failing to deliver on its mandate. The turnaround strategy – the Seven-Year Business Improvement Plan -- had been launched in January 2012, with the core of the strategy being zero tolerance for fraud and corruption, and improving business. Prior attempts at change had failed due to leadership instability and ineffective change management.

In 2011, following adverse audit findings, the then new Minister’s engagements with the Department had confirmed that it was in a dire state, with areas of dysfunction. High levels of fraud and corruption were evident in the findings of the Special Investigation Unit and the Public Protector. In November 2011, the Minister had requested assistance from the Technical Assistance Unit (TAU) of National Treasury, to provide a rapid diagnostic on the state of affairs within the Department. The report and findings had been presented in January 2012, and comprehensively detailed problems of mismanagement and misalignment. They had pointed to the need for fundamental reorganisation, and immediate interventions to stabilise the Department.

The turnaround strategy involved:

  • Stabilisation – focused on immediate challenges. Stabilised areas created the potential for more fundamental change.
  • Efficiency enhancement systematic improvements, with a redesign of processes, systems and structural elements, and a focus on key strategic areas to improve efficiencies and effectiveness.
  • Sustainability and growth – a policy review, involving refreshing the mandate of the DPW family, and the Public Works Act.

The Property Management Trading Entity (PMTE) was being operationalised to improve service delivery in the context of the government’s priorities. This would reduce costs to the Department and the fiscus by maintaining the value of Government’s assets, improving access to and quality of Government’s assets, optimal utilisation of state stock and move away from leasing-in, and using the state’s vacant properties productively to create a funding stream for capital maintenance and improvements to extend the life-cycle of existing state properties. The focus would be on reclaiming the mandate of Public Works by developing small proclaimed and unproclaimed harbours, developing government precincts in small towns and rural areas, safeguarding the state’s assets from vandalism, theft and invasion, reclaiming all misappropriated state land, and preserving government assets, structures, buildings and land parcels.

The Department had revised and adopted an anti-fraud and corruption strategy. The internal investigation backlog of 250 cases had been reduced significantly and investigations were currently being instituted within 30 days of receipt of allegations. To date, 296 allegations had been received, 190 had been completed, 67 were at various stages of investigation, and 39 had been referred to other business units, the Special Investigating Unit (SIU) or the police. Emanating from the investigations, 156 disciplinary actions had been recommended, and100 had been finalised. Sanctions had ranged from dismissals, final written warnings, written warnings.

 

Discussion

Ms P Adams (ANC) said the Committee wanted to put the Department on the right footing. However, the Department had developed a seven-year strategy, but the Members’ terms ended in five years. She asked how the DPW had foreseen that the Minister would remain in office after the 2014 elections. She asked why there had been a decrease in the PMTE’s performance, despite an increase in workshops from 2006 to 2010. Which cities had been earmarked for inter-city regeneration and which towns had been targeted for small harbour development, as this would benefit tourism? The statement that the Expanded Public Works Programme (EPWP) was performing well, but reporting was poor, was a contradiction. When would the acting positions be made permanent? She asked for the DPW to put an estimate on the number of government properties in municipalities. She asked what the reclaiming of harbours entailed.

Mr K Sithole (IFP) asked if the DPW had stabilised its leadership, and whether it had the capacity to manage the PTME. He asked for details of the TAU report submitted to the Minister. Was there a link between the DPW inner city regeneration, and the activities of Human Settlements?

Mr K Mubu (DA) said three Members had their places broken into at the Acacia Park parliamentary village. The likelihood of ladies being robbed and raped should be considered, and the DPW and the police must ensure that parliamentary villages were secure. What public relations exercises had the DPW engaged in, as its name was associated with a bad image, such as the overspending on Nkandla? When he was on the Labour Committee, they had visited labour offices that were without roofs or air conditioning in the Eastern Cape. “Horrible” was the best word to describe the conditions of those offices, and if he had been offered a job in such offices, even if he were desperate, he would have refused. He asked why it was taking so long for the DPW to take back misappropriated state land. It was of no use for the DPW to focus on inner city generation if there was no employment for the people.

Ms Adams asked how the DPW ensured that state property remained state property. Which programme did Work4You fall under? She asked if the hotline number worked, because it had taken six months to have her bath working in the parliamentary village. If Members were treated this way, she was doubtful that other departments were treated better. She asked for a breakdown of the learners in terms of their level of studies in tertiary institutions. Mr Govender, as a former teacher, should have simplified the presentation so that Members understood what names such as Zimisele, Blue Peter and Kieviskroon meant.

Mr Cox Mokgoro, Chief Financial Officer, DPW, said the establishment of MPTE had been approved in 2006, and the National Treasury had granted an exemption from reporting in terms of the Generally Recognised Accounting Practice (GRAP) format. An audit had then been conducted and there had been some negative findings which had been addressed in the clean audit plan, as shown in the presentation. .

Mr Govender thanked Ms Adams for reminding him of his former profession. However, he had been out of the classroom for some time. Blue Peter was a company that had led the organisational transformation project of the DPW, but the project had never been completed. People had been made to reapply for jobs and this had created a lot of resentment, and the DPW was still living with the effects of this. Zimisele was a Department of Public Service and Administration (DPSA) initiative aimed at improving service delivery. Officials had been appointed, but the programme had also been abandoned. A presentation on timelines had been presented in the past. When the turnaround strategy had been developed, no-one had an idea of who would be back, but the strategy was written on the basis that the leadership stability of the minister, deputy minister, director general and deputies, be addressed as an issue of primary importance. There was a link between the high turnover of executives and senior executives in the DPW with poor performance. The Tshwane inner city regeneration programme had failed to deliver what was expected.

Mr Mziwonke Dlabantu, Director-General: Department of Public Works, said inner city regeneration was not in the DPW’s mandate. It was just contributing to the efficiency of cities. It was working with the Department of Cooperative Governance and Human Settlements to make sure that their programmes did not conflict. It was having discussions with Polokwane and other metro municipalities to help with inner city regeneration and investing appropriately in government facilities.

Mr Govender said it was now called planning and precinct development, not inner city regeneration. Some of the facilities provided by DPW were poor, especially where houses had been converted into offices to provide accommodation for Home Affairs. Some municipalities were providing the DPW with land to build relevant government offices. The TAU finding had been that the EPWP was performing better compared to other DPW programmes, but the presentation had depicted it in a contradictory way. TAU report had been summarised on pages seven and eight, but it was a very comprehensive report. The disbursement of grants had been poor at that time, but it had improved. The operationalisation of PMTE was a process and the presentation had shown what had been done and what still needed to be done. The DPW would work with the National Treasury and DPSA in operationalising the PMTE. Currently, it had satisfied the Treasury conditions for establishing it as a super branch within the DPW.

Mr Dlabantu said the concept of a government component was fairly new in government. Even though the Department was able to report on the annual performance plan of the PMTE, it used to have no five-year plan. It was the first time that it had a separate report on the PMTE as an entity. The PMTE had to be resourced with adequate staff and an operational budget. The appointment of a head, rather than acting head, of the PMTE would be announced by the Minister in due course. The process currently involved second level interviews to make sure that the successful candidate had the level of expertise required to run a successful PMTE.

The protection of prestige residences was an area that he and the Minister were concerned about. Significant improvements needed to take place. The whole management of parliamentary villages was being looked into, including whether it should be transferred to Parliament. The DPW managed the transport to transfer Members and officials to and from parliamentary villages, but the DPW was not the Department of Transport and should deal only with infrastructure matters of Parliament. The safety of Members was partly the responsibility of the DPW and the police. The parliamentary village boards were currently having discussions every two weeks, and had invited the police to be part of the discussions. He was concerned about he had heard from Mr Mubu. The Department was making an effort to bring to a conclusion the protection of parliamentary villages with other relevant stakeholders.

Ms L Mjobo (ANC) said it was not only parliamentarians who stayed in these villages, but ministers and their staff. When it came to issues of protection, the Secretary to Parliament had said the police had distanced themselves as not having a responsibility to protect the villages.

Mr Dlabantu said Parliament was a national key point, and there was need to define the role of SAPS in parliamentary villages. If it became a DPW responsibility, it must be funded. In the interim, the DPW had put in additional security.

Ms Mjobo said the other challenge was that the parliamentary staff and ministerial staff sometimes stayed with their friends who worked outside of Parliament, or did not work.

The Chairperson said the issue of parliamentary villages was an issue at the heart of Members, but it must not become the agenda of the day.

Mr Govender acknowledges the challenges the DPW had in delivering its services. The challenge on harbours involved reclaiming and managing all the coastlands from Alexander Bay to the Mozambican coast. It had started with reclaiming 12 harbours in the Western Cape. It was working with the Departments of Agriculture, Forestry and Fisheries (DAFF) and Environmental Affairs (DEA) to prioritise four of the 12 harbours where it could starting injecting capital for aquaculture development. It had started discussions with Port St Johns and Port Alfred municipalities on the development of aquaculture. Discussions were also in progress with the Hibiscus Coast Municipality. Initiatives were targeting the four coastal provinces.

Mr F Adams (ANC) asked which four harbours had been targeted in the Western Cape.

Mr Govender replied the DPW was having discussions with DAFF to have one harbour in each zone in the Western Cape prioritized, given the current available resources. There was no law that compelled the DPW to work with municipalities on their immovable assets, but it had concurrent relations with the provincial governments. There was a general perception that all government properties belonged to the DPW, but that was not true as the provincial governments and the Department of Land reform also owned some properties. Information from municipalities came from the Registrar of Deeds. The DPW believed it had properties in municipalities that belonged to it, but it could not impose itself on the municipalities. The prestige users did not use the DPW call centre, as they had to call the Cape Town office. Port Alfred was managing properties that it thought were being neglected by the DPW.  The Special Investigating Unit was also investigating houses fraudulently transferred to private owners. Operation Bring Back was identifying those staying in DPW properties and making them pay rent according to the market price.

Mr Dlabantu said the DPW had not succeeded in communicating its good stories, and was always measured against the former bad news which it could not hide. It had engaged the Government Communication and Information System (GCIS) to communicate good stories about the DPW.

Ms E Masehela (ANC) welcomed the capacity building initiatives in the DPW. She asked what made it difficult to reclaim its properties. She asked if it was possible to complete the sustainability and growth stage of the turnaround strategy during this current Parliament.

Ms D Mathebe (ANC) said combating fraud and corruption had always remained a priority for DPW. She asked how many people had been arrested, detained or fired from the DPW. She asked how it regulated properties in municipalities.

Mr Govender said the turnaround stages had walls between them which made it impossible to move sustainability and growth to the middle of this term of Parliament. There was no law that compelled municipalities to work with DPW, but legislation such as the Government Immovable Asset Management Act (GIAMA) allowed the DPW to claim what rightfully belonged to it. The highest value of DPW properties was in Pretoria.

Mr Imtiaz Fazel, Deputy Director General: Governance, Risk and Compliance, DPW, said it had investigated 296 allegations, 190 were completed, and 67 were at various stages of investigation. In terms of consequence management, 116 disciplinary recommendations had been made, of which 100 had been finalised. Some had been dismissed, and others issued with final written warnings and written warnings.  Disciplinary investigations had been carried out in 30 days. 41 cases had been investigated by the SIU, of which three people had resigned before investigations commenced, seven had received final written warnings, seven had been found guilty, and four had investigations pending. The SIU was also investigating 13 former members and 16 service providers. Civil actions had been opened with end users in eight matters.

There was a national forum on Operation Bring Back to be launched in all provinces a day after this meeting, mainly interested in developing an approach to reclaiming misappropriated property of the state and illegal occupation of properties owned by the state. It was premised on a dual approach. The first was inviting members of the public to come forward and report on any property that had been illegally transferred from the state to the hands of private individuals, and the utilization of information discovered from the review of the asset register to identify unusual transactions. Operation Bring Back would run for two years.

Mr Mokgoro presented a diagram showing the clean audit report on the progress the DPW and PMTE had made in various areas since they were given a disclaimer in 2011/12 financial year.

Mr Sithole asked about the outcome of the anti-fraud and corruption strategy.

Mr Govender replied it had been to reduce fraud and corruption within the DPW and restore public confidence in the Department. Contractors no longer wanted to sign contracts with it, because they had been victims of extortion. Fraud and corruption was found in lease agreements, construction and supply chain management.

Mr Adams suggested that in the interests of time Members should submit questions to the DPW through the Committee Secretary, as they had to prepare for the afternoon House sitting.

Ms Adams said since it was a turnaround strategy, the Committee should have another day to engage with the DPW, even though she supported writing questions to the DPW.

The Chairperson said the Committee would find a date to make a follow up on the turnaround strategy.

The meeting was adjourned.  

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