Allocation of Expanded Public Works Programme (EPWP) incentive grants to Municipalities

Meeting report

The Chairperson opened the meeting by expressing dissatisfaction with the document originally presented to the Committee. The Committee was no longer interested in what was going to be done, but rather in actual service delivery. A case in point was the situation regarding mud schools in the Eastern Cape, which she described as “pathetic.” She questioned whether skills were being transferred to municipalities and provinces, as there was no way money should be allocated without this taking place. She also wanted to know whether potholes were being correctly repaired, as the state of many roads was an embarrassment.

Ms Cathy Motsisi, Chief Financial Officer: Department of Public Works (DPW), said the Department had entered into a partnership with the Independent Development Trust (IDT) to tackle the mud schools problem, and to convert them into better structures. On the question of potholes, she requested that the DPW be allowed to prepare a detailed report to show that its methods produced sustainable repairs.

Mr Stanley Henderson, DWP Deputy Director-General: EPWP, then proceeded with the presentation on the EPWP wage incentive programme. He said the incentive grant was introduced in the second phase of the EPWP in order to reward local governments which actually implemented labour intensive methods, using their existing capital budgets to increase the labour content of their infrastructure delivery. These public bodies would be encouraged to meet job creation targets, leading to a rapid expansion of new jobs being created.

He said seven of the nine provinces had accessed the incentive programme in 2010/11, the exceptions being Northern Cape and North West Province. Of the R330 million available, only R185,9 million (56%) would be paid out. At the municipal level, where R623 million was available, only R273,3 million (44%) would be paid out. This meant that out of a total infrastructure allocation of R954 million, only R459 million (48%) had been accessed. He blamed this situation on several factors, such as poor reporting and under-reporting, the low labour-intensity of projects implemented, low technical capacity, poor design and prioritisation on projects, and changes in leadership leading to a low commitment to the programme.

The Chairperson said the Committee was anxious to know what the DPW was doing about these challenges, as the blame could not continually be borne by the municipalities. There needed to be effective monitoring and a transfer of skills before incentive grants could be paid out.

Ms N Ngcengwane (ANC) said job creation had been spelt out by the President as a priority, and it was therefore important for the EPWP to work effectively.

Mr M Rabotapi (DA) expressed concern that there appeared to be little monitoring at muncipal level.

Mr Henderson said several measures were in place to improve the situation, including the employment of 90 data capturers and the deployment of EPWP officials to different muncipalities in order to improve reporting, as well as training and technical support. At the Municipal Summit in Durban last October, a protocol indicating a target of 4,5 million new jobs had been drawn up, and 140 of the country’s 283 municipalities had signed this document by April 11.

Ms Motsisi assured the Committee that since February, a monitoring system had been put in place to ensure that where grants had been paid out, new jobs had been created.

Ms C Madlopha (ANC) said there had been an improvement in the EPWP performance in the 2007 to 2009 period, but a deterioration since then, and wanted to know at what stage assistance had been offered to municipalities. As early as 2005, the Contruction Industry Development Board had issued guidelines for contractors and institutions like the DPW to follow in the implementation of labour-intensive projects, and yet the EPWP report said training was only now being rolled out. She asked whether the Department was effectively marketing the incentive programme, spelling out its expectations and enforcing a service level agreement which could be monitored.

Mr Rabotapi said he knew of instances where incentive grants had been paid out, but the workers had not been paid for four months. This was a monitoring problem, which should not be left to the municipalities to resolve.

Mr K Sithole (IFP) asked for clarification on the poor performance in areas such as the Northen Cape and North West Province.

Mr N Magubane (ANC) pointed out that effective monitoring was essential for the sake of both the Government and the people the programme was supposed to assist.

Ms N November (ANC) said there was an outcry about the lack of service delivery, and asked when the DPW’s training of officials would start to bear fruit.

The Chairperson referred to a recent report quoting an analyst who had identified various sectors, such as agriculture, which had created jobs, but the DPW had not been mentioned. She was also critical of inconsistencies in the statistics quoted in the EPWP report. She asked, in the light of concerns over monitoring, how sure the Committee could be that the money allocated was being spent on what it was supposed to be, and suggested that officials should “get out of their air-conditioned offices” and engage directly with the communities involved.

Mr Henderson said the Department had ensured there was a skills transfer to the municipalities, although he conceded that this might not have have been sufficient. In many instances, this was the result of staff rotation, which meant that training had to be an on-going process until a particular body was fully staffed.

By signing the protocols, municipalities were committing themselves to job creation targets. This meant the Department could hold them accountable and deal with their performance at a municipal level, which was not previously possible.

The data capturers were deployed where necessary, although some had been placed in muncipalities where the bulk of the job creation work took place.

Mr Ignatius Ariyo, Chief Director: EPWP Infrastructure, said the Department supported work commissioned by municipalities by providing a “Code of Good Practice” to be attached to tender documents, aimed at ensuring labour-intensive, rather than capital-intensive, contracts were secured. This formed a crucial part of its technical support.

The Chairperson referred to a National Treasury report, which blamed the DPW, rather than the municipalities, for the poor performance of the EPWP. Her understanding was that they were not providing adequate technical support, which was why the municipalities were using machines, rather than labour.

Mr Henderson said he disagreed with this viewpoint. There were certain skills and capacities which should be institutionalised within all municipalities, but these were not always there for the DPW to work with. Furthermore, they had to deal with a mind-set that viewed labour-intensive methods as delivering lower quality work than machines, and the EPWP was taking steps to correct this perception.

Ms Motsisi said the EPWP support programme was supplementary to what the municipalities and provinces were supposed to be doing themselves in the field of job creation. The incentives were a “top up” – their capital budgets were supposed to drive the projects.

Ms Madlopha said although the mayors had signed the protocol, it was now important for the Department to meet with the senior municipal officials to market the incentive programme to them, as it did not form part of their performance contracts. Certain municipalities were not clear on how to access the funds available, and this was causing frustration, as they desperately wanted to provide services. Rural areas, in particular, needed assistance.

Mr Henderson supported this proposal, but said the Department already had a procedure in place to engage with senior municipal management.

Mr Rabotapi said he had seen people fixing potholes, but after rain a few weeks later, the potholes were back again. He asked if the Department had determined the best way to effect repairs.

The Chairperson said her information was that after priming and sealing the pothole, very hot asphalt should be applied. The use of cold asphalt was not a solution.

Mr Ariyo said the decline in the incentive allocations could be ascribed partly to changed reporting systems, as well as the need to train the new data capturers. The position should now start improving, and results from the overall training initiatives would be seen by early next year.

The Department was collaborating with the Council for Scientific and Industrial Research (CSIR) on specifications for pothole repairs, but he understood the Chairperson’s methodology was correct.

The marketing of the EPWP incentive was being conducted through municipal summits, road shows and reorientation workshops aimed at changing the pro-machinery mindset.

The Chairperson asked whether the right people were being trained, as she had heard that in some instances, personal assistants (PAs) were being sent to EPWP training sessions.

Mr Ariyo said they were now checking very strictly to prevent this happening.

Ms Ngcengwane said that as politicians, members of the Committee had offered to visit problem municipalities to help secure their support for the EPWP incentive grant, but had not yet been approached by the DPW. They wanted to assist, as this was a part of their oversight work.

Ms Motsisi said the Department was on a learning curve, and would embrace the Committee’s suggestions.

The meeting was adjourned.