Department of Science and Technology Quarter 1 performance

Meeting report

Briefing by the Department of Science and Technology on the 2018/2019 Quarter Performance Report

Mr Tommy Makhode, Deputy Director General Institutional Planning and Support, DST, made an extensive presentation to the Committee. He noted that in the period under review, the Department had been able to submit the first draft of the 2019/ 2020 Annual Performance Plan to the National Treasury (NT) and to the Department of Planning, Monitoring and Evaluation (DPME) for their review. The second draft would then be submitted by the end of November. The National Treasury and the DPME’s inputs would assist the DST in terms of quality assurance. Then in the period under review the DST had continued to provide support to the economic sectors and employment and infrastructure development clusters as a contribution to the government’s National Development Plan (NDP) through project management achievements. He said the following compliance document was also submitted: the 2018/2019 DST Annual Performance Plan. The document was tabled in Parliament and all the DST entities that reported to Parliament through the Department of Science and Technology.

The DST also finalised and submitted the financial year internal audit coverage plan, and the DST’s 3-year monitoring and evaluation plan, as per requirements by the DPME.

Mr Makhode said the DST was also able to finalise the financial year’s Strategic Risk Plan, the Business Continuity Implementation Plan, and the Fraud Prevention and Detection Plan. This was to bring the department and its entities in line with the National System of innovation (NSI) in an efficient and coordinated manner. He also said the DST appreciated the support that they had received from the Committee with the processing of the National Research Foundation Amendment Bill which had been passed by Parliament. Similarly, he acknowledged the Committee’s lead role in the Indigenous Knowledge Systems (IKS) Bill which was currently with the NCOP (National Council of Provinces). He said there were issues that the NCOP has raised concerning the Bill and that the Minister was attending to them. He also said that as the DST, they acknowledged that without providing research grants, the country would not be able to build this knowledge generation. As a result in the period under review, the Department had been able to provide several grants through different instruments that are there to strengthen research capacity, including universities, the South African Research Institutes, and the Centres of Excellence Programme. In this quarter, the DST had provided 2 219 researchers with grants through a programme that is managed by the DST and the NRF. There was also collaboration on a MOU (Memorandum of Understanding) between the Square Kilometer Array (SKA) project office in South Africa and the National Cyber Infrastructure System (NICIS) Programme which is led by the Centre for Scientific CSIR. This MOU would assist in terms of attracting officials around the concept of big data.

On Africa Day, 25 May, the Department had launched the MeerLicht Telescope in Sunderland, Northern Cape. The launch of this instrument was key to the DST, in the sense that it would advance SA’ s Multi Wavelength Astronomy. It would also place South Africa on the map with international players with regard to highlighting the importance and success of SA’s international collaborations in this field of astronomy. He said the Netherlands, United Kingdom (UK) and South Africa were already collaborating on this project. The MeerLicht would also complement the existing MeerKAT Centre’s observations in the optical spectrum of space.

In in the period under review, the Department had also made significant contributions in terms of Human Capital Development. In the first quarter, the Department had been able to support 2 235 PhD students and 6 010 postgraduate students (Honours and Masters Students). Regarding building their own experience in terms of Research and Development (R&D), the Department had placed 806 interns in Science, Engineering and Technology Innovation (SETI) and DST-funded institutions. 82 grants were awarded to organisations that assisted and participated in the National Science Week and Sciences festival that the Department had successfully hosted in Mpumalanga.

In pursuance of the strategic outcome oriented goal of using knowledge and innovation for economic development, the Department continued to provide and encourage industry innovation & partnerships as part of the broader government support for industry competitiveness. As a result, the Department was also able to ensure that Hydrogen South Africa (HySA) infrastructure sold the Liquid Organic Hydrogen Carrier (LOHC) to a South African local company. HySA were also able to sell a 1 KW high temperature fuel stack cell to a Chinese company. These sales were done based on the HySA ‘s independent assessments, which indicated that these products were ready for the market.

The joint workshops had also been conducted in collaboration with the Departments of Trade and Industry (DTI), Small Business Development (DSBD), Rural and Land Affairs (DRLA), and the Department of Agriculture, Forestry and Fisheries (DAFF), which spoke mainly on how to get Indigenous Knowledge (IK) based initiatives ready  for commercialisation.

Regarding HySA, Mr Makhode said HySA had continued to contribute positively to the Department’s initiatives in finding a diversity energy mix strategy. As a result, HySA had developed a 2.5 KW fuel cell system which had been installed at Poelane School in the North West. This initiative had been launched by the Minister on 13 April 2018, with the aim of providing a reliable source of clean energy to the school. The 2.5 kW fuel cell systems would also power lights in classrooms and some computer labs within the school.

The DST’s initiatives to advance leveraging ICT in agriculture were recognised through an award of excellence for relevance and innovation at the National Agriculture Extension Services Advisory forum.

In advancing interdisciplinary research, the Department was also able to host a seminar on 14 June which spoke to the water- energy nexus and the application of green technologies. Here the DST ensured that the discussions were aligned to its service delivery and to responding to UN Sustainable Development Goals, in particular Goal 6, which speaks to water and sanitation, and Goal 7 which speaks to affordable clean energy.

On the international front, Mr Makhode said that in the period under review, they were able to secure an amount of more than R 100 million in funding over the next three years from the European Union. This remained the biggest donor support by a collection of countries to South Africa for the general budget support programme. The funds would go towards supporting the green economy for development.

Similarly, the Department was also able to present and be represented at an international meeting on Triangular Cooperation, which was hosted by the OECD. This is where countries share experiences and look at how to advance South-South collaboration and Global Partnerships.

The DST were also part of the panel that reviewed and discussed the newly developed OECD toolkit, which identifies and does monitoring and evaluation of the Triangular Cooperation. The DST in partnership with HITACHI, the Water Research Commission (WRC) and the South African Institution of Civil Engineering (SAICE), was able to send six candidates on a scholarship programme to Japan for on-the-job training in Water and Sanitation Technologies.

With regard to overseas bilateral cooperation, the DST was able to participate in the SA - Canada Binational Cooperation meeting in Ottawa. This meeting was led by DIRCO (Department of International Relations and Cooperation) and among others it reviewed current programmes and agreed on a new action plan and MoU between the two countries. The DST had participated in the visit by the Chinese President Xi Jinping, by reporting on Joint Research Centres and bilateral cooperation between the two countries.

Mr Makhode also said that on the 13 September 2018, the Joint Research Center would be launched at Mintek in Randburg by Chinese representatives and the Deputy Minister for Science and Technology. The Department had also been able to provide support to the Committee during their recent visit to Japan and South Korea to learn about science systems, benchmarking as well as creating opportunities for South Africa. He said that he hoped that the Committee could share with the Department lessons learnt from that trip.

South Africa had hosted the BRICS Young Scientist Forum, and also participated in meetings on science and technology with Ministers from India and China, where these countries evaluated progress on ongoing collaboration, and recommitted to bilateral cooperation.

Mr Makhode said that some of the planned targets, three or 14% were underachieved or not achieved.  These included the validation of 33 Honours and Masters students who had applied for funding. One knowledge or innovation product had been added to the industrial development Intellectual Property (IP) portfolio, and the pre-approval of at least 45 R&D tax incentive applications. The main reason for the underachievement was because of process delays beyond the control of the DST, ineffectiveness of implementers, as well as target formulation deficiencies. He said these would be further explained by his colleagues in the discussion.

Mr Makhode concluded by saying that the DST was committed to achieving and maintaining high standards. He also indicated that his department would continue to pursue cutting edge initiatives to enhance social development. He re-iterated that to achieve the goals set by the country, and to meet the requirements of the National Development Plan (NDP), the DST and its entities would continue to ensure that they maintained the highest standards of cooperative governance. He said the DST and its entities would do so by espousing the following guidelines:

‘Clean Audits; ensuring DST pursues Science; Technology and Innovation initiatives; pursuing Human capital Initiatives; Innovation Support; Targeted Innovation; Initiate and strengthen international and bilateral agreements, as well as strengthening cooperation on the continent, with BRICS, the EU and other international partners in pursuance of science and technology’.

Discussion

The Chairperson thanked the DST team for an excellent presentation, and opened the floor to the Committee Members to ask questions.

Dr A Lotriet (DA) also thanked the delegation for an extensive presentation. She  referred to page 58 of the presentation which indicated the five programmes of the DST as well as their planned and actual expenditure. She asked why, apart from programme 4, had all the other programmes of the DST had lower than expected actual expenditure compared to planned expenditure. She also asked how, with lower expenditure, these four programmes had also managed to achieve 100% of their goals. She said that since departments usually ask for more money, she was curious as well as concerned about the reasons for the under expenditure and overachievement.

Dr Lotriet also asked if the under expenditure reported might be caught up later in the year  with the other quarters in terms of expenditure.

Dr Lotriet also raised a point concerning page 39 of the presentation, where the Department had indicated that their quarter target of 10 new partnerships had been achieved. She asked how, if the annual target had been set at 550 new partnerships, only 10 had been set for the quarter. This did not make sense.  She asked for clarity on this matter.
Mr N Koornhof (ANC) praised the Department's very good performance report for the first quarter.

He referred to page 22 of the report which showed the progress report of the 2235 Honours and Masters, and 6010 PhD students that the Department supported. He wanted to know if the success rate of these students was 100%. If not, what was the failure rate, and what happened to the students who failed? He asked if the failing students were given another chance, or if they were expected to pay back the bursary.

Mr Koornhof also referred to page 27 of the presentation which indicated that the DST had received financial resources of R100 million over three years from the European Union (EU). He asked if aside from the EU there was other funding coming from international donors such as the US or Germany.

Mr Koornhof also asked about the HITACHI - Water Science Commission scholarship to Japan. He wanted to know how many of the six6 students issued with these engineering bursaries were women.

He referred to the IKS (Indigenous Knowledge Systems) Bill, which had been recently been tabled in Parliament. He remarked that there were comments made on the draft bill. He  asked the DST team for a progress report on whether those comments had been addressed.

Finally, Mr Koornhof said that although he did not wish to be negative, he was a bit concerned about the size of the DST delegation. In his opinion the DST delegation was too big given the nature of the presentation. He suggested that given the challenging economic times currently experienced by the country, the Department should consider tightening belts as well by sending smaller delegations.

Ms C King (DA) asked about staff shortages at the DST. She said that the issue had first been raised during the Department's first budget presentation and wanted to know what had happened since regarding vacancies that were not filled.

Ms King commented on the international cooperation between the DST, the EU and China, especially on the growing role of China as a big investor in South Africa. She then asked what, if any, under the current review, were joint projects between the DST and China and what were the monitory costs of these projects.

Ms King also asked about the R&D tax incentives introduced by the Department. She inquired as to whether the backlog that had been there regarding this tax had been cleared  given that the DST had in a previous presentation highlighted this as one of their areas of concern.

She asked about the Advanced Manufacturing Technology Strategy which was initially  pushed by the Department yet which  now seemed to have pulled back. She asked why the Department had done so.

Ms King asked if the deviations in terms of financial expenditure were only attributable to advance payments made to SARCHI (The South African Research Chairs Initiative) as presented, or if there were other financial deviations.

The Chairperson asked that the DST team, when next they presented their updated Annual Report to the Committee, that they include details about where and what information was not validated regarding the 33 students mentioned earlier.

The Chairperson also, like Dr Lotriet, asked whether the quarterly targets not met would be offset by 2nd and 3rd quarter targets.

She also asked about the HITACHI-Water Science Commission partnership. On the Committee's recent visit to Japan, HITACHI had expressed frustration about the slowness of the project and had asked the Committee to intervene. She said their frustrations seemed to come from the fact that the person who had been appointed to represent the Water Science Commission was not empowered to make important decisions. Generally, the partnership was a good one with great potential for water and sanitation. She said that the Committee's findings and recommendations from the Japan - South Korea visit had been brought to the Department's attention through a recent report submitted to the Department.

The Chairperson also commented on the positive recognition that the importance of science and technology were steadily gaining in wider society. Because of the recent visit to Korea and Japan, where science and technology programmes were directly under the presidency, she could appreciate the efforts made by the President, who she said was not just recognising this field, but was also putting resources in it as well. She also appreciated the Vice President, who would chair the Fourth Industrial Revolution discussions.

The Chairperson also spoke about a recent fire in Gauteng, which had gutted a government office building and had claimed the lives of several firefighters. She asked, based on that tragedy, if office buildings housing the DST and its entities complied with  safety and health standards.
 

Mr Makhode said that the R100 million in funding from the EU was only a quarterly target specifically for the development of the green technology. The DST often worked with other international partners and funders for example the Bill and the Melinda Foundation.

As for the IKS Bill, Mr Makhode said he wasn't aware of specific details. However, he was aware that colleagues from the Department had been working on addressing comments from Parliament, and the Minister planned to take it to the National Council of Provinces.

The Chairperson interjected to say that as a matter of fact the latest version of the IKS Bill was on that day’s (12 September 2018) order paper in Parliament.

Regarding Ms King's question about the SA - China projects in the pipeline and the monetary value, Mr Makhode said that the DST was not just a recipient of funds, but rather a co-investor with the EU, China and others, thereby making the DST an equal partner.

In terms of the health and safety standards of the DST and its entities' buildings, Mr Makhode said it was difficult to speak for all entities. However, with the DST office building, the Department of Labour had identified problems relating to structural deficiencies as well as ventilation problems. Because of that, the building did not meet the required 80% compliance level. However, the Department of Labour as well as the Department of Public Works were attending to the current problems of the DST building. One of the buildings housing one of their entities that of the Human Sciences Research Council (HSRC) was up to code receiving over above 80% compliance certification. But, he said that this compliance had come at considerable cost. The HSRC was spending about R40 million per year on maintenance. Because of this the Department of Social Development was in talks with the HSRC to buy the building.

Regarding infrastructure funding cuts from the Treasury, Mr Makhode said that the Department had been lucky.  The Treasury had given approval for the purchase of necessary lab equipment for ITHEMBA labs and the DST appreciated this. Mr Andries Shila would elaborate on infrastructure funding.

Mr Makhode said that the six students on the HITACHI-WSC Scholarship were all South African women.

In terms of the size of the delegation many of the colleagues’ present had come for cluster work and several other presentations. Other colleagues lived in the city or within the province. However, he took the point on the need for tightening belts as raised by Mr Koornhof.
 

Mr Andries Shila, Director of Management Accounting, DST, said that Treasury had asked each department to identity programmes where if necessary, funding could be cut. This had also forced departments to identity only priority projects which would be kept. However, by allowing the DST to buy necessary lab equipment for ITHEMBA Labs, Treasury had shown that it understood the necessity and importance of science and technology for the nation.

Mr Shila acknowledged that some programmes had underspent in the time under review. He said that however compared to the same period the previous year and the situation was better at 5.5%.

With regards to deviations, he re-iterated that these had mainly come from the money borrowed from SARCHI, which had to be repaid a month earlier than anticipated. He said there had been no deviations related to procurement and supply.

In terms of vacancies in the Department, Mr Shila said that because Treasury had put a moratorium on the hiring of staff, the DST had saved some money in 2017. With these savings from unfilled posts in 2017, the Treasury had in the period under review, allowed the Department to fill some vacant posts. However, the savings had not been enough to cover all vacant posts. To address that challenge, DST had concentrated on filling priority posts. Mr Shila said that the Department had communicated this challenge of the remaining vacant posts to Treasury. Treasury had responded that they were encouraging colleagues of 55 years and older to take early retirement and had even budgeted for penalties to be paid to pension funds for early retirement.

Ms Nonhlanhla Mkhize, Chief Director: Innovation for Inclusive Development, DST, said that in terms of Knowledge Production, where only one target had been set per quarter, this was deliberate. This was because this was a platform to share with colleagues’ ongoing progress, new discoveries, and policy implications thereof.

On the point of the 33 students not validated, Ms Mkhize said the process was internal. The DST quality assurance was still verifying their applications. She said she was aware that the Department needed to submit a report on that by the end of the month, and by then they would have completed the verification process. The process had taken long because the DST had made the process rigorous. This was to make sure that when it comes to using evidence to support data, the DST processes and systems would be aligned. In introducing these new stringent measures, the Department had ensured that evidence provided would align with technical indicators set and would avoid problems with auditing processes at the end of the year.

As for the quarterly targets of 10 per quarter and 550 per year, Ms Mkhize said that these targets were not evenly distributed per quarter. Some quarters had more targets set and, others less  depending on the length of time each quarter had. In most cases, the 2nd and 3rd quarter usually had more targets set, with the 4th quarter having the least targets. She therefore assured the Committee that all set targets would be achieved.

As for the R&D tax incentives, Ms Mkhize said that the department had made good progress in clearing the backlog. However, staffing challenges, including resignations from senior staff members had affected the process.

In terms of the Advanced Manufacturing Technology Strategy, Ms Mkhize said that the strategy was often affected by new developments unfolding. This time around those developments were the Fourth Industrial Revolution, a series of discussions between the Department of Science and Technology, the Department of Planning, Monitoring and Evaluation, the Department of Telecommunications and Postal Services and others stake holders.

As for the pass and failure rates of bursary students supported by the DST and its entities, Mr Shila said that the students selected were already the best of the best. As a result, those students supported by the DST (6% Honours, 8% Masters and 16% PhD nationally), had had positive experiences generally. A two-year tracking system had already indicated that these students graduated or completed on time and were easily and quickly absorbed into jobs and internships.

He also said that a digital platform, like the one used by the South African Revenue Services (SARS) had been introduced by the DST. This platform would help the DST track these students' economic performance.

Mr Francois Davel, Director of International Cooperation and Resources, DST said that most of the underachievement was due to programmes or projects outside the DST's control.

For example, during planning, the DST had anticipated that some joint programmes and activities falling under the SADC umbrella would take place later in the year in November. But, because of the intricacies of international diaries, the entire process shifted to early in the year. This resulted in international partners reporting on some activities early, and not in line with reporting timelines previously set because they wanted to include their own achievements both at the SADC and BRICS meetings.

Mr Davel also said that although the six engineering students on the HITACHI - WRC bursaries were a very good start, the consortium of partners involved agreed that the number was not enough. Therefore, the consortium was taking initiatives to address that. He said they were aware of the frustrations from HITACHI and were addressing those.

Mr Davel mentioned that engagement with China had been challenging. The Chinese had cancelled many meetings which had hampered the Department. However, the Department continued efforts to engage.

The Chairperson once again thanked the DST delegation, and said that given that this was the preliminary report, the Committee looked forward to the final report.

The meeting was adjourned.