Department of Tourism Q3 2023/24 Performance; with Ministry

Meeting report

National Department of Tourism: Third quarter performance

Mr Victor Tharage, Director-General, National Department of Tourism (NDT), informed the Committee that the Department achieved 48 of 54 (88.89 percent) of its targets in the third quarter of the 2023/24 financial year. The administration programme met 12 out of 14 targets (85.7 percent) while the tourism research, policy and international relations programme achieved 100 percent. The destination development programme met 7 of its 9 targets (77.78 percent) and the tourism sector support services achieved 15 of 17 targets (88.24 percent).

Ms Nomzamo Bhengu, acting Deputy Director-General: Corporate Management, said there were key issues related to vacancies. The vacancy rate was maintained at 10.3 percent. The rapid exit of employees made it difficult to lower the vacancy rate. Interdepartmental transfers contributed to this. There was also uncertainty about cost containment measures in filling posts. Women representation in the senior management service (SMS) was maintained at 47.5 percent due to the absence of senior human resources (HR) managers to drive processes. The following corrective measures were proposed:

- Moderation of internal departmental transfers.

-  Urgent and clear decisions on the continuation of recruitment processes.

- A review of the vacancy target due to cost containment measures.

- Urgent filling of SMS posts in HR to drive the processes.

Twenty-six identified positions were submitted to the Minister of Public Service and Administration. No response has been received yet. There was a large recruitment drive for these positions. While the Department was closing the gap, staff attrition was still a problem.

Ms Aneme Malan, Deputy Director-General: Tourism Research, Policy and International Relations, said all targets were met in the third quarter.

Ms Mmaditonki Setwaba, Deputy Director-General: Tourism Sector Support Services, stated that the Resource Efficient and Cleaner Production (RECP) Training and Business Support Programme was not implemented. A service provider was not appointed due to compromised supply chain management (SCM) processes, which delayed the approval process. Based on a reduced timeframe, the tender would be re-advertised in Quarter 4. It was expected that implementation would start in Quarter 4.

The Tourism Monitors Programme (TMP) was developed but not fully implemented. There were recruitment processes in all nine provinces. Interviews were conducted in the provinces of Mpumalanga, Limpopo, and Kwazulu-Natal, and inductions were conducted in parts of Mpumalanga and Western Cape. The launch of the TMP took place on 12 December 2023 in Hazyview, Mpumalanga. Monitors had been placed in the Blyde area of Mpumalanga and Table Mountain National Parks. Service providers had been appointed for all nine provinces. Service provider contracts were being prepared and recruitment and placement processes in all provinces would be finalised in Quarter 4.

Dr Shamilla Chettiar, Deputy Director-General: Destination Development, reported that a total of 25 maintenance projects were being implemented. Twenty-two had reached practical completion while three were underway. A total of 29 community projects were being implemented and four had reached practical completion. Twenty-one projects were in construction. Eleven were on schedule while ten were behind. Two were at the planning stage and two were at the contractor appointment stage.

Mr Tharage took the Committee through the audit action plans. Out of 45 action plans, only three were not concluded. Areas of focus would be on the reconciliation of leave, the payment of invoices on time, and asset verification to ensure the asset register was up to date. All the areas raised by the Auditor General would be dealt with.

Ms Patricia de Lille, Minister of Tourism, informed the Committee that on 16 April, she would be visiting the Western Tembuland Cultural Village Project where there were incomplete Expanded Public Works Programme (EPWP) projects. The Development Bank of Southern Africa (DBSA) has been given R27 million to complete the work. She would be checking water and electricity challenges affecting the project. In January 2024, Eskom submitted a quote of R2.5 million to the Department and this funding would be processed to conclude the project.

She further stated she would be visiting the Cape Agulhas Lighthouse Project. Phase 1 was completed in 2018. Funding of R54 million has been made available to complete the project. Reports on these two projects would be submitted to the Committee.

See attached for full presentation

Discussion

Ms S Maneli (ANC) asked what was done differently to ensure all infrastructure projects were completed in the Western Cape, compared to other provinces where some had not been implemented or concluded.

Dr Chettiar explained that 22 of the 25 maintenance projects were concluded. Six of those were in the Western Cape. Three community projects in the Eastern Cape were practically completed, as was one in the Free State. Lessons were being learnt where there had been successes. Maintenance projects had a shorter timeframe and all except three had been completed. 

Ms L Makhubela-Mashele (ANC) asked about the use of the National Youth Portal for the Tourism Monitors Programme. She commented that if it was easy to use, it would make it much easier to recruit in all the nine provinces. This was one of the critical projects to absorb young people and provide a visible presence so that people could feel safe when visiting SA, which had been red-flagged by tourists as unsafe. She asked what the Department had done about filling critical vacancies, given its observance of an advisory notice from the Department of Public Service and Administration (DPSA).

Ms Bhengu explained that the directive from the DPSA allowed the Department to identify critical posts. Fifty-two posts were identified and submitted. No response has been received so far. Recruitment had been rolled out. There was recruitment within the organisation to fill the posts. This process has been putting pressure on the people, service delivery, and implementation of projects. The Department was fast-tracking the filling of 26 positions.

The Minister commented on the use of the Presidential Youth Database for the Tourism Monitors Programme (TMP). She said the old process followed by the Department was to tender for a service provider to do recruitment in every province. No recruitment was done in the first and second quarters. She and the Director-General contacted the programme management office in the Presidency for permission to use the database which comprised young people who had been screened. There was no need to appoint a service provider to do the recruitment when there was a database for people receiving grants and another one at the Department of Labour, because that would have delayed recruitment for the TMP. She said the Department was working with the private sector and the SA Police Service (SAPS) in the deployment of tourism monitors. Fifty-nine hotspots were identified across the country and monitors were deployed to those areas.

Mr Tharage added that the Department’s access to the databases mentioned by the Minister would enable them to recruit timeously and obtain the managers needed to oversee some of the projects happening in provinces. The Department had to take drastic action to bring them on board. The database had grown to four million and covered the entire country.  

Ms H Ismail (DA) sought clarity on the number of vacant posts in the HR section of the department. She asked whether projects in the Eastern Cape that were expected to end on 12 March 2024 had been completed. What would the Department do to avoid slow progress on projects in future?

Ms Bhengu stated there were three SMS director posts. One person had been shortlisted. Two candidates were shortlisted for positions of senior managers. The Department was pushing for urgency in the appointments.

The Minister said the Department was making efforts to meet gender parity and employment equity targets. Where the Department wanted recruitment to be biased towards women, it was important to state in the advertisements that preference would be given to women. She pointed out that sometimes, when candidates were shortlisted, there would be one woman and three males. If that woman was not successful, that delayed meeting equity targets. More women should be shortlisted so that the targets could be met.

Ms S Xego (ANC) noted the Department’s recruitment drive to fill SMS posts and the response of the DPSA on this matter. She proposed that the Department’s annual performance plan (APP) should contain a staff retention strategy, because recruitment had financial implications and progress was delayed. She suggested that destination development should be prioritised. The EPWP projects should be prioritised because they created employment. There should not be under-expenditure because of late implementation of EPWP projects.

Ms Bhengu said the Department was proceeding with the 26 advertised posts. There was a policy on the retention of personnel. It was being implemented and would be reviewed as things changed. At this stage, they were locked into what they could do.

Ms P Mpushe (ANC) remarked that she was pleased to see corrective measures outlined in the presentations. The Department should try to do better in the representation of women, and the HR vacancies should be prioritised to speed up the recruitment process. She inquired about the nature of projects in programme two because there was only one line on the achievement of targets. She asked if security had been upgraded on the Ngove project,  because during an oversight visit, the Committee was told of theft and vandalism. She asked why slow work by contractors and service providers was being tolerated. She asked about the non-implementation of the RECP programme because of compromised SCM processes.

Ms Malan highlighted key deliverables during Quarter 3. The Department targeted five monitoring and evaluation reports on tourism projects and initiatives. All targets for the following projects were reached:

- Assessment of the state of publicly-owned tourist attractions supported by the Department;

- Monitoring of new and continuing capacity building programmes;

 - Evaluation of the departmental incubation approach;

- Evaluation of the Tourism Grading Council of South Africa (TGCSA) accommodation grading programme;

 - Bi-annual monitoring of the performance of the tourism sector.

Work on the national tourism statistics plans would be finalised at the end Quarter 4. The Department would continue to advance SA in multilateral platforms. Quarterly reports were developed. A concept document for a workshop on the sharing of best practices workshop had been finalised.

Mr Tharage added that information and knowledge systems were in place.

Regarding the compromised SCM process, the report he received was that the bid evaluation committee sought clarity on an item requiring legal attention. However, this was not taken to the bid adjudication committee, which was the final arbiter. Instead, it was taken to the legal services section which had not been involved in the bid. Hence, the bid was re-advertised because the Minister felt the whole matter was contaminated.

Dr Chettiar said some projects were impacted by floods and roads were impassable; the contractor in the Ngove project had security on site and there had been no incidents of vandalism since the project was started.

The Chairperson asked what the challenges were in developing programmes and about underspending attributed to the EPWP. The EPWP was supposed to create jobs, provide work experience, upskill people, and fight poverty. The EPWP allocation had been redirected to Manyano Lodge and this violated the intent of the programme.

She said the tourism safety awareness sessions held in Pretoria and Johannesburg should have been taken to the Kruger National Park and to the Western Cape. This would have turned the tide so that the country could be seen to be doing something about tourism safety.

She remarked that cut-and-paste operations were done on the reports about the Committee’s oversight visits. She sought clarity on the work done on Matsila Lodge and the effect of inclement weather. She raised a concern about the Ngove project. The Department had reported progress of 45 percent when it last updated the Committee on this project, but now it was reporting 55 percent progress. She asked for an explanation about why no penalties were imposed on contractors who delayed projects. She asked the Department to confirm to Ms Xego that the two projects in the Amathole region - Mthontsi and Qatywa Lodges - existed and whether their status was what was reflected in the presentation.

Dr Chettiar said details of the effect of weather conditions on the Matsila Lodge project and information about delays in the Numbi Gate projects would be sent to the Committee. She appreciated the advice from the Committee on the EPWP. She assured Members that penalties were imposed on contractors who delayed projects. The Department monitored the contract of the DBSA team, and the implementing agent tried to give the contractors time to remedy the problems.

The Qatywa project was behind schedule and would not be completed by the set date. The road to the project was washed away by floods, which delayed the delivery of building material. The Ngove project was expected to end on 19 May 2024. The DBSAhad indicated it was on schedule. She would provide written feedback on the 55 percent progress on Ngove.

Mr Tharage told the Committee the Department would provide an up-to-date report on all projects. He said he had visited Ngove and could see good progress, but it would not be finished by the end of May 2024, even though the DBSA stated it would be completed on the set date. He had visited the Manyano Lodge project as well where progress was at 17 percent progress. A report was sent to the Minister. He confirmed that the Qatywa project was in existence and that work was taking place there.

Mr Fish Mahlalela, Deputy Minister of Tourism, enlightened the Committee about difficulties with projects such as Numbi Gate. There were challenges in communities, because a project would start and a particular group would come and stop it. The contractor would then leave the site or suspend the project.

The Numbi Gate project was awarded to a contractor and a project committee was established. A family came to stop the project because it claimed it was on the land of their forefathers. They also claimed they were not consulted even though it was a communal land. He noted that communal land belonged to the community as a whole and not to a family. Once a community agreed that a project should happen, then that became binding.

The project was disrupted and had to be stopped. He went to the area and engaged with the stakeholders. All the nitty-gritties were ironed out. When the project was about to resume, the traditional council stopped the project. He said he went back to the traditional council and reached a consensus with the steering committee. They met towards the end of November and early December 2023 and agreed the project would start in January 2024.

He enquired and discovered it had not been started because the involved parties could not agree on certain things. Recently, he visited the area and engaged with the mayor and councillors. He was told that the parties met the steering committee of the project and agreed on most things except the appointment of a CLO. The councillors wanted to follow their own process in appointing the CLO instead of following the law. The meeting was deadlocked and could not proceed.

These were some of the practical challenges facing these projects on the ground.

He disputed information given in the presentation about the Mtititi project. He said there was no progress with that project. He had visited it recently. He was told the contractor ran out of funds and the project was abandoned. The DBSA had to find other contractors to finish the work.

The Department needed to find ways of resolving these matters. Communities at the Vredefort project demanded a 30 percent share in it without understanding what that meant. That figure applied to projects above R30 million, according to treasury regulations. The community was shown the law. That did not mean the contractor should not consider locals and employ local SMEs, but not in the context of 30 percent and only in the context of what locals could do.

The Minister said the Tourism Safety Forum was activated in 2023. It consisted of representatives from the SAPS, the National Prosecuting Authority (NPA) and the private and public sectors. A series of meetings were held in Mpumalanga, Gauteng, and Western Cape. The forum agreed to meet every three months. It was being driven by the Ministry and Department.

Concerning underspending and poor performance by contractors, she said there was a need for a contract management structure within the Department. The Department had agreed to review contracts so that penalties could be imposed. The risk had been on the government rather than on the service providers.

Mr H April (ANC) said he appreciated the visits done by the Director-General and Deputy Minister to the projects. It was worrisome to hear of work stoppages and abandoned projects. It was important to involve communities in these projects to avoid work being stopped and so that communities could protect these projects.

His main concern was that the infrastructure report by Dr Chettiar had misled the Committee. Her action was illegal. He wondered if it was right for a person to come to the Committee to tell members a project was well underway. The Deputy Minister, on the other hand, told the Committee that work on that particular project had stopped completely. He told the Director-General and the Minister that this was an indictment. Was this intentional or was she unaware of what was happening in the Department?

Mr Tharage said sporadic, unannounced visits were producing results but should be done in a careful manner for safety reasons. In some instances, it was the Minister and Deputy Minister that made the visits. The Department needed to be transparent about the issues. Matters raised by the Deputy Minister had enlightened the Department. In some instances, when land was made available for projects, communities believed it had been given back to the government. The Deputy Minister had successfully dealt with this matter.

Ms Mpushe said she was only interested in knowing why targets achieved in programme two were not included in the presentation. She was not asking the Department to list the achievements. She was not sure if the responses from the Minister about safety had provided an answer to the question about safety matters at Ngove.

She agreed with Mr April regarding the presentation by Dr Chettiar. She had been economical with the truth and did not give the Committee the necessary information. Whenever the Committee conducted oversight, it provided support and guidance to the Department. It could not hide information from the Committee. This was the very same Deputy Director-General who had undermined the Committee when it visited Manyane Lodge in the North West. Her actions were intentional. The presence of the Deputy Minister had helped the Committee to know the truth. His absence would have left the Committee with the impression that everything was going well. She wondered if Dr Chettiar was overwhelmed by work or needed assistance in terms of human resources, because there were no plans to address delays on the ground. She thanked the Deputy Minister for giving Members the correct information, and asked if there were no project managers to oversee work on these projects.

Mr Tharage said there was security at Ngove, which was visible on the site.

Ms M Gomba (ANC) said she was worried about what the Deputy Minister had raised regarding the abandoned projects. This showed that not all was well and there were hidden issues the Committee was unaware of. It raised concerns about procurement processes by the DBSA because it was the one that appointed contractors. This could mean that the project management processes were flawed or did not follow the legislated processes of the Public Finance Management Act (PFMA). It could be that the DBSA did not check on the financial muscle of the contractors when appointing them, or it could be that it did not give the contractor upfront payment as progress was made. It was difficult to understand why contractors were running short of cash while projects were underway. She questioned the type of payment agreements in place. She also remarked the Department was not doing enough to monitor project management by the DBSA. Community engagement was very important so that communities could look after these projects.

Mr Tharage explained that funds managed by the DBSA were not advanced to contractors. The contractor did the work and then submitted an invoice on completion of work. In some cases, the DBSA would advance a loan to the contractor to continue with the project in order to protect the funds of the Department. If it was impossible for the contractor to continue the project, then that work with the contractor was terminated. However, before that happened the DBSA would try to approach the contractor to remedy the situation. If not, the DBSA would have to find another contractor to finish the project. Sometimes, community challenges would resurface and social facilitation would have to be done again from scratch. For example, in one project in Limpopo, the chief who was part of the project died. Then, an acting chief disagreed with the Department and the project had to be started from scratch. That was why the DBSA was always advised to do developmental facilitation.

The Chairperson remarked that consequence management was very important, and some of the matters raised by Members were not new. The Director-General should ensure that assessments were made of the work done by his staff members. She said she was aware of the specifics and guidelines from the treasury that the Department had to follow. When the Committee asked the Department to produce summaries for its presentations, the idea was to make things easier. When the DBSA engaged with the Committee, it gave members a list of projects and deadlines for the completion of some projects. She proposed that there should be a column for general comments in the infrastructure report. The reports showed 23 completed projects, but there was confusion in the quarterly reporting. There should also be a column on progress.

She remarked that stakeholder engagement was important. When the Committee visited North West, there was a certain character named Majoro who organised the community to disrupt the visit. There was going to be some kind of a hostage situation if the Committee was not brave enough. Their main concern was around consultation on projects. The Committee advised the DBSA to stage public participation before it started projects to make it easier for the communities to understand what the projects were all about and take responsibility for them. The DBSA should be invited to update Members on the infrastructure projects it presented to the Committee in June 2023. The Minister and DG should be included in the meeting.

Mr Tharage stated he has taken note of the DBSA matters, and it would be asked to prepare a presentation on each project. The Department would continue visiting the projects. Good work was being done at some, but others left much to be desired and some were abandoned by contractors.

The Minister said she would welcome a meeting with the DBSA.

She said the point raised by Mr April was important. There were structural changes taking place within the Department. In terms of the law, there must be consultation with the communities at the conception level of a project. That was when construction mafia issues started to come in. So, social facilitation had to be done. The Department’s service level agreement (SLA) with the DBSA should have a provision that the DBSA should do social facilitation before starting any project. The DBSA had its own social facilitation policy. 

The Department had no proper oversight mechanisms over the DBSA, even though it implemented Department projects. The Department had now reviewed its SLA with the DBSA and agreed that certain projects should be concluded by certain set dates. There were nine projects in intensive care. To provide capacity within the Department, it consulted Infrastructure SA. It was advised that there should be a multi-disciplinary built environment team. An agreement had been signed with the Industrial Development Corporation (IDC) to recruit this team so that the Department could exercise oversight. The Department did not have properly skilled project managers for tourism.

Part of the MOU with the DBSA was the Department was not going to provide it with the full budget upfront, but it would receive it in tranches based on the key performance indicators. She met the CEO of the DBSA, and the relations between the DBSA and the Department were good. The DBSA would continue to manage the procurement of contractors. The DBSA should be strict in applying the standards of the Construction Industry Management Board (CIDB).

The Minister referred to a social facilitation project she was working on with the Minister of Police. As a result of stakeholder engagement, communities around Pretoria stopped the construction mafia when they wanted to become involved in the construction of government headquarters in Pretoria.

 She stated the Deputy Director-General of infrastructure would be assisted with human resources capacity in her Department.

In her conclusion, the Chairperson said the Committee noted all the commitments made by the Minister and appreciated the report presented to Members. Given the concerns raised by Members, it was agreed that the DBSA should make a detailed presentation to the Committee on its projects.

She said development facilitation and social facilitation were the same thing, and there should be a community liaison officer when starting a project.

A contract management structure was needed to avoid delays and abandonment of projects. It was not acceptable to have underspending because of delays in the EPWP.

The Committee should be given a presentation on Green Tourism. 

She said Members had raised concerns about Dr Chettiar being economical with the truth. The concern expressed by Members should be seen as an official warning. Lies would not assist the Department to do better.

In terms of progress, she noted improvements within the Department and many projects were completed. The Committee would like to see progress on the Ngove and Manyano projects because they have been red-flagged. Penalties should be imposed on contractors delaying projects.

The meeting was adjourned.