Devolution of responsibility for infrastructure from DPW to Defence Works Formation; with Minister and Deputy Minister

Meeting report

The Chairperson welcomed the Minister, Deputy Minister and Committee Members to the meeting.

The Defence Works Formation: Background Notes
The Committee’s researcher, Dr Wilhelm Janse van Rensburg, introduced the document which was sent to all Committee Members. He conducted a brief discussion around the document which provided a background to the key issues.

The structure of the Defence Works Formation (DWF) was well documented in 2017. The document has been explained to Members.

The challenges between the Department of Defence (DoD) and the Department of Public Works and Infrastructure (DPWI) are ongoing for some time. There is a need to find solutions. Some of the issues include appointing contractors. There is no immediate remedial action over contractors

The One Military Hospital’s leaking roof has not yet been repaired. Such projects are taking long to complete and will result in a high reliance on outsourcing. It will increase costs, and this does not help the financial situation.

DPWI has not replied to the request by DoD to allow it to execute a protest on government immovable property. DPWI is also processing municipal accounts and leases without carrying out proper verification. This has been a constant complaint.

The Chairperson said capacity and ability are two different things. It must be clarified by the DoD when it makes its presentation.

Discussion
Mr W Mafanya (EFF) asked if decisions were taken regarding the capacity of the DoD.

Mr G Hendricks (Al Jamah) said the Committee is busy with a petition to Parliament regarding housing. He wanted to know if the Defence Works Formation is going to give direction about the land in Simonstown. The people do not have land there because the land is in the hands of Public Works.

Mr S Marais (DA) said the DPWI are not the owners of land. It only looks over the land and assets. The Committee visited the One Military before, and nothing has changed. If the hospital was in the hands of Defence Works Formation there would have been a positive change. Silvermine was supposed to be a strategic communication port. The depletion of resources is not acceptable.

The Chairperson said the DPWI will continue to be the landlord and the land will continue to be used by the DoD.

Ms M Modise (ANC) asked the Chairperson to stick to the agenda of the meeting.

Mr J Maake (ANC) asked for clarity about capacity and the skills in the DoD. He said it has most of the skills needed to complete projects. Soldiers possess most of the skills and are in a position to do some of the work. Soldiers do not wait for the Department of Public Works to do the work. The money is to be transferred straight to the DoD, not to Public Works.

Defence Secretary, Dr Sam Gulube, supported Mr Maake’s comments and said there is also a reserve force which can be made use of instead of relying on the Department of Public Works.

Progress report to the Portfolio Committee on Defence regarding the Infrastructure Development Function Transfer from the Department of Public Works and Infrastructure
In March 2019, the Standing Committee on Appropriations (SCOA) instructed the DoD to take over infrastructure development from the DPWI. The Minister of Defence and Military Veterans agreed to take over, however, to be able to take over it needed a financial injection for projects and to capacitate Defence Works Formation. The Defence Secretary said the main reason for attending the meeting is to provide a progress report to the Portfolio Committee on Defence regarding the infrastructure development function transfer from DPWI to the DoD.

Challenges facing the DoD include the availability of funds. Availability of funding to enable capacitation will increase and/or decrease the timeframe required for capacities.

The Department of Public Services and Administration has completed the DoD structure, as instructed by the SCOA. The DoD entered into a Memorandum of Agreement with the Development Bank of Southern Africa (DBSA) to fast track projects implementation and skills transfer to the DoD.

The challenges causing delay in the complete takeover of infrastructure functions from the DPWI are:
- the financial injection agreed to during the SCOA meeting of March 2019 was not made available yet
- an accumulation of expenditure on the costs of employees since 2016, when costs were reduced by R6 billion
- Severe budget cuts on infrastructure budget were instituted in the financial year 2018/2019, to date

DOD could not change some of the contracts already concluded by the DPWI. This means some of the contracts have to be concluded and only then can the DoD employ its own personnel.

Severe budget cuts on facility repair, maintenance and refurbishment, limits the DoDs ability to ensure the current and future sustainability of its immovable asset portfolio. Leases increased, and leasehold budget increased due to dilapidated and unsafe existing buildings. The DoD strategy on lease replacement has become critical.

Engagement between the DoD and DPWI is ongoing to ensure smooth transfer.

The DoD is in discussion with National Treasury to address the budget shortfall. It is building bridges, roads, and purifying its own water in the Democratic Republic of Congo (DRC). This is difficult to do in South Africa because of COVID-19. The DoD was able to assist in such issues recently with the Department of Education, but the problem is the money goes to the Department of Education first.

Discussion
The Chairperson asked if the skills in the reserve force were audited, since there is work already being done by the DoD.

Mr Maake referred to the Memorandum of Understanding (MoU) between the DPWI with the DoD. He wanted clarity about a need to make or amend certain legislation. This is to assist the DoD in some of the contracts it finds itself in.

If legislation can be changed it is important the discussions take place soon. Regarding funding, there seems to be a trend of irregular funding, and it will continue to happen. He asked what National Treasury is expecting the DoD to do. There is a need to put a stop on special Defence accounts.

Mr Marais thanked the Chairperson for asking some of the important questions. He asked if there is any appetite from the Treasury to transfer money to the DoD. He wanted an elaboration on Silvermine. Lastly, he asked about the current situation at One Military hospital, because it did not have up to date technology and some of the wards are poorly maintained and ill equipped.

The Chairperson reminded Members the Committee was discussing the transfer of ownership by the DPWI, and did not want to burden the Department with matters not on the agenda.

Mr W Mafanya (EFF) spoke of a need for political willingness to challenge these issues, as it was dealt with before.

Ms Modise asked if there is a proper plan in place for the DoD if funding is not availed. She also asked if there is a possibility to take students to universities to acquire more skills, it will assist in having more skills in the DoD.

The Chairperson said it might be the appropriate time for soldiers who reach a certain age, to be trained, to acquire more skills, such as training soldiers to be artisans.

Mr D Ryder (DA, Gauteng) said DPWI seems to be lambasted for not doing its job, and it seems to be getting away with it at the moment. He asked if the DoD took control over any properties in Thaba Tshwane, and he asked how the pilot program is working. The issue of lack of funding was talked about for long, and there is a need for an urgent meeting between the DoD and Treasury.

Maj. Gen. Joseph Ledwaba, General Officer Commanding of Defence Works Formation, replied that over the years, there were projects done and completed by the DoD at a cheaper fraction compared to what DPWI was going to charge. This shows the DoD is capable of delivering. An assembly line is needed to assist the DoD. This will make it easier to complete projects, and also to make sure reserves are always on standby.

Technicians are trained. Some are trained by Tshwane University of Technology. The DoD has appointed the Department of Public Service and Administration (DPSA) for a period of three years so it can source the skills the DoD lacks. There is a mentorship program between the Departments. Onsite job training will also be enrolled to reduce the costs of consultations.

In Saldanha, the DoD built ten houses which are in line with municipal guidelines. This shows the DoD is in a position to take over and do projects. There are artisans who are already employed within the Defence Works Formation (DWF) and some are registered with local councils.

Maj. Gen. Ledwaba said there is a plan in place. His fear is the Department will be required to do all the things without the necessary workforce qualified for such projects.

One geyser was being repaired more than once in one year at the project in Thaba Tshwane. The DoD checked on the geysers and realised the issue was only broken elements, and this did not require the whole geyser to be removed. Thaba Tshwane is a risk, there are leaking pipes, old equipment, but there are some good things which can be appreciated. The electrical system is very poor because the wires are poorly joined. DPWI is the responsible party but the DoD will like to take over. However, not without a budget.

Portfolios under corporate budget, includes

• refurbishment,
• capital projects and demolition,
• leases,
• municipal services, and
• accommodation charges.
• Unfunded facilities related projects, includes
• own resource projects,
• projects ordered by higher authority, and
• professional services.

DPWI will wait for a facility to deteriorate. This will require it to pump in a lot of money to repair the facility, instead of fixing the small problems which arise. The DoD will like to reduce leases so it can have total control of facilities.

Mr Thabang Makwetla, Deputy Minister, said the complete picture regarding the transfer from DPWI to DoD must address some of the challenges talked about. Part of the divine issues which should have been dealt with at the beginning includes a clear indication of what the DPWI has done so far. The delivery of infrastructure is something DPWI executes. This capacity does not sit with the government. The infrastructure of South African National Defence Force (SANDF) is a national footprint visible in nine provinces, and not to have in house skills is mind boggling. DoD is doing everything from basic maintenance to building air bases. There are levels of responsibility which can be overtaken by the DoD and savings can be realised, but there is a need to be cautious. Everything must be done properly because there are also critical sides which may not be known by the DoD. Capacity must be sustainable and readily available when needed.

Mr Marais asked about Silvermine, specifically about meetings between Treasury and DoD. He was concerned about not using the reserve force expertise.

The Chairperson said it does not mean reserve forces are not relied on, but are called when necessary.

Mr T Mmutle (ANC) said the formation of the Unit (DWF) must be appreciated, but the practicality of it might be a challenge to be dealt with. It must look at what the private sector is doing wrong. It cannot find itself in the same position. He asked if DWF was running projects timeously, if it was completing before deadlines. A few army bases have dilapidated buildings. He asked why SANDF are subjected to such unhealthy conditions. At this stage, DWF is not expected to do everything by itself.

Ms A Beukes (ANC) asked about the challenges dating back to 2015, and why it has not yet been addressed. She asked when the last inter-ministerial meeting was, and what the outcome is of the accounts disputed by the DWF.

The Secretary of Defence said the document provided explained in depth on the projects done by the DoD, including the required funding.

Replying to Mr Marais, Maj. Gen. Ledwaba said One Military Hospital is still work in progress, and the amount for medical equipment is about R 1 billion. Silvermine is now in the hands of the DoD. Regarding capacity, it is important to know what can be done internally, what can be outsourced, if professionals outside are expensive there is a need to do the job internally, and there is a need to check the work done by the professionals so money is not wasted.

He also said it registered the asbestos programme with the DPWI, but has not yet received feedback.

Minister Nosiviwe Mapisa-Nqakula said the DWF is willing to do the job but does not have a budget at the moment. As capacity is created within the DoD, the budget must be included for DWF.

During this COVID-19 pandemic, the DoD realised it will have more members going to hospitals. It has asked for those with skills in the reserve force to come forward and assist. There are project managers within the DoD but it struggles to meet deadlines because of lack of resources. The DPWI needs financial support for it to be in a position to achieve the desired results.

The Minister said she has not yet had an inter-ministerial meeting since the beginning of this term.

The Chairperson proposed the Committee meets within three months for a follow up.

The meeting was adjourned.