Devolution of DPWI functions to the Defence Works Formation; with Deputy Minister

Meeting report

DOD plans to devolve some DPWI functions to Defence Works Formation

Ms Gladys Sonto Kudjoe, Secretary for Defence, said that at some stage, the Department of Defence (DOD) had formed a task team with the Department of Public Works and Infrastructure (DPWI) to get the two departments to be represented in the process where the issue of devolution was thoroughly looked at. Updates were received on some of the functions that had been devolved. In the process of devolution, there was also a decision by the DOD to form its team by including people from human resources (HR) to ensure that there was capacity building throughout the devolution process.

Every year, the DOD sets aside R1.2 billion for regular ongoing maintenance. That budget was within the account of the DOD, and if the DPWI had to conduct the maintenance, the money had to come from the DOD account. However, with some of the functions having been devolved, it meant that the DPWI would get less money from the DOD, and this resulted in savings for the DOD.

Maj Gen David Nyangasya, Defence Works Formation (DFW), DOD said the Department had taken over the payment of the municipal services portfolio from the DPWI effective 1 April 2020, and had introduced efficiencies and better control measures to achieve an annual reduction. The DOD had settled arrears accounts not paid by the DPWI before April 2020 that were due to municipalities. It was agreed with the DPWI to refund the amount to the DOD, but there was still ongoing engagement with the DPWI.

The DOD had been inundated with outstanding payments for periods since 2019 to date due to readjustments by service providers, and arrears had been charged to the DOD due to short payments by the DPWI. Further, the allocation on the DOD lease portfolio was insufficient for the current lease footprint, and funding the portfolio for the current requirements would enable lease reduction programmes.

The functions that were to be in-sourced back to the DOD included the planned maintenance portfolio, which was composed of the property rates and taxes, day-to-day repairs -- which by 1 April 2023 would remain with DOD emergency repairs-- and refurbishment, which would be partially transferred incrementally to the DoD.

The leasehold portfolio had a budget shortfall of R400 million. The DOD was engaging with National Treasury to top-up the budget for the Department to address all the leases that must be taken over.

Maj Gen Nyangasya added that for the DOD to engage with the DPWI through the savings made from the devolvement of the municipality services, it would address all its unfunded projects, especially those that were life-threatening thus moving members of the DOD from leased buildings to refurbished buildings. This would see a reduction in the leasehold portfolio.

The process that the DOD would follow in the devolution of rates and taxes included evaluating all the contracts, renegotiating and/or ratifying the contracts, and transferring the contracts with the DOD. 

The process that would be followed in the lease replacements would constitute finalising the DOD's facility master plan to ensure lease replacements over the next five to eight years, with emphasis on refurbishment and planned maintenance to reduce the requirement for additional leased accommodation (increase the useful life cycle of existing facilities), funding the current shortfall in the leasehold medium-term expenditure framework (MTEF) requirement, and investigating funding mechanisms for the investment/capital required for lease replacement. The devolution of emergency repairs, maintenance and construction, would include the assessment of the current DOD project portfolio, which presently lay with DPWI. An unqualified assessment would thus be accepted by the DOD and transferred to the DOD project portfolio. Qualified assessments would be referred to the DPWI to resolve any issues and discrepancies.

Discussion

Ms S Marais (DA) asked if there had been any progress on the erection of the border fence. Did first-line maintenance imply that the officer commanding the ordinary bases of the DOD would be responsible for first-line maintenance, such as grass and fences?

He said that the timeframes provided for the devolution process seem to be for unqualified agreements and contracts -- what would be the timeline for the qualified agreements and contracts? He said a detailed time frame would be useful.

He asked if the SCOA decision was binding, or if it was a recommendation. He was unsure if a committee like the SCOA could make a binding decision.

What was the agreement with the Development Bank of Southern Africa (DBSA), including the costs of their involvement in the devolution process? Would the skills acquired by the DOD be useful in ensuring a functioning and independent division?

Mr T Mmutle (ANC) raised his concern about the presentation, because another DOD presentation delivered earlier in the year had referred to a transfer approach with available resources, where it had been indicated that internally the Department had the capacity for built environment professions, with partially qualified members, artisans, and an external implementation agent which would execute complex capital works and refurbishment projects including providing systems and specialised resources. What was the progress on this programme?

The Chairperson added that he had been excited when he saw the staffing structure of the DOD, including the plan to recruit new graduates. In the past, there was mainly a dynamic relationship between the private sector and technical colleges, making employment placements easier. However, that relationship had weakened over the years. He said that the DOD should look closely at ways to revive the recruitment process of new graduates.

DOD's response

Ms Kudjoe referred to the borderline fence, and said she had written to the Director General (DG) of the DPWI. The reason for writing to the DG was because the DPWI normally did to engage the DOD, the South African Police Service (SAPS) and the Border Management Authority (BMA) separately. All these structures sat in the justice cluster, and the DOD had requested that the issue of borderline management be shifted to one cluster, as this provided a platform to iron out possible discrepancies and duplication of roles.

She said that resource constraints were serious, so working together as a team instead of working in silos meant that more could be done with the limited budget available. The response received from the DG of the DPWI was that the matter would be shifted to the justice, crime prevention and security cluster.

On the issue of unqualified and qualified agreements, Ms Kudjoe said that a team was critical in the process of devolution to prevent any unforeseen challenges. The decision on the SCOA division in a meeting hosted in 2018, had been guided by what the Government Immovable Asset Management Act (GIAMA) and the Defence Act stated on the powers given to the Minister of Defence in terms of the ownership of the infrastructure. In the meeting, there had been an agreement for the devolution to start, hence the devolution process of some of the activities to the DOD. This was not a one-off process, but a lengthy and gradual process.

She said that the Development Bank of Southern Africa (DBSA) had gone through an approval process through National Treasury. Part of the agreement the Department had entered into with the DBSA was that the DOD would identify people from a professional point of view that would support the team coming on board with the DBSA, to assist the DOD in building capacity. The Department was not charged for this. She admitted that this would not be possible to be done with one company, hence the recommendation to appoint other credible companies with a good track record to help build a stronger capacity. The DOD was also open to other ideas to build capacity, including engaging with technical and vocational education and training (TVET) colleges. The updated presentation would be shared with the Committee.

General Kekana, Director of Facilities, DOD, said that the issue of first-line maintenance would remain the responsibility of the unit commanders. However, the logistics division had created an enabling course where the services and divisions of the unit could nominate their members to do the course that would assist them in a multi-skilled, first-line maintenance capacity to be able to do maintenance at a unit level.

He added that the DOD had started engaging with National Human Resource Development Strategy (NHRDS) to recruit members who would be trained as building inspectors. The DOD's human resources (HR) division was still sorting out the modalities in terms of recruitment and the agreement to have recruits to be absorbed.  

Deputy Minister's comments

In his closing remarks, Deputy Minister Thabang Makwetla pointed out that the matter being discussed needed further discussion, as it had to be dealt with comprehensively, and the DOD must return to the Portfolio Committee for further engagement. There should be better clarity provided about what was going on with the devolution process.

The Defence Works Formation had presented a broad plan dating as far back as 2019 to be employed in the devolution process to parliamentary oversight committees. In his review of some of the documents, there seemed to be genuine institutional memory issues on the matter that may make it difficult for the DOD to make as much progress as planned. This was because what had been presented in 2019 was far more structured compared to what had been presented in this meeting.

He said the plan presented in 2019 included the need to complete the structure to accommodate the migration of identified infrastructure development functions. There was anticipation of purchasing the required information communication technology (ICT) equipment and software, including a comprehensive procurement strategy and the appointment of an internal professional team. It was noted that there was a need to engage the Department of Public Service and Administration (DPSA), as the bodies responsible for the takeover of these functions were not part of the workforce of the DOD, but were located in the DPWI. Therefore, migrating them from the DPWI to the DOD had compensation of employees' (COE) budget implications. All of these were transitional matters anticipated in the plan, so there should be clarity about these issues.

He agreed with the Portfolio Committee that there could be no transfer plan without the executors of the different responsibilities, including the specific timeframes and risks involved. The DOD would return to the Committee to unpack this issue.

Deputy Minister Makwetla pointed out that from the presentation made, it was still unclear how far the DOD was concerning municipal services and the properties that the DOD leased. He proposed that the ministry would deal with this matter more comprehensively and return to the Portfolio Committee for further engagement.

As had been observed by Mr Mmutle, there were details shared with the oversight Committee in a DOD presentation in April which had been omitted in the current presentation. These were important details, as they referred to the building of capacity to be responsible for infrastructure within the DOD. Furthermore, there had been mention of the DPSA assisting in the transfer, which had not been comprehensively explored in the current presentation. Therefore, further clarity would be provided to the Committee.

He recommended that the issue of the border fence and the refurbishment of the hospital should be dealt with as a separate matter for discussion and accounting. The DOD would provide the Committee with the plans on how the refurbishment would be completed.

The Chairperson thanked the delegation from the DOD, and said that the Department would be invited back next year for further engagement.

Adoption of minutes

The Committee adopted the minutes of 9 November 2022.

The meeting was adjourned.