International Agreements with Cuba, Lesotho & Netherlands; Committee Report on DHS Quarter 1 performance

Meeting report

The meeting was scheduled to start at 09:00 but was delayed, to allow the Chairperson time to join the proceedings. At 09:15 Mr Robert Mashego (ANC): Chief Whip, suggested that an Acting Chairperson be elected. Members agreed that Mr Mashego be appointed as Acting Chairperson.

Mr Mashego announced that he just received a telephone call from the Chairperson who was under the impression that the meeting would be starting at 09:30 as agreed in the last meeting.

After a moment of silence was observed, Mr Mashego confirmed that a quorum existed, allowing the meeting to continue. The apology of Ms E Powell (DA) was accepted. The Deputy Minister, Mr David Mahlobo (ANC) requested to be excused at 11:00 to attend a joint parliamentary meeting. Mr Mashego requested to leave at 10:30 for a 11:00 flight.

The Deputy Minister asked Ms Deborah Mochotlhi, Acting Director-General (DG): DWS to lead the presentations.

The Acting DG said due to time constraints, she would hand over to Ms Lindiwe Lusenga, Deputy Director-General (DDG): DWS to brief members on the status of implementation on the three agreements.

Cuban Agreement
Ms Lusenga said the agreements were tabled in accordance with Chapter 14, Section 231(3) of the Constitution. This process was launched to renew the 2013 agreement that expired in May 2019. The renewal agreement was signed on 6 February 2020 and would be effective for a duration of five years, from 2020 to 2025. The RSA and Cuba agreed to deploy Cuban water experts to assist in the fields of water supply and water resource management.

The areas of collaboration included services provided by hydrologists and scientists in the engineering field. Cuban engineers would be deployed to rural areas where the need was most dire and where they would be sharing knowledge and skills, particularly to young graduates. 

Netherlands Agreement
The Memorandum of Understanding (MoU) with the Government of the Netherlands was signed in 2018 for a period of four years. In November 2019, the Water and Sanitation Master Plan, which guides the plans and priority areas of the DWS, was launched with the support of the Netherlands.

The areas of cooperation included projects such as exchange programmes, the Kingfisher programme and the Blue Deal Project. To date, the exchange programme hosted 24 scholarships to the benefit of students in the Water Sector and the Department. The Blue Deal had been implemented since the beginning of the MoU and entailed an elaborate process in support of Local Government and other water institutions.

Cooperation on the Water and Sanitation Master Plan was taking place at a political level. The main focus was youth development. The Netherlands was currently hosting a South African PhD student on a full-time basis. The DDG: DWS expressed the hope that the student would contribute to the DWS when she returned.

The two countries benefitted from cooperation at multilateral platforms. The President was one of 11 heads of states on the High-Level Panel on Water.

The Blue Deal Project, which had been operating on an international level, involved activities in support of infrastructure projects on municipal level. The Blue Deal South Africa Committee identified and selected a number of municipalities for Phase 1 of the project. The Crocodile River Improvement Project would assist in improving the performance of municipalities. The goal with the Blesbokspruit Project was to improve the water quality. Compliance and Monitoring was the focus of the Vredefort Dome Project. Municipalities involved in the Msunduzi River Improvement Project was to gain experience in water catchment management strategies.

In conclusion, Ms Lusenga said both countries benefitted from effective relations and exchanges. The political commitment to share skills, especially with the youth, was beneficial to South Africa.

Lesotho Agreement
Mr Andre Lambrechts, Commissioner & Chief Delegate: Lesotho Highlands Water Project (LHWP), said the project endeavoured to procure water of high quality, mostly for communities in the Gauteng area. The project offered substantial job opportunities with 50% being allocated to South African contractors. The benefits to Lesotho was mostly in the form of compensation but also included social programmes, for example the development of subsistence farming in order to prevent over-grazing which became a big issue.

The LHWP treaty was signed in 1986 however, a number of amendments had since been made. The domestication of laws had been problematic as it was based on a decision-making consensus. The treaty for Phase 11 of the project was signed in 2011 and involved the construction of the Polihali dam and tunnel. The designs and tender documents were completed but the project was delayed due to Covid-19. The forecast of long-term cost to 2027 was R32,5 billion as at May 2020, with a contingency of R1,7 billion. The cost to date, as at December 2020, was R3,1 billion.  

Risks and challenges of the LHWP included taxes, granting of permits and Covid-19 delays. Lesotho taxes had been described as unfair. The differences on the issue needed to be resolved. Construction of the dam walls was a priority but was in jeopardy due to permits not being granted. Concerns were raised about the implications for the project in light of a possible third wave of Covid-19. 

Discussion
The Deputy Minister advised the Chairperson, who had since joined the proceedings, that the presentations were led by the Deputy Director-General (DDG): DWS and the Lesotho presentation was delivered by the representative of the LHWP, Mr Andre Lambrechts. He thanked Mr Mashego for holding the fort in the Chairperson’s absence and indicated that he needed to leave early for a joint parliamentary meeting which started at 11:00.

The Chairperson thanked the Deputy Minister and apologised for not joining the meeting earlier. She was under the impression that the meeting would start at 09:30 and not at 09:00. She invited members to interact with the presentations.

Mr M Tseki (ANC) noted that the DDG presented two agreements and the Lesotho agreement was presented by a man. He asked, in jest, whether this was an indication that soft skills were being transferred to ladies.

Ms R Mohlala (EFF) requested that, for the purpose of future meetings, the issue of time be addressed. She proposed that officials should test the systems prior to meetings, similar to what was being done for parliamentary meetings. This would ensure that meetings start on time.

Ms Mohlala said the Auditor-General (AG) found anomalies in terms of non-adherence to accounting controls on the LHWP. She asked whether the issue had been resolved and if more information could be made available. She requested an explanation on whether the benefits to Lesotho in terms of the current Operating Rules were not putting the citizens of Gauteng at risk. She indicated that Phase II had not been finalised which presented an opportunity to address potential risks through an amendment of the agreement. She questioned why 3 509 Lesotho households were being compensated annually for resettlement while South African communities, who had been waiting for 22 years to be compensated, were not afforded similar benefits. Resettlement payments of only R6 824 were made to South Africans, which could not be compared to the benefits they enjoyed from farming on the land.

As the Committee was dealing with transboundary projects, Ms Mohlala used the opportunity to raise questions on the ORASECOM (Orange-Senqu River Commission) project. She wanted to know whether the SADC protocol on shared water resources were complied with on the project and requested feedback on the achievements and challenges of the project.

Ms S Mokgotho (EFF) enquired about the mitigating measures put in place to address the risks associated with the LHWP. She had no problem with the project being in the development phase but questioned the lack of transparency in terms of progress on the project. She asked what the security arrangements were in terms of the LHWP and whether the legal agreement was binding on Lesotho. She noted that the ORASECOM project did not appear on the report and asked why information on the project was so secretive.

Ms G Tseke (ANC) welcomed the agreements as it would help to build the technical skills that were lacking in our country and would create employment for young people. She asked what the difference was between an MoU and a treaty and how binding such agreements were on nation states. Entering and implementation of agreements involved costs. She requested the Department to provide a breakdown of the costs per Agreement. According to the presentation, the 2013 Cuban Agreement which expired in 2019, was implemented successfully. She asked how effective the Cuban assistance was in terms of the transfer of technical skills. She wanted to know whether the Department had an educational agreement with Cuba, how many students from South Africa were receiving Water Sector training in Cuba and if the Department could share the challenges and achievements with the Committee.

Ms N Sihlwayi (ANC) found the presentations very interesting but needed clarity on whether the deployment of countries was project specific or if it was based on an election process. Cuban technical skills in the areas of mechanical, civil and electrical engineering were deployed on various projects by the DWS. She was unable to find an evaluation of the achievements of Cuban engineers in the presentation. She asked whether the risks and challenges, highlighted in the Lesotho presentation, were included in the agreement as areas of disputes or weaknesses. Lesotho could withdraw from the agreement, leaving South Africa to face the challenges on its own if provision were not made in the agreement. She asked about the status of resolving the risks relating to work permits and taxes. She was concerned that South African workers in Lesotho, who might be found guilty of ill-discipline, could be sent home if issues of taxes and work permits remain unresolved.

Ms N Mvana (ANC) was concerned that the work done by the Department on the LHWP, was not to the benefit of South African citizens. The Graduate Trainee Programme of the DWS involved the mentoring and coaching of young engineers by Cuban experts. She wanted to know what the criteria was for students to participate in the programme and whether students could apply or if they were chosen randomly.

The Chairperson said that the Cuban technical support team had been in the country for quite some time and in some cases, language became a barrier in the transfer of skills. She asked whether the issue of language had been addressed in terms of providing assistance for clear communication, so that they could be helpful during interaction with officials at the municipalities. Cuba had been giving a great deal of support to South Africa however, tangible outcomes had not been visible. She was of the opinion that the Cubans were sometimes placed in useless areas and that the issue of skills transfer was being used to protect the terrain of tenders. Ms Mohlala raised the issue of ORASECOM which referred to the scheme to supply water through a pipeline from Lesotho through South Africa to Botswana. The initial agreement included providing part of the North West province with water through the pipeline. She asked what was happening around the agreement and why it was being handled with secrecy. The MoU with the Netherlands included the Blue Deal project and the Kingfisher programme as areas of cooperation. She requested an explanation of what the Blue Deal entailed, how it related to the Blue Drop, what the time frame was for the project and how progress on the project could be measured. She asked how municipalities involved in the Kingfisher programme, which dealt with Water Catchment Management Agencies, were selected. She questioned why Cubans were not deployed to the Vaal River to fast-track challenges with the Vaal system and which were affecting areas in Gauteng, Free State and Mpumalanga.

Deputy Minister Mahlobo indicated that he would hand over to the Acting DG and the DDG to respond to the questions raised by members. The Department would return to discuss the ORASECOM issue at a later stage. The ORASECOM Treaty had been in place for 20 years and was being reviewed from time to time to determine whether it still served our national interest. The Deputy Minister asked for permission to leave.

Ms Mochotlhi replied that the pipeline from Lesotho to Botswana via the North West province was in the planning phase and that engagements were taking place on a technical level. It would be impossible to ignore the neighbouring countries as projects would be at risk of not getting approval from authorities. The No Objection Letter from Namibia posed difficulties in attracting investment. The SADC protocol was the first port of call to ensure compliance to agreements. In addition to the projects, the DWS had normal operating forums between the Limpopo province, Mozambique and Swaziland. The DWS developed operating rules in consultation with neighbouring countries to manage floods. Information about imminent storms or heavy rains is shared with neighbouring countries, including the names of people on stand-by who may be contacted during the November-December period.

Ms Mochotlhi indicated that the DDG would provide a brief response to the ORASECOM issue. In response to the concern about challenges that may jeopardise the agreements, she said there had been no serious challenges to date. The DWS always had mutual agreement on issues that were negotiated with other countries. Addressing the proposal to deploy Cuban engineers to the Vaal, she replied that it was an idea that would be explored but at this stage it was not the ideal time due to contractual issues which the Minister was dealing with.

Ms Lusenga reiterated that the Department would return to the Committee on ORASECOM. It was one of the best transboundary river basin schemes in the world and would soon be celebrating its 20-year anniversary. She explained that the difference between an MoU and a treaty depended on the legal opinion from the Department of Justice and the state law advisors at DIRCO. The Minister would get permission and guidance via a presidential minute on whether to draft a treaty or MoU.

Ms Lusenga said the Department would make sure that all countries benefit from the pipeline in the Lesotho-Botswana Water Transfer (L-BWT) scheme. It was still in the planning phase. Responding to the issue of Cuban assistance, she said there was value in the 2013 cohort of Cuban engineers. The information was contained in a booklet which would be made available to the Committee. To address the language issue, the Department made sure that Cubans who are recruited, were proficient in English. As a back-up plan, a service provider was contracted to provide English skills training. 

Ms Thoko Sigwaza, Chief Deputy Director: Institutional Oversight, DWS, explained that the Blue Deal is an international programme in cooperation with the Netherlands. The programme aims to reach 20 million people across the world. The goal of the Blue Deal South Africa Programme is to help 2,5 million people in at least three Water Management Areas, including in Kwazulu-Natal and the Vaal, with access to clean and sufficient water by the end of 2030. The Netherlands had capacity in water resource management due to their experience in managing floods. In contrast, South Africa was a dry country but it could build on Dutch expertise with the focus on improving water quality. The Department was currently working on the Crocodile River and Msunduzi River Improvement Projects with Local Government and SALGA to improve water quality and to rehabilitate the waste water systems. The Department was also learning to manage the hyacinth that had been growing around the dam in the Blesbokspruit area.

The budget on the Blue Deal was minimal. The focus was on building capacity and providing skills training to young people in terms of exchange programmes. The Netherlands made an initial payment of R7 million. No monetary contribution was made by South Africa. The goal was to assist South Africa to strengthen the management of water resources. It is referred to as a cash and in-kind arrangement.

Mr Leonardo Manus, Chief Director: Infrastructure Operations and Maintenance, DWS, said English-proficiency had always been a stumbling block in the deployment of Cuban engineers. In selecting the new cohort of Cuban engineers, the criteria had been revised to include English-proficiency. The large number of applications received was significantly reduced after excluding candidates, who were not English proficient. The Department invested in further training to teach the use of plain language for technical terms. The current team of Cuban engineers placed in the Central District, including in the Gauteng area, was doing well in terms of communication. The majority of the Cuban engineers was operating in the space of water resource management and was therefore not available for deployment to the Vaal.

He explained that a wide range of payments had been made to people who were displaced as a result of the LHWP. The Department had to re-evaluate previous payments made as some families were under paid while others were over paid. The re-evaluation involved a complex calculation, based on the size of the property, and was being done by a professional valuator. A list of the evaluation per family had been compiled but the Department was having difficulty in linking ID numbers obtained, with the family members on the list. The Chief Director reassured members that the values were not generalised but based on actual calculations.

Responding to the non-adherence to accounting controls as per the AGs report, Mr Percy Sechemane, Chief Executive Officer (CEO): Trans-Caledon Tunnel Authority (TCTA), advised that money for the project was raised in South Africa although the Lesotho Highlands Development Authority (LHDA) was taking responsibility for building the infrastructure in Lesotho. The DWS recorded the project based on accounting principles however, the AG needed evidence that the money was used for the intended purpose and reported it as non-adherence to accounting controls. The AG was applying the Public Finance Management Act rules which were not applicable to cross-border projects. This was a unique problem as the activities were taking place outside the country. The DWS invited National Treasury and the AG for consultation about the proper manner to account for the cost and appointed a service provider to engage with all role players. The process had been delayed due to the busy schedule of the AG.

He said the main benefit of the LHWP was the security of water supply at the lowest cost. Other alternatives would have been more expensive. He referred members to slide four of the presentation where all the benefits were tabulated.

Ms Sihlwayi asked how long the DWS had been experiencing the risks and challenges on the LHWP and what the intervention strategy was. The entire agreement would be negated if issues of taxes and permits were not addressed.

Mr Lambrechts said the issue of taxes were being addressed with the counterparts in Lesotho. A small team of legal experts were delegated to the Lesotho Government to deal with the issue. The issue of permits was a political question due to the legal implications of the domestication of laws, therefore the assistance of the authorities was called on to resolve the matter. To address the funding risk, the Commissioner said the delegation had re-enacted efforts in 2021 to set up negotiations with the Namibian Government. The objections from Namibia came as a surprise as there had not been issues in prior years. The No Objection Letter from the Namibian Government was received late last year. Extensive investigations were done to circumvent the risks of unforeseen geotechnical conditions. Border restrictions due to Covid-19 hampered the progress on and increased the costs of the project. The Prime Minister of Lesotho was expected to soon make an announcement on the re-opening of the border. The Department approved an additional budget to assist with the sanitising of people (330 personnel and the delegation) and equipment. The Commissioner said the operational arrangements, dealing with water transfer and payment of electricity obligations, need to be revisited. A committee was set-up to assess the monthly payment of royalties for water delivered to South Africa. The negotiations were of a sensitive nature and were being treated with care. In conclusion, the Commissioner said provision was made for bursaries. Students were mentored and assisted in finding employment if jobs were not available on the project.

Ms Mokgotho asked whether the Department was putting measures in place to address the risks of the LHWP. Water is a scarce resource in South Africa and for this reason, people were struggling to access water. She asked what impact the supply of water to Botswana, via the L-BWT scheme, would have on water supply in South Africa. She wanted to know why public participation was not considered before legal agreements were signed. Technical meetings were being held with stakeholders without the input of the public, which she considered to be the main stakeholder.

Ms Mohlala asked whether the DWS could share the achievements and challenges on the implementation of ORASECOM since the issue of transboundary projects was being discussed. She wanted to know if the DWS could name the Covid-19 projects that were being managed by the Cuban engineers.

The Chairperson noted Commissioner Vusi Nhlapo, Permanent Representative: LHWP, on the platform and requested that he or the CEO respond to the issue about the placement of advertisements for work done on the project. The agreement referred to a 50/50 sharing of infrastructure contracts. She wanted to know where advertisements were placed for work done in South Africa.

Mr Tseki noted that Mr Sputnik Ratau from the DWS was also on the platform and asked whether he could provide feedback on the dams. He immediately retracted his question and jokingly said he only wanted to hear the voice of Mr Ratau.

Mr Lambrechts replied that all contracts are advertised in both local and international newspapers. To date, the LHDA project management unit was responsible for the allocation of contracts in terms of very clear guidelines and in terms of the BBBEE scorecard. Some of the work was of a very high technical nature but the DWS was doing its best to ensure fairness as per the treaty and not to compromise the agreement.

Ms Mochotlhi requested that the Department be allowed to provide a written response on the ORASECOM issue. She explained that public participation does take place but it differed from the normal process in that representatives from various sectors of the community would participate in the planning meetings. She would however discuss the issue with the Planning Director to determine whether more community members could be allowed to participate in the meetings. Responding to the issue of permits, she said there were differences of opinions on how the issue should be addressed. The Department engaged with DIRCO at DG-level but were experiencing difficulties in obtaining responses.

Ms Lusenga added that it was a political matter and had been referred to the political heads.

Mr Manus explained that the first assignment of the Cuban engineers, was the Covid-19 projects which involved the conversion of tanks into a sustainable water supply system. The engineers joined in on the scoping exercise after completion of the compulsory isolation period. They had since been allocated to other areas. At this point, his connection started deteriorating and after multiple failed attempts to reconnect, the Chairperson suggested that he provide a written response.

Ms Lusenga said the achievements on the LHWP would be communicated to the Committee in writing. On the ORASECOM issue, she said work had been done on pollutants and a report was published on the matter. All four countries affected by the pipeline had been involved in the implementation, which had been done according to the National Plan. The Orange-Senqu basin was the best example of cooperation on transboundary rivers. UNESCO was providing guidance on the implementation of the shared river basing scheme. Addressing the No Objection Letter, the DDG said the DG indicated that it was a complex matter and that he had been engaging with his counterpart to find a resolution.

Mr Sechemane acknowledged the DDG for doing justice in her responses to the questions raised by members. He said the escalation process regarding the No Objection Letter took longer than anticipated due to changes in administration on political level. He added that the Minister had been briefed. The current Lesotho counterpart on DG level had been working with the Department for a while and had a good understanding of the matter. Addressing the issue of water security for South Africans, the CEO said the scheme was being managed to serve the rights of the four countries in the shared river basin. He explained that the Vaal system consisted of 14 dams, some of the dams are in Lesotho and some are in South Africa. Provision was made in the treaty on how to deal with the matter of sharing water resources. The CEO said the Sterkfontein dam served as a storage facility for South Africa and the Department was equipped to release water when needed.

Ms Mochotlhi asked whether other colleagues were able to respond to the question about the deployment of the Cuban engineers.

The Chairperson proposed that a written response be forwarded to the Secretariat for distribution to members.

Ms Mokgotho was expecting a response on the mitigation of risks on the LHWP.

The Chairperson replied that the Acting DG did respond to the question but agreed that a further response should be provided in writing.

The Chairperson thanked Commissioner Nhlapo for the good work as permanent representative on the LHWP and invited him to address the members. 

Commissioner Nhlapo said there were six commissioners on the project, led by Commissioner Lambrechts. In his position as permanent representative in Lesotho, Commissioner Nhlapo was managing the office on behalf of the team. However, due to Covid-19 restrictions, he was currently not in Lesotho.

The Chairperson indicated that Mr Ndlovu was one of the six commissioners and asked Commissioner Nhlapo to inform the members about the roles of the other commissioners. 

Commissioner Nhlapo replied that the delegation also included Mr Leon Tromp and Mr Piet Swart as alternate delegates. The contract of Mr Ndlovu was not renewed.

Ms Mohlala asked whether Mr Ndlovu’s deployment as Commissioner was not a conflict of interest as he was also a member of the NCOP.

The Chairperson replied that his contract might not have been renewed for this reason. She requested the Acting DG to include the information about Mr Ndlovu’s deployment in the written response to the Committee.

The Chairperson thanked the DWS officials for the engagement. After releasing the officials, she announced
a five-minute break. The break was followed by a discussion to adopt the report on the 2020/21 first quarter financial and non-financial performance of the Department of Human Settlements (DHS) as well as the accompanying minutes.

Committee Report on DHS Quarter 1 Performance

The Chairperson requested the Parliamentary Content Advisor for Human Settlements to take members through the 2020/21 First Quarter Report of the Portfolio Committee, which highlighted the engagements, observations and responses to departmental presentation on expenditure spend against targets for the period under review.

Following the reading of the report, the Chairperson asked that the accompanying minutes also be tabled.

Ms Mohlala said that she wanted to engage with the report and asked what revisions had been made to the annual plan in circumstances where targets were not met.

The Chairperson explained that the report contained the work that was done by Content Advisors and that it needed to be submitted to Parliament. The Committee would engage with the DHS officials during their next appearance.

Ms Sihlwayi wanted to know how many DWS officials were affected by Covid-19.

The Chairperson advised members that questions needed to the directed to the Department. She explained that the report was based on engagements between the Committee and the Department. The issues that members had been raising would be added to the Observations and Recommendations section in the report.

Ms Sihlwayi referred to a proposal that was made in a prior meeting made about two or three organisations that came together on rural housing. The observation was made that people who were given houses by these organisations, were not a true reflection of the people of our country. She wanted to know how many coloured people in the Western Cape received houses.

The Chairperson requested that the Department compile a list of people who benefitted and had been given houses in all provinces, not only in Cape Town. The list should be made available for the perusal of members.

Ms Mohlala enquired about the Lockdown Recovery Plan that was dealing with delays in constructions and repeated her question about revisions to the Annual Performance Plan (APP) in circumstances where targets were not met.

The Chairperson enquired from the Deputy Director whether the Department had revised the APP and requested him to add this issue to the recommendations.

The Deputy Director replied that adjustments were made to various entities and the revised APP had subsequently been tabled in Parliament.

The report and minutes were adopted with the objection of the EFF.

Ms Mohlala asked that the objection be added to the report and not to the minutes.

Conclusion

The Chairperson advised the members that the planned oversight in the Western Cape had been rejected by the Chief Whip due to a Parliamentary sitting scheduled for the same time. The two days allocated for the visit would be used to deal with the annual report of the Housing Development Agency (HDA). The report was initially scheduled for discussion the following Tuesday however, the item would be removed from the programme.

Ms Mohlala asked when the DWS would be tabling its report.

The Chairperson replied that in terms of the Act, the Department had six months after the deadline to table the report. The report had not yet been tabled but the Department was still within the six-month grace period. The Committee would deal with the report as soon as it was tabled even if it were to be done before Parliament closed.

The Chairperson indicated that amendments to the programme should reflect the briefing on 2 March 2021 by the AG on the HDA report and a briefing on the Property report on 16 March 2021.

The Committee agreed to adopt the amended programme.

Ms Mohlala asked the Chairperson to clarify the HDA issue.

The Chairperson explained that the HDA was one of the entities not audited by the AG, as had been reported when the AG presented its annual report. The AG fulfilled an oversight role of the work done by the auditors of the HDA. 

The Chairperson asked the Secretariat to follow up on written replies from the DWS and to distribute it before the next meeting. She requested officials to take cognisance of the starting time for future meetings. Meetings would start at 09:30 to allow members, who first needed to attend Parliamentary sessions, to join the meeting on time.

The meeting was adjourned.