Department Annual Report and Expanded Public Works Programme: Input from Stakeholders

Meeting report

PUBLIC WORKS PORTFOLIO COMMITTEE
1 November 2005
DEPARTMENT ANNUAL REPORT AND EXPANDED PUBLIC WORKS PROGRAMME: INPUT FROM STAKEHOLDERS

Chairperson: Mr F Bhengu (ANC)

Documents handed out:
SAWIC Submission on the Expanded Public Works Programme PowerPoint Presentation
Klipfontein Corridor Learners’ Submission on the Expanded Public Works Programme
Afrikan Outback Services Submission [please email [email protected]]

SUMMARY
Input was heard from various organisations and contractors who were involved with the Department of Public Works programmes such as the Expanded Public Works Programme.

Investec explained that it offered innovative ways of financing empowerment deals and it was committed to empowerment. However, black-owned small construction companies did face some tough barriers in the industry. For example, a successful tender bidder needed to provide a ten percent guarantee before they could commence a government job. Small black-owned companies often did not have the capital to cover the guarantee. The commercial banks could not risk providing loans to such companies. In order to address this, Investec suggested that the Department of Public Works should alter certain aspects of the tender process. Indeed, if the Department could provide assurances that the small contractors would be paid promptly, the commercial banks might be willing to offer small-scale contractors bridging finance to cover the guarantees.

The Committee were concerned about the ten percent guarantee proviso for government tenders and that only an elite group of people had benefited from black economic empowerment. Also raised was the problem of black-listing. Investec was asked if it had programmes to assist and guide women and black-owned businesses and whether black-owned construction companies should enter into partnerships with white-owned companies.

The South African Women in Construction delegation explained that their organisation had been established to assist and promote women in the construction sector. They suggested that there were a number of challenges associated with the Expanded Public Works Programme. For example, some local municipal officials had a limited understanding of the Programme. The delegation also noted challenges that women faced in the broader construction sector, which included gender discrimination. Despite these challenges, women contractors had been very successful in the construction industry.

During the discussion, Members debated issues around gender equality. They were also concerned about the problem of fronting in the construction industry, whether the micro-MBA offered to South African Women in Construction members, was a high quality qualification and what type of assistance was provided to their members.
The Klipfontein Corridor Learner Contractors delegation gave information on the Expanded Public Works Programme project which had provided them with an opportunity to become employed. They had, however, experienced problems with the Project. These included theoretical training not corresponding with the issues on site; a delay of three months between the class phase and the site phase of the Project, poor guidance from the mentors; and the City of Cape Town’s delayed payment to the learner contractors. A major problem was site security as they had been robbed there by criminals. The City of Cape Town and the Public Works Department had Certain had instituted measures to address security but these had been inadequate. One of the learner supervisors had been subsequently murdered at the site. The Committee decided that the Minister, the Deputy Director-General, and the Mayor of Cape Town should be made aware of the problems the learners had faced.

The Appolis Builders delegation had undertaken various jobs for the National Department of Public Works in the Northern Cape but they alleged several irregularities on the part of departmental officials. Appolis Builders were advised to re-submit their complaint to the Public Protector. The Committee would write to the Minister, and contact the Department about the issues raised by Appolis Builders.

The Afrikan Outback Services and Mvandaba’s Cleaning Services delegation outlined problems that they had experienced with officials from National and Provisional Department of Public Works in the Western Cape. The delegation alleged that certain regional officials in the tendering division, were involved in corruption. They had informed the Committee about this at a 2004 hearing and a Member of Parliament had promised to assist them, but had reneged on the promise. The Minister’s office had appointed investigators to investigate their allegations but the corrupt regional officials had discovered the investigation and had made threatening phone calls and delegation members feared for their safety. The Committee would liaise with the Minister’s office around the issues that had been raised by the delegation.

MINUTES
The Chairperson noted that a number of organisations would be presenting their views on the Department of Public Works’ (DPW) Annual Report, the sectors in which they operated, and on issues surrounding the Expanded Public Works Programme (EPWP). He stated that the organisations were welcome to raise concerns and make recommendations.

Investec Submission
Ms F Lery-Hassen (Investec Consultant) stated that she had only been notified on the 31^st of October that she would be a speaker at the meeting. As a result, she had not prepared a written submission. Nonetheless, she would be providing an oral submission.

Ms F Lery-Hassen began by explaining that Investec was a private bank that dealt mainly with large companies and wealthy individuals. Nonetheless, one of Investec’s key focus areas was empowerment. There were many white-owned companies that were seeking to enter into partnerships with black individuals and companies. Some of the empowerment candidates had the skills to succeed in business, but lacked assets and security. In such cases, Investec would finance the empowerment deal by ensuring that the white-owned company provided the security. As a result, Investec was empowering people that would normally not receive funding from other commercial banks.

Ms Lery-Hassen noted that a number of black-owned companies had been operating under the auspices of white-owned companies. Some of these black-owned companies had realised that they were capable of performing the work themselves. As a result, they had started to bid for Public Works, and other government, tenders. The problem, however, was that any successful bidder needed to provide a ten percent guarantee before they could commence a government job. Many small black-owned companies would often not have the capital to be able to put down this ten percent guarantee. The commercial banks could not provide the loans for the guarantee if the company did not have security. She, therefore, noted that perhaps the tender process needed to be slightly altered. If the tender process was completely transparent, included certain controls and had concrete payment timeframes, the commercial banks would perhaps be willing to provide loans to companies for the guarantees. Added to this, DPW perhaps needed to reduce their terms of payment in order for small black-owned companies to gain access to working capital.

Discussion
The Chairperson enquired whether Investec had attended the recent Construction Charter Conference. Ms Lery-Hassen replied that, unfortunately, she had not attended the Conference.

Ms Siphayi (South African Women in Construction (SAWIC) National Chairperson) noted that women had been historically marginalised in South Africa. During the apartheid era, women were unable to legally own assets. As a result, many women still did not own assets. In the light of this, she asked whether Investec had a programme to specifically assist women. Ms Lery-Hassen replied that the Construction Charter had set targets for the empowerment of black women. Investec had realised that many of these women would not have sufficient assets to acquire financing for empowerment deals. As a result, Investec would examine the assets of the white-owned company, which wished to be empowered through a partnership with black women. If the white-owned company had sufficient assets, which could be used as security, Investec would offer financing for the empowerment deal. She added that a number of white-owned businesses in the construction sector were resisting empowerment. In such cases, Investec had explained to these companies that they needed an empowerment partner if they wished to bid for government tenders in the future.

Ms Lery-Hassen stated that the government agencies, such as the National Empowerment Fund (NEF) and the Umsombuvu Youth Fund, had the funds to assist black-owned small business. The problem was that they were not spending these funds and, as a result, they were failing to effectively empower people. In addition, some of these institutions had higher interest rates than the commercial banks. There seemed to be major problems with these institutions. Ms M Matanda (African Outback Services) added that she had applied for financial assistance from the NEF. They had refused to finance to her company. Indeed, they had done so because they believed that her company was incapable of competing with larger companies. She noted that this was unfair, as she had produced a sound business proposal.

Mr S Wang (ANC) and Mr M Appolis (Appolis Builders) commented that it was problematic that a successful bidder, for a tender, needed to provide a ten percent guarantee. It prevented many capable companies from procuring work from the government. Indeed, banks were not willing to provide loans to small companies, which had no security, for the ten percent guarantee. Mr Wang noted that perhaps government needed to re-examine whether successful bidders should be required to provide a ten percent guarantee. Ms Lery-Hassen replied that the aim of commercial banks was to make profit. The banking environment was very competitive and the profit margins of the banks were small. They, therefore, could not take too many risks. If DPW could ensure the quality of the companies’ work, and outline the payment terms, then perhaps banks could supply financing for the guarantees.

Ms M Ntuli (ANC) commented that many small black-owned companies, unfortunately, had failed. Due to this, the owners of these businesses had lost their assists. In the light this, she asked whether the banks were offering small black-owned businesses guidance. Did the banks monitor the performance of these companies in order to reduce the possibility of failure? Ms Ntuli and Ms Siphayi added that it was important that the owners of small businesses were trained in management and financial skills.

Ms Ntuli and Ms Matanda were concerned that a small elite had benefited from BEE. More people amongst the black population, including small business owners, needed to also benefit from BEE. Ms Lery-Hassen responded that the broader black population needed to be empowered. Perhaps the BEE Charter needed to be re-examined. White-owned companies, which were seeking an empowerment partner, tended to select the same people. Hence, there was a core group of black people that were benefiting from BEE. There was a need for broad-based black economic empowerment: women’s groups and communities needed to be included in BEE.

Ms Lery-Hassen commented that many women were unable to work because they were raising families. However, these women could be provided with accountancy skills. This would enable them to perhaps do bookkeeping for companies from home.

Mr H Cupido (ACDP) questioned whether BEE was empowering small black-owned businesses or large white-owned companies that were using black individuals as fronts. Mr Wang added that many white-owned companies were using black people as fronts in order to get government tenders.

Mr N Gogotya (ANC) observed that most of the agricultural BEE initiatives in the Limpopo Province had collapsed. This meant that the money that had financed these deals was wasted. In the light of this, he stated that one could not provide finance to small black-owned companies without providing other forms of support. There needed to be skills training, business training, and marketing training.

Mr E Parker (Klipfontein Corridor Learner Contractor) was concerned that there was a view that small black-owned companies needed to be paired with white-owned companies. Banks needed to be willing to finance 100% black-owned companies. Mr Gogotya responded that having 100% black-owned companies was a noble idea. However, would most of these companies have all the skills that were required to undertake massive projects? Indeed, at times, it might be necessary to sources skills from white-owned companies. Added to this, there needed to be integration. One could not have purely white and purely black companies and economies. There had to be a dilution of the white economy.

Ms J Maranyane (Klipfontein Corridor Learner Contractor) stated that she knew of a case where a contractor had been doing small jobs for the government. This contractor eventually received a large contract, worth R 8 million, from the government. As a result, the contractor needed to increase his credit facilities. He, therefore, approached his bank to increase his credit limit. His bank undertook a credit check and found that he was listed on the ITC. However, he had never received a notification that a judgment had been taken against him. Due to his ITC listing, the contractor could not extend his credit and lost the R 8 million contract, which also caused his business to collapse. It was eventually discovered that the contractor had been listed on the ITC because he owned a debt of R 52. Ms Maranyane enquired whether Investec assisted people that had been listed on the ITC for nominal debts. Ms Lery-Hassen responded that this was a problem. Indeed, she knew of a similar example where someone had been black-listed for R 72. She then explained that a good banker should undertake an ITC check. Once the banker had done this, they should investigate why the prospective client was listed. If the prospective client had been black-listed due to a small bad debt, or because they were not aware that they had a judgement against them, a good banker should offer some assistance to help the prospective client remove their name from the ITC. She added, however, that some bankers did not investigate why prospective clients had been listed: they simply declined the loans.

Mr Wang noted that a person had to consult specialist lawyers to remove their name from the ITC. This was time consuming and costly. The Chairperson observed that the SACP and COSATU had raised certain concerns about the ITC. Indeed, the Portfolio Committee on Finance had also held public hearings on the ITC. He added that it was unacceptable that someone had lost a contract of R 8 million because they were listed on the ITC for a bad debt of R 52. Companies that were black listing people for R 52 should be exposed and discredited. It was also unacceptable that some people were not being properly informed about actions, which were being taken to obtain a default judgement against them. Certain issues surrounding the ITC needed to be addressed. Mr Wang added that people should not be listed on the ITC for bad debts that were under R 1 000.

Mr Cupido highlighted that the National Credit Bill stipulated that if a person’s debt had been paid, he/she should be removed from the ITC. He suggested that the Committee should study the National Credit Bill to understand the changes that it proposed.

Mr Wang noted that he knew of a development project where a company had trained 600 people to use certain machines. It was planned that these people, once they were skilled, would purchase machines and work from home. The company would then market the products that these people were producing. These 600 people had approached a bank for a loan in order to purchase the machines. The bank, however, had declined the loan because it required an extensive business plan. These 600 people did not have the skills that were required to draw up a business plan. As a result, they investigated the possibility of hiring a consultant to draw up the business plan. However, they discovered that they could not afford to hire the consultant: he wanted R 25 000 for an extensive business plan. Due to these obstacles, the project has stalled. He enquired whether Investec could offer any assistance to this project. Ms Lery-Hassen responded that commercial banks would not assist such a project. The company, or the 600 people involved, should rather approach development agencies, such as the NEF, for funding. The problem was that some of these development agencies also required extensive business plans, which could cost up to R 25 000. Development agencies perhaps needed to train people to compile their own business plans.

Mr M Likotsi (PAC) commented that the development agencies should offer better terms than the commercial banks. They had been mandated to assist small businesses.

Mr Likotsi noted that many small black-owned businesses had been operating since the apartheid era. These businesses had proved themselves. The commercial banks and development agencies should be offering financial assistance to these companies. Perhaps 70% of the funding should be allocated to these businesses; while 30% should be allocated to new businesses. This could change once the new businesses became stable. It was no use providing all the funding to new business, which were failing. There needed to be some form of consolidation.

Mr Appolis was concerned that government paid contractors in instalments. It made it difficult for the contractors to run their businesses efficiently.

The Chairperson commented that perhaps the financial institutions should hold a national convention to examine the issues surrounding the financing of small businesses. The Chairperson added that the Committee should invite some of the development agencies and financial institutions to discuss the issues that had been raised at the meeting. The Committee, at a later meeting, also needed to discuss the issues around fronting, skills transfer, the ten percent tender guarantees and default judgements.

The Chairperson requested Investec to send a written submission, which included its recommendations, to the Committee. The issues that had been raised were important and would be included in the Committee’s report on the Department’s Annual Report. Ms Lery-Hassen replied that she would forward a written submission to the Committee.

South African Women in Construction (SAWIC) submission on the EPWP
Ms Siphayi provided the background history of SAWIC. This included highlighting SAWIC’s mission, which was to promote and assist women in the construction sector. She noted that SAWIC was a non-profit organisation, which had approximately 1 000 members. She then provided an overview of SAWIC’s organisational structure. SAWIC was geared towards offering various assistance programmes to its members. This included offering members access to training, offering assistance with capacity building, and access to a micro-MBA course.

Ms Siphayi outlined SAWIC’s view of the EPWP. It was noted that the EPWP had created jobs and had offered opportunities for empowerment. SAWIC members were participating and contributing towards the EPWP. Ms Siphayi added, however, that some of SAWIC’s members had aired a number concerns about the EPWP, which were:
- that some municipal officials seemed to have a limited understanding of the EPWP;
- that the contractor training courses were not user-friendly and perhaps were not practically orientated;
- that some contractors – who only had work during certain periods of the year – had been excluded from the EPWP’s definition of an unemployed person;
- that some of the small-scale women contractors, due to family demands, were experiencing difficulties in completing the NQF courses that were required for participation in the EPWP.

Ms Siphayi discussed some of the challenges that women faced in the construction sector. These included harassment; physical constraints; fronting; blatant and sophisticated gender discrimination; difficulties in securing jobs and contracts; difficulties in securing finance and other resources; difficulties with receiving relevant training; problems with cash flow due to the manner in which DPW paid contractors; the need for bridging finance; the problem of providing ten percent upfront guarantees; and limited access to the networks that existed in the construction sector. Nonetheless, many women were succeeding in the construction sector. Some of the successes of SAWIC’s members included obtaining contracts from the Department of Public Works; undertaking a construction project at the Pretoria Technikon; being involved in the construction of the Maputo and Platinum toll roads; being involved in the Coega development; and undertaking the construction of the Gugulethu market.

Ms Siphayi outlined the benefits of entering into a partnership with SAWIC members. These included recognition, empowerment, compliance with the Construction Transformation Charter, access to networks, and the minimisation of risk. Ms Siphayi recommended that an action plan should be established to ensure that there was greater co-operation in prospective projects, and to ensure that more women participated in the EPWP. In addition, she recommended that a focused women contractor development programme should be established. This would increase the number of women contractors that were entering into the EPWP.

Discussion
Mr Gogotya noted that SAWIC had stated that some joint ventures between white-owned and black-owned companies had led to fronting. He, therefore, enquired whether SAWIC viewed joint ventures with scepticism. Was there a problem with the manner in which joint ventures were being undertaken? Mr Likotsi added the Department had formulated a definition of fronting in order to prevent it. However, many people felt that the Department’s definition of fronting was too narrow. He asked how SAWIC defined fronting.

Ms Siphayi responded that fronting was a problem in the construction sector. White-owned companies would sometimes falsely record their domestic workers as shareholders/partners in order to receive government work. Other white-owned companies would form partnerships with small black-owned companies in order to receive government tenders. Many of the owners of these small-black-owned companies would not have financial skills or understand corporate governance. Indeed, some of the owners of these companies would know little about the finances of the ‘partnership’ that they had entered into. As a result, the white-owned companies would reap most of the profits out of these deals. This needed to be addressed. Nonetheless, it was difficult to define fronting, because some of the fronting scams were complex.

Ms T Matabela (SAWIC North West Provincial Chairperson) added that sometimes large contractors would bribe people to become fronts. These people would then register companies that would be operated by the larger contractors.

Mr Likotsi asked whether the following example would be considered fronting. A small company secured a tender, but did not have the capital to undertake the work. This small company was then approached by a larger company to enter into a partnership. The larger company would finance the deal; but it would then take 80% of the profits. Ms Siphayi and Ms Matabela replied that such a scenario would be considered fronting and corruption. However, it would be acceptable if a large company genuinely entered into a partnership with the small contractor and took approximately 20% of the profits. Small contractors needed to understand business principles to protect themselves from entering into unfavourable or exploitative partnerships. The problem was that some people were desperate, and would do almost anything to ensure an income.

The Chairperson noted that there were Women in Construction groups in the Eastern Cape and Western Cape. Were these groups affiliated to SAWIC or were they independent groupings?

The Chairperson commented that there needed to be a broader debate around the role that men should play in developing women. The empowerment of women should not be viewed as the disempowerment of men. Women needed to be empowered to ensure that they had an equal status in society. The Chairperson and Mr Likotsi stated that the fear, and resistance, that men felt towards the empowerment of women needed to be addressed. If this happened, men would also be empowered. It was not a question of domination but equality.

Mr Likotsi enquired whether SAWIC was involved in educating men in the construction sector to ensure that their resistance to the empowerment of women was addressed. Ms Siphayi responded that men supported women in the construction sector, even though the sector was male dominated. Nonetheless, women constituted 30% of the contractors working on the Coega project. Men and women needed to co-operate and work together to find solutions to gender discrimination.

The Chairperson commented that some of the municipal councillors were failing to fully understand the issues surrounding the EPWP. This problem needed to be addressed.

The Chairperson noted that South African contractors needed to begin to undertake work in the rest of Africa. This was for various reasons. South African contractors needed to use the resources that they had acquired to assist other African countries. However, there was also perhaps a danger that South Africa’s market could possibly become saturated because of the number of people that were being trained as contractors. As a result, there was a need to become involved in the rest of Africa. In the light of this, he enquired whether there was a plan for South African contractors to become involved in projects in other African countries. Ms Siphayi responded that SAWIC had approached the President to promote South African women contractors in Africa.

Ms Ntuli asked about SAWIC’s future plans. Did SAWIC have a vision of where it would be in 2015? Ms Siphayi responded that SAWIC’s vision was to enhance women’s role in the construction sector, through promoting and assisting women-owned construction businesses.

Ms Ntuli noted that the delegation had discussed SAWIC’s activities within the EPWP. However, SAWIC was older than the EPWP. She asked what SAWIC’s achievements had been prior to the launch of the EPWP.

Ms Ntuli enquired whether SAWIC’s provincial structures were offering assistance to rural women. Ms Siphayi replied that SAWIC had considered taking its annual conference to Aliwal North in order to reach rural women in the Eastern Cape. However, it had proved too costly, and the conference was moved to Port Elizabeth. Nonetheless, SAWIC had provided buses for rural women to attend the conference in Port Elizabeth. Ms T Matabela added that SAWIC was mandated to empower rural women.

Ms Ntuli asked whether SAWIC had any plans to ensure that its members received access to appropriate training. Ms Ntuli enquired how SAWIC assisted its members, and women in general, to gain access to financing. Ms Siphayi replied that SAWIC was a national organisation, which was supported by the Minister of Public Works. The Minister had supported SAWIC because she realised the plight of women in the construction sector. Mr Siphayi added that SAWIC regularly met with the commercial banks in order to convince them to formulate plans to assist black and women empowerment. Added to this, SAWIC had facilitated job opportunities for its members. SAWIC had also signed Memorandums of Understanding (MOUs) with a number of engineering organisations. These engineering organisations made their expertise available to SAWIC’s members. Indeed, SAWIC regularly invited experts in the construction field to provide skills training to its members. This included providing leadership skills to women. Added to this, SAWIC introduced members to networks in the construction sector which could be beneficial for their businesses.

Mr Wang observed that ABSA Bank and the Development Bank of South Africa (DBSA) were some of SAWIC sponsors. In the light of this, he asked whether SAWIC assisted its members to obtain financing from these institutions. Why could SAWIC not negotiate a deal with these banks to ensure that they provided finance for the ten percent guarantee that was required from successful tender bidders? Ms Siphayi responded that SAWIC had worked hard to attract sponsors. As a result, it had found sponsors that were committed to its vision. Some of SAWIC’s sponsors offered free skills development training to its members. In the past, the DBSA had also assisted SAWIC to send its members to various conferences. Ms Siphayi added that SAWIC was holding discussions with ABSA, which were aimed at securing financing for its members. However, DBSA funded local governments; not private individuals or entities.

Mr Likotsi asked why small contractors could not cede their tenders to commercial banks, as security, to obtain financing to cover the ten percent guarantee that was required for government jobs. Ms Siphayi responded that there were various issues around ceding tenders as security. Some contractors would promise to cede a tender to different entities. For example, they would purchase material from a supplier on credit and ‘cede’ the tender as security. Once they had done this, they would draw out the money in their accounts. They would then disappear with the material and the money. When the supplier went to the contractor’s bank in an attempt to recover their lost money they would find that the supplier had also ceded the tender to the bank. The Department of Education, however, had addressed this problem. If a contractor were purchasing supplies on credit, the contractor, and the contractor’s supplier, would have to jointly sign at the bank in order to ensure payment.

Ms Ntuli and Mr Wang asked about SAWIC’s finances. Mr Wang asked how much SAWIC’s income was for 2004/05. It seemed as though SAWIC had received donations from some large companies. Ms Ntuli enquired about the size of SAWIC’s budget and how it was spent. Ms Siphayi responded that most of the sponsors did not provide large donations to SAWIC. As a result, SAWIC’s funds were limited. It spent most of its funds on administration costs and publications. She added that SAWIC forwarded its Annual Reports to the National Department of Public Works on a yearly basis. She noted that SAWIC would send its 2004/05 Annual Report to the Committee.

Mr E Magubane (ANC) asked why SAWIC had suggested that the DPW tendering documents needed to be simplified. Ms Siphayi responded that SAWIC offered its members assistance in completing tendering documents. When a contractor was bidding for a tender, they would often have to visit a number of departments in order to collect the relevant application forms. It would be beneficial if the tender documents, and the processes surrounding the tender applications, were simplified.

Ms Maranyane stated that many commercial banks would not offer small contractors bridging finance. As a result, these small contractors often approached other financial institutions. These other institutions would offer financing on the condition that they received a share of the contractor’s profits in addition to the interest on the loan. She enquired whether there were regulations that outlined the share that a financial institution could take from a contractor’s profits. Added to this, were there regulations that outlined how much such institutions could charge for offering financing? Ms Siphayi replied that every financial institution decided on the terms under which they would provide finance. SAWIC had no control over the interest rate that these institutions charged. Ms Lery-Hassen pointed out that commercial banks were governed by regulations, which outlined what they could charge. However, commercial banks would not offer bridging finance. Other financial institutions, which offered bridging finance, charged much higher fees, than the commercial banks, because of the perceived risk that they were taking.

Mr J Blanche (DA) suggested that women contractors needed to enter into the sector by first undertaking small projects. This would provide them with the necessary experience to undertake larger projects in the future. Any contractor would fail if they were suddenly expected to undertake a large project. Ms Siphayi responded that there were some benefits for a contractor to initially undertake small projects: it allowed them to build up their skills base. Most small companies that received large contracts would also secure the services, or assistance, of experts. However, the problem was that many of the small contractors would never receive the larger projects.

Mr Gogotya noted that SAWIC offered a micro-MBA qualification to its members. He enquired what a micro-MBA was. He observed that a number of SAWIC members had battled with the NQF courses. In the light of this, he questioned whether they would be able to cope with undertaking an MBA. Ms Siphayi replied that the micro-MBA, which was offered to SAWIC members, was run by Price Waterhouse Coopers. The micro-MBA was not an MBA; it was a basic course on business administration that could be completed within a few weeks. On completion, the participants would be issued with certificates.

Mr Gogotya responded that it appeared as if these micro-MBAs were perhaps sub-standard. Indeed, if the course only lasted for a few weeks, it was misleading to refer to it as a micro-MBA. Providing people with "quack" MBAs was not restoring their dignity. People needed to be provided with high quality practical training. They should be taught how to tender, business management, finance, and how to undertake deals. Perhaps the Committee needed to meet with Price Waterhouse Coopers to ascertain the quality of the micro-MBA. Mr Blanche stated that SAWIC was misleading its members by referring to Price Waterhouse Cooper’s course as a micro-MBA. A MBA was a difficult post-graduate degree; not a course that only lasted a few weeks.

Ms Siphayi noted that the standard of the training in the construction sector needed to be regulated. The Construction Education Training Authority (CETA) needed to monitor the training that was provided in the construction sector. Ms Siphayi acknowledged that people should be proud of their education. There were many educational institutions that were offering the micro-MBA. Some people studied the micro-MBA because it was prohibitively expensive to undertake an actual MBA. Business Enterprise South Africa and Eskom also offered their employees micro-MBAs.

The Chairperson commented that perhaps the micro-MBA could be part of an education system that was comprised of modules. Hence, the micro-MBA could be converted into one of the modules of a quality course. The Chairperson added that it was good that people were undertaking courses. However, perhaps the institutions should not be referring to the course as micro-MBAs.

Ms Matanda asked how much SAWIC membership fees were. Ms Siphayi noted that it cost R 600 for an individual to join SAWIC, R 1 800 for a company to join, and R 6 000 for a corporate to join. Some of these fees went to the national office. However, most of the income was allocated to the provincial structures.

Ms Matanda asked whether SAWIC assisted women whose businesses had failed. She felt that SAMIC was not assisting the women in the townships. Ms Siphayi noted that there had been problems with some of SAWIC’s provincial offices. However, SAWIC was working towards addressing these problems.

The Chairperson noted that SAWIC would be invited back to Parliament to engage on its Annual Report and other issues, such as fronting and women empowerment.

Afternoon session
Klipfontein Corridor Learner Contractor Submission
Mr M Zibi (Klipfontein Corridor Learner Contractor) noted that the EPWP Klipfontein Corridor Learner Contractor Project was conducted under the auspices of the National Public Works Department. In fact, the National Public Works Department had financed the project. The Construction Education and Training Authority, along with the services providers, were responsible for providing the actual training. The City of Cape Town was the local authority. Mr E Parker (Klipfontein Corridor Learner Contractor) noted that the Project had offered historically disadvantaged people the opportunity to become building contractors. It was, therefore, a project that was aimed at poverty alleviation and creating employment opportunities and the learner contractors were supportive of the initiative. Mr Zibi noted that 85% of the Klipfontein Corridor Learner Contractors had completed their first project. Mr E Parker (Klipfontein Corridor Learner Contractor) and Mr Zibi indicated there support for the programme and their desire to make it a success.

Mr Parker, Ms J Maranyane (Klipfontein Corridor Learner Contractor), Mr M Vanyaza (Klipfontein Corridor Learner Contractor) and Mr Zibi discussed some of the problems that the learner contractors had encountered with the Project, which were:

- The Project had been advertised through the local press, and a road show had been held at the Athlone Civic Centre. The problem was that the National Department of Public Works had not been present at the road show, which created a negative perception amongst the prospective learners.

- An induction examination was held at the Customs House in Cape Town. During the examination, the invigilators had been unable to answer basic queries about the question papers. Added to this, interviews that were held with the prospective learners ran up to two hours late.

- During the classroom training phase, some of the trainers were unaware of the site where the learners would be undertaking their practical work. This meant that the training that was provided did not link up with specific issues that their learners would face at the site. Hence, the trainers were unable to connect the theoretical work with the practical work.

- Major problems had been experienced during the site phase of the project. There was a delay of three months from the class room phase to the project site phase. The choice of the site for the learner’s practical training was problematic, as it was situated in one of the most dangerous areas of Cape Town. The learners realised that construction was needed in underprivileged areas; however, the site was perhaps inappropriate for the learners’ first project. Effective learning could only take place in a safe environment. Unfortunately, the learner contractors were robbed and assaulted at the site. Indeed, one of the learner supervisors was murdered at the site by a criminal. Some of the learners were questioning whether they had been sent to the site because the major contractors had refused to work at that site.

- During the site phase of the programme, the learners were provided with mentors. Unfortunately, the mentors were rarely on the site, and provided little leadership or guidance. The learners had completed all the site work on their own without technical assistance from the mentors. The mentors usually only appeared when they had to sign the cheque requisitions. The learners had raised the concerns that they had about the mentors with the National Public Works Department. This, however, had not produced any results, and it appeared as if the Department was perhaps siding with the mentors. The learners did not want to enter into Project 2 with the same mentors.

- The City of Cape Town’s payments were being delayed. The City of Cape Town owed money to some of the learner contractors. For example, one of the learner contractors was owed R 400 000. Due to this, the learner contractors could sometimes not pay their workers. There had been incidents were the workers had become extremely angry about not receiving their wages. Indeed, one of the learner contractors had been briefly held hostage by angry workers. This had come about because the mentors had failed to sign the workers cheques. In this situation, the City, the National Department, and the mentors had offered no assistance. The gap between the realities on the site, and the people that managed the project was vast. Added to this, the City of Cape Town did not have systems to support the Project.

Mr Parker noted that the Klipfontein Learner Contractors were determined to succeed. The Project had been a good opportunity for the learners. However, the programme was in danger of being de-railed. The learners needed the Department to intervene in order for the Project to be a success.

Discussion
Mr S Opperman (DA) enquired whether Safety and Security officials had been sent to the site to protect the learner contractors. Added to this, he asked whether the leaner contractors notified the City of Cape Town about the security problems at the site. Mr Vanyaza replied that the learners had notified the City of Cape Town about the security issues at the site. Indeed, they had done so as soon as they started working on the site. The City of Cape Town, at that stage, informed the learners that the City was not responsible for security at the site. The learners then contacted the Department of Public Works about the dangers that they were facing at the site. Public Works informed the learners that the site would be fenced off. However, the site was never fenced. As a result, the learners and workers were being robbed and assaulted on a daily basis. Following this, someone was shot on the site. At this point, the learners refused to return to the site until there was security. A number of councillors were sent to meet with the learners. These councillors made hollow promises that security would be properly addressed. The City of Cape Town then provided security guards at the site. However, a learner supervisor was shot and killed by criminals whilst the security guards were on site. When the incident occurred, the security guards were the first people to flee the site. Hence, the security measures were still not adequate.

Mr Parker added that, after the murder, there was a meeting about the security. At that meeting, the City promised that the City Police would visit the site regularly. The City also promised that a private security company would be deployed at the site. Mr Parker, however, noted that the site was so dangerous that a private company could not adequately handle the security. The security could only be addressed if a law enforcement agency was permanently on the site.

Mr Parker stated that it was extremely difficult to undertake construction work under such dangerous conditions. He added that the tendering processes were not under the control of the learners. Hence, the learners were unable to budget for security. This meant that the learners had no control over their own safety.

Mr Opperman enquired whether the learners had started Phase 2 of the Project. Mr Vanyaza replied that Phase 2 had not yet started.

Mr Vanyaza added that the learners attended classes when they initially started the Project. The learners had expected to receive training in these classes that would prepare them for the practical project. This did not happen. As a result, the learners had faced a number of challenges at the Project site. For example, the learners were not taught about cash flows in the class. On the site, however, the learners had to manage their own cash flows. Added to this, there were no mentors on the site to assist the learners. The mentors were supposed to offer a bridge between the classes and the practical work. The problem was that the mentors refused to attend the classes and were, therefore, unaware of what the learners had been taught. The transition from the class to the site was badly managed. Even on the site, the mentors offered little assistance or guidance.

Mr Parker noted that the learner contractors received more support from a group historically disadvantaged consultants than from the mentors. One consultant even provided the space for the learners to hold a meeting about site security. The consultants had also offered guidance to the learners.

Mr J Blanche (DA) suggested that a list of the mentors should be given to the Deputy-Director General of the EPWP. The names of the security people that left the site should also be given to the Deputy-Director General. In addition, a list of the councillors should be given to the Mayor. Added to this, the Department, the City, the mentors, and the security people should also be given an opportunity to respond to the allegations.

Mr Parker noted that the City of Cape Town had stated that it could not meet its financial obligations because the provincial structures had not provided the funding that they had promised. The learners did not know whether this was the actual situation. The custodians of the Project also needed to examine this. Mr Parker added that if there were such inter-governmental problems; it was the learners that were receiving the brunt of these problems. Despite this, the learner contractors were still positive about the Project.

The Chairperson asked whether the delegation could include the positive aspects of the Project in their formal submission. However, they needed to highlight the challenges that they were facing in the Project in their formal written submission.

Mr M Likotsi (PAC) suggested that, in the future, the mentors should receive performance appraisals. This would allow the performance of the mentors to be measured.

The Chairperson pointed out that the Department was facing a number challenges around the Project. Nonetheless, the idea behind the Project was sound; the problem was with the way that the managers were implementing it. It was important that the delegation highlighted the problems that they had faced. There were perhaps other projects that were experiencing similar issues. The Department needed to be more hands-on and evaluate these projects at the sites. The Chairperson added that it was unacceptable that the mentors were undermining the Project. He noted that the Deputy-Director General of the EPWP would be at Parliament on the 2 November. The Committee would meet with the Deputy-Director General to discuss the problems that the learners were facing. Indeed, the learner’s delegation should also meet directly with the Deputy-Director General. Added to this, the Committee would write a letter informing the Minister about the issues that Klipfontein Corridor Learner Contractors had raised. The Chairperson added that there needed to be inter-departmental co-operation to ensure that the safety problems at the site were addressed. He also expressed his concern that the City of Cape Town had not paid some of the leaner contractors. This needed to be addressed and the Committee would make the Mayor aware of this problem.

Appolis Builders Submission
Mr M Appolis (Appolis Builders) commented that he had experienced a number of problems with the National Department of Public Works. These problems began in 1999/2000.

Mr Appolis explained that in 1999/2000, he had received a contract from the National Department of Public Works to undertake a renovation project at the Upington Police Station. This project had been worth approximately R 3 million. On completion of the work, there had been a technical problem with the air conditioners and their faulty parts had been replaced. Nevertheless, the consultant then hired another company to replace the air conditioners with new units. The ‘old’ air conditioners were placed at the back of the building. In 2002/03 the consultant removed the ‘old’ air conditioners from the site. In the meantime, the National Department had charged Mr Appolis delay penalties. As a result, the Department had refused to pay him two amounts of R 29 000 and R 45 000. Mr Appolis had written to the National Department, but they still refused to pay him. Eventually, he called the Public Protector to investigate why the ‘old’ air conditioning units had been removed from the site.

During this period, Mr Appolis had also undertaken work for the National Department of Public Works in Colesburg. Public Works had appointed a consultant to oversee this project. This consultant had hired a sub-contractor to do some electrical work at the site. The consultant was supposed to check the quality of the sub-contractor's work. As the main contractor, Mr Appolis was responsible for paying the sub-contractor. On completion of the electrical work, Mr Appolis paid the sub-contractor. However, it turned out that the sub-contractor’s work had been sub-standard, and the equipment that he had installed was condemned. The consultant then informed Mr Appolis that he was responsible for rectifying this problem. Mr Appolis disputed this, as he felt that the consultant should have checked the work. Mr Appolis explained that he was a builder not an electrician and, therefore, he did not have the qualifications to undertake quality checks on electrical work. Added to this, the sub-contractor had disappeared and could not be traced.

The National Department’s regional official and the consultant then informed Mr Appolis that unless he rectified the problem, he would be removed from the site. Indeed, Mr Appolis and his builders were removed from the site. Mr Appolis noted that this was unfair, as rectifying the work that the sub-contractor had undertaken was not within his job mandate. As far as Mr Appolis understood, the consultant would have paid a guarantee in the event that some of the work was sub-standard. Mr Appolis felt that a portion of this guarantee should have been used to cover the debts that he had incurred through the sub-contractor’s payment. However, Mr Appolis claimed that the Department had still not paid the money that it owed to him. As a result, Mr Appolis declared a formal dispute. Following this, an individual from the Department’s legal services had written a letter to Mr Appolis’ legal representatives informing them that the legal services would deal with the issue. Mr Appolis alleged that this was unusual, as the Director-General was supposed to be responsible for handling formal disputes. In the light of this, Mr Appolis said that there appeared to be certain irregularities at the Department’s legal services. Indeed, Mr Appolis alleged that the entire dispute had been mishandled by the Department’s regional legal services. As a result, Mr Appolis approached the Public Protector. He alleged that the Public Protector had found that a Departmental legal official had acted corruptly.

In the meantime, an official from the Department’s regional offices had employed another company to complete the construction work at Colesburg. However, Mr Appolis held the tender to do the work. As a result, since Mr Appolis had been removed from the site, a new tender process should have been initiated. Mr Appolis claimed that this had not taken place. He alleged that this pointed towards corruption at the regional offices.

Mr Appolis noted that in this period, he was also undertaking construction work for the National Department at the De Aar Magistrates Court. During the initial phases, a sub-contractor received payment for some electrical work that he had undertaken. The sub-contractor had been paid R 130 000 for the job. However, Mr Appolis claimed that the job was a small job and not worth R 130 000. Mr Appolis claimed that he realised that the same problems, which had happened at his Colesburg job, were going to occur at De Aar. He alleged that the regional Department official then told South African Revenue Services (SARS) to deduct R 55 000 from Appolis Builders to cover the payment that had been made to the sub-contractor. Mr Appolis approached SARS to inform them that they could not deduct the R 55 000, as there should have first been a negotiation process. Mr Appolis believed that he had been harassed in a bid to force him to pay the sub-contractor’s fees. Indeed, he claimed that he had paid a portion towards the sub-contractor’s fees. Following this, the Department’s regional official delayed the Department’s payments to Mr Appolis. Mr Appolis met the regional official in an attempt to resolve the matter. However, at the meeting, the regional official claimed, in front of witnesses, that Mr Appolis was lying about the delayed payments.

Mr Appolis alleged that the Department’s regional official later informed a third party that he was going to ensure that Mr Appolis contract was terminated. Following this, the Department stopped all payments to Mr Appolis. Indeed, he was owed an amount of R 72 000. He alleged that the regional official had changed this amount on the Department’s records to zero. Hence, this was an act of fraud. Mr Appolis claimed that the regional official had done this to ensure that Appolis Builders could not complete the job. He felt that this was a blatant bid to ensure that his contract was terminated. In fact, the regional official eventually ordered Mr Appolis from the site. Mr Appolis claimed that the regional official had sent representatives, along with the police dog squad, to deliver a letter of termination. He then declared a formal dispute with the Department. Following this, he claimed that his lawyer received a letter from the Department’s legal services, which stated that the Department refused to have any further meetings with him. Mr Appolis approached the Public Protector to investigate the matter. When questioned by the Public Protector why the amount of R 72 000 had been changed to zero on Department records, the regional official claimed that the R 72 000 had been changed to zero as a result of deductions that had been paid to SARS. However, Mr Appolis alleged that SARS had never received any such payment. Mr Appolis questioned why the Public Protector had not followed up on this issue. Why had the Departmental regional official not been arrested? Mr Appolis had also travelled to Pretoria in a bid to highlight his plight to senior Departmental officials; however, they had not offered him the assistance he was seeking.

Added to this, Mr Appolis had done another small job for the Department in 2004. In February 2005, Mr Appolis contacted the Department about payment. A Department representative informed Mr Appolis that the Department would not pay him as he owed the government a large sum of money.

Discussion
Mr S Wang (ANC) suggested that Mr Appolis perhaps needed to take the case to court. Indeed, perhaps he needed to make a statement at the police station. The Committee, however, needed to also hear the Department’s version of the events.

Mr Wang commented that Mr Appolis should have produced a written submission that clearly outlined his grievances as it was difficult to follow Mr Appolis' oral submission. There was much detail, which should have been outlined in document form for the Members. It was, therefore, difficult to ask Mr Appolis specific questions.

Mr Blanche noted that Mr Appolis should make copies available of the Public Protector’s report, which he had in his possession, to all the Members of Parliament. Indeed, Mr Appolis needed to provide a copy of the Public Protector’s report to the Committee. The Committee could then make the Department aware that there was perhaps corruption amongst lower level staff.

Mr Blanche commented that Mr Appolis needed to re-submit his case to the Public Protector. In doing so, Mr Appolis needed to draft a document that clearly outlined his allegations. This would assist the Public Protector to obtain answers to each of these allegations. Mr Blanche added that the Public Protector was an effective independent entity, which needed to investigate whether there was a basis to the corruption allegations. If the allegations were factual, the Public Protector would then be in a position to advice the Committee on how to address the issue in its oversight work.

Mr Wang and Mr Blanche asked Mr Appolis to provide the names of the alleged corrupt officials to the Committee.

The Chairperson commented that Mr Appolis had highlighted certain challenges in the Department. A process was needed in order to address this situation. The Committee would officially refer these matters to the Department. Once this had been done, the Committee would contact the Department for a response. Copies of Mr Appolis’ documents would also be made available. These, along with a letter outlining the issues, would be sent to the Minister. The officials from Pretoria would then have to respond and outline how they were addressing these issues. Added to this, they would be provided with an opportunity to respond to the allegations. The Department would perhaps need to undertake an internal investigation into the issues raised by Mr Appolis. In addition, the Committee would meet with the Director-General, when he was at Parliament, to discuss these issues. However, Mr Appolis needed to produce a succinct written submission so that the Committee could follow up on the issues. In addition, the Committee would consider undertaking an oversight visit to the Department’s regional office. The Chairperson added that the challenges that had been highlighted would inform the Committee's Report, which it would be producing on the Department’s Annual Report.

African Outback Services and Mvandaba’s Cleaning Service Submission
Ms M Matanda (African Outback Services) commented that she had applied to undertake a job, to erect a fence around the Mitchells Plain Magistrates Court, which had been tendered by the National Department of Public Works. A Departmental regional official initially informed her that she had been awarded the job. However, the official later contacted her and informed her that she had lost the tender because the Bank had not approved her loan. Ms Matanda then held a meeting with her bank to clarify the situation. The bank informed her that they would still approve her loan if she were awarded the tender. She then held several more meetings with the bank and the Departmental regional official in an attempt to rectify the perceived misunderstanding. Eventually, the tender was given to another contractor. Ms Matanda enquired, from the Departmental regional official, why this action had been taken. However, the only answer she received was that the bank rated her as a risk, which she had established was not the case. She had reported the matter to the Public Protector. The Public Protector, however, had offered her little assistance.

Ms Matanda noted that she had also attended the Committee’s public hearing in 2004. During that hearing, she outlined the problems that she had encountered and she met with the Director-General of Public Works. The Director-General had assured her that he would send a Departmental delegation to meet with her to discuss the issues that she had raised. However, before the Director-General sent the delegation, Ms Matanda allegedly overheard the Departmental regional official bragging that he had taken the tender away from her, and had awarded it to another company that had furnished him with a bribe. Added to this, she claimed that she overheard this Departmental regional official organising a meeting with another company, which was also bribing him.

Ms Matanda continued that, in preparation for the meeting with the Department’s delegation, an official from the Minister’s office wrote to the Department’s Western Cape regional offices to request a report on Ms Matanda’s tender. The Departmental regional office had never provided the report. Nonetheless, Ms Matanda met with the Department’s delegation. She provided them with the details of the case. After the meeting, the delegation returned to Pretoria. She was then informed by members of the delegation that she had not been awarded the tender because she had failed to fill in a tender application form. However, she had filled out an implication form. Indeed, the Department’s regional official would have needed the application form, with her contact details, to contact her in the first place.

Ms Matanda alleged that shortly after the meeting with the Department’s delegation, a regional official from the Department contacted her. He informed her that she would never be able to expose the corruption at the regional office. He would ensure that there was a cover-up. Indeed, she alleged that he had stated that the officials, who were involved in corruption, would "stand together and cover each other's backs".

Ms Matanda added that the Departmental delegation, and officials from Pretoria, had promised her that she would be placed in the Department’s incubator programme. Indeed, they had stated that through this programme she would have an opportunity to win future tenders. However, she was never placed in the programme. She had not been awarded any of the tenders that she had subsequently applied for. As a result, her company was in serious financial trouble. She had been forced to sell her house and she was now residing in an informal settlement. At this point, Ms Matanda became too emotional to speak.

Mr S Mvandaba (Mvandaba Cleaning Services) commented that he had experienced similar problems to Ms Matanda. However, she had experienced problems with the National Public Works; while he had experienced problems with the Western Cape Provincial Public Works. As a result, he alleged that there was also corruption around tendering, at the Western Cape Provincial Public Works’ offices. He had worked together with Ms Matanda to highlight the problems at both the Provincial offices and the National regional offices. During the 2004 public hearing, a Member of the Committee had promised to assist them in exposing the corruption at these offices. Indeed, a third party had introduced them to this Member. However, following the public hearing meeting, Mr Mvandaba had a personal disagreement with the third party over an unrelated matter. During the argument, Mr Mvandaba alleged that the third party had stated that she would ensure that the Member would not assist Ms Matanda and Mr Mvandaba with their problems. In fact, he alleged that they never heard from the Member after the argument with the third party. Mr Mvandaba added that he was wary of disclosing any further information about corruption at the Public Works’ offices to the Committee.

Mr Mvandaba claimed he had been told that the Minister’s office had sent investigators to investigate the alleged incidents of corruption at the Western Cape National and Provincial Public Works offices. However, he claimed that a certain official, who was being investigated, discovered the investigation. Following this, this official started making threatening phone calls to Mr Mvandaba and Ms Matanda. Ms Matanda then alleged that this official, who was being investigated, had attempted to abduct Mr Mvandaba. Added to this, Mr Mvandaba claimed that certain officials were ensuring that Afrikan Outsource Services and Mvandaba’s Cleaning Services did not receive any government work. He claimed that a corrupt official had also bribed one of the witnesses to leak information surrounding the investigations. Indeed, he alleged that this official had ensured that the witness received a job in return for the information and their silence. Ms Matanda and Mr Mvandaba added that one of the alleged corrupt officials had left Public Works and was now employed at the City of Cape Town. In the light of this, Mvandaba claimed that the present government was no different from the apartheid government. Both were, in different ways, victimising people. Added to this, Mr Matanda alleged that an opposition party had offered him assistance to expose corruption at the Department’s offices because it wished to win the local government elections.

Discussion
Mr Blanche asked what type of jobs Afrikan Outback Services and Mvandaba Cleaning Services had tendered for. Ms Matanda and Mr Mvandaba responded that their companies applied for tenders to undertake construction and cleaning work.

Mr Blanche enquired whether these jobs had been advertised in the tender bulletin or whether had they been advertised at the City Council on a daily basis. Ms Matanda replied that the jobs had been advertised at the City Council and at Public Works.

Mr Blanche commented that Ms Matanda had referred to tender documents that she had completed and asked if she had made copies of the documents that she had handed in at the regional office. Ms Matanda replied that she had not made copies. She had not expected to encounter such problems when she originally applied.

Mr Wang said that it would perhaps be difficult to prove corruption in these cases because Ms Matanda had not kept any copies of the tender application. Added to this, the main alleged culprit had left the Department to work at the City Of Cape Town. Mr Zibi replied that it was irrelevant that she had no copies of her tender applications. He felt that the fact that a Departmental official had contacted her was proof that she had filled out the tender application.

Mr Blanche noted that there were two ways in which a tender application could be submitted. The first way was to hand the tender to an official. The official would then sign that they had received the application. Added to this, the application would be given a number and recorded. The second way to submit a tender was to drop it into the tender box. He asked if she had given her application to an official or dropped it into the tender box. Ms Matanda replied that she had put the tender application in the tender box. However, she waited until the tender application was taken out of the box. An official then assigned it a number. Following this, the number and details of the tender were recorded on an audio recording system.

Ms Maranyane commented that, before she had entered into the EPWP, she had experienced a similar problem around tendering in the Western Cape. A Public Works official had phoned her at 9pm one night to inform her that she had won a tender. However, the official then said that her bank rating was poor. He then allegedly asked for a bribe to ensure that she received the job. She refused to talk to the official and put down her phone. After this, she never again heard from the Department about the tender. Indeed, she continued to tender for other government work, but had never been awarded any jobs. The corruption around the tendering process needed to be addressed.

Mr E Magubane (ANC) was concerned that a Member had allegedly reneged on their promise to help them. The Committee should investigate this and, if necessary, take action against that Member.

The Chairperson replied that he appreciated Mr Magubane concerns. However, the Committee, due to various reasons, would perhaps be unable to take action against the Member. During last year’s meeting, no Member was directly delegated to assist Ms Matanda or Mr Mvandaba. Indeed, if a Member had promised to help, this had been done outside of last year's meeting and the Member would have made the promise in a personal capacity. Members should not use their position in Parliament to make promises. When the Committee handled issues such as the ones raised that day, it could discuss the issues, take a position, and decide on a course of action; but it could not make promises. Nonetheless, it was terrible to hear that Mr Mvandaba could not trust a Member of Parliament.

The Chairperson re-assured Mr Mvandaba and Ms Matanda that the Committee and government were committed to combating corruption. Corruption needed to be exposed. If anyone experienced such corruption, they should immediately write to inform the Committee about the incident. The Committee, and not individual Members, could then attend to the issue. Members could take individual actions whilst serving in their constituencies but only the Committee was mandated to take action on issues that were discussed in Parliament. Nonetheless, the Chief Whip would be informed that there had been a complaint about a Member of Parliament. The fact that a Member had made a promise in a personal capacity, and then reneged on the promise, reflected badly on Parliament.

Mr Likotsi observed that the cases of Mr Mvandaba, Ms Matanda, and Ms Maranyane were very similar. As a result, there appeared to be a number of corrupt Public Works officials. Mr Opperman added that, from the information in the submissions, it was clear that there were public servants that were abusing their positions. Independent investigators needed to be appointed to investigate these alleged cases of corruption and intimidation.

Ms Likotsi said that it was painful that some people perceived the post-apartheid government as being the same as the apartheid era government. The fact that there was this perception was a ‘wake-up call’ for the government. The people that liberated South Africa needed to fight the problem of corruption. In fact, corruption could only be tackled if the government and the people worked together. The public needed to inform Parliament and the government about corrupt officials. Mr Likotsi added that certain apartheid-era public servants were still in the public service. This was due to the compromises reached during the negotiation process. Some of these officials were also resisting transformation and undermining the work of the public sector. The public sector needed to be thoroughly transformed by appointing people that were committed to post-apartheid South Africa.

Mr Opperman responded that many of the corrupt officials in the public service were members of the liberation movements. This needed to be acknowledged and addressed. Perhaps government tenders needed to be rotated. This would assist towards addressing corruption. It would also ensure that more companies received work from the government. This could, in turn, assist with the drive for broad-based black economic empowerment (BEE).

Mr Blanche requested that Ms Matanda and Mr Mvandaba supply the Committee with the names of the alleged corrupt officials and possibly the dates when these officials had made the phone calls to them. One could then use phone records to investigate the matter and check the allegations.

Mr Mvandaba replied that he and Ms Matanda were not safe. People had visited them claiming to be investigators that had been sent by the Minister’s office. He and Ms Matanda had handed information, about the corruption in Public Works, to these people. Shortly after this, the Public Works official, who was being investigated, began making threatening phone calls to them. Mr Mvandaba was concerned about how the Department official, who was being investigated, found out about the investigation. Nonetheless, he said that they would supply the information to the Committee.

Mr Blanche stated that perhaps the processes around tendering needed to be re-examined. There was something wrong with the system if people continually tendered, but received no work. If a small company’s tender applications were poor, the Department should perhaps assist with training to ensure that this was rectified. This would assist small companies to get work from government. The Chairperson added that the tendering process should also require the Department to send letters to people acknowledging that they had received their tender applications.

Mr Magubane wondered whether the Tender Board had a right to investigate the financial status of an individual without their permission.

The Chairperson commented that the Committee needed to decide on how to take these processes forward. The Committee would meet privately with Ms Matanda and Mr Mvandaba on 2 November. During this meeting, Ms Matanda and Mr Mvandaba could disclose the names of the officials, and the dates on which they received the phone calls. The Committee could not refer this matter to the Department, because Ms Matanda and Mr Mvandaba felt that they could not trust some of the Department’s officials. The Committee needed to be sensitive. He stated that two or three Members would be delegated to examine how to take the process forward. The Committee also needed to seek legal advice on how to take the process forward. Added to this, the Committee needed to liaise with the Minister’s office.

The Chairperson thanked all the people that had made submissions. The submissions highlighted the challenges that the Department was facing. The Committee and government were committed to rooting out corruption in the departments. The government was the people’s government and it was important that the people raised issues in cases where there was maladministration. The government legalisation was sound; however, certain problems existed around its implementation. Indeed, the government would take action against those people that were not implementing the legislation properly. The Treasury had also come up with the idea that Members of Parliament, councillors and civil servants had to make disclosures. Therefore, there was a guideline to prevent conflicts of interest and corruption. However, it would perhaps be difficult to establish whether a civil servant was somehow involved with a company that was tendering for government jobs. The Chairperson added, in his personal capacity, that it was also problematic that some civil servants left government to form companies in order to tender for government contracts. They would know how the system worked. Added to this, some of these people would possibly use their contacts in the Department to ensure that they received work. This was unfair to other companies. These were the challenges that government was facing.

The meeting was adjourned.