Public Works Perspective on State of Nation Address

Meeting report

Opening Statement by Chairperson
The Chairperson seemed taken aback by the Department of Public Works' non-attendance. She was however eager to make a start.

Department of Public Works (DPW) perspective on State of Nation Address
Expanded Public Works Programme
The committee researcher, Ms Inez Stephney, said the Expanded Public Works Programme (EPWP) was expected to produce 4.5 million work opportunities by the end of 2014, it being one of the country's instruments to deliver on the Millennium Development Goals (MDG). The Quarterly Labour Force Survey for the fourth quarter (October- December 2012) noted that the unemployment rate had decreased by 0.6% while the number of discouraged work seekers decreased by 58 000 (a figure obtained from Statistics South Africa). The EPWP created 2.6 million work opportunities since 2009 and needed to create another 1.8 million to reach its target of 4.5 million work opportunities by 2014. A table set out the contributing agents creating work opportunities and the number of work opportunities each created. Thus, national departments created 877 698 work opportunities, provincial departments 1 146 312 and municipalities 665 729. The implementation of the EPWP's revised incentive grant model for municipalities resulted in an increase in the number of municipalities reporting and accessing the EPWP and 77 more municipalities received incentives in 2012/13 compared to the 158 municipalities in the 2011/12 financial year.

Employment of youth and skills development
The youth was identified as those aged 15 to 24 years. According to the 2012 Census the number of youth not attending school was 3.3 million. A table indicated the number of youth not working per province: Eastern Cape the percentage of unemployed youth was 13.4%, the Free State 5.6%, Gauteng 22%, KZN 21.7%, Limpopo 9.4%, Mpumalanga 7.9%, North West 7.1%, Northern Cape 2.3% and Western Cape 10.8%. The table indicated the provinces with the most unemployed youth were Gauteng and KZN. The reason behind the high unemployment rate in those 2 provinces was likely to be because those two provinces were where the unemployed youth went to look for work as there was a belief that urban areas and large cities offered more work opportunities. Rural areas which have not formed development plans have weak infrastructure and do not offer many work opportunities. A table was produced to show which cities in each province had the highest unemployment rates. It was unclear from the Census figures whether the large number of unemployed youth had a desire to enter the employment sector. The figures indicated that the highest instance of unemployment occurred in the female youth group. One of the department's responses to youth unemployment was a career development exhibition at the Olivienhoutbosch Community Centre. The youth were advised to consider subjects such as Mathematics and Science. They were also advised to improve their grades in those subjects, as those two subjects were required for careers in the "built environment". Those careers included Engineering, Architecture and Project Management. Project Management skills were especially rare and required. During the exhibition the department collected 31 curriculum vitaes and were able to offer internships to 26 matric learners. DWP planned to re-open Public Works Workshops which aimed at encouraging skills development and producing artisans for the department.

Social Infrastructure Programme
Eight MDGs must be reached by 2015. MDGs 2 and 3 relate to education. MDG 7 relates to health, reducing child mortality and diseases such as malaria. A large sum of money was set aside to achieve these MDGs. R36.3 billion has been allocated for the construction and maintenance of schools. Two new universities would be built. R30 billion was allocated to the Department of Health for the development, upgrading and rehabilitation of five hospitals. Four of the hospitals to be upgraded and rehabilitated were King Edward VIII, Nelson Mandela, Baragwanath and Dr George Mukhari.

The plan to eradicate mud schools was based on a 2006 document in which the Department of Education's (since 2009 split into the Departments of Basic Education and the Higher Education and Training) National Education Infrastructure Management System reported that some 8537 structures had to be eradicated. It was difficult to obtain recent figures on the number of mud schools eradicated thus far. Under the EPWP innovative methodologies were introduced to deal with mud schools. The Independent Development Trust (IDT) was assigned as the implementing agent of the programme. The Public Works Portfolio Committee undertook an oversight visit to the Eastern Cape in 2011. The Committee stressed that the lifespan of those radical construction technologies must compare favourably to conventional construction methods. In addition, the speed with which the structures were built did not allow for skills development and long work opportunities. It was desirable to build the schools quickly, but it was a balancing act to simultaneously achieve transfer of skills and to use methods which were labour intensive (so as to create more work opportunities).

Fraud and Corruption:
During the 2011/12 review period, the Department finalised a total of 98 misconduct and disciplinary hearings. Types of misconduct highlighted were: (1) failure to follow tender and supply chain management processes, (2) failure to investigate allegations of financial misconduct committed by officials and (3) failure to conduct disciplinary hearings for all incidents of financial misconduct committed by officials. In August 2012 the DPW presented its fraud and corruption strategy to the Committee. It reported on a dedicated fraud awareness and investigation unit, in line with the Public Service Anti-Corruption Strategy. The role of the unit was to investigate all reported incidents of fraud and/or corruption to the department. The Minister of Public Service and Administration planned to create an anti-corruption bureau to deal with major cases of financial misconduct.

Implications for Parliament in 2013
The Committee must continue to monitor the implementation of the EPWP. It must particularly ensure the uptake of the incentive grant for low capacity municipalities. It must ensure the utilisation labour-intensive methods for all infrastructure projects. The progress made in re-opening the department's workshops and training young people as artisans must be monitored. Parliament should receive progress reports on the eradication of mud schools and unsafe structures and the use of innovative technologies to build these. Labour-intensive methods should be used where possible and skills should be transferred on projects where possible. Parliament should receive progress reports from DPW in respect of implementing its anti-fraud and corruption strategy, the finalisation of disciplinary procedures taken against officials and whether there was a possibility of recovering misappropriated funds.

Discussion

Ms Dreyer (DA) advised the Committee that it would be more helpful if the unemployment youth figures per province were compared to the past record of that particular province. In other words, a comparison of youth unemployment figure through the years for the same province as opposed to a comparison amongst the provinces. She asked that "finalised" in respect of the 98 misconduct cases be defined because the DA was more interested in the penalties the guilty parties were receiving. The penalties would send a strong message to deter future misconduct. It would send a strong message that the department was serious about eradicating corruption.

Ms Stephney said she would look into the youth unemployment figures in accordance with the formula requested by Ms Dreyer and send the statistics to the Committee. It was however a department issue, which she could not answer. The figures were broad strokes because it was a sample of the information received and then broken down. She advised that when looking at statistics it was possible to obtain a range of answers depending on what the questions were one was trying to answer. She could not define "finalised".

Ms N November (ANC MP) said she was concerned about the varying year end dates for municipalities and national entities. The financial year for municipalities commences on 1 July while national commences 1 April. With all the programs and turn around strategies were there enough warm bodies to monitor those strategies. Was the information about internships being spread sufficiently to the rural areas because there were rural areas that did not know about these internships? She gave some examples of rural villages.

Ms N Ngcengwane (ANC MP) asked if the R30 billion allocated to the Health Department was being properly monitored. In her experience such large sums were not properly monitored in the metros and it needed to be monitored. She said labour intensive methods were not being utilised in construction projects despite it being a job creation strategy. When they did oversight at construction projects, they discovered big machines doing the work instead of people. She felt that the regional offices of Public Works should monitor the construction projects to ensure that the objectives were achieved. The Committee was not properly informed about fraud and corruption and this lack of information was detrimental to their oversight work. One only heard about dismissals but never about the consequences for guilty parties or the recovery of the misappropriated funds. IDT was doing a very good job, but she was concerned about big companies receiving large sums of money which was not being monitored, thus defeating the purpose of employing the youth. She requested a list of all the EPWP municipalities, the incentive grants for those municipalities and who used the grants.

Ms Stephney said that the Department had asked the Committee to investigate the municipality year end issue. She undertook to investigate and to report back. In respect of DPW's turn-around strategy, it had indicated that it was attending to filling its vacancies, but this was once again a department question which she could not answer. DPW would also have to answer how it trickled the information about internships down to the rural areas. The R30 billion was a matter for the provincial department of Public Works to answer because the Committee made recommendations to them such as placing disabled persons on the projects. As for the mud schools, the Committee found that one of its challenges was that the Departments of Health and Education had created their own pseudo department of public works and that they were attempting to do the work of Public Works themselves. Health and Education were informed they cannot take matters into their own hands so to speak and do the work which was officially allocated to another department, that is, Public Works. The recovery of misappropriated money was a department matter which she could not answer. The Special Investigating Unit would be able to indicate whether there was any possibility of recovering misappropriated funds.

Mr M Swathe (DA) asked if it could really be said that people actually acquired skills via the EPWP. He asked if the creation of 4.5 million jobs by 2014 was achievable, taking into consideration that only 2.6 million jobs were created between 2009 and 2012. Was the department chasing numbers when it came to the eradication of mud schools or was it giving young people the opportunity to acquire the skills in new construction technology. How would the R38 billion allocation help young people and could they anticipate the number of young people who would be involved?

Mr N Magubane (ANC) had an issue with the deteriorating state of the country's roads. Friends of municipal workers were getting the jobs to fix the roads, but these people did not have the knowledge to do the job. It was incorrect to say that 2.6 million jobs had been created since 2009, the figure was achieved since 2005/6. If the figures were being received from the municipal field workers themselves then the information could not be trusted because they would always give wrong answers (implying to make themselves appear better).

Ms Stephney said that skills development was ensured on large projects which extended over at least 100 days. Oversight visits had confirmed that skills had been transferred. In respect of roads, there was a project with access roads where ordinary people were given the opportunity to monitor roads in order to report on roads which require fixing. The department would have to answer whether the job creation target of 4.5 million by 2014 was achievable. She pointed out that Phase 1 of the target was to create 1 million jobs and that that was in fact achieved and the Phase 1 target was exceeded by 300 000. The job creation project was now in Phase 2. Reporting on this aspect was behind by one quarter, so there was a quarter's worth of information which still had to be verified and added to the current figures which indicated that they had reached 60% of the target. Mud schools allowed for employment opportunities and for people to be employed as contractors. Whether mud school eradication projects would provide in terms of innovative technologies only time would tell as it was a pilot project run in 10 schools in the Eastern Cape. It was difficult to say if DPW was chasing numbers. They saw skills developed, but the numbers were also important.

The Chairperson said that the department was not chasing numbers. The Committee's concern was the lifespan of the project and at the end of the day the area needed schools. A swing bridge was constructed across the Umzimvubu River. Even though it was only accessible to pedestrians, not cars, the good thing was that traditional leaders were able to train people to maintain a bridge of this nature.

Ms C Madlopha (ANC MP) asked whether it was correct to refer to 15 - 24 year olds as unemployed when at that age they should be attending school or a tertiary institution. Did the statistics for the EPWP include formal and informal work because the inclusion of an informal work period of three weeks for example would be an unfair inclusion (giving rise to misrepresentation of the actual situation). The DPW must provide a mud school status quo report in order to understand the type of skills being transferred, if any, and the number of jobs being created. She applauded government for increasing the budget to fight fraud and corruption, but said that unless the guilty parties were named and shamed the situation would not change. The Committee must insist on getting a proper report naming and shaming the guilty parties because corruption delayed the fast tracking of service delivery. [Ms Dreyer agreed wholeheartedly.] Ms Madlopha thanked the Committee Researcher for the well drafted report, which she said was a starting point and she encouraged the Committee to join hands in the fight against corruption.

Mr K Sithole (IFP) said that he saw no need to questionthe  Committee Researcher any further. The unemployment issue was a ticking bomb in the country. They must follow up with SIU on the 98 misconduct cases and they must have a strategic follow up.

Ms Ngwenya-Mabila (ANC) said that the information would assist them during the budget vote. She also considered it unhelpful to question the Committee Researcher, but asked her to consider the issue of the overuse of consultants and to report back to the Committee on this. Figures were important, but the impact of the construction projects on people's lives was also important because the EPWP was alleviating poverty and it was not just about the figures. It was important to build new hospitals and universities, but also important to maintain them once built.

Ms N Madlala (ANC) thought it was important to track who was corrupt within the Department of Public Works.

The Chairperson said that she was concerned about the kids using Sector Education and Training Authorities (SETAs) where they write aptitude tests and then they were all channelled to Further Education and Training (FET) colleges. Blade Nzimande always talks about SETA.

Ms Madlopha said that it was very important to know one's constituents and who the indigent were, so that during negotiations one was able to do so appropriately with the relevant information.

Ms Dreyer raised fraud and corruption again at which point the Chairperson intervened and said that she thought the briefing was to prepare them for the budget debate.

Ms Dreyer asked the Chairperson whether she was unhappy with her question when all the MPs had agreed that information in respect of fraud and corruption was lacking.

Ms November then said she thought they should move on and end the meeting because the Committee Researcher could not answer on behalf of the department.

The meeting was adjourned.