Department of Science and Technology on its Quarter 2 performance

Meeting report

Department of Science and Technology: 2nd Quarter performance

Dr Phil Mjawara, Director General (DG): Department of Science and Technology (DST) listed the DST’s strategic outcome-oriented goals as a responsive, coordinated and efficient National System of Innovation (NSI), increased knowledge generation, human capital development, using knowledge for economic development and the utilization of knowledge for inclusive development.

From July to September 2016, 57% of the total 49 planned output targets had been achieved. In an effort to build a responsive, coordinated and efficient NSI, the panel appointed by the Minister had presented a draft Science, Technology and Innovation (STI) Institutional Landscape report, which sought to assist in the achievement of South Africa’s National Development Plan (NDP) and respond to the country’s socio-economic needs, and identify the gaps in the current institutional landscape. It proposed a model for STI institutions that could enhance the promotion of a coherent, integrated and optimized mandate to ensure that direct funding flowed across the significant components of the NSI. The achievements of DST under knowledge generation and international co-operation and resources, were highlighted.

Dr Mjawara said that the gains of Knowledge Generation had been recorded under infrastructure, implementation of bio-resources, tri-lateral research programme and technical exchanges. In achieving these gains, the DST had developed strategies to increase the gross expenditure on research and development (GERD) to 1.5% of the gross domestic product (GDP) as specified by the National Treasury. In addition, the DST had secured an approved budget for Knowledge Generation through a Cabinet memorandum and partnered with industry in supporting companies to benefit from technology localisation programmes.

National Research Fund (NRF) DST bursaries had been awarded to 2 898 PhD students, 8 070 pipeline post-graduate students and 894 graduate students (733 NRF, 161 National Youth Service) had been placed on DST-funded Science, Engineering, Technology and Innovation (SETI) internship programmes. In addition, a Centre of Excellence (CoE) directors’ forum had been held at the University of KwaZulu-Natal from 25 to 26 August 2016 under the theme, ‘Sustainability of the CoEs’. The Minister had successful launched the National Science Week (NSW) at the University of the Western Cape. The theme for the year was ‘Science for sustainable development and improved quality and life,’ and the programme had taken place from 8 to 13 August 2016. A roundtable discussion of the Mathematics and Numeracy Chairs’ Community of Practice was held at Rhodes University. The discussion was centered on how funding could address the challenges faced in research.

With regard to the implementation of the National Integrated Cyber-Infrastructure System (NICIS), the Minister had approved the establishment of a regional tier 2 data node to a University of Cape Town-led consortium. The DST had identified ‘Big Data’ as one of the opportunities for the next frontier, and had implemented a national e-Science post-graduate teaching and training platform -- with a primary focus on the delivery of a structured Masters degree -- by a University of Witwatersrand-led consortium.

The Square Kilometer Array (SKA) had made significant progress with the MeerKat construction. In July, the DST had also launched the 16 integrated antennas which were referred to as Array Release 1 (AR1), which showed 1 300 radio galaxies in the distant universe, compared with the previous best from Australia, which showed only 70 radio galaxies. In terms of resolution, the AR1 was confirmed as the best in the Southern Hemisphere and when completed, the MeerKAT should be the world‘s best telescope of its kind.

Dr Mjawara reported that in terms of the bio-economy strategy implementation, whose objective is to derive bio enterprise and bio-products development and commercialisation, progress was being made under the enzyme manufacturing initiative (ReagENZ) to develop a marketing strategy for commercialization. Two research and development partnerships had been signed by the Council for scientific and Industrial Research (CSIR), one with the Clive Teubes Close Corporation, and another with Puri’s Property Limited to promote research partnerships with industry by the National Bio-Catalysis Initiative (NBI). The CSIR had also approved funding support for some institutions under the Office of Technology Transfer (OTT).

Dr Mjawara reported on the benefits of technology localisation and advanced manufacturing, as demonstrated by Paltechnologies Limited, a 100% South African local manufacturer, with a niche market for a high performance butterfly valve range which provided solutions for a cheaper replacement of leaking transformer valves. He also referred to gains achieved through international cooperation and resources under the tri-lateral research programme involving technical exchanges and Brazil, Russia, India, China and South Africa (BRICS) engagement. In terms of the tri-lateral research programme, South Africa was elected to be the incoming Chair of the Southern African Developing Community (SADC) from August 2017, and the first tri-lateral research programme had been launched between South Africa, Kenya and the United Kingdom. This marked the commencement of a new era of innovative modalities among international partners, where South Africa and partner countries funded research together. In addition, the Minister’s visit to New Zealand resulted in a new relationship between South Africa and New Zealand. The relationship areas of focus were the SKA, Big data, indigenous knowledge systems, agricultural biotechnology and climate change.

The DST had hosted several technical exchanges, including a symposium focused on infectious diseases’ early warning in Japan, a workshop on grassroots innovation in India, and a workshop to discuss the establishment of a hydrology centre in the United States. South Africa also participated in engagements in the area of water, youth, oceanography and astronomy under the BRICS engagement.

Dr Mjawara highlighted the performance of the DST in each programme during the second quarter. Under administration (programme one), 83% of targets were achieved; technology innovation (programme two), achieved 25%; international cooperation and resources (programme three), achieved 10%; research development and support (programme four) achieved 75%; and socio-economic innovation partnerships (programme five), achieved 67% of targets (see document attached). He said the reasons for under-achievement included deficient target formulations due to variables which had not been foreseen during the formulation process. For instance, the inclusion of post-graduates as a target for the second quarter was not realistic. Another reason was process delays, which referred to factors which were not in the control of the department, and made achievement of targets dependent on external circumstances. For instance, the DST relied on international partners to give evidence for support, but it was expected that most of this outstanding evidence would be made available in the third quarter. In addition, the SADC science and technology funding initiatives were also affected by process delay because it was not easy to predict precisely how many students would receive bursaries from the DST. Another process delay had been discovered during the roll-out of the MeerKat programme, as one of the drivers for the MeerKat dish had been faulty, although the company responsible had been consulted to fix the problem. The MeerKat dish needed to work, because targets were dependent on the successful operation of the dish, and as failure of this dish during use would have been disastrous, he asked the Committee to allow the reformulation of this target.

There were also administrative delays due to the internal processes of the DST. For instance, the number of days required to fill a vacancy had increased due to an Executive Committee (Exco) decision not to fill vacant positions unless there were sufficient funds to cover the cost of the staff as a result of the ceiling placed on human resources expenditure. Evaluation and assessment reports caused administrative delays, but this would be resolved in the next quarter because the reports had been completed. Delays in the procurement of audio-visual upgrades in the Department had led to under-performance, but Treasury had approved the funding and procurement of audio-visual assets.

Dr Mjawara also reported that 85% of applications for research and development had been concluded, and should be rolled out between December and January. The DST’s financial performance reflected that the National Research Foundation had received 56.5% of the budget, the CSIR programme 24.2%, the space programme 13.6%, the exchange of knowledge capacity and resources programme 1.7%, and the management of administrative programmes in the DST 4%. The highest budget achievement during the second quarter was recorded under administration (programme one). The research and development support initiatives (programme three) through the NRF had the highest budget allocation, but the budget utilization had been under 70%.

In conclusion, he submitted that the majority of targets that were under-achieved were due to late reports from partners, but in the third quarter -- after the DST had received the reports -- they would be captured as audited targets. He reminded the Committee that work on the 2017 White Paper was on-going, after reviews by the National Advisory Council on innovation.

Discussion

Mr N Koornhof (ANC) congratulated the DST on its achievements during the second quarter, and said that the Committee was concerned about the skyline wind mills during the oversight visit to Sutherland. He asked the DST to interact with the Department of Energy and other concerned departments over the use of the skyline wind mills and resolve the issues, and give a feedback report so that the Committee could assist in fulfilling the goals of the DST.

 

Mr C Mathale (ANC) asked if the non-achievement and formulation challenges would ever go away as it was a recurring challenge. Was there a way to avoid this by removing such targets? During the visit to the iThemba laboratory facility, it had been identified that the Department needed a machine that would enhance the capacity for the production of neutrons which would in turn generate a bio-capacity in the machine, which could be used for reference purposes. This was necessary because of the potential of the institution to develop a product that could help deal with medical challenges, such as one that might help to detect and cure cancer.

Dr A Lotriet (DA) agreed that it was wise to reformulate the targets so that the DST would not carry on with target outcomes that were wrong, She also expressed great concern on the economic constraint resulting in the non-filling of vacant strategic science and technology positions, as this led to a loss of capacity in the Department, and falling behind would lead to huge cost implications for catching up. She asked Dr Mjawara to comment on what strategies could be used to fill these positions.

Ms J Terblanche (DA) asked Dr Mjawara to advise if there had been audit outcomes on the budget allocation.

The Chairperson congratulated the DST on paying contractors within 30 days. She emphasised the issues that Mr Mathale had identified. She asked what could be done with Treasury, since the budget allocation for essential services had been frozen, although it was not only the DST that had been affected. As this might give a negative audit outcome, maybe the DST needed to raise this issue with Treasury or the Minister of Finance. On research and development (R&D), especially in the Budgetary Review and Recommendations Report (BRRR), what would be the DSTs’ recommendation should there be a separate vote? She asked if the DST had done a study on vote disbursement for R&D, or if it had employed other departments to research whether a separate vote could be created for R&D to ensure that the DST fulfilled its mandate.

DST’s response

Dr Mjawara replied that a study had been done as part of the coordination process, to make sure the current budgets were disbursed properly. A report on how other countries funded R&D had been prepared. A challenge noted in the provinces had been that a percentage of the budget had not been allocated to initiate innovation and support for R&D. The DST was grateful to Gauteng Province, however, for the investment made available in the innovation hub and how this had assisted the industry by providing support in the area of information and communication technology (ICT), and also expanded to the bio-technology industry. In addition, the Department has started useful discussions with the Western Cape government with interest in a health bio-park in Pinelands, high technology media in Paarl, as well as ICT Big Data because of the Department’s investment in Big Data. However, this depended on the vision of the Premier, because past experience had shown that if the tenure of the premier expired, the project was terminated. He asked Parliament to assist in interacting with the appropriate authority to ensure that the DST fulfilled its mandate. Also, in countries like Brazil, R&D had been allocated funding even in the provinces.

In terms of audit outcomes, the budget had remained almost constant, so the DST had not lost a lot of investment except that some of the money coming in was directed to certain projects. For instance, some funds for infrastructure had been directed to prioritised mining projects. Three main issues had been raised by the Auditor General (AG). The first was related to the turnaround of supply chain management (SCM)in terms of internal audit control to make sure that the process followed the proper procedure, and that three quotes for tenders were done. In addition, the chief financial officer (CFO) and the deputy director general (DDG) corporate services had initiated and developed the turnaround plan for SCM, and this was being monitored by the executives and audit committee. The second was related to disclosures in the annual financial statement, and the CFO was working diligently with the team from internal audit to ensure that things were done properly. The third was the general sense of behaviour and the division of responsibilities between the finance department and executives that were down the line, and the roles had been delineated in the turnaround strategy. The executive had made a commitment to continue to monitor the audit outcomes to ensure that the next audit report will be much better.

Ms Pretty Makukule, Chief Financial Officer (CFO) added that in terms of the medium term fiscal allocation, the preliminary baseline allocation received for 2017 had been reduced by one percent on employee’s remuneration and capital assets. Therefore, the compensation of employees would put more pressure on the DST, and this reduction had started a dialogue with Treasury, but no resolution had yet been reached. There had been a reduction in the previous year, and with a further reduction in budget allocation for 2017/2018, this was having a negative implication on the funding of some projects.

Dr Mjawara reported that, due to the one percent reduction in the budget allocation, the DST was proposing three solutions to the Committee that might ensure that the impact of the reduction was not too severe. The first was consulting with human resources on the age profile of staff to consider the likelihood of early retirement options. This might save on salaries, but the measure would impact on pensions. Another approach was to work with other entities to identify people who could be seconded to other departments in the DST. The third option would be to have a changed approach which engaged the Treasury and the Department of Public Service, to look at how to cushion the impact of the reduction in employee benefits without impacting on staff employment, as this was important to the Department.

Referring to the MeerKat programme, he said the DST was about to complete the repairs on the faulty drivers, and the equipment would soon be functional. In terms of the iThemba Laboratory facility, the DST had engaged with the NRF and the Nuclear Energy Corporation (NEC) because South-Africa believed it was the second or third distributor of global isotopes, and the DST was looking at how to maintain or even improve on this position. Based on this, the DST had proposed investing in another cyclotron so that the Department could have a separate one to treat health issues, while the second cyclotron facility would be used for material characterisation. The DST had made a commitment to raise funds for the second cyclotron under this revised funding.

Regarding the delays due to target formulation deficiencies, verifications by external bodies would be received by the third quarter, so the target formulation deficiencies would recur during first and second quarter reviews. The challenges on the research and development support initiatives were due to delays from the faulty driver in the SKA equipment, and determining the actual number of students being given support for research and for post-graduate studies. Consequently, the DST was negotiating with the Accountant General in order to be able to give a specific number of students who would be supported for research and for post-graduate studies, and the DST would give feedback to the Committee on this discussion.

He said that he was not familiar with the skyline windmills in Sutherland. He promised to follow up, but said that the position of the Department was that for windmills, the types of activities were regulated by the Astronomy Geographic Advantage Act.

The Chairperson said that this was the last meeting of the Committee for the year, but other events would be the public hearing on the SKS bill in late January, and a preliminary hearing would commence in March 2017. The Committee would meet with the legal adviser on the issues in the bill. The Committee was passionate about issues of R&D, and would assist the DST to negotiate with relevant authorities to ensure that it received some funding from external bodies.

Committee matters

Dr Lotriet observed that the presentation on the Committee’s draft programme circulated did not have a slide, and asked the legal advisor to assist.

The legal advisor said that she had listened the audio recording, and would send the key points to the Committee Members. She informed the Committee that she would be commencing her maternity leave from January 2017, and appreciated the good wishes of Members

Mr Koornhof informed the Committee that a workshop on intellectual property would commence on Tuesday, 6 December, and asked the Chairperson if it was worthwhile for the Committee to attend it.

The Chairperson asked the Secretary to get the invitation and work out the logistics for the Committee to attend the workshop. She wished each member a restful Christmas season.

The meeting was adjourned.