DBSA on Tourism infrastructure projects; SA Tourism Q1 & 2 2022/23 Performance; with Minister

Meeting report

The Chairperson stated that DBSA was the intervention machinery for the collapsing projects of the NDT. She hoped the Committee would get added perspective and said DBSA must be truthful when interacting with the Committee and it was a criminal offence to lie to Parliament. Everything done in the Committee is recorded and is for public consumption. Many people have lied to the Committee thinking they were not lying to Parliament and there would be no consequences. Wherever the Committee, goes, whether for oversight visits or public hearings, that engagement becomes the official business of Parliament because it is expected to produce a report for adoption by the National Assembly.

Development Bank of Southern Africa: implementing agent for Tourism infrastructure
Mr Chuene Ramphele, DBSA Group Executive for Infrastructure Delivery, updated the Committee on the projects allocated to the DBSA for implementation on behalf of NDT such as community projects; maintenance and beautification of provincial state-owned attractions; local community museums; and coastal and marine tourism initiatives.

In terms of the agreement, DBSA has to assist the department to establish a project support unit (PSU) to implement the tourism infrastructure programme; assist with the conditional assessments and planning for allocated tourism infrastructure; upgrade/refurbish identified or prioritised tourism facilities; support the department to implement comprehensive facilities maintenance programme; and propose alternative funding mechanisms for identified tourism infrastructure that is newly built and upgrade/refurbish when and where necessary.

DBSA, as an implementing agent, was expected to carry out a full role for the infrastructure build and refurbishment projects as well as the maintenance projects throughout the construction lifecycle; to ensure the department receives adequate capacity on each of the projects and take the initiative to appoint the necessary Professional Service Providers (PSPs) to represent both the department and DBSA on all projects; to ensure project management throughout the lifecycle and oversee the appointment of the suitable qualified service provider (contractor) to implement the works; and to implement procurement of service providers on behalf of the department. DBSA would apply its own procurement policies and procedures in procuring service providers either by open tender or from panel of service providers. To date, all of the service providers have been appointed from DBSA panel of service providers. DBSA was also expected to conduct and coordinate consultation with the affected communities through its social facilitators with support from the department.

Challenges encountered in the overall programme were the National Treasury moratorium that caused an initial delay from February until June 2022 in the procurement of service providers. After the assessment of facilities, the conditions were found to be more severe or dilapidated and required more work than initially anticipated. This also include additional design not originally anticipated. Access to sites in some remote areas was problematic and this delayed the delivery of the material. With the severe flooding in the Eastern Cape, some of the roads were washed away and repairs require coordination with other governmental departments. Requests to change scope or add scope by the end-users was also encountered, but was managed through the assistance of the department as and when it was required. Threats of project closure demanded the appointment of contractors from specific areas or provinces and this resulted in additional community facilitation and delay of implementation of projects.

Some risks have been identified and there were mitigation measures in place. On under-performing service providers, weekly meetings would be held to ensure this is not an issue and the service providers would be managed strictly by the contract. Regarding contractors not performing due to resources and cash flow constraints, frequent site meetings and inspections would be executed. Funding support would be provided by DBSA to the contractors through direct payment to suppliers when material is delivered to site in order to avoid delays. In terms of theft on sites at completion or close to completion, the owning entities have to identify an operator to take over immediately on handover as some equipment like fridges and stoves, beds etc., have been added in some facilities. When it comes to delays in the payment of local service providers and/or of labourers, service providers have to ensure all submitted information is correct and submission of invoices to DBSA is done on time. DBSA would ensure payment has been completed within the contractual stipulated time and service providers to compensate the local service providers and labourers as per their agreement. A follow up with labourers or community liaison officers (CLOs) would also ensure that there are no delayed payments that can stop implementation of services.

Of the 47 projects, three projects have appointed contract value larger that R30m. These are Matsila Lodge (R36 366 481) in Limpopo Qatywa Eco Tourism Development (R32 802 163) and Mthonsi Lodge (R31 072 568) in the Eastern Cape. The standard practice at DBSA and in line with its SCM policy and procedures is that any project above R30m need to include 30% of construction value to local SMMEs. These requirements were being measured and reported on a monthly basis via our appointed PSP and reviewed by DBSA team to ensure compliance.

Projects below the R30m construction value were being also encouraged to allocate the maximum amount to the local SMMEs and local community job creation. The appointed contractors were being encouraged to buy material for local suppliers. In procuring of service providers in line with the implementation plan, DBSA would make use of its own SCM policy and procedures, but would get concurrence from the department before any appointment was made. This would allow DBSA to inform the department of possible shortfall or material changes in the budget of the programme.
[Tables were shown to illustrate progress on construction stages]

In her introduction to the South African Tourism briefing, the Chairperson said that the letter of apology from the SAT interim board chairperson, Mr Tim Harris, was disturbing because the Committee was not interested about knowing if he had other responsibilities outside of the SAT board. The Committee knew of his whereabouts; he was in Kenya attending the Jon Howell AviaDev programme because he was on the list of the speakers there and representing Consulum Government Advisory  on a subject which he spoke fondly of but on the SAT platform. The event he was attending was a premier platform which is dedicated to growing connectivity and used to be hosted in Cape Town, but it remained unclear how SAT lost it. She did not understand why someone leading SAT was representing someone else in this programme, and enquired who was representing the SAT in that Jon Howell Programme. Committee members had instructed her to source legal advice from the Parliament's legal unit on what happened during the Tourism Indaba in Durban, where a SAT board member lied to Parliament. She then read the Committee a confidential legal opinion on the alleged deception of the Committee by Ms Kholeka Nzama.

South African Tourism 2022/23 Quarter 1 & 2 performance
Ms Nomasonto Ndlovu, SAT Acting Chief Executive Officer, focused on an environmental analysis, target performance, financial performance, and human capital. There has been a steady improvement globally from January to September 2022. International tourism showed robust performance in January-September 2022, with arrivals reaching 63% of pre-pandemic levels in the first nine months of 2022. The Europe region performed at 81% of pre-pandemic levels. The Americas reached 66 % of 2019 levels, while the Asia and the Pacific (+230%) arrivals more than tripled in the first nine months of 2022, reflecting the opening of many destinations, though remained 83% below 2019 levels. The African region performed at 63% below 2019 levels. Total foreign direct spend for January to September 2022 increased by 188.6%, reaching R37.0 billion compared to the same period in 2021.

Domestic overnight trips from January to September 2022 reached 23.9 million trips, 138.6% over the same period in 2021. Holiday and MICE trips increased in share whilst trips for visiting friends and/or relatives (VFR) purposes fell in share. Total domestic expenditure was R65.9 billion, a 150.7% increase over 2021, with holiday trips accounting for 43.3% of total expenditure. Domestic day trips recorded a 169.4% increase or 131.0 million. Day trips spend also showed a phenomenal increase of 163.3% to reach 122.1 billion and was largely driven by trips taken for purposes of shopping and attending. The most arrivals were from Africa over land with a 129.9% increase in arrivals compared with January to August 2021.

SAT target achievement was 65% for Quarter 1 and 71% for Quarter 2. The achievements for each programme were outlined:

Corporate support (Programme 1): 52% of valid audit recommendations were implemented, exceeding the 50% target due to proactive implementation by management. The risk environment has been strengthened through a number of initiatives, driven by the appointment of Risk Champions who meet on a monthly basis. Employment Equity targets were exceeded for the percentage of women in SA Tourism, women in senior and top management positions as well as maintaining at least 60% black people across all occupational levels. Continuous monitoring of the internal control environment has resulted in the payment of 100% compliant invoices within 30 days. The focus for Quarter 3 would be on the 75% implementation of valid audit recommendations, payment of invoices within 30 days, implementation of improvement actions from the 2021/22 staff engagement assessment as nothing was achieved during Quarter 1 and 2, and driving employment equity targets. Key organisational touchpoints have been identified where the four core themes that were areas of under-performance in the staff engagement report would be addressed.

Business enablement (Programme 2): The revised stakeholder engagement programme was approved and executed. The Integrated Digital and Analytics Operating Framework was finalised and approved. The Year 1 (2022/23) Roadmap of the Integrated Digital and Analytics Operating Framework was developed and approved. The focus for Quarter 3 would be on continuing with the implementation of the revised stakeholder engagement programme, and execution of the Integrated Digital and Analytics Operating Framework. Seven of the 10 actions in the revised improvement plan were implemented. Roadshow dates had to be rescheduled to accommodate participation of the required sector partners and stakeholders. The activities were shifted to October and November 2022.

Leisure tourism marketing (Programme 3): Quarter 2 milestones of the Global Tourism Brand Campaign Plan were implemented. The Sho’t Left Travel Week Domestic Campaign was delivered. The Sho't Left Summer Campaign was developed and approved. The West Africa Summer Campaign and the Central, East and Land Campaign Plans were implemented. The focus for Quarter 3 would be continuation of the implementation of: Global Tourism Brand Campaign, Integrated Destination Brand and Marketing Strategy, One Global Brand Activation, travel barrier removal communications roadmap for each source market, and strategic events communications calendar. On the number of Global Brand Activations implemented, it was felt the 30-day submission period has proved to be insufficient for the collation of activation information from SAT partners. More effort would be made to ensure that the close-out report will be submitted within 30 days. Stringent measures for tracking the Global Advocacy Programme plan have been put in place to attend to the backlog whilst achieving quarterly obligations. An additional resource has been put in place to augment content development and project delivery.

Business events (Programme 4): The Domestic Business to Business Campaign was implemented. The Global Business to Business Campaign was implemented. 30 international bids were submitted. The Africa’s Travel Indaba 2022 post-review report was approved. Planning for Meetings Africa 2023 and Africa's Travel Indaba 2023 has commenced. Two national business events were hosted in VTSDs. The focus for Quarter 3 would be on the implementation of the Quarter 3 milestones in Domestic Business to Business Campaign, implementation of Quarter 3 milestones in Global Business to Business Campaign, to submit 15 bids, and planning for Meetings Africa 2023 and Africa's Travel Indaba 2023.

Tourist experience (Programme 5); Review and audit of current business model and TGCSA value proposition were currently in progress. 4 348 properties were quality assured. Quarterly milestones of the Global Trade Re-Imagined Programme roadmap were implemented. The focus for Quarter 3 would be on consolidating and presenting a reviewed business model TGCSA value proposition for approval, 4 016 quality assured products, implementation of Quarter 3 milestones in the Welcome Programme roadmap and Global Trade Re-Imagined Programme roadmap. [Tables and graphs were shown to illustrate revenue review as of 30 June 2022, expenditure per programme review as of 30 June 2022, revenue review as of 30 September 2022, budget and expenditure review as of 30 September 2022, and budget and expenditure review per economic classification; human capital management; and number of board meetings]

Discussion with DBSA
The Chairperson remarked the Auditor General South Africa (AGSA) had indicated many department projects were handed over to the DBSA. The Committee had visited some of these projects during its oversight. DBSA has been very clear on why some projects were delayed.

Ms M Gomba (ANC) asked what percentage of work for the projects is being implemented by women and youth companies. She asked if there were plans or an MOU in place for projects that were supposed to be completed by 31 March 2024. She asked if the appointment of local contractors and suppliers has been resolved because it has remained a challenge and sabotage risk. Many times communities have complained that people come from afar to implement projects in their areas whereas experienced local contractors have been overlooked. She asked what the role of NDT or DBSA was in the public participation processes and if stakeholder analysis was done because these were key to project implementation.

Mr Ramphele replied that of the 29 contractor companies, 22 belonged to men and those belonging to females were very few. DBSA has started to find ways of packaging these projects so that female contractors could be invited to bid. The target is to move from 36% to 40% female-owned companies on board. He was not comfortable that many male-owned companies were getting more work than female-owned companies.

DBSA has made recommendations for projects that might go beyond their contract end date. There would be facilitation for the completion of those projects and there were MOUs in place. DBSA is promoting local contractors because there is a risk when you import someone. Even the equipment has to come from locals. Not many youth companies have participated in the DBSA projects and they were encouraged to take part.

Ms H Ismail (DA) asked what strategic implementation tools were used to engage with local government seeing that DBSA has its own employment policy and processes and consults with CLOs yet there was so much vandalism to projects on the ground. She asked how much DBSA was charging for its project management fee and how was it correlated. Was DBSA getting the previous feasibility study on geo-technical instability or did it initiate a new feasibility study. This was because the Minister indicated R284m has been spent on various projects across the country and an additional amount would be spent by DBSA for the completion of projects not finalised by previous contractors.

Mr Ramphele replied that DBSA has been encouraging working with local government, and there is dysfunctionality that takes place at local government level which delays the DBSA, especially when it comes to being given the database of local contractors which complicates things. CLO appointments become a contested terrain. That is why DBSA has made provision for the CLOs. But it tries to find solutions by putting parties together for the appointment of a CLO. There has always been a pressure between the business forum and the community. Communities look for employment opportunities and there are elements that come and claim to be a business forum. In one community sometimes you find three different business forums that demand different things and do not recognise each other. That was why DBSA was having fears about the management of the projects when they are finished. It has come to an agreement with the department to provide security around the projects under construction. DBSA only provides advice on operations. Its role is to look at the projects that are given to them and look at the geo-technical survey to ensure it designs something sustainable. Geo-tec and planning issues have been rectified and it has invited experts.

Mr K Sithole (IFP) asked what the DBSA tender policy stated about challenges seeing that some contractors were not performing due to work stoppages caused by communities, construction mafias, cash flow constraints, and risk of theft.

Mr Ramphele replied that the development component has been very important for the DBSA. They put money aside in the form of a working capital loan which gets repaid by the contractor over the contract period. It is not an upfront payment because if they do not finish the work, DBSA would get into trouble. The banks were not providing any support to the contractors. They were strict on contractors that were not performing. The focus has always been on contractor development in the construction industry. There has been no sympathy for contractors who have been given money but chose to use it differently and have not finished projects. When a project is finished, DBSA hands over the site to the department together with a maintenance plan and advises the department to bring its own security to protect the site.

On the 30% local content, Ms S Xego (ANC) asked if DBSA encouraged local SMMEs to do the work or do they just give the money to them seeing that they demand 30% on a monetary basis. What was the position of DBSA on community forums that were causing instability and delaying the projects? She commended DBSA for having a female CEO. She asked about DBSA's social responsibility role. Was it sensitizing the department because most community projects ended up being white elephants? She asked if DBSA was providing after-care when projects were completed and advised the department on this as the Committee was interested in the ownership of the establishments. Was DBSA building capacity in the department seeing that as implementing agent it had the responsibility to advise it. She expressed interest in its risk management strategy as DBSA intervenes when local suppliers have not been paid on time.

Mr Ramphele replied that the tender documents have been designed in such a way that when DBSA evaluates a contractor, it has to ensure the contractor operates within that 30%. The 30% is the total value of the work. For example, if a project is R30m, then R3m would be given to local contractors. Monitoring would look at the fulfillment of the 30%.

DBSA's intention was not to permanently stay in the department. The department officials were working with DBSA and shadowing them. They were willing to assist the department to establish a programme support unit within it. The matter has been discussed with the DG and there were plans by the department to bring in built environment specialists on a smaller scale for infrastructure projects. When it comes to social responsibility, DBSA has been rebuilding some buildings with its own money in all provinces on some infrastructure projects including drilling of boreholes and provision of water tankers.

Mr A Matumba (EFF) said the Committee needed to spend more time with DBSA because it has received a better presentation from DBSA than it usually gets from the department. He asked why 476 men were employed versus 158 women. That was a lack of women empowerment and it was totally wrong. A project was done in the name of the community even though it was not belonging to it. The projects were not initiated by the community but by individuals in the name of the community. Communities would protect projects that would benefit them. DBSA has come to fix projects that were failed by the department. These projects were being funded for the second time. DBSA was being used to cover up for the money that was wasted. The money that was being used for management fees could be used for capacity building within the department.

Mr Crouse Schoeman, DBSA Head: Construction and Maintenance Delivery, stated there were normal guarantees in place when DBSA takes over a contract and monetary values were being kept in the contract as well when replacing a contractor.

Ms P Mpushe (ANC) said that most of the issues that have arisen from the presentation should be directed to the department. She requested that the Committee be given a list of all projects being maintained, built and refurbished. She asked for the cost implications for incomplete projects and how this was affecting the work of DBSA because when the work was handed over to DBSA there were clear specifications on what should be delivered. She sought clarity why Platfontein Lodge and Manyane Lodge were green-flagged instead of being red-flagged. Intervention was needed on the Ngobe project as no work has commenced there. She sought clarity on the phrase “4 million jobs per million”.

Mr Ramphele replied that there was not much of an impact but they do assessments and cost analysis on the projects they deal with. The challenge has been that these were projects that failed before and the way forward has been to complete them. That has come with additional costs. The “4 jobs per million” is the model DBSA has been following. It depends on the nature and scope of the project. A project has at least to employ 15 people. The model advocates that if a million rand is spent on a project, at least four jobs should be created out of that project.

Mr Schoeman replied that the green flag indicated the phase of the project. It means the design phase has been completed but the construction phase has not started yet. In the case of Manyane, the tender went out and has been closed. The next stage would be evaluation. There would be more investment in the project.

Ms S Maneli (ANC) said it was disappointing that nothing has been done about Ngobe since the Committee had visited the site 14 months ago. The delays were not caused by a change in the design scope but by individuals who wanted to do something not wanted by the community. There has been no adherence to what is needed by the community and this has affected ownership of the project by the community. She asked if the 30% local was per subcontractor or inclusive of the entire project.

Ms L Makhubela-Mashele (ANC) commented that since DBSA has taken over the projects there have been improvements and that is an indication there was no capacity on the part of NDT. She asked for the percentage of department projects had were not implemented by DBSA. She proposed the Committee should request from NDT the plans and budget of the 47 projects DBSA was implementing. She asked what the timeframe due to implementation delays because there a moratorium or judgment on the BBBEE codes.

Mr T Myeni (ANC) noted DBSA pays the contractors within 30 days but asked how DBSA was monitoring the payment of subcontractors by the contractor. When was DBSA planning to open opportunities for new contractors because it has a panel of contractors which were being used all the time.

Mr G April (ANC) wanted to hear more about Matsila Lodge that has been funded again. He expressed concern that projects were being done more than once. He advised the Committee to get deeper into verifying what was happening at Tshapogwe Lodge.

The Chairperson asked why Manyane Lodge was green-flagged and why 90% of the projects were in Limpopo and who the owners of these projects were.

Mr Ramphele replied that DBSA is given a list of projects and it dissects how it is going to deal with them according to geographical spread. DBSA was not qualified to talk about the rationale for the numbers in each province.

The Chairperson asked if the scope of work has been changed on Manyane Lodge as per the Committee recommendation after its oversight visit there.

Mr Isaac Motsoari, DBSA senior project manager, replied that nothing has been changed and the project was continuing as presented to the Committee during the oversight visit.

The Chairperson enquired if renovations were being done at Manyane Lodge because the building was in need of attention and if the Committee suggestions were incorporated into the plans.

Mr Motsoari replied that there were renovations happening to the structure.

The Chairperson said the Committee suggested that a heritage feel should be incorporated into the Manyane project so that the place could become a tourism attraction. There were white people who had been killed at that site. The mayor promised to employ young people to clean the area so that it becomes attractive because there were relatives or families of those people that might be found in the North West. The place has got history. The suggestion from the Committee was to incorporate that into the renovations. There was a forest there and it was not supposed to be a forest. That area was supposed to be preserved because Credo Muthwa was living in that place. As it stands, it did not look like it would attract international tourists despite the stature of Credo Muthwa globally and his contribution. The Committee had suggested that part of the forest should be developed. There was a proposal that the kingdom in the area should be approached as it was the owner of that land. The Committee was told there were traditional healers staying there from all over Africa as that is the place where Credo Muthwa convened them during his last days. The Department would be reminded about this because sometimes it suffers from amnesia. The Committee would tell NDT about what it discovered during its North West oversight visit and provide a submission as it appeared Mr Motsoari has forgotten about the Committee suggestions.

The Chairperson said that the Committee members were obsessed with Manyane and indications were that there was human resource capacity to finish Manyane. Hence it was green-flagged in the presentation. The Committee suggestions of what should be incorporated were blurry in the presentation. DBSA should relook at the Committee suggestions and respond in writing about Manyane Lodge.

The Chairperson expressed satisfaction with what DBSA had presented on the 47 projects and the meeting was fruitful and informative. The Committee would continue to dissect the presentation to see if targets would be met and look at the challenges. Due to time constraints, she requested that DBSA respond in writing to the unanswered questions.

Discussion with SAT
The Chairperson stated the Committee would seek legal advice on what happened during the Tourism Indaba when a SAT board member lied to Committee members. She then read from a document on the alleged deception of the Committee by Ms Kholeka Nzama.

Mr M De Freitas (DA) asked for an unpacking of the Global Brand Activation and Global Advocacy Programme. He asked if it would be possible to pilot the National Business Events in small villages, townships and dorpies. Why only the Sho't Left Campaign was mentioned in the presentation to the exclusion of other campaigns? Were products that have been "quality assured" referring to grading? He asked for an update on the universal grading the Committee proposed should be cost-free.

Minister de Lille replied that the South African Township and Village Tourism Association  (SATOVITO) represents all villages and townships. The organisation has assured them “nothing about us, without us”. The organisation was doing good work. In the last meeting with SATOVITO, the organisation asked to be included in all the department discussions, events and campaigns on tourism in the townships, small villages and dorpies.

Ms Ndlovu replied that the Global Brand Activation was providing an opportunity to create the experience of SA in a particular place. It was bringing the brand to life so that you get a better understanding of what SA was about. It was doing what a 30-second TV advertisement could not do. The activations were taking different forms, depending where you are in the world or country. Sho't Left is part of the domestic campaign, but globally there are campaigns linked to the Global Campaign. The Live Again Global Brand Campaign was staged last year and it took us out of the Covid-19 world. The world was invited to get out of hibernation and South Africa was part of that. There were sub-campaigns of how to localise the Live Again Campaign in the various markets because markets interpret things differently. The Global Advocacy programme states that SA is a great destination; however there are barriers such as the visa application process that was intimidating and long, and these barriers were discouraging people from coming to SA. Some of these barriers including safety and health. This programme was trying to minimise or manage some of these barriers by engaging with stakeholders. This advocacy programme was about beautiful things happening in SA to create an impression of how SA was dealing with the barriers. It is about the content generated about managing these barriers. On the National Business Events, they were dealing with national associations around the country to host smaller national events in small dorpies, villages and townships. The focus and efforts have been on supporting smaller towns or villages instead of big cities. This did not mean a big event that could be hosted in an international convention centre would be taken to a small dorpie. Quality assured products referred to graded products or establishments. This is quality assurance given to tourists on the star grading given to that event. Universal grading has been put on review as it was a policy matter that NDT was aware of.

Mr Victor Tharage, NDT Director General, replied about compulsory versus voluntary grading saying that this was a policy matter and he did not have a delegation on that matter and there was no policy position on it.

Ms Gomba asked if the TOMSA system challenge has been resolved since there has been under-collection of TOMSA levies. AGSA has failed to hold SAT accountable about the TOMSA system.

Mr Ndlovu explained the findings raised by AGSA had to do with weak controls in the contracts at that time. Those contracts came to an end and the gaps have been closed.

Mr Myeni asked when SAT vacancies as well as safety in the Kruger National Park would be addressed. What was the strategy behind the dorpies, townships and small villages economy because that was not mentioned in the presentation?

Mr Matumba asked if the CEO was the accounting authority since there was only an interim board; if global activations were done in Europe; when the SAT vacancies would be filled and the number of vacancies; why SMMEs could not go to Frankfurt due to visas not approved by the Minister, if the Minister has to approve international trips; what SAT was doing in Asia because it was not working well and soon it would have to go to China.

Minister de Lille replied that she has been guided by the 2022/23 National Treasury regulations on international travel. She had not received a complaint from SMMEs, but they were welcome to send complaints to her and they would be investigated by the department complaints unit as she was not sure if the SMME could not attend the Frankfurt event due to visas or late approvals.

Ms Ndlovu replied that there were global activations happening in Europe such as the one happening in Germany currently. There is a SA global activations company that has been doing activations on behalf of SAT. SAT has offices in Beijing and Tokyo. The main challenge has been vacancies that was hitting SAT hard. The plan for this year was to run a marketing campaign in China as it re-opened markets at the start of this year after Covid-19. The plan is to enter the Asia and China markets. China is part of BRICS.

Mr Sithole asked for the status of the project plan that was supposed to be completed in 2022.

Ms Ndlovu replied that plans and approvals for these projects have been corrected and that information would be reported to the Committee in the Quarter 3 and 4 reports.

Ms Makhubela asked if there was the intention in the short-term to transfer money to SAT; the percentage and amount; how SAT was planning to meet the three conditions set for budget approval; and if the set conditions were met or ignored.

Mr Tharage reported that R586m was transferred to SAT on 3 May 2023 and that constituted 44% of the overall appropriation. 56% of the budget has not been transferred.

Ms Xego noted the improvements in the layout and content of the presentation which was an indication the Minister was approving the presentation before it got presented to Parliament.

Minister de Lille indicated she has been relying on the SAT for the presentation because she was not there. She was happy SAT had put together an engaging presentation. She suggested the Committee Chairperson submit a proposal on the format of department presentations and the department would follow that format going forward.

Ms Ismail asked how effective the SARS passport was and how it has assisted the tourism sector. How would the implementation of additional resources on the Global Advocacy Programme have an impact on the budget? Were there strategies in place between Tourism and Police to ensure the protection of tourists in South Africa so they did not seem to be endangered? There was reluctance to prioritise the safety of tourists in the country.

Minister de Lille replied that the department had finally dusted off the 2018 Safety Tourism Strategy. A meeting was recently held in Johannesburg with the tourism forums and other stakeholders on tourism safety. The tourism forum meets quarterly. The department has budgeted R174.5m for the training of tourism monitors so they obtain an NQF 3 qualification and certificate. At the tourism safety conference, the department consulted with the provinces, private sector and MECs. 59 hotspots in the country were identified and the first batch of the tourism monitors would be deployed in these hotspots.

Ms Ndlovu replied that SAT realised that during Quarter 1 and 2 it was lagging behind and it was resolved resources should be added to the Global Advocacy Programme. There was no impact on the budget, but it was to ensure agency partners were putting more effort in helping SAT deliver more content.

Ms Mpushe asked if the DG Oversight Committee was a new appointment or if it existed in previous years and if it was part of the department organogram. Was there a challenge with the payment of invoices within the 30-day stipulation? Had the powers of the Acting CEO been relegated to the executive management? How much was given to SAT before the conditions were set? Has SAT partnered with Robben Island Museum in marketing SA icon attractions? She said the Tim Harris matter was presenting a conflict of interest.

Ms Ndlovu replied that they did not have a partnership with Robben Island, but had MOUs with provincial tourism authorities so that SAT could market their destinations in the Global Marketing Campaign. An MOU has been signed with Wesgro in the Western Cape to see what could be done in terms of work.

Mr Tharage explained that when SAT concluded its reports, it would send them to the department. Then the team that deals with oversight work would go through the SAT documents or reports and various matters would be sent to the relevant DDGs for their attention, after which the DG would convene a meeting to discuss these matters with the Exco and other sub-Committees dealing with specific matters. So, this has been an old structure and oversight mechanism for dealing with the documents or reports from the SAT board. Previously, DDG Malan was responsible for the structure but now it was in the hands of DDG Rhulani Ngwenya.

On Robben Island, NDT was working closely with the Department of Arts, Culture and Sport. The department has been doing work on Robben Island and assisted in the digitisation of information there and putting up a mini-solar substation valued at R25m. The department was also trying to put up a restaurant in a form of a spaza shop there as well. There has been a meeting between the Minister s of arts, culture and sport and tourism to review the MOU in order to enhance the contribution of the department on these heritage sites.

Ms Ndlovu replied that there was 100% achievement on the payment of invoices. The delays were caused by invoice non-compliance.

Ms Maneli asked if Exco was supposed to approve the implementation of the Brand Campaign plan; enquired how much of the 53% already allocated to the SAT was in terms of rands because it might be that 80% of the 53% has been spent already and that would have an impact on the set conditions; she suggested the filling of vacancies in the entity be delayed because there was a process of appointing a new board and it should be given space once it has been established to have an input in the filling of the vacancies; and wanted to find out what the impact of the Regional Brand Campaign has been.

Ms Ndlovu replied that the matter of Exco approvals has been corrected in the 2023/24 plan because weaknesses have been witnessed in the technical indicators. The Q1 and 2 performance presented to the Committee was audited by the Internal Audit Committee to ensure 100% accurate reporting. The bulk of arrivals were from the African continent and the numbers and spend was indicated. The impact of the Regional Brand Campaign on Africa has been analysed and lot of emphasis would be put on the African work as it consistently performed ahead of other markets.

Mr April asked if SAT has determined the potential growth since the President announced the remote work e-visa. He asked if Robben Island marketing has considered establishing a restaurant and tourist accommodation on the island to bring investment into the country; enquired if there were strategies in place to stimulate the MICE sector; wanted to find out what were the current insights on global consumer trends and how the SAT was responding to that; and indicated it was not a good idea to hear about Tim Harris all the time when members come to the meeting because he might not make it into the new board, and members want to hear where the money of South Africans was going to.

Minister de Lille replied that she had a meeting with the Minister of Home Affairs on the remote work visa. They were informed the regulation was still in process and would be finalised before September 2023. There was a big demand for remote visas and it was a good strategy that SAT should include in the global marketing strategy to have people working from our country.

Ms Ndlovu said that SAT was focusing on the MICE sector and more details would be responded to in writing. The emerging consumer trends were being incorporated into the strategic plan.

The Chairperson stated that no more transfers should be made to SAT by the department based on the Committee Report published in the ATC. The appropriation that had been approved by Parliament was a conditional appropriation. For the department to make a transfer, there would be amendments made by the Parliament based on the set conditions. There must be timeframes on the conditions set by the Committee so that the way forward is known by all.

On vacancies, the Committee had resolved that the moratorium by the Minister on the filling of vacancies should be uplifted and the Chairperson asked if the moratorium has been uplifted.

The PFMA has vindicated the Committee about the three people on the board not constituting a board – they were only persons managing the affairs of SAT. The PFMA assigned the CEO as the accounting authority in the event there was no board. That was why the Tourism Act did not speak about an interim board. There was a process taking place for the filling of the CEO and CFO positions by the previous board. Other vacant positions would be administered by the appointed CEO. So there should be a way forward on how to deal with the matter based on what the Committee proposed so all parties could move in unison. The Minister had indicated she would personally handle the appointment of a department representative to the SAT board. She asked the Minister to direct the Committee to the section of the Tourism Act that empowers the Minister to decide on international travel. In the previous meeting the Committee was referred to Memorandum 7 which, when checked, did not empower the Minister in any way on international travel.

On the moratorium on vacancies, Minister de Lille replied that the department has discussed the matter with the SAT board and it was agreed the board would facilitate the appointment of critical posts because there is an agreement with three human resource companies for the recruitment of personnel. The board would select one of these recruitment companies to fill the key vacancies. She has discussed with the DG about looking for another name for the department representative on the SAT board. The gazette still has the name of the current incumbent but this would be changed through the gazette. NDT has taken note of Members' concerns on this matter.

On international travel, the Ministers have been told to monitor leakages in government and to stick to travel guidelines and reduce delegations.

The Department evaluates each and every invitation through set criteria to see if it would add value to the department and decides on the delegation. When she travels, she only with travels with one person because she does her homework with a specialist before attending any conference. The process that is being followed would be presented to the Committee so that it can have input on it. She would look at what the PFMA says about Schedule 3 entities like SAT and provide feedback. She respected that the Committee to has its own interpretation of legal matters and asked that she be allowed space to re-read the law and get a legal advice from the department legal unit. In fact, the department has been looking at all standard operating procedures that have been developed over the years because the President has asked the cabinet to find ways of speeding up service delivery. There is a report that documents legislation that was restraining service delivery.

Ms Ndlovu replied that the R586m allocated to SAT was based on Quarter 1 projects that had to be delivered. The funds have been committed and exhausted already. There was no money beyond Quarter 1. How SAT was going to survive through the second quarter was unknown unless there were negotiations with the suppliers.

Mr Vincent Mntambo (SAT Interim Board member) asked to leave the meeting due to time constraints but before he was released, the Committee asked him some more questions.

Mr Matumba asked if Mr Mntambo appointed or nominated Mr Tim Harris to be the SAT interim board chairperson because the gazette had stated that Mr Mntambo was to be the chairperson.

Mr Mntambo agreed that in the first meeting he proposed that Mr Harris be the board chairperson in recognition of the fact that the time available to Mr Mntambo would be insufficient for that role.

Ms Maneli said that Mr Mntambo should not make it a habit to leave Committee meetings because he was the only board member at the meeting. When he comes to the Committee, he has to dedicate a full day as no one is sure when the meeting would be completed.

Ms Makhubela-Mashele agreed he should be released as the Committee has other commitments to engage on. She suggested that the incident at the Tourism Indaba should be put in a report and submitted to the National Assembly because the feeling of the Committee was that the interim board was not going to assist it in any way so Parliament could take a stand against the three appointed board members. This would provide the Committee with an opportunity to make its feelings known about the three board members and their pattern in attending Committee meetings.

The Chairperson agreed Mr Mntambo be released because the questions the Committee had would not be answered. She asked several questions – why the SAT board had so many meetings which was in contravention to the Act; the people working on the Activation Campaign to market SA were removed from that campaign involving BMW; the participation of SAT on the global tourism platform; and if the Vredefort  dome was in the BMW activation because it was a true representation of SA. She noted that the DG would not be able to answer on SAT matters since the Minister and Mr Mntambo have left the meeting. She asked if there were follow up questions.

Ms Gomba asked what would be done about the payments from TOMSA levies that were short.

Mr Matumba said that the SAT interim board has no Chairperson because there was no gazette appointing Mr Tim Harris to be the Chairperson but he was nominated by Mr Mntambo.

Ms Makhubela-Mashele enquired how much money was left to be transferred to SAT.

Ms Maneli asked why the department representative for the SAT board has not been gazetted.

The Chairperson informed the Committee she would like to establish good work relations with the Minister and assured members that when the meeting happens between her and the Minister, the discussion notes would be shared with them. The Committee appreciated the quality of the SAT report, hoping more improvements would be seen. She asked that the Department assign an official who would travel with the Committee on the China study tour as it would be engaging with the SAT tourism hub based in China. The Committee has written to SAT about this matter.

National Treasury's Memorandum 7 did not give powers to the executive members to approve international travel. It is a guide for members of the executive. Any moratorium on international travel by SAT would depend on its mandate, but that would be detrimental. On the vacancies, the Committee has resolved that the CEO and CFO appointments should be delayed until a fully-fledged board has been established to administer the process because currently SAT has no board but only three persons.

The legislation states the SAT CEO should act on behalf of the board. The previous board had a process in place for that and the CEO should consider that because if it has to be abandoned, that would count as fruitless expenditure. She asked what would happen to the process and what the implications are if the Minister states that an HR recruitment company would be appointed to recruitment for key posts. On the matter of the department representative on the SAT board, the ball was in the court of the DG. On the legal opinion about Ms Kholeka Nzama, the Committee would discuss via a Zoom meeting on how to move forward on this matter. The confidential document would be sent to Committee members and there has been concurrence on that.

The Chairperson pointed out that the appointment of the SAT interim board Chairperson was flawed because Mr Mntambo nominated Mr Harris. When the Committee writes to the DG requesting the assignment of a department official to accompany the Committee on the study tour, the response should come directly from the DG, not from any other person. She noted the Committee has been vindicated about legislation pieces and on the conflict of interest involving Mr Harris who was at a panel discussion in Kenya representing Consulum while being the SAT board chairperson. She appreciated that the Minister would look in to the legislation matters with her legal advisors of the department. The meeting was adjourned.