Speech Notes: Vote 5 – Public Works Annual & Half Year Financial Oversight Reports

Issued by Vicky Knoetze, MPL
Shadow MEC for Public Works

Core mandate of ‘the nerve centre’ of infrastructure development in limbo

The failure of client departments to pay the Department of Public Works and Infrastructure (DPWI) is wreaking havoc in the EC with many schools, hospitals, and clinic projects standing in limbo.

Exponential amounts of money are being spent on leases for governmental departments while the Bhisho Precinct is still incomplete.

Honourable Speaker, honourable premier, honourable members and guests, good afternoon.

Honourable Speaker, in examining the report of the DRPW it becomes more and more evident that there needs to be a focus on increasing accountability through effective oversight mechanisms.

The DPWI is the province’s infrastructure nerve centre – which essentially means that they must provide services to client Departments – normally in the form of building or renovating schools, hospitals, and clinics.

DPWI plays a major role in terms of building new infrastructure. They are responsible for building and investing in infrastructure projects, thereby growing the economy and creating jobs.

They must do this within pre-determined time-frames and the available budget.

In this 6th administration after the first democratic elections in South Africa, it was decided that DPW will strive to be a “Nerve Centre” for the Eastern Cape Provincial infrastructure delivery, coordination and investment by transforming the property and construction sector. But, for the past few years, the Department has been struggling to position itself as the ‘infrastructure nerve centre of the province – a status which is far from achieved.

This report and the reports over the past seven years tell us they are very good at spending their budgets, close to 100% every year (99% in the 2019/20 financial year), year on year.

One area where the Department must be commended for a massive improvement is the payment of invoices within 30 days at 97%, a substantial increase from the previous financial year at 85%.

What the reports also tells us is that, although they spend their budget, they don’t necessarily achieve their targets, and often fail to meet legislative or statutory requirements as set out in legislation.

Programme 1: 74%
Programme 2: 76%
Programme 3: 97%

The Department of Public Works is plagued by the following issues (and in many instances has been for years):

The Department is still faced with the reoccurring finding (for the past seven years) that they are unable to recruit skilled and professional core staff. Having said that, staff debts incurred was at R2.5 million rand due to amongst other issues – irregular appointments.

Honourable Speaker, we are running out of time to cut the fat, if the Department does not start filling key vacancies with skilled employees that are fit for purpose, it will soon be too late to turn the ship around.

Irregular expenditure is at unacceptable levels of R132 million with many such instances not being reported or investigated, with accumulated irregular expenditure at R 969 million.

Fruitless and Wasteful expenditure is standing R 6.9 million and accumulated fruitless and wasteful expenditure at R 504 million. There seems to be a culture in this province that irregular, fruitless and wasteful expenditure is the norm, we have to start instilling a new culture of accountability and transparency as well as a zero-tolerance approach to ballooning levels of wasteful expenditure, the fiscal cliff is drawing closer and closer year-on-year.

A lack of consequence management and massive delays in finalising disciplinary hearings. This means that nobody is held accountable for this waste as there is no consequence management.

Illegal occupation of government properties. Illegal occupants on land and of buildings that are in the ownership of the Department of Public Works is a massive issue right across the province – and have been an issue for many years. The province is losing out on income that could be generated from these properties, while those illegally occupying these properties are damaging and vandalising them, putting an additional financial strain on the Department and therefore on the Public Purse.

The Department must expedite a complete audit on all property whether it be vacant land or buildings in its possession and ensure that it is not illegally occupied, that it is well maintained, and that income from these properties are maximised.

Continuous challenges in collecting money owed to it by client departments resulting in many key infrastructure projects standing in limbo. With schools across the province standing incomplete, being vandalised and learners being endangered on incomplete building sites. One of the/if not the biggest issue that this Department is faced with is non-payment by client departments. This has led to many infrastructure projects (schools, clinics, office accommodation) not being completed on time, being abandoned, SMME’s, contractors and sub-contractors having to close their doors due to non-payment by the Department.

This is also an issue that has been persisting for years, and it seems to be getting more severe every financial year. It is not fair to scholars who wait with hope in their eyes and hearts for these schools to be completed; it is not fair to emerging and established contractors, sub-contractors and SMME’s that are trying to earn a living. Just look at Jubilee Park Primary School in UTH, Lincom and Asherville Schools in Graaff Reinet – still incomplete with scholars having to go to class on construction sites.

The cost of housing governmental departments. Until the Bhisho Office precinct is completed, year on year spending on rent is spiralling out of control with the Departments of Health, Transport and Human Settlements being the biggest spenders. Public money is being wasted exponentially, month after month, year after year on liabilities instead of assets. Instead of having a forward-thinking vision of reducing costs and increasing value for money in terms of public expenditure, the Department remains short-sighted in terms of progress. According to the MEC’s Policy Speech, the MEC himself stated that ‘this state of affairs of a government that is perpetually leasing and heavily relying on privately owned properties for office accommodation cannot be a permanent solution and that the key to this will be to ensure that the Bhisho Office Precinct is delivered’. Provincial Government is spending in excess of R300 million per year on rental accommodation to house Departments.

Honourable Speaker, given the state in which we find our economy both due to the COVID-19 crisis and poor fiscal and economic decision-making by the government, the government has a major role in revitalising the economy over the short to medium term.

Honourable Speaker, according to the Strategic Plan of the Department – One of the critical challenges our country has faced since its transition to democracy in 1994 is that we have not managed to translate the ethos of our globally celebrated, progressive constitution into practical and meaningful change, positive daily living experiences and a better quality of life for the millions of our citizens who remain trapped in poverty, burdened by extreme inequality and hobbled by lack of opportunity.

A grim reality which has resulted in the government making a clarion call to all institutions of our country, public and private alike, to intensify the fight against the triple challenges of poverty, inequality and unemployment and fashioning themselves to be capable institutions of a developmental state.

In conclusion, Honourable Speaker, effective and capable government and governance can improve the lives of all South Africa’s people. Our decisions and actions as government must be aimed at delivering these improvements to all South Africans. Let us always put the people first. Every effort of the government must be focussed on improving the lives of South Africans. As we continue to fight against the challenges of unemployment, poverty and inequality, we need all spheres of government and all organs of state to effectively deliver on their responsibilities to make South Africa a better place to live for all the people – these are the things that only a CAPABLE STATE can deliver so that the people of the Eastern Cape can live a LIFE OF VALUE.

The Democratic Alliance will continue to hold the government to account to ensure that public money is spent in the most efficient and effective way possible. Only a DA government can create fair access to jobs and opportunities. The Democratic Alliance will continue in our efforts to root out incompetence, non-compliance, cadre deployment and corruption in government in general and actions that fly in the face of our Constitutional principles so that we can build one South Africa for all.

The DA supports the report by the Department.

Thank you.