Parliament, Thursday, 17 September 2020 – Contractors causing delays in water and sanitation projects need to be dealt with decisively by imposing penalty clauses on contracts, the Select Committee on Appropriations has told the OR Tambo District Municipality.
The committee yesterday received an update from the municipality on the progress made with regards to the implementation of committee findings and recommendations on water and sanitation projects, specifically the projects visited during oversight visit undertaken by the committee on 30 July to 3 August 2018 during the fifth Parliament. This oversight visit was triggered by a letter from the executive mayor dated 3 May 2017 requesting the intervention of the National Council of Provinces (NCOP) in the R90 million reduction in the Municipal Infrastructure Grant (MIG) allocation.
While significant progress has been made in addressing the challenges arising from the MIG allocation, the committee remains concerned about the continued delays, cost escalations and variation orders in some of the water and sanitation projects. The committee believes that the delays caused by contractors are often deliberate and are a means to get more funds. The committee also believes that there is a larger systemic challenge of contractors working in several municipalities across the country that needs to be addressed. Ms Dikeledi Mahlangu, the committee chairperson, spoke strongly against deliberate project delays, which she said shows the lack of consequence management, poor planning and abuse of public funds.
Responding to the committee’s question on the whether National Treasury is satisfied with the progress made by the municipality, National Treasury’s Director: Conditional Grant Monitoring Mr Sello Mashaba told the committee that there has been significant improvement since the MIG was reduced in 2016/17. The problem, he said, appeared to be in the municipal project scheduling, where the municipality would bring about projects that were not ready to be funded. Of concern is the delay in project completion leading to unnecessary cost escalations, which means that value for money is not being realised.
Further to this, National Treasury’s Deputy Director for Local Government Budget Analysis Ms Matjatji Mashoeshoe told the committee of the district municipality’s fragile financial health. The municipality has adopted a budget with a significant surplus of R40 million. However, the collection rate is low, reported at 61 percent during the 2018/19 financial year. Ms Mashoeshoe told the committee that the municipality might soon not be able to honour its financial obligations.
The committee is concerned by the large number of institutional challenges presented by Ms Mashoeshoe. These included a bloated structure not fit for purpose, a qualified audit opinion for the past six years and there is no institutional arrangement with the overall performance of the municipality. The committee acknowledges that the municipality, like many other rural municipalities, faces a large number of legacy challenges. However, it advised officials to urgently address these challenges and improve on their service delivery mechanism.
The committee welcomes the support provided by the Municipal Infrastructure Support Agent through the Regional Management Support programme. The committee also welcomes the intergovernmental relations displayed by the municipality, the provincial department of Cooperative Governance and Traditional Affairs, National Treasury, regional offices of the Department of Water and Sanitation and other stakeholders in trying to address the challenges in the municipality. Ms Mahlangu encouraged the municipality to resolve issues leading to community unrest and communicate with the affected communities on the progress and challenges, to enhance public participation and to be responsive to the needs of the community.
ISSUED BY PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE SELECT COMMITTEE ON APPROPRIATIONS, MS DIKELEDI MAHLANGU.
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