1 Social Responsibility Implementation Progress ReportBriefing to Portfolio Committee on Tourism 11 November 2016
2 Overview of presentationPurpose of briefing Objective of SRI Programme SRI funding criteria and requirements Programme History Programme Successes Challenges, lessons learned and corrective measures Update on forensic audits Status of infrastructure projects Other SRI Projects Presentation on SRI: 11 November 2016
3 Objective of the SRI ProgrammeThe Department of Tourism is funding and managing the implementation of tourism infrastructure and skills development and destination enhancement projects through the Social Responsibility Implementation Programme (SRI). The programme is aligned to and funded as part of the Expanded Public Works Programme (EPWP). The objective of the SRI Programme is job creation (fulltime equivalent jobs) through the provision of a range of tourism services and infrastructure. Presentation on SRI: 11 November 2016
4 Objective of the SRI Programme cont.….The areas of work includes, but not limited to: Visitor information services; Accommodation establishments; Caravan sites; Retail centres for crafts; Heritage tourism products; Day visitor precinct; Youth tourism learnership programmes; Tourism experience and destination enhancement (e.g. safety monitors) and Product/attraction enhancement - the development and maintenance of infrastructure like: benches, boardwalks, fencing, pathway development, attractions interpretive signage, access roads into attraction, parking and sidewalk infrastructure, bike lanes, and other public space upgrades. Presentation on SRI: 11 November 2016
5 EPWP: Funding criteriaProject must be identified based on their ability to generate a labour content of between 25% and 35% for the infrastructure projects and 40% to 60% for the skills development projects. The EPWP employment target set for women is 55%, youth is 55% and 2% for people with disabilities as set by the national EPWP programme. Persons must be employed in terms of the conditions of service for Special Public Works Programmes determined by the Minister of Labour. Presentation on SRI: 11 November 2016
6 EPWP: Funding criteria cont…….Selected persons must be provided with accredited training, the cost of which may not exceed 5% of the total project cost. Non-accredited training to the value of 2% of the total project cost must be provided. The EPWP infrastructure project must be for community or public benefit. Presentation on SRI: 11 November 2016
7 Programme history In 2010 all tourism related projects from the Department of Environmental Affairs and Tourism (DEAT) were ceded to the Department of Tourism (NDT). 310 project files were handed over to NDT. Only 43 projects (with 97 contracts of different phases) were work in progress. The remainder of the project files (i.e. 267) were administratively concluded. Presentation on SRI: 11 November 2016
8 Programme Successes – since 2010Created Full-time Equivalent Jobs Create tourism assets for beneficiary communities. Local procurement and supplier empowerment (brick layers, landscaping, interior décor, horticulture, painting, tiling, plumbing, carpentry, transport, catering, branded clothing etc.) Non-accredited training, ( life skills, first aid, health and safety, financial management and HIV/Aids). Achieved accredited training associated with delivery of infrastructure for beneficiaries (skills areas include –construction and hospitality related areas). Trained 2077 youth as Chefs. Trained 6600 youth as Buddies. Trained 470 youth in food and wine pairing. Deployed 1200 safety monitors in partnership with SAPS and provinces at key South African attractions. Presentation on SRI: 11 November 2016
9 Challenges encountered with infrastructure projectsThe challenges are mainly in the implementation of the Infrastructure projects within the Environmental cluster (instead of the infrastructure cluster). Pervasive focus on job creation and limited focus on the resultant infrastructure. Viability and due diligence assessments conducted by the same people who implemented the projects. Detailed planning and technical designs completed after budget allocation, (leading to under or over estimation of project costs) – sequencing problem. Limited joint planning amongst the key role players. (impacting on Project sustainability beyond construction) Lack of internal technical capacity to manage infrastructure projects and insufficient contract development and management skills. Programme budget reduction in the MTEF. Presentation on SRI: 11 November 2016
10 Lessons learnt The majority of community based organisations do not have the capacity and capabilities to operate and manage the accommodation establishments. Pre and post construction support, training and mentoring is needed. It should be part of the requirements for funding community owned projects. Tourism infrastructure projects are capital intensive and it is a challenge to meet the EPWP labour intensity. Mechanisms for sustainability must be established prior to the commencement of projects and where applicable the future strategic/operating partner must be involved from start. Presentation on SRI: 11 November 2016
11 Lessons learnt cont……. Joint planning and pulling together of resources across all spheres of government (vertical and horizontal) is a critical success factor. EPWP requirements would be best served through the destination and experience enhancement, maintenance of viable existing facilities and skills development types of projects. Greenfield projects (built from scratch) are expensive due to the need to put bulk infrastructure – thus project bulk infrastructure should be in place prior to starting of projects. Need for an integrated approach which takes into account economic and technical aspects of interventions. Where implementers had a tourism background, projects were largely successful. Involvement of all parties during planning phase led to post completion sustainability. Presentation on SRI: 11 November 2016
12 Corrective measures Projects must prove that they will be technically, commercially and financially viable before funding is granted. Viability covers amongst others: Land availability/ownership and use rights; Identify access (roads); Bulk services (water, electricity, sewer); Identify beneficiaries; Type/ nature of facility and the required grading; Blending with surrounding environment (natural and built); Identify other developments that will complement the facility (if any); Identify development that may have a negative impact on the facility (if any); Ownership and operating mechanisms for the facility; Market viability assessment; Highlight linkages with the IDP Process including support from other spheres of government; and Surrounding attractions and amenities (the case for tourists). Presentation on SRI: 11 November 2016
13 Corrective measures cont…Application of construction industry standards – within the context of EPWP for SRI; Provide targeted support to owning entities in pursuit of sustainability (skills and capacity support); Introduction of milestone based payment (a balance between the cashflow needs and accountability for resources); and Review and prioritisation of the funding. Presentation on SRI: 11 November 2016
14 Corrective measures cont…Undertaking economic and technical evaluation of projects under planning and those that had to be stopped and re-evaluated after the forensic investigations. Services of Government Technical Advisory Centre (GTAC) have been sourced in this regard. Each of the projects under planning or that were stopped after the forensic investigations will be treated independently and the decisions on each will be based on the outcomes of the assessments. GTAC will all provide technical expertise to ensure that the projects which are currently at a planning phase are successfully completed and handed over. External audit services have also been acquired to undertake a detailed independent review of the internal systems and practices- with the view to close existing systemic gaps. Engagements with Provinces regarding sustainability support for projects that are ready for handover. Presentation on SRI: 11 November 2016
15 Corrective measures cont….GTAC to provide Technical Assistance Services to the National Department of Tourism (NDT) to:- provide long term support to establish a Programme Office (PO) to assist the department to manage the Social Responsibility Initiative (SRI) Programme and review the processes and guidelines for this programme; AND/OR to undertake a short term review of the department’s current SRI stopped projects, those under planning and undertake pre-feasibility studies on identified projects. Presentation on SRI: 11 November 2016
16 Forensic investigationsInitially during 2010, a total of four projects were referred for Forensic Investigation; After recommendations, three were referred to the SAPS for further investigation and one taken on arbitration; The SAPS referred the cases to the Commercial Crimes Unit; NPA initiated prosecution in one case at the Commercial Court in Pretoria; and 3 cases are still under investigation by the SAPS (one of which is in arbitration with the aim of enforcing accountability). Presentation on SRI: 11 November 2016
17 Forensic InvestigationsThe 2nd Forensic Investigation was instituted in 2013: 13 Projects were referred for Forensic Investigation; After recommendations they were referred to the SAPS for further investigation; SAPS referred the cases to the Commercial Crimes Unit; The NPA issued a Nolle prosequi, (decision not to prosecute) with advice that the Department institute civil proceedings to recover any losses incurred; Office of the State Attorney has been given instructions to institute civil proceedings to recover losses; and Summons are being prepared for issue and service to the affected Implementers. Presentation on SRI: 11 November 2016
18 Forensic InvestigationsIn the main, the findings were as follows:- Possible misstatement of expenditure on material and equipment of projects; Non-compliance with the pertinent conditions of the MoA by the project implementers and by officials of the Department; and Inaccurate reporting or failure to report on the progress of the project by the project implementers and the provincial project managers (i.e. departmental officials managing projects in various provinces). Presentation on SRI: 11 November 2016
19 Forensic InvestigationsIt was recommended that:- Corrective action be taken against 4 departmental officials for the following; Failing to timeous report non-compliance and breach by implementers; Corrective action was taken in a form of disciplinary steps. Presentation on SRI: 11 November 2016
20 Risk and Mitigation The findings of the forensic investigations have been discussed at the Departmental Risk Committee. A Policy on the Management of Contracts has been developed. Accounting Officer has withdrawn delegations of powers on all SRI projects (pending the processes and efforts to strengthen the system – GTAC process). Presentation on SRI: 11 November 2016
21 Forensic Investigations INVESTIGATED PROJECTS: (re-evaluation underway)LP- Tshakuma Heritage and Conference Centre; EC- Wild Coast Tourism Development; KZN - King Matiwane; Gauteng and Eastern Cape training; FS- Guest House Building in Qwaqwa; FS- Information and Business Centre Project; EC-Lake Gariep Development Project; EC-Lake Gariep and PK Le Roux dam; EC- Rock Art Tourism; EC- Motherwell Eco Tourism Development Project; (MP) LP - Mnisi Resort project; LP- Vha Tsonga Cultural Village Project; and LP- Thutlane Site. Presentation on SRI: 11 November 2016
22 SRI Projects to be launchedProvince Project Name Budget Location Free State Witsieshoek Mountain Lodge R26 158 606 Moeding Gauteng Komjekejeke Heritage Site R21 Gauteng: Wallmansthal Mpumalanga Middleburg Tourism Information Centre R 4 Mpumalanga: Nkangala District Municipality / Steve Tshwete Local Municipality Middelburg Northern Cape NC- Caravan Park Kai Gariep (launched already) R Kai Garib Local Municipality Presentation on SRI: 11 November 2016
23 WITSIESHOEK CHALETS PC SRI Presentation 11 November 2016
24 KOMJEKEJEKE HERITAGE PROJECTPC SRI Presentation 11 November 2016
25 MIDDLEBURG INFORMATION CENTRE COMPLETEDPC SRI Presentation 11 November 2016
26 KAI GARIEP SWIMMING POOLPC SRI Presentation 11 November 2016
27 Projects currently under implementationProvince Project Name Budget Location Eastern Cape Aliwal Spa Project R 7 930 080 Maletswai Local Municipality Cradock 4 Garden of Remembrance (Phase 2) R13 056 403 Eastern Cape: DC13 Chris Hani District Municipality Inxuba Yethemba Local Municipality Cradock Mthonsi Lodge Project R28 215 000 EC127 Nkonkobe Local Municipality Qatywa Eco -Tourism Development R23 750 000 Amatole District Mbhashe Local Municipality Qatywa Presentation on SRI: 11 November 2016
28 Projects currently under implementation cont…Province Project Name Budget Location Eastern Cape Six Day Hiking Trail R 9 405 000 O.R. Tambo District Municipality Port St Johns Local Municipality Free State Building a Guesthouse in Qwa Qwa - Phase 2 R16 906 319 Maluti a Phofung Local Municipality KwaZulu - Natal Lilani Hot Springs Project R18 810 000 Umzinyathi District Municipality Umvoti Local Municipality Lilane Muzi Pan Phase 2 R12 447 480 Umkhanyakude District Municipality (Hluhluwe) Presentation on SRI: 11 November 2016
29 Projects currently under implementation cont…….Province Project Name Budget Location Limpopo Mukumbani Waterfalls (Phase 3) R23 Mopani District municipality Greater Giyani Local Municipality Ngove Ngove Cultural Centre and Theatre (Phase 2) R20 133 951 North West Manyane Lodge Project R47 515 112 Mahikeng Presentation on SRI: 11 November 2016
30 Projects currently under planning (also under evaluation)Province Project Name Location Eastern Cape Kiwane Camp site Buffalo City Municipality Mdantsane Lodge Qaukeni Great Place Cultural Village Qaukeni Local Municipality Free State Dinosaur Project Golden Gate National Park Empereni Hospitality Training Centre Setsoto Local Municipality Presentation on SRI: 11 November 2016
31 Projects currently under planning (also under evaluation)Province Project Name Location Free State Masilonyana Information centre Masilonyana Vredefort Dome Fezile Dabe Limpopo Oaks Information Centre Maruleng Municipality Phiphidi Waterfall Thulamela Local Municipality Sekhukhune Cultural Village Fetakgomo Local Municipality 24 Rivers Mogalakwena Local Municipality Presentation on SRI: 11 November 2016
32 Projects currently under planning (also under evaluation)Province Project Name Location Mpumalanga Bohlabela Cultural Village Bushbuckridge Local Municipality Mnisi Resort Northern Cape Platfontein Lodge Sol Plaatjie North West Lotlamoreng Dam Mahikeng Local Municipality Western Cape Cape Agulhas Agulhas Presentation on SRI: 11 November 2016
33 Current Non-Infrastructure InitiativeBuddies (2100 youth) Chefs (577 youth) Food safety (500 youth) Wine appreciation (270 youth) Blue Flag beaches (200 youth) Presentation on SRI: 11 November 2016
34 Thank You Presentation on SRI: 11 November 2016