Alignment, collaboration and cooperation among SOEs and between SOEs
and all spheres of Government
3
Date:
11 March 2012
Document Name:
Alignment, collaboration and cooperation among SOEs and between
SOEs and all spheres of Government
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Dr Simo Lushaba
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SMOE
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Position paper as part of meeting the requirements of the Terms of Reference
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Dr Simo Lushaba
PRC Committee Member
Mr. Deon Crafford
PRC Committee Member/ SMOE
Work-stream Chairperson
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document
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11/03/2012
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reviewed by workstream chair
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e of
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ge
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1.
TABLE OF CONTENTS
1.
Table of contents......................................................................................................................... 5
2.
Problem statement ...................................................................................................................... 9
3.
Assumptions ............................................................................................................................. 11
3.1.
Collaboration at National Ministerial level enhances service delivery by SOEs ....................................... 11
3.2.
Collaboration amongst SOEs enhances service delivery by SOEs ......................................................... 11
3.3. Alignment between the various spheres of government facilitates an environment in which
SOEs can function optimally ............................................................................................................................... 11
3.4.
SOEs function within the context of unambiguous and singular line of supervision ................................ 11
4. Imperatives of alignment, cooperation and collaboration in Government and Stateowned Entities.................................................................................................................................. 12
5.
Methodology ............................................................................................................................. 16
6.
Information on collaboration at different levels and in different sectors ...................................... 17
6.1.
Collaboration at National Ministerial level ................................................................................................. 17
6.1.1.
Ministerial clusters .............................................................................................................................. 19
6.2.
Collaboration amongst SOEs ................................................................................................................... 20
6.3.
Alignment between various spheres of Government ................................................................................ 21
6.3.1.
MINMECs ............................................................................................................................................... 21
6.4.
Collaboration between/amongst national SOEs and provincial SOEs ..................................................... 23
6.5.
Line of supervision of SOEs ..................................................................................................................... 25
6.6. Case study: Lessons on intergovernmental and SOE collaboration from the development of the
King Shaka International Airport ......................................................................................................................... 25
6.6.1.
Challenges of collaboration .................................................................................................................... 25
6.6.2.
Strategic alignment ................................................................................................................................. 26
6.6.3.
Impact of poor collaboration ................................................................................................................... 26
6.6.4.
Findings of the case study...................................................................................................................... 26
7.
Findings .................................................................................................................................... 28
7.1.
Non-effectiveness of IGR forums ............................................................................................................. 28
7.2.
IGR forums get stuck in hierarchy effect .................................................................................................. 28
7.3.
The effect of rigid government policies ..................................................................................................... 28
7.4.
Lack of policy directives of legislation to facilitate collaboration. .............................................................. 28
7.5.
Monitoring of alignment, collaboration and cooperation of SOEs. ........................................................... 29
8.
Recommendations .................................................................................................................... 30
8.1.
Amendment of IGR Act ............................................................................................................................. 30
8.2.
Inclusion of collaboration in mandates and performance criteria ............................................................. 30
8.3.
Institutional oversight of collaboration ...................................................................................................... 30
8.4.
IGR Forums for key projects ..................................................................................................................... 30
8.5.
A framework for effective collaboration .................................................................................................... 30
8.6.
Policies encouraging and mandating collaboration .................................................................................. 30
8.7. Clear policy framework for relationships of National SOEs towards provincial and local
governments ....................................................................................................................................................... 30
8.8.
Centralised management and monitoring of collaboration ....................................................................... 31
9.
Conclusion ................................................................................................................................ 32
10.
References.............................................................................................................................. 33
11.
Annexures ............................................................................................................................... 34
Abbreviations
ACSA:
Airports Company of South Africa
CEO:
Chief Executive Officer
CoGTA:
Co-operative Governance and Traditional Affairs
DFI:
Developmental Finance Institution
DG:
Director General
DIA:
Durban International Airport
DoC:
Department of Communications
DoT:
Department of Transport
DPE:
Department of Public Enterprises
DPLG:
Department of Local Government
DPME:
Department of Performance Monitoring and Evaluation
DTP:
Dube Trade Port
DWA:
Department of Water Affairs
FOSAD:
Forum of South African Directors-General
GEP:
Gauteng Enterprise Propeller
GPFIP:
Gauteng Province Freeway Improvement Project
GCIS:
Government Communications and Information Systems
IDC:
Infrastructure Development Cluster
IDP:
Integrated Development Plan
IGR:
Intergovernmental Relations
IGRF:
Intergovernmental Relations Forum
KSIA:
King Shaka International Airport
KZN:
KwaZulu-Natal
M&E:
Monitoring and Evaluation
MEC:
Member of the Executive Council
MinMEC:
Forum of Minister and Members of the Executive Councils
MuniMEC:
Forum of Municipalities and Members of the Executive
Councils
MTEF:
Medium-Term Expenditure Framework
NCoP:
National Council of Provinces
NDoT:
National Department of Transport
NT:
National Treasury
PCC:
President’s Co-ordinating Council
PFMA:
Public Finance Management Act
PRC:
Presidential Review Committee
SALGA:
South African Local Government Association
SANRAL:
South African National Roads Agency Limited
SCOPA:
Standing Committee on Public Accounts
SOE:
State owned Entity
SPV:
Special Purpose Vehicle
ToR:
Terms of Reference
2.
PROBLEM STATEMENT
One of the key reasons governments own enterprises and entities outside normal public
service departments, is to ensure the proper delivery of services to the people and the
economy of a country, to enable development and growth. Currently, South Africa has over
6001 SOEs. While one assumes they are focused on serving the above purposes, the
market and customer suggestion is that the majority of them are not effective in what they
are supposed to do or deliver (refer SMOE paper on TOR 1). A major contributor to this
situation is the fragmented and ‘silo’ existence of these entities. This impacts on the
harmonisation and collaboration around expected national outcomes. In the analysis of the
harmonisation of performance management in SOEs (SMOE paper in TOR 2), it was clearly
shown how the lack of integrated planning and management of SOEs, caused poor
alignment of actions across the value chain of service delivery, that is, collectively driving to
achieve common identified outcomes.
According to Tage Group (2012: 6) in the Case Study on King Shaka International Airport,
strategic alignment, collaboration and cooperation in Government and SOEs will help to
achieve the following:
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Improved deployment of state assets and resources across SOEs
Optimal utilisation of state assets and resources across SOEs
Elimination, or at least minimization, of duplication of state assets and resources
across SOEs
Improved sharing of information between Government (at all spheres) and SOEs
to facilitate effective planning and delivery of services by SOEs, and
Effective monitoring and evaluation of SOEs by Government
A 2007 Audit report by the Auditor General of 247 infrastructure projects amounting to R6,
635bn found that the communication and coordination between the departments,
management, local authorities and/or communities were insufficient to ensure
comprehensive delivery of infrastructure. Not all role players were properly engaged during
the planning of the projects. Service delivery was negatively affected as the projects were
put on hold or were delayed due to scope changes. Insufficient coordination and liaison
between officials at the department or the other implementing agents resulted in newly
constructed hospitals, clinics and schools or sections thereof not being optimally put into use
at the time of commissioning. The completion times of the contractors, the appointment of
staff and the availability of equipment and municipal services were not sufficiently
synchronised. This led to facilities that were commissioned, but not used, for as long as 12
months due to staff shortages and lack of equipment. This clearly points to lack of
collaboration, coordination and cooperation in implementation of infrastructure projects to
name but one key area. The impact this has on the critical delivery of services to the people,
is highly negative.
According to the Department of Provincial and Local Government (DPLG, 2008: 10)
weaknesses in the structures and practices of intergovernmental relations led to poor
coordination within and between different departments and spheres of government, creating
incapacity to implement national programmes and a consequent failure to deliver basic
services. It further stated that in concurrent functions there tend to be considerable
overlaying of roles and responsibilities between national and provincial responsibilities within
a particular sector such as health, transport or education, creating tensions between
spheres, which may create a fertile terrain for intergovernmental contestation, and disputes.
The complexity of concurrent functions tends to blur lines of accountability. Managing the
structural tensions inherent in concurrency and the aspirations to cooperative government
lies at the heart of the evolution of South Africa’s intergovernmental system.
1
Source: PRC SOE Database, 2012.
DPLG (2008:12) highlights the problems that derive from concurrent functions of government
in planning. The National Treasury (NT) and the relevant national department introduced
uniform statutory formats for their provincial counterparts’ strategic plans in 2004. These
were issued in terms of the Public Finance Management Act of 1999 (“PFMA”) and covered
sectors such as education, health, roads etc. Provincial governments also promulgated their
own planning legislation in respect of their municipalities. KwaZulu-Natal enacted the
Planning and Development Act 6 of 1998, and proposed a new Bill in 2007 which was aimed
at devolving power to make certain planning and development decisions to municipalities.
The Western Cape Planning Development Act 7 of 1999 and the Gauteng Planning and
Development Act of 2003 were also passed. These enactments, according to DPLG,
contributed to considerable variation in planning approaches across provincial governments.
SOEs are focused arms of government that are formed to bolster service delivery and help
government towards realising its national objectives. This impacts at national, provincial and
municipal levels. These levels of government are faced with the above issues of
concurrence and lack of integrated planning. SANRAL, for instance, implemented the
Gauteng Province Freeway Improvement Project (GPFIP) for the National Department of
Transport (NDoT). Commenting on the issue of e-tolling, for instance, that emanates from
this project, officials from Ekurhuleni Metro in their stakeholder engagement with members of
the PRC lamented the fact that they were not involved in this development yet road vehicles
that will be diverted from the improved freeways due to tolling will damage municipal roads.
The municipality will have to find budget to maintain these roads due to a heavier load that
the municipal roads may now have to carry.
It is important to ask why these kinds of situations, as mentioned above, occur. There are
suggestions that SOEs are not working collectively in driving towards national outcomes. In
fact, it has been ascertained that national outcomes are not that well integrated in their
strategic objectives as it is (SMOE paper in TOR 1) and that this fragmented approach
destroys value, not only in allocated resources but essentially in the quality of service
delivery.
It would be important then to determine to what extent SOEs are contributing to, or being
affected by, the above issues of lack of alignment, collaboration, coordination and
cooperation among themselves and with all the spheres of government? What is their role
and performance in achieving alignment, collaboration, coordination and cooperation in
projects where they are involved to help achieve national outcomes?
The problems that need to be addressed by this paper are summarized below:
(1) Is service delivery curtailed in effectiveness and quality by a fragmented and noncollaborative approach between SOEs and between the different ministries or levels
of government that oversee these SOEs?
(2) If this is indeed the case, what could and should be done to promote a much greater
culture of collaboration? What systems, processes and practices should be put in
place to facilitate this culture?
(3) What should be done to eradicate current “as-is” situations and conditions that sustain
the culture of fragmented service delivery?
3.
ASSUMPTIONS
In this report, the PRC sought to understand the levels of cooperation amongst


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State-owned entities
Executive Authorities (national departments) and
Levels of government
With respect to coordinating and improving operational efficiency and optimising service
delivery and improved operational efficiencies. The report further seeks to identify at which
levels of the SOE and Executive Authorities collaboration is most effective. The following
assumptions form the basis of the investigation:
3.1.
Collaboration at National Ministerial level enhances service delivery by SOEs
(a) Are national outcomes assigned to ministerial clusters and do they coordinate the
SOEs in these clusters towards meeting their assigned national outcomes?
(b) What is the level of cooperation within these clusters of SOEs?
(c) Are there any examples of projects whereby collaboration has taken place?
3.2.
Collaboration amongst SOEs enhances service delivery by SOEs
(a) Do SOEs identify which other SOEs form part of their service delivery mandate?
(b) Do SOEs leverage their common mandate under the national outcomes to
cooperate and collaborate?
(c) Is this cooperation and collaboration formalised or ad hoc?
(d) At which levels of the organisations is the propensity for collaboration to achieve
national outcomes highest and lowest, eg strategic, tactical and operational
levels?
3.3.
Alignment between the various spheres of government facilitates an
environment in which SOEs can function optimally
(a) Is there any structure whereby the Executive Authorities from the three spheres
of government meet to discuss common matters to enable service delivery?
(b) Are these structures effective in enabling alignment and building synergies across
all spheres of government?
(c) Is there a common understanding and clear collaboration amongst the three
spheres of government on common functions of delivery, such as Housing,
Education, DFI’s, and Infrastructure?
(d) Are there any examples of projects where there has been collaboration among
the three spheres of government?
3.4.
SOEs function within the context of unambiguous and singular line of
supervision
(a) Does the SOE have a clear line of supervision?
(b) Does the SOE experience ambiguity from directives from other Ministers?
(c) Is the SOE able to navigate through diverse ministerial expectations and maintain
delivery focus?
4.
IMPERATIVES OF ALIGNMENT, COOPERATION AND COLLABORATION IN
GOVERNMENT AND STATE-OWNED ENTITIES
The Republic of South Africa is governed through three spheres of government, that is,
national, provincial and local. Each of these, as per Chapter 3 [40] of the Constitution, is
“distinctive, interdependent and interrelated”. As it were, these levels of government thus
hold autonomy with regard to all those functions conferred on them. This implies that each
sphere of government has autonomy on the functions conferred to each of them and yet in
certain instances it is necessary for some level of interdependency and interrelation.
The Constitution confers certain powers to each of the three spheres of government to carry
out certain functions for the citizens of South Africa. These functions vary from provision of
housing, roads, education, electricity, and water to mention a few. Some of these functions
cut across the three spheres. This is what is referred to as ‘concurrent powers’ in the
Constitution of the Republic of South Africa.
Section 40 of the Constitution defines the principles of co-operative government and
intergovernmental relations amongst these spheres of government. Section 41 of the
Constitution provides for a legislative framework to be passed through an Act of Parliament
to establish structures that promote intergovernmental relations (IGR).
From the
Constitution’s description of government, it is apparent that cooperation and collaboration is
required between and/or amongst the three spheres of government for optimum and
seamless delivery of services. It furthermore holds that there should be no duplication of
effort amongst these spheres, particularly on those concurrent functions. To that end, the
government put in place various structures aimed at enabling, to a certain extent, some level
of collaboration and cooperation amongst the spheres of government. In addition, the Intergovernmental Relations Act was promulgated in 2005 in line with section 41 of the
Constitution. In delivering co-operative government, according to Layman (2003:10), the
Constitution sets four requirements in section 41(1)(c):
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Effective government – co-operative government must entail the effective and
efficient use of resources, not wastage and duplication, but the unlocking of synergy
of collective effort.
Transparent government – co-operative government should not be an entangled
web of committee and consultations, making it difficult to determine who is
responsible for what task.
Accountable government – the system and process of co-operative government
should not impede holding executives accountable for their decisions and actions.
Coherent government – government should be rational, informed by best
information with due regard to consultation between spheres of government.
Contradictory or overlapping policies should not arise by oversight, the absence of
consultation or poorly informed decisions
The effectiveness of the IGR system may be gauged by the extent in which it promotes good
governance and the translation of development policy intent into actual service delivery
outcomes through cooperative government in policy and planning, budgeting,
implementation and monitoring and evaluation (M&E) processes across and within the three
spheres of government (DPLG, 2008:10)
According to Inwent (2009:11-16) the general call for collaboration in the public sector is
confronted with a striking lack of professional knowledge and expertise on how to manage it
successfully. They state that according to IBM Center for Business of Government, of all the
potential trends facing public sector leadership, government is least prepared to build and
maintain collaborative networks and partnerships. Resources put into managing and
evaluating public sector collaboration are limited and insufficient funding and ad hoc
planning often characterize it. They further define collaboration as the process of facilitating
and operating in multi-organisational arrangements to address challenges that cannot be
solved or easily solved by single organisations. The prevailing theory is that working together
can improve services and ‘customer’ satisfaction even during spending cuts. Doing more
with less will however only be possible if everyone – from frontline civil servants to front
bench politicians - learns to collaborate to hitherto unprecedented degree. Officials and
professionals will only be able to innovate their way out of service quality cuts by harnessing
collective intelligence from across the delivery chain.
Inwent (2009: 16) outlines the following as characteristics of collaboration in public sector:
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It is joint action between at least two players as a means of achieving a commonly
defined goal by working across boundaries in public sector relationships.
Participants who actively take part and who do not are clearly defined.
All partners perceive a benefit from collaboration.
It is based on the value of reciprocity – every actor involves his or her strengths and
resources to create synergies.
It involves shared responsibility that consists of shared risks, resources, costs and
benefits, both tangible and intangible.
The independence of the institutions involved is preserved.
Successful collaboration leads to development of a new social system.
Public sector and public services, such as health, education and urban development are
confronted with the increasing specialization of knowledge-based work and international
integration and complexity. The public sector is called on to increase productivity and
adaptability to change and to improve accountability and transparency. The challenges
facing the public sector are increasingly complex and they overwhelm the problem solving
capacity of individual sectors. Public institutions no longer have the information, skills and
resources that they need to tackle these challenges independently. These challenges
require an effective and coordinated response across organizational landscapes. This has
become an imperative that has increasingly replaced other forms of governance of public
goods such as centralized planning and regulation.
Inwent (2009:17-18) further stated that depending on the scope and context of application, a
myriad of potential benefits could result from collaboration. These include:
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better informed decisions
better use of scarce resources
ability to create something that you cannot create (as well) by yourself
higher quality service product
potential for individual and collective learning
expand networks (to assist future work)
improved customer service and satisfaction
legitimacy gains: more widely accepted responses to public sector challenges,
sustainability and long-term impact.
Collaboration and cooperation relate to the efforts taken by individual organisations/forums
and the benefits associated with these efforts when the intention is working towards a
common goal. Working together enables entities to accomplish jointly something that one
entity could not achieve on its own. Following is a list of collaboration benefits:
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Better use of scarce resources conserves limited capital.
Cost and effort are not duplicated.
Fragmentation among services, programmes, and initiatives is reduced.
An entity can create something in collaboration that it could not create on its own.
Higher-quality, more integrated outcomes for end users.
Integration of diverse perspectives to create a better appreciation and understanding
of the situation.
Improved communication among entities, and between entities and their constituents.
Increased trust and understanding among individuals and organisations.
Potential for organisational and individual learning.
Better ability to achieve important outcomes.
(www.naccho.org/topics/environmental/pullingtogether/sectiontwo.cfm)
According to Kriel (2012:4-5) collaboration enables action across boundaries defined by
geography, authority, values and perceptions and develops an appreciation for multiple
sources of expertise. It builds social capital through relationship and trust building. She
argues that collaboration has even more benefits in public organisations, which naturally
have many stakeholders to accommodate in delivering services. She presents that SOEs
must be given permission to collaborate through the mandates of their shareholders. This,
she emphasises, must be made explicit in the shareholders’ compacts as part of the
corporate plan sign off process. She proposes that corporate plans of SOEs should include:


an analysis of the interdependent stakeholder environment of the SOE as part of the
environment analysis
a collaboration plan, as subsection of the implementation plan that needs to include
how collaboration will be implemented externally and internally through its
organisational architecture, culture, rewards and communication.
Each collaboration event is unique in its processes, successes and failures. Managing
collaboration therefore requires flexibility and creativity. It is an effective instrument of
change and innovation. Managing it demands more than linear project management skills
(Inwent, 2009:12).
Structures for intergovernmental relations provide a platform to achieve alignment,
collaboration, coordination and cooperation in government across all three spheres. These
IGR forums, according to Layman (2003:21), function optimally when there is clarity on their
status, role, governing principles and relationship between them and the executive
authorities that they comprise of. He argues that uncertainty and confusion about the ground
rules result in inconsistent practices, unreasonable expectations and unconstitutional
conduct. Furthermore, he states that these consequences are unfortunately not uncommon.
He also states that clarity on the ground rules of IGR forums is essential for the stability and
predictability of the system of intergovernmental relations.
There are further challenges for coordinating systems and processes that are produced and
implemented by the IGR forums in the spheres of government in order to make co-operative
government work. Layman (2003: 23-25) cites the following challenges of the above systems
and processes:
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clarity in operational concepts
integrating strategic planning between spheres
integrated service delivery
integrated and coordinated regulation of local government
integrated and coordinated supervision of local government
effective processes and procedure for settlement of intergovernmental disputes
Layman (2003: 25–27) further states that joint work and common projects are the products
of successful co-operative government initiatives. He however cautions that their effective
implementation poses formidable challenges, such as:
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clear financial accountability
effective and efficient decision making
promoting a joint work ethos within the public service
integrated planning linked to budgets
clear mandates for intergovernmental forums and
full participation in municipal IDPs
According to Inwent (2009: 18) the number of collaborations that fail to live up to their
promises is striking, despite good intentions. This they attribute to the fact that many of these
initiatives fail to dismantle organisational silos. They present that in many countries the
institutional framework of the public sector is based on monolithic silos that make effective
collaboration across boundaries particularly difficult. On the systemic side, the call for
integration of policies and resources to create synergy effects is confronted with a
fragmented institutional landscape in which a role player has its own:
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partial political and financial interests
specific administrative culture and way of dealing with conflict and hierarchy
closed system of logic directed at sector policies and skills
specific method of making decisions
They also argue that financial budgets are also very tightly linked with these sector policies.
Budget law is often too narrow and static to allow for the flexible bundling of resources,
which is frequently a precondition for collaborative efforts. According to them, collaboration
may be challenged by an agency’s performance management system that is closely aligned
with realising the agency’s own focused programmes. Public sector organisations and
administration operate through a hierarchy of roles, a clear chain of command, a system of
rules and specialisation, all of which are not very permeable. Collaboration involves
transaction costs, time and work resources and therefore requires sufficient incentives and
mutual benefits. The benefit of collaboration in public sector is less clearly defined in
monetary terms than in private sector. Performance rewards in public sector rarely provide
specific incentives for collaboration efforts. (Inwent, 2009: 18-19)
The motivation for collaboration across entity and government boundaries is made very
clear. What is however even clearer at this point is how ineffective this is amongst those
from whom it would be required. System, financial, political and legacy challenges abound in
making the lack of collaboration one of the major stumbling blocks towards effective SOEs
and effective service delivery.
5.
METHODOLOGY
This review sought to analyse the current situation (‘As-Is’), to establish if there are any
challenges, lessons or opportunities to improve the state of alignment, collaboration and
cooperation among SOEs and all spheres of Government.
We reviewed primary and secondary research information. The primary research information
covered was through review of Terms of Reference of the Social Protection and Community
Development Cluster, Human Development Cluster, Economic Sector and Employment
Cluster, and Infrastructure Development Cluster, minutes of the Infrastructure Development
Cluster and other clusters, a Case Study on the construction of King Shaka International
Airport (KSIA) and the decommissioning of the Durban International Airport (DIA) that was
commissioned by the PRC, annual reports of SOEs in DWA, DoT, DPE and DoC.
Primary research information was also obtained from engagements with SOE customers,
SOEs (Boards, Executives and Management) and Oversight functions of the Executive
Authorities of DoT, DPE and DWA.
Secondary research information included a concept paper on collaboration that was
commissioned by the PRC, report on Managing Collaboration that was published by Inwent,
a report on the State of Intergovernmental Relations in South Africa, and other literature.
The results of this study indicate existence of certain tendencies that were found from the
above research information in Government and in SOEs that seem to contribute to poor
collaboration and cooperation across Government and to all SOEs.
6.
INFORMATION ON COLLABORATION AT DIFFERENT LEVELS AND IN
DIFFERENT SECTORS
6.1.
Collaboration at National Ministerial level
National Ministers have signed performance agreements with the President of the Republic
of South Africa. These agreements take cognisance of the interdependencies that exist
between different ministries around national objectives that ministries are responsible to
deliver. In the performance agreements the responsible minister is the main signatory. The
responsible minister chairs the cabinet cluster that is responsible for delivery of the national
outcomes that have been assigned to the cabinet cluster. Other ministries that support
achievement of national objectives that are contained in the performance agreement are
listed. This creates a clear view of the interdependencies and shared/common interest
between the ministries to achieve a certain goal. According to Kriel (2012: 6) collaboration
requires significant interdependence in the design of work efforts and is all about achieving
value through synergy of diverse talents.
The working together of ministers to achieve this collaboration seems to be facilitated
through cabinet committees and clusters. Terms of reference (ToRs) of the following clusters
were reviewed:
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
Social Protection and Community Development Cluster
Human Development Cluster
Economic Cluster and
Infrastructure Development Cluster
The review of these terms of reference established that most clusters recognise the
importance of collaboration, coordination and alignment. The following were stated in ToRs
of the corresponding clusters:
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

Infrastructure Development Cluster: The cluster has four main objectives and
one of which is to promote active collaboration between Ministries, Departments,
State-owned entities, the three spheres of Government and to ensure the
implementation of Government’s Programme of Action (3).
Social Protection and Community Development Cluster: To ensure coordination and alignment of government-wide priorities in the Programme of
Action (3). The Human Settlement Programme will align the Local Government 5
year Strategic Agenda in terms of urban management.
Economic Sector and Employment Cluster: To strengthen coordination and
policy coherence across government, between departments and with state
institutions and SOEs by identifying and leveraging synergies (9). To strengthen
coordination and policy coherence the Cluster will identify linkages and
complementarities with other Clusters around areas like infrastructure, skills,
spatial policies and global economic strategies integrate state entities and SOEs
and their work and governance into the new vision (11).
Composition of clusters also indicated the extent to which different national ministries
played a role in their functioning. Examples below of composition of cabinet committees
and clusters illustrate representation of different ministries and spheres of government in
these:

Social Protection and Community Development:
o Co-Chairpersons of the Cabinet Committee: Minister: Social
Development and Minister: Human Settlement.
o Core members: Social Development, Human Settlement, Women and
People with disabilities, Arts and Culture, Agriculture Fisheries and


Forestry, Rural Development and Land Reform, Water and Environment,
Cooperative Governance and Traditional Affairs, Labour, Public Works,
Defence and Military Veterans.
o Participating departments in the cluster include, but are not limited to:
Health, Transport, Sports and Recreation, SALGA, Stats SA, Education
Correctional Services, National Treasury, GCIS and The Presidency.
o Also in attendance: DGs from national departments or their designated
alternates, Provincial Chairpersons of FOSAD Cluster, and the National
Secretariat.
FOSAD (Forum of South African Directors-General) Cluster for Social
Protection and Community Development: is co-Chaired by DGs of Social
Development and Human Settlements and attended by DGs from above
departments.
Infrastructure Development Cluster:
o Co-Chairpersons of the cluster are Ministry of Transport and Ministry of
Public Enterprise.
o Core members: Ministers of Communication, Cooperative Governance
and Traditional Affairs, Economic Development, Energy, Human
Settlements, Water and Environmental Affairs, National Treasury, Public
Works. Rural Development and Land Affairs, the Ministries of Planning
Commission and Performance Monitoring and Evaluation in the
Presidency.
o Director Generals from national and provincial departments as may be
required.
o Chairpersons/ CEOs of relevant parastatals.
o Representatives from Metros and strategic district municipalities and
o Invited stakeholders.
Review of minutes of the Infrastructure Development Cluster (IDC) showed that the cluster
focused on the job creation through infrastructure development. This is in support of the
objective to create 5 million jobs by 2020 as highlighted in the New Growth Path. The
cluster is required to report quarterly on progress made on Outcome 6, with the intention of
continuously improving on performance. Reports are reviewed by the Department of
Performance Monitoring and Evaluation (DPME).
The IDC works closely with other spheres of government, for example in the establishment
of a pilot Special Purpose Vehicle (SPV) with the main aim of accelerating and improving
Municipal infrastructure development. According to the IDC minutes the SPV will not replace
Cooperative Governance and Traditional Affairs (CoGTA), but will serve as implementation
agency for CoGTA.
A review of the minutes of 2011 of the IDC indicates the following:



Discussions were largely dominated by administrative discussion on a programme of
action (POA) reporting, which is process oriented. For instance, one of the
recordings stated that “Outcome progress implementation reporting focuses on
tangible achievements (impact based) instead of process issues”.
It may appear that the discussions at the cluster level were largely for progress
reporting on the roles played in the Outcome by each responsible Department. And
thus it can be deduced that the cluster largely focused on information sharing.
Attendance of these meetings by the Director-Generals is not consistent. It raises a
question whether the forum is deemed useful and effective by the respective
departments of Government. This is further illustrated by the request from the
Transport work-stream that departments send officials familiar with transport issues
within Outcome 6.


Reporting by the work-streams shows that there is indication of “working together” at
a certain level by the different national departments in the cluster eg working on the
National Ports Act by the Department of Transport and Public Enterprises.
The Outcome 6 delivery plan recognises the need to involve SOEs in the
implementation of the plan. The SOE involvement is on an “as required” basis i.e. ad
hoc. But the SOEs are the direct ‘doers’ of a large part of the outputs of Outcome 6.
The IDC also works closely with other clusters that have interest on its activities such as
Economic Sectors and Employment Cluster. Collaboration between the Economic Sectors
and Employment Cluster as per the minutes is driven by IDC’s drive to create jobs through
infrastructure development, an area which is also core to Economic Sectors and
Employment and also due to the fact that Economic and Employment Cluster reports on
data from IDC. There is no formal involvement of SOEs in the cluster work streams. The
arrangement is that each work stream will do its own assessment as to the need and level of
involvement by their SOEs. This further illustrates that involvement of SOEs in the IGR
forums is done on an ad hoc basis.
There is evidence therefore that indicates that in the terms of reference of clusters and the
cabinet committee, the importance of alignment, collaboration and coordination is
recognised. Structures of these formations also consider involvement of different ministries
that are interdependent which is important for collaboration. Provinces, Metros and district
municipalities are also catered for in some of these structures. SOEs are cited particularly at
the levels of chairpersons and chief executive officers. SALGA also attends the meetings of
the Social Protection and Community Development Cluster as a representative of
municipalities.
No evidence could however be found of attendance of cluster meetings by SOEs and the
Infrastructure Development Cluster leaves the involvement of SOEs to its work streams.
Also no evidence was found of the involvement of SOEs in work streams of the Cluster.
National outcomes are assigned to ministerial clusters eg Infrastructure Development
Cluster, who report quarterly on Outcome 6 but does not seem to coordinate SOEs in this
cluster towards meeting the assigned national outcome. No level of cooperation within these
clusters on SOEs was detected even though delivery plans for the outcomes indicate that
SOEs play a crucial role in the delivery of some of the national outcomes eg Outcome 6.
6.1.1. MINISTERIAL CLUSTERS
Cabinet clusters were introduced in 1999 by the then President Thabo Mbeki with the aim of
enhancing cross- sector coordination. According to a statement issued by the Presidency,
clusters were established to foster an integrated approach to governance that is aimed at
improving government planning, decision-making and service delivery. The main objective is
to ensure proper coordination of all government programmes at national and provincial
levels. The main functions of clusters are to ensure alignment of government wide priorities,
facilitate and monitor the implementation of priority programmes and provide a consultative
platform on crosscutting priorities and matters being taken to Cabinet.
There are seven Ministerial Clusters, which are:







Infrastructure development
Economic sectors and employment
Human development
Social protection and community development
International cooperation, trade and security
Governance and Administration and
Justice, crime prevention and security
The FOSAD clusters are organised in line with the cabinet clusters. The FOSAD clusters
are comprised of the respective Director Generals and they serve as technical support to the
Ministerial Clusters. Terms of reference of these clusters refer to their ability to co-opt
members from provincial and local governments. SALGA also participates as a member of
the Social Protection and Community Development Cluster.
6.2.
Collaboration amongst SOEs
Shareholder compacts, corporate plans, quarterly reports and annual reports of SOEs in
DoT, DPE, DWA and DoC were reviewed. No evidence was found in the above reports
indicating that SOEs identified other SOEs that formed part of their delivery mandates. They
also did not leverage any common mandates under national outcomes to cooperate and
collaborate. In fact, from the engagements that were held with SOEs, it was indicated that in
areas like investment and trade promotions it was very difficult to cooperate with other
entities, spheres and departments of government. Examples were cited were different
entities, spheres and departments had gone outside the country to promote the same
opportunities at different times in some cases at the same destination.
Elements of collaboration that seem to exist at cabinet committees and clusters do not seem
to have cascaded down to SOEs. It was also established during engagements with oversight
functions of the DoT, DPE and DWA that there were no standing integrative forums between
these oversight functions that monitored collaboration of SOEs. It seems from the review
that was conducted that at the moment collaboration takes place at government level
through IGR forums and not with and among state-owned entities. The Case Study on
Collaboration from the development of King Shaka International Airport (TAGE Group, 2012)
indicates that ACSA did not make inputs into the critical cabinet decisions that were made
regarding this project and yet they were expected to own and construct the airport.
The Case Study also shows that there is no alignment of strategies between ACSA, Dube
Trade Port and KZN Tourism presently to improve the utilisation of the King Shaka
International Airport. It appears that any alignment, collaboration and cooperation of SOEs
taking place at the moment is an ad hoc occurrence rather than a result of a deliberate
strategy driven and monitored by Government/ or its entities.
It can be inferred that if there are concurrent powers amongst national, provincial and local
government then there will be similar roles carried out by national SOEs as well as provincial
and municipal entities. Some level of cooperation and interdependencies are therefore likely
to exist or are required from the respective entities. Duplications and overlaps are however
still to be avoided and/or eliminated. For instance, where there are development fund
institutions (DFIs) at all spheres of government these tend to carry the same/or similar
mandates that overlap eg Ithala Bank in KZN providing loans to acquire farmland to farmers
and the Land Bank. In some instances, the national SOEs also operate in the same
geographic locations as the provincial and local government entities and sometimes with
different approaches and lending terms. During the engagements with SOEs, for instance it
emerged from the Eastern Cape Development Agency that it recapitalised its funding but
they are finding it difficult to issue loans and are sitting with reserves of R200m which they
cannot lend out. This they believe is largely due to National Government’s policy of social
grants that has people pushing for grants than to take up low cost housing loans. This shows
that misalignment in the approach of DFI’s may sub-optimise their use of assets and uptake
of facilities thus slowing down development that they are set to facilitate and
promote/support.
In Gauteng, officials of the Gauteng Enterprise Propeller a provincial DFI stated they tried to
pass to the National Empowerment Fund and the Industrial Development Corporation
applications that they had assessed and approved that required more funding than they
could provide. Their experience is that these nationally owned DFIs reassess these
applications from scratch and place no reliance on the work of Gauteng Enterprise Propeller.
This, in their view, duplicates their efforts and wastes resources of the state. It would seem
that concurrent functions of different spheres of Government do lead to overlapping and/or
duplicate mandates given to SOEs of different spheres. It is clear that lack of cooperation
and collaboration between SOEs leads to duplication of resources, disjointed processes and
wastage.
Some SOEs, like the Landbank, indicated during our stakeholder engagements that they
have taken it upon themselves to facilitate more collaboration with different political
stakeholders. They stated that they are taking an approach to be the central point of
coordination between different ministries that they are related to.
6.3.
Alignment between various spheres of Government
There are a number of inter-governmental structures that are aimed at promoting
cooperative governance amongst the three spheres of government. These include the
following:






PCC (President’s Co-ordinating Council)
NCOP (National Council of Provinces)
MINMECS (Ministerial Forum (of national ministers and provincial MECs)
Cabinet Clusters
FOSAD (Forum of South Africa Director Generals;
MUNIMECS
We reviewed functioning of MinMECs and Cabinet Clusters based on information that was
made available to the PRC.
6.3.1. MINMECs
The IGRF Act defines MINMECS as a “standing intergovernmental body consisting of at
least a Cabinet member and members of the provincial Executive Councils responsible for
functional areas similar to those of the Cabinet member”. MINMECS are informal
intergovernmental structures aimed at promoting cooperation between national ministers
and provincial MECs those that are operating in the same sector or are leading the same
function. Each MinMec is required to define terms of reference that guide its functioning.
These forums are consultative in nature.
6.3.1.1. Current Situation Analysis
The effectiveness of the MinMec structures in enabling cooperation varies. The difference in
the effectiveness is due to a number of reasons outlined below. These findings were based
on:


The review of the Transport MinMEC structure (minutes and terms of reference)
Engagement with Gauteng MEC on Economic Development
6.3.1.2. Transport MinMEC
To illustrate the findings above, an analysis of the Transport MinMEC structure were carried
out.

Composition of the transport MinMEC is representative of the three spheres of
government. The Deputy Minister of Transport, Director General of Transport, MECs
of the nine provinces as well as their respective Heads of Departments,
representations from the metropolitan municipalities as well as CEOs of the transport
entities that report to the national transport executive authority are attendees of the
Transport MinMEC meetings.



Scheduling of meetings is done in advance and meetings are held across the
provinces. This allows the members of the MinMEC to plan accordingly for the
meetings.
Records of meetings indicated that discussions focused on substantive matters such
as provincial budget allocation from the NDoT, provincial tolling roads, Gauteng
Freeway Improvement Project communication strategy, funding mechanisms for road
construction and maintenance beside road tolling, the need to focus on internal roads
in townships and rural areas to mention a few.
In addition, there seem that where resolutions requires multiple stakeholders, the
multiple stakeholders were held responsible for the resolution, eg DoT, SANRAL,
Eastern Cape Department of Transport and KZN Department of transport to discuss
the funding of N2 to Eastern Cape.
6.3.1.3. Findings on MinMEC structures
According to engagements with various stakeholders,
 It may seem that effectiveness of these structures is largely driven by personalities.
One of the interviewees stated that some of the MINMECs are not engaging and are
more a talking platform for the national Ministers and thus as a provincial MEC does
not gain value in attending these meetings.
 The administration of the forums was not efficient because we came across
participants that indicated that they were not provided with the annual meeting
calendar at the beginning of the year. As a result they are unable to plan for these
meetings in advance because they receive meeting notifications too close to the day
of meetings.
There is evidence that there are structures known as MuniMECs, MinMECs and clusters
where different spheres of government meet to discuss common matters. No information
could be found that indicated the extent to which these structures enabled alignment and
building of synergies across all spheres of government. The terms of reference of some of
these structures that were reviewed demonstrated that there was understanding and
appreciation of the need to collaborate among the three spheres of government.
The Case Study on collaboration from the development of King Shaka International Airport
however indicates that there may still be gaps in the effectiveness of these structures. The
project was supported and driven by the province of KwaZulu-Natal. It took place within
eThekwini Metro but it experienced delays and resistance from the officials of eThekwini
Metro. It is stated in the case study that delays of up to six months and fines of up to
R720million were incurred. It took the Premier of the KZN Province at the time to convene a
meeting with eThekwini municipality before the municipality made inputs to the
environmental impact assessment study. Even after a joint submission was made by the
KZN province and eThekwini Metro to the environment impact assessment, officials from the
Metro wanted to object.
On the other hand, the municipality was forced to re-prioritise its expenditure budget to find
money to fund investment in infrastructure for basic services in order for the project to
continue. It did not have the project in its integrated development plans (IDP) as well as the
budget for the time when it was expected to invest in such infrastructure to make it possible
to build an airport. These developments illustrate a significant level of misalignment that
existed at the early stages of this project despite the existence of the IGR structures.
In Western Cape the complaints centred about PRASA’s poor service and maintenance.
Despite attempts of the government to take over the function and assets – it seems the
impasse is continuing. The city also has major problems convincing the NPA/Transnet of
“selling” non-utilised land for economic development. SANRAL’s collaboration with the
Gauteng provincial government is another example – the provincial government having
made a late and protest-filled entry into the issue of highway tolling. It appears that the
MinMecs dealing with these issues was not effective in ensuring earlier alignment and
collaboration.
6.4.
Collaboration between/amongst national SOEs and provincial SOEs
It can be inferred that if there are concurrent powers amongst national, provincial and local
government then there will be similar roles carried out by national SOEs as well as provincial
and local entities. And thus some level of cooperation and interdependencies are likely to
exist or required from the respective entities. For instance, development fund institutions at
all spheres of government tend to carry the same mandate. In some instances, the national
SOEs also operate in the same geographic locations as the provincial and local government
entities.
The table below illustrates the point on how entities are likely to operate in the same
geographical space and offer the same service without leveraging on one another.
Attribute
description
National
IDC)
Nature of entity
National SOE
Areas of Focus
SOE
(eg Provincial-Owned
(eg GEP)
 Agro-processing
 Green and energy
saving industry
 Bio-fuels
 Logistics
 Industrial Infrastructure
 Craft and film
 Business
process
services
 Tourism
 Auto-motives,
components, medium
and heavy commercial
vehicles
 Clothing,
textiles,
footwear, leather2
Entity
Provincial public entity as
defined in section 1 of the
PFMA
 Textiles, clothing and
leather
 Electrical machinery and
apparatus
 Furniture
 Construction
 Petrochemicals
 Biochemical;
 Renewable energy
 ICT
 BPO
 Auto-motive
 Film
 Tourism
The Industrial Development Corporation’s 2011 Annual Report, states that it now has
regional offices in the main centres and satellite offices in the small towns. The aim of this
presence is to assist it with early project identification. The same annual report, mentions
that it will contribute to sector development by “risk management capacity-building initiatives
at other development finance institutions (DFIs)”. It can be concluded that expansion of its
geographical location is positive because it increases its accessibility to the citizenry and
thus improves on its service delivery. It can also be concluded that its contribution to other
DFI’s will demonstrate effective collaboration.
Please note that there is not a complete list of the Industrial Development Corporation’s Priority Sectors; but a few
of them to illustrate the common sectors with GEP.
2
The table above demonstrates the similarity in key sectors of focus of the Gauteng
Enterprise Propeller and some of focus areas of the Industrial Development Corporations.
The Industrial Development Corporation’s intention of providing risk management capacitybuilding initiatives at other DFI’s is a good initiative that will demonstrate effective leveraging
off a big well-resourced SOE to other small, in particular, provincial and local government
owned entities. However, it can be questioned that should the Industrial Development
Cooperation be putting in place regional centres and satellite offices where there are already
provincial or local government owned DFI’s. If there is effective collaboration, there can be
uniform project identification standards and procedures across the DFI’s at all the three
spheres of government, similar to the risk management capacity building that is currently
planned for. And thus national DFI’s can utilise the provincial and local DFI’s to carry out the
initial project identification as well as dissemination of information. As already mentioned by
Kriel (2012:6), collaboration is possible where there are shared goals and thus there can be
leveraging and mutual benefits. In this case, the benefits for the national DFI’s is cost
savings from implementing a costly physical accommodation infrastructure, whereas the
provincial or local government owned DFI’s’ infrastructure and personnel could be leveraged
off. In recognition of the possible risk of skill capacity, the national DFI will have to
capacitate the provincial/local government owned DFI and enter into service-level
agreements that are tightly managed.
6.5.
Line of supervision of SOEs
Line of supervision of SOEs is through their executive authorities to cabinet and parliament.
National Treasury has a responsibility for financial oversight of SOEs. In parliament, SCOPA
oversees financial management of SOEs and the Portfolio Committees oversee service
delivery. In all reports of SOEs that were reviewed elements of financial management and
service delivery were found. These were more consistent in annual reports than in quarterly
reports of SOEs as reported in the position paper on harmonisation of performance.
There, however were no reports on collaboration between state entities, both in quarterly
reports and in annual reports of SOEs that are overseen by DoT, DPE, DWA and DoC. Our
engagements with institutional oversight functions that oversee SOEs in DoT, DPE and
DWA also established that these functions did not meet or liaise regularly to direct, monitor
and encourage collaboration among their SOEs. It seems that joint working and
collaboration between SOEs are not areas of focus that they are required to report on.
Where they may be required to make inputs to the work of IGR forums like clusters it is left
to individual work streams of such clusters to engage SOEs, and it cannot be concluded that
the other clusters/MINMecs follow the same approach. There is no focus on collaboration in
the line of supervision of SOEs and institutional oversight functions of the executive
authorities. Mechanisms to monitor and oversee collaboration of SOEs have not been
developed.
6.6.
Case Study: Lessons on Intergovernmental and SOE collaboration from the
development of the King Shaka International Airport
A Case Study that was commissioned by the PRC on SOEs on the development of the King
Shaka International Airport (also attached to this report for ease of reference) provided key
lessons in the following areas:
6.6.1. Challenges of collaboration
The following challenges underpin issues that were experienced during the project in relation
to collaboration between spheres of government and between SOEs and different spheres of
government:







Provincial Government of KwaZulu-Natal initially developed the project as a publicprivate partnership (P), which is the model on which the feasibility study was based.
This happened despite the fact that this new airport was going to compete with the
old Durban International Airport (DIA) that was owned and managed by ACSA. The
closure of DIA needed approval of ACSA’s shareholders (which included a private
company viz. Aeroporti di Roma at the time).
According to the CEO of Dube Trade Port (DTP), Ethekwini Metro
o Did not establish a dedicated team for the project with a mandate for speedy
decision making
o Representatives at the meetings of the project had no mandates
o Officials consistently challenged the necessity of building the airport even after
Cabinet had decided that the airport had to be built by 2010
Coordinating Committee was powerless. It had no decision-making powers.
ACSA also questioned the commercial viability of the project based on its timing.
ACSA was not part of the team that motivated the project to Cabinet yet they ended
up building and operating the King Shaka International Airport.
Ethekwini Metro also did not have the MTEF budget provision for the R1,73 bn that
was required to provide bulk infrastructure for services that were required to build the
airport.
These challenges made it difficult to achieve desirable levels of collaboration and contributed
to poor alignment of organisations that were involved in this project.
6.6.2. Strategic alignment
A number of issues were also identified in the case study that led to misalignment between
the parties that were involved at a strategic level. These issues are:

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




Concurrent functions: certain airports are a concurrent function of national and
provincial governments in terms of the Constitution of South Africa. There is,
however no clarity on the roles of the two spheres of government as far as these are
concerned.
ACSA asked as to how far provinces can go to push for airports to be built? There
seems to be lack of clarity in this regard.
There is no clear relationship between the mandate of ACSA and the concurrent
function of provinces regarding airports. Who should champion development of
airports between ACSA and provincial government?
ACSA and Ethekwini Metro seem to have leaned towards the King Shaka
International Airport being built around 2017 to 2020 based on projected passenger
numbers and the capacity of Durban International Airport.
ACSA had a hub (OR Tambo International Airport) and spoke (other regional
airports in South Africa) model.
FIFA 2010 bid for South Africa presented a three (3) ports of entry model being OR
Tambo International Airport for visitors coming from Europe, Cape Town
International Airport for visitors coming from America and Durban International
Airport for visitors coming from Asia and other countries that are located in the east.
This seems to be in contrast to ACSA’s hub and spoke model.
Province of KZN only had R1, 370 bn leaving ACSA to fund R6,7 bn of the project.
Key stakeholders that were necessary to successfully collaborate on this project were
therefore misaligned at a strategic level.
6.6.3. Impact of poor collaboration
The following were results of poor collaboration that were identified by the case study:


Project delays of up to 6 months were experienced.
ACSA and DTP paid delay charges, acceleration costs, escalation costs etc totalling
R720m.
Officials from Ethekwini Metro did not wish to make submissions to the Environment
Impact Assessment (EIA). This led to an intervention by the Premier of the KZN
Province, which resulted in a joint submission by Metro, and the Province.
When a Record of decisions was issued, officials from Ethekwini Metro sought to
lodge an objection and this led to an intervention by the Minister of Transport, the
Mayor and the Deputy Mayor before the objection was withdrawn.


6.6.4. Findings of the Case Study
The following were key findings of the Case Study:


Commercial viability of ACSA was negatively affected by pursuit of a national (albeit
in appearance a more provincial) interest.
Funding models for collaborative projects and regulatory framework: ACSA carried
the lion’s share of the funding that was required and the regulator changed from
allowing ACSA to pre-fund projects and required that these should be funded from



tariffs, thus forcing ACSA to rely more on borrowed funds (financial costs of ACSA
increased by 124% in FY 2011).
Clarity of benefits to stakeholders: during the feasibility study, benefits to Ethekwini
Metro were not clarified leading to costly ‘resistance’ by its officials.
Political support for the project was good, stakeholder engagement and buy-in
especially from ACSA and Ethekwini Metro was poor.
The legislative framework also impacts on collaborative efforts: the Immovable
Assets Act 19 of 2007 requires that all proceeds from sale of immovable assets
should go to National Treasury which negatively affects the Balance Sheet of SOEs,
in this case that of ACSA in the possible sale of the Durban International Airport.
In all, collaboration between different spheres of government and between these and ACSA
was not a strong element of this project. This was a result of issues of:




misalignment identified at a strategic level
poor engagement of key stakeholders at crucial stages of the project
legislative and regulatory frameworks that do not foster collaboration
planning of project that was not linked to budget/s that were required to adequately
resource the project (eg the MTEF budget for provision of bulk infrastructure by
Ethekwini Metro)
7.
FINDINGS
The following findings were made from the review:
7.1.
Non-effectiveness of IGR forums
Although the IGR forums have been designed and established to facilitate alignment,
collaboration, coordination and cooperation across spheres of government, it appears not to
be effective. This is based on:
-
-
These objectives do not appear to cascade to institutional oversight functions of
executive authorities.
They also do not appear to cascade down to state-owned entities that are overseen by
these entities. Even though the terms of reference of clusters indicate that Chairpersons
and CEOs of state-owned entities will be invited, practise seems to be that they get
involved on an ad hoc basis in projects that may have significant implications to the
performance and well – being of the entity eg King Shaka International Airport.
They are largely consultative and operate with very little or no authority to enforce
execution or compliance.
Some could improve on elements of administration like scheduling of meetings to ensure
that attendees prepared sufficiently for these meetings.
In spite of the IGR forums like the Munimecs being in place between province and
municipalities, joint projects between these spheres of government may still experience
challenges of misalignment of planning, planning that is not linked to budgets, lack of
clarity for financial accountability and ineffective and inefficient decision-making as it
seem to have plagued the early phases of construction of King Shaka International
Airport.
7.2.
IGR forums get stuck in hierarchy effect
Membership of IGR forums focuses on the hierarchy of the structure, that is, ministers,
DGs, Chairpersons and CEOs. None or very little consideration of collaborative skills was
found in the constitution of these forums whereas literature presents that successful
collaboration is delivered through competencies that include requisite expertise and
know-how necessary to collaborate efficiently and effectively (Kriel, 2012: 9). National
Department of Transport (NDoT) for instance requires that other departments should
send individuals that have the knowledge of transport to attend the Infrastructure
Development Cluster (IDC). This begs a question as to why such competency
requirements were not catered for when membership of the cluster and/or work streams
was set up,
7.3.
The effect of rigid government policies
Rigidity of government policy may also contribute to lack of collaboration of SOEs. It was
reported in the Case Study on collaboration in the construction of King Shaka
International Airport for instance that Treasury Regulations require that proceeds of sale
of assets of state-owned entities should be handed over to treasury and it will be the
decision of National Treasury how these are utilised by Government. This, it was
contemplated in the Case Study, may serve as a disincentive to ACSA who are
negotiating the sale of the decommissioned Durban International Airport.
7.4.
Lack of policy directives of legislation to facilitate collaboration
There are areas like the promotion of investment opportunities and the promotion of
trade where collaboration across spheres of government and state-owned entities is a
critical success factor. There is, however, no policy directive or legislation in place to
encourage collaboration in these areas and there are numerous examples of duplication
and conflicts that arise when individual departments and/or SOEs act out their mandates
without any further consideration of a bigger collaborative picture – serving the best
interests of the country and its determined national outcomes. This could be due to the
narrow focus of the Constitution’s “distinctive, interdependent and interrelated” nature of
the three spheres of government.
7.5.
Monitoring of alignment, collaboration and cooperation of SOEs
Mandates that are given to SOEs do not require them to collaborate even though some
of them are overlapping and duplicated. Institutional oversight functions that oversee
SOEs operate in silos without any ability to oversee collaboration and cooperation.
8.
RECOMMENDATIONS
The following recommendations are made from the study that was conducted:
8.1.
Amendment of IGR Act
Amend the IGR Act to enforce compliance to Section 41 of the Constitution of the Republic
of South Africa to enforce collaboration by providing protocols and resources to affect
collaborative mechanisms and spell out consequences for failing to collaborate between
spheres of Government and among SOEs.
8.2.
Inclusion of collaboration in mandates and performance criteria
Mandates and performance criteria for state-owned entities should require these entities to
collaborate and cooperate to optimally utilise their resources and contribute to achievement
of relevant national outcomes, especially where these mandates are overlapping and/or
duplicated.
8.3.
Institutional oversight of collaboration
Institutional oversight functions of executive authorities should mandate and monitor
collaboration of state-owned entities that they oversee. Also a consolidated monitoring of
effective collaboration and its oversight among SOEs by DPME or any other empowered
ministry like DPE or agency is recommended (similar to National Treasury’s mandate to
oversee financial management of SOEs). Such consolidated monitoring of cooperation and
collaboration should be enabled through appropriate legislation and should form part of the
performance management framework of SOE in line with the approach that is recommended
for harmonisation of SOE performance (PRC paper).
8.4.
IGR Forums for key projects
Appropriate IGR forums should oversee collaboration on key projects that contribute to
achievement of national outcomes. They should ensure that institutions and entities that
deliver these projects jointly are aligned, cooperate and coordinate their activities to achieve
integrated planning that is linked to financial budget and other resources of such institutions
and agencies.
8.5.
A framework for effective collaboration
IGR forums that involve ministers, DGs, chairpersons and CEOs should provide leadership
for collaboration and cooperation that cascades to government departments and stateowned entities. A framework for effective collaboration of government and state-owned
entities should be developed. Practice notes that help to guide and promote collaborative
practices across all spheres of government and state-owned entities should support it.
8.6.
Policies encouraging and mandating collaboration
Policies of government must encourage state-owned entities to collaborate and cooperate
with each other and with all spheres of government to optimally utilise assets of the state.
This includes areas like sale of assets, promotion of investment and trade opportunities.
8.7.
Clear policy framework for relationships of National SOEs towards provincial
and local governments
The development of a clear policy framework on the responsibilities and roles of National
SOEs towards provincial and local governments in supporting their strategies for
development and improved service delivery should be mandated and implemented.
8.8.
Centralised management and monitoring of collaboration
The establishment of a central body/ministry like DPME or DPE with the powers to set
standards and legal/policy frameworks for collaboration and cooperation for institutional
oversight and SOEs should be considered. This centralised function will oversee compliance
to these standards in the same manner that National Treasury oversees financial
management of SOEs.
9.
CONCLUSION
Intergovernmental relationship forums in South Africa are mandated to support cooperative
government. Structures are in place that enables the IGR forums to work. These are pitched
at the highest level in government, involving ministers, DGs, chairpersons and CEOs. Their
terms of reference recognise the importance to align, collaborate, co-ordinate and cooperate
across all spheres of Government and the state-owned entities. These form a leadership
coalition to achieve cooperative governance in South Africa.
The IGR forums have not as yet effectively cascaded collaboration to other levels in
government and state-owned entities. Some joint projects that were implemented across
different spheres of government, like the construction of King Shaka International Airport,
struggled through phases that were marked by poor collaboration and cooperation. This
resulted in delays and payment of penalties as a result of poor responses from some players
as well as from lack of integrated planning that is linked to financial budgets.
Collaboration and cooperation therefore still needs to improve across spheres of government
and among SOEs to leverage state resources to the effective and efficient delivery of
services. This can be achieved through improvement of legislative and policy framework that
facilitates the cascading of collaboration and cooperation in terms of actual monitored
policies and practices. IGR forums should monitor effectiveness of collaboration beyond
themselves in the implementation of key government programmes and projects that
contribute to the achievement of national outcomes. Mandates, corporate plans and
performance frameworks for SOEs should direct and monitor effective collaboration among
SOEs. Institutional oversight functions of executive authorities can help IGR forums and
oversee collaboration and cooperation of appropriate entities that they supervise.
Collaboration and cooperation among state-owned entities and within all spheres of
government can help to improve the achievement of national outcomes. IGR forums can be
used more effectively to give impetus to this approach by directing and monitoring
collaboration in state-owned entities.
10.
REFERENCES
Customer Roundtable discussion. 2011. Notes reported by SMOE from round table
discussion that were held with customers of SOEs.
Department of Provincial and Local Government. 2008. 15 year Review Report on the State
of Intergovernmental Relations in South Africa. Commissioned by the Presidency.
Inwent – Capacity Building International. 2009. Managing Collaboration – Management
Model for Successful Collaboration in the Public Sector.
Kriel, V. 2012. An Overview of collaboration and suggested application in SOE environment.
A concept paper commissioned by the PRC on SOEs.
Layman, T. 2003. Intergovernmental Relations and Service Delivery in South Africa – a Ten
year Review commissioned by the Presidency.
National Treasury. 2010. MTEF budgeting for Infrastructure and Capital Expenditure
Guidelines.
National Treasury. 2007. Framework for Managing Programme Performance Information.
Scope of work. 2009. Economic Sectors and Employment Cluster.
SOE Roundtable discussions. 2011. Notes that were reported by SMOE of round table
discussions that were held with Boards, executives and managers of SOEs.
Tage Group. 2012. Lessons on Intergovernmental and SOE Collaboration from the
development of the King Shaka International Airport and the Durban International Airport. A
Case Study commissioned by the PRC on SOEs.
Terms of Reference. 2009. Human Development Cluster.
Terms of Reference and Program of Action. 2009. Infrastructure Development Cluster.
Terms of Reference. 2009. Social Protection and Community Development Cluster.
www.naccho.org/topics/environmental/pullingtogether/sectiontwo.cfm
11.
ANNEXURES
Concept Paper: An overview of collaboration and suggested application in SOE environment
– by Vera Kriel, 2012.
Case Study: Lessons on inter-governmental and SOE Collaboration from the development of
the King Shaka International Airport and the Durban International Airport – Tage Group,
2012.