Transnet on Progress on Issues Raised by Portfolio Committee
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
24 May 2006
TRANSNET ON PROGRESS ON ISSUES RAISED BY PORTFOLIO COMMITTEE
Chairperson:
Documents handed out:
Transnet (PowerPoint Presentation)
Committee Report (November 2005): Department, Transnet, Eskom, & Alexkor Annual Reports & Denel Interim Report
SUMMARY
Transnet briefed the Committee on the progress it had made in attending to the issues raised in the November 2005 Committee Report on the Annual Reports of the Department and State Owned Enterprises. The Chairperson commended Transnet on its well prepared feedback. Members raised questions touching on the effect or lack thereof of Broad Based Black Economic Empowerment (BBBEE) and how other companies were declared Black Economic Empowered (BEE) as a result of fronting which means that they did not meet the requirements to qualify as BEE companies. Transnet would implement the suggestions that the Committee had raised about the compilation of its Annual Report 2004/05 in preparing for future annual reports.
MINUTES
The Group Chief Executive of Transnet, Ms Maria Ramos, introduced her delegation as Mr Pradeep Maharaj, the Group Executive: Strategy and Transformation and Mr John Dludlu, Group Communications. Ms Ramos presented on the following issues raised by the Committee in November 2005: procurement, selection criteria and handling the disposal of non core assets, HIV/AIDS, Social Plan Agreement, corruption incidence and strategies and matters arising.
Some of the points she made was, on the matter of procurement, that divisions currently used their own standards for collecting data and reporting. Transnet awaited the finalisation of the codes of good practice on BBBEE before systematising the collection of information. With the selection criteria, the recommended qualification criterion for BEE companies was 25% +1 and companies needed to have access to funding. Handling BBBEE requiring acquiring parties to be at least Black Empowered (25%+1 equity owned or more). Acquiring parties also had to have a formal plan to address the other areas of the BBBEE scorecard. It was possible that Transnet allowed a sale of convertible securities as a disposal option.
Transnet Lifestyle Management Plan (TLMP) was a programme that targeted "lifestyle" diseases such as hypertension, diabetes and HIV/AIDS. The TLMP also targeted employees who did not have medical deductions through the payroll. The take-up rate was about one percent. Ms Ramos indicated that the Social Plan was an agreement between Transnet and trade unions in 2000. Employees would receive their fund benefits and payout process would be speeded up. Transnet offered all retrenched people compulsory financial counselling services to the value of R800 through a professional counsellor. Transnet adopted a Risk Enterprise Wide (ERM) approach as a fraud prevention plan, which encompassed about twelve key initiatives. These included a focus on the code of ethics, surprise audits, fraud tip-off line, staff vetting and training. Transnet would implement the suggestions that the Committee had raised about the compilation of its Annual Report 2004/05 in preparing for future annual reports (see presentation for a full report).
Discussion
Mr Louw T (ANC) was concerned that certain BEE companies were products of fronting. Were there any mechanisms in place to ensure that declared BEE companies were genuine?
Mr Maharaj indicated that there were new verification agencies to monitor BEE companies. There needed to be clear processes before any companies are verified. A copy of the draft regulations with its responses had been sent to the Minister of Department of Trade and Industry.
The Chairperson asked if there were any lessons to be learnt from the South African Transport and Allied Workers Union strike. Were South African companies ready for Broad Based Black Economic Empowerment?
Mr Maharaj responded that of course there were lessons to be learnt from the strike. Everyone came out stronger and more mature with a full understanding of what the issues at hand were and what exactly needed to happen in dealing with them. More importantly was that there was now a level of mutual respect and trust. He added that determining the status of BEE readiness of companies was an important issue that needed to be carefully monitored. As such, Transnet was ready to discuss this with all suppliers that were in a position to supply.
Ms N Khondlo (ANC) asked for clarity on transaction guidelines for the disposal of non-core assets.
Mr Maharaj replied that transaction guidelines had been approved by the Board and were audited by lawyers and auditors ensuring that proper processes took place.
Mr C Wang (ANC) asked what training mechanisms were there to educate and train employees to monitor fraud prevention.
Mr Maharaj responded that there were fairly intense programs around fraud prevention and all these were aimed at educating employees on the fraud prevention strategies.
Mr Gololo wanted to know what happened to home loans and other service benefits after employees were retrenched.
Mr Maharaj indicated that there were processes that they observed on when to offer alternative accommodation after retrenchment. There was a clause that allowed for a 90 day period whereby workers sought alternative loans with other service providers.
The Chairperson requested Mr Maharaj to comment on the capacity Transnet had in dealing with its core function.
Mr Maharaj responded that that it had undertaken a fairly detailed study to understand the required skills to sustain capacity. The study looked at specific training skills that were crucial and focus was on apprenticeship and learnership programs. The long-term goal was to ensure that there were no capacity constraints in the near future.
An ANC researcher asked whether or not the HIV/AIDS plan was related to the national government programme. She also asked what was Transnet’s position about upgrading road infrastructure
Mr Maharaj replied that Transnet’s programme on HIV/AIDS was not related to that run by Government. Regarding infrastructure, Mr Maharaj said that they prioritised road infrastructure according to demands of the economy. Areas were assessed and a response to that would be based on what was needed then.
The Chairperson asked Mr Maharaj to brief the Committee on Spoornet’s position.
Mr Maharaj said that he had not much to comment on the position of Spoornet. However he said that in the Annual Report to be tabled soon, they would make mention of what has been happening. He further proposed that there be a special meeting where focus would be on Spoormet. The issue around Spoornet was complicated. It was critical to know that despite all that, Spoornet was meeting its standards and revenue objectives.
Mr Maharaj noted that a detailed report would be tabled before the Committee in due course about the specific actions that Transnet had taken in response to the Committee's concerns.
The meeting was adjourned.
Audio
No related
Documents
No related documents
Present
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.