ANNUAL REPORT OF THE
PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES - 2008
The Portfolio Committee on Public Enterprises.
Chairperson: Ms F I Chohan - From August 2007 to date.
2. CHAIRPERSON’S
OVERVIEW:
·
Having assumed the chair of the
Portfolio Committee in August 2007, I was taken aback by my lack of insight
into the work and function of the Department of Public Enterprises,
particularly as I have been a public representative for ten (10) years.
·
Approximately a year (1) later I am
convinced that my initial lack of insight is a common phenomenon amongst
Members of Parliament (outside the Finance Cluster) and indeed the general
populace.
·
I attribute some of the reasons for
this state of affairs to inter-alia the
following matters:
o
The Department of Public Enterprises
is not a service delivery department but is the “shareholder department”
managing the State’s shareholding in strategically identified public entities.
o
It
is not a policy-making department either though it plays an indirect role in
shaping of policy in the strategic areas of minerals and energy, transport,
infrastructure, communications and forestry.
o
The
public enterprises department seeks to assist the specific utilities to realize
their operational gains while securing optimal strategic “spin offs”
within the economy.
·
These truths make for a unique
department with a unique role within the Executive. It is an interface
between Cabinet and the
various SOEs, and as such affords government the ability to be an active and
important player within the economy.
·
That the State composes more than
simply the executive, and given the unique role of Parliament within our
constitutional dispensation it must be said that while the Executive has since
at least 2003 completely re-orientated its capabilities regarding state-owned
enterprises in accordance with international best practices – Parliament has
not reviewed the mechanism it employs to fully meet its mandate in this regard.
Indeed there is much to discuss about Parliament’s mandate in regard to
State-Owned Enterprises themselves and the notion of the State as a
shareholder.
·
A lay assessment of the work of the
Committee will make apparent the fact that in regard to its oversight function
the Committee lacks an effective legal framework to enable it to have sight of
and engage with commercially/legally sensitive material.
·
The importance of an urgent review
in this matter is made clear when regard is had to the “energy crises” that
currently pertains. There is broad political consensus around the fact that the
reason for the energy crises is the failure by government to heed the advice of
Eskom to proceed with building of new power stations, by all accounts at least
in 2000. However, there is no record of Parliament through the Portfolio
Committee on Public Enterprises or indeed any other committee at any time raising
the issue prior, during, or indeed after 2000. This speaks volumes about the inadequacy
of a simple “one-size-fits-all” Portfolio Committee in the same mould as Portfolio
Committees designed around service delivery portfolios.
·
The Committee
engaged during the year on this and other related issues, and was made aware of
other models employed by other countries. Some even reserved on the Boards of
SOEs ex-officio spaces for MPs. While this may be an option to discuss and
debate in the future, it is the view of the Committee that a structure along
the lines of the Portfolio Committee on Intelligence is a minimum requirement
for Parliament to adequately meet its constitutional oversight mandate.
3 (A)
§
To
contribute to the effective monitoring of the performance of the State Owned
Enterprises (SOEs), including their financial and operational sustainability.
§
To
ensure alignment of the SOE business strategies with the sector department
policies and regulatory authorities whilst ensuring that SOEs are sustainable
businesses that provide economic benefit to the country
§
To
monitor the planning, delivery and financing of Eskom and Transnet’s
infrastructure programmes, turnaround programmes of Denel and SAA, the
establishment of Broadband Infraco, the growth strategy of Alexkor, and the
design and development programme for the Pebble Bed Modular Reactor (PBMR).
§
To
facilitate public participation in Parliament relating to the above issues.
§
To
effectively play a monitoring and oversight role of the Ministry and Department
of Public Enterprises
(B)
VISION
·
Maintaining an
effective and efficient Portfolio Committee that is able to legislate and
provide oversight of all SOEs, thereby enhancing the consolidation process of a
non-racial, non-sexist, prosperous, democratic
4. LIST
OF ENTITIES REPORTING TO THE COMMITTEE:
|
Entities |
Mandate |
|
|
|
|
(i) Alexkor |
Committed to the profitable
and sustainable development of mineral and natural resources for the economic
benefit of the |
|
|
|
|
(ii) Broadband Infraco |
Affordable
access to long-distance telecommunications network infrastructure and
broadband telecommunications connectivity services in |
|
|
|
|
(iii) Denel |
Developing and maintaining
a strategic military aerospace and landward defence environment |
|
|
|
|
(iv) Eskom Holdings Limited
(Eskom) |
Generation, transmission
and distribution of electricity to industrial, mining, commercial,
agricultural and residential customers and redistributors |
|
|
|
|
(v) Pebble Bed Modular
Reactor (Pty) Limited (PBMR) |
Development of safe Fourth
Generation nuclear energy system for electricity and heat processing
applications |
|
|
|
|
(vi) SAA |
The national airline
carrier delivering sustainable profits and growth through world-class service
to customers internally and externally |
|
|
|
|
(vii) South African Forestry Company
Limited (Safcol) |
Dedicated to growing its
business in the forestry and forest products industry |
|
|
|
|
(viii) Transnet Limited |
A logistics company with
rail engineering and port services capacity including pipeline services |
|
|
|
Meetings
held: 17
|
Date |
Agenda |
Minutes
adopted + date |
|
|
|
|
|
19 February |
Briefing by Department of Public
Enterprises on the current energy situation and Eskom’s Build Programme |
Available – not adopted* |
|
|
|
|
|
27 February |
Budget Briefing: Department of Public
Enterprises |
Report adopted - 11 June 2008 |
|
|
|
|
|
28 February |
Budget Briefing: Department of Public
Enterprises |
Report adopted – 11 June 2008 |
|
|
|
|
|
12 March |
Consideration of Committee Reports and
Minutes |
Available – not adopted* |
|
|
|
|
|
20 May |
Briefing by Eskom on Winter
Electricity Demand Management Schedule |
Available – not adopted* |
|
|
|
|
|
4 June |
(i) Briefing by SAA |
Available – not adopted* |
|
|
|
|
|
11 June |
(i) Consideration and Adoption of
Budget Report and PBMR Report (ii) Briefing by Department on “Rest
of |
Available – not adopted* |
|
|
|
|
|
17 June |
(i) Consideration and Adoption of PBMR
Report (ii) Briefing by Alexkor on Update on
Restructuring |
Available – not adopted* |
|
|
|
|
|
25 June |
(i) Adoption of PBMR Report (ii) Briefing by Department on Alexkor
Township Development Programme |
PBMR Report Adopted |
|
|
|
|
|
5 August |
Consideration of the following
Reports: - SAA Report - |
Available – not adopted* |
|
|
|
|
|
19 August |
(i) Adoption of the following Reports:
- SAA Report
- (ii) Consideration of Alexkor Study
Visit Report |
Reports Adopted |
|
|
|
|
|
26 August |
Annual Report Briefing: Transnet |
Available – not adopted* |
|
|
|
|
|
21 October |
Annual Report Briefing – Department of
Public Enterprises |
Available – not adopted* |
|
|
|
|
|
22 October |
Consideration and possible Adoption
of: -
Alexkor Study Visit Report -
SAFCOL Study Visit Report |
Available – not adopted* |
|
|
|
|
|
23 October |
Adoption of: -
Alexkor Study Visit Report -
SAFCOL Study Visit Report |
Reports adopted* |
|
7 November |
Special meeting (Follow-up to Study
Visit to Alexkor): Briefing on outstanding progress
report from DPE and Alexkor arising from special meeting of 30 July 2008)
(represented by DPE, Alexkor and Richtersveld Community (RVC) |
Available – not adopted* |
|
|
|
|
|
18 November |
Consideration and possible Adoption
of: -
Report on Annual Report – DPE -
Report on Annual Report –
Transnet -
Transnet Study Visit Report -
Committee Annual Report |
Available – not adopted* |
|
|
|
|
|
19 November |
Adoption of: -
Report on Annual Report – DPE -
Report on Annual Report –
Transnet -
Transnet Study Visit Report -
Committee Annual Report |
Reports adopted |
*The Chairperson requested that the Secretary keep a
record of minutes of meetings – but that minutes are not formally adopted in
meetings.
Meetings
Cancelled: - 12
|
Meeting
Date |
Agenda |
Reasons
for Cancellation |
|
|
|
|
|
23 January |
|
Chairperson was attending
a workshop of Committee Chairpersons |
|
|
|
|
|
29 February |
Deliberations on Budget |
The Committee concluded
its discussion on the Budget on 28 February 2008 |
|
|
|
|
|
26 March |
Oversight Visit to
Transnet |
The Committee’s oversight
visit to Transnet was received very late and due to time constraints could
not undertake the visit - the CEO was
also not available at the time |
|
|
|
|
|
2 September 2008 |
Annual Report Briefing:
ESKOM |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
9 Sept ember 2008 |
Annual Report Briefing:
DPE |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
16 September 2008 |
- Annual Report Briefing:
PBMR - Briefing on ASGISA
Report 2007 |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
7 October 2008 |
Annual Report Briefing:
Infraco + ALEXKOR |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
10 October 2008 |
Annual Report Briefing:
DENEL |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
14 October 2008 |
Annual Report Briefing:
SAA |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
15 October 2008 |
Consideration and Adoption
of Reports |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
16 October 2008 |
Consideration and Adoption
of Reports |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
|
17 October 2008 |
Annual Report Briefing:
SAFCOL |
Changes to Parliamentary
Programme – Reprioritisation for Committees with Legislation. Permission to
convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
|
|
|
|
Explanatory note: Although the Committee’s programme had been initially
approved by the Chief Whip and the House Chairperson, permission for the
Committee to continue its work was retracted telephonically by the former Chief
Whip on the 31 August 2008. The reason given by the former Chief Whip was that
there was a political decision to allow only Committees with legislation to
continue convening. On this premise, the Chairperson of the Committee cancelled
all further meetings on the agreed programme.
(7.1) REPORTS:
|
REPORT |
REFERRAL DATE |
CONSIDERATION DATE |
REPORT PUBLICATION |
DEBATE IN HOUSE |
|
N/A |
Adopted in Committee on 25
June 2008 |
ATC No 102 – 2008 (Friday,
22 August 2008) |
||
|
|
|
|
|
|
|
3 September |
Adopted by Committee on 11
June 2008 |
ATC No 84 – 2008 (Thursday,
26 June 2008) |
20 November 2008 |
|
|
|
|
|
|
|
|
N/A |
Adopted by Committee on 19
August 2008 |
ATC No 147 – 2008 (Friday,
14 November 2008) |
20 November 2008 |
|
|
|
|
|
|
|
|
N/A |
Adopted by Committee on 19
August 2008 |
ATC No 147 – 2008 (Friday,
14 November 2008) |
20 November 2008 |
|
|
|
|
|
|
|
|
N/A |
Adopted by Committee on 23
October 2008 |
ATC No 146 – 2008
(Wednesday, 12 November 2008) |
20 November 2008 |
|
|
|
|
|
|
|
|
N/A |
Adopted by Committee on 23
October 2008 |
ATC No 147 – 2008 (Friday,
14 November 2008) |
20 November 2008 |
|
|
|
|
|
|
|
|
N/A |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
|
|
|
|
|
|
|
|
ATC No. 109 – 2008, dated 3 September 2008 |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
|
|
|
|
|
|
|
|
ATC No. 90 – 2008, dated 31 July 2008 |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
|
|
|
|
|
|
(7.1) REFERRALS:
(7.1.1)
TABLINGS:
|
|
|
Strategic Plan of the Department of Public Enterprises for
2008 to 2011 – See ATC No 15 – 2008, dated 18 February 2008 |
|
|
|
Amendment to Eskom’s pricing structure, tabled in terms of
section 42(4) of the Local Government: Municipal Finance Management Act, 2003
(Act No 56 of 2003), and supporting documents required in terms of section 42
(3) of the same Act – See ATC No 43 – 2008, dated 15 April 2008 |
|
|
|
Report and Financial Statements of the Accelerated and
Shared Growth Initiative for |
|
|
|
Eskom’s 2008-09 tariff increase and amended pricing
structure subsequent to Nersa’s revision of the 2008-09 Eskom price increase
from 14,2% on 18 June 2008, tabled in terms of section 42(2) of the Local
Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and
supporting documents required in terms of section 42(3) of the same Act – See
ATC No 84 – 2008, dated 26 June 2008 |
|
|
|
Report and Financial Statements of Transnet Ltd and the
Group for 2007 – 2008, including the Report of the Independent Auditors on
the Financial Statements for 2007 – 2008 – See ATC No 90 – 2008, dated 31
July 2008 |
|
|
|
Report and Financial Statements of Pebble Bed Modular
Reactor (Pty) Limited for 2007 – 2008, including the Report of the
Independent Auditors on the Financial Statements for 2007 – 2008 – See ATC No
101 – 2008, dated 21 August 2008 |
|
|
|
Report and Financial Statements of Eskom Holdings Limited
for 2007 – 2008, including the Report of the Independent Auditors on the
Financial Statements for 2007 – 2008 – See ATC No 102 – 2008, dated 22 August
2008 |
|
|
|
Report and Financial Statements of Alexkor for 2007 –
2008, including the Report of the Independent Auditors for 2007 – 2008 – See
ATC No 104 – 2008, dated 27 August 2008 |
|
|
|
Report and Financial Statements of the South African
Forestry Company Limited (Safcol) for 2007 – 2008, including the Report of
the Independent Auditors on the Financial Statements for 2007 – 2008 – See
ATC No 105 – 2008, dated 28 August 2008 |
|
|
|
Report and Financial Statements of Vote 30 – Department of
Public Enterprises for 2007 – 2008, including the Report of the
Auditor-General on the Financial Statements and Performance Information of
Vote 30 for 2007 – 2008 [RP 156 – 2008] – See ATC No 109 – 2008, dated 3
September 2008 |
|
|
|
Report and Financial Statements of Denel (Proprietary)
Limited for 2007 – 2008, including the Report of the Independent Auditors for
2007 – 2008 - See ATC No 127 – 2008, dated 30 September 2008 |
|
|
(7.1.2)
FOR CONSIDERATION:
|
|
|
Letter from the Minister for Public Enterprises, dated 13
March 2008, to the Speaker of the National Assembly, informing Parliament
that Eskom’s pricing structure for 2008-09 would not be tabled on 15 March
2008 as required by section 42 of the Local Government: Municipal Finance
Management Act, 2003 (Act No 56 of 2003), but on 15 April 2008 – See ATC No
75 – 2008, dated 12 June 2008 |
|
|
|
Amendment to Eskom’s pricing structure, tabled in terms of
section 42(4) of the Local Government: Municipal Finance Management Act, 2003
(Act No 56 of 2003), and supporting documents required in terms of section 42
(3) of the same Act – See ATC No 75 – 2008, dated 12 June 2008 |
|
|
|
Eskom’s 2008-09 tariff increase and amended pricing
structure subsequent to Nersa’s revision of the 2008-09 Eskom price increase
from 14,2% on 18 June 2008, tabled in terms of section 42(2) of the Local
Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and
supporting documents required in terms of section 42(3) of the same Act – See
ATC No 123 – 2008, dated 23 September 2008 |
|
|
(7.1.3)
FOR CONSIDERATION AND REPORT:
|
|
|
Report and Financial Statements of Transnet Ltd and the
Group for 2007 – 2008, including the Report of the Independent Auditors on
the Financial Statements for 2007 – 2008 - See ATC No 123 – 2008, dated 23
September 2008 |
|
|
|
(i)
Report and Financial Statements of Pebble Bed Modular Reactor (Pty)
Limited for 2007 – 2008, including the Report of the Independent Auditors on
the Financial Statements for 2007 – 2008 (ii)
Report and Financial Statements of Eskom Holdings Limited for 2007 –
2008, including the Report of the Independent Auditors on the Financial
Statements for 2007 – 2008 See ATC No 123 – 2008, dated 23 September 2008 |
|
|
|
Report and Financial Statements of Alexkor for 2007 –
2008, including the Report of the Independent Auditors for 2007 – 2008 - See
ATC No 123 – 2008, dated 23 September 2008 |
|
|
|
Report and Financial Statements of Vote 30 – Department of
Public Enterprises for 2007 – 08, including the Report of the Auditor-General
on the Financial Statements and Performance Information of Vote 30 for 2007 –
08 [RP 156 – 2008] – See ATC No 134 – 2008, dated 17 October 2008 |
|
|
|
Report and Financial Statements of the South African
Forestry Company Limited (Safcol) for 2007 – 08, including the Report of the
Independent Auditors on the Financial Statements for 2007 – 08 – See ATC No
134 – 2008, dated 17 October 2008 |
|
|
|
Report and Financial Statements of South African Airways
(Proprietary) Limited (SAA) for 2007 – 08, including the Report of the
Independent Auditors on the Financial Statements for 2007 – 08 – See ATC No
134 – 2008, dated 17 October 2008 |
|
|
|
Report and Financial Statements of the Broadband Infraco
(Pty) Limited for 2007 – 08, including the Report of the Independent Auditors
on the Financial Statements for 2007 – 08 – See ATC No 134 – 2008, dated 17
October 2008 |
|
|
(7.1.4) ANNOUNCEMENTS:
|
|
|
Membership of Committees – Appointed: Meruti, Ms MV – See
ATC No 91 – 2008, dated 5 August 2008 |
|
|
|
Objective |
Date |
Delegation |
Place |
Report adopted |
|
|
|
|
|
|
|
19 – 20 March |
Ms F Chohan (ANC)
(Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr
Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla (ANC), Dr M van Dyk (DA) |
Pelindaba, Pretoria |
25 June 2008 |
|
|
|
|
|
|
|
|
26 – 27 May |
Ms F Chohan (ANC)
(Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr
Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla |
Durban and Johannesburg |
19 November 2008 |
|
|
|
|
|
|
|
|
29 – 30 July |
Ms F Chohan (ANC)
(Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr
Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla
|
Alexander Bay |
Adopted on 23 October 2008 |
|
|
|
|
|
|
|
|
11 – 12 August |
Ms F Chohan (ANC)
(Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr
Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla, Ms P Lebenya (IFP) |
Nelspruit |
Adopted on 23 October 2008 |
Referral date
|
Briefing by Department |
Hearings |
Report Publication (ATC date) |
|
|
|
|
|
|
3 September 2008 |
27 – 28 February |
Budget Briefings: Department of Public Enterprises |
ATC No. 84 – 2008
(Thursday, 26 June 2008) |
|
|
|
|
|
Referral date
|
Briefing |
Hearings |
Report Publication (ATC date) |
|
|
|
|
|
|
23 September |
Annual Report Briefing: Transnet |
26 August |
23 January 2009 |
|
|
|
|
|
|
23 September |
Annual Report: PBMR (meeting cancelled) |
none |
None |
|
|
|
|
|
|
23 September |
Annual Report: ESKOM (meeting cancelled) |
none |
None |
|
|
|
|
|
|
23 September |
Annual Report: Alexkor (meeting cancelled) |
none |
None |
|
|
|
|
|
|
30 September |
Annual Report: Denel (meeting cancelled) |
none |
None |
|
|
|
|
|
|
17 October |
Annual Report Briefing: DPE |
21 October |
23 January 2009 |
|
|
|
|
|
|
17 October |
Annual Report: SAFCOL (meeting cancelled) |
none |
None |
|
|
|
|
|
|
17 October |
Annual Report: SAA (meeting cancelled) |
none |
None |
|
|
|
|
|
|
17 October |
Annual Report: Broadband Infraco (meeting cancelled) |
none |
None |
|
|
|
|
|
The following
matters are to be taken up in 2009:
·
Matters
raised in the Chairperson’s overview
·
Follow-up engagement with SAA on:
o
Turnaround
strategy
o
VSPs,
skills retention and “Retention Premium”
o
Operational
plan
o
Balance
Sheet stability
o
“The
Value/Strategic Importance” of SAA to South Africa
o
Outstanding
Annual Report Briefings:
·
DENEL
·
SAFCOL
·
ALEXKOR
·
Broadband
Infraco
·
PBMR
·
ESKOM
·
SAA
o
Follow-up
meeting with Transnet on tender processes
o
Follow-up
meeting with DENEL on funding
o
Follow-up
meeting with ESKOM on tariffs
o
Follow-up
meeting with PBMR on funding and strategic positioning
o
Follow-up
meeting with SAA on capitalisation
o
Monitoring the resolution of land
claims of forested land.
o
Monitoring the enhancement of safety
and efficiency in Transnet Freight Rail
o
Outstanding Oversight Visits to
DENEL, ESKOM and SAA
13.
SUPPORT STAFF:
Committee Secretary: Mr Llewellyn A Brown
Control
Committee Secretary: Mr Johnny Ramrock
Secretary
to Chairperson: Ms Loretta Lawrence
Researcher: Mr Eric Boskati