Tag Archive | Department of Public Enterprises

Minister Brown wants utility shareholder management 

Shareholder Management Bill could kill cosy jobs…. 

sent  to clients 20 Dec…..Public Enterprises Minister, Lynne Brown, reports that she is to introduce, as aLynne Browndraft, the Shareholder Management Bill as part of a plan to introduce more leadership ability and some form of continuity for the state owned enterprises (SOCs) under her control. This includes Eskom, Transnet, Denel, SA Express, Alexkor and Safcol.

Maybe start of something big.

Whilst troubled SAA is now an independent, falling under National Treasury for the moment. Providing President Zuma makes no more changes, Minister Pravin Gordhan is set to sort out National Treasury itself and challenge the management style of his old stomping ground, SARS.. How much come out of the Cabinet Lekgotla is critical.

The problem children

PetroSA logoMeanwhile, PetroSA is in real deep water, the entity falling under Central Energy Fund (CEF) and which reports itself to Department and Energy (DOE). But at least the PetroSA problem is now in the open with somebody obviously having to take over the reins and sort the mess out, probably CEF itself.

Oddly enough there are people in CEF who know exactly what the problem is but once again politicians pushed experts in the wrong direction, it appears.

In addition, the Passenger Rail Association (PRASA) is very much on the slippery slope and, together with SANRAL, both present highly contentious transport issues, are now in the hands of to untangle

Public Enterprises comes to the party.

Minister of Public Enterprises, Lynne Brown appears to be getting the senior management of her portfolio undereskom control and whilst there could possibly be power supply problems at Eskom she says, because “machines can break down unexpectedly”, the leadership is there, as is the case with Denel.

Minister Brown recently reported at an AmCham meeting in Cape Town that there are around seven hundred SOCs, an extraordinary fact, but bearing in mind the fact that South Africa is reputed to have the largest head count in public service per population count, this would appear quite probable.

On the road again

With Deputy President Cyril Ramaphosa chairing an Integrated Marketing Committee, which will hopefully designate which entities should remain SOCs and those which should be absorbed back into their relevant departments, there appears some hope with regard to containing the ballooning public service machine which has characterised President Zuma’s presidency.

Hands off appointments

An essential element of Minister Lynne Brown’s plan is to remove the appointment to the boards of the entities under her domain away from Ministers, including herself, to a shareholder management team that creates a leadership operational plan for all SOCs and appoints, through due process, a tightly run appointment system.
A brave proposition indeed but it does indicate that Minister Brown is her own person.

Whilst the proposals might look like state control, in fact it is a clear signal that government may have heard the message that the current system of Ministers appointing board members is not working and is one of the reasons leading to what the auditor general calls “useless and wasteful expenditure”.

On the drawing board

The Shareholder Management Bill, Minister Brown said subsequently in Johannesburg, will first need a concept paper (perhaps she means a White Paper) and such could be released after the Cabinet Lekgotla in February, with an intention of introducing such as system by the end of 2016.

Minister Brown said that she herself as a Minister would therefore be excluded from making appointments in her own SOCs for a start. Perhaps this system can be applied to all forty-seven government departments and agencies, suggested a questioner bu the Minister would not be drawn into matters outside of her brief.

Leadership needed

During the same address, she added that Eskom was “not out of the woods” yet and there was still not sufficientlyne brown 2 electricity to facilitate economic growth but this would change. Minister Brown said none of the entities under her control “would be approaching the National Treasury with begging bowls.”

One small step

No doubt, as far as confirmation of an appointment is concerned, the Minister involved will still have to “approve” any selection decision by the independent team of specialists but it is worth watching the outcome of the debate on the shortly-to-be tabled Broadcasting Bill, if only to see if the appointment of inept senior appointments can be halted or reversed.

What has come out of the Eskom, PRASA and PetroSA issues is that a person who has no right to be in a position of leadership, or worse one who has supplied fraudulent qualifications, leads to frustration and anger by those with genuine skills and high academic qualifications lower down the ladder and at the coalface.

This is in the space of government service where technical skills are located and badly needed and it is hoped that Minister Lynne Brown has more of these “eureka” moments.

Previous articles on category subject
PetroSA on the rocks for R14.5bn – ParlyReportSA
Central Energy Fund slowly gets its house in order – ParlyReport
Shedding light on Eskom – ParlyReportSA

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MPs attack DPE on energy communications

DPE has a tough time on energy issues…

business-communicationsPoor communications with the public on the energy crisis and the limited ability of the ministries involved to communicate with state owned companies (SOCs) were issues raised during a report on SOCs falling under control of the department of public enterprises (DPE) during a meeting of the relevant portfolio committee.

The meeting was called to respond to the AG’s report on the performance targets of the DPE.

One opposition member complained that all bonuses paid to Eskom executives should be keyed to whether the lights stayed on or not. Despite there being six state utilities being reported on, it was questions on Eskom that occupied most of question time.

AG report about targets only

AGSA logoWaleed Omar, audit manager, auditor general’s office (AGSA), indicated to Parliament that no significant findings representing failings on issue targets were identified in their review of the DPE annual performance plan for the 2015/16 financial year.

It was explained by Sybrand Struwig, manager of AGSA, that any annual audit of actual performance period was prepared against pre-determined objectives, coupled with indicators and targets as contained in the annual performance report of a department.  Such confirmed compliance with laws and regulations.

The usefulness of this performance information against targets and the reliability of performance reporting enabled AGSA to compile an audit of a department or SOC to reflect an opinion or conclusion on performance against predetermined objectives and how risk had been managed.

DPE met standards set

Ms Matsietsi Mokholo, DPE acting DG, expanded on this by saying what in fact AGSA was saying to parliamentarians was that the exercise had been to assess DPE’s compliance according to AGSA’s matrix; how it aligned with the National Development Plan (NDP); and how issues were dealt with in terms of the medium strategic frameworks report (MTFs) made regularly to Parliament over the given period 2014 -2019.

She said the auditor general had confirmed that DPE was on track with regards to this alignment.  Indeed, she said, DPE had identified its key challenges and the risks which “could materialize” if measures within state owned entities under their control were not taken.

Eskom the only real SOE problem

In answer to MPs questions on Eskom, Ms Mokholo said that DPE has identified that the tense situation of load shedding needed to be carefully managed and monitored in order to avoid a blackout.   Currently the country has moved towards stage three of load shedding in order to avoid a blackout.

The issue was the only matter in the DPE portfolio of state owned companies (SOCs) that had major problems; otherwise DPE had a good record. However, she said, there were questions still being asked about how Eskom would prevent stage four which would apply in the case of a total blackout. This issue was now being addressed in its strategy plan and, consequently, the AG was satisfied that issues had been addressed not ignored. That was what the report was all about.

Medupi on or off

Other issues addressed were the unrest at the partly constructed Medupi power plant, which was difficult because the workers involved were not public servants, but the matter had been addressed and a resolution hoped for.   Another issue covered was a strategy to how further avert any downgrading of Eskom from a shareholder perspective, again most difficult because much was outside of DPE’s control.

DPE’s control over SOEs limited

Other matters being discussed were the whole issue of the reliance of SOCs on government guarantees and the reliance SOCs on road transportation.   It emerged during the discussion how little DPE could intervene in SOC management and parliamentarians said that thought should be given to this as the success of an SOC was imbedded in a minister’s performance agreement.

Ms Mokholo concluded that DPE currently was responsible for six SOCs. She said, “The challenges currently faced by Eskom should not be seen as a reflection on the performance of the entire portfolio. Eskom was the only SOC which was facing serious challenges”.

She repeated the fact that the others were doing well. AGSA confirmed that the corporate plan of any SOC was audited consistently throughout the portfolio of DPE’s SOCs and, as was reported in October 2014, the current portfolio at that time, with the exclusion of SA Express, did not have any material findings that worried AGSA.

Financials to come at end of year

Waleed Omar, audit manager, explained that AGSA did not wait until the end of a financial year to audit a department or entity’s financial plans. Financial audits were a completely separate issue. AGSA would provide input before the end of the financial year.

In this case, internal auditors of each SOC looked at the reliability of the information reported and whether the quarterly results were supported by the matching documents. AGSA would then rely on the work of internal audits. He said there have not been any instances at this stage within DPE at this stage showed any material differences between the findings of internal audits and those of AGSA.

Mr Omar explained that AGSA has considered the work of internal audits for the first two quarters of the financial year for 2014/15. AGSA followed a process according to international standards but this particular meeting showed that DPE’s operational plans were compliant.

DPE admits private sectors skills needed

When the committee started to discuss the gradual development of DPE into commercial sectors, Mr Ratha Ramatlhape, DPE director, added that many of the new strategies being triggered in the core entities of energy, manufacturing and transport would require bringing in technical experts from the outside to deal with the challenges being faced within the DPE portfolio.

Ms N Mazonne (DA) raised the fact that Eskom had paid bonuses to executives, none of which had achieved 100% of their key performance indicators (KPIs) which were therefore far too easy to reach.  DPE needed to tell Eskom, she demanded, that executive KPIs had to be aligned to whether the lights were kept on or not.

This indicated, the DA said, what the minister of public enterprises had been telling Parliament for some time to the effect that the level to which the DPE could intervene with SOCs was far too limited.   DPE could only play an advisory role it seemed, Mazonne said, and there needed to be legislation in place urgently to resolve this.

Legislation expected on minister’s powers

Ms Mokholo responded that DPE has already started working on giving ministers the power to intervene based on the Companies Act.  For example, she said, the DPE had a meeting with the Eskom board to deal with interventions which were not necessarily based on legal prescripts, an example being the co-generation contracts. She confirmed legislation was being looked at.

Opposition members were of one voice that although it was unfair to blame DPE for the electricity crisis, nevertheless, with the country at stage three of load shedding, there was no way DPE could deny that the economy and people’s lives were being badly affected. Current communication with Eskom was very poor, they said, and a national broadcast was needed to allay the air of panic that existed in some quarters of the economy.

The DPE responded that it had advised the Minister and the war room to release such a statement or the President to make a statement in his budget vote speech.

Other articles in this category or as background

Public enterprises reports on controversial year – ParlyReport

South Africa remains without rail plan – ParlyReport

SA Energy gets war room status – ParlyReportSA

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SAA turnaround plan involves flight changes

A strategy that can be achieved…..

SAAMonwabisi Kalawe, the newly appointed CEO of SAA, told parliamentarians that that the new long term strategy for SAA, four months in the making, “is within the reach of SAA and that a turnaround in the fortunes of the national airline can be achieved.” His subject was the SAA annual report, Minister Gigaba having introduced him and endorsing the turnaround plan.

Noting that the twenty year long-term turnaround strategy (LTTS) had no financial figures attached, a fact questioned by MPs a number of times, Kalawe responded with the reply, “Since we are still deep in discussions with national treasury and matters relating to guarantees and estimates of cost, it would be both ill advised and premature to discuss numbers. We are still in the middle of a bid to recover the balance sheet.”

Public Enterprises “comfortable”

Both the new CEO and the plan itself were introduced by the minister of public enterprises, Malusi Gigaba, together with the chairperson of SAA, Duduzile Myeni, both of whom said they were also “comfortable” with the plan.

The strategy plan, Kalawe said, had been drawn up in time to meet an April 2013 deadline in production and was approved by cabinet in August. MPs noted that in the last few years, no less than nine strategic plans for SAA had been presented to Parliament costing many millions of rands.

The consensus of opinion from MPs was that SAA’s new plan looked hopeful, particularly bearing in mind that no less than seven outside groups had been used in this round of consultations and other international airlines had also been contacted for opinion.

New routes on flight plans

The minister said he had instructed that a “new route network had to be designed and that SAA’s procurement programme had to be re-thought out. An “Africa” strategy had to be evolved, fully cognisant of the facts that the airlines market was characterised by low margins, constantly increasing fuel costs and changing geo-politics.”

“There has to be a turnaround in the fortunes and profitability of SAA and any strategy had to be a holistic document that is both aimed at developmental needs and financial accountability to the shareholders”, the minister concluded.

Kalawe said that on analysis SAA had an “impeccable safety record” and that technical needs of SAA were to be contracted out to Denel and that this would allow that state body to build its services throughout Africa.   He said that an assessment of SAA had indicated at present high cost factors running the airline that were intolerable; “a sub optimal capital structure” and he described the airline as having been run on a “value destructive business model”.

Re-branding on the way

“South Africa”, he continued, “was a long way from market centres and there had been a failure in the past to recognise the geographic situation”.  A new group would be formed to handle the SAA brand and information technology, updated to compete properly in the international market, Kalawe told parliamentarians.

Savings of R100m this year would be effected, he said, and a complete review of all non profitable routes debated with government departments to establish what was necessary in the national interest and what could be discontinued. Emphasis would be on developing cargo carrying in Africa, localised regional sub-Saharan traffic. Mango would open a service to Zanzibar.

Voyager to be tackled

Kalawe noted that the new LTTS would focus on a sustainable economic future for SAA and said, “We have set up a body that will track the implementation of our strategic plan”.  He said the Voyager customer service division was undergoing major changes with various customer improvement, aviation being a key developer in the National Economic Plan, supplying as it did some 35,000 jobs and R6.8m to GDP.

The financial controller of SAA admitted there had been too much “ad-hockery” in the past with regard to decisions on routes, “with an ambassador always somewhere in the globe calling for an SAA service to their area”.

Three in one

From now on, Kalawe promised MPs, there would be on-going focus on cost efficiency and the creation of an integrated group by combining SAA itself; Mango as a low-cost carrier; and SA Express as a regional operator; all into one cohesive unit serving the globe and particularly Africa. “However, it could take us well into next year to sort out both the business, loan and legal implications of such a move”, he concluded.

Minister Gigaba finally noted that a “re-worked route network” would be completed in stages over the next twelve years, having established priorities with government policy but the next stage was to satisfy Treasury with a long term and sustainable budget before any major capital injections would be considered.

Neither party would be drawn into any form of discussion on such costs.

Refer previous articles in this category
http://parlyreportsa.co.za//cabinetpresidential/aim-prc-report-connect-tiers-public-service/
http://parlyreportsa.co.za//cabinetpresidential/public-enterprises-reports-on-a-rocky-and-controversial-year/

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Minister Gigaba to line up Eskom for carbon tax

SOE’s in for carbon tax on climate response….

Public enterprises minister Malusi Gigaba, without mentioning carbon tax specifically, has launched a climate change policy framework for state-owned enterprises (SOEs) that seeks to align their climate response with the United Nations Global Compact (UNGC) on carbon emissions.   South Africa is a signatory to the UNGC and to the ten  UNGC principles which include human rights, labour, climate response and anti-corruption.

Principle seven states that business should support a precautionary approach to environmental challenges; principle eight says the signatory will undertake initiatives to promote greater environmental responsibility; and principle nine encourages the development and diffusion of environmentally friendly technologies. Minister Gigaba enumerated these.

The UN’s ten principles we are to follow

The minister said, “The UNGC calls companies everywhere to voluntarily align their operations and strategies with the ten universally accepted principles in areas  which include greenhouse gas emissions”.

The minister’s statement is featured  on SA government’s news site, and quotes the minister as stating , amongst other things, that it was “strategic” for South African business corporations to align their operations with  UNGC and their principles.

In aligning the newly launched policy framework for  state owned enterprises along similar lines, he says government will develop a detailed strategic plan in relation to climate change that includes “green economy considerations in operational decisions”.

The minister referred to four key design principles informing the policy framework, including the need for SOEs to focus on the overlap between commercial, economic, developmental and environmental objectives whilst carefully managing areas where these objectives conflict.

SOEs include…….

It emerged during the debate that certain state-owned enterprises (SOEs) have already endorsed the global compact, which, according to SAnews were, Denel, Transnet, Eskom, SAA, Broadband Infraco, Safcol and SA Express.

This agreement with UNGC appears to be one of the “global agreements which finance minister Pravin Gordhan referred to in his parliamentary budget vote speech when he gave his reasons for proposing a carbon tax, one of these and the main reason being to “change behaviour towards emissions”.     This  is also the keynote point of the recent treasury updated Carbon Tax Policy Paper out for public comment and which follows the much earlier discussion paper of 2010, “Reducing Greenhouse Gas Emissions: The Carbon Tax Option”.

“Recycling” of carbon tax rather

Minister Pravin Gordhan told parliamentarians recently that the “full earmarking” (or ring fencing) of specific tax revenue streams are not in line with sound fiscal management practices.     However, the efficient recycling of revenue, his deputy Cecil Morden said, was if mechanisms for structural adjustment revising greenhouse gas mitigation (GHG) is to be possible.   Morden said, ” A carbon tax will be introduced as part of a package of interventions to ensure that the primary objective of GHG mitigation is achieved”.

Public enterprises minister Malusi Gigaba’s recent speech therefore presumably means that he has every intention of following the minister of finance’s speech in making Eskom pay carbon tax, or as Cecil Morden said, “mechanisms for structural adjustment revising greenhouse gas mitigation”.

 

Posted in Electricity, Energy, Enviro,Water, Finance, economic, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Public Enterprises reports on rocky and controversial year

Minister  Malusi Gigaba, introducing the debate on the department of public enterprises (DPE) 2011/12 annual report, said. “We have a dual role as government departments and utilities because we have to build an understanding of why our state public enterprise components do certain things operationally and why they do certain things as a result of government policy.”

He thus indicated that at times the two may be at variance and underlined DPE’s role in harmonising the two.

He said that one of the biggest issues currently was to monitor the oil and gas companies in order to bring together a common strategic picture and obtain a better picture with data of the situation. This was the last time oil and associated products and gas were mentioned in the entire presentation, matters relating to Eskom and SOEs being of main focus.

Minister Gigaba said “Another issue is that we have had to ask certain utilities to go beyond their own plans in order to meet certain national obligations, especially bearing in mind the infrastructure programmes being embarked upon throughout South Africa.”

Minister Gigaba said that human resources issues have been at the forefront especially bearing in mind the lack of skills acknowledged generally as a national issue and in many cases obstructing SOEs from reaching the objectives set.

On objectives and targets, he was referring the measurement processes set out in the DPE annual report now assessed by the department of performance, monitoring and evaluation (DPME).

He commented that the environment on which SOEs are now operating had changed completely and were continuing to evolve almost daily. He also referred to the challenge of cost increases and marketing conditions that accompanied this.

“DPE has worked closely with all SOE’s to ensure accountability and oversight meetings are held at least twice a month”, he assured parliamentarians. “This is a robust programme in terms of meeting DPME requirements and is geared to see how all SOEs are responding to current conditions”.

But he asked that treasury in future consider an enlarged budget for DPE due to its expanded mandate as “change managers”. The total staff complement of DPE is 189 persons.

DG Tshediso Matona placed each of the DPE portfolios activity in the context of the current economic picture, which he said was important to reflect upon before one considered both the delivery service picture, an internal issue, and also matters of concern which were national issues.

Real fixed capital expenditure by the public corporations gathered great momentum during the period under review as Eskom and Transnet accelerated their spending, he said, and which was “further crowding-in private sector investment”.  He was not asked to explain this by MPs.

Capital investment went up to 560bn; most of the increase of 9% over the previous year of R520bn occurring in the fourth quarter.

During the last year DPE focused on oversight practices;  the business of stabilising the SOEs in terms of the changing economic picture;  and looking at funding options – all the time constantly reminding the SOEs that by driving fixed investment they were unlocking economic growth.

Joint project facilities between all SOEs, particularly in the area of common procurement, had been a focus of DPE during the year, and also the issues of skills training and development. Transnet provided some 3,500 engineering-related learners and enrolled 854 new artisan learners. Eskom trained some 5,400 learners, of which 4,200 had an engineering leaning and 1,066 new artisans. SAA enrolled 254 learners, Denel 229 learners, and Infraco, Safcol and SAX had together added 191 learners.

In terms of delivery service agreements and targets, Tshediso Matona said that DPE had “largely delivered on all shareholder management functions, including signing of shareholder compacts, delivery of strategic intents and quarterly reviews as called for under the PMFA.”

Exceptions where delivery did not take place were that a shareholder contract for Infraco was not signed, since the new board stated it required more time to assess the situation and this was agreed to, and a review of South African Express was not completed on time because of a necessary restatement of financials.

In the area of energy and broadband enterprises, Matona said that achievements were the approval of Eskom’s medium term maintenance plan and implementation of the “keep the lights on” programme.  An R350bn government guarantee was confirmed for Eskom and 76% of the funding for the New Build programme is now in hand. At this stage Eskom had added 535Mw of generation capacity for 2011/12 and 631km of transmission lines.

Transnet for 2011/2012 had upped iron ore transits to 1.22m tons and coal to 1.6m.  Overall efficiency was claimed by DG Matona as being up 17% on the previous year. Procurement of rolling stock had started and a consignment of 95 locomotives.

SAA, which came under considerable questioning by MPs, had worsened insofar as the financial position, although five additional African routes to Ndola, Kigali, Bujumbura, Pointe Noire and Cotonou had been launched and SAA saw such Africa routes as a future area of expansion. Additional African services to Zambia, Zimbabwe and the DRC were working out of King Shaka.

Major problems in an overall sense mainly boiled down to rising fuel costs, increased international airport docking facilities and strong competition, parliamentarians were told.

Both Minister Gigaba and DG Matona responded to a barrage of questions on staffing issues at SAA and loss of market share to other airline competitors but such questions were continued out of parliamentary time and are adequately covered in the media. The minister admitted to MPs that he had been caught short by all the resignations on the SAA board and was “flabbergasted” to hear of some of the reasons.

He said the guarantee which was being obtained for SAA for future funding should, in his opinion, come attached with a requirement for a new strategic plan and a plan for a complete overhaul of the airline. A diagnostic overview of SAA is now being obtained, he said. “A consultant’s report, given to us in September, is being incorporated.”

Minister Gigaba added on the subject of SAA,”We need to work around the clock to achieve a better situation and we are addressing the staff to allay their fears. The long term vision and strategy to be produced must include a procurement plan and a network design incorporating more of Africa.

An experienced task team has to be assembled to facilitate a strategy, not try to do it themselves”, he told parliamentarians in conclusion.  He admitted that there had to be a clearer distinction between the SAA board and its management team.

On general DPE issues, key areas where targets were not achieved by the department, said DG Matona, mainly lay in the area of Denel where the defence plan had not been finalised therefore stultifying any progress; Safcol, although the balance sheet had improved; and Transnet where its branch line roll out programme (on freight issues) had been held back.

The Ngqura container terminal position had not developed, neither had a national freight network plan been concluded.  Also, a major issue was the future of Eskom and the IRP2 plan.

Posted in Cabinet,Presidential, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Transport0 Comments

Parliament critical of ISMO due diligence report delays

The parliamentary portfolio committee on energy under chairperson Sisi Njikelana when debating the ISMO Bill has expressed extreme dissatisfaction with the delay in the production by Eskom of a due diligence report on the implications of and the financial risks involved in Eskom transferring its assets and the financial and operational  implications in future of not running portions, or the whole of, the national electricity grid.

Eskom is part of a task team which includes national treasury and department of public enterprises, led by department of energy, but the key to the report is the participation of Eskom.  ParlyReport clients will get details of the report immediately is is presented in Parliament.

The need for a due diligence report on the possibilities of breaking up the national electricity supply chain and transferring the national grid network out of Eskom arose during joint portfolio discussions under the Independent Supply Market Operators (ISMO) Bill recently tabled in Parliament.

Present for the portfolio committee meeting, but not included in the discussion for reasons of maintaining impartiality, was the director general of the department of energy, Ms Nelisiwe Magubane.

Eskom had been requested in meetings to produce such a report to the committee but outraged MPs said that they were there to listen to the report – only to be told by Eskom when they arrived that there would be no such document. It was then indicated by Eskom that by mid February a further meeting indicating how the task team would work was  given.

Njikelana was told by a spokesperson for Eskom that the agreed due diligence exercise had not yet even been started at that stage, due to a whole change in the manner of preparing the report. She said that another four months was required by both Eskom and its partners to the exercise, National Treasury, plus the department of public enterprises.

The committee was told that it had been decided by all the parties compiling the report that in order to retain impartiality insofar as Eskom was concerned it had been agreed, as emphasised by National Treasury and the department of public enterprises, that outside consultants must be appointed.

Such required authority in writing from the minister of energy, who, having only just been asked to give such authority, had not yet acceded.

Such a due diligence exercise, said Eskom managing director of transmission, Mongezi Ntsokolo, was not only essential to the process of Eskom retaining its rating for international funding purposes in the light of breaking up its balance sheet as proposed in the exercise, but also in the light of the revenues that might be taken away from Eskom for sales against what it might receive for its assets.

He said the implications of the ISMO Bill were extremely serious for Eskom, the Eskom balance sheet as it stood now having been the basis of past funding arrangements. This could now to be changed. How the new ISMO portion and Eskom portions would be rated after the application of the new proposals was an important exercise for Eskom and the idea of having this done by independent consultants had been agreed to in order to maintain financial integrity.

Opposition MPs, particularly ID MP Lance Greyling, diminished this excuse saying that the time delay was entirely unacceptable, it now being August and more than halfway through the parliamentary year. The delay, he said, “was ignoring a request from Parliament to have this report ready on time.

Greyling said the opportunity given by Parliament to Eskom “had been taken advantage of”.  Parliament had not been informed of the necessity of appointing outside consultants, he said, or the fact that there was to be such a long delay affecting the passage of the ISMO Bill and affecting also the entire industry.

Chair Sisi Njikelana echoed the sentiment saying that such delays could not be countenanced.  He reminded both Eskom and National Treasury in terms of the promise made to the country in the state of the national address that the ISMO Bill would be processed by Parliament and be ready for enactment by the end of the year.  He said that the ISMO exercise with Eskom and all parties was a supposed to be a “team” exercise but Parliament had been let down.

It was put to Eskom by Njikelana that the reasons for the delay, however serious to Eskom, had more serious implications in the terms of both the national integrated energy resource energy plan (IRP) and the development and economic planning behind other sustainable sources of energy. The incorporation and registration of new independent power producers required urgently the fruition of the ISMO Bill in terms of bringing the necessary security to their own funding proposals.

Both National Treasury and the department of enterprises were informed by the chair that no more than two months further could be given under any circumstances if the ISMO Bill was to be processed in the current parliamentary year.

The director general of energy, stood to confirm her acknowledgement of this request in front of the other representatives of the various state departments.

Eskom acquiesced to the request although Eskom’s Ntsokolo had said earlier that he did not see how consultants could carry out the exercise in such a short time.

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Minister Gigaba focuses on new and old Durban harbours

Delivering his budget vote speech to parliamentarians, Malusi Gigaba, minister of public enterprises, said that the Durban “dig out” port on land that was previously the Durban international airport was going ahead and would require at least R100m initially to develop, most of which would be spent on the excavation of millions of tons of earth.

Interviewed later, he would go no further on the subject but to say, “A project of this scale will only be possible in partnership with the private sector and we have already started developing an implementation plan.”

Meanwhile the deepening of berths at the existing Durban container terminal continues, creating an additional 400 000 TEUs of capacity for the expected larger vessels. All this means additional port handling equipment and five ship-to-shore cranes and 40 straddle carriers and the extension of Pier Number One into Salisbury Island continues, which will give another 1,1 million TEUs per annum.

Transnet is acquiring another 8,6 hectares of Salisbury Island and will construct a new quay wall on the eastern side.

As far as the container terminal is concerned, nine ship-to-shore cranes and 36 rubber tyred gantry cranes are to come into operation. The minister made no reference to the single buoy mooring system used to offload crude oil at Durban, nor did he mention the then scheduled shutdown at the SAPREF refinery.

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    Closed ranks on Sizani resignation….. As South Africa struggles with the backlash of having had three finance ministers rotated in four days and news echoes around the parliamentary precinct that […]

  • Protected Disclosures Bill: employer to be involved

    New Protected Disclosures Bill ups protection…. sent to clients 21 January……The Portfolio Committee on Justice and Constitutional Affairs will shortly be debating the recently tabled Protected Disclosures Amendment Bill which proposes a duty […]