Tag Archive | Public Enterprises

Parliament set for tough questioning

Editorial…

…..Busy session to get some answers

….  In the absence of any move by the National Prosecuting Authority, particularly the somnambulant National Director of Public Prosecutions Shaun Abrahams whose department seems confused as to whether 100,000 leaked Gupta e-mails constitute prima facie evidence of fraud or not, it falls to a parliamentary committee in Cape Town once again to be the first official venue for any debate of consequence on the State/Gupta corruption scandals.

In one of the first meetings of the recently re-opened Parliament, the Public Enterprises Portfolio Committee is to receive a report back from legal experts on the setting up of the Eskom enquiry.

Party vs the Church

Oddly enough, it was in also Cape Town, at St George’s Cathedral, in early June, where the fight first began.    Later, the venue was room 249 in the National Assembly, where the Public Enterprises Portfolio Committee was addressed by Bishop of the South African Council of Churches (SACC). He had then just released a report on corruption by the SACC Unburdening Panel.

It fell to the Bishop the first shot and there was a sobering moment of silence in parliamentary room 249 when he finished talking. It felt like a small moment in South African history.  What came after that seemed like a little bit of a parliamentary let-down in the following weeks but it is important that what the Bishop had to say is further reported for the record.

Take that

Bishop Mpumlwana reminded all present, and particularly parliamentarians who claimed that the Church should not be “fiddling in politics”, that the same politicians had repeated the phrase, “So help me God” when taking office.

He said that the Church had no intention of ignoring the evil that was being perpetrated on the people of South Africa and asked all to note that the Constitution ended, “May God bless South Africa.”

He also said that systematic looting of resources had created a crisis for South Africans, particularly the poor. He called upon all parliamentarians to look to their consciences and assist with “the righteous cause of tracking down all those involved” in what was now an obvious state capture plan hatched during President Zuma’s watch in which the President himself, he said, was involved.

Cry, the beloved country

In a particularly moving address, he reminded all that SACC had come out in vocal support of the ANC during the apartheid years when President PW Botha was in power.   Now was the time to speak up again on the unbridled abuse of power by an ANC Cabinet and a President “who had lost his way on moral issues.”

The Church, he said, must intervene and as a result of the SACC “unburdening” process which had been conducted some months ago, he now knew that “mafia-style control” was being exercised by a political elite in Eskom, Transnet, Denel, and other government agencies.

Ignored

An attempt was in process to gain control over public funds destined particularly regarding rail, arms and nuclear projects, the last being a totally unnecessary burden placed upon the country, he said.    He concluded with an appeal to parliamentarians present to expose the crimes committed and “restore the dream that had built a rainbow nation admired the world over.”

It was gratifying to hear in following days that the Public Enterprises committee, under chairperson Zukiswa Rantho, had instituted an enquiry into Eskom’s accounts (and also Transnet and Denel it turned out) with legal opinion to be discussed in the in the next session of Parliament.

That time has now arrived and one hopes that a lot of explanations will emerge and a lot more untruths discovered in meetings with the Department of Public Enterprises (DPE) and its apparently confused but certainly compromised leader responsible, Minister, Lynne Brown.

Looking ahead

Parliament has now a busy schedule in August to catch up on lost time with delays incurred by staging a “secret ballot” on the no-confidence in President Zuma vote.

One issue will involve the passage of the contentious Mineral and Petroleum Resources Development Amendment Bill, scheduled for a meeting with the Select Committee again towards the end of August; the Expropriation Bill; and the implementation of all Twin Peaks regulations – including those for the Financial Intelligence Centre to operate in terms of the “money-laundering” changes.

This last-named body is quoted as having handed over some 7,000 cases of suspicious money movements to SAPS/Hawks and Themba Godi, chair of the Standing Committee on Public Accounts (SCOPA), has made the public comment that any parliamentary finance joint meetings must see such matters on oversight resolved in the short term, preferably immediately.

Energy up and down

Minister of Energy, Mmamaloko Kubayi, was to be informing her Portfolio Committee on the can of worms opened with her suspension of the board the Central Energy Fund stated by her as being in connection with the suspicious sale of South Africa’s oil reserves held by the Strategic Fuel Fund.

Past Minister of Energy, Tina Joemat-Pettersson, seems to have possibly lied earlier to Parliament over the sale of these assets and she, in her subsequent silence, appears to be joining what is now a whole roomful of past ministers and director generals involved in the tangled web of deceit and manipulation at the edge of business and commerce  – some of it linked to Gupta e-mails, some just motivated by plain criminal greed.

But all Energy Portfolio Committee meetings on any subject have now been abruptly halted in the light of matters involving the possible suspension of the DG of Energy Policy and Planning, Omhi Aphane, (a long-time and experienced government staffer) on on an issue regarding of nuclear consultancy fees, according to the media.   It would appear a whistle blower is at work in DoE.

Minister Kubayi is certainly causing waves and many hope that the responsibility for Eskom is to be handed over to this Minister from the DPE, back to where it was originally rooted with all other energy resources.

Untouched as usual

The issue of debt relief legislation under the aegis of Chair Joan Fubbs of the Trade and Industry Committee will be important as will meetings on energy involving electricity, IPPs, nuclear and clearing up the PetroSA mess.   But first, this committee should sort out what is to be done with a draft Copyright Bill amending and updating anchor legislation, laws that have not been touched since 1976.

What DTI have so far come up with has legal experts in complete confusion since there appears no understanding by DTI in their draft of the difference between paintings, works of art and the high-tec world of data authorship which underwrites commerce and industry and on which depends a massive IT industry both here and mostly abroad.   Fortunately, with a person like Joan Fubbs in charge, basic misunderstandings such as this will get sorted out.  However, that such unintended consequences might have occurred worries many.

The various Finance Committees will meet for joint sessions for a number of tax and money Bills and amendment proposals and Posts and Telecommunications will hear its Department’s comments on public hearings, all regarding the ICT White Paper Policy.

Posted in cabinet, Communications, Electricity, Energy, Finance, economic, Fuel,oil,renewables, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Parliament rattled by Sizani departure

Closed ranks on Sizani resignation…..

As South Africa struggles with the backlash of having had three finance ministers rotated in four days and
Stone-Sizani-XXX-news echoes around the parliamentary precinct that the Chief Whip of the ANC has resigned, there is a palpable feeling amongst MPs that all is not well within the governing party. The resignation of Hon Stone Sizani has come at a bad time.

Also, the legislation that is zeroed in at Parliament at the moment clearly indicates that President Zuma cares much about the rural vote and knows full well that in the months before the municipal elections that this is the power base that must be focused upon politically. His recent statement that land reform will be backdated to the 1800s manifests this view.

Team spirit

But then much of the political rhetoric at the moment is typical of a pre-election period. This has unfortunately arisen at a time that the country is on a knife’s edge in terms of both financial ratings and a possible increase in interest rates.

cropped-sa-parliament-2.jpgThe dilemma being experienced in parliamentary meetings at the moment is how to turn the ever apparent failure of government departments to meet their targets and constant reminders that projects have not even arrived at tender stage into the positive spin called for by business heads to kick start team spirit and overcome the country’s difficulties by creating more jobs.

The fact is that the parliamentary process calls for oversight of government activities and criticism is an essential part of any debate. It therefore becomes difficult to walk the fine line between exposing obvious failure and unwarranted expenditure at a time when the country needs only good news.

Good news

Maybe, it would be good then to report, as we hereby do, that the meeting between business heads and President Zuma has produced a positive reaction amongst most parliamentarians, except of course the EFF and extreme Left. It has produced the re-emergence of the MPRDA Bill, sadly without the scrapping of the Private Security Industry Bill. It has seen some excellent plans emerging in the world of SOEs and public utilities.

It has also seen the re-emergence of positive statements of progress in transport, roads and the positive fact that Eskom has reported to Parliament that it feels it can make it without load shedding at the tariff figure fixed by Nersa. Also the rush to spend enormous figures on nuclear power has been slowed down.

Certainly it is good to see at most meetings reference made to the saving of unnecessary expenditure and an acceptance by most in Parliament that things cannot go on as they were.

Posted in earlier editorials, Earlier Stories0 Comments

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

Posted in Electricity, Facebook and Twitter, LinkedIn, Public utilities, Special Recent Posts, Transport0 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


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