Archive | Transport

Parliament updated on SOE finances

…..article dated 25 August 2020……

DPE presents bleak picture…. 

As part of a portfolio committee meeting covering the status of the seven SOEs under the umbrella of the Department of Public Enterprises (DPE), new director general,  Khathatso Tlhakudi,  provided a sombre picture of the current financial malaise within the SA public sector.  However. he ended up on a more positive note with regard to Denel and SAA.    On Eskom, he said,  he would make some comment but as they were reporting on a regular basis to Parliament, he said he would not report in great depth.

On Denel, he commented that he had “a good feeling that acting CEO Talib Sadik would hold the situation until a new CEO was appointed”, saying that “we need Denel for strategic reasons”.  He said that Sadik had the necessary enthusiasm and  drive to hold the fort.

As far as SAA was concerned, DPE “had made good progress with a business rescue plan which had now been approved” which fact  he claimed was “a major milestone after what had happened beforehand”. Now it was just a question if support could be found for the plan.

Outside Eskom

Tlhakudi commented that a good deal of the problem at Eskom, other than the specifics of state capture, was that most of the municipalities were not investing adequately in their distribution networks which he said were “falling apart at the nation’s expense”.

On electricity distribution “much of the problem could be put down to bad town planning”, he said.  “As a result of an inability to provide a proper  “pay as you go” service, informal settlements had simply connected themselves to the network, resulting in overloading and continual damage.”

Another issue was that councils should not just collect rates from communities but had to also invest in those communities. Consumer attitudes had to change, Tlhakudi said. Eskom was not in a position to subsidise non-payment in infrastructure, he said. “Responsible management is called for at community level and consumer attitudes have to change”.  He looked to CoGTA to assist in bring such changes about, as well as  the departments of Human Settlements, Water & Sanitation and Public Works to play their roles more purposefully.

Not all bad

DG Tlhakudi said that an infusion of new thinking had started at DPE.  “New ideas are emerging, he said. Great progress had been made with the ports; business was flowing well through the Maputo Corridor with the export of exporting magnetite; and activities around wine and fresh produce were getting some good numbers, ” he listed.  “The story at Transnet is coming right and the Trade and Industry Committee will be impressed, despite the problems of COVID”.

He concluded that DPE was in the process of finding new ways to intervene and assist timeously in SOE and departmental problems and cut short any drift towards malfeasance and corruption with intervention from the top, on an immediate response basis.

Overview of the SOE seven

In an overview of the DPE portfolio, Ms Jacky Molisane of DPE  took MPs through the sorry picture.

In alphabetical order, she recounted that (1) Alexkor, a diamond mining business and which has been attempting to establish a diamond polishing venture down the line, had reported a loss in the 2019/2020 financial year of R63m. This was in part due to low diamond prices, not helped by corruption at management level at its mine. Its cash reserves will be depleted by September and DPE.  Furthermore, its head office is being wound down.

Denel (2), which had been in the newspapers a lot this month with attempts to save the entity for its strategic value, reported a loss of R1.7bn for the 2019/20, its equity being well below the level of R4bn required as a going concern for investors. This, despite a R1.8bn funding in the year under review.  Ms Molisane said that R576m allocated for the 2020/21 has not been passed on by DPE at this stage, since the impact of COVID-19 had resulted in more strain for Denel, the position now being fluid. An acting CEO was currently holding the fort.

Simple facts

As far as Eskom (3) was concerned, Ms Molisane, giving a short picture, saying the simple facts were that any increase in revenue would purely be mainly reflected as due to increases in electricity tariffs.  Although cash from operations might be increasing, Ms Molisane said, earnings before interest, taxes, depreciation, and depreciation were never going to be sufficient to cover increasing costs.  DPE and the taxpayer, as the shareholder, were not receiving a return on investment and the entity was a serious drain on the economy.

South African Forestry Company (4) had reported a loss of R47m for the year under review, mainly as a result of the decline in revenue and high operating expenses. A fair value adjustment saved the company from worse figures and Safcol badly needs re-investment in its equipment and operations.

South African Airways (5) has been under business rescue since December 2019 due to its declining performance and now the inability to pay its debts as they fall due.   A business rescue plan was approved in July 2020 by all creditors. Various options for raising funds were now being carried with the assistance of RMB as transaction advisor, Ms Molisane said. There was every hope that a partner would be found before 17 September.

Old story, old routes

On SAA, DG Khathatso Tlhakudi added the fact said the Department had brought in “some of the best brains, working together linked around the world to help it implement a plan mainly people who understood the airline industry.” Once a strategy was implemented for SAA, he said, DPE would be looking, first for a feeder network to sustain the airline, and then a decision was to be made as to the best way forward to recover routes.    Right now, “effort is being applied to help SAA out of the situation it found itself in”.

SA Express (6) was placed under business rescue in February 2020, Ms Molisane said, but a credible business plan was not found and liquidators called in.   With little likelihood that any expression of interest will be shown, SA Express could be liquidated at the end of September this year.

Ms Molisane then quickly touched on Transnet (7) where revenue had grown marginally by 3% to R75bn for the 2019/20 year under review but decline in demand is expected for the coming year due to COVID-19 and lockdown circumstances. Revenue at an expected figure of R78bn for 2020/21 therefore looked very unlikely. Given that Transnet would eventually get over the COVID setback, Molisane’s figures indicated a possible break-even point in the near future.

Dartboard

For three quarters of an hour, MPs from across party lines criticised DPE for its handling of a situation over the months preceding, a period in which in their view things had been allowed to get totally out of hand.    It was pointed our , however, by the DPE team that it was the system of government that was at fault as the individual boards ran the SOEs and there was a limit to which DPE could interfere.

Point after point was raised, eventually leading to a relatively sensible overview from Ghalib Cachalia (DA) who calculated that the seven SOEs were the major debt trap that had cumulatively led South Africa into its present sad state, whilst also being the home of state capture. Cachalia told DPE that they had to go about things differently, and very soon.

Action now

With a warning that SA was  “falling off the fiscal cliff”, Cachalia remarked that “tinkering around with balance sheets and expenses was getting the country nowhere” and that some new management concepts “were needed and needed urgently”.  The objectives of DPE were “to lead with vision a stable of state entities that led South Africa into new territory and uplifted the poor”. Quite the reverse was happening, he said.

Sibusiso Gumede (ANC) said the quagmire that DPE found itself in was contributed to by the inability state to intervene at any particular point, having to deal with a balance sheet problem well after the event.        He said, “Whilst it is commendable that DPE itself has shown good performance, it had to start running ‘good’ SOEs as well.  He said, “One cannot have an excellent department running ‘bad’ SOEs and we cannot have business as usual any more’.

Eskom starts internal overhaul – ParlyReportSA

Posted in Agriculture, Electricity, Finance, economic, Mining, beneficiation, Public utilities, public works, Trade & Industry, Transport0 Comments

PetroSA part of new energy plan

…..article dated 2 September 2020…..

CEF to restructure both PetroSA and NECSA…..

In what appears to be the first serious attempt to organise and restructure the struggling state entity Central Energy Fund (CEF) and rescue what will now be branded as South Africa’s ‘national petroleum company’ in the form of PetroSA, Minister of Energy, Gwede Mantashe and the relatively new CEO of CEF, Dr Ishmael Poolo, faced a barrage of questions during their scheduled update to Parliament on the fortunes of the troubled group.  CEF appears to be handling two intensive recovery programme at the same time, including at last replacing a swathe of acting posts.

The  first, smaller programme will be the merger of the Nuclear Energy Corporation of South Africa (NECSA) with subsidiaries Pelchem and NTP Radioisotopes, for which a common board has now been established.   The programme includes a drive to return to profit recovering from the massive losses sustained by NECSA providing for a nuclear programme under the tenure-ship of Jacob Zuma’s presidency and which never materialised.

Project Inkwezi, remember?

The second recovery exercise is to sort out and re-build CEF’s entity, PetroSA, after its long-running saga of failure over the Mossel Bay gas-to-liquid venture.   Having had no CEO for 5 years and left to drift without any co-ordinated approach to the industry it was supposed to serve, PetroSA has been in the wilderness without a technical plan to re-establish its presence called for by Parliament for even longer.   Paralysis and ignorance on the part of successive ministers has also been to blame.

Involving billions of rands, the second issue is, by a long chalk, the most damaging to the national fiscus and although both matters are an acknowledged disgrace in terms of financial management, nobody in government, in this case both the Department of Mineral Resources and Energy (DMRE) and CEF, has come with a proper financial plan on the way forward or have been called to account for the mess.

CEF has also suffered SIU investigations into the illegal sale of oil stocks held by the national Strategic Fuel Fund (SFF), another of its entities, a numerous enquiries instigated by the Auditor General.

Top down

In inheriting the problems, Minister Gwede Mantashe has insisted that new management teams be found to head up not only CEF at the top but also for both NECSA and PetroSA in an attempt to bring fresh perspectives to the whole group.  This means, of course, that the Minister has also decided that both entities, NECSA and PetroSA, are to be saved  and this despite the enormous cumulative losses on the balance sheet of CEF.

Not only this, but he insists that the group moved into the black as a whole in the shortest time, but this is only made possible by the fact that it’s entities will have continue functionally bankrupt in the meanwhile.

In the case of NECSA, new appointments are about to be made, MPs were told.   In the case of PetroSA, CEF chairperson Dr Monde Mnyande announced earlier this year that Pragasen Naidoo had been appointed as CEO of what is now branded as the “new national oil company.”   Dr Mnyande said at the time that this move was the first step in “breathing new life in CEF”.    He said that more appointments would follow.

This month

In his first appearance before Parliament, the new CEO of CEF, Dr Ishmael Poolo and appointed by Dr Mnyande in May, told the Committee that a consortium of the three consultancies Mazars, Bayajula Services and US consultancy AT Kearney, are now contracted to assist CEF in the process of merging the entities of SFF and i-Gas into PetroSA.

On a second separate exercise of absorbing Pelchem and NTP Radioisotopes into NECSA, an announcement on the names of consultants to be used in this case would shortly occur, he said.

New Bill

A major refurbishing process was now being hastened in the case of PetroSA, Dr Pollo said, because of the advent of the Upstream Petroleum Resources Development Bill, the crux of which Bill was to allow for PetroSA to receive the benefits of “free carry” gas and petroleum exploration rights granted by the state, thereby fulfilling its mandate as the state’s contractual agent.

“Such a merger of interests, led by a strong PetroSA, would unlock the upstream petroleum economy”, Dr Pollo told MPs, “whilst also maximising the socio-economic benefits flowing from such arrangements and assisting the Minister in realising the state’s Integrated Resource Plan (IRP).”

Bare facts

In an earlier report back to MPs this year, CEF had confirmed that PetroSA had incurred losses totalling R20bn since 2014, mostly in its attempts to stave off shutting down Mossel Bay as a community in a downhill battle for additional gas for its gas-to-liquids refinery, which itself has also had a chequered production life.

Dr Pollo said that now PetroSA was currently producing at a rate of only 6,000 barrels per day, primarily due to shortages of gas from drilling and well operations in nearby coastal waters.    MPs were told by him that PetroSA’s headcount remained at the same level as it had been when producing at an earlier daily rate of 18,000 barrels. He drew attention to the fact that PetroSA was a relatively large company and it accounted for a large portion of CEF’s 1 800 employees.

Rescue plan

It was important for PetroSA to refurbish the refinery and upgrade its ability to take on more gas supplied as part of the overall plan for liquid fuels, Dr Poolo said, and the restructuring processes in respect of merging  SSF and i-Gas into one group was to start Sept. 1.   He said that CEF was exploring its options for either selling or finding a partner to assist with “the commercialisation” of the gas-to-liquid unit.

Dr Poolo concluded by telling MPs that he would return to Parliament in October and account to them on progress of the PetroSA stabilization programme.    During questions, labour issues immediately arose immediately because retrenchments would follow

Cold facts

The Minister said that PetroSA had three union movements involved and negotiations were underway regarding retrenchments which could not be avoided.  Only one of the three plants at Mossel Bay was operating and lay-offs were being limited to the smallest number possible, the unions “having acknowledged that over-staffing existed”. He had told unions that success with PetroSA would result in further employment at a future date.

Questions from both the EFF and DA concerned consultancy fees being paid.  Dr Poolo replied that on retrenchments, the internal teams had stated they were unable to be objective.  “Obviously they could not ‘self-amputate’ and consequently, for many other reasons as well, third party consultants were preferable” Dr Poolo confirmed that both SFF and i-Gas were viable units but that PetroSA was reporting a loss of R200m for 2019/2020.

Asset acquisitions

As to the future, MPs were told that both CEF and Sasol had indicated that talks on the sale of a stake in the Romco gas pipeline from Mozambique to South Africa were possible and discussions were well advanced.   Other assets of Sasol for sale were being considered as Sasol was offloading to raise cash.

Refurbishing the Mossel Bay refinery in order to be able to use liquid feedstock was also part of the restructuring considerations, Dr Poolo said, and CEF was further exploring its options to find a partner to assist with the commercialisation of the PetroSA gas-to-liquid unit.

New nucleus

On matters regarding the re-structuring at NECSA, David Nicholls, board chairperson, told MPs that an “appointment of an external service provider was imminent” in order to act as consultant in the process of merging Pelchem and NTP Radioisotopes into its parent body.  By eliminating the need for three boards and re-sizing, profitability would be seen sooner, he said

Nicholls added that in the short-term, losses of R239m in 2020-21 were projected bearing in mind that COVID-19 had cost an estimated R400m as a result of having on-board highly paid scientific experts but, nevertheless, the new NECSA was estimated to return to profitability in 2021-22, he felt.

He noted that in the meantime Pelchem was producing sanitisers in response to COVID-19 and that the Fund’s Ketlaphela Pharmaceuticals unit “was working hard toward the production of anti-retroviral medication at the soonest”.

DMRE tunes in

As the meeting progressed , a department of energy presence became evident as more members joined the meeting.  In a discussion on general energy matters, Tseliso Maqubela, Deputy DG, Petroleum and Petroleum Products Regulation, DMRE, was called upon to answer the question from MPs as to why the country had very recently “run short of diesel in such critical times”.

He told MPs that the reason was theft direct from the pipeline by “ a highly organised group”  in the Pretoria area, coupled with fuel unloading problems at the East London terminal due to a COVID-19 outbreak which had occurred.

In conclusion, Minister Mantashe, in answer to questions from Kevin Mileham (DA), committed DMRE to publishing an Integrated Energy Plan (IEP) before the end of the current parliamentary year. Mileham had pointed out that in terms of the Energy Act, a IEP was required from the ministry on an annual basis. Seven years had passed since the last energy plan and investors needed this.

Posted in Energy, Finance, economic, Fuel,oil,renewables, Public utilities, Trade & Industry, Transport0 Comments

Road Accident Fund stays as it was

……article dated 2 September…..

Parliament withdraws Bill making settlement changes…

The idea that MPs might be able to revitalize the Road Accident Fund (RAF) by changing the method of claims payments under a new Road Accident Benefit Scheme (RABS) Bill  has been dropped by the Parliamentary Committee on Transport.   The method envisaged, it has been decided, would massively increase costs against the national fuel levy which could not be tolerated, an increase which would have to be borne unfairly by the consumer.

Under the present Road Accident Fund claims system, compensation paid has amounted to as much as R11bn for the year 2019/20, way over its budget allocation; meaning that the Fund technically insolvent.  Currently reliant on Treasury bail outs, it forms part of Treasury’s major national debt worries.

No blame concept

A switch has been thought possible to a ‘no-blame’ pay out system in order to avoid much of the costly litigation in determining liability,  all of which processes have resulted over the years in a disproportionate amount of the funds in the RA Fund landing up with the litigators rather than the litigants, and lengthy delays in settlement of claims awaiting court outcomes.

However, as was strongly suspected would be the case this year, there has been even more strain upon funds because of COVID 19 budget claw backs by Treasury on Fund allocations, resulting in yet more pressure to investigate  further possibilities of a different system of the payment of claims.

Extended social plan

The possibility was tabled some months ago of introducing a regular social payment similar to a pension payment and this paid over a number of years as a planned annuity-type settlement. This it was thought would both improve the Fund’s cash flows and would help to avoid the bad habit of claimants of spending cash pay outs in one initial splurge. Some pointed out that it was not the job of government to run people’s lives.

The Bill has been sitting moribund on the Transport Committee’s agenda for well over a year, simply because no one was prepared to actually cost out what was envisaged as an enormously expensive system needed to effect the plan.   ANC MPs who had become extremely enthusiastic on the idea, baulked at the costs in the face of Treasury misgivings.  Now it has now been finally admitted by a majority vote that the costs of instituting such a system would be similar to running a small SOE all reliant on the national fuel levy, idea not sustainable.

Another idea wanted

DA’s Carl Hunsinger successfully moved this week a motion this week for the Bill to be withdrawn by the Speaker, but this move is accompanied by a suggestion that the Department of Transport go back to the office on the subject and urgently work out a way, as put by Hunsinger, “address the structural manner the way that the Fund operates and bring down costs”. Parliament, he said, wants an answer.

Parliament has called instead for a draft Bill rather amending the RAF Act and “provide a working system that the country can afford”.  Presumably the matter will be taken off the parliamentary agenda.

 

Basics at play

The Fund is managed through a Board and receives its revenue direct from SARS, collected from the fuel tax levy by them.   Technically, as established by the RAF Act, the Fund does not have share capital, is an entity is owned by the South African public.   It is listed as schedule 3 public body in accordance with the Public Finance Management Act.

 

Posted in Justice, constitutional, Transport0 Comments

Economic Regulation of Transport Bill plans for future


 

…….article 15 July……

Its all about regulating prices, says govt….

The Economic Regulation of Transport Bill, now in final process in Parliament, represents the complex task of bringing together a multitude of factors governing the regulation of the transport in South Africa within one framework, intended to deliver “a transport system enabling economic activity and the stimulation of growth”.  The objective is lower the cost of doing business by the regulation of pricing, says government.

In one of the better Bills to come before Parliament in 2020,  the Bill proposes to empower a Transport Economic Regulator as the functionary authorised to sign off on the prices imposed by regulated transport entities in the sector.  The Bill is the result of two periods of public comment in 2018.

 Order in chaos

A portion of 2019 was used by the Department of Transport (DoT) to digest all the information and come up with a final answer to a complex situation since public comment from stakeholders was extensive.   M

any of the issues, as emerged during the debate in Parliament, have always been about Sou

th Africa’s poor record in port handling facilities; entry and export and other border nightmares; Transnet’s rail turn-around problems; and the country’s prohibitive road transport pricing matters.

Recognising this, the Bill has as an objective to rationalise of transport pricing but in order to do this, DoT has to first consolidate all the working parts into a single framework and policy.

Not just rubber stamping

To take a step back, in order to execute the new plan, the establishment of a Transport Economic Regulator is called for as the working body and, secondly, Transnet must establish a Transport Economic Council which will act as arbiter for decisions made.  This has been achieved but not ratified. There also has to be “a mutual consideration between the many stakeholders to make things work”, DoT says.

Good news is that as part of the process Transnet is about to appoint a Corruption Investigation Officer whose work, no doubt, will be cut out.  What has been achieved in this regard was the subject of a recent parliamentary report, but SOEs about to be drawn into the body of the Regulator will be the Transnet National Ports Authority; Transnet Port Terminals; Transnet Freight Rail; ACSA; Air Traffic and Navigation Services; PRASA and SANRAL plus its concessionaires.

Such a big bite worried MPs in the first transport parliamentary committee meeting as much as it did private sector comment sector beforehand, i.e. the idea of establishing a national entity for all forms of transport i.e. road, rail, air and maritime all in one go. MPs  suggested that the Regulator be allowed to take on one area of endeavour at a time.

Even a bigger bite will be that eventually, the proposed Bill includes the concept of regulation within the taxi industry, it was noted from the meeting from the comments made by DoT representatives in their time slots.

Price determination

The body of the Bill provides that the Regulator will consult with interested parties and the public when considering the pricing proposal of a regulated entity and whether it is fair and reasonable. Subsequently if agreed to, a consent order will be published in the government gazette taking effect on the date set.

On the whole question of the roads on which transport survives for its existence, since the Regulator would be a “Chapter 9 institution outside the public service and its independence subject only to the Constitution”, it therefore can be the functionary authorised to sign off on the prices it decides upon.  Important was the fact that should issues arise, the Economic Regulation of Transport Bill as proposed would trump the SANRAL Act.

Up to date

As a Section 76 Bill, the Transport Economic Regulator Bill will now have to be passed through the NCOP to all nine provinces for comment and mandates.

 

Posted in Finance, economic, Public utilities, Trade & Industry, Transport0 Comments

Hopes pinned on PetroSA comeback

…… may 15 2020…..

CEF outlines plan to save PetroSA

…… In a series of statements to Parliament’s Mining and Energy Portfolio Committee, acting CEO of Central Energy Fund (CEF), Lufuno Makhuba, surprised many with a promise of not only totally restructuring government’s stake in the energy sector but to save ailing oil and gas subsidiary PetroSA with major capital “re-vitalisation”.

He also hinted on plans to enter the fuel retailing industry as a major player, PetroSA currently owning only one fuel station in the Free State.

Pipe plans

Makhuba stated that it would be proposed that “the Transnet fuel pipeline” (which particular one was not named) should fall under the management of CEF with income re-routed accordingly.  The plan also was a request that PetroSA should move towards LNG developments and to execute liquid nitrogen gas (LNG) projects with “strategic partners”.  He also proposed that CEF should receive 25% of the national fuel levy.

In order to breathe new life into PetroSA, Lufuno Makhuba suggested that in addition a proportion of carbon tax funds should be re-directed by Treasury to assist in the “recapitalisation” programme as well as the previously mentioned pipeline income.  He said that CEF would acquire by transfer other state “energy assets” in order to build its portfolio income.

Makhuba told Parliament that the CEF was now “busy reducing operational costs and divesting in unnecessary  buildings” as a holding entity.   The liability on its books of an estimated figure of R8bn mainly arising from the PetroSA Mossel Bay gas to liquid operations would be “dealt with”.

The answer

“Until now”, he commented in his presentation, “CEF had had no operational plan, no strategic direction and has been subjected to a leadership vacuum.”    He said he and his colleagues were at the moment producing the final plan to solve the group’s two most pressing problems – that of restructuring the group so that activities were inter-connected and to provide for the principle that PetroSA becomes “a revenue producing National Oil Company as per its mandate”.

Lufuno said that the new plan would also involve integrating its subsidiaries Strategic Fuel Fund (SFF) and iGas with PetroSA.

Long time coming

Parliament has been demanding a plan during portfolio meetings for PetroSA for over two years, some attempts at doing this being attempted but always they had come before committee with neither Treasury approval or any form of accompanying financial plan. (ParlyReports in 2018/9 refer)  Parliament has rejected all over the months.

Lufuno said that the CEF group was still making an overall loss, and estimated R330m for 2018/9 which was an “improvement” on the R1.4bn net loss reported in the previous year, most of the loss attributable to  PetroSA. However, no actual numbers were  once again presented.

Right into the red

Makhuba, presumably speaking in his dual capacity as financial officer, his previous position at CEF, said the PetroSA deficit “weighs heavily on the group’s earnings and although PetroSA remains in the red, it had nevertheless improved on the losses reported in  previous years.   PetroSA recently suffered an “impairment” on its balance sheet of R14bn.

Matters to be dealt with in the next few weeks include deploying an external refinery team to optimise refinery operations at Mossel Bay. Other tasks include strengthening sales and business development and institute consequence management

Issues and problems at PetroSA are not being taken lightly,” he told his audience of MPs.  “We can’t have poor business performance, quarter on quarter, and not react as has been the case in the past.  The new plan deals with how to hold people to account and what to do with assets.”

Desperate stuff

In what sounded like a business rescue discussion, Monde Mnyande, acting chairman of CEF, (it appears on loan from SA Reserve Bank) said that CEF had established that in deciding what to do there were three options before them . The first was doing nothing at all, other than finding find R25m to finalise PetroSA accounts for the current year,  which option would probably collapse CEF in the process and lead to costing the taxpayer “billions in write offs” .

The second option was restructuring CEF but closing down PetroSA at a cost of some R15bn with the associated cost to the Mossel Bay and Eastern Cape economy.

Just money

The third option was to source R18bn from equity input and re-structure PetroSA with its new management developing a partnership strategy on the basis of new initiatives in the petroleum industry.

Monde Mnyande said that the third option was preferred but there was no intention of asking Treasury for this as a bailout for PetroSA.  What the new CEF board wanted would be the portfolio committee’s support for the restructuring process as described.

As far as PetroSA was concerned,  he said, such restructuring would involve inviting strategic partners to assist them with upgrading refinery operations, divesting from upstream blocks and investing in downstream activities.

Sasol story

Following this, a major case of misunderstanding by the media arose.  During questioning, Cheryl Phillips (DA,) said she knew that PetroSA only had downstream one filling petrol station in the Eastern Cape but asked if there was any plan for PetroSA was to build more petrol stations of its own or acquire such assets from others.  She reminded MPs of the aborted PetroSA deal with Petronas/Engen.

Monde Mnyande replied that he knew such assets did exist on the market at this moment and in particular he was aware that Sasol was selling such assets.  This sort of thing might be an example of the way PetroSA had to go, he said.

Due to misreporting in minutes and the what perhaps was said somewhat indistinctly by Mnyande, a head line emerged in Business Day that PetroSA was already involved in a deal with Sasol.  Mnyande never said this, confirmed by ParlyReport, and a CEF spokesman denied that he did a week later in a statement.

Looking back

Mnyande continued with his time slot stating that one of CEF’s biggest mistakes in the past was to think it could operate alone without the government and DMRE, especially during turbulent times at Mossel Bay. A great number its executives without experience were in acting roles and failed to follow the basic rules, he said.

In answering questions by Kevin Mileham (DA) on the illegal sale of national strategic fuel stocks by the Strategic Fuel Fund four years ago to a large oil trader-consortium, Lufuno Makhuba  replied that the contested sale was the subject of a court case nearing completion, the oil still being retained in storage in South Africa.       Chair Monde Mnyande said a new CEO, who was a woman well known in the industry, would be appointed as CEO for SSF shortly.

Let’s hear more

In general questioning, which is difficult in virtual, Mileham threw cold water at any plans to save PetroSA in the manner suggested since any such idea at the moment could not be loaded on to the taxpayer’s shoulders. However, he said the DA would await developments and finalisation of the plan before responding in full

He asked if, in the process of restructuring, whether it was CEF’s  plan to move the regulatory authority, the Petroleum Agency of South Africa, out of CEF to a new domain. As the meeting timed-out, the chairperson asked Lufuno to respond to Mileham’s question in writing.

Posted in Energy, Enviro,Water, Finance, economic, Fuel,oil,renewables, Public utilities, Trade & Industry, Transport0 Comments

Parliament goes virtual for lockdown


….20 May 2020…

SA first with virtual e-debate

….At the same time as the venerable British Parliament was tackling what seemed to them a totally invasive idea of a virtual e-Parliament, South Africa was simultaneously tackling the same subject as COVID 19 arrived at the shores of Africa.  Immediately, the issue of the consideration of lockdown conditions arose in SA and the question of how Parliament could work with everybody boarded.

Whilst British parliamentarians dithered on the subject and due to the fact that the UK kept social distancing going for a much longer time before their lockdown came into force, South Africa’s virtual website portal went up in an incredibly short time and was first in the world by a few days.

Maak ‘n plan

In comparison, the British virtual system. which is also now also working, only allows for debate in the House of Commons whilst South Africa, in terms of its Constitution, follows proceedings in both the National Assembly and the NCOP and also at committee level as well, with the current joint meetings providing provincial coverage.

The design of the entrance website is pretty similar to the UK portal, the principle being the same but with a British budget, the UK presentation is a good deal slicker.  All the same, the Daily Telegraph complained after the UK launch that all that the voice links in the meetings sounded like Darth Vadar and it was confusing to know who was speaking.

Many players

The beginner’s look of the SA virtual meetings is understandable in the situation.   One can see in SA technicians are having a daily struggle with people using Skype and Zoom connections for the first time, some of whom have little knowledge of the difference between an app and a hard drive.

Most are trying, knowing it all has to happen and it would be best to learn quickly but a certain number of senior politicians still demand studio facilities and a camera.   We shall no doubt look back in years to come and laugh at these early attempts to live a virtual reality life.

48 hours allowed

In South Africa, where the decision to suspend the SA Parliament was a “precautionary measure” in the light of a forthcoming Cabinet decision on how to deal with the pandemic, Parliament’s presiding officers in the form of chief whips and political parties all agreed beforehand on the 17 March that the remaining two days of parliamentary business would be devoted to urgent legislation only.

As a result of this decision, Budget Papers in the form of the Division of Revenue Bill were hustled to the National Assembly for adoption in order that money could flow to the provinces and local government.   A Cabinet meeting followed and the Speaker of the House, who acts for the President in Parliament, was summonsed for a meeting soon after.

Hard facts

The role of Parliament is indispensable for the country to run.   The Constitution demands that Parliament scrutinise and oversee all Executive actions, processes Bills in the  form of legislation, to provide a forum for public consideration of issues and to facilitate public involvement in its legislative and other processes. Such is inviolate, whatever the conditions facing the country.

Realizing that the only way was virtual meetings to consider matters,  Speaker Thandi Modise issued a statement that Parliament would have to “intensify its technological capabilities for a transition to an “e-Parliament”.   She concluded that as a result, a decision had been taken that “Parliament will be able to resume taking advantage of virtual media technology”.

 Into action

The leave period, or recess, for MPs was duly cancelled and parliamentary staff were assigned permits to stay at work.  They used this time for urgent meetings -to assess how Parliament could best resume its proper function under lockdown regulations and deal with the lacuna (i.e. a situation where there is no applicable law to deal with the matter).

It was agreed by the Speaker that priority had to be given in Parliament to virtual meetings that required oversight on COVID-19 matters, bearing in mind the limited number of meetings that could be held at any one time.  It was also agreed that any virtual meetings would be primarily joint meetings based on the government cluster system, i.e. meetings comprising the various representatives from a number of differing committees affected by one subject.

 Order, order

Chief whips were then tasked to adapt parliamentary rules to meet the new conditions. All this had to be based on the procedures, precedents, practices and conventions, which have been developed over the years, known as parliamentary rules.  This was in respect of not only how NA and NCOP virtual plenary meetings were to be run but how debate was to be conducted committee.

Speaker Thandi Modise then confirmed to all political parties that in the planned virtual meetings, members of parliament would have the same powers, privileges and immunity as they have ordinarily in parliamentary proceedings.  Quorum requirements were to be exactly the same she said, and MPs would be entitled to cast their votes either electronically or by voice.

Public participation and access to virtual proceedings had to be made possible, said Modise, “in a manner that is consistent with a participatory and representative democracy, virtual meetings to be live-streamed wherever possible”.

Global comparisons

Despite time limitations Parliament was indeed able to try and benchmark against some other legislatures who were operating as legislatures whilst their countries were fighting against COVID-19. To the surprise of all, little was found.

The prime constitutional constraint in South Africa’s case was that any virtual meetings had to involve both the sittings of the National Assembly and the National Council of Provinces and these had to be seen to be happening if the public wished to observe proceedings, a factor necessary according to the Bill of Rights.   This was overcome by making most meetings “joint” committee meetings of parallel committees from both Houses.

One and only

In the UK, which has no constitution, a parliamentary virtual meeting concept had been designed and planning was six months into happening.  From a standing start, SA Parliament achieved their deadline in about a fortnight.  Australia and New Zealand are still only thinking of going about it and the USA is still fighting about lockdown itself.

Without fanfare, the parliamentary process under the extraordinary conditions began internally in the Cape Town precinct after a very short training period on 20th April, with access being made to the existing  public parliamentary website on the link www.parliament.gov.za/parliament-tv.

 Time will tell

The whole thing seems to work quite well but obviously glitches occur regularly whilst MPs struggle from time to time to find the mute button and some appear if they have just got out of bed.  Already, however, after an initial learning curve, things are changing and before long it will be the way things happen.

At each meeting, provision is made for the parliamentary secretary to log in those MPs present at a virtual meeting, name them, see them, accept apologies and at point count voting if required from those logged in through the  electronic response system.   Minutes are established later through the audio track recorded in the same manner as before. This is quite some procedure to witness in some of the hallowed chambers where the Speaker once wore a wig.

An MP’s presence in any virtual meeting is established through a secure link sent to their email address which also enables counting to be established for the purposes of establishing a quorum, taking decisions on issues or voting on a matter. Links are established on Facebook, Linked-in, Twitter and Instagram, the photography on Facebook on parliamentary issues being quite stunning.

 7 out of 10

In general, the new parliamentary virtual world established is considered by most quite for such a rush and the process will no doubt tide the country through this terrible period in its history.  This aside from any opinion on how well MPs handle their own inputs and deal with difficult question of switching between one another to pose and answer questions.  What you see is what you get.  The result is not always pretty but it is legal.

One advantage is that with so much happening with lights flashing and buttons to worry about, there is little time for any MP to have a quiet slumber.

Posted in Agriculture, cabinet, Communications, Defence, Earlier Stories, Energy, Fuel,oil,renewables, Home Page Slider, Justice, constitutional, Police, Public utilities, public works, Security,police,defence, Trade & Industry, Transport0 Comments

Parliamentary Overview 12 June 2019….

 

Changing the guard…  

Plenty of note for business has happened legislatively during the parliamentary recess but perhaps none so important as the re-structuring of Cabinet. As a result  there will be a change in the appropriate portfolio committees to reflect any changes and a consequent shift in portfolio responsibility for various Bills held over from the previous Parliament.    In the areas of energy, trade and industry and communications this will be particularly interesting of who gets to be the chairperson in the light of differences emerging within ANC structures.

Parliament will choose its portfolio committee chairpersons for the National Assembly and select committee chairpersons for the National Council of Provinces on 27th June, two days after the State of Nation Address ANC party chairpersons.  These appointments reflect how a government governs on policy and legislation. Through the chairpersons.

Read more..Parliamentary overview 12 June 2019

Posted in Agriculture, cabinet, Cabinet,Presidential, Energy, Fuel,oil,renewables, Health, Justice, constitutional, Land,Agriculture, Trade & Industry, Transport0 Comments

Gigaba pushes for control of border posts

Treasury, Home Affairs at odds on customs issues

Parliament will be debating in the new session in August the Border Management Authority Bill.   What the Bill proposes is a single state entity known as the Border Management Authority (BMA) to oversee all aspects of the movement in the import/export of goods and to control movement of all persons either leaving or entering the country.

The idea is that all border law enforcement functions along South Africa’s fragmented 5,000 kilometres of border will be the responsibility of the BMA.   Read More……    Border Management Bill July 2018 PDF

Posted in Agriculture, Finance, economic, Security, Security,police,defence, Trade & Industry, Transport0 Comments

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