Discussion of Programme for Oversight Visit to Department and entities

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Public Enterprises

21 November 2011
Chairperson: Mr P Maluleke (ANC)
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Meeting Summary

The Committee deliberated on its draft programme for its oversight visit scheduled to start on 29 November 2011. The Committee would visit three provinces in four days – the Committee Secretary would make amendments to the programme so that the Committee could make the most of its oversight. Members debated whether or not the Committee should include a visit to South African Express Airways (SAX) during its oversight. The Committee decided to correspond with SAX to inform it that the Committee had noted some additional information that SAX had not disclosed to the Committee in its most recent meeting with the Committee. That information, according to the independent auditor, involved the conduct of SAX management and had very serious implications. Subsequent to the meeting with SAX, the independent auditor had informed the Committee that it might have to withdraw its audit opinion on SAX to say that, instead of SAX having made a profit it had in fact made a loss. The Committee would ask SAX whether or not the forensic investigation and report on irregular matters reported through its fraud hotline had been completed.

The Committee had also raised a number of Public Finance Management Act (PFMA) issues experienced by SAX and other state-owned companies that the Committee still needed more detailed information on. The Department should provide the Committee with follow-up on this during the oversight tour.

The Committee adopted the minutes of thirteen of the meetings held during the 2011 year with amendments. Amendments were limited to the correction of minor technical and language errors. The Committee agreed to incorporate the resolutions and recommendations made by the Committee in its various meeting into its 2012 programme.


Meeting report

Adoption of Outstanding Committee Minutes
The Committee adopted the minutes of meetings that took place on the following dates in 2011: 22 March; 29 March; 24 May; 31 May; 28 June; 16 August; 23 August; 25 August; 11 October; 12 October; 18 October; 19 October and 25 October.

Members corrected several minor technical and language errors and thereafter adopted all the minutes with amendments.

Mr P van Dalen (DA) commented that the Committee had resolved at the end of 2010 to not leave the adoption of minutes to the end of the year and to instead adopt the minutes of the previous meeting at every subsequent meeting so as to keep up to date with this task.

The Chairperson replied that Mr van Dalen was right and that the Committee would aim to stick to this in the coming year.

Ms G Borman (ANC) and the Committee members thanked Mr Disang Mocumi, the Committee Secretary, for the excellent minutes.

Mr G Koornhof (ANC) suggested that some of the “resolutions” and “recommendations” made during the 2011 year be highlighted by the Secretary and incorporated into the Committee’s 2012 programme so that they were not lost.

The Chairperson suggested that the Secretary prepare a short document, of even one page, highlighting some of the recommendations and resolutions made by the Committee in 2011 for this purpose and that this should be done in preparation for the Committee’s strategic planning for 2012 and/or its first meetings in 2012. The document should include issues that needed to be followed-up on as well as outstanding answers and information promised by delegates.

The Committee agreed that this should be done.

Discussion of Plans for Oversight Visit to DPE and Public Entities on 29 November
Mr Mocumi presented the Committee’s planned oversight visit which included a half-day visit to the Department of Public Enterprise (DPE) in Pretoria on 29 November 2011. The Committee would talk to staff members employed by the DPE to get a feel for the working environment at the DPE.  In the afternoon (of 29 November), the Committee was scheduled to visit the headquarters of Broadband Infraco. Infraco had reported that its documentation management system had been in a complete mess and that it had implemented measures to address this. The Committee would be assessing Infraco’s progress on its turnaround strategy to deal with these issues amongst others. The Committee would visit the Eskom Medupi and Kusile power stations the following day. The oversight would focus on job creation and skills development, as well as the working environment at these stations. The entities would all be advised to keep their presentations short so that the Committee could have as much time as possible for oversight. The Committee would then visit the South African Forestry Company Ltd (SAFCOL) in Mpumalanga the following day on the 1 December. It would possibly engage with the community stakeholders on land claims, community involvement in SAFCOL as well as the working conditions at SAFCOL. On the last day the Committee would visit Transnet and do a site visit at the Durban Port terminal and the pipe line.

Discussion
Mr K Dikobo (AZAPO) advised that the Committee Secretary should inform Transnet that it should not repeat the presentations that had already been given to the Committee in Parliament but that it should rather do specific presentations on the actual site visits and that these should be incorporated into the site visits.

Mr A Mokoena (ANC) commented that the pipe line was very long and that he did not just want to see the start of the pipe line and its mechanics. Was it too much to ask for Transnet to arrange for helicopters to fly the Committee over and along a section of the pipe line?

Mr C Gololo (ANC) supported this suggestion.

The Chairperson stated that the Committee could ask if this was possible.

Ms C September (ANC) proposed that the Committee raise the problems reported by South African Express Airways (SAX) with the Deputy Minister of DPE during their visit. Furthermore, the Committee had raised a number of Public Finance Management Act (PFMA) issues experienced by SAX and other entities that it still needed more detailed information on. The Department should provide the Committee with follow-up on this. The SAX should be included in the Committee’s upcoming oversight visit as the Committee had received “extremely worrying signs” from this State-Owned Enterprise (SOE). The oversight visit would allow for an opportunity to have “a bigger bite” at the issues at SAX.

Ms Borman agreed with this suggestion but said that the Committee really needed to engage with the forensic report that SAX had said it was busy with at the time of the most recent meeting held with them. She did not know if this report would be available for the Committee to engage with before the oversight tour.

Mr van Dalen said that SAX could surely brief the Committee on the status of the forensic report without necessarily going into too much detail. Ms Boyle, the Chairperson of SAX, had said that irregular matters reported through the fraud hotline had become known to SAX “after the fact” but that it had been discovered that SAX had known about the irregular matters. This was very concerning as it means the Committee had not been told the whole truth by SAX in its meeting with them. The Committee needed to get to the bottom of this. Mr van Dalen urged the Committee to visit SAX and ask it these questions; otherwise the Committee was being reminiscent in its oversight role.

Some members were concerned that the Committee might be crowding its oversight programme with too many visits and meetings.

Mr Dikobo said he did not want for the Committee to not be thorough in its oversight.

Mr van Dalen suggested that a meeting be held with SAX in the evening if need be. The issue was a very urgent one and should not be put on hold until the start of Parliament in 2012.

Mr Koornhof said that if a meeting were to be convened with SAX there were certain key individuals that would need to be present. The meeting should be put on hold for now, but in the meantime, there was nothing prohibiting the Committee from writing a letter to SAX to say that it had noted some additional information that SAX had not disclosed to the Committee. That information, according to the independent auditor, involved the conduct of SAX management. This had very serious implications. The Committee had to adopt SAX’s Annual Report, but all of a sudden the independent auditor had informed the Committee that it might have to withdraw its audit opinion on SAX to say that, instead of SAX having made a profit it had in fact made a loss. This was very serious and there was no quick fix for the issue. The Committee needed to think carefully about how it should deal with the issue.

Mr Mokoena suggested that the Committee also ask SAX how far along it was with the forensic investigation and report and whether or not it was ready to present it to the Committee. If the forensic report had already been completed then there would be no need to wait until next year to meet with SAX.

The Chairperson stated that this would be done.

The logistics of timing and traveling arrangements would be reconsidered and finalised in due course.

The Chairperson confirmed that the Committee would be meeting with Transnet and Transnet Second Defined Benefit Fund at 09h00 on 25 November 2011.

The meeting was adjourned.

 



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