Report on 2012 Strategic Plan of Department of Public Enterprises; Report on the Submission to the Presidential Review Committee; Committee Programme

Meeting report

Election of Chairperson
Report on 2012 Strategic Plan of Department of Public Enterprises
The Chairperson asked if the Committee had any remarks or proposals on the agenda for the day.

Ms C September (ANC) questioned the wisdom of dealing with the Budget Vote now as the rules stipulated that it was the Extended Public Committees (EPC) that had to deal with it first. It would not be a train smash if the Committee did not complete the Budget Vote process now as it was only required that this be done in May thereabouts.

Mr A Mokoena (ANC) proposed that the Committee should invite the Standing Committee on Public Accounts (SCOPA) to brief it on the work it had done during the public hearings held on the irregular expenditure by Transnet.

The Chairperson said that normally SCOPA gathered evidence that it accumulated at a hearing, deliberated and then put it in a report which was tabled in Parliament. This report was also sent to the relevant Committee that performed oversight over the particular entity. The report was also debated in the National Assembly (NA).

Mr Mokoena said that SCOPA should be invited so that the Committee may have an interaction with them. 

Ms September said that Mr Mokoena was advocating for the sharing of views.

The Chairperson agreed and instructed the Committee Secretary to draft a letter to SCOPA.

Dr M Oriani-Ambrosini (IFP) questioned whether the rule mentioned by Ms September even existed. The agenda had been made public and the budget vote was listed as an item and should therefore be dealt with.

The Chairperson said that said that there was still outstanding information that the Department of Public Enterprises (DPE) had to submit to the Committee which would be used in a report for the Budget Vote. Ms September was making the point that there was no need to rush the report and that the Committee could deliberate but not finalise it now.

Ms September said that there was need to rush the Report on the Budget Vote as there was still outstanding information that the Committee still had to receive.

Ms G Borman (ANC) agreed with Ms September.

Mr Mokoena also agreed with Ms September and said that the Committee should do a thorough job and have all information ready.

Ms N Michael (DA) also agreed that there was outstanding information which would have a bearing on the Committee’s decision. There was also the issue of South African Express withdrawing its reports and the Committee had to have all relevant information in order to apply its mind correctly. Dr Oriani-Ambrosini was also correct that the EPCs should not determine whether or not the Committee made any decisions.  The information dealt with figures, statistics and other entities so it was not something that could be skimmed over. In addition Members would still have to discuss these issues with their parties.

Mr M Sonto (ANC) agreed with the view that the Committee should not finalise the Budget Vote now.

The Chairperson said that the report would be re-tabled before the EPCs, and the Committee would not deal with it now, further the Committee should wait until the information it had requested was provided to it was made available. The report stands over until next term during the first week.

Ms Michael said that she had received the agenda for the second term where it was specified that the different clusters would meet on 17-19 April to discuss the National Planning Commission’s discussion paper. During the first week the Committee should not have any meetings.

Committee Second Term Programme
The Committee tabled the second term programme for consideration.

The Chairperson said that the programme was already finalised by Parliament via the Rules Committee and was the official programme.

Ms September said that the Committee had decided during the workshop earlier this year to use the time it had to conduct oversight work. The Committee had decided that it had to go back to Eskom and perform oversight over the job creation and skills development initiative.

Ms Borman said that she had no problem with what Ms September said, however it seemed like what Ms Michael was referring to had come from Parliament.

Ms Michael said that she had received an email from the Honourable Cedric Frolick (House Chairperson). The email stipulated that during the first week of the second term there would be briefings from the four parliamentary cluster.

Mr Mokoena said that he supported what Ms September had said but in light of the new information the Committee should go with the general flow of what Parliament aimed to do.

Ms Borman said that it would be pointless for the Committee to plan for the first week because the House Chairperson had sent an email specifying the programme for the first week. 

Ms Michael suggested that the Committee should begin with its planning from the week of 24 April 2012. 

Mr Mokoena agreed and suggested that the Department of Public Enterprises (DPE) should provide the Committee with information on the winding up of Aventura and Pebble Bed Modular Nuclear Reactor (Pty (Ltd) (PBMR).

The Chairperson said that the entities mentioned by the Honourable Member could not come to Parliament for oversight; the Committee would have to go to them and see for itself what was going on. The draft programme suggested that during the week of the 24 of April the Committee would conduct oversight visits to address the issue of the future of the South African Forestry Company (Limited) (SAFCO) and the remuneration recommendation report from the DPE, did the Committee agree with the proposal?

Members agreed to this.

The Chairperson moved on to 8 May 2012 where it was proposed that there would be an oversight visit in order to receive a briefing from Transnet on its infrastructure programme, job creation and skills development. 

Members agreed to the proposed oversight visit.

The Chairperson said that there would be a joint meeting with the Portfolio Committee on Communications on the issuing of the ECS license to Broadband Infraco.

Members agreed with the proposal.

Ms Borman said that she was worried that the sooner the Committee performed its oversight role over Telkom and Transnet the better because of the big spend that came from these companies. Could Eskom not come before Infraco?

Ms September said that the Committee did tend to look at the bigger State Owned Enterprises (SOE) at the expense of the smaller ones. The smaller SOEs were also important.

Ms Borman said that she agreed that the smaller SOEs were important however the spend for the other two was massive and the sooner the Committee dealt with them the better.

Mr Mokoena said that the smaller SOEs could be dealt with first. 

Members agreed.

The Chairperson said that on 29 May 2012 the Committee was supposed to have a joint meeting with the Portfolio Committee on Defence on the orders from Denel by the military as sell as the military strategy. The defence strategy would not see the light of day until September; the Committee should then consider the recapitalisation of Defence and Aero Structures.

Members agreed.          

The Chairperson said that the next item was the oversight visit of 5-8 of June to SOEs. Members had already mentioned PBMR, Aventura, Eskom, Infraco and Alexko. It was important to meet with communities and spending more time doing this then being in meetings and boardrooms.

Mr E Marias (DA) said that Eskom should be a priority.
Mr Mokoena said that it was important for accounting officers to be present during the visits.
The Chairperson said that he was putting on the table that the Committee should visit the Pebble Bed Modular Reactor (PBMR), Aventura, Eskom and Infraco.

Ms September said that the Committee wanted to see how the SOEs were performing and not be briefed on visions and missions etc. The Committee should visit PBMR and Aventura for one day because they were both in Pretoria.

The Chairperson said that the Committee would then go to Eskom’s plants; Medupe and Khosile.

Mr C Gololo (ANC) suggested that the Committee could make use of Eskom’s private plane to get to the plants as this would save time.

Ms Borman proposed that 5 June could be for PBMR and Aventura, 6 and 7 June for Eskom and then 8 June could be for Infraco.

Mr M Nhana (COPE) seconded the proposal.

Members agreed.

The Chairperson said that the next item was a briefing from South African Airways (SAA) and South African (SA) Express.

Members agreed.

The Chairperson said that 19 June was set aside for a briefing by the DPE on its 1^st Quarterly Report.

Mr Mokoena proposed that SAA and SA Express should have separate days so that the Committee did not have a superficial treatment of these entities.

The Chairperson said that if the Committee decided to treat these entities separately then it would also have to decide on which one to prioritise.

Ms September suggested that SA Express should be dealt with on 12 June. DPE and SAA should be dealt with on 19 June.

Ms Borman said that she was happy to separate the two SOEs however they should not be lumped together with the Department when it would present its Quarterly Report. SAA could be lumped together with the recapitalisation of DSA.

Ms September said that during the last meeting SA Express had said that it had withdrawn its financial reports; there was nothing on record from the Committee’s side to this effect. The matter of SA Express had to be handled very carefully.

Mr Disang Mocumi, Committee Secretary, said that the state law advisers were still working on the Opinion and would communicate this to the Committee. There had not been any letters from the Ministry regarding the withdrawal.

Mr Mokoena said that if SA Express was invited to make a presentation on the withdrawn forensic reports, what would be the status of such a process?  SA Express had to be sanitised completely. The Committee also had to write to the Speaker informing his office of what had happened at the meeting and then add that the reports were withdrawn so that it would not seem like the Committee was party to anything that misled Parliament.

The Chairperson summarised and said that on 12 June SA Express would come before the Committee. The Committee would find out what it wanted to present before the meeting took place.
On June 19 the Committee would have the 1^st Quarterly Report from DPE. SAA would then be grouped with the recapitalisation report of DSA in the third term.

Members agreed and the programme was adopted as amended.

Report on the Submission to the Presidential Review Committee
The Chairperson said that the next item on the agenda was the Committee’s report on the Presidential Review Committee (PRC) for SOEs.

Mr Mocumi said that the document was developed by the research unit and was as per the request from the PRC for purposes of a consolidated report from Parliament on SOEs. The report highlighted the various entities that fell under the oversight function of the Committee. The report contained information on when the entities were established, the Acts that created them and also the challenges faced by DPE when managing the SOEs.

Mr Mokoena said that the submission was fair however the Committee’s views should come out clearer in respect of oversight and recommendations. An issue that should be mentioned was personnel that moved on from SOE to SOE for various reasons, this should not happen. There were 500 SOEs and this was too much, the suggestion from the Public Service Commission (PSC) that they should be streamlined would not work.

Ms Borman asked if PBMR should not be included under SOE.

Dr Oriani-Ambrosini said that he would like to place on record his position and that of his party. The report and this entire exercise missed some of the parameters that had been suggested by the IFP.

The Chairperson interrupted and said that the report had to have consensus from all political parties as its basis.

Dr Oriani-Ambrosini said that this need not be the case.

The Chairperson continued to say that there was nothing that prevented political parties from making submissions to the PRC.

Dr Oriani-Ambrosini said that the document emanated from the Committee of which the IFP was party, if it did not distance itself from the document then it would be bound by its content. The Committee may register this minority view, it was not mandatory. The aim of this exercise should have been to retain each SOE under its specific line function; a prior assessment to determine compelling needs of the public should have been done after which it should have been undertaken to privatise SOEs. SAA should be privatised as it was receiving state funding to put other airlines out of business; it was destroying the tourism industry and was a menace to the country. Denel should also be privatised as well as Alexcor. Transnet should be broken down as it was deeply inefficient. SAFCO should also be privatised.

The Chairperson referred to page 9 and requested that PBMR should be included as an SOE as it had not been winded down.

Ms Michael said that the DA was of the view that SAA and SA Express should be privatised. Infraco should fall under the oversight function of the Department of Communications- it was misplaced where it currently was situated in the DPE. There had to be more private-public partnerships especially for Transnet and the port system.

Mr Mokoena said that South Africa was a developmental state and SOEs should not be viewed solely as failing companies. SOEs play a role within the developmental state.

Mr Nhana said that the PRC should open the debate on whether or not to privatise SOEs. There had to be a national debate on the privatisation of SOEs.

Mr Mokoena recommended that Parliament should suggest that the PRC should have more than the 18 months that it had been given as this time was too short.

The Chairperson said that he was not sure that Parliament had the power to recommend that the time span be increased as this was a presidential committee with terms of reference.

Mr Mokoena said that there were no terms of reference. It was said that the terms of reference were to be formulated by the PRC. 

Mr Gololo asked what would be the reason for extending the term of the PRC.

Mr Mokoena replied that Parliament should just be sensitive to the enormity of the task and that perhaps the time span should be extended.

Mr Sonto said that a sentence could be put in to the effect that if the PRC did not finish its work it may be necessary to give it more time.

Ms Borman agreed that the Committee could not recommend that the time span of the PRC be extended; this would be up to the President even if it was necessary.

The Chairperson said that certain wording to the effect that if the workload was too much and there was a need for the time span to be increased, Parliament would encourage it however a clear recommendation to this effect could not be done.

Members agreed.

The Chairperson put to the Committee whether the report should be approved and it was.

Outstanding Minutes
The Chairperson tabled 3 outstanding minutes for consideration. These were dated 7 February, 21 February and 28 February 2012.

The Committee made grammatical and sentence structure corrections to each of the minutes before adopting them.

The meeting was adjourned.