The Committee dealt firstly with the adoption of minutes, adopting minutes of 18 February and 4 March with corrections, and those of 26 February without correction.
The Committee then turned to the adoption of its draft Oversight Report on the visit to Department of Public Enterprises, and made some grammatical and content changes, asked that carat production figures be double-checked and that the Committee Secretary should also check whether beach mining was mentioned.
The report was adopted, subject to those corrections.
The draft Report on the oversight visit to South African Airways was adopted. Members debated whether issues raised by SAA’s staff should be included in the Report, but decided that this would help to track the issues, although the wording needed to be attended to. There were debates on whether it might be expected that international routes made economic losses, although one Member questioned why, since there was a demand for them, to which other Members countered that the fluctuations in the dollar and rand rate had a large influence. It was proposed that the achievements of SAA should be mentioned and a recommendation was inserted that the Minister of Public Enterprises should ensure that SAA became a financially sustainable state owned company. The Report was adopted with the necessary corrections.
The Committee also adopted its oversight report on the visit to Denel Dynamics and Denel Land Systems, with corrections and the inclusion of international long term orders, and a recommendation that Denel’s international business links should be supported by government so they could grow.
The Committee finally went through, but did not yet adopt, its draft Legacy Report covering its activities over the last five years. It was suggested that there be inclusion of a reference to the Presidential Review Committee into the state owned companies, that problems in Eskom would be noted, particularly in relation to Medupi and executive instability, and clear links established between the maintenance programme and security of energy supply. The wording for Alexkor’s Deed of Settlement was corrected, and issues of diamond theft were raised. The 48M electricity savings campaign should be included. Members were not entirely happy with the way that the follow up section read, and asked that this be redrafted with more specific dates. It was decided that the Committee Secretary would effect the necessary changes and then e-mail the revised report to Members to get their approval. If Members were to be recalled in April, they could meet shortly before the plenary to adopt the Legacy Report formally.
The Chairperson stated that the Committee would consider and adopt its minutes, oversight reports and legacy report.
Adoption of Committee minutes
18 February 2014.
Dr G Koornhof (ANC) proposed a correction on page 2, and another minor correction on page 2.
Dr Koornhof referred to page 5 and said, in the sentence “The Committee further noted that the existence of the PSJV would need the repealing of the Alexkor Act”, the “repealing” should be replaced with “renegotiated”. This Committee could not repeal an Act.
The minutes were adopted, subject to these amendments.
26 February 2014
The minutes were adopted, without corrections
4 March 2014
The Chairperson referred to page 2, and said, in the sentence: “He called upon Eskom to present to the Committee”, the word “Eskom” should be replaced with “SAA”.
The minutes were adopted, with this correction.
Oversight visit to Department of Public Enterprises: Report of the Portfolio Committee dated 11 March 2014
Mr A Mokoena (ANC) proposed grammatical corrections on page 5.
Ms G Borman (ANC) said that she had been present during the oversight visit.
Dr Koornhof was concerned whether the information in the oversight report was reflected in the Annual report.
Dr Koornhof referred to page 4, and said that he found the sentence “…senior officials of the Department of Communications have deliberately frustrated Infraco and delayed the policy directive” to be somewhat harsh. He thought that this should be reworded as “it is alleged that..”.
The Chairperson wondered if the sentence should be deleted.
Members agreed that it could be reworded as an allegation.
Dr Koornhof referred to page 5 and stated that the sentence which read, “initiate investigations into community trusts and ensure that they are accountable to the community” should be reworded, as it did not provide the full picture of the investigation. He stated that both PriceWaterhouseCoopers and the Master of the High Court were conducting the investigation.
Ms Borman did not have a problem with the statement.
Dr Koornhof enquired whether the figures in the report on carat production were reflected in the annual report.
Mr D Mocumi, Committee Secretary, stated that the carat production figures were in the report.
The Chairperson asked that this issue should be double checked.
Mr C Gololo (ANC) asked if the report referred to marine and beach mining.
Dr Koornhof noted that in the report there was no mention of beach mining, only sea and land mining.
The Chairperson indicated that Mr Mocumi should double check and corrections would be made where necessary.
The Oversight Report was adopted, subject to amendments.
Oversight visit to South African Airways: Report of the Portfolio Committee 11 March 2014
Dr Koornhof referred to page 1, and particularly to the portion reading “…lack of platforms to engage with management about issues of mutual interests, inaccessibility of management, uniform allowance, fatigue due to long hours of work, shortage of staff, the decision to have the domestic and international departures at the same terminal has caused long queues, distress among customers and delayed some international customers. The cabin crew complained regarding lack of relaxation (debriefing) facilities e.g. as kettles and beverages”. He stated that the Committee was supposed to present these issues to management of SAA. He stated that if this information was placed in a public document, it would reflect badly upon SAA and may be used by its competitors. The statement should be reworded as not to damage the national airline.
Mr Mokoena agreed with Dr Koornhof.
Ms N Michael (DA) believed that the Committee had a responsibility to include this issue in its oversight report. If the issue of refreshment areas as raised by pilots did not appear in the oversight report, then SAA may not be responsive in future.
The Chairperson stated that the Committee had promised to deliver information on SAA staff complaints to SAA management.
Ms Borman stated that this matter was general, as no names were mentioned.
Dr Koornhof noted that “inaccessibility of management” was a wide issue, and this referred to all management.
Ms Borman thought it could be watered down by saying that in some instances there was inaccessibility to management.
Mr C Gololo (ANC) referred to international routes making economic losses.
Mr Mokoena noted the London to Cape Town route.
Ms Michael noted that the new incoming committee should receive a report on the profitability of the London to Cape Town route. She referred to a newspaper article which indicated that the Cape Town to London flight was one of the busiest in the world, and asked how this could be unprofitable.
The Chairperson noted that reference was made to the Johannesburg to London flight.
Ms Michael noted the increase of people travelling from Cape Town to London and from Johannesburg to London and repeated her assertion that these international routes could not be unprofitable.
Mr Mocumi noted that fluctuations in the dollar and rand affected operating costs and this caused flights to experience economic losses.
Ms Borman noted that exchange rates had a big influence on fuel.
Dr Koornhof noted that it should not be generalised that all domestic fights were profitable, while international flights were not.
Ms Borman noted that SAA, in its report, referred to domestic routes and regional routes being profitable and international routes as being not profitable.
Mr Mokoena proposed a grammatical correction on page 3.
Dr Koornhof proposed a grammatical correction on page 3.
Mr Mokoena referred to page 4, and the sentence reading “the board of SAA should investigate whether there were any royalties due to SAA from the transfer of assets to Airports Company of South Africa”. The reference to “royalties” should be removed and replaced with “compensation”.
Mr Gololo noted that a recommendation on routes being unprofitable should be developed.
Ms Borman expressed the view that due to the dual mandate, there would be instances where flying could be at a loss.
Dr Koornhof proposed that the achievements of SAA should be included in the report, since it was a loss making entity.
Mr Mocumi noted that SAA’s achievements were in the report.
Dr Koornhof noted that increased cost was a problem for SAA. SAA’s costs increased but its income did not increase, and this was problematic as it ended up demanding that more be given to it.
Mr Mocumi replied that the issue mentioned by Dr Koornhof should be included in the observations of the committee.
Dr Koornhof proposed that the Committee should recommend that the Minister of Public Enterprises should ensure that SAA becomes a financially sustainable state owned company”.
Members adopted the Report, with the necessary corrections.
Draft Legacy Report on activities undertaken during the 4th Parliament (May 2009 – March 2013)
The Chairperson tabled the draft Legacy Report for consideration, and the Committee went through it, page by page.
Ms Borman suggested that the Committee should capture the report of the Ministerial investigation into state owned companies (the Presidential Review Committee) in the Legacy report.
Mr Mocumi agreed that this would be done.
Dr Koornhof enquired which companies would be left out, in the section on key challenges emerging.
Mr Mocumi replied that Transnet and Denel would be left out.
Mr Mokoena noted that the Committee must mention the problems in Eskom, as this was a national focus.
Ms Borman noted that the construction at the Medupi power station was two years behind schedule and felt that this particular challenge should be noted in the legacy report.
Mr Mokoena referred to executive instability within Eskom.
Mr Gololo proposed that the challenges related to specific entities should be included in its legacy report.
Dr Koornhof noted that the maintenance programme should be linked to security of energy supply for Eskom.
Dr Koornhof referred to the recommendations of the committee, and particularly to the sentence: “Interact with Department of Public Enterprises on implications of the Deed of Settlement as it relates to Alexkor.” He felt that the implications of the Deed of Settlement could not be a recommendation, and said that instead the Committee should be reviewing the Deed of Settlement. The issue of diamond theft should also be placed in the report.
Mr Gololo noted that the efforts of the Committee regarding the 49M electricity savings campaign should be included in the Legacy Report.
Dr Koornhof noted that the Department of Public Enterprises’ Spring Schools were part of the method of work of the Committee.
Ms Borman proposed that the Parliamentary Monitoring Group should be included as one of the stakeholders of the committee.
Dr Koornhof referred to section 6 of the Report, dealing with oversight trips undertaken. He noted that this section did not capture what was the standard of the follow-up issues. On its visit to Transnet from 16 to 19 November 2009, the follow-up issues noted, “The completion of the Transnet Pipeline” but the Legacy Report did not indicate that the pipeline had been completed.
Mr Mocumi noted that if all work was completed, then there was no need to have follow-up issues. He added that some of the follow-up issues that emerged from the oversight visit in 2010 may not refer to that year. He thought that follow up issues should be current.
Dr Koornhof noted that the “follow-up” section of the report seemed to indicate that it was following up on issues arising from the May 2010 visit.
Ms Borman stated that she was now going through the Legacy Report for the first time. She asked how far the issue of land claims for Safcol was.
Dr Koornhof referred to the oversight visit from 29 November to 2 December 2011 to South African Airways, Broadband Infraco, Department of Public Enterprises and Safcol. Four entities were mentioned but the follow-up issues only referred to Broadband Infraco.
Mr Mocumi said that all necessary corrections would be made, in line with comments raised by the Members.
Dr Koornhof noted that similar problems ran throughout the whole Report.
The Chairperson proposed that the Legacy Report should be reworked.
Ms Borman noted that as the Report was reworked, the column on status should be filled in, to inform the next Parliament’s committee what issues had to be addressed.
The Chairperson stated that there should be a natural progression in the report, in terms of the recommendations, the responses, follow-up issues and the status of the report. There would not be another meeting to adopt the Legacy Report. Instead, he suggested that the Committee Secretary should make the necessary changes and email that report to Members, and they could propose changes to it from that copy.
Dr Koornhof noted that if the Committee was to be recalled in April then a meeting could be scheduled before the plenary, to adopt the oversight report.
The Chairperson noted that if the Committee was recalled, then a meeting on the day of the plenary would be convened.
Oversight visit to Denel Dynamics and Denel Land Systems, Draft Report of the Portfolio Committee dated 11 March 2014
The Chairperson tabled the draft Report on the Denel Oversight visit and Members went through it, page by page.
Mr Gololo proposed a grammatical correction on page 2.
Dr Koornhof noted, in the Committee recommendations on page 5, that international long term orders be included in the Report, and not only long term domestic orders. Denel’s international business links should be supported by government so they could grow.
The Report was adopted, with that correction.
The Chairperson noted that this was the last meeting of the Committee and thanked the Members and the staff for their support.
The meeting was adjourned.
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