Public Enterprises Budget Review and Recommendations Report

Meeting report

Opening Remarks by the Acting Chairperson

The Acting Chairperson welcomed everyone to the Committee meeting and indicated that the purpose of the meeting was to consider and adopt the draft Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Public Enterprises. There were apologies from Mr N Nkankwa (UDM), Mr K Morapela (EFF) and the Committee Chairperson, Ms D Letsatsi-Duba (ANC). The Acting Chairperson requested the Members to adopt the Agenda of 22 October 2014. Ms G Nobanda (ANC) moved for the adoption of the Agenda and Ms P Van Damme (DA) seconded the motion.

Draft Budgetary Review and Recommendations Report (BRRR)

Mr Disang Mocumi, Committee Secretary, firstly apologised to the Members as the report contained grammatical errors but promised this problem will be rectified. The Report listed the entities that the Committee had interacted with. The Report also spoke to where information contained in it had been accessed from the State of the Nation Address (SONA), Department of Public Enterprises (DPE) Annual Report and Financial Statements. The Report also contained a summary of the Department’s Key Performance Achievements for the 2013/14 financial year and this took a large portion of the Report. It also contained a report of the Auditor-General of South Africa (AGSA). The Department had received an unqualified audit for 2013/14. An analysis of the financial management of the Department for the financial year 2013/14 was also provided. The observations and recommendations of the Committee were also contained in the Report. Recommendations were made in relation to observations made by the Committee and were directed towards the Minister of Public Enterprises.

The Acting Chairperson stated that the Committee should follow up on reported cases where the department provided computers to rural schools that did not have access to electricity or lack of adequate training of teachers on how to use the technological equipment as this was critical important to ensure that the computers were utilised effectively to improve the quality of education in the country.

Mr E Marais (DA) said under recommendations on page 54, the department, as guided by the National Development Plan (NDP) needs to ensure that there are improvements in integration, harmonisation and alignment of planning and implementation in all three spheres of government and State-Owned Companies (SOCs).

Mr Rodney Mnisi, Committee Content Advisor, agreed that the issue of integration, harmonisation and alignment of planning and implementation was critical important as the foremost priority is to create job opportunities, reduce poverty and inequality. 

Mr R Tseli (ANC) asked if it was possible to explain the acronyms provided in the Report as a process of improving the recommendations. The Report failed to mention the audit opinion of the South African Airways (SAA) and South African Express Airways (SAX).

The Acting Chairperson replied that the Report only focused on the entities that already presented their Annual Report and Financial Statements. 

Mr Tseli appreciated the response but emphasised that the Report must indicate the reason why the two entities were omitted in the financial report. How did the Report arrive at 83% performance targets as the Department only achieved 50% of the targets? As part of the recommendations, the Report must replace “consider” with “must” throughout the recommendations as in consider the Department might decide otherwise. The recommendations should it make clear that there would be consequences for non-performance of targets. The Report must add recommendation that speaks of skills retention strategy as this was highlighted as the key challenge by the Department.

The Acting Chairperson replied that it was still difficult to determine why the Department continuously lose critical skills to entities but the issue seemed to be on remuneration. The recommendation was for the Department to introduce the system of cumulative bonuses and also introduce policies that would ensure that employees can work for the Department for at least 5 years before considering other offers.

Ms L Bramwell, Committee Researcher, replied that the 83% achievement of performance targets was based on the Annual Report for 2012/13 and 50% achievement was based on the current financial year.

Mr Mnisi replied that team will explain all the acronyms as this will make it easier to read and understand the Report. It is appropriate to replace “consider” with “must” for the recommendations.

Ms N Michael (DA) suggested that the Committee must remove the recommendation to allocate the necessary resources to ensure the successful implementation of the SAA’s Long Term Turnaround Strategy as the entity has not released its Annual Report and Financial Statement. The Minister of Finance in consultation with the department must allocate additional funding to capacitate the Department and address the human resource constraints. The oversight over SOCs must be organised in proper way taking into consideration of the accommodation and transport arrangements. The last Committee oversight visit was allocated during Constituency Work and this was totally unacceptable and showed lack of proper planning.  

The Acting Chairperson responded that the last oversight was not done by the Committee as it was a joint visit and everything was organised by the Portfolio Committee on Energy. The oversight over SOCs must be organised in a proper way as this is an important mandate recommended by the Parliament.

Mr Tseli felt that although the Boards of the Department were paid higher salaries, however they remained ineffective in dealing with challenges facing the entities and the Department. Who is monitoring the performance of the Board members?

The Acting Chairperson stated that it was of concern that the Department and the entities continued to perform poorly despite having the most qualified people for their posts and receiving huge salaries. The draft Report was adopted with all the amendments.

The Chairperson requested Members to adopt the minutes of the 17 September and 15 October 2014.

Adoption of Minutes

Mr Tseli moved for adoption of the minutes of the 17 September 2014 and Ms Nobanda seconded the motion. 

Ms Bramwell said the minutes must state the name of the Acting Chairperson, Ms Rantho, who was present on that day.

Ms Michael moved for adoption of the minutes of the 15 October 2014 and Ms Van Damme seconded the motion.

The minutes were adopted with all the amendments.

The meeting was adjourned.