Department Budget: briefing

Meeting report

PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
2 April 2003
DEPARTMENT BUDGET: BRIEFING

Chairperson: Mr B Martins

Documents handed out:
Department of Public Enterprises Business Plan
Public Enterprises Vote 9 (link to treasury website)

SUMMARY
Department of Public Enterprises briefed the Committee on the annual budget and work programme. Members were informed on the Department's strategic goals for the year, plans that were in place, and the budget. The most important issue was a rollover amount of R19 million.

MINUTES
Dr E Mokeyane, head of the IPO Office, Department of Public Enterprises outlined the Departments vision and mission, and strategic goals.

On strategic goal 1 - to ensure effective State Owned Enterprises (SOE) performance monitoring - the focus was on implementing protocol on Corporate Governance, and the development and implementation of the Investment Map, a database to manage all SOE's both inside and outside the country. the benchmarking on performance of SOE's, to bring them to a universal standard, was 60% complete.

Points were raised and stressed regarding Strategic Goal 3 - to ensure effective execution of SOE restructuring transactions. On Transport, the focus was on Transnet, and what the vision of government was in this regard, especially in respect of Transnet's meaningful role, and what their focus was. Regarding ports, the Department was currently looking at addressing internal efficiencies, the backlog of containers at the ports, and the infrastructure to clear this backlog.

On other Projects, Dr Mokeyane briefly touched on AlexKor, and a Bloemfontein Supreme Court judgement handed down the previous week. The judgement specified that the Namaqualand community was dispossessed by the deal, and that the land must be returned to them. The Department was currently looking at a harmonious approach to this issue.

On the budget of the Department, it was noted that the total budgetary requirement was R249 million. The amount allocated is R60 million. The reason for this low allocation was that the bulk of the funding went to the IPO Office for the Telkom share listing. It was noted that expenditure in the Department by 27 March 2003 amounted to R219 million. R19 million rolled over to deal with certain IPO related costs. R12 000 was carried over to pay for a Telkom Internet line, of which payment was due at the end of May 2003.

Please refer to attached presentation for details.

Discussion
Mr B M Komphela (ANC) commented on a statement by the Auditor-General that money had not been spent well. He asked a number of questions:
-if the R19 million rollover was - as claimed by the Dept - deliberate, then what were the procedures or protocols from Treasury regarding this. Is it contravening the Treasury laws?
-on social contributions, what was the approximate percentage of the Department's budget given to Black Economic Empowerment (BEE)?
-on the SOE database, were enterprises prior to 1994 listed?
-regarding the restructure of SAA and SAX, how far were plans for the merger? Are there any problems? Any labour problems?
-what were the Department's budgetary patterns like, and were they similar to other Departments.

Dr. Mokeyane answered these questions. Regarding the R19 million rollover, this was indeed deliberate. The Department's Chief Financial Officer approached Treasury, and on consultation and discussion, the rollover was approved. He stated that the figures are exactly as he delivered them in the presentation, and there has been no overspending or underspending. The budget is balanced. On the percentage of budget to BEE, Dr Mokeyane had no details. Each was handled on a case by case basis. The SOE database was completely up and running, and including all data bother after and prior to 1994. This database could now be accessed. On the SAA/SAX merger, Dr Mokeyane reported that all aspects of an agreement had already been reached, and they were merely waiting on a Competition Commission approval for the merger. He stated emphatically that absolutely no jobs would be lost in this endeavour. As to the Department's budgetary patterns, Dr Mokeyane said that they were completely different to other departments, as their are no consistencies, but rather periods of high and low spending.

Mr RJ Heine (DA) asked about the Durban Container Terminal. How urgently did the Department consider the backlog, and did it have a timetable to resolve the issues?

Dr Mokeyane said that the issue was being fast-tracked, and that studies were being carried out. A programme would be set up on completion of the studies, probably around May-June 2003, and would continue for approximately nine to ten months. There was no reason to believe that this timetable would not materialise.

The meeting was adjourned.