Transnet Corporate Social Investment projects

Meeting report

The Chairperson said the Committee would receive a briefing by Transnet on how its corporate social investment (CSI) projects benefited South African communities by creating a better life for all. The Committee was concerned that the board of Transnet and senior management was not present at this meeting. It was important that the management of Transnet and its Board appeared before the Committee next time they came to present, because there were issues which they needed to explain.
 
Transnet: Corporate Social Investment
Mr Tumelo Mokoena, Group Executive: Transnet, said that Transnet’s footprint and its corporate social investment (CSI) initiatives were spread across all the provinces in South Africa. These consisted of socio-economic infrastructure development; whole school development; health; employee volunteerism; heritage preservation; and grants and donations.

The whole school development programme encompassed a holistic approach to improve academic outcomes. This included learner support, teacher development and sports talent development.

The Transnet Foundation’s two healthcare trains, Phelophepa I and II, were designed to provide comprehensive primary healthcare to communities. The programme also covered sanitary and life skills support to both boys and girls.

For socio-economic infrastructure development, they were using a combination of old retired containers and conventional bricks and mortar. Transnet provided vital community infrastructure to support government programmes and key community needs.

On grants and philanthropic donations, Transnet provided immediate assistance and relief to communities through once-off funding and material contributions to assist poverty-stricken communities, and supported non-governmental organisations (NGOs) that did critical upliftment work in communities.

Through the programme of heritage preservation, Transnet demonstrated an understanding of preserving rails, transport and other artefacts of historical significance for future generations.

Mr Mokoena said the employee volunteerism programme operated through the assets and competency in the hands of 60 000 employees, with Transnet leveraging this resource to address corresponding needs in communities. Employees were encouraged to share their time to assist communities in need.

Transnet’s award-winning healthcare trains, Phelophepa I and II, provided comprehensive health care to communities across the country. The trains feature a healthcare clinic, a pharmacy, a psychology clinic, dental clinic, eye clinic, and outreach programmes. For health outcomes in 2016, the input had been R99.3m for Phelophepa I and II and R19.1m for the teenage health initiative. The outputs of this were that 177 871 patients received primary healthcare; 1 120 community volunteers received training; there were 1 353 student placements; and 378 816 individuals received services through outreach activities. Approximately 10 000 teenage girls and 8 000 boys participated in the Teenage Health Initiative. The material outcomes included 4 200 indirect jobs being created. There was improved access to primary healthcare services in communities. There were increased opportunities for medical students to receive experimental training. The Teenage Health Initiative reduced absenteeism from school, and also improved academic performance and quality of life.

Mr Mokoena said that the whole school development programme improved learner support, teacher training, rural and farm schools’ sports development, and involved the SA Football Association (SAFA)/Transnet School of Excellence.

Regarding socio-economic infrastructure development (SEID), he said steel shipping containers outlived their usefulness as cargo carriers within five years and usually ended up abandoned in shipyards. The SEID portfolio recycled these containers to develop a combination of containers and fixed buildings to provide essential infrastructure in communities. This unique infrastructure model had transformed numerous communities and enabled people to live healthier, safer and more fulfilled lives. The output for 2016 was that there were 23 728 non-financial beneficiaries. 45 small, medium and micro enterprise (SMME) members were trained. 15 participants benefited from the Adult Basic Education and Training (ABET) programme. 753 destitute families benefited from the food distribution programme. 22 direct jobs were created via the establishment of community centres. There was an increase in the number of local suppliers.

Through the Employee Volunteerism programme, Transnet employees volunteer their time to render assistance to needs in the communities. Approximately 2 500 employees volunteer throughout the year. There were infrastructure upgrades at four pre-schools in Greenpoint and Kimberley. 500 learners had benefited from the Adult Basic Education and Training (ABET) programme. Solar energy had been provided to 91 households in Rosmead, Eastern Cape.

Through the heritage programme, the Transnet Railway Museum had opened to the public in George. There were tourism attractions, and education on heritage assets for schools and community. R11.4 million had been injected into this programme.

Mr Mokoena concluded that the Foundation spent close to R160 million per year on community projects and sponsorship. Key sponsorships consisted of:

• Making a Difference Trust;
• Care Bears Pre-School;
• Wings of Life;
• Masizakhe Home-based Care;
• Rhodes University Library; and
• Alexandra Health Centre and University Clinic.

Discussion

The Chairperson complained that she had difficulty in following where Transnet’s CSI projects were located in each province. The Committee needed to be able to see the various programmes that had been presented to them when they were doing their oversight.

Mr O Sefako (ANC, North West) said that as Members came from various provinces, they were grateful that a number of areas were captured in the document. It was important when they conducted oversight to be provided with as much information as possible because the National Council of Provinces (NCOP) had programmes where they took Parliament to the people, and next week they would be going to their various provinces and spending the whole time in municipalities. Also, as Members in charge of Parliamentary constituency offices, they had programmes as individual MPs and therefore it was key to know exactly what was happening. For instance, when they were conducting their own outreach programmes, like going to farm schools where the marginalised and the poor were located, knowing about what Transnet was doing would help them to collaborate and together improve people’s lives. It was therefore important that when they went out on oversight in communities they should be accompanied by entities like Transnet.

When addressing the issue of poverty and equality, they would see struggling members of the community in their constituencies, for example at taxi ranks, where they were in the business of tyres and were struggling for shelter, because they could not take home all their equipment when closing their business at the end of the day. Therefore, as MPs in their constituencies, they had to be able to identify which department or entities of Government that could assist those people with the challenges they faced on a daily basis. It was critical, therefore, much information should be provided when departments and entities came and presented before the Committee.

Mr E Mlambo (ANC, Gauteng) thanked Transnet for doing a good job in communities. It had reported that its Foundation spends close to R160 millions per year on community projects and sponsorship, but he wanted clarification as to whether it was something happening annually, or had happened over a period of five years since 2010. He asked what the exact figures were, and when the Foundation’s programme had started.

Mr J Parkies (ANC, Free State) said he hoped that the Transnet board and senior management would be invited to come before the Committee, as already alluded to by the Chairperson, so they could engage with the relevant people regarding the activities and accountability at Transnet. He asked for a breakdown of the 1 353 medical student placements indicated in the report, and also to give a breakdown of their activities. He appreciated the fact that medical students had received experiential training, which was a good thing, but it had to go beyond experiential training because doctors needed to be placed so that they serviced the community. He asked what Transnet’s target was for issuing bursaries to students each financial year.

In light of the economic conditions in the country, he asked what Transnet was doing in order to avoid job losses and increase job creation in order to increase economic growth, because public entities should be the drivers of economic growth and the retention of jobs. Transnet and other state entities must have a deliberate programme that would create jobs, and a deliberate programme to empower youth with skills so that they could be absorbed by the labour market. It was also important for Transnet and other state entities to focus and channel their resources on programmes such as sport so as to redirect the minds of young people in townships and rural areas to stay away from drugs and gangs.
 
The Chairperson hoped that Transnet would take note of these suggestions when it drew up its five-year plan because they, as Members working with communities, could assist state entities on certain programmes to deal with the kind of issues Mr Parkies had been referring to -- like the drugs issue -- so that the money they were spending developed the community.

The Chairperson asked for an explanation with regard to the programme of supporting families with food parcels, and what it entailed. She asked whether there was a relationship between Transnet and the Department of Basic Education with regard to the ABET programme that was rolled out by the entity, and whether a fee that was charged for the people who participated in that programme.

Mr Sefako said that he hoped the narrative that state entities were captured did not exist at Transnet. He asked whether the R106m was part of the budget that had been approved by Parliament, and to explain how the R160m had been spent by Transnet since 2010 to allay the fears that the state was captured.

Mr Parkies asked for an explanation of the supreme objective of the stakeholder engagements with communities -- when it had started, what the outcomes were, and what their intentions were with regard to the views of the communities. He wanted to know why the opening of the railway museum to the public as a tourist attraction, and the conservation of heritage resources, had cost R11.4m, and asked for a breakdown of this expense. Transnet should also explain the R28m spent on the employee volunteer programme involving, among other projects, the provision of solar energy to 91 households in Rosmead.

Mr Lebohang Ntwampe, Acting Deputy Director General (DDG): Transport Enterprises, Department of Public Enterprises (DPE) said that before the company explained its CSI programme, it was important to first note how the DPE facilitated and coordinated the programmes of state-owned companies (SOCs). On an annual basis, it signed a shareholders’ compact with the company, and in the compact the issue of skills was quite important. In this regard, it was not allowing Transnet only to train people looking at Transnet’s own skills requirements, but to look at the training needed to meet the national needs. For example, Transnet may require 10 artisans, but they were training more artisans than required within the company so that the national economy could then benefit from the skills that Transnet had produced.

The point was that how entities drove their CSI programmes had been different in past years. Each SOC would sit and look at how much they wanted to contribute, and then go out and implement. However, the DPE was currently coordinating this and planning it going forward, looking at each company’s CSI programme, how much had been allocated, and how they would spend the money going forward. He was explaining this because what Members of the Committee were saying was that if Transnet spent R160m, where exactly were they spending it, or why did they not take it from here and spend it there. There was a coordinated way in which to consider how they were going to allocate the company’s corporate social investments.

Mr Ntwampe said in all the small SOCs, their CSI could not be compared to that of Transnet, so their individual impact would be much less, so what the DPE was trying to do was to make sure that it consolidated the CSI plans with all the SOCs, so that when they visited areas like Matatiele, the needs there did not have to be addressed by Transnet on its own. Consolidation of the plans of all the SOCs, such as Eskom, Transnet, Denel, etc, enabled their resources to look at the needs of places like Matatiele, and have a greater impact on communities across a wider area.

He agreed that in the past, more activities were happening in metros and cities where there was better access to economic infrastructure. However, with this coordinated approach, the DPE was looking at also how to get to the rural areas, including those where Transnet did not operate. There was now a body called the Corporate Social Investment Forum (CSIF), where it was bringing all stakeholders together for planning purposes, in order to have a greater impact on addressing the needs of communities. It was also important note that there were other departments which had started to have particular responsibilities. For example, the issue of electrification remained with Eskom, but where Transnet was able to assist they stretched the company to go and assist in order to meet those needs.

Mr Parkies interjected that each SOC should not deviate from its mandate but if there was a need to assist that need should be realised and entities should be alive to the challenge of resources. What could be the alternative way of giving electricity to schools in Matatiele? These were the areas were Transnet needed to intervene.

Mr Ntwaupe said that as they get the needs and how they use corporate social investment they were looking at the needs and if they’ve identified those needs they’re able to say how they then go and support those needs that have been identified. Therefore, they look at what was available in order for it to have a greater impact.

Mr Ntwampe said there was a challenge involving training versus placements, because SOCs like Transnet and Eskom were training a number of people who were absorbed into jobs, but it was a problematic issue nationwide. The DPE was looking at how to create more industries, because that was what was needed. The Department was putting together a manufacturing and industrialisation forum to consider how they should spend money on creating more industries so that as Transnet trained artisans and took 10 out of 100, the remaining 90 artisans could be taken up by those other manufacturing SOCs. As they continued get the views and thoughts of the Committee, they would put them to those SOCs in order to improve on how they absorbed young people in South Africa so that they could get jobs in future.

Mr Ntwampe said the SOCs’ headcount reduction was not a direct intention, but when the economy was not perform well the entities’ incomes were reduced they found themselves paying people who had nothing to do within the company. The company did not retrench people, but offered a voluntary severance package so that they could start their own small businesses in order to sustain themselves. Transnet was offering its staff early retirement so that it could manage the cost of paying salaries despite the lower income. The DPE was looking at that very closely because it had given Transnet a job creation target -- either direct or indirect. He pointed out that during this economic downturn, there was a situation where mining companies were shutting down and Transnet was able to provide what they called “price reprise” to sustain them and enable them to remain operational instead of shutting down. Therefore, as one of their strategies, they did not support retrenchment but at least sustained jobs so that the economy could grow.

Ms Cleopatra Shiceka, General Manager: Transnet, said the entity liaised with the DPE to look at where their investment infrastructure was in relation to their business. They had lot of problems and challenges in terms of people sitting in communities and being up in arms, wondering why they were not being employed at Transnet, why Transnet employed people from other places. It had become an important issue for Transnet to start engaging with communities in terms of investments the company was doing and the work they did in communities so that they understood exactly what the communities needed.

For example, in Matatiele Transnet had what were called “branch lines” that had been abandoned for years, and had been used for moving a particular cargo. Over the years there had not been enough cargo to move on those lines, and as a result people had lost their jobs. Transnet had engaged with the community to discuss these branch lines, in conjunction with the provincial and local authorities and local businesses, to find out what they could do to resuscitate these branch lines. Paramount to that was the understanding of the skills base that was there, or not there, the demographics of who was there, or not there, and the social infrastructure that went with it. The social infrastructure was obviously the responsibility of the local government.

When people talk about resuscitating a life and about a community that had to be developed, it was crucial that entities such as the education and health departments were there, as well as the local authority was there in terms of the local infrastructure, water affairs, etc. This key engagement involved all the stakeholders that were the in the community. It also meant industry was there, because if they needed electricity, for example, they would look to Eskom to provide power for the community as part of the project they were looking into.

This also meant a mind shift in terms of legislation as well, which was why sometimes Transnet wanted to get close to Parliament to assist them to consider that type of a problem, because if they needed electricity for this type of project, they got into the domain of energy production where they would be told it was not their business and not to get into that. Therefore, stakeholder engagement was vital as it brought all the different parties together and made sure that everybody was consulted about what was going on.
Mr Mokoena said that in 2016, Transnet had invested over R248 million in sustainable community development programmes across South Africa. CSI spend contributed to the achievement of an overall B- BBEE score of Level 2. R211.4 million had been spent on programmes and R37 million on support functions. The total CSI spend included external sponsorships and donations (R21.4 million); Transnet employees’ directorship fees (R2.5 million); and the Transnet CSI budget allocation (R224,5 million).

The Chairperson thanked the Department and the delegation from Transnet for the presentation and responses.

The meeting was adjourned