Portfolio Committee on Public Enterprises Legacy Report

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Public Enterprises

20 February 2019
Chairperson: Ms L Mnganga-Gcabashe (ANC)
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Meeting Summary

Documents handed out: Report of the portfolio committee on public enterprises on its activities undertaken during the 5th parliament (March 2014-March 2019) available under Tabled Committee Reports once published

The committee met to consider the draft legacy report of the Committee for the Fifth Parliament.

Key highlights discussed included exercising oversight over the department and seven state owned companies (SOCs), consideration of international agreements referred to the committee, consideration of the budget vote of the department of public enterprises and its entities and to facilitate public participation in its processes.

The report indicated the committees focus areas during the 5th Parliament and these included providing oversight to improve governance, financial sustainability, on oversight of the department of public enterprises and SOCs. Finalise the repeal of the Overvaal resorts bill, institute an ESKOM oversight inquiry, to receive briefings on audit outcomes by the auditor general annually, receive annual reports on department on their strategic plan, annual performance plan and quarterly reports.

Key areas of future work included, continuing with the work to improve governance, continually monitor and provide leadership in the SOC environment, consider instituting an investigation into the entities, to fill vacant posts in the department, to address issues relating to the proposed SOC shareholder management bill, monitor South African airways, mango and South African express.

Key emerging challenges include addressing issues related to its vacancy rate, SOCs improving their audit outcomes, access to information specifically the shareholder compacts, reviewing areas addressed by the budget review and recommendations report.

Matters that were raised by the Members included whether or not the Committee had engaged with South African Airways since its return to the Department on the 1st of August 2018. Members also suggested a better description in the report of the eight month long investigation into entities, and also that the report should indicate that board members were part of the governance for all entities – not just ESKOM.

Meeting report

Deliberation on the Legacy Report for the Fifth Parliament

Mr Disang Mocumi, Committee Secretary, said the Legacy Report was still a work in progress. The Content advisor is yet to make a few additions because there were computer issues and the report is constructed from a standard template used by all committees.

The first point of the report reflects on the Committee Programme per year and on whether the objectives of such programmes were achieved. It also describes what the mandate of the Committee is and what responsibilities the Committee had.

The second point deals with the Committee’s focus areas during the Fifth Parliament which were to provide oversight, improve governance, financial sustainability, performance and ensuring that all issues referred to it by the Fourth Parliament have been sufficiently addressed.

The second page highlights that the Committee instituted an ESKOM oversight inquiry to address the governance and financial challenges faced by the SOCs. The repeal of the , and the repeal of the Overvaal Resorts Limited Bill, was finalised and the transfer of South African Airways (SAA) from the Department of Public Enterprises (DPE) to National Treasury was done on the 12th of December 2014, and referred back to DPE from the 1st of August 2018.

The key areas for future work are to continue with the work to improve governance, continually monitor and provide leadership in the SOC environment in the following areas; governance, financial sustainability and the procurement environment. It also included areas to address issues relating to the proposed SOC Shareholder Management Bill; to continually monitor the implementation of the audit plan; to monitor the implementation of the recommendations of the ESKOM inquiry report; to consider instituting an investigation into Transnet and Denel regarding lapse in governance; to fill vacant posts in the Department due to negative impact on budget; and to monitor SAA, Mango and South African Express.

The key challenges include DPE addressing issues related to its vacancy rate, SOCs improving on their audit outcomes, strengthening of SOC balance sheets, access to information (specifically shareholder compacts), capacity of internal audit function and audit and risk committees, ongoing issues in the SOC environment not sufficiently addressed, and review areas addressed by the Budgetary Review and Recommendations Report (BRRR).

The recommendations included the following:

-develop a strategic plan for the Committee with an Annual Performance Plan

-the Committee to continue to request the shareholder compacts on an annual basis

- the Committee to conduct oversight visits to all entities within the portfolio of the Department on a regular basis

- address areas of policy alignment areas with policy departments

- provide guidance on the future role of Alexkor and Safcol

- institutionalise the recommendations of the public on the Presidential Review Committee on SOEs

- monitor the turnaround strategies of major SOCs including the rationalisation of state assets,

-monitor procurement spend in all SOCs and the impact on socio-economic outcomes

- monitor and implement BRRR recommendations

Mr Mocumi outlined the report further that dealt with oversight, functions of the Committee, study tours, interventions and petitions that were considered by the Committee, briefings, legislation and more.  


Ms Z Rantho (ANC) thanked the Chairperson and the secretariat for the report. The report reflects most of the things that happened during the term and asked if the Committee will have time to engage SAA since it only has three weeks. The report needs to clarify that SAA has returned to DPE,  but that the Committee has not yet engaged SAA since its return.

The Chairperson clarified that the committee did engage SAA.

Mr E Marais (DA) referred to page 6, bullet point 4, on the last sentence about the inquiry that was meant to have three phases that would also cover Denel and Transnet, but due to time constraints, the Committee could only investigate ESKOM. He said the Committee spent eight months since the beginning of the investigation and that the one line description in the report that refers to the work done is insufficient and gives the impression that not a lot happened.

Mr R Tseli (ANC) said with regards to forensic investigations into procurement, maladministration, governance and financial irregularities, not everything is supposed to be handled at the level of the Department - some issues require the board of ESKOM. If is captured like it is in the report, it is as if the board does not have a role in the implementation of the recommendations of the inquiry. It is important to include the board so that in future the board cannot shift the rest of the issues to the Department. 

Ms Rantho suggested it should be shown that the board members were part of the governance for all entities - not just ESKOM.

Consideration and adaptation of minutes

Minutes dated 14 November 2018 and 5 December 2018 were adopted without amendments.

The Chairperson said the date of the minutes for the meeting that took place at the Townhouse hotel and should be changed from 21 November to 27 November.

Mr Lebohang Tekane, Project Manager, DPE, indicated that the Minister had attended the meeting and that it is not shown on the first page under attendance.

The Chairperson agreed.

Minutes dated 27 November 2018 was adopted with amendments.

The meeting adjourned.  




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