DPME 2019/20 Quarter 2 performance for National Departments; Committee strategy concerning Eskom

Standing Committee on Appropriations

13 November 2019
Chairperson: Mr S Buthelezi (ANC)
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Meeting Summary

The Committee was supposed to have been briefed by the Department of Performance Monitoring and Evaluation DPME on the performance of National Departments but the Committee did not accept that the Department had only sent a single Chief Director. Members found it a sign of disrespect as the Deputy Directors General (DDGs) had to be there to answer to the Committee. The DPME was excused, and the Chairperson decided that the Committee could use the opportunity to formulate a position concerning Eskom.

Members were very concerned about Eskom having overpaid a certain company to the tune of R4 billion; and overspent R147 billion on the Medupi and Kusile power stations. They   called for a forensic audit of the overpaid service providers. The circumstances impacting on that had to be identified. They called for engagement with the Minister of Public Enterprises about Eskom contracts, and the structural defects and staffing had to receive attention. The National Treasury had to be engaged with about transfers without conditions attached. The Committee felt it had to play a bigger role in identifying challenges. It also had to take the lead in involving the Portfolio Committees of Public Enterprises and Energy to consolidate assistance to Eskom’s restructuring.

The Committee was very disappointed to note that there was a serious lack of intent to address corruption. Underspending was informed by the impact of repeat challenges without reflecting and strategizing on improving performance.

Meeting report

The Chairperson welcomed the DPME.  Apologies were received from Mr Kwankwa and Ms Ntlangweni. He asked the DPME to introduce its delegation.

Ms Edeshri Moodley, Chief Director, Planning Alignment: DPME said that she was the only DPME member present. She apologised on behalf of the Director-General.

The Chairperson told her that when she appeared before the Committee again, she had to bring the Director-General and the Deputy Minister with her. He objected to the fact that there were no Deputy Directors-General (DDGs) present, and asked Members to comment.

Ms R Komane (EFF) commented that although Ms Moodley had to be given the benefit of the doubt as concerned her capability, the question was if the goal could be reached. If the presentation was allowed, it would be a mere formality. There had to be engagement with the Deputy Minister and the DDGs. She could not see the value of engaging with only one person.

Mr A Shaik Emam (NFP) said that he was from the Fifth Parliament and still had many questions to put to the DPME at the senior level. The DPME had made certain commitments and it had to be seen if it had followed up on those. He was not happy with the DG simply being excused for having other engagements.

Mr Z Mlenzana (ANC) noted that the DPME dealt with all the votes, and the Committee wanted answers about that, also about the SOEs. Although there were financial implications, he would advise that the meeting be rescheduled. It was not possible to hold the DPME accountable.

Mr X Qayiso (ANC) remarked that an entity could not be allowed to undermine the Committee. It was the first meeting of the current Committee with the DPME, and first impressions could be lasting. The DPME was a key Department meeting with a strategic Committee. To send the DPME back would convey a clear message that he Committee had to meet with the relevant people.

Mr D Joseph (DA) asked when the invite to the DPME was sent out. ‘Were they given enough time’? He shared the sentiments of other Members. How many CDs were there?

The Chairperson replied that the invite was sent on 4 October 2019. He told Ms Moodley that it was the mandate of the Committee to follow the money that passed through it. It looked at the budget submitted by the Minister and made recommendations to Parliament about that. The Standing Committee had to ask how the money was spent, and what the impact of such spending had on communities. Capex underspending had an impact on economic growth. The country was experiencing slow economic growth, and the unemployment rate stood at 29 percent. There were critical issues to consider. Mr Shaik Emam had alluded to issues he had identified during the Fifth Parliament. The Committee would write to the Minister to register dissatisfaction. Interaction with the DPME could not be a matter of merely ticking boxes. The DPME dealt with facts that had implications for the economy.

Mr Shaik Emam commented that the absence of DDGs seemed to indicate that the DPME was not properly recognising the Committee and was seeing it as unimportant.

Ms Komane suggested that what was to be sent out to the DPME had to have the character of a summons, rather than an invite, as the DPME had failed to respect the Committee.

The Chairperson concluded that the DPME would not be allowed to present on the day. He would talk to the Secretary about a rescheduled date, possibly on the Tuesday of the following week.

(At this point the Chairperson adjourned the meeting, but Members were recalled after some minutes).

Discussion of the Committee strategy concerning Eskom

The Chairperson announced that the Committee had to discuss how it was to be efficient and effective concerning the Eskom crisis. It was found that Eskom had overpaid a certain company to the tune of R4 billion. The name of the company had to be known, the circumstances, and what had transpired. Likewise, it had to be known what had led to R147 billion overspending on the Medupi and Kusile power stations.

Mr Shaik Emam commented that all departments had challenges, and the root causes of that had to be identified. Problems in SAA were well known. A bottle of water on a plane cost ten times as much as anywhere else. SAA had to be asked who it bought its water from. The Fifth Parliament had found corruption in the Department of Water and Sanitation for four years in a row. A document requested about that was never provided, and problems continued. The Committee had to assume a bigger role through identifying the causes of challenges and eradicating it. Money for all departments came to the Committee. It could be better practice to visit Pretoria to interview departments over a period of three to four days instead of bringing departments to Parliament at cost. The Committee had to set an example of picking up corruption at ground level. There had to be a move away from a Department like Water and Sanitation saying the same things year after year.

Ms Komane remarked that it had to be asked if the Committee was equal to the task facing it. In the case of Eskom, the question was how to identify service providers that were overpaid, and what had led to that. Disciplinary procedures took ages to conclude. There was a lack of serious intent to address corruption. Underspending was informed by the impact of repeat challenges. There was a lack of alignment between procurement plans and infrastructure development plans in municipalities which was not gone into deeply enough. She was in favour of dealing with only two departments, for instance, but to work intensively with those. If challenges could be eradicated, it could serve as a lesson to other Departments. If the Committee could go to Pretoria to engage with two or three departments, it could save on costs and time, and other committees could follow that example.

Mr O Mathafa (ANC) commented that two issues were relevant concerning Eskom. The first was related to irregularities picked up around payment to service providers, with no details about payment. The second was structural defects. ‘How was that to be resolved’? A forensic audit was needed that would drill deeper to ascertain why people and systems were failing. Concerning contract management, independent power producers (IPPs) and the coal contract were identified as cost drivers. The Minister of Public Enterprises had to be engaged with about contracts, and had to take the Committee into their confidence. Eskom entered into contracts without damage clauses, and damages were not borne by the client, but by Eskom. The Eskom staffing position had to be considered. A member of the Eskom Board had stated that the staff was bloated, but management did not hold that view. Structure rightly had to follow strategy, and that was certainly true for Eskom. It was essential that the Committee stay informed about the unbundling and restructuring of Eskom. The question was how to protect the Chief Restructuring Officer (CRO). It was advisable that the efforts of the Portfolio Committees on Public Enterprises and Energy be consolidated to contribute to assisting Eskom.

Mr A Sarupen (DA) noted that R9 Billion, which was not part of the R23 Billion emergency transfer to Eskom, was transferred without conditions attached to it by the National Treasury (NT). There had to be a serious conversation with the NT. The NT argued that the Eskom situation could pose a risk to the economy. But Eskom was holding the taxpayer to ransom by arguing that if money was not granted to it, there would be a debt crisis.  

Mr Joseph asked about the possibility that more than one company was involved in the R4 Billion overpayment by Eskom. It had to be interrogated to unpack the issues raised, and the results had to be included in the oversight report. There had to be a follow-up after six months with the Eskom senior management and Board about operational issues. The Committee could not deal directly with Eskom’s operational issues, but other Portfolio Committees and the Minister could be asked to pronounce about the economic impact of Eskom’s operations. The Committee still had to take the lead in that engagement.

Mr Mlenzana agreed that a forensic audit of especially overpayment to service providers had to be considered. Parliament had to obtain a mandate to seek the best way to dig up information within the framework of legal prescriptions. The Committee was not to be seen as security guards over money, it had to be followed up on.

Mr Qayiso advised that relations with the NCOP had to be tightened concerning Eskom.

The Chairperson noted that the Committee Researcher wanted to comment on the DPME briefing that was not presented.

Mr Musa Zamisa, Committee Researcher, Parliament, said that the DPME presentation was not up to scratch. The mandate of that Department was bigger than merely looking at figures, it had to dig deeper to ascertain the impact of programmes and projects. The DPME had merely taken the adjusted estimates of expenditure for its briefing. He suggested that the DPME be written to, to present in more depth about the impact of the key programmes.

The Chairperson remarked that the Committee had a deeper interest than facts about money. All recommendations made to the Committee made it more effective. Departments had to be assisted to be more efficient in the use of money. The Committee Bible was the Money Bills and Related Matters Act. There was a legal responsibility to do what the Act required of it. Members would be informed about an adjusted date for a meeting with the DPME.

The meeting was adjourned.

 

 

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