Overview of Committee work undertaken during 2019

Standing Committee on Appropriations

05 December 2019
Chairperson: Mr S Buthelezi (ANC)
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Meeting Summary

The Standing Committee on Appropriations deliberated on the work undertaken by the Committee in 2019. The Committee Content Adviser took the Committee through the draft report of the recommendations made by the Committee at the previous meeting. It was decided that it was imperative for Members to attach specific timeframes to the various recommendations made to Ministers.

Members raised their concerns about the instability of the management and governance of South African Airways (SAA) and Eskom. It was recommended that the Chief Restructuring Officer (CRO) of Eskom be invited to brief the Committee on his vision on how to turn Eskom around. Members also asked about the R4 billion overpayment by Eskom, and what steps would be taken to investigate it.

It was recommended that the Department of Higher Education and Training (DHET), as well as the Department of Small Business Development (DSBD), must present their plans on how they intended to improve the spending of conditional grants. They should brief the Committee within 90 days of the report being adopted in the National Assembly. It was also recommended that the Minister of Public Enterprise should present the government’s overall strategic plan for turning around the stressed state-owned entities (SOEs), particularly SAA. In the 2019 budget, the Minister of Finance had allocated money to these SOEs, so he needed to present a strategic plan in which he could explain what he would be doing to improve the situation. This should be done within 90 days of the report being adopted.

Meeting report

Overview of Committee’s work undertaken during 2019

The Chairperson invited Mr Sifiso Magagula, the Parliamentary Content Adviser, to give a comprehensive summary of the draft report of the Committee’s previous recommendations.

Mr Magagula took the Committee through the key strategic objectives of the Committee. Every term, the Committee needed to present a strategic plan, which the Committee had not drawn up yet. When the Committee came back in 2020, they needed to make time to draw up their strategic plan. As a Committee, they did not have entities specifically reporting to them, but whenever there were spending issues that had to be addressed, every entity of government came to the Committee.

The functions of the Committee were stated in the Money Bills Amendment Act. In Section 4(3) of the Act, the Appropriations Committee considers spending issues, amendments to the Division of Revenue Bill, the Appropriation Bill, the Supplementary Appropriation and Adjustment Appropriation Bill, the communication of the Financial and Fiscal Commission (FFC), including the Intergovernmental Fiscal Framework. The Committee reports on any expenditure published by the National Treasury.

The Constitution requires that every year, the Division of Revenue Act determines the equitable division of revenue that is issued nationally between the national and provincial governments. Section 213 of the Constitution provides that money may be used from the National Revenue Fund only in terms of appropriation by an Act of Parliament.

He took the Committee through outstanding matters that they needed to follow up on. These matters were categorised based on the work undertaken during the year, and what the Members had agreed to follow up on. Firstly, in July they had passed the Appropriations Bill No. 6 of 2009. The Members had agreed that the Minister of Finance and the Minister of Transport must ensure that the Passenger Rail Agency of South Africa (PRASA) develops adequate capacity to spend its allocated budget on projects such as railway maintenance and stock renewal. However, this required that at some point the Ministers should come to present before the Committee. Furthermore, the Ministers should come up with funding for the Gauteng freeway, as well as the e-tolls programme of the government in Gauteng. The issue remained that it would be a futile exercise for the Committee to pass the 2020 Appropriation Bill without getting a report on the previous recommendations.

Secondly, after the Appropriation Bill on Eskom was passed in July, part of the recommendation was that the Minister of Finance should ensure that stringent conditions were put in place with the special Appropriation Bill of R59 billion, to ensure the sustainability and financial viability of Eskom. The Minister should have briefed the Committee by the end of November. However, the Committee had not been briefed on this. This was an issue to be dealt with in January. When the Committee comes back in the new term, they need to ask the Minister to brief them on those conditions. Some of those conditions should be contained in the 2020 Appropriation Bill. This means that before the budget, the Committee should have a discussion on which of the conditions should be contained in the 2020 Appropriation Bill, as a recommendation of the Committee.

Mr Magagula also noted that the Members had also said that the instability of the government’s leadership and management of Eskom remained a concern for the Committee. He thought that a lot of the Board and Chief Executive Officer’s roles should be clarified to avoid overdependence on the Chief Restructuring Officer (CRO) for management functions. Furthermore, it would be a good idea for the Committee to have the CRO come and brief the Committee on what his vision was, and how he intended to turn things around.

On the medium term budget, it was recommended to Parliament that a clear oversight model be developed so as to avoid hasty reactions to certain emergency situations. Usually, the problem was that the Committee was forced to act immediately to situations because they were told, for instance, that if they did not act in certain way at a certain time, the economy may face repercussions. This was why, if they had a clear oversight model that was understood by everyone, everyone would know what to do when, and avoid hasty decisions which were a result of poor management.

It was also recommended in the medium term budget policy statement (MTBPS) that the National Treasury and Department of Employment and Labour should conduct a comprehensive study on the public sector in order to gain an understanding of what they were dealing with when it came to the public sector.

On the Division of Revenue Amendment Bill, the Committee recommended that the Minister of Finance should ensure that there was a consequence management framework and action taken against government institutions which continuously under-spent their appropriated budget. If a budget was appropriated, but then five months down the line the Division of Revenue Bill needed to be amended, it meant people were not spending the money where it should be spent. The Committee had therefore recommended that the Minister of Finance look into this matter. National Treasury should submit to the Committee a report in which it noted the early warning signs, so that when the Committee intervened in terms of spending issues, they could act in time.

Regarding the Adjustment Appropriations Bill No. 16 of 2019, the Committee had recommended that the Minister of Water and Sanitation should ensure that a mechanism be put in place to ensure that those who were responsible for polluting the Vaal River System were held accountable. The Members should remember that it was mentioned that parts of Mpumalanga, Gauteng and the Free State were responsible for polluting the Vaal River system, so the recommendation was that the Minister of Water and Sanitation should locate these people and hold them accountable.

The Committee also recommended that the Department of Higher Education and Training (DHET), as well as the Department of Small Business Development (DSBD) should present to the Committee a plan on how they intended to improve on the spending of conditional grants. Mr Magagula reminded Members that when they were dealing with the MTBPS, funds had been under-spent on the Small Enterprise Development Agency (SEDA) and on the public works programme under Cooperative Governance and Traditional Affairs (COGTA). This was why the Committee had recommended that they present their plan before the Committee, so that come the 2020 MTBPS, the Committee was not dealing with the same issues again.

It was also recommended that within 90 days, the Minister of Public Enterprises present the overall strategic plan on how the government planned to turn around the state-owned enterprises (SOEs), particularly South African Airways (SAA). On the expenditures that were announced in the 2019 budget, the Minister of Finance had allocated money to these SOEs. The Minister needed to present a strategic plan in which he explained what he intended to do to improve the situation. When one looked at the Act that establishes State Enterprises, it emphasises that these institutions need to raise their own revenue. Yet, it was becoming the norm that the Committee was appropriating funds to them. Hence, the Committee had recommended that the Minister present on the progress made thus far. This report was expected to be submitted towards the end of February 2020.

The Chairperson thanked Mr Magagula for the summary.

He said he would like the Committee to deal with the issues step by step. Starting on page 3 of the report, he asked how the Members would like to move forward with item 2.1, which dealt with the Passenger Rail Agency of South Africa (PRASA).

Ms D Peters (ANC) wanted to know what the normal procedure was after the report had been adopted. She felt that the report did in fact reflect their outstanding work and was happy that Mr Magagula was suggesting that the Committee actually deal with these recommendations prior to the budget being concluded. She recommends that they should have a meeting with the Minister of Finance regarding these issues, before they moved forward.

Mr Darren Arends, Committee Secretary, responded to Ms Peters question regarding the procedures to be taken. After the report was adopted by the National Assembly, there were people who informed the appropriate Ministers about the recommendations. The challenge with that was that they did not send those requests through the Committee, so the Committee often did not know whether or not those requests had been sent through. The only thing the Committee could do was to refer the affected Minister to the report that had been adopted and ask for progress on the recommendations. The only thing the Committee team saw was when the Minister had responded.

The Chairperson expressed his concern about this procedure, and asked if there was anything that stopped the Committee from writing to the Ministers and requesting them to refer to the particular recommendations.

Mr Arends responded that there was nothing stopping the Committee from doing that.

The Chairperson proposed that the Committee should then write to the relevant Ministers to request that they refer the particular recommendations pertaining to their departments in the report. He thought that this should be done even before the report had been adopted in the National Assembly, so as to allow the relevant Ministers to be aware of the recommendations before the time. That way, they could not make any excuses.

Mr Magagula advised the Committee to allocate the exact dates that they wanted correspondence from the Ministers. The reason for this was similar to that of the proposal of the Chairperson – so that they did not make any excuses. The Committee should decide on the particular dates in the meeting and communicate them to the Ministers in time.

Mr O Mathafa (ANC) sought clarity on the issue of resolutions, and whether they were being implemented. He wanted to know if, as committees, they had a resolution implementation mechanism. He suspected that there thousands of resolutions being made by committees that were not necessarily being implemented, so he would like to know if there was a formalised approach on resolutions that could monitor their implementation and effectiveness.

The Chairperson said that the Committee was aware of that problem, which was why they were putting proposals in place -- so they were able to trace their own resolutions and ensure that they did not just float around aimlessly.

Mr X Qayiso (ANC) expressed his view that the one thing that may be very difficult to implement would be the issue of implementing deadlines. In any given project, there was a need for deadlines by which one had to report on what was achieved and what was not achieved. As a Committee, they should implement deadlines.

Ms M Dikgale (ANC) wanted to know who would be responsible for monitoring the progress. Was it the Committee Members themselves, or would they put people in place to do that job?

Ms Peters explained that the 90 days and 60 days that were contained in the report were the timeframes. The Committee should be able to recall the time that they specified for the various matters to be dealt with. She recommended that after every meeting, the Committee secretary should track what was due when, and they could then engage with the various ministries. She supported the Chairperson’s suggestion that the Committee write to the relevant Ministers. The secretary had the ability to engage with the office of the Ministers through their Parliamentary Liaison Officers (PLOs), since it was the work of a PLO to know what had been resolved in Parliament with regard to a particular ministry. Furthermore, if any of these recommendations had financial implications, then they needed to have been signed off before the workshop.

Mr D Joseph (DA) wanted to ask a question on the crucial points that Mr Magagula had said needed to be resolved before the budget. He did not see those points in the report, and would like to know where he could find them. In principle, he agreed with the report that Mr Magagula had put together and he agreed with the PRASA point that had been discussed. He did not think that the Committee should plan their priorities based on how the report was drawn up, because if that was the case, they would have to start with PRASA, which should not really the top priority. He thought that the Members should prioritise their mandates and functions, their spending and the appropriations, and the conditions that were mentioned. He would like to know where the Members would fit that in, in terms of their mandate for the budget speech next year. Furthermore, he would like it to be noted that in the previous term there were only four oversights, and he thought that the Committee should keep it like that.

Ms R Komane (EFF) said there needed to be communication between the Committee and the various departments regarding the timeframes so that they knew when they needed to report. She also felt it was imperative that the Committee take the PRASA oversight, given that they had postponed it. There was a very serious need to take the PRASA oversight, and not to postpone it.

The Chairperson commented that all the inputs had been very valid. He requested that the Members go through the report point by point, so that they could be clear on how to deal with each recommendation. He agreed with Ms Komane that the PRASA matter was a very pressing one, but there were even more pressing matters which had to be dealt with before the budget. The Committee should start with all those matters that were budget-related, and then move on to other things.

Ms Komane added that given the communications between the Committee and the respective departments, their response may give an indication of when to deal with the matter, and then the Committee could engage on that before the budget.

The Chairperson said that the Committee needed to refer back to the issues mentioned in the report. Their main concern was the spending capacity of departments. The Members should write to the various Ministers and request a report on the matter. He asked the Members when they would like to receive this report so that they could give the Ministers a timeframe.

Mr Arends explained that the reports had been requested in July when the Appropriation Bill was drafted, so the 90 days had already expired. He would write to the Ministers and remind them that they were supposed to have responded within the 90 days already. The Committee could not give the Ministers a further 90 days, but they could just remind them again. 

Ms Peters said the Committee needed to first check whether the Ministers had actually received correspondence from Parliament regarding the matter, instead of just assuming that they did. They should check with their own internal Parliamentary communication channels to the ministries first. She also felt that the Committee should create a platform from which they could also follow up with Parliament, and see whether Parliament had actually fulfilled certain communication duties.

The Chairperson noted what Mr Arends had said about not giving the Ministers a further 90 days. He felt that they could not put 90 days on the PRASA matter, but it was impractical to put a timeframe of 30 days, considering that Parliament was going into recess. They should rather agree on a timeframe of 60 days, which would give the Minister until January. In fact, they should assign 60 days to all matters that did not have a timeframe. He asked if the Members agreed on that.

The Members agreed.

Mr Mathafa wanted to know what the Committee’s communication to the departments that were under-spending entailed. Was the Committee requesting the interventions that the departments were going to make, or was it asking the departments what systems were currently in place to solve the problems. He felt that the Committee should also try to find out what systems were in place already, because one may find the issue was inefficiencies within the system, and not necessarily the absence of a system.

The Chairperson said that he actually wanted to pre-empt that, so that as the Committee went through the different departments, they could decide what it was they needed from them. For instance, when looking at PRASA, the Members knew that the issue was that the entity did not have capacity. So as they went through the various departments, they could decide on what was needed from each department and then work things out from there.

With item 2.1 of the report, the Committee had agreed to assign a 60-day timeframe in which they would continue to remind the Ministers to submit their reports. On 2.2, which was the Special Appropriations Bill, the Members had recommended that the Minister of Finance should attach stringent conditions to the special appropriation of R59 billion to ensure the sustainability and financial viability of Eskom. The Minister should have briefed the Committee by the end of November, but this deadline had already passed and the Committee had not received anything. Therefore, the type of communication that would be sent out would be to refer the Minister to the Appropriation Bill and the recommendation that the Committee had made. The Committee should write to the Minister that the report had not been submitted. They were giving the Minister 60 days to comply with the Committee’s resolution. He asked if Members agreed with him.

The Members agreed.

Mr Magagula said that if the Committee was saying that it wanted to put the Minister’s conditions on the 2020 Appropriations Bill, they should also keep in mind that the 2020 Appropriations Bill would be submitted to Parliament in February. This meant by February the Minister should have complied to the recommendation already. However, when the Committee had requested that those recommendations be put into place by the end of November, the Minister would have delegated which conditions should go into the Appropriation Bill in February.

The Chairperson said that the Committee wanted to first deliberate on the conditions before they were put into the Bill. In 60 days, the ministry should come and brief the Committee so that the Members knew exactly what the conditions were.

On item 2.2, the Minister of Public Enterprises should ensure that Eskom had a turnaround strategy that was transparent, with clear timeframes that included quarterly, midyear and annual targets. The Members would also like to be briefed on the turnaround strategy so that they could avoid a situation where Eskom asked to be bailed out again. The Committee was giving Eskom a deadline of 90 days.

Mr Qayiso said that he had a different opinion on the timeframe given to Eskom. He was under the impression that Eskom had already been given time to draw up a strategy. He suggested 60 days instead of 90 days.

Mr Joseph suggested that Members keep in mind that the strategy did not come only from Eskom -- they needed to liaise with National Treasury, the unions and other stakeholders. To develop the complete strategy, they had to engage with many other people and so the Committee needed to be reasonable. He thought that 90 days was a good start.

The Chairperson reiterated Mr Qayiso’s point that they should already have developed the strategy in any case. However, he also understood Mr Joseph’s point, that there was no need to press it into 60 days. He suggested that the Members stick to the 90 days. Furthermore, the report recommended that Eskom embark on debt collection processes in order to recover debts from its debtors. This debt collection strategy should also be included when Eskom came to present before the Committee. The report further recommended that contracts should be reviewed and renewed to ensure reasonable and efficient pricing. The Ministers of Minerals and Energy, Public Enterprises and Finance had said that they were engaging on the issue of contractors. He felt that these ministers – or at least even one of them – should also be given a chance to brief the Committee on what progress had been made on the matter. Ultimately, the Minister of Public Enterprises should be responsible for that, so the Committee should write to him requesting that he brief them within 90 days on the progress that had been made.

On the MTBPS, Parliament should consider developing a government guarantee oversight model in order ensure the different use of government guarantees to SOEs. He would like to know who exactly in Parliament would be responsible for this.

He felt that Parliament should be able to see warning signs before an issue actually arose. The Portfolio Committees that were responsible for these issues and should know what to do at specific times when issues came up. He asked for Members’ thoughts on this.

Ms Peters said she did not know if there was a platform where chairpersons of Committees met as a collective to deliberate on issues of Parliament and oversight responsibilities. She would have recommended that they call for an oversight model.  It would speak to all the committees of Parliament. She knew that there was a report in which somebody wrote about the inadequacy of the oversight arrangements in Parliament. Even in the Committee’s experience, there were gaps in terms of adequate time to deeply engage on oversight arrangements. She believed that there was a great need for this recommendation, but the implementation and follow up of this recommendation needed to be taken up between the Standing Committee on Appropriations (SCOA) and the Standing Committee on Public Accounts (SCOPA), and they should draft the recommendation.

Ms Komane wanted to know if there was a relationship between SCOA and the other committees, given the fact that they appropriated funds to be used by the departments. She wondered if the committees should have a platform where they communicated among each other.

Mr Qayiso agreed that there had to be a way of communicating with other committees.

The Chairperson said that there was a model called the Economic Transformation Cluster (ETC) where the Committee Whips and Chairpersons in the Economic Cluster meet. He thought that Parliament could start by adopting a similar model. He asked what the Members thought about that model.

 Ms Peters said she agreed with the Chairperson, and that was how it should be.

The Chairperson continued with the recommendations. There was a recommendation that the National Treasury and the Department of Employment and Labour should conduct a study on the public sector, which would be at all levels of government. He felt that this was an ETC matter. The ETC had its own Chairperson to whom the Committee could write.

Mr Qayiso asked to go back to the issue of Eskom. There was a matter that was related to an overpayment of R4 billion. They were still waiting for further details on the matter, and he thought it should be put into the report under the issues that were related to Eskom.

The Chairperson responded that the Committee had said that Eskom should come back to the Committee and tell them which company had been overpaid, by whom, under what circumstances and what the consequences had been. He thought another question that should be asked was, who else had been overpaid?

Mr Mathafa referred to the lack of government management in the public sector. He wanted to know if that could be linked to poor service delivery, because he was yet to see any government department improving their performance. Was there a way to sort that issue out, because they spoke of consequence management, but he doubted that one could effect consequence management where there were no agreed terms of performance.

The Chairperson commented that there were terms of performance, but they were not effective.

Mr Qayiso responded that when they had the Public Servants Association of South Africa (PSA), it was indicated that was no correlation between the performance of the departments and what was paid at the end of the financial year in terms of performance bonuses. One would find that departments that did not perform well would still receive high performance bonuses.

The Chairperson suggested that the Committee write to the Public Administration Committee explaining their concern with the fact that some departments got these bonuses, even when they were not performing.

Mr Joseph wanted to go back to the Eskom issue. He suggested that the Committee check for the R4 billion invoice, and ask the Auditor General (AG) to investigate it.

The Chairperson asked if they could put a hold on the Eskom issue until they had gone through 2.6.

Ms Peters raised the issue of the Department of Planning, Monitoring and Evaluation (DPME) and the misalignment between what the departments present as their targets and what they had actually achieved, based on their performance. That was where the anomaly came in. The Public Service Commission (PSC) should not be left out of this process because they were central to the process of the appointment of Directors General (DGs) and the performance agreements. She said the Committee should discuss that issue with the DPME and the PSC.

The Chairperson said that based on this discussion, he felt that they should have a session during the consideration of meeting minutes, in which they discuss the things that must still be followed up. There were issues that required more than one or two committees to deliberate on them, and the Members should not exhaust everything at once.

He continued with the recommendations. The executive authority of the Departments of Agriculture, Defence, Health, Energy, School of Government and Public Service Administration should submit the financial disclosure form to the PSC and report to the Committee within 60 days after the adoption of the draft report.

Ms Peters said that time had run out. It was supposed to have been done in May and they had not submitted it.

Mr Joseph sought clarity on what the term ‘executive authority of the department’ meant. He also referred to what Mr Magagula had said about the non-negotiable criteria according to the Public Financial Management Act (PFMA) that had to be disclosed, and also sought clarity on that.

Mr Magagula explained how the process worked. The Minister and the department had to submit the information to the PSC. The DGs submit the information to the Minister, and the Minister submits to the PSC. When PSC engages with the DGs, they find that the DGs say that they have already submitted the information to the office of their respective ministers, and they cannot submit the information to the PSC. So the delay was usually on the side of the Ministers.

The Chairperson said that the Members needed to be consistent with the language they used. They should not say ‘minister’ in one place and then call it ‘executive authority’ in another.

Recommendation 2.4 of the report on the Division of Revenue Amendment Bill stated that the Minister of Finance should ensure that there was a consequence management framework and that action was taken against government institutions which continue to under-spend their allocated budgets. The Chairperson asked the Members’ for their comments.

Mr Joseph said that the question they should ask was if there was a consequences management framework in place, and if so, they should check if it was effective.

The Chairperson commented that there were departments that were perennially under-spending, and funds were being shifted. He felt that as far as service delivery was concerned, there was no consequence management framework in place, because if there was, departments would not be having this issue.

Mr Qayiso agreed with the Chairperson, adding that a number of departments submit reports where they merely state where they had not spent funds, without giving the substantial reasoning behind it. The Committee could recommend that any reports from a department should give substantial reasoning behind under-spending.

Mr Magagula responded that if money had been under-spent, the person who was responsible for accounting to Parliament was the Director General. The question that should be asked was to what extent was Section 38 of the PFMA being complied with. In the event that money had been unspent, what were the consequences? What happenned to the individuals who were entrusted with those responsibilities?

Mr Joseph said it should be understood that consequence management due to poor performance was very critical. He believed that recommendation 2.4 was spot on, and that action should be taken against people who were accountable.

Ms Peters said that there was an 8% virement requirement, and what often happened was that people used items in the budget as a piggy bank, where they would deliberately budget for something that they would not use. A programme was created and money was put aside for it, so that later they could draw from it and use it as their personal bank.

The Chairperson added to this point of departments using items in the budget as their personal bank. There had been an incident where a department had R18 billion rand in the bank which they were not going to use. The Committee had asked if they could take it away and the department’s chief financial officer (CFO) had said that the department would struggle because they lived off of the interest of that money. This was the wrong way of doing things, because that was an incentive for not spending CapEx because one wanted to finance the OpEx from the interest. This was a big problem. Furthermore, most of the time that money had been borrowed, and the interest that the department got was far greater than the interest that was being paid to the government. The other was that, for instance, the Minister of Transport was saying that they were engaging other institutions to help them spend on CapEx, but what they did not disclose was that this would not be done for free. The Chairperson said this was a crisis that needed to be dealt with.

He moved on to recommendation 2.5, which recommended that the Minister of Water and Sanitation should ensure that a mechanism was put in place to ensure that those who were responsible for polluting the Vaal River system were held accountable. Furthermore, the Minister of Environment, Forestry and Fisheries should work together with the Mnister of Water and Sanitation to resolve the matter. The Committee should give them 90 days to get back to them on progress made. 

On the recommendation that the Department of Higher Education and Training, as well as Small Business Development, must present to the Committee a plan on how they intend to improve on the spending of conditional grants, they should brief the Committee within 90 days of the report being adopted in the National Assembly.

The Minister of Public Enterprise should present the overall strategic plan on how the government plans to turn around the SOEs,, particularly SAA. On the expenditures that were announced in the 2019 budget, the Minister of Finance allocated money to these SOEs. The Minister needed to present a strategic plan in which he explains what he intends to do to improve the situation. This should be done within 90 days after the report had been adopted.

Ms Peters expressed her view that the Board of SAA was not serious about the responsibility that they had been given. She wondered how they had been able to say that they were not going to pay salaries. It was these types of things that told you that something was not right.

Mr Mathafa asked who monitored the performance of the boards of directors. He thought that Ms Peters’ point was valid. However, it also reflected on their ability as Parliament to do oversight. PRASA had not submitted financial reports for two consecutive years. What did the Portfolio Committee say in the first year when there were no financial reports? What did they do in the second year? This reflected on Parliament.

The Chairperson said that the Minister responsible was the shareholder, and had to deal with that. The Portfolio Committee responsible should do that. They had submitted their financial reports, but in the previous year it had been qualified audit and the latest one had been a disclaimer.

Mr Magagula explained that if these institutions, for whatever reason, did not submit their annual reports according to Section 55 of the PFMA, they had to write to the Speaker of Parliament indicating why they had not submitted their annual reports.

Ms Peters said it was the responsibility of the Portfolio Committee. If the Portfolio Committee was not doing its work, what then happened? Even now, the Committee should have started their work in reprimanding SAA for not submitting, and they would face the consequences for not complying. How could they give SAA a budget for the next financial year if annual reports had not been submitted? It was an indictment on Parliament that SAA was in the situation that it was in right now. It had been debated in Parliament, yet nothing had been done. They were working in the environment of a company that was going down.

The Chairperson said that there was a shareholder compact, where there was an agreement between the Minister and the Board on what was going to be done. On a quarterly basis there was a report submitted to the relevant department on what had been done. The question of good governance was one of the things that should be reported on, which included the board meetings. It was through these reports that one could start to see the issues. Reports were the responsibility of the Minister. He told Ms Peters he thought the excuse that SAA may give was that they had legacy problems.

Mr Josephs said that SAA was under business rescue, and he would like to know what the impact of that decision was on the Committee. The analysts were saying that at the end SAA would still come to the Committee and ask for more money, and they would still give it to them -- yet they had not conducted a single intervention. Did that mean that they were adding to the problem?

Ms Peters said that when she was Minister of Transport, the Board of PRASA at the time was busy with investigations that were not budgeted for, and she had written to them on the importance of not spending CapEx. What had transpired was that the Minister did not ask them to conduct investigations. This CapEx issue had been going on for a long time. Even when one knew that there was a shareholder compact, there were times when boards would start thinking of political interference.

The Chairperson agreed, and expressed the view that these kind of issues were catch-22. It was very easy for people to conclude that it was a political interference. Furthermore, he felt that there was still going to be a Zondo Commission 2, because politicians were busy doing a lot of wrong things in the name of “conducting an investigation.”

The Committee moved on 2.6 of the report, which covered the Eskom Holdings oversight visit from 14 October 2019. The Committee agreed that they had already dealt with Eskom issues.

Ms Peters said that the only thing that was missing in 2.6 was the overpayment of R4 billion, which Mr Qayiso had spoken about earlier.

Mr Joseph referred to the R4 billion invoices, and asked if the Committee expected Eskom to investigate themselves, or if the AG should do the investigating,

Mr Magagula said that at the moment, they were not conducting an investigation because Eskom had made the payment. They would like Eskom to provide the Committee with details of the payment.

Mr Arends read through an email containing issues that had been raised by Mr A Shaik Eman (NFP), who was absent from the meeting. The issues were: to go to Pretoria to interview all different departments; identify certain departments with weaknesses and follow them through on national level; with regards to SAA, interrogate supplier chain processes; unannounced visits to facilities, including police and other government departments; investigate whether 30% absenteeism of staff was correct; when inviting departments, they should also invite Portfolio Committees where possible; Treasury should introduce mechanisms to ensure value for money reviews of the tender system.

The Chairperson noted the issues raised by Mr Shaik, and the Members agreed on them.

The Chairperson concluded the overview of the Committee work done in 2019. He felt that there had been a lot of issues raised during the discussion, and asked the Members read through the draft and then adopt it next year at their first meeting.

Adoption of draft minutes

The Committee decided to postpone the adoption of the minutes to next year.

Mr Joseph explained that they cannot come back next year and adopt draft minutes for an oversight visit that had to take place in the following week.

The Chairperson said that the Committee still did not have a programme for next year. This was why he had proposed that the Members go through the draft report and then, when the Committee came back next year, they could then adopt the minutes.

Mr Joseph insisted that they could not come back in January to approve an oversight visit that had to take place five days later. 

The Chairperson asked where Mr Joseph had got the idea that they would be going to PRASA five days later, because he had already explained that the Committee did not yet have a programme.

The meeting was adjourned.


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