Minister of Public Enterprises on Key Achievements and Benefits of Government Restructuring Plans

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Public Enterprises

26 November 2003
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Meeting report

PUBLIC ENTERPRISES SELECT AND PORTFOLIO COMMITTEES

PUBLIC ENTERPRISES SELECT AND PORTFOLIO COMMITTEES
26 November 2003
MINISTER OF PUBLIC ENTERPRISES ON KEY ACHIEVEMENTS AND BENEFITS OF GOVERNMENT RESTRUCTURING PLANS

Chairperson:
Mr B Martins (ANC)

Documents handed out:
Minister of Public Enterprises Address
Proposed Programme: First Term 2004

SUMMARY
The Minister of Public Enterprises informed the Portfolio and Select Committees on restructuring proceeds since 1997, the introduction of cost-reflective pricing mechanisms, state-owned enterprises, Telkom share successes and progress made in port operations. Concerns raised included preference for learnerships to white students, restructuring the smaller business concerns in ESKOM, rural areas not yet receiving electricity and maintenance of infrastructure. Members were pleased that the Minister showed understanding and insight into matters discussed.

MINUTES

Remarks by the Minister
Mr Jeff Radebe, the Minister of Public Enterprises, addressed the Select and Portfolio Committees. Members were briefed on restructuring proceeds since 1997, the introduction of efficiency and the newly introduced cost reflective pricing mechanisms. State-owned enterprises (SOE's) are to be restructured to contribute to the developmental agenda of the state. The Khulisa share offer was successful as 100 000 people, mostly in rural areas, took advantage of the offer to become investors in capital markets. Organised labour had been brought on board by means of various consultations and agreements.

Please refer to attached document.


Discussion
Mr J Theron (DA) referred to the other business concerns within ESKOM and asked if these were also to be restructured.

The Minister answered that the aim was to rationalise ESKOM to focus on its core business. Meetings had been convened with top management because some of the smaller business concerns did not sit well with ESKOM's focus.

Ms P Mnandi (ANC) said that there had been complaints of white students getting preference for learnerships offered. This was a serious problem. Negotiations and agreements with organised labour was to be applauded. He asked for clarity as to the concept of a "mixed model" and why some rural areas were not yet electrified while ESKOM supplied electricity to other countries in Africa.

The Chairperson said that written complaints on learnerships should be submitted for the matter to be addressed accordingly.

The Minister stated that it had been decided at the Growth and Development Summit that SOEs would participate in the learnership programme. He referred to the new CEO of Denel to make additional comments on learnerships.

Mr Victor Moshe (CEO: Denel) said that learnerships were to be doubled with the emphasis on subjects like Mathematics and Science to prepare students to enter the engineering field. This was based mostly in Gauteng, but the aim was to expand into the rest of the country.

The Minister added that the oversight and monitoring role of the Department would be strengthened to deal with various challenges.

Mr Lucky Montana (Director: Public Services and Stakeholder Liaison) addressed the Committee on ports. There had been consultation with organised labour, and the media focus was on black economic empowerment in port operations. Another agreement concluded will introduce the private sector into participating in port operations.

Mr M Sibiya (IFP) asked what the implication of disposing of ESKOM's assets would be, especially when considering the stronger rand.

The Minister said that the question was one of assessing market conditions. There was ongoing work in ESKOM as well as internal competition between generation plants. Majuba in Mpumalanga boasted one of the biggest world-class plants.

Ms H Mpaka (ANC) asked about the delay in provinces providing free basic electricity services.

The Minister answered that ESKOM continued to provide this service. There had been various bureaucratic obstacles, but the aim is to resolve these as soon as possible. The issue related to one of capacity.

Mr Theron asked whether the Minister was satisfied with the current level of investment in and maintenance of infrastructure.

The Minister said that, on the one hand, SOEs had garnered a great deal of resources and can meet infrastructure challenges. On the other hand, investment in infrastructure declined at the end of the Apartheid regime and reinvesting in this area poses a major challenge.

Mr M Nonkonyana (ANC) praised the Minister for the understanding and insight displayed in matters discussed in the meeting. This was indicative of great leadership.

Mr Sibiya asked whether the controversy around the land issue had been cleared as the successful bidder was to be announced the following week.

The Minister answered that the bidding process was underway and on track, but that information as to the successful bidder could not be divulged at this point.

The Chairperson thanked the Minister and his delegation for the address. He referred to the Committee programme for the first quarter of 2004.

The Committee adopted the programme.

Meeting was adjourned.

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