DMRE on financial sustainability of SDT, SADPMR & NNR; Petro SA Refinery Oversight Report

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Mineral Resources and Energy

25 November 2020
Chairperson: Mr S Luzipo (ANC)
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Meeting Summary

Tabled Committee Reports

The South African Diamond and Precious Metals Regulator (SADPMR) briefed the Portfolio Committee on Minerals and Energy on the financial sustainability of the entity. The meeting took place on a virtual platform. 

The SADPMR showed how revenue from the sale of services was reduced on average by 8.8% during the 2019/20 financial year compared to the 2018/19 financial year. This has caused an unfavourable economic environment which had a negative impact on the diamond and precious metals industry. One of the long term proposed interventions that the SADPMR suggested is the amendment of the Precious Metals Act to include provisions that allow for the charging of tariffs as a way of increasing revenue generation.

The State Diamond Trader (SDT) briefed the Committee on its financial sustainability. The SDT showed that diamond production levels from producers have been declining and the SDT made a significant loss in the 2019/2020 financial period due to the depressed global economy and weak market conditions. The SDT highlighted that to counter their financial challenges the entity is in discussion with the Department to finalise the Industrial Development Corporation of South Africa (IDC) credit facility. Members asked the SDT how its gross margin percentage of three percent compared with that of the private sector; why the State Diamond Trader was not using the cash reserves to fund its acquisitions; what the cause of the rising employee cost was and were scrap metals currently regulated. Members felt that the retention of surpluses was something that should be considered and that the State Diamond Trader (SDT) especially needs to be self-sufficient and not reliant on grant funding.

The National Nuclear Regulator (NRR) briefed the Committee on the financial sustainability of the entity. The NRR showed how the number of licenses has been on the decline since 2018/19 due to unfavourable economic conditions which have worsened due to the COVID-19 pandemic. The NRR proposed that Regulatory fees should be due and payable at the beginning of the financial year and interest levied on overdue accounts to enhance certainty.

Members asked how the entities were going to sustain themselves considering the current poor performance and projected losses; what will happen to the SDT as it anticipates a loss for four years and how will the entity operate with the anticipated loss and how many applications the entity received in the last 18 months and how many applications were turned down. Members heard that 

The Committee was pleased to hear about the appointment of women as CFOs and said that they hoped that the male counterparts that they work with gave them the respect that they deserved. Members heard that in the period under review the entity had issued 613 licenses. Of these, 333 were for diamonds and 280 were for precious metals. Out of the 333 for diamonds, 148 were for secondary licenses. Under precious metals, of the 280 licenses there were 96 endorsements. There were very few license declined which were because either applicants did not meet local demand or there was no refining activity.

The Committee asserted that the Treasury regulations stipulated that a budget cannot be made on a deficit so how is the SDT budgeting while projecting losses. They stated further that it would be difficult for the SDT because its existence was subject to the shareholders and that was why the brief stated that the Department must brief the Committee on the issue of financial sustainability of the entities.  It cannot be the entities that had to justify their existence and it should be the Department that highlights the challenges that the entities are facing and what the Department is doing to assist the entities. The Committee would have appreciated a consolidated report from the Department on the issue of financial sustainability. The Committee complained about the lack of a report from the AG and said that the AG report would have allowed the Committee to see how the entities were performing and how the entities have been managed.

 

Meeting report

Opening remarks by Chairperson
The Chairperson said that the Department was to brief the Committee on the financial sustainability of the South African Diamond and Precious Metals Regulator (SADPMR), the State Diamond Trader (SDT) and the National Nuclear Regulator (NNR).

South African Diamond and Precious Metals Regulator (SADPMR) Financial Stability
Mr Abe Mgomezulu, Chairperson, SADPMR, briefed the Committee on the financial stability of the entity. The briefing addressed the financial position of the Regulator, cash generated from operations post-lockdown and initiatives implemented to ensure financial stability – these included:
-Utilisation of reserves: this option will result in going concern challenges 
-Executive and Senior Managers not receiving annual increases. 
-Revision of Tariff structure which will be implemented post the Covid - 19 pandemic: this option was commenced with and suspended upon the announcement of the State of National Disaster by the State President. 
-Turnaround strategy initiated with the objective of obtaining the optimal resource requirements to mitigate the cost burden
Financial challenges confronting the SADPMR included:
Revenue from the sale of services reduced on average by 8.8% during the 2019/20 financial
year compared to the 2018/19 financial year;

At the end of September 2020, the six months financial performance reflected a deficit of R2.2 million due to the declining revenue generated from sale of services; and

The SADPMR is further burdened by employee costs which amounted to over 75% of its operational expenditure and is a fixed cost.

Recommendations to deal with financial challenges:
Short term:
-Cash injection from the shareholder to cover the shortfall in revenue to the extent of R24.4 million that will not be generated in the 2020/21 financial year to cover operational costs.
-Assisting with funding the move to the GIDZ which is projected to cost at least R15.8 million. 
-Worst case scenario if shareholder cannot assist with short term option 
-The combined shortfall above of R40.2 million will be funded from reserves. 
-Safety net of R35 million, which in itself is insufficient to cover the above shortfall will be eroded
 -Resulting in going concern issues
Medium Term:
-Reprioritisation of Medium Term Expenditure Framework (MTEF) allocations by the DMRE. 
 -Increased appropriation by parliament by at least 12% of the budget. 
-Additional revenue generated and not approved for retention will be surrendered to the fiscus. 
- Approval of revised tariff structure by the Minister for implementation post the Covid-19 pandemic. This is dependent on Ministerial approval and the minimum timeframe required to publish same in the National Gazette.
- Rationalisation of the entity pending the outcomes and recommendations of a resources utilsation optimisation study
Long term:
- Generation of revenue – through amendments of the Precious Metals Act to include provisions that allow for charging of tariffs. Requires amendment of the Act 
-To include provisions that will allow charging of tariffs for precious metals similar or equivalent to those charged to the diamond industry. 
-Inclusion of other minerals besides diamonds and precious metals, e.g. scrap metals. This would resolve quite a number of challenges in the industry relating to illicit trading and loss of revenue
Financial Sustainability of the State Diamond Trader (SDT) 
Ms Monica Ledingwane, Chairperson, State Diamond Trader (SDT) briefed the Committee on the challenges that the entity was facing.
Financial challenges confronting the SDT include:
Over the current period production levels from producers have been declining;
For 2019/2020, 15 producers complied with the law, this is on the back of many producers still not being compliant;

The State Diamond Trader has made a significant loss in 2019/2020 financial period due to the depressed global economy and weak market conditions; and
The operating costs of the entity are mainly fixed.
The presentation also addressed the past 12 years of the entity’s trading performance, inspections vs. purchases and sales of the past 12 years - The State Diamond Trader noted a decline in sales in the 2019/2020 financial year. Decline in production levels from De Beers that contributes 60% of State Diamond Trader revenue as well as global market conditions due to US-China trade wars. The number of clients sold to over the years has declined since inception. The reason for this is clients find it difficult to secure funding to purchase rough diamonds. A decrease in the number of clients sold to was noted in the 2019/2020 financial year. 

Members were also briefed on the Trader’s profitability in the last ten years, operating costs for the last ten years, sales for the last ten years and cash for the last ten years - over the period production levels from producers have been declining, which means less amounts State Diamond Trader has access to. For 2019/2020, 15 producers complied with law, this is on the back of many producers still not being compliant. State Diamond Trader has made a significant loss in 2019/2020 financial period due to depressed global economy and weak market conditions. The operating cost of the entity is mainly fixed.  Cash reserves were utilised to fund operating costs due to the loss. Gross profit margin percentage remains stable at 3% and only reduced to 2% in 2020

The 2020/21 budget is significantly less because the budget was adjusted due COVID19. State Diamond Trader has made total sales of R176 million up to September. Sales have improved as the countries globally ease the lockdown restrictions. The trade was also assisted by shortages of polished in certain categories. The loss for the entity at the end of September is R5.6 million this is due non-trading in April and May. Decision taken to sell some of the old stock to improve cash flow, these sold at loss from June. Sales projections for the last six months of the financial period amounts to R436 million. The entity is anticipating to have a performance loss of R3.5 million. Cash projections at year end will amount to R16.7 million. 
Projections for 2022-2025 show the State Diamond Trader Gross Margin is on average of 3% per annum.  Operating costs increment is 5% per annum. Finance Income is interest from the bank investments. Finance expense is the interest incurred if the entity have access to the credit facility. The entity will make a loss as the overheads exceeds Gross Margin. Cash Reserves will decline annually as they will be utilized to cover the loss
Interventions:
-The entity is in discussion with the Department to finalize the IDC credit facility. 
-Consider the changes to the listing of SDT as schedule 3B for SDT to obtain funds from fiscus. 
- Revise the business case together with the financial model of SDT 
-Review gross margin rates 
-Develop revenue enhancement plan 
-Develop and maintain relations with other African diamond producing countries for exchanges idea and as long-term strategy, to trade with them 
-Review legislation and regulations
National Nuclear Regulator (NRR) Financial Sustainability
Dr Bismark Tyobeka, Chief Executive Officer, National Nuclear Regulator (NRR), briefed the Committee on the challenges that are confronting the entity. The presentation addressed the funding model and trends analysis for authorisations, provisions, fees and debtors collection. Members were also taken through the MTEF revenue trends per category. 
Potential revenue stream for research and development:
-The NNR has established the Center for Nuclear Safety and Security (CNSS) in collaboration with a number of academic institutions both locally and internationally 
-The CNSS is hosted at the University of Pretoria 
-The CNSS has attracted interest from continental and international regulatory bodies
-It has potential render regulatory research and development services sustainably 
-The CNSS focus areas are: Education and Training (E&T), Regulatory Research and Development (RRD, Technical and Scientific Support (TSS) and Strategic Partnerships 
Recommendation:
-The NNR funding model should be fixed to 32% government grant and 68% regulatory fees 
-Regulatory fees should be due and payable at the beginning of the financial year and interest levied on overdue accounts 
-The CNNS should be empowered as a research and development wing of the NNR with revenue generation capacity for self sustainability
-The regulator should be allowed a certain quantum of surplus for retention 
Financial challenges confronting the NRR include:
-The number of licenses has been on the decline since 2018/19 due to unfavourable economic conditions and this has worsened due to COVID19;
-The current projections are significantly negative forecasting tripling the previous year’s provisions; and
-The impact of the slump in the economy and COVID19 to the licensees is visible in the spike of the debtors collection turnaround times. 
Discussion

Mr K Mileham (DA) noticed that profitability and sustainability over the short term were the main themes that were emerging from the presentations by the SADPMR, SDT and the NNR. He noticed that the SDT had projected to incur losses for the next four years. He asked the SDT how its gross margin percentage of three percent compared with that of the private sector. He asked what the margins in the private sector were. The SDT said that there was need for a credit facility and yet a year ago the entity had cash reserves of over R100 million. He asked why the SDT was not using the cash reserves to fund its acquisitions. He questioned why the entity was seeking expensive credit when it could be using its reserves. Based on the profitability projections, there are losses for the next four years; he asked why the SDT should continue operating. ‘What would be accomplished by pouring money into an entity that is projected to make losses’? He asked why government should keep putting money into the entity.

In relation to the SADPMR, he asked why there was a big increase in employee costs where it increased by over 11% in a single financial year. He wanted to understand what the cause of the rising employee cost was. He asked on the number of employees at the SADPMR. In relation to the SADPMR move to secure a credit facility from the GIBZ at a cost of R15.8 million, he asked whether it was necessary to undertake the move considering the high cost. He asked if it were possible to continue with operations without committing to that facility. The SADPMR was committing to a capital expenditure that they could not afford. In terms of the retention of surpluses, if all three entities are going to be self-sustaining there is need for negotiations with the National Treasury; the SDT especially needs to be self-sufficient and not reliant on grant funding. He did not think that there was need to consider the status of the SDT but the retention of surpluses is something that should be considered.

He asked were scrap metals are currently regulated. He questioned why the regulation of scrap metals should be moved to the SADPMR. Although he acknowledged that this was an attempt to increase revenue streams for SADPMR, it does not match with the mandate for the entity.
With regard to the NNR, he asked what was stopping the NNR from billing from the first day of a financial year. The regulation says that there is an annual fee but the actual operational date is determined by the NNR.

Mr M Wolmarans (ANC) said that all three entities, namely the SADPMR, the NRR and the SDT were facing financial challenges. These entities are also encountering challenges in accessing credit. With regard to the SDT interventions to negotiate with the Industrial Development Corporation of South Africa (IDC) so as to get access to credit; he asked what was hampering those negotiations across all three entities. The Department was supposed to assist all three entities with the review of legislation. He asked the Department why it was not prioritising some matters that allowed the entities to survive financially because the Department was not coming clear on what they were doing in discussing with sister Departments where they have leverage in negotiating. He said that there is an approval that is required by the entities for them to use the money that would have accrued to them as surplus which shows the red tape involved of having to go through the Treasury.

With regard to the SADPMR, he noted that slide 17 showed that the employee cost savings amounted to R6.5 million Rand. ‘Apart from the staff not taking an increase how did the entity achieve such employee cost savings’?  He asked whether some employees had to lose their jobs.
Ms C Phillips (DA) asked whether the omission of the Auditor-General’s (AG) reports from the presentations was because the audit process had not yet been completed. If the entities have been audited, she requested copies of the Auditor General’s report
On the SADPMR she asked how many applications the entity received in the last 18 months and how many applications were turned down and what the reasons were for this.

Ms V Malinga (ANC) said that for the three entities she wanted to commend the appointment of women as CFOs. She hoped that the women are well treated as the 16 days of activism against violence against women was commencing. She also hoped that the male counterparts that they work with gave them the respect that they deserved. Of all the three entities, she thought that the SDT was the hardest hit by financial constraints. She said she welcomed the reduction in bonuses from the SADPMR for the senior management as it shows that they are trying to keep their finances in order. She asked what will happen to the SDT as it anticipates a loss for four years and how will the entity operate with the anticipated loss.
Responses: SDT
Ms Ledingwane (SDT) said with regard to the question of how the SDT gross margin compared to that of the private sector, the SDT was a Schedule 3b entity, she was not sure whether the entity was expected to be profitable. The entity was supposed to be self-sustaining but she was not sure if it was supposed to be profitable.

In terms of the question of why the SDT was not using reserves and seeking credit, she said the entity has been using both credit and reserves.
In response to the question of why the SDT must be retained regardless of the losses that the entity is making she said that the SDT is one of the most important institutions of government and it has a mandate to buy and sell rough diamonds for local beneficiation. This mandate resonates with a lot of South Africans considering the poor performance of local beneficiation over the years. She did not think that the fact that the entity had not yet made progress in dispatching its mandate means that the entity should be closed. All stakeholders must come to the table and consider the options to improve the entity.

She said she welcomed the comments that appreciated the appointment of women in executive positions and the SDT was going to support these women. She also welcomed the comments that the SDT was the hardest hit entity although she had not yet made the comparison herself.  
Mr Conrad Van Der Ross, Chief Operations Officer, SDT, said that in response to the question of whether the SDT was comparing the gross margin percent to that of the private sector, a diamond company has done an analysis to consider this comparison globally, the average percentage that is attained globally is between one and five percent.

Ms Nelisile Mncwango, Chief Financial Officer, SDT, said that in response to the R99 million that the SDT had in the bank as the reserve in 2019; the reason why there was the R99 million in the bank is because the entity had received an income in advance where payment was made from the sale of diamonds and it was to be delivered in the next financial year. To follow accounting standards it had to be recorded that year and had to be recorded in cash and in the bank. There were also creditors of R10 million. That R99 million was used to fund the loss that had been made of 16 million. So far the SDT had not received any funding from the fiscus or the Department and as such the entity was operating based on sales made on rough diamonds.
With regard to the question of access to credit facilities, the SDT is still in discussion with the Department. The SDT has submitted the information required by the IDC and the SDT was going to continue engaging with the Department to finalise the approval process.
In terms of how the SDT was going to sustain itself while making a loss, the SDT proposed changes in the legislation as well as getting allocations from the fiscus to get funding to cover part of operational cost.

Mr Stanley Mguni, Chief Executive Officer, SDT, said that in terms of the question about the credit facility and why the SDT was not using its reserves. The reserves are a revolving credit used as and when there is need. The SDT pays within ten days as per agreement at a rate of two percent over prime.
With regard to the Auditor General’s report, it is available and ready but the SDT was not expected to present the report. 

Responses: SADPMR
Mr Mgomezulu said that in terms of the question of the cost of relocating SADPMR to another location, it is important to consider that the lease for where the SADPMR is currently located is expiring. He said currently the place where the SADPMR is located is in a poor condition, and the entity is spending money on hiring security because the property owners have removed security. He said that the place where the SADPMR is located is not a good place, it is risky and whether the entity liked it or not it just has to move. There were members of the entity that were nearly hijacked while leaving the office.
He said that with regard to the question on scrap metals, in the past there were two acts, the Diamond Act dealing with diamonds and the Precious Metals Act dealing with precious metals. That time the precious metals were defined as gold and silver and when the Precious Metals Act was amended and the regulator was established, silver was removed because of the dollar price of the silver which was low even to this day. It is not worth it to mine it at the lower price. However looking at the suggestion that the SADPMR is giving about scrap metals, it is not saying it wants to get into scrap metals immediately. With regard to scrap metal there is a dual kind of engagement that is involved and the SADPMR suggested that the Act needs to be amended so that it involves scrap metals as a long term intervention.

With regard to the question of why the Auditor-General’s report was not included in the presentation, the specifications of the presentations did not require including Auditor-General reports. The SADPMR however has clean audits.
He welcomed the commenting of the SADPMR management for not taking any salary increases.
The SDT is classified under schedule 3b while the SADPMR is classified under 3a which means that the operation models are totally different. The problem that happened when the SDT was initiated is that the SDT never received any appropriation from the state. For the SDT to open it had to go to the IDC and the private sector banks to be funded.

Mr Cecil Khosa, Chief Executive Officer, SADPMR, said that in terms of the number of applications received, in the financial year 2019/2020, the SADPMR received 333 diamond licensing applications as well as 280 for precious metals.  When applicants do not comply, the SADPMR tries to understand the challenges involved and in cases were license applications are refused there would be a lack of compliance with the minimum requirements stipulated in the Act. The General Manager Regulatory Compliance can provide figures.
Dr Jacky Lenka, General Manager: Regulatory Compliance, SADPMR, said that in response to the question of licensing, in the period under review the entity had issued 613 licenses. Of these, 333 were for diamonds and 280 were for precious metals. Out of the 333 for diamonds, 148 were for secondary licenses. Under precious metals, of the 280 licenses there were 96 endorsements. There were very few license declined which were because either applicants did not meet local demand or there was no refining activity. On diamonds, it can also be because the license applicants may not be meeting the 80/20 rule which means that they have to beneficiate 80% before they can export. Declines can also be because of anomalies found on registers. If there are valid reasons to suspect suspicious activities license applications are declined.
Ms Linda Nkhumishe, General Manager: Corporate Services, SADPMR, said that with regard to the employee cost within the SADPMR, the regulator has 119 employees. Of the 119 employees, 99 are based in Johannesburg; eight in Kimberly and Kwazulu-Natal and Cape Town have one employee each. The bulk of the licenses are in Gauteng so the 99 employees are in Gauteng to service all the other areas not mentioned. Regulation requires a lot of physical interaction of employees with licenses whether its renewals or new applications, walk-ins or send via email. It also includes inspection of diamond and precious minerals were employees would be going physically to the premises of licensees to check compliance to the requirements as per legislation. There are also employees that are employed to deal with the issue of transformation; they are also required to go to the premises of licensees to verify the compliance levels of the licensees in terms of the Mining Charter of 2018. There is also a component under the SADPMR that is called the Diamond Export and Exchange and Center (DEEC) were employees work physically to facilitate Diamond tenders as well as facilitating and processing exports and imports of diamonds. There is also the Government Diamond Valuers who go to premises such as De Beers and value diamonds and when the diamonds are coming to the DECC, they are the ones that have to do the physical verification of the market value of the diamonds. There are also the support services which support the core activities. 
The major cause of the employee cost component is the cost of living adjustment for employees below senior management; these are the collective bargaining level employees that receive salary increases over the financial year. The employee cost savings came out as a result of the vacancies at the SADPMR. The Management Executive Committee decided not to immediately fill vacancies due to the financial challenges that the entity is facing. Only strategic and critical positions were immediately filled. In the previous financial year the position of the CEO and CFO was among those positions which were only filled from the first of July 2019 and that also contributed to the salary saving cost
Responses: NRR
Dr Tyobeka said that authorisation fees must be gazetted by the government and that happens after consultations and this is difficult to do online due to the iterative nature of the process. Currently there are no gazetted fees for the current financial year. It is not only the NNR which determines the process, the process has multiple stakeholders, mainly political players that need to agree with what the board has proposed.
He said in terms of the issue of scrap dealers, NNR also regulates scrap metals because some of the scrap is radioactive.  
The Chairperson said that the Treasury regulations stipulate that a budget cannot be made on a deficit so how is the SDT budgeting while projecting losses. He noted that it would be difficult for the SDT because its existence is subject to the shareholders and that is why the brief stated that the Department must brief the Committee on the issue of financial sustainability of the entities.  It cannot be the entities that must justify their existence and it should be the Department that highlights the challenges that the entities are facing and what the Department is doing to assist the entities. Next time when the correspondence is sent, whoever is handling what is presented to the Committee, it is important to be precise to the brief so that the Committee is taken seriously. All the CEOs were supposed to be careful not to leave an image that maybe incorrect as they were the accounting chief officers of the three entities. He said that the CEOs were supposed to consider their delegations because excessive devolution can result in accounting officers being unaware of what is happening in the institutions they are accountable for. There was an Auditor-General’s audit outcome even of the SDT and the Committee would have appreciated a consolidated report from the Department on the issue of financial sustainability.
Mr Mileham said that the SDT indicated that the range of gross margin percentage is between one and five percent globally for operations within the SDT’s category. He asked why the SDT was not considering the upper end of the range as it would give them a bigger revenue stream and it would make them more likely to be profitable. He said he did not get a response to the big increase in employee cost from R79 million to R88 million in a single year at the SADPMR. The Auditor-General’s report was a key document for the Committee to evaluate whether the entities are financially sustainable. The AG report allows the Committee to see how the entities are performing and how the entities have been managed.
He said that with regard to the NNR’s legislative framework, he concurred that there was need for amendment, however according to section 28 of the NNR Act; the Minister does not necessarily have to determine the annual authorisation fee every year. The Minister could determine the annual authorisation fee for the next say five years. He said that this was one of the ways that could be considered in getting around the constraints that are presented by the current legislative framework and provide a growth path that allowed the NNR to bill from day one of a financial year. There is need to engage the minister as to why the annual authorization fee had not been gazetted yet.
Mr Van Der Ross said that in relation to the question of why the SDT was not adopting the upper end of the gross margin there are other factors that come into play such as supply and demand, competition for rough diamonds. The SDT negotiates with the producers in the best possible way but the aim is that of getting as much profitability as possible from acquisitions. Over the 12 years of its existence, it reached the five percent gross margin in 2011- 2012 financial year
Mr Khosa said that there has not been a big increase in SADPMR’s employee cost, in fact there has been a reduction in grants and revenue. This has resulted in the shrinkage in operating cost and this affects the ratio of operating costs versus other costs. Executives have not had any increase in salaries in the past two years. Only employees at bargaining level received salary increases of about eight percent in the past and recently the entity has agreed on a four percent increase which is not indicative of a big increase in employee cost.
Ms Mncwango said that with regard to the question on increasing employee cost, the R88 million referred to on the slide compared to the R79 million of 2019 which was the actual expenditure. The R88 million is a projected figure, it is not the actual employee cost and included in that projection is the provision for 12 months’ salary for senior executives including the CEO and the CFO. The previous year the cost of these executives only started to be incurred in July when they were appointed but in the projection, the cost has to be included for the full year. Included in the R88 million projections is a four percent increase in the salaries for junior staff factoring in back pay as well. SADPMR factored in the employment cost for the vacant executive positions such as the General Manager Regulatory Compliance and the Company Secretary. This was factored in because the recruitment process has been undertaken and it is in the process of being finalised so full employment packages have been factored in the projection. The projection also includes a leave provision as well, the employee cost is holistic including different aspects such as leave provision which is about over R2 million.
Dr Tyobeka, in response to the proposal for setting authorisation fees for future periods, said it was tried three years ago but it turned out that there was no consensus with the Department as to how the provisions of the NNR are understood. The NNR was willing to discuss these legal provisions. He concurred that approval for future periods stabilised NNR activities.
Adv Thabo Mokoena, Director-General, Department of Mineral Resources and Energy (DMRE), said that the Department appreciated its engagement with the Committee and valued the guidance it received. He apologised for delegating the presentation to entities while the brief stated that it was the Department that was supposed to provide the brief. He concurred with the Chairperson that the entities needed to engage the Department on some of the challenges that they were facing.
The Chairperson said that as the Department should continue with work for the next financial year, it needed to consider the issues that were raised in the meeting. He said he was encouraged with some of the entities such as the energy portfolio and the minerals portfolio. Under the stewardship of the boards of the three entities, the chairpersons should do their best to ensure that performance improves.
The meeting was adjourned.

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