ESKOM: hearing on 2019/20 Annual Report & Investigations; with Minister (postponed)

Meeting report

The Chairperson welcomed the Minister of Public Enterprises, the Board members and executives of Eskom present at the meeting. The purpose of the meeting was to deal with the annual report of Eskom and the investigations at Eskom. This evening the Committee would be dealing with deviations and expansions. However, there were recent developments that occurred late yesterday which would require the realignment of the meeting.

The Chairperson informed the Committee that he had received a letter from the Minister the previous night indicating that Eskom would not be in a position to deal with the annual report and investigations this morning. The Minister therefore requested a postponement on that front. It was requested that the Committee move forward to deal with deviations and expansions. He handed over to the Minister to provide further clarity. He would then take suggestions and comments from the Committee members. The Committee would then make a determination on how it would proceed on that request.

Mr Pravin Gordhan, Minister of Public Enterprises, greeted the members of the Committee. He had just stepped out of a National Coronavirus Command Council (NCCC) meeting to attend this meeting. He concurred with what the Chairperson had reported. The Department had requested that in response to the letter of the Committee, dated 19 February 2021, which requested a presentation and discussion on the annual report and that Eskom be available today. Given the shortness of time and the inability to get the material to the Committee on time Eskom thought it was better to request that the meeting be postponed by a week. This was so that the material could be sent to the Committee on time and adequate preparations made. The second half of the meeting would continue at 18h30 this evening. Eskom would avail itself for that discussion. The Minister asked that the Committee consider the request for postponement of the meeting.

The Chairperson said that for the record the correspondence from the Committee was sent on 12 February. It would need to be discussed how that letter was interpreted and the letter of 19 February. That was the request before the Committee. He opened the floor for members to make comments or suggestions. He would then make a few suggestions in response to the request made by the Minister.

Mr S Somyo (ANC) said that the difficulty was the preparation that the Committee made for the meeting. Eskom should have been ready with the information. When the Department or Eskom was not ready with the annual report then the Committee needed to grant them that postponement. The meeting needed to be rescheduled so that with time the Committee received the necessary information and documentation. The Committee needed to look into how it could best deal with matters of communication between itself and the institution so that there was no confusion on those matters. His opinion was that if Eskom was asking for a postponement then the Committee should grant them a postponement which was not later than seven days and that the meeting be rescheduled.

Mr A Lees (DA) greeted the Minister and said he hoped that the running of the SOCs would be better than the previous year. The question of the annual report was an interesting one. He had not seen the hard copy and the Committee needed to get on top of that. He understood that this annual report was signed off by Eskom about four or five months ago. He was not sure why there was a hesitance for being ready for it. What was the readiness that was required? If Eskom was not ready, then they were not ready. He was curious about what it meant to not be ready long after the annual report was completed.

Ms B Van Minnen (DA) agreed with Mr Lees. It was indicative of the state of many of the SOEs that Eskom was not ready to present something that they should be familiar with. The Committee was ready with questions and it had far less notice than Eskom had. This evening’s meeting was problematic and she would need to reschedule a number of things to attend. She expressed her displeasure at the very late notice. She did understand that Eskom wanted to give credence to what it wanted to present but it was problematic that the Committee was sitting in a situation with a very packed schedule where suddenly a very relevant player was not ready.

Mr B Hadebe (ANC) welcomed that the Minister had made time for this meeting to request for a postponement. For the Committee to have effective and meaningful oversight it needed to have all the relevant players on board and ready. The Committee would have to accede to the Minister’s request. However, the Committee needed to state categorically that this was not the first time this was happening. It appeared as if Eskom wanted to get special treatment and that was based on the sequence of events that has occurred previously. He was not saying that was the case but history indicated such. The Committee did not take such behaviour kindly. The request was sent on 12 February well in advance. The Committee sacrificed weekends and had sleepless nights preparing for the meeting only to receive a letter yesterday asking for postponement as if the invitation was sent very late. The Committee would have appreciated a situation where the request for postponement was sent at least by last week Friday. The members did not only serve in SCOPA. The members served in several other Committees as well. He had to submit apologies to two other Committees to be in this meeting because he wanted to prioritise this meeting. Now he had to rush back to other Committees which he did not prepare for because he focused his time and energy on Eskom. He raised that due consideration ought to be taken for the Committee members that they also needed to be given sufficient time if there were any changes to the programme. It should not happen at the last minute so that the members could focus on other issues of priority that needed their attention. He could have prepared for other Committees and read documents in preparation for other Committees. He should have been informed well in advance that Eskom had challenges in relation to this meeting. It should not be perceived that the Committee was giving Eskom special treatment. This needed to come to an end and the Committee needed to put its foot down. In future, the Committee should not encounter such treatment. Having said that the Committee should accede to the request for postponement. He raised his dissatisfaction and disappointment in the manner in which the communication between SCOPA and Eskom were handled.

Ms V Mente (EFF) wanted to warn Eskom and try to clarify the Committee’s position in terms of accepting the excuse that Eskom had given. The Committee should not be seen as setting a precedent that when institutions were not ready they could ask for an apology and be excused. It was for the first and for the last time that Eskom was not prepared and come at a time when they were asked to account. The Committee’s monitoring tool was not measured on the after-effect. The Committee’s monitoring tool was supposed to deal with the real-time monitoring. As long as the Committee postponed looking into the matters of the past the Committee would be delayed at looking at the matters of the present. The Committee ought to be ready and Eskom must be aware that unannounced visits and unannounced accountability was going to be demanded from them. If Eskom’s house was not in order, then that was not the Committee’s business. All the information about financials should be available by any entity and any Department. It was even worse when it came to an annual report. An annual report was a document that has been signed-off a long time ago. The excuses that Eskom gave were highly unacceptable. It looked like Eskom was just ticking boxing. It made the annual report, thought that everything was fine and that it did not need to account for it. Eskom could not give an excuse about a document it had given itself and now it still wanted to be prepared. That meant that it was a ticking of the box exercise which was very wrong. The annual report status should be internalised, cites information and who was at fault. The information should be accounted for on a daily basis. It should not be the case that Eskom wanted to look into it and then account for it. She was not sure what there was to study on a report that Eskom had already submitted. It boggled the mind. She was not sure if the Committee was being taken for a ride or if Eskom was coming with a genuine excuse. She did not feel certain about it. She felt that Eskom just did not want to account before SCOPA at this time and wanted to come on its own time. She found it unacceptable and said it would not be allowed in the near future.

The Chairperson said that the members covered his sentiments as well on the matter. There were questions directed to Eskom and he asked for a response. After that he would make a proposal on the matter.

Professor Malegapuru Makgoba, Board Chairperson, Eskom, said that he wanted to make a correction. There had been a misunderstanding of what was requested and he wanted to correct that. There was a letter sent to Eskom on 12 February requesting it to present the annual report and deviations to SCOPA. Eskom responded to that and that information had been provided to the Committee. Eskom was ready to present the annual report because it already had presented the annual report in any case. Eskom did not want to be treated as an exception. On 19 February, Eskom received another letter from the Committee asking it to have a different preparation. The Board was needed to look into the documents that Eskom was going to present to the Committee. That was why Eskom was requesting to delay. Eskom was not delaying the annual report presentation. He wanted to clarify that matter.

Mr M Dirks (ANC) intervened on a point of clarity. He did not understand meant what Prof Makgoba meant when he said that another letter was sent to Eskom to present.

The Chairperson said he would explain. Prof Makgoba should finish his explanation. Prof Makgoba and the Committee were not speaking past each other. Both were on the same page.

The Chairperson handed over Prof Makgoba to finish his point.

Prof Makgoba responded that two letters were sent to the Eskom Board. One letter was sent on 12 February and one on 19 February. In response to the letter sent on 12 February Eskom sent information to SCOPA and was ready to present on that matter. For the request that came on 19 February, Eskom was not prepared and ready to convene a Board and go through the documents that were to be presented to SCOPA. That was what he wanted to clarify. Eskom was not requesting a postponement because it could not present the annual report. That was not its request. There was a letter written to the Chairperson and that letter was explicitly clear. He remembered the last paragraph of what Eskom requested. It could be read into the record so that it was clear what Eskom was asking for.

Minister Gordhan said that Prof Makgoba should leave the responses to him.

The Chairperson said that he was sitting with a letter from the Minister on issues about the annual report. He maintained that on 12 February he sent correspondence through to Eskom for a hearing, which the Committee had conducted before and any other time with any Department or entity, on the annual report. There were findings which the AG may have made. It was largely no submissions or presentations. The Committee coupled that with deviations and expansions which the Committee was briefed on by National Treasury. On 19 February, because of the bulk of the work which would have characterised today the meeting was staggered so that this morning the Committee would deal with the annual report and the investigations. That would have emanated from the annual report in any case but it was drawing the attention of Eskom to SIU perspectives which the Committee had been briefed on. That should have happened this morning. The Committee would not have been able to do the deviations and expansions in the same session. It was for that reason why the expansions and deviations was scheduled for this evening. Therefore, the letter of 19 February, in the Committee’s view, was for the purposes of clarifying how the meeting was to be structured. The letter of 12 February, as the standard operating procedure, was to ensure that Departments and entities were given no less than seven days’ notice of a scheduled meeting. There were other issues that had been brought to his attention. Eskom, like any other entity, will have to appear before Parliament. That was a non-negotiable. He assured members of that. There should not be confusion because of other things. In his view the members were being very measured in what they were saying. Eskom should not put the Committee in a difficult position now. He requested that that matter be left at that. The members did not want Eskom to continue with the hearing if it could not be a meaningful engagement. The Committee did not just want to tick off boxes. The Committee would not do that. He assured the members that the correspondence was sent timeously. He imagined that if there was an issue or any confusion on 19 February Eskom could have notified him on that very day. He proposed that the matter be left at that.

Minister Gordhan said that Eskom would accept the Chairperson’s guidance. He said that the new item in the letter of 19 February was the SIU matter which was not in the letter of 12 February. There has been some mix up between the letters of 12 February and 19 February. Those were the logistical matters to Parliament. The history of Eskom and its presence before the Committee has been good, open, cooperative and diligent. Members should remember that. The last week was a busy week for Eskom in terms of appearing before different structures of Parliament. Nothing was being done to undermine the status of SCOPA. He assured the Committee that both Eskom and the Department did everything possible to do the things that needed to be done. Like he explained at the beginning of the meeting he was supposed to be a part of another meeting. He asked for the Chairperson’s guidance on the way forward. He assured the Committee that Eskom would get its coordination done better. Sometimes a letter could be dated 19 February but by the time the management sees it would be after that date. He noted the comments that members made but asked that the members take note of what he said as well. Cooperation between the Executive and Parliament, through the process of accountability, was as important as the accountability itself. He said the Chairperson would guide how to move forward on the matter.

Mr Lees said that there was a lot of talk about letters. The Minister was quick to come in when Prof Makgoba was talking about a particular letter. It would assist the Committee’s understanding if the Committee could see the letters that the Chairperson wrote to Eskom and any responses received from Eskom and the Minister.

The Chairperson said that the letters would be circulated to the members. The letter of 12 February, the letter of 19 February and the letter from the Minister would be sent to the members. There were quite a number of issues. The Committee would have a meeting to discuss Eskom in detail and discuss how it would structure its approach to Eskom moving forward. He aligned himself with the sentiments that the members had made. The Committee should not have an unproductive hearing. The work needed to be done correctly. He proposed that the hearing on the annual report and the investigations, including the SIU investigations, be rescheduled for next week Wednesday. Next week Wednesday the Committee was scheduled to receive a briefing from the SIU on Denel and SAA investigations. That meeting would be held after the question session on Wednesday at 18h30 to 20h30. This would be done because the matters of Denel and SAA were just as important. The session on deviations and expansions would continue this evening at 18h30. That session would continue with Eskom. In the Committee’s own time it would make a determination around how it would move forward with these other matters. He presented that readjusted programme to the Committee. Issues into the annual report and the investigations be held next week Wednesday. This morning’s meeting would be reconvened at 18h30 for deviations and expansions.

Mr Hadebe requested that if there were any outstanding documents that it be given to the Committee at least 48 hours prior to the meeting so that members had sufficient time to study the documents.

The Chairperson said that the Committee would discuss that and communicate the timeframes to Eskom this evening. Mr Hadebe should prepare what he would need and that would be communicated to Eskom this evening.

The Chairperson advised that the annual report was only available in softcopy because of the lockdown. There has been no production of hard copies. For now, all documents were in softcopy form. The meeting would be reconvened at 18h30 on deviations and expansions.

The meeting was suspended.