ACSA on upkeep and maintenance at their managed airports & scandals; Transport Appeal Tribunal A/B & Marine Pollution (Prevention of Pollution from Ships) A/B: adoption; Recommendations on PP Report

Meeting report

Oil companies' refusal to fuel Russian and Ukrainian aircraft

Ms Mpumi Mpofu, Chief Executive Officer (CEO), Airports Company South Africa (ACSA), said the jet fuel supply value chain had several role players working together to realise the jet fuel supply to airports. These role players included oil companies, infrastructure and logistics companies, airport jet fuel storage operators, and dispensing equipment operators. These role-players were contracted outside ACSA’s scope.

She said the Russian aircraft refuelling incidents occurred on 10 July 2022 and 12 August 2022, when the planes could not be refuelled at the airports where they had landed. Moveable into-plane equipment and vehicles were owned by the fuel consortium and/or through-putters, and the fuel facilities' operations and the management arrangement entered between the oil companies and ACSA gave the former a right to directly operate and manage the facilities. However, the ACSA board had reviewed the jet refuel strategy to attend to these challenges so that it had control of who was refuelled. The reviewed jet fuel strategy meant that ACSA would separate the two components of the fuel supply process at the airport -- operation (fuel tanks, fuel hydrant, ownership of moveable into-plane equipment), and through-putting (supply of jet fuel).

With the expiry of the contract at the end of September 2022, an interim arrangement had been negotiated with the fuel supply operators to allow the ACSA supply chain process to go out on tender. Among other things, the reconfiguration model aimed to ensure the mandatory declaration of stock weekly, and an order of up to three months.  

The fuel contingency plan focused on ensuring a stable supply of fuel after a shipment expected to arrive in Cape Town had been delayed, which resulted in a disruption in fuel supply. ACSA was also looking at diversified ways of ensuring an efficient pipeline supply of fuel to both OR Tambo International Airport and Cape Town International Airport.

Fuel disruption at OR Tambo International Airport

On 28 December 2022, the feeder line actuated valve at the bulk Jet A1 fuel storage facility at OR Tambo International Airport failed in a closed position, and was not able to be opened manually. This resulted in the loss of supply of Jet A1 fuel to the fuel hydrant network on all aprons of the airport. This had a knock-on effect on the early domestic and international flights, as they could not depart OR Tambo International Airport. Although there was a restoration within two hours, this had a knock-on effect on the whole day’s flights.

Ms Mpofu said that this was an incident that ACSA took seriously.

Grass fire incident

A main grass fire incident occurred on 5 September 2022 at OR Tambo International Airport after sporadic incidents of fire outside the airport perimeter reported from the previous evening. These grass fires were located adjacent to Emergency Gates 3 and 4, outside of the airfield on the outer boundary of the airport property. The fire had also jumped the airside perimeter fence onto the airfield, but was extinguished by the ACSA fire and rescue department.

Stored and possibly scrapped old aircraft parked on the Denel precinct had been impacted. However, no serious injuries were sustained, and there were also no delays or cancellations due to the fire.

Ms Mpofu said Ekurhuleni’s emergency services had been activated, but arrived only later due to other commitments they had attended to earlier, and this had impacted the efficiency of the fire response. The actual cause of the fire had not been established, but it had been determined that it had started outside of the airport perimeter fence and, due to the wind and dry weather conditions, had jumped the fence. Measures had been implemented to secure the parameters of the airport. Security personnel around the airport parameters had been bolstered for early detection, the trees in the midfield had been eradicated, and the emergency call-out and response process had been reviewed and enhanced.

Upkeep and maintenance of ACSA airports

ACSA reached rock bottom when there was a lockdown at ACSA in 2020. However, there has been steady progress in recovery, as some parts of the airports have been reopened due to improving traffic. Some measures have been put in place to ensure the maintenance of the airports.

She conceded that the condition at ACSA airports was not up to the best, but a turnaround plan of action had been put in place, and the Bram Fischer Airport had been a matter of focus. The action plan was adopted for implementation in June 2022. It included an increase in on-site management oversight and direction, the renting of grass-cutting equipment as a short-term intervention for the team to cut grass immediately, and getting current equipment repaired and serviced.

Alleged grass-cutting tender irregularities

The incumbent contract ended on 30 June 2022, so ACSA had invited requests for quotations (RFQs) for a contract of six months, estimated at R4.8 million, while finalising the transition process into the expanded public works programme (EPWP), as grass-cutting and cleaning services had been identified as being airport services that could be used to address socio-economic challenges.

The matter was subject to litigation, and ACSA had also instituted an internal process to investigate the allegations. Once the process was completed, the findings would be shared with the Portfolio Committee.

Polokwane International Airport and Mmabatho Airport

ACSA was in discussions with the Limpopo Province and the Gateway Airports Authority Limited to conclude a memorandum of understanding (MOU) for the provision of airport technical services, subject to the allocation of the provincial budget.

Concerning the Mahikeng/Mmabatho Airport, Ms Mpofu said that an MoU had been concluded in 2017, followed by a proposal in December 2017, for the provision of project management and quality assurance, regulatory training for fire and rescue and marshalling, and the design of bird and wildfire control.  

Discussion

Mr L McDonald (ANC) referred to the grass-cutting tender, and asked if the company that initially applied for the tender had been the one that was awarded the tender. Given the various media reports which had reported some irregularities, he requested clarity on how the process was carried out.

He commented that the fire at OR Tambo International Airport had been a serious threat, and this should be looked into closely to ensure that such an event did not happen again.

On refuelling the Russian aircraft, he said that when faced with a similar situation, ACSA must find a way to refuel third-party aircraft without meddling in politics.

He raised concern about the 600 jobs lost at ACSA, as this was a highly skilled field which had consequences for the functionality of aviation in the country.

The issue of maintenance should be attended to, especially at OR Tambo International Airport, which was a gateway for tourists.

Mr McDonald said he was pleased that there was a revised fuel strategy, and wanted to know what the contingency plan was while working on the revised strategy.

Mr C Hunsinger (DA) said the Portfolio Committee had been anxiously looking forward to meeting ACSA, as there had been three occasions on which it had been invited to appear before the Committee, and this had not happened. He wanted to know why ACSA failed to appear before the Committee.

Referring to the condition of airports, he asked about the contracting of ground handlers, as sometimes aircraft got damaged, and lost passenger luggage was not kept safely. Who was contracted to provide ground handlers, and what scrutiny measures were put in place to ensure the proper allocation of skills?

Regarding the grass tender, there were a variety of rumours as to whether the company involved had existed at the time of the fire, as there were suspicions that the company had been dormant since 2017. He asked for clarity on this issue.

He asked for more details on the specific projects that had been mothballed by ACSA.

Ms F Khumalo (ANC) said the Committee accepted ACSA's apology for failing to appear before the Committee timeously. She raised concern that the presentation indicated that the cause of the fire had not been established, pointing out that this was a serious matter which needed to be dealt with decisively. She therefore asked if there were strengthened security measures around the airport to ensure that such an incident did not happen again.

Concerning the 600 lost jobs and the early retirement packages ACSA offered, was there any plan to return the laid-off employees to their jobs?

She sought clarity on who took responsibility if passenger luggage was lost or mishandled.

Mr K Sithole (IFP) indicated that oil companies' refusal to refuel the Russian and Ukrainian aircraft seemed to be a political move. What was the future mitigation strategy to ensure that such a situation did not recur?  

The five-hour disruption in the OR Tambo International Airport operations in December was severe. Had any planning been put in place to ensure that this does not happen again?

Regarding the budget and the 600 lost jobs, what was the plan to absorb all the employees to ensure that they could still use their skills?

Ms M Ramadwa (ANC) said she hoped that this was the last time that there was a disruption in communication between the Portfolio Committee and ACSA.

On the issue of refuelling the Russian and Ukrainian aircraft, she said it seemed like this was a political move, and this was against the ethos of what South Africa stood for, which was peace and fair dialogue between Russia and Ukraine without the imposition of indirect sanctions by oil companies in South Africa. This was something that must be taken further.

Referring to the Polokwane and Mahikeng Airports, she stressed the importance of revising the Airports Company Act to ensure that the passengers at these airports were assisted, especially given that tourists widely used these airports. ACSA was needed, as it had the responsibility to oversee airports.

She asked what the criteria were for the early retirement package offered to the 600 workers who were laid off.

Mr T Mabhena (DA) thanked ACSA for appearing before the Portfolio Committee. He pointed out that there were three occasions that the Committee had requested the entity to appear before it, but it had not done so. He requested that such issues should not become the norm, as the Committee and ACSA were not rivals -- they were both working together to protect the interests of the entity.

He said there was poor maintenance of the flagship OR Tambo, Cape Town and King Shaka airports, such as ensuring proper cleaning measures. These airports had stained walls which had not been cleaned. Failure to take care of the small issues showed that there were underlying challenges at ACSA.

Mr Mabhena asked what ACSA planned to bring the 600 laid-off staff back to ensure its sustained efficiency. Also, what had informed the decision to convert some of ACSA’s operations to the EPWP, and how many people have been employed by the EPWP? He commented that the conversion might have been unrealistic, as many of the skills required in aviation were highly specialised.

He pointed out that the continuous blame of COVID-19 for shortcomings was no longer sustainable, and all challenges should be well responded to.

Mr Mabhena said 26 companies had bid for the grass-cutting tender, but ACSA evaluated 28. This suggested that the extra two had been sneaked in after the bidding process was closed. He asked for clarity on this matter.

The mismanagement of airport facilities impacted the businesses that operate in the vicinity of the airport in terms of revenue, especially restaurants. This was something that should be looked at closely by ACSA.

He asked for clarity on what the cost factor was for ACSA taking over some of the operations of provincial airports, as some of them were not busy. Would this have an impact on the sustainability of the operations of ACSA? He also about the cost involved in the in-sourcing of airport security guards.

Regarding the fire at OR Tambo International Airport, what was the subsequent cost incurred for the airport equipment, as there was no material damage, according to the presentation? He asked for more information because every cost, whether small or big, should be accounted for.

What had been the status of the InterContinental Hotel, as there were reports that its name had been changed?

Mr P Mey (FF+) referred to the grass-cutting tender, and asked what measures had been put in place to avoid corruption.

The Acting Chairperson asked ACSA to respond in writing on the projects that had been mothballed, including the issue of maintenance of the airports. He then laid out how ACSA should respond to the issues raised by the Committee Members.

ACSA's responses

Ms Mpofu clarified that the community-based employment programme had not started. ACSA had been allocated a six-month extension to conclude that programme.

She said there could be a definitional misunderstanding on the issue of mothballing. When COVID-19 hit, ACSA had mothballed infrastructure, which meant that there was a decision that certain parts of the infrastructure would be closed off due to significantly reduced traffic. However, as traffic was growing, there were efforts to "un-mothball" parts of the infrastructure that had not been used during the peak of the pandemic. ACSA would be more specific on the infrastructure mothballed in a written response.

There had been no change in arrangements at the InterContinental Hotel at OR Tambo International Airport. It was functioning well and continued to be the flagship hotel of the country.

She said that ACSA provided the necessary infrastructure for baggage processing, but baggage issues involving passenger claims was something that was managed by the individual airlines.

Mr Siphamandla Mthethwa, Chief Financial Officer,  ACSA, responded to the grass-cutting tender issue. He said that ACSA was transparent in the process of awarding tenders, and there were robust measures to ensure that irregularities were dealt with. He confirmed that at the time the award was given, the entity that had been awarded the contract had not changed names in the process. Procurement in the public sector meant working closely with National Treasury and the South African Revenue Service (SARS). At the time of awarding the tender, the entity was in good standing with up-to-date tax affairs. The tender had attracted 26 bidders, and the team that evaluated it was transparent. He assured the Committee that there were checks and balances to ensure that tender awardees were competent. There was nothing on the documentation to suggest that there was any irregularity in the awarding of the tender. If there was anything that arose, consequence management measures would be implemented.

He emphasised that the impact of COVID-19 should not be underestimated, as over a period of two years, ACSA had lost R4 billion in revenue. This had had a huge impact on resource availability in the company. It also provided about R2 billion in rescue funding to retail partners at the airports who had been significantly impacted by the reduced traffic at South Africa’s airports.

In the next three years, ACSA would be adding at least 300 jobs, including in-sourcing about 1 500 security personnel. There were also measures to bolster maintenance measures at ACSA's airports, and the results of this would be visible in the next few years.

Mr Terence Delomoney, Group Executive: Airport Operations Management, ACSA, said that the impact of COVID-19 meant that maintenance which had been in progress had to be halted, with a focus only on critical infrastructure, and this had left the passenger areas without any maintenance in progress. He further pointed out that ACSA was also dealing with ageing infrastructure, and there were initiatives to refurbish passenger terminals.

Regarding the fuel issue, he said that ACSA did not have a line of sight of the contracts between an airline and an oil company. All that ACSA managed was the total high-level volume of stock that was made available. However, the new contract being looked at would enable ACSA to get more detailed information on each contract, such as the fuel each supplier had, including to whom they were supplying it.

ACSA took consequence management very seriously to ensure transparent accountability, and if there was any transgression with the law, such cases were reported. However, there had been delays with the processes of the HAWKS, but the cases were taken seriously and dealt with decisively.

Ms Mpofu thanked the Committee for engaging with the entity, and stressed that ACSA was committed to engaging with it on any issues. A written response would be provided to the Committee on some of the issues discussed.

Adoption of Marine Pollution (Prevention of Pollution from Ships) Amendment Bill [B 5 – 2022]

The Bill was adopted by the Committee without amendments. 

Report of the Portfolio Committee on Transport on the Marine Pollution (Prevention of Pollution from Ships) Amendment Bill [B 5 – 2022] (National Assembly – sec 76),

 The Chairperson tabled the report.

This was supported by the Committee, and was accepted for adoption without amendments.

 The Chairperson said that issues raised by the Committee about the Bill, including grammatical errors, had been dealt with and were included in the list of amendments.

Clause-by-clause deliberations on and adoption of Transport Appeal Tribunal Amendment Bill [B 8 – 2020] 

Ms Phumelele Ngema, Parliamentary Legal Advisor, highlighted the corrections and technical issues raised in the Bill during the previous meetings with the Portfolio Committee.

The Committee moved to adopt the corrections in Clauses 6 and 12.

Clauses 1, 2, 3, 5, 6 and 12 were adopted as amended.

Clauses 4, 7 to 11, and 13 were adopted without amendments.

The Bill was adopted as amended.

Report of the Portfolio Committee on Transport on the Transport Appeal Tribunal Amendment Bill [B 8 – 2020] (National Assembly – sec 76)

The report was considered and adopted. 

Recommendations on Public Protector Report No. 37 of 2018/19

The Committee's report, finalising its recommendations, was adopted with minor amendments and considerations.

Consideration and adoption of minutes

The Portfolio Committee recommended that the adoption of its minutes of 29 November 2022 and 7 February 2023 be deferred to the following meeting to allow time for the Members to listen to the recording that had been emailed to them. This was agreed to.

The meeting was adjourned.