Department of Public Enterprises Annual Performance 2024/25; with Ministry

Meeting report

Opening remarks by Chairperson
The Chairperson greeted the Minister, the Deputy Minister, the Committee, and DPE representatives. She informed the Committee that today's meeting was focused on monitoring and evaluating the DPE. She reminded everyone that the President had dissolved the DPE from the Seventh Administration, transferring its responsibilities to the Presidency. The Minister would provide more clarity on this transition and the Committee would approve the DPE budget. She requested that the Minister discuss the dissolution of the DPE and clarify her responsibilities as outlined by the President.

Opening remarks by Minister of Planning, Monitoring and Evaluation
Minister Maropene Ramokgopa reiterated that the President had announced the dissolution of the DPE, with its responsibilities being transferred to the Presidency. The Department of Planning, Monitoring, and Evaluation (DPME) has now been tasked with coordinating SOEs and advancing the establishment of a Holding Company. Although the Cabinet had signed the National State Enterprises Bill and sent it to Parliament in January 2024, it has not yet been finalized, making it a priority for DPME to push this Bill forward.

The primary role of SOEs is to ensure economic, socio-economic, and skills development in South Africa, helping it play a meaningful role globally. The Holding Company is crucial for strengthening the functioning of SOEs by centralizing the coordination of the institutions. DPE would present the APP for adoption. Due to the cessation of the DPE, some staff members would be reassigned to their respective policy-holding departments.

The Minister explained that the DPME, DPE, and the Office of the Presidency were working on stabilizing the SOEs and addressing the employment of the DPE staff. While the Holding Company is still being established, some DPE employees will continue working under the DPE. She expressed her anticipation of the Committee's support in providing accountability, political direction, and support to the SOEs.

DPE on its APP and Budget Plans for 2024/25
Ms Jackie Molisane, Acting DPE Director-General and Adv Melanchton Makobe, Deputy-Director General presented. 

Strategic Plan 2020 – 2025 Measuring Outcomes: Socio-Economic Performance Indicators
Tabled Strategic Plan will end in the current financial year 2024/2025
The department will revise the Strategic Plan to align with the 7th Administration priorities

MSTF Priority: Capable, Ethical and Developmental state
Programme 2: Oversight
Strengthen state-owned companies (SOCs) governance system and institutional alignment of the oversight function.
Outcome indicator: Independent Board Performance Index with a five-year target of 80%.

Oversee the implementation of infrastructure programmes within SOCs.
Outcome indicator: SOC planned Capacity Adherence with five-year target of 98%.

MSTF Priority 2: Economic, Transformation and Job Creation
Programme 1: Socio-economic impact
Position the SOCs to support re-industrialisation of the SA economy
Outcome indicator: Increase SOC local content (manufactured) spend to 75%

Increase SOC contribution in support of the transformation of the South African economy
Outcome indicator: Increase % of total annual preferential procurement spent to 80%
Outcome indicator: BBBEE recognition levels using a generic scorecard and/or a qualifying scorecard, from 7 to 4.

Support the development of small, medium and micro enterprises (SMMEs)
Outcome indicator: % spending on development initiatives and activities as % total annual procurement spent (3%)
Outcome indicator: % spent on enterprise development beneficiaries who graduated to the supplier development level (1%)

Accelerate the development of skills to support the needs of the economy
Outcome indicator: 3.5% of leviable amount spent in the supply of scarce and critical skills in occupations in demand (from 2.5%)

Programme 3: Sustainability
Improved independent financial sustainability of SOCs
Outcome indicator: 60% minimum increase on SOCs’ financial performance

Improved operational efficiency of SOCs
Outcome indicator: 60% of SOCs operational efficiency

Reduce vulnerability to risks associated with climate change
Outcome indicator: Annual and cumulative climate change risk report

Transition to a low carbon economy by reducing emissions
Outcome indicator: 5-year review report on implementation of Paris Climate Agreement

Secure supply of energy (Eskom-specific)
Outcome indicator: >80% increased energy availability factor to ensure constant supply
Outcome indicator: Increased electricity reserve margin to counter loadshedding by 15%
Outcome indicator: Separated and unbundled Eskom to eliminate cross-subsidization and
improve efficiency (Eskom unbundled into generation, transmission, and distribution)
Outcome indicator: Explore embedded generation options to augment Eskom capacity

Increase access to affordable and reliable transport system (Transnet and Portnet-specific)
Outcome indicator: Compile long-term rail strategy linked to capacity plan
Outcome indicator: Implement a comprehensive rail modernisation and upgrade programme
Outcome indicator: Corporatised Transnet National Ports Authority

2024/25 APP Targets per Programme
The APP 2024/25 is aligned to the Tabled Strategic Plan.

Programme 1: Administration
Monitor interventions by SOEs to prevent critical infrastructure vandalism and cable theft.

Programme 2: SOC Governance Assurance and Performance
Sub-programme: Legal, Governance and Risk
Produce two pilot reports on Board Performance Index (BPI) on two SOEs.

The objectives of the holding company Bill are to:
- Provide that the State is the sole shareholder of the holding company and President is the representative of the shareholder. The President may delegate the shareholder functions to a Cabinet Minister.
- Establish a state-owned holding company named State Asset Management SOC Ltd.
- Enhance the operational efficiency of State enterprises, to achieve the State’s developmental objectives.
- Transfer the shareholding of certain identified enterprises to the holding company in phases, in order that the operations of those enterprises are independently supervised by the holding company.
- Provide for appropriate and effective monitoring and reporting mechanisms over subsidiaries
- Promote the commercial sustainability of State enterprises
- Provide for a transparent process for the appointment of the Boards of SOEs.

Sub-Programme: Financial Assessment and Investment Support
Review 6 SOEs quarterly financial reports
Review 6 SOEs Corporate Plans.
In terms of Eskom debts relief package, the sub-programme will monitor compliance SOEs comply with debts conditions.

SOEs need to ensure that its capital structure is optimal to fund its operations and capital investments at the lowest costs. In the case of Eskom and Transnet and most SOCs under DPE, there has been more reliance on debt to raise funds. Capital that is provided by the shareholder (government) is usually provided to settle debt. The consequence of not being adequately capitalised, is that the companies will have to pay excessive amount of interest on debt. This has contributed to the losses SOEs have reported from year to year.

Programme 3: Business Enhancement Services
Sub-Programme: Energy and Resources
The sub-programme oversees the following SOEs: Eskom, Alexkor and SAFCOL
The sub-programme will ensure Shareholder Compact of the 3 SOEs are signed

ESKOM
- Monitor implementation of the Recovery Plan on quarterly basis.
- Eskom is focusing on unbundling of Eskom into three subsidiaries: Transmission (Tx), Distribution (Dx) and Generation (Gx).
- Generation recovery plan has been developed and Eskom is on track with implementation
- DPE sub-programme will produce two progress reports on NTCSA progress to trade.
- National Transmission Company of South Africa (NTCSA) has been established, started trading as of 1 July 2024 as an independent entity.
- The next entity to be established will be National Electricity Distribution Company of South Africa (NEDCSA).

ALEXKOR
- Produce two progress reports on consultations with stakeholders on Alexkor proposed role.
In line with the commitment to reposition the SOEs to play a bigger role in the economy, Alexkor’s future role is currently being considered to ensure wider socio- economic benefits are derived from State’s ownership of the diamond assets.

SAFCOL
- Produce progress reports on identified strategic projects to diversify products and enhance operations of SAFCOL.
Safcol continues to grow South Africa’s plantation assets, invest in the other state managed forestry plantations by sharing best forestry business management. This will reduce unplanted areas and increase security of raw material for small & medium enterprises.

Sub-Programme: Transport and Defence
Oversees the following SOEs: Transnet, South African Airways and Denel
- The sub-programme will ensure the three Shareholder Compact are signed

Transnet
- Produce one assessment report on rail addressable market share versus customer willingness to move to rail.
Transnet has established Infrastructure Manager (IM), a move that will culminate in the reform of the country’s rail network by, among others, opening the market to third parties, with effect from April 2024. Transnet has since published the draft Network Statement, a critical milestone in the rail reform process and the successful introduction of third-party access onto South Africa’s rail network.

- Produce one assessment report on rolling stock in identified corridors in line with Transnet recovery plan.
Transnet recovery plan was developed with the aim to stabilize and turnaround the business. The recovery plan focuses on the recovery of volumes from key operations across operating divisions through the implementation of short-term tactical initiatives. This includes the execution of the ‘segment strategy’ approach to drive commercial returns and improve customer responsiveness across operations.

- Produce one report on the 2024/2025FY reform actions and deliverables of Roadmap for the Freight Logistics in South Africa.
The Freight Logistics Roadmap, which was approved by Cabinet in the 2023/24 financial year, will allow third-party operators to utilise the rail network in the new financial year. To increase the effectiveness and financial performance of the port and rail systems, the plan places a strong emphasis on structural changes to the operations of the rail and terminals and encourages private sector engagement.

- Produce one assessment report on private sector participation (PSP) opportunities pursued.

Denel
- Produce assessment report on implementation of Denel’s 2022/2023 restructuring plan.
Denel is on a path towards stabilizing and growing sustainably, underpinned by:
Execution of the turnaround plan.
Strengthening governance and internal controls.
Enhancing support to South African National Defence Force (SANDF).
Developing strategic partnerships and future products.
Investing in young engineering talent.

Denel has made considerable progress in the implementation of its restructuring plan. Operations are showing signs of steady recovery

South African Airways (SAA)
After the mutual termination of the strategic equity partner (SEP) transaction with Takatso, SAA is revising its business plan.

To regain market share, SAA will be expanding its route network to include regional and international routes. SAA remains a viable business entity with no debt. However, SAA needs capital to be able to expand and will pursue alternative sources of funding.

Sub-Programme: Business Enhancement Services
- Ensure DPE participates in two District Development Model (DDM) technical structures.
DPE will institutionalise DDM within it and SOEs, by co-ordinating participation of senior managers and SOE technocrats in the DDM Technical Committees. This will be at National and District as well as Metropolitan areas as guided by the DDM Implementation Framework. DPE will collate SOE Localised Project Plans, especially the catalytic project per district and or metro areas and analyse against them. One Plans aims to ensure alignment and validation of information, as well as improve the support for Political Champions.

Sub-Programme: Economic and Research Modelling
- Produce four quarterly progress report on the implementation of Eskom’s revised JET strategy in line with the Just Energy Transition Framework.

At least 10,000MW of power from Eskom’s coal plants will be reaching their 50-year design life between now and year 2030. The 2019 and draft 2023 Integrated Resource Plans envisage that the majority of the power will be replaced by cleaner energy sources, other than coal. These cleaner sources include gas, wind, solar, biomass, nuclear and hydro.
Eskom is accelerating Komati, Grootvlei, Hendrina and Camden as part of striving for net zero emissions by 2050. The World Bank is working with Eskom on how to use coal in an optimal manner. JET needs to be implemented in a just and inclusive manner.

DPE Budget 2024/25
The Medium-Term Budget Policy Statement tabled in Parliament on 1 November 2023 showed that government faces severe fiscal pressures, including revenue declines which will require expenditure reductions of up to R206.9 billion over the MTEF period.

As a result, DPE budget has been reduced by R19.9 million in 2024/25, R21.7 million in 2025/26 and R22 million in 2026/27.

Over MTEF no provision was made for recapitalisation of any SOEs under DPE portfolio.

The only allocation is to Eskom allocated through National Treasury under the Eskom Debt Relief Act 2023 together with the Eskom Debt Relief Amendment Act 2024.

These amounts are being allocated as debt that is convertible to equity after meeting certain conditions as stipulated by National Treasury.

Total debt relief of R254 billion is a direct charge against the National Revenue Fund and attributed to the vote of the National Treasury and allocated as follows:
R78 billion for the 2023/24 financial year;
R66 billion for the 2024/25 financial year;
R40 billion for the 2025/26 financial year;
R70 billion debt take over after 3 years.

Eskom met the allocation conditions in 2023/24 for first allocation for which R44 billion was converted to equity and shares were issued by Eskom to DPE. R2 billion was withheld due to failure by Eskom to meet one of conditions from the previous equity injection.

(See presentation for further details)

Discussion
 Mr M Manyi (EFF) commended the Acting DPE DG for their presentation skills but expressed disappointment at receiving the DPE presentation and report late, which he felt undermined the process. He found the concept of the DPE confusing, as he understood that the DPE no longer existed and that the coordination of relevant enterprises had been moved to the Presidency, even during the implementation of the new shareholder model. Therefore, he expected a presentation about the new developments.

Mr Manyi questioned why they were misleading South Africa by stating that the DPE did not exist when it had been relocated. He asked if the DPE had been relocated rather than dissolved and if the DPME Minister would oversee it. He was concerned about who would monitor and evaluate her work in the DPE since she was also the Minister of DPME whose main responsibility was to do exactly that.

He criticized DPE five-year targets, calling the 60% figure poor and shocking, and advised revising these targets. He asked if talk of corporatising ESKOM did not actually mean privatization. Additionally, he questioned the government's stance on unbundling SOEs to improve efficiency while simultaneously centralizing them.

Mr Manyi asked if the DPE statement about providing a transparent process for the appointment of SOE board members implied that previous appointments had not been transparent. He expressed confusion about ESKOM, noting that energy generation matters were being moved to the Ministry of Electricity and Energy, yet Programme 3 claimed to oversee Energy and Resources. He wanted clarity on the exact responsibilities of each ministry.

On non-operational railways, he asked who was responsible, DPE or the Ministry of Transport? He pointed out that various SOEs seemed to fall under different departments but were somehow under the DPE, using examples like DENEL, which could fall under the Defence Ministry, and SAA under the Transport Ministry. He also urged the DPE not to interchange the terms SOE and SOC, as there are technical differences between the two, and referring to companies as enterprises could create confusion.

Mr Manyi criticized DPE for allocating only 22.5% of the budget to the core functions of the MTSF, while 56% went to staff and 28% to consultants. He questioned who these consultants were and why they were receiving such a large portion of the budget.

He argued that there was no achievement in employment targets as SA’s employment rate had not grown. He asked DPE to clearly admit that the department had failed dismally, and that the relocation was an attempt to improve its performance.

Ms K Christie (DA) commented that she understood DPE had been misusing funds, which led the President to take it under his direct oversight. She noted that the government had spent R280 billion between 2019 and 2024 to bail out the SOCs, receiving only R1 million in return. This SOE model, she argued, had collapsed public financing and cost taxpayers’ money that could have been used for education, health, roads, and other essential services. The failure of SOCs had diminished the economy and hindered its growth.

Ms Christie argued that SOCs should focus on basic service delivery rather than development. She cited the negative impacts of poor service delivery by Eskom, bad harbour ports, and poor transport services, on the economy. She mentioned the railway system in Cape Town as an example, highlighting how billions of rands were stolen under state capture, leading to vandalized railways and shacks built on the tracks, rendering trains immobile.

She questioned how the DPME would hold SOCs accountable and prevent fraud and incompetency through centralization, asking about the checks and balances in place. Ms Christie was concerned that centralization would reduce transparency and stressed the need for the most qualified and competent individuals on the boards and in administration.

She identified the root cause of declining government revenue due to businesses struggling, leading to fewer jobs and lower tax revenues, which in turn reduces the national budget. Ms Christie believed that by focusing on basic service delivery, the economy would revive, generating more revenue and preventing budget cuts.

Ms A Kumbaca (ANC) commended the work done so far and expressed her support for the establishment of a state holding company, believing it would guide the country towards becoming a developmental state. She emphasized the need for the Committee to closely examine Programmes two and three, focusing on their operational capacity, output, and impact indicators, to ensure these functions are strengthened.

She requested clarity on the unbundling of Eskom, asking if there was a document available for the Committee to reference. She asked if there had been a change in reference for the infrastructure manager under Transnet.

Mr D Bergman (DA) expressed concerns about the new bill, citing numerous unresolved issues from the previous administration and the complexity of understanding each entity. He pointed to Eskom as an example, noting that while South Africa had experienced continuous load shedding, it suddenly stopped and was controlled before elections. This suggested that a single person had solved load shedding which he thought was unlikely.

He also highlighted the bailout given to SAA, questioning how the airline could lease airplanes at a significant cost to itself and whether it was profitable. He wondered if the airline would remain a public entity or be privatized.

These were matters the Committee should have investigated.

Mr Bergman asked who was managing the SOE boards since the dissolution of DPE and questioned the benefit of prolonging the state enterprise board. He called for the reopening of the National State Enterprises Bill for public comment. He doubted that the Holding Company would have sufficient information, oversight, and independence to be successful.

He then requested that the Chairperson postpone the budget debate for another week to allow the SOEs to present to the Committee first, as he felt there was not enough time and information to make fair decisions.

Mr A Mngxitama (MK) complained that such a critical meeting should not have been held online and agreed that receiving documents from DPE so late made their job difficult. He questioned how the Committee could effectively monitor and evaluate DPE while it was under its oversight. He emphasized the need for a proper discussion on responsibilities and functioning to ensure that the DPME role is not undermined by having to evaluate a ministry under its own jurisdiction. He warned that this could lead to unplanned outcomes and the government's failure to serve South Africans effectively.

Mr N Buthelezi (IFP) supported the relocation of DPE to the Presidency, believing that the DPME role should be to govern the affairs of DPE without meddling in its operations. However, he expressed concern that the current structure left the Committee without adequate powers over DPE. He worried that DPE reporting to the Committee might overwhelm it and questioned the powers the Minister of Planning would have if she is also part of the Presidency.

Mr S Subrathie (ANC) commented that the state has a responsibility over these SOEs and with them now under the Presidency, DPME has been tasked with overseeing them. He acknowledged that DPME had inherited oversight of these entities in a much better state than a few years ago. He raised several questions: What level of capitalisation has the state provided to support public enterprises for growth rather than just addressing financial challenges? What types of measurable indicators are included in the shareholder compact? What is the growth potential of each entity? What is the trade potential of public entities, and how is the Department leveraging BRICS+ and the Africa Continental Free Trade Area?

Mr Subrathie asked for examples of the great work apparently being done in DDMs. He supported the idea of a holding company to create economies of scale but expressed concern about the level of oversight. He questioned potential conflict of interest in terms of oversight, how the board would be selected, and how board members would be compensated?

DPE responses
Acting Director General Ms Molisane explained the importance of National Treasury assisting Eskom financially until it can stand on its own. Eskom was not adequately capitalized, and its tariffs were not cost-reflective. The costs of business operations did not correspond to its revenue. By taking on Eskom’s debt, Treasury aims to improve the capital structure until Eskom becomes financially viable.

On the operational side, Eskom’s board has implemented a generation recovery plan to address the declining energy availability factor caused by lack of maintenance and other issues. This plan has improved energy availability from 50% to over 70%, resulting in much lower levels of load shedding. Additionally, the removal of the procurement cap has encouraged the use of solar rooftops, further enhancing Eskom’s performance.

Ms Molisane explained that Transnet National Ports Authority (TNPA), a division within Transnet, must be corporatized similarly to how NTCSA is now a subsidiary of Eskom but with an independent board. When conceptualizing the holding company, it is crucial that the entities under it are operationally and financially sustainable. Separating NTCSA ensures that each entity is evaluated on its own merits, without the issues of cross-subsidization and inefficiencies.

Addressing concerns about the National State Enterprises Bill and DPME’s dual role, she mentioned examples from China, Singapore, and France, where segregation of roles between policy regulators and shareholders has been effective. The SOCs of those countries have become major global entities due to this clear division of responsibilities.

On PRASA, Ms Molisane deferred passenger rail to the Transport Department. On Transnet, she highlighted challenges within its freight rail division, which accounts for about 50% of the group’s revenue. The 1064 locomotive contract with a Chinese company is being addressed, and efforts are underway to secure additional locomotives to improve rail services.

Ms Molisane acknowledged the valid concerns about the budget for consultants and transport and committed to revising the budget to better focus on the assessment of SOCs. She agreed that Eskom and Transnet should prioritize their core services—electricity provision and efficient railways. She noted interventions at the Port of Cape Town, working with the agriculture sector to ensure the smooth movement of goods, and promised to provide the Committee with a comprehensive update on these efforts.

On SAA and its impact on tourism, she agreed that the business rescue phase affected tourism but highlighted SAA as a success story, serving as a blueprint for other state-owned companies. She emphasized the importance of diligent fund management in the wake of state capture, which had repurposed SOC funding.

Ms Molisane offered to share detailed updates on Eskom’s terms of reference and progress. On the recent reduction in load shedding, she explained that Eskom's increased use of diesel, removal of caps, and ongoing communication with South Africans about energy efficiency have all contributed to this improvement.

Adv Melanchton Makobe, DPE Deputy Director-General: State-Owned Companies, addressed transparency in board members selection, noting that the State Capture Report recommended a more transparent process. Consequently, a board would be established specifically for these appointments. He clarified the difference between SOEs and SOCs: SOCs are state-owned companies incorporated under the Companies Act, while SOEs are not necessarily incorporated under this Act and may be created by statute, such as PRASA.

Deputy Minister Seiso Mohai acknowledged the challenge for the Committee to tackle such significant planning and budget issues within a limited timeframe. However, the urgency was driven by parliamentary programming and necessary processes. DPE recognized this would not be a one-off meeting but viewed it as an important starting point to address issues raised.

In closing, the Minister urged everyone to thoroughly review the National State Enterprises Bill, which is based on successful global models but needs to be adapted to the country’s specific context. She noted that over 3 500 public comments had already been received and emphasized that the Department's job was now to shape the Bill to address the concerns raised, ensuring corruption is tackled and SOCs become sustainable and independent. She stated that mandates are the President's prerogative and not open for debate. DPE was instructed to transition the department to establish a holding company for all SOCs. Those not meeting the requirements would receive departmental assistance to do so. Each company would retain its own board and operations but fall under the holding company. The Minister urged the Committee to expedite the process of passing this holding company bill and related measures.

The Chairperson agreed that there was an urgent need for a workshop with all the entities.

Mr Manyi felt that the Minister had avoided addressing his concern about her dual role as both referee and player, leaving the matter unresolved. He also took issue with the Minister blaming the parliament programme committee for the delay in APP and budget documents, arguing that the real issue was the executive's failure to constitute a month after the elections.

Mr Manyi expressed dissatisfaction with some of Ms Molisane’s answers. When she cited international examples of holding companies and spoke about role segregation, he pointed out that the current discussion was about consolidation, which seemed contradictory. He questioned why the government was talking about consolidation while also discussing unbundling. Eskom, for example, had been unbundled into three entities, yet the meeting discussion focused on consolidation.

Mr Manyi also criticized the Acting DG focusing solely on Eskom’s 60% target, while the presentation referred to all SOCs. He felt the Committee was being asked to rubber-stamp a budget with a 60% target over five years, which he viewed as a sign of laziness. On confusion between SOEs and SOCs, the presentation stated responsibility for six SOEs but listed SOCs, and he sought further clarity.

The Chairperson noted that some of Mr Manyi’s follow-up questions were going to be addressed at the workshop.

Mr Manyi replied that the questions he asked would only take 10 minutes to respond to and asked the Chairperson not to suppress his responses. He felt that the Chairperson was protecting the Department and shielding it from taking accountability.

The Chairperson allowed the Department and Minister to respond and denied the allegations about suppressing Mr Manyi.

Ms Molisane explained that some companies within the SOEs have a dual mandate, encompassing both commercial and developmental goals. Certain listed companies must raise capital in the private sector, focusing solely on their commercial mandates. However, SOCs, being state-owned, inherently have this dual mandate, leading to the interchange between SOEs and SOCs.

She clarified that she used Eskom as an example to illustrate the 60% target because much of the focus is on Eskom and Transnet, the larger portfolios with significant impact. Additionally, these two companies receive the majority of the funding, which is why they were highlighted in the discussion.

Minister Ramokgopa explained that DPME is currently subject to the same framework as all other departments. This includes the priorities of the APPs and other plans, which are treated no differently. Parliament also plays an oversight role while remaining accountable for its actions. According to the Bill, the President will act as the government's shareholder representative.

She agreed that a briefing on the National State Enterprises Bill would address many of the questions raised. Once everyone understands the Bill, systems can be implemented to ensure accountability and mitigate the risk of conflicts, such as being referee and player simultaneously. The finalised Bill will allow for the application of benchmarks from other countries. She cited Rwanda as an example, where its DPME was initially part of the Presidency but later moved to Treasury for more effective monitoring and evaluation of budget implementation. Similarly, our Treasury monitors departmental budgets and performance, but this does not mean Treasury is exempt from the same processes as other departments.

The Chairperson asked the Committee to submit any additional questions to the department in writing. She emphasized that nothing should prevent the Committee from adopting and debating the Public Enterprise Budget Vote or conducting oversight work on DPME. She reiterated the Committee's commitment to aligning the priorities of the Seventh Administration to ensure that the entities are focused on service delivery.

She acknowledged the improvements in these entities and supported repositioning the SOEs, leading to the SOE holding company having more outcome- and impact-related indicators. This would drive a developmental orientation rather than a purely business one. She also agreed that the entities should develop strategies for lowering tariffs in line with their growth strategies and work on value chain development and empowerment.

The Chairperson agreed that the Department should present the National State Enterprises Bill to establish the State Asset Management SOC Ltd and to clarify the SOE versus SOC. She emphasized the importance of prioritizing capitalizing the growth of these entities. She urged the Committee to consider the Committee Report on the DPE Budget Vote despite its dissolution and delegation to the Minister of DPME. She asked the Committee to adjourn for an hour before reconvening for the budget vote discussion.

Mr Manyi said that he wanted to second Mr Bergman's motion for another physical meeting before adopting the budget, as he felt that today's answers and explanations from the Department and Ministry were unclear.

However, the Chairperson did not support rescheduling the adoption of the Committee Report.

Committee Report on DPE Budget Vote: Consideration and Adoption
Mr Disang Mocumi, Committee Secretary, read out the report, allowing members to comment at any point.

Mr Manyi noted that the term “reinstatement of DPE” suggests that DPE still exists.

The Chairperson responded that since the APP is from the previous administration, the budget vote would refer to the dissolved DPE as if it still exists.

Mr Manyi argued that while there was a strategic plan for DPE in the previous administration, it expired with the elections. He felt that the extensive mention of the dissolved DPE in the budget vote undermined its dissolution. A new administration should focus on a new direction.

Mr Julius Ngoepe, Committee Content Advisor, acknowledged Mr Manyi’s comments and explained that the budget vote is still for DPE. He suggested adding “as dissolved” at the beginning of the report but continuing to reference DPE.

Mr Manyi disagreed, pointing out that the Committee Report heading referred to DPE and was dated 16 July 2024, despite DPE being dissolved on 30 June 2024. He insisted that the report should clarify throughout that it pertains to a department that no longer exists.

Mr Mocumi argued that the report starts by explaining what happened to DPE and that the Minister of DPME was tasked with implementing the holding company, which justifies Parliament processing the budget vote. He agreed to check with the National Assembly if it is acceptable to use two names but reiterated that the heading could not be changed, only clarified in the introduction.

It was finally agreed that “Former Public Enterprises” in the heading would work for everyone.

3. Programmes of the Department
Mr Manyi felt that the Committee was engaged in a meaningless tick-box exercise because the report did not reflect reality. He pointed out that Programme 3.1 talks about DPE existing and questioned how they could adopt such a paragraph.

Mr Mocumi replied that since the department as an institution still exists – employees are still there, merely reporting to a different executive authority (i.e. DPME) – and because this is a transitional period, perhaps that is why Parliament wants the Committee to process this.

The Chairperson agreed, stating that even in the presentation, it was noted that DPE has been moved to the Presidency but is delegated to the Minister of DPME. She reiterated that according to this budget vote, it will be treated as if DPE still exists. After the debate and the passing of the budget, DPME will take over DPE. This budget vote cannot be treated as if the transition has already happened.

3.2 Programme 2: SOCs Governance Assurance and Performance
Mr Manyi stated that this section was a mere copy and paste of the roles of the board, highlighting that people in government want to interrogate the plans, which is typically the board's responsibility. He questioned what the role of the board would be.

The Chairperson reiterated that there would be a workshop to explain the Bill, providing everyone a chance to scrutinize it. She requested that Mr Manyi park all the issues he had raised, as they were noted.

Mr Manyi asked for more patience from the Chairperson, explaining that the shareholder compact is where politicians ensure SOCs adhere to state policy. His issue was that the current discussion involved politicians in the operational aspects of SOCs, which could not wait for a workshop.

Mr Bergman agreed with Mr Manyi, emphasizing that he was trying to protect himself and the Committee, not being disruptive. He pointed out the complexity of the process and stated that the Committee was being tasked with handling someone else's problems. He asserted that someone would need to take responsibility for approving something with many questions and few answers, and it should not be the Committee.

Mr Subrathie reiterated that the Committee must provide oversight of the SOCs and suggested focusing on the content of the document unless there was a factual inaccuracy.

Mr Manyi argued that adopting a report means adopting its contents, but the report's contents were faulty.

The Chairperson explained that today's focus was on the Committee's recommendations. The workshop could produce a report for the National Assembly. She asked the Committee to adopt the APP despite the issues, which would be addressed by the Department at the workshop. She urged them to continue reviewing the document.

Mr Buthelezi noted the many moving parts in the document and the urgency of holding a workshop. He believed the Committee was being asked to proceed with insufficient tools. He suggested adopting the report after the workshop, questioning what the workshop would resolve if they adopted the report today.

Mr Mocumi explained that the budget votes were tabled during the transitional period of elections, so the Sixth Administration could not address them. The current administration needed to conduct the budget vote to ensure correct budget documentation.

Mr Manyi found Mr Mocumi’s explanation inadequate, emphasizing the political transition. He proposed an urgent workshop the following Monday to address the loose ends before having the budget vote the next day.

Ms Kumbaca suggested that the presenter be allowed to finish followed by discussion.

The Chairperson asked Mr Manyi not to threaten them about minority parties disagreeing with the budget vote.

Mr Manyi asked the Chairperson to be careful with her words, clarifying that he was not threatening but stating a fact. He noted there was no majority party in the Seventh Parliament, so he was not lying or threatening. He requested the Chairperson withdraw her statement.

The Chairperson withdrew her statement and reiterated that Mr Manyi should not act as the mouthpiece for other members. She requested once again that members allow the presenter to continue.

3.3.3 Sub-programme: Transport and Defence
Mr Manyi argued that an indicator should independently reflect if something is going right and provide a sense of the impact of actions. He explained that setting a target of 20 reports and calling it an indicator is misleading, as it merely shows how busy one is, not a true indicator of progress.

The Chairperson disagreed with Mr Manyi. She had served on different committees and the standard of reporting had always been the same. She asked Mr Mocumi to continue.

4. Budget
Mr Manyi raised a concern that the Acting DG had acknowledged the R28 million allocated for consultants as an issue but it had not been changed in writing. Approving the budget as is would mean that, despite her concession, the allocation remains unchanged.

The Chairperson assured him that nothing would be brushed aside. She reminded the Committee that they were still discussing the APP content and that all other issues would be addressed under Observations and Recommendations.

5.3 Eskom
Mr Manyi raised a concern about the recommendation to appoint a Group CEO for Eskom, noting that this recommendation originated from the Sixth Parliament. The Seventh Parliament was about to approve a mere cut-and-paste of the Sixth Parliament’s observations. These shortcuts, aimed at meeting deadlines, were compromising the quality of their work and short-changing the taxpayer.

The Chairperson responded that Mr Manyi would have the opportunity to forward his inputs on recommendations and state them during the National Assembly debate.

6. Committee Observations
Mr Manyi suggested that all the observations be deleted as they belonged to the Sixth Parliament.

The Chairperson objected and instructed Mr Manyi to make his observations.

Mr Manyi made the following points:
1. The DPE has not ceased to exist but has been relocated and possibly renamed.
2. The budget is not aligned with MTSF priorities.
3. The DPME will become both a player and a referee, as it will have a monitoring and evaluating role as well as a presidential executive role at the same time.
4. Performance indicators for both operational efficiency and financial performance are set at a 60% target over five years.
5. There is an excessive budget for consultants, with no mention of who the consultants are.
6. The DPME will interfere with the legal functions of the boards.
7. The DPE of the Sixth Administration failed to achieve any of the MTSF priorities.
8. There is an incorrect conceptual understanding of what an indicator is.

The Chairperson responded that Mr Manyi’s observations would be incorporated into the 10th observation of the Committee Report.

Mr C Dugmore (ANC) supported the Chairperson's ruling on Mr Manyi’s observations. His understanding was that the SOEs operate from their own budgets. Therefore, when it is raised that DPME is not advancing objectives such as industrialization, it is clear that there is a particular role played by DPME. It is not DPME using its budget to invest directly. This was to explain his concern over Mr Manyi’s observation 2, saying that the observation shows Mr Manyi’s lack of understanding of the role of DPME in relation to the state-owned entities.

Mr Bergman acknowledged that they were rubberstamping the work of people who are no longer part of the Committee and had only a few hours to look at the report and understand the SOCs. Since they were not able to find middle ground, he suggested the fairest way to move forward was to table a minority report. The DA wanted to work with everyone respectfully but felt that this process was anything but respectful, not from party to party, but from officials and people at the top to the Committee. He asked what they were going to do with these entities until the Bill has been legislated.

The minority report read: “We from the Democratic Alliance and … have expressed severe concerns around the rushed process in which we have been asked to pick up the work of the Sixth Parliament and rubberstamp their efforts, contributions and inputs in one workshop. This undermines the process of oversight and the importance of consensus based on fact put before us. Noting the restraints and logistics that have made it impossible for us to deliberate productively and fairly, we as the minority in this Committee, hereby cannot express a fair and proper opinion and therefore reserve our right to vote on this report and distance ourselves from the recommendations contained in the 2024/25 APP. Signed Darren Bergman and …”

Mr Subrathie acknowledged that the situation was not ideal and appealed for the Committee's understanding, noting that the officials had done their best. He expressed hope that they could find common ground and make progress over the next five years. He made the following observations:

1. There is a positive trajectory for the SOCs. It is not all gloom and doom as opposed to a few years ago.

2. There is a need for DPME to continue its oversight function over the SOEs.

Mr Manyi challenged Mr Dugmore, stating that the DPE mandate was to ensure through the shareholder compact that the SOCs deliver on the government's mandate. There was no government directive to downsize, halt industrialization, or lack transparency around board appointments. All these elements are incorporated in the MTSF, and DPE is expected to deliver through these SOCs, which, if managed properly, would provide a dividend to the shareholder. The shareholder minister is at the centre, so the failure of the SOCs is ultimately the failure of the Minister.

Mr Dugmore agreed that he was not supposed to comment on another member’s observations as the Chairperson had ruled.

7. Recommendations
Mr Dugmore recommended that the Committee invite the entities along with the Department to present on their performance.

Mr Manyi suggested that the recommendations from the Sixth Parliament that the Seventh Parliament agrees with be highlighted. He added his points:

1. The SOCs must revert to their respective line ministries to improve accountability. For example, Eskom should report to the Ministry of Electricity and Energy, and Transnet to the Ministry of Transport.

2. The Ministry of Planning, Monitoring, and Evaluation should focus on its core functions without engaging in operational matters— "Get your nose in, your hands out."

3. The budget for the envisaged Holding Company must reflect the MTSF priorities.

4. There must be clear communication to correct the DPE dissolution misconception.

5. The 60% goal on performance indicators must be revised and increased.

6. Indicators must reflect the impact of progress, not merely the activities of the department.

Ms F Hassan (ANC) opposed his recommendation 1, arguing that the SOEs have a lot on their plate and need coordination from the Presidency and DPME, which can provide a high-level understanding and gather the SOEs from a multi-functional and multi-departmental approach. She believed it made sense to keep them under the Presidency. She expressed her willingness to move forward with the adoption of the report.

The Chairperson supported Mr Dugmore’s recommendation to invite the entities. She did not see the need for Mr Manyi’s recommendation 1 to revert SOCs to their line ministries. She also did not support Mr Manyi’s recommendation 2, as she felt that the DPME involvement in operational matters fell under its standalone department and not the SOEs. Additionally, she suggested that Mr Manyi’s recommendation 5 be removed, as she felt it was not a substantial recommendation, noting that it was written as, "Target must be reviewed...".

Mr Manyi raised a few points of order:

1. He clarified that it was not his fault the secretaries had not heard him when he spoke about recommendation 5 and then repeated it.

2. He expressed concern that the Chairperson was making unilateral decisions – behaving like a boss of the Committee – referring to her removing his recommendations without discussing them with the whole Committee.

Ms Hassan interrupted, explaining that there was no "boss".

Mr Manyi also interrupted, asserting that he was still on a point of order and that this was not an ANC meeting.

This back-and-forth continued briefly until the Chairperson instructed Mr Manyi to keep quiet and allow Ms Hassan to speak.

Ms Hassan explained that the Chairperson should be allowed to chair as she was elected by the Committee to do so. She emphasized that one member’s view does not represent the entire Committee and that a variety of views need to be considered.

Mr Manyi reiterated that his comments were removed because the Chairperson disagreed with them, rather than putting them to the Committee for discussion. He insisted that his points be reinstated.

Ms Hassan countered, stating that the meeting should not collapse just because Mr Manyi disagreed.

Mr Manyi found Ms Hassan's interruption disrespectful and reiterated his concern about the way his points were removed by the Chairperson.

Ms Kumbaca suggested finding a way forward and moved to second the adoption of the report.

Ms Hassan highlighted that the Committee consisted of individuals with different views and ideological perspectives, and while robust discussion was expected, one member's disagreement should not dictate the addition or removal of points.

The Chairperson announced that the report had been adopted with all the recommendations.

Mr Manyi insisted that his points be rewritten because of his objection to the way they were removed. He claimed he did not hear anyone adopting and seconding the report and stated he rejected it.

The Chairperson clarified that Ms Hassan and Ms Kumbaca had adopted and seconded the report, and Mr Manyi might not have heard them.

Mr Dugmore expressed concern that Mr Manyi was undermining the Chairperson. He believed the Chairperson had clearly explained why she removed the points. He seconded deleting Mr Manyi’s recommendation that SOCs return to their line ministries. He seconded the adoption of the report, provided the observations were written for everyone to see.

Mr Subrathie acknowledged Mr Manyi's experience and challenging input, noting that new members might sometimes feel overwhelmed. He supported the adoption of the report.

Mr Manyi disagreed with Mr Dugmore’s assertion that he was disrespecting the Chairperson. He explained that his expressive manner of speaking might be perceived as anger or aggression but emphasized that he respected the Chairperson, though he disagreed with how she was chairing the meeting. He repeated that he was rejecting the adoption of the report.

The Chairperson noted the objections from the DA and EFF.

Members were asked to restate their observations and recommendations for the secretaries to record them clearly.

Mr Dugmore objected to Mr Manyi’s observation that DPE had not ceased to exist but was merely renamed and relocated. He understood that the function of DPE was moved to DPME, but this did not mean it had not been dissolved. He also objected to the observation that the budget priorities did not align with the MTSF. He explained that the budget's role was oversight, and the overall report clearly stated that DPME's function was to advance the industrialisation strategies of the various SOEs, aligning with the MTSF. He proposed amending the observation about DPME playing a dual role to say, “The Committee was concerned about the potential conflict of DPME playing both player and referee.” He agreed with Mr Manyi that the indicators in the report were inadequately phrased. On the observation about excessive spending on consultants, he preferred stating, “We observe the budget component allocated for consultants and believe this should be further interrogated.” On the observation that DPE would interfere with the legal functions of the SOE boards, he believed that DPME, now acting as the shareholder, would not interfere legally. He was uncertain if the Committee could definitively state that the Sixth Administration achieved none of the MTSF priorities due to a lack of categorisation.

Mr Manyi replied that they were dealing with the DPE APP in this meeting. If DPE had ceased to exist, this would not be the case. When the President announced that SOCs would be under the Presidency and until the holding company was formed, the Minister of DPME would be in charge, it made sense. However, the Minister now having executive powers in the Presidency over the SOCs indicated that DPE still existed, just relocated. If it had ceased to exist, there would be no Minister responsible for them. Mr Manyi maintained his stance on the budget priorities not meeting MTSF targets. He explained that DPE delivered through SOCs; therefore, the SOCs' failure reflected the department and ministry's failure. The budget allocation should reflect the MTSF priorities, and if these are not achieved, DPE failed. He also stood by his point that the DPME would interfere with the legal functions of the SOCs. It detailed the programme activities which delved into the SOE operations, constituting interference. He challenged the Department to provide statistics to prove his assertion wrong that there were zero achievements. He cited the lack of economic growth and the unemployment rate as indicators of failure.

The Chairperson expressed concern about keeping the point about DPE not being dissolved, as this contradicted the President’s public announcement. She suggested removing this observation for now until there is further clarification from DPME. She proposed that the Committee write to the Speaker of Parliament to request clarity from the President on this matter rather than including it in the report.

The meeting was adjourned.