Eskom Conversion Bill: deliberations

Meeting report

PUBLIC ENTERPRISE PORTFOLIO COMMITTEE
16 May 2001
ESKOM CONVERSION BILL: DELIBERATIONS

Chairperson: Mr ST Belot (ANC)

Documents handed out:
Eskom Conversion Bill [B16-01]
[currently only draft version available]

SUMMARY
The Department informed the Committee that a meeting between the Department and Cosatu had taken place and that the deliberations were continuing. Cosatu had proposed certain amendments to the Bill, which the Department had accepted while other amendments that the labour movement proposed were not accepted.

MINUTES
The Chairperson informed the committee that the purpose of the meeting was to listen to the Department's report back on the Eskom Conversion Bill. Representing the department were Mr L Montana (Director: Parliamentary Services) and Mr D Matsila (Director: Legal Services).

Mr Montana informed the committee that a meeting between the Department (with the Minister present) and Cosatu took place where several issues had been raised and that meetings between the two parties would continue.

Mr Matsila touched on several items that the department had discussed with Cosatu. The first section to be discussed was Section 2: Object of Act in which Cosatu proposed certain amendments and the Department accepted these since they made sense. (Note: details of the amendment(s) will be presented in the next meeting)

The next section Cosatu discussed, Mr Matsila told the committee, was Section 5 - Powers and duties of Eskom where he said Cosatu was concerned with the developmental role of Eskom and suggested changes be made in that clause to highlight that role. Again the department accepted the proposal.

He said that Cosatu had also suggested that Section 7 (1) Borrowings secured by Eskom's revenue and assets be amended. However the Department told Cosatu that this clause as it stands gives comfort to the lenders and in the end it was left as it is.

Another section that Cosatu was concerned with was Section 6 (2) on Memorandum and articles of association of Eskom, which details that the Minister would determine these articles. Here again changes were agreed to and the Department will provide the written version of these amendments at a later stage.

Section 9 Regulations, which Cosatu had contested, would remain as is. Likewise Section 8 Taxation of receipts and accruals of Eskom and subsidiaries would also remain as is as it is a "fait accompli and cannot be changed".

The Department told the labour movement that the budget for electrification as it stands would not be tampered with. Instead the shortfall within the R1 billion allocation (approximately R600 million) would come from donor funding.

The last section that Cosatu brought to the attention of the Department was Section 4 (3) (b) Effect of conversion to which both parties agreed that it would be extended to bring workers on board.

Mr Matsila said details of these amendments would be available at a later stage.

Discussion
Mr Heine (DP) asked whether the proposal by the Chamber of Mines as far as shareholders in the Board of Directors has been or will be discussed.

Mr Montana replied that there are two elements to this: the first is around the regulations that the Board be subject to public scrutiny. He said the Department accepts that though the wording may change.

Mr Montana said the second element is on Board appointments. He said there is nothing that stops the Minister from appointing individuals the mining industry to the Board and who had had historical links with Eskom.

Mr Msomi (IFP) said he was concerned about the powers given to management without putting into place responsibilities to make management accountable.

Mr Montana replied that the Public Finance Management Act addresses such issues and that the State has enough resources to take care of that.

The Chairperson asked the Department to take into consideration views raised by members and informed committee members that the next meeting on the subject would be on 23 May.

The meeting adjourned.