South African Weather Service: 2006/07 Cash Flow Projections and Quarterly Progress Reports

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
5 September 2006
SOUTH AFRICAN WEATHER SERVICE: 2006/07 CASH FLOW PROJECTIONS AND QUARTERLY PROGRESS REPORTS

Chairperson: Mr L Zita (ANC)

Documents handed out:
South African Weather Service PowerPoint Presentation

SUMMARY
The South Africa Weather Service gave a full briefing to the Committee on its work, future plans and projects. The Weather Services’ core business was the saving of lives, property and businesses through timely weather warnings. It provided meteorological products and services. Its strategic objectives were outlined. The financial results for 2005/6 were similar to the previous years, but it was noted that commercial income was steadily increasing. An operational surplus had been achieved due to careful restrictions on spending. There was a contribution from the aviation industry and a meeting would be taking place about the aviation debt. It seemed that the Weather Service would need to write off a portion of this debt.

The corporate governance and external stakeholder issues were outlined. Business processes were described, including observation platforms, automatic weather and rain-gauge systems, and upper air sounding equipment, which the Weather Service was looking to manufacture in South Africa at a much-reduced cost. Research focused on hail detection systems, rain detection, and a special project to discover how science and indigenous knowledge could complement each other. Information communication technology was improving. SAWS would be issuing invitations to bid for a marketing strategy as well as a media strategy, which was essential for saving lives. Often the media did not take warnings seriously enough. Modernisation was vital not only to improve warning systems but also to create socio-economic ventures.

SAWS trained maths and science matriculants, but pointed out that a challenge remained the scarcity of maths and science skills.

Future projects included the upgrading of the radar network, used to track storm fronts, new lightning detection sensors. Integrated observation networks were needed for high quality forecasting and warnings.

Members commended the presenters. Questions related to climate change and how rural communities could be protected, flood warnings in the Eastern Cape, monitoring of international weather patterns and phenomena, responses by other institutions to disaster warnings and the possible use of cell phones for warnings. The commercialisation of the Service, its equity, and the work in indigenous knowledge were also highlighted. On the financial side, questions were raised on the internal audits, the performance bonuses, the staff matters and suspension of an employee, composition of the Board, and the possibility of bursary schemes.

MINUTES
Briefing by South African Weather Service
Mr Bruce Tashe (Chief Executive Officer (CEO), South African Weather Service (SAWS)
reported that the core business of SAWS was saving lives through its services. He explained that severe weather could also cause damage to property. SAWS wished to be a global player and because of the African Renaissance was already a very good regional player. The mission of SAWS was to provide meteorological products and services for the use of all South Africans, including beyond the borders. SAWS had undergone a change to a “client mindset” that would enable it to treat people with respect and provide a quality service.

Mr Tashe briefly summarized the five strategic objectives for SAWS, which included financial viability and sustainability, corporate governance and strategic leadership. He added that SAWS must become a learning organization that was client-centric and that never compromised quality. He added that there must be improved internal business processes. In SAWS corporate governance it had included compliance issues, and staff were seen as supporting SAWS not merely as resources. He stressed that SAWS was keen on building a better relationship with the Portfolio Committee.

Mr Tashe presented SAWS’s financial results for 2005/6. Nothing had changed for the medium term estimates, except transfer grants which saw a 5% increase. Commercial income was steadily increasing, but he cautioned that there was still work to do, even though it had become a fully viable department. Because of the nature of the organisation, he felt that it was not necessary to budget for a surplus or deficit.

Little had changed with regard to the balance sheet, because SAWS’ capital and equity reserves were static and were included in the annual statement. For 2006 there was an operation surplus of R3.3 million. This was due to careful restrictions to ensure that SAWS had not overspent. He added that SAWS had to comply with new international accounting standards. The property value had been revalued due to land issues with Tshwane Municipality. Revenue for 2006 was R167.2 million, up from R153.8 million last year. Previously there had been a loss in operational costs, but this had now been reversed. SAWS also received donor funds for certain projects and the aviation industry had contributed as well, which was reflected in an increase in commercial income. This had commenced in 2004 because of tariffs that were gazetted. A meeting would take place the next day between SAWS and the aviation industry about the aviation debt.

Mr Tashe tabled the first quarter prediction for 2007. This showed revenue of R44.8 million, R800 000 over budget. This was due to the Board’s emphasis on operational issues, and employee benefits savings were R3.1 million. He also explained that the cost of a lightning detection unit had been paid in full, thus reducing overall long-term costs.

On the issue of corporate governance SAWS management dealt with the risk, but the Board had oversight. There would be increased dialogue between management structures and an extended executive management committee. SAWS would continue to work with their external stakeholders, including increased collaboration with the World Metrological Organisation (WMO). Southern African countries depended on SAWS for information and SAWS was linked to Nairobi, London and Washington D.C. The Southern African Development Community (SADC) would shortly convene a meeting to discuss forming a body for improved weather information for the region. SAWS would be attending the WMO Congress for the first time and would have a stand to showcase its operations.

Some of the business processes of SAWS were outlined. Observation platforms included a cam camera in the Outeniqua Mountains to detect and warn small private aircraft without sophisticated instrumentation of weather patterns, such as decrease in visibility, lessening accidents. The Automatic Weather Stations gathered, relayed and fed real-time information to farmers. Automatic Rain Gauge Systems around the country could predict rainfall in areas by relying on information gathered from the rain gauges in other areas. SAWS also used Upper Air Sounding equipment, which was very expensive for developing countries, around $9 million per annum. SAWS was investigating producing a re-usable balloon locally at around half the price.

SAWS focused research would include better hail detection systems and analysis, and an integrated rain detection system, which would held forewarn people of extreme weather conditions. SAWS had also commenced a project to revive and work with indigenous knowledge, and discover how science and indigenous knowledge could complement each other. The flash flood warning system had predicted floods four days in advance. Although predictions were not perfect, SAWS was working on the problem. Mr Tashe reported that information communication technology was improving. SAWS had just bought a new NEC super computer valued at R6 million, which communicated with UK Met Unified model.

From a customer perspective, Mr Tashe said that SAWS would be issuing invitations to bid for a marketing strategy as well as a media strategy. He made it clear that a media strategy was important for “saving lives.” Sometimes the media did not understand the information or data provided to them. Flood possibilities, and other advice and warnings, were not taken seriously enough.

Mr Tashe stated that SAWS had a modernization plan in operation. Rural areas were mostly affected by adverse weather, and there was a need for accurate and timely information of a high quality that could quickly be give to decision-makers. SAWS was allied to Accelerated Shared Growth Initiative of South Africa (ASGISA) as many issues were weather sensitive. He explained that the impact of air and wind was not properly taken into account in planning a new stadium for the FIFA World Cup in 2010, and that SAWS has brought this to the attention of the developers. Modernisation was important because, even though Africa saw only 4% of all aviation traffic, 28% of air accidents occurred over Africa. The modernisation plan would have socio-economic benefits. It would enable farmers and others to better predict and plan for their business, their property and their lives. SAWS could also help inform on climate change and ozone layer depletion, as well as acid rain.

SAWS focused on saving lives because news reports indicated that 500 people lost their lives through weather-related causes from 2000-2005. SAWS aimed to increase the safety of travel by land, sea and air, and took its job very seriously with regard to weather-related natural disasters.

SAWS had contributed to job creation by training maths and science matriculants, who now worked for SAWS detecting weather changes.

SAWS radar network was to be renewed and updated with more sophisticated systems. It was necessary to track storm fronts, tornados and large thunderstorms, as well as inform the airline authorities of dangers to aircraft through microbursts and windsheers. Two new radars would be installed. Northwest Province was not entirely covered, but all critical areas were covered. SAWS had helped commission radars in Botswana and Mozambique and the information acquired from was also fed to the SAWS system. SAWS also provided “free” services to Lesotho and Swaziland.

Mr Tashe reported that SAWS had 19 lightning detection sensors in place. At any one time there were 2000 thunderstorms in progress around the world, and the new network would be used to inform people of impending danger. He noted that 40 people had died in South Africa from lightning, and that lightning-related insurance claims could be as high as R500 million per annum.

Mr Tashe concluded that all SAWS early warning systems were key to disaster prevention, mitigation and preparedness. He emphasised that integrated observation networks were needed for high quality forecasting and warnings. He ended by saying that weather-related climate change is making South African people more vulnerable to adverse weather conditions.

Discussion
Mr M J Ellis (DA) asked what was being done about climate change and especially what was done to protect vulnerable communities. He asked how the information from the lightning detection system was helping vulnerable rural communities

Mr Mnikeli Ndabambi (Senior Manager: Forecasting, SAWS) replied that climate change matters were driven by the Department for Environmental Affairs and Poverty, but they and SAWS would in future have to work together. The United Nations was taking climate change very seriously and SAWS had recognised this. WMO stated that 90% of weather was climate related. In regard to lightning, Mr Ndabambi confirmed that SAWS did give warnings for thunderstorms. However, there were problems with how the information was received. SAWS outreach programme included educating children at schools. SAWS had a station in Limpopo that helped with the warnings and that it already had six key people who helped to distribute the information via SMS alerts, essential since storms could form in about an hour.

Mr R Shah (DA) asked about staffing, and the fact that both a CEO and CFO had left very recently while Mr Tashe only had a contract for six months. He asked why it was taking so long to find another CEO. Lastly, he asked about the internal audit report that took place at SAWS.

Mr Tashe replied that the turnover of top-level management was worrying. His predecessor had moved on to a post at the WMO, and had provided the opportunity for SAWS to attend its first congress. He stated that he was given a six-month contract until a new CEO could be found, and this was in progress. The CFO had resigned and another top-level manager had been suspended and subsequently fired for sexual harassment. That Manager’s replacement only worked for two months before he resigned. He added that the current CFO could not be present as she had another important meeting in Cape Town.

Mr Tashe commented that the Auditor-General had not made his opinion on the audit known. It was clear that matters had not been fully correct because nobody was prepared for the problems of the CEOs and CFO leaving. There was a business plan but there was simply not enough time to present it. He did promise that next year all the targets would be met.

Mr M Swart (DA) asked about the flooding in the Eastern Cape and whom SAWS had informed.

Mr Ndabambi answered that a warning was issued four days ahead of time. SAWS had worked with the local disaster management services department. Regrettably the media were only concerned with sensationalism after the fact, and it was part of SAWS new strategy to educate the media about the importance of their warnings.

Mr Swart asked about the internal audit and specifically about bonuses that were handed out. He asked how the performance bonuses were assessed and what was used as a measurement.

Mr Tashe answered that performance bonuses were based upon an agreed up-front contract, and that it was clear how people would be evaluated. He added that the new accounting standards would affect these bonuses.

Ms R Ndazanga (ANC) asked what could be done about hail which destroyed homes and agriculture as well as killing and injuring livestock. She wanted to know if people could be warned in time. She added that not everybody had radio and TV and that the poor in the rural area suffered the most.

Mr Ndabambi concurred that rural people were not getting the information that they needed. Although traditionally communities could have told the difference between a cloud with the potential for hail and one without, this skill had been lost. All warning messages would be sent to the appropriate structures and if it was found that this did not work then the issue would be addressed.

Ms J Chalmers (ANC) asked what kind of education young people would need to get into the industry. .

Mr Tashe answered that the pool of science and engineering graduates in South Africa was very small, as most were economics and business students, and that there had to be a shift in the mindset in South Africa. Meteorologists required matric and a B.Sc. with an emphasis on meteorology, preferably at Honours level. SAWS could provide training with a bridge year to B Sc graduates, who could then move on to Honours. UCT had five SAWS students currently and one student had been sent to the USA to study for a PhD in an area that was not available to study in South Africa. SAWS was also working with the Universities of Zululand and Kwa-Zulu Natal and with people with indigenous knowledge of the weather.

Ms Chalmers asked how the weather phenomenon of El Nino affected South Africa and how SAWS monitored this

Mr Mark Majodina (Senior Manager of Regional Affairs, SAWS) answered that SAWS did watch the Atlantic and Pacific changes that affected South African weather. SAWS also used the information to predict changes in rainfall three months in advance, and the knowledge was used by authorities in water management department and for probabilistic forecasting.

The Chairperson asked about the SCOPA encounter and the issue of the re-evaluation.

Mr Tashe answered that the interim audit report raised issues that still need to be tabled and further discussed.

The Chairperson asked whether South Africa was globally competitive and if there was scope for growth?

Mr Tashe stated that in terms of competitiveness, South Africa stood among the best, but it did not have unlimited resources. Many third world countries were coming to South Africa and it was important for South Africa to keep up its good presence in the region and internationally. He added the increases in commercial income would allow for greater growth.

The Chairperson asked for SAWS’s evaluation of the institutions that responded to disaster warnings. Lastly, he asked if SAWS could use cell phones to alert people, as this was the prime form of communication used by so many people.

Mr Tashe said that the response of other institutions showed shortcomings but in fairness SAWS also had room for improvement. It could work on making the messages easier to read and faster to communication, and must also educate the media and shift their reporting focus away from sensational after-the-fact reports. SAWS was already involved in a pilot programme using cell-phones, and this would be taken seriously.

Mr D Olifant (ANC) commented that Mr Tashe was very well prepared. He had concerns about SAWS becoming a more commercial entity and viewing people as clients.

Mr Tashe answered that the “agentisation” of SAWS was likely because the data is pointing in that direction. He said that it must not be a drain on the fiscus and that the commercial work was helping to pay for the operations and improvements within SAWS. He again stressed that SAWS could not budget for a deficit or a surplus and if it was not commercialised then the public good would suffer. He noted that the aviation industry were not paying their debts, but that would be addressed. He added, in respect of some matters raised by SCOPA, that SAWS was not presently occupying the land and needed to take the title. He noted that they were not worried because the problem was unrelated to concerns about SAWS itself.

Mr Olifant commented that this was a crucial question and that he did not want to see it back in a year’s time. He stressed that it must be put to rest.

Mr Olifant asked if there was anything that could be done to mitigate the effect of lightning.

Mr Ndabambi answered that lightning mostly affected rural areas and in the USA it was responsible for 30% of power outages. For this reason, he explained, Eskom wanted to work with SAWS on this problem. Currently the detection system used with the UK Met system was very good but the information needed to be disseminated faster to the public.

Mr Olifant asked about the equity of SAWS. He knew it was state-owned but if people were allowed to buy shares then there would be less accountability, similar to the situation with ISCOR.

Mr Tashe stated that SAWS was 100% state-owned. He regretted that the CFO had been unable to attend to answer this question in more detail.

Mr Olifant also enquired about training and development at SAWS, and whether more bursaries could not be made available as income grew, and graduates then taken in to SAWS for five years.

Mr Tashe answered that SAWS had already established links with universities. However, South Africa had a problem in having too few maths and science students.

Mr Olifant commended SAWS on its ability to provide easy and simple information in Venda, Sotho, Zulu and other official languages.

Ms M Ntuli (ANC) also praised SAWS for their user-friendly approach. She asked why thunderstorms occurred more over Johannesburg than over Cape Town.

Mr Majodina explained that the areas were subjected to different weather influences, and that Cape Town’s proximity to the sea was a factor.

Ms Ndzanga asked what SAWS is doing about the disappearance of indigenous knowledge and what attempts were made to bring science and indigenous knowledge together.

Mr Ndabambi commented that it was distressing to see that the old knowledge systems and their values were disappearing, and that this was related to the whole issue of colonisation. This issue should be looked at by a number of parties, including the education system. SAWS could only make a small contribution and would do their best. He noted that there were three projects in progress on the linkage of science and traditional knowledge.

Ms Chalmers commented that during the Asian tsunami the animals had sensed impending danger. No elephants were killed in the disaster. Horses seemed to have a similar ability.

Mr Tashe confirmed that this was true, and commented that such observances and indigenous knowledge systems all fitted together.

Ms Chalmers asked for clarity on the Board of SAWS.

Mr Tashe answered that the Board had 12 members and met four times per annum. There were currently two vacancies. He said that the Board should meet more regularly and that some issues in lower management were being brought to the Board.

Mr Shah said that it was good to hear that issues were being addressed. He mentioned that the Committee should receive a copy of the new audit report. He asked about SAWS’ supply chain management and if there were any upgrades.

Mr Tashe answered that there were changes occurring in the supply chain and that SAWS had held a two-day workshop on this issue. There were some shortcomings in the current model and the end result would be approved by the Board. At this point he added that he would like to inform the Committee about the recent dismissal of the staff member. She was suspended and appeared before a disciplinary committee, chaired by an expert in labour relations. She had brought her own lawyers but they had to leave because she was a member of a union. After the committee made a decision, the management was advised to dismiss her. She had then taken the issue to the CCMA and there was a meeting the following week. It was completely incorrect that she had been notified of the dismissal through the media.

Mr Shah suggested that Mr Tashe be commended to the Minister on his presentation. He asked about climate change and whether South Africa received constant information about weather and climate happenings from expeditions in Antarctica.

Mr Majodina answered that there was a global warming station at Cape Point that measured greenhouse gasses in the air. He said that some results were given in February by The Commission of Atmosphere Sciences of the WMO. A few South African scientists were given awards for their work. SAWS was working with a number of departments, such as Department of Housing, to mitigate global warming. A number of expeditions left year round to the islands and the Antarctic. They deployed weather buoys to gather data about the Southern Oceans for South Africa and other countries.

The Chairperson asked if there was a relationship between SAWS and The Department of Housing, such that SAWS advised where and how to build.

Mr Ndabambi answered that SAWS were trying to see how their services could assist other government departments within the government. Department of Health could benefit since many diseases changed with the weather. In addition, areas with adverse weather conditions should not be considered for housing or informal settlements.

Mr Majodina added that SAWS already had a working relationship with civil engineers, for instance, for the 2010 World Cup, but more could be done about housing and informal settlements.

The Chairperson asked how information about the weather was conveyed to fishermen?

Mr Ndabambi confirmed that this information was sent telephonically. However, he added that some communities did a better job than others of disseminating the reports.

Mr Tashe said that he would like to mention more about the aviation industry debt. He told the Committee that he had had a meeting with the CEO of SAA last week and a meeting with ACSA. SAWS was estimated as having to write off R11 million worth of debt owed to them, but the rest must be paid. There were many issues from the past and a model for the discussions had been agreed, which had then resulted in the figure mentioned.

Mr Shah made a request for SAWS reports and papers of all the various international and WMO meetings or conferences that SAWS has attended for his own education.

The Chairperson thanked the SAWS delegates. The meeting was adjourned