Transnet Pension Fund Amendment Bill: adoption; Department Second Quarter Performance: briefing
Public Enterprises
08 November 2006
Meeting Summary
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Meeting report
PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
8 November 2006
TRANSNET PENSION FUND AMENDMENT BILL: ADOPTION; DEPARTMENT SECOND QUARTER
PERFORMANCE: BRIEFING
Chairperson: Mr Y Carrim (ANC)
Documents handed out:
Report of the Portfolio Committee on Pubic Enterprises on the Transnet Pension Fund Amendment Bill [B30 – 2006]
Amendments Agreed To: Transnet
Pension Fund Amendment Bill
Amendments Agreed To: Transnet
Pension Fund Amendment Bill (Additional Amendments)
Department of Public Enterprises Presentation of 2nd
quarter performance
Department of Public Enterprises Presentation of 2nd
quarter CAPEX Update
Department of Public Enterprises Quarterly Performance Report (01 July – 30
Sept 2006)
Department of Public Enterprises Presentation of 2nd quarter
performance report 2006/07: Part1, Part2, Part3 & Part4
SUMMARY
The Committee unanimously adopted the Transnet
Pension Fund Amendment Bill.
The Committee was also briefed by the Department of Public Enterprises on its
performance in the second quarter of 2006. Members
felt that the Department should explain how it planned to convince the public
and South African Airways’ competitors that the new low-cost airline, Mango, is
not, and will never be a state sponsored subsidiary of the national
carrier. Other questions dealt with the
issue of intellectual property held by Denel, the
future of the SA Forestry Company and litigation against the Department.
MINUTES
Finalisation of the Transnet
Pension Fund Amendment Bill
The Chair stated
that a sub-committee of the full Committee was appointed to process the Bill.
The sub-committee went through various drafts and changes were then made in an
attempt to simplify the language of the Bill. The sub-committee also consulted
the Transnet Pension Fund and the trade unions in
order to make sure that the changes did not affect the existing agreements
between the two parties.
The Chairperson stated that the sub-committee could not undermine the overall
intentions of the Bill. The unions had argued that they were not given enough
time to examine the actual text of the Bill, as a result were unable to comment
on the amendments. Therefore there should be a provision in the Bill which
would allow the unions to object to any changes that affected the existing
agreements.
Clauses 1 and 3 were agreed to.
Clause 5
The Chair stated that the Department's lawyers were happy with the proposed
change, and will be included in the proposed document. The chair then went
through the changes made in the proposed document and stated that Clause 5 was
rejected and had to be re-written. In the re-witting there were no fundamental
changes included to the principles of Clause 5, however it had to be simplified
in a language that could be easily understood. The Chair then put forward
Clause 5, as amended and asked Members if they agreed.
All Members agreed.
Clause 6
The Chair stated that the clause dealt with how rules must be agreed to by
the general board of the Pension Fund. The clause was agreed to
Clause 7
The Chair put forward Clause 7, as amended in the document and asked
Members if they agreed.
Clause 9
The Chair said Clause 9 essentially deals with what happens when an
employee is declared bankrupt, and that it provides
that the pension money remains protected and cannot be used to settle any other
debt. Members agreed to the clause.
Clause 13
The Chair put forward Clause 13, as amended in the document and asked
Members if they agreed.
All Members agreed
Clause 15
The Chair stated that the clause allows for the transfer of members who are
not members of the second defined pension fund, but are being paid by Transnet to be incorporated into the second defined pension
fund. Members agreed to the clause.
Clause 17
The Chair put forward Clause 17, as amended in the document and asked
Members if they agreed.
All Members agreed
Clause 2, 4, 8, 10-12,14, and 16
The Chair put forward the clauses, without amendments and asked Members if they
agreed.
All Members agreed
The Committee agreed to the short title, long title, preamble and the Bill as a
whole.
Committee Report on Transnet Pension Fund
Amendment Bill
The Chair outlined the history of the processing of the Bill, the
Committee’s views, and the stakeholders concerns.
Mr J Minnie (DA) argued that it is unfair to single
out the Freedom Front Plus for its submission in the report.
The Chair said the FF+ made a written submission to the Committee, which the
report reflected.
Mr B Nkosi (ANC) argued that
it was unfair to single out one party.
The Committee agreed to amend the wording to state that collective submissions
were received from various parties.
The Committee
agreed to the amended report.
Department of Public Enterprises (DPE) presentation
The DPE presentation on its various programmes
was made by Mr J Theledi
(Deputy Director General), Ms U Fikelepi (Chief
Director: Legal Services), Ms S Hutchings (Chief Financial Officer), Mr E Harris (Chief Director: Transport), Ms S Crosson (Head: Human Resources) and Ms K Vennier (Coordinator: Joint Projects). Mr
L Mcwabeni (Deputy Director General) was also present
to answer questions.
Mr Theledi provided an
overview of the Department's 2nd quarter performance. He stated that
significant progress had been made with regards to the Alexkor
deal, the establishment of Infraco, recapitalisation of Denel and the
separation of South African Airways (SAA) from Transnet.
Ms Hutchins then gave an overview of the Department’s expenditure and stated
that it had spent 45% of its budget. Ms Crosson stated
that in terms of human resources, the Department had filled 131 out of the 157
available posts. At the moment 63% of the Department’s workforce is female;
however the Department targets to have a 50/50 gender representation by 31
March 2009.
Ms Fikelepi focused on the Department's Legal
Governance and Transaction (LGT) programme, and
stated that the Department is currently defending itself against legal action
instituted by the Pahapur / Londoloza
Consortium. So far it had filed all the necessary documents with the registrar
of the High Court, and will soon be tracing all the documents required in the
legal action.
Mr Harris gave an update on the Capital Expenditure Programme (CAPEX), stating that CAPEX has planned
big projects in the major ports of the country, and that the Department is confident that the approved budget
for 2006/07 will be largely spent.
Ms Vennier concluded the presentation by giving an
overview of the Joint Project Facility (JPF).
Discussion
Mr J Stevens (DA) asked when the Committee
would be informed about the study into the shareholder compacts and about the
future of the SA Forestry Company Limited (SAFCOL).
Mr Theledi stated that the
shareholder compacts have yet to be clarified.
Mr Mcwabeni said that SAFCOL had significant research
capacity in forestry. The Department is currently making recommendations to the
Minister on the future of SAFCOL. The Minister will report to Cabinet before
March 2007.
The Chair asked the Department to provide a list of the consultants it was using
and their services. The Department should elaborate on its relations with the
Department of Communications (DOC) with regards to INFRACO.
Mr Theledi stated that there was a database on the
consultants and it will be forwarded to the Committee. The Department is
working together with DOC on INFRACO on the licensing issue and the role of the
Independent Communications Authority of South Africa (ICASA).
Mr C Gololo (ANC) questioned the percentage interest
that will be given to Eskom in the Pebble-bed Modular
Reactor (PBMR) Company. Secondly, the Department should state whether it had a
deliberate strategy to employ females as more than half the staff.
Mr Mcwabeni stated that Eskom
planned to have greater representation in the PBMR; however Eskom
still has to inform the Department about their intentions.
Ms R Issel (Chief Operating Officer) said that the
high female representation was not a deliberate strategy, but a matter of
coincidence.
The Chair questioned board remuneration. The Department had apparently
completed their study on board remuneration; however during that period the
Minister had substantially increased the remuneration of some board members.
Were the increases made before or after the study?
Ms Fikelepi stated that the increases were given
before the completion of the study.
The Chair stated that the issue of board remuneration had to be reviewed as it
was unfair for the Miinister to earn an annual salary
of R700 000, while a part-time board member could earn as much as R500 000 per
annum.
Mr Nkosi asked if the Department would win the court
cases against it.
Mr Theledi stated that there had been two bidders on
the Komatiland deal. Bonier won the bid but the
Competition Commission disallowed the deal, and the Department was forced to
cancel the agreement. Bonier argued that the deal could not be cancelled, and
then decided to take legal action.
Mr Stevens thanked the Department for giving feedback on intellectual property;
however it was of great concern that agreements with the Department of Trade
and Industry (DTI) have not been finalised. Secondly, have the Department
thought of solving the intellectual property issues of selling a part of Denel through commercial agreements? This could be done by
specifying licensing arrangements for new intellectual property. With regards
to SAA, there seems to be a perception amongst SAA’s
competitors that it would be a state subsidised entity. Since the state helped
SAA with its recapitalisation programme and SAA funded Mango, the perception
appeared to be accurate. Therefore, the Department should elaborate on how they
planned to convince the public that Mango is not a state sponsored subsidiary
of SAA.
Mr Mcwabeni stated that there has been no resolution
to the issue of intellectual property. However the Department felt it should
reduce Denel’s research capability as it was not a
research institution. The defence research aspect, however, can never be given
to a private contractor as the law prohibited it, and this posed a large
dilemma for the Department. Therefore the Department proposed that there should
be licensing agreements with South African commercial companies that performed
defence research.
Mr Harris assured Mr Stevens that the state has not financed SAA directly for a
long time, and was not intending to do so any time soon. In instances where SAA
was assisted it was via guarantees and SAA had to pay the money back. When SAA
approached the Minister for approval for Mango, the Department raised concern
about its sustainability.
Mr Chang raised the issue of new nuclear power plants and asked for clarity.
Mr Mcwabeni stated that no new plants have been built
due to problems with licensing and regulations, the massive costs of
decommissioning and nuclear waste management issues.
The meeting was adjourned.
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