Question NW3525 to the Minister of Public Enterprises

Reply:

(a)(i) The Board of Directors, entrusted with the ultimate responsibility and guided by their fiduciary duties, is empowered to manage all facets of the SOE's business. In instances of significant operational challenges affecting both the Company and the broader economy, as exemplified by Transnet, I have tasked certain Boards, including Transnet's, with developing and implementing a recovery plan. This strategic initiative aims to reassess and enhance operational effectiveness, ultimately leading to a substantial improvement in SOE’s performance.

The Boards are wholeheartedly committed to ensuring operational continuity and the successful implementation of the turnaround plans.

(ii) The Shareholder has a responsibility to hold the Boards of SOEs accountable in line with relevant laws including the Companies Act and Public Finance Management Act. Furthermore, the shareholder exercises shareholder rights in line with the Memorandum of Incorporation. There has not been any political interference in the SOEs that resulted in any leadership vacuum.

While the Departments ensures that there is stable leadership in SOEs, we have appointed interim leaders who possess the necessary experience and expertise to effectively manage and guide Eskom and Transnet. We have recently directed the Transnet Board to promptly formulate solutions for a variety of operational challenges, which encompass matters such as accountability, cost structure, and employee engagement.

(b) During extremely challenging times, it is found that more often than not, changes in leadership at both Board and Executive level are necessitated in order to drive urgent change and performance of an organisation, based on its operational requirements and the need for a review and refocus of operational effectiveness. This has been the case in the instance of Transnet and Eskom in recent months.

Leadership change is but one of the levers utilised to drive strategic enhancement of the organizations. It is on this basis that a review of Executive Management to determine whether they were fit for purpose and capable of executing the Board’s revised strategies and plans was undertaken by the SOE Boards. Coupled with leveraging of existing resources to pursue long-term success, the Boards of some entities in the DPE portfolio, namely Transnet, Eskom, and Denel, are undertaking rigorous and comprehensive recruitment processes to fill key positions of Group Executives and Prescribed Officers.

While the recruitment processes are underway the Boards have appointed interim executives and prescribed officers from within their existing management structures, with immediate effect. This ensures leadership continuity and stability, and operational sustainability.

Any assertion of the so called “interference” is rejected emphatically.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date: