Hansard: NCOP: Unrevised hansard

House: National Council of Provinces

Date of Meeting: 31 Oct 2019


No summary available.





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The Council met at 14:09.



The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.



The CHAIRPERSON OF THE NCOP: I have been informed that the Whippery agreed that there will be no Notices of motion or Motions without notice.






Ms D G MAHLANGU: Hon Chairperson, hon Deputy Minister of Finance, my principal, tata Masondo, hon members, fellow South Africans, it is my privilege to table before this House a report on the 2019 Special Appropriation Bill on Eskom, on behalf of the Select Committee on Appropriation. The Special Appropriation Bill was tabled by the


Minister of Finance on 23 July 2019 and it was referred to the committee on 22 October 2019.



We note that the Bill was passed by the National Assembly without any specific amendments and thereafter the Bill was referred to the National Council of Provinces for concurrence. In line with section 13(2) of the Money Bills Amendment Procedure and Related Matters Act, read together with section 72 of the Constitution, the committee has a responsibility to hold public hearings on Money Bills and to report thereon to the National Council of Provinces.



To this end, an advertisement was published in national and regional newspapers, inviting the general public and interested parties to commend on the Bill. The committee, together with the Standing Committee on Appropriations, jointly conducted a series of successful stakeholder engagements and public hearings on the Bill, as required by the Money Bills Amendment Procedure and Related Matters Act and these include the Financial and Fiscal Commission, FFC, and the Parliamentary Budget Office, PBO.



Further, written submissions were received from the following individuals and organisations: Mr G Segwela, Mr G Galstone, Fish Hoek Valley Rates Payers and Resident Association, Alternative


Information and Development Centre, Organisation Undoing Tax Abuse, Congress of South African Trade Unions, National Union of Mineworkers, dearSA Online ... [Inaudible.]



During this process, the committee engaged robustly and constructively with various stakeholders. The main objective of these engagements was to ensure that the 2019-20 Special Appropriation Bill process becomes transparent, people-centred and to ensure that the deepening of our democracy continues.



The Bill proposes the following additional financial support for Eskom: An additional R26 billion for the 2019-20 financial year and R30 billion for the 2020-21 financial year. We must, however, note that these amounts, as indicated and expected will be adopted today as a commitment from Treasury, the Minister of Finance, hon Tito Mboweni and his Deputy Minister and the Minister of Public Enterprises, that the money will not be given to Eskom as a lump sum, for example, the R26 billion of 2019-20. There will be a condition that says that Eskom has to make an application and give a motivation for the required amount, and depending on the outcome or approval by the Department of Finance, they will then get the money.


The Bill further provides that the Minister of Finance, in writing, must impose conditions to be met by Eskom before any part of the amounts is transferred and must impose conditions to be met by Eskom after the transfers of any part of the amounts.



We have also had engagements with Eskom and during those engagements, a turnaround plan from Eskom has been presented and engaged by the Joint Committee. There have been critical observations and recommendations made by the committee. Allow me to take this opportunity to present these critical observations and recommendations to this august House.



The Select Committee on Appropriation, having considered the briefings and comments by invited stakeholders on the Bill, recommended as follows.



The Minister of Public Enterprises and Eskom should be conscious of the fact that Eskom cannot rely on government financial support forever, particularly the fiscus. You have heard what the Minister of Finance said yesterday. Provisions of continuous financial support to Eskom directly from the fiscus have the potential to compromise government social programmes for the poor and other development obligations of the Republic of South Africa.


As part of Eskom’s turnaround strategy, concrete steps should be taken to strengthen the work of the Chief Restructuring Officer, CRO, including the swift appointment of the qualified and experienced CEO, to turn the financial position of Eskom around, within a reasonable period after the adoption of this report. I think, yesterday, also when the Minister was presenting the MTBPS, he has alluded to how far they are.



The Minister of Finance and the Minister of Public Enterprises should ensure that there is full compliance with all conditions prescribed for Eskom before and after appropriated funds are transferred. Should there be noncompliance, the appropriate consequence management should be instituted expeditiously, which includes the stoppage of funds, and they should report the matter to Parliament within a reasonable time. That is the oversight role that we are committed to play.



Over and above that, Eskom should diversify into other alternative energy-generation sources and not only rely on coal. This will address the matter of low-approved Eskom tariffs by the National Energy Regulator of South Africa, Nersa, by supplementing the tariffs.


Eskom should revive and escalate the implementation of delayed infrastructure repairs maintenance programme ... [Inaudible.] ... due to low or nonavailability of maintenance farms. And all other noncore services should be outsourced. This should be done as soon as possible after the adoption of this report.



The Minister of Public Enterprises should ensure that Eskom urgently take steps to improve the implementation of consequence management regarding the mismanagement of funds and corruption in the entity. A progress report should be submitted within three months after the adoption of the report by the House.



The Department of Public Enterprises and national Treasury should put in place mechanisms and strengthen the oversight capacity to monitor Eskom’s operations and expenditure, and jointly provide quarterly reports with the prescribed set of performance indicators to Parliament, so that we can measure the performance.



The Department of Public Enterprises and Eskom boards, in collaboration with national Treasury, the National Prosecuting Authority, the Special Investigation Unit, the Hawks, SAPS, and the State Security Agency should institute in-depth forensic


investigations into the contributing factors of the financial state of Eskom.



A proclamation by his Excellency, President Ramaphosa, on this recommended forensic investigation is critical and may even assist to ensure this recommendation is implemented without delay. This should be done within a reasonable timeframe after the adoption of this report. We mean business.



As I conclude, please allow me to take this opportunity to thank all committee members and support staff for the diligent manner in which they have worked on this Bill. Without your contribution, it would not have been achieved and would not have been possible. For us to get to where we want to be, we are required to work together, no matter what our differences are.



As the ANC, we acknowledge the fact that issues affecting Eskom might not be resolved overnight, but we are certainly committed to play our part to assist government to resolve these problems that we are facing.



The Select Committee on Appropriation, having considered the Special Appropriation Bill, referred to it and classified by the Joint


Tagging Mechanism as a section 77 Bill, reports that it has agreed to the Bill without the proposed amendment. Thank you. [Applause.]



Debate concluded.



Declarations of vote:


Mr D R RYDER: Chairperson, where is the security? Please, call in the white shirts, because Eskom is holding a gun to the head of every person here. [Interjections.] “Too big to fail” is what they told us. The executive of Eskom has decided to take that as permission to continue to mismanage our most strategic commodity.



The process followed to get this Bill to this House has been hopelessly flawed. We have been rushed to ensure that we can pass this Bill in time to meet Eskom’s looming deadlines. Public participation was given lip services and the committee has been lied to and misled. Let me explain that statement.



On 24 July, we had a meeting that was recorded in the media and when I called for strict conditions to be placed on this appropriation, there was consensus across party lines. On 9 October, Treasury spent an entire morning listing their proposed conditions and gave the committee various options of introducing these conditions, either


through inclusion in the Bill or through amending the Bill to allow the Minister to place regulations on it. Again, there was consensus that tough conditions must be demanded and some should be included in the Bill with power given to the Minister of Finance to impose further conditions.



Imagine our horror when we got the final report with an unaltered Bill, no conditions and we were told that the timelines do not allow for the Minister of Finance to promulgate regulations. We were misled by Treasury. In a spectacular undermining of the Parliamentary process, the executive has colluded behind our backs and made a mockery of our oversight role.



What Treasury did tell us though is that Eskom management continues, seemingly unfazed by what is happening. They have not made material changes to how they operate. They submit inaccurate reports and they miss their deadlines. They display arrogance and they refuse to be scrutinised by intelligence authorities. It is just business as usual for them. They are showing South Africa the middle finger. And now, once again, the NCOP is going to rollover and merely rubberstamp the Bill, pandering to the executive.


I say no. I propose that we amend this Bill to include, if not the conditions themselves, by the very least, the clause, to empower the Minister of Finance and the Minster of Public Enterprises to enforce strict, measurable and smart conditions, as we all agreed in the committee meeting. And that will ensure that Eskom starts to come back on board with a project of fiscal recovery for South Africa, following the rampant theft - state capture.



Eskom allowed themselves to be captured. They must now submit to scrutiny and control or we must replace the executive with people who intend to put South Africa first. We reject this report and the Bill. Thank you.





Mnr A B CLOETE: Voorsitter, hier is ons weer met ’n reddingsboei aan Eskom. Nog geld vir nog ’n sukkelende staatsbeheerde entiteit.





Since 2006 until now, South Africa has given Eskom R83 billion, only, like Mr Ryder has said, to be held hostage. We are hostages with the ANC government who appoints their cadres with salaries. We are held hostage by short-sighted unions that only protect the


interests of a few millions or of a few, while millions of South Africans are literally kept in the dark.



We are held hostage by the ANC who is like a co-dependent spouse who clings to a manipulating partner in a very unhealthy relationship who will do anything not to lose that votes. This money will be spent only to bail out Eskom’s due to debt, but it provides no guarantee that the total collapse of Eskom will be prevented.





Die voorwaardes wat aan Eskom gestel word beteken niks, want met elke ander reddingsboei was daar ook voorwaardes en daar was niks. En tog is ons weer hier om geld aan Eskom te gee.



Die ontbondeling van Eskom alleen is nie die antwoord nie. Al wat die Minister doen is om van een probleem, drie probleme te maak. Tot nou toe was daar geen verantwoordbaarheid nie en Eskom kan aanhou leuens vertel en die staat sal maar aanhou gee. Dis hoe hulle dink.



Kom ons vergeet nie van die toestand van munisipaliteite, wat weer en weer gaan sukkel om vir elektrisiteit te betaal nie. Die kans is goed dat ons op ’n stadium weer hier gaan kom staan en weer gaan wonder hoekom ons vir Eskom geld moet gee.


Die VF Plus sê: Haal Eskom uit die hande van die staat en plaas dit in ’n mededingende gereguleerde mark en kyk hoe Eskom dan sy sokkies op sal trek. Slegs dan sal Eskom baie vinnig met baie gesonde besigheidspraktyke moet funksioneer, maar tot dan sal Eskom en Suid- Afrika se elektrisiteitsvermoë in die donker bly. Daarom kan die VF Plus nie ... [onhoorbaar.] ... pakket ondersteun nie.



Mr Y I CARRIM: Chairperson, firstly, we should be clear that none of the political parties, least the ANC, is happy with this Bill. I don’t think that the executive and certainly the Minister and the Deputy Minster as well as the director-general are happy with this Bill. So, it is not a Bill that we enthusiastically support, as we have indicated to Mr Ryder and his colleagues of the DA and the EFF, Mr Fanie Botha is here. So, firstly, we are not happy with this Bill.



In fact, the clear position of the chairperson of the committee, representing the ANC was that we want the conditions for the allocation of this money to be put in the law. However, after further discussions within our party, we felt it is absurd to put it in the law, because conditions change all the time. We live in volatile, uncertain circumstances. So, every time you want to add more stringent conditions, you will have to go back and change the


law and that could take you up to a year, by the time you gazetted it.



Then we said, let us make it part of the regulations. We discovered, as we got closer to agreement on that ... Mr Rider is right; there was agreement across all political parties that we should put it in the Bill. Then Treasury came back to us. Where Mr Rider is right is that Treasury should have alerted us at the outset that our decision across political parties should be to insert it into the regulations rather than into the Bill, and that the conditions for this allocation are not feasible for the certain reasons.



When those reasons were spelt out, it made perfect sense to us. It would take up to a year for the Minister to regulate, for it to be gazetted, for public comments, for Parliament - if it decides in law

- to approve those regulations.



One could even argue – though I don’t think that it is Mr Ryder’s intent – that it is a sinister attempt by the DA to destroy Eskom and this country, simply so that the ANC government can fail.



Eskom does not belong to the ANC, it belongs to the country. [Applause.] For Eskom to collapse would mean the whole democratic


project, which the DA does not support ... As we know full well from the conditions of the last three weeks, they have essentially gone back to being a white party. They say race does not matter. In a country that has the most racial inequalities in the world, they say race does not matter. How are they going to win the votes of black people? I do not know.



Let me go on. On this, we must be clear. There is a fundamental difference between the DA and us, not on the Bill. They have a different vision of the role of the NCOP. They think we are in a federal state. So, even Bills on which we do not have concurrent powers and functions, they want us to go through what is not required in terms of the Constitution or any constitutional court decision. Yes, on section 76 Bills, there must be full active public participation. On Bills that are not concurrent, we have a limited role and even then, there is no space for the public to participate. The Constitution prescribes what the role of the NCOP is and the roles of Parliament make it clear what public participation is, as endorsed by the courts.



So, what would be the point of somebody saying to put it in the regulations when it is not feasible? So, please, let us deal with the issues and let us not politicise it. Thank you. [Applause.]


Ms M O MOKAUSE: House Chairperson, the EFF does not support this Bill. For the mere fact that you have put business people who continue to loot Eskom in the name of board members, South Africa and South Africans will never benefit anything from this Bill. Eskom remains untransformed and we all know that that is where the looting began. We all know that with the leadership of Jamnadas there, Eskom will never be transformed. Therefore, the EFF will never support anything that comes from the direction of Eskom looters and Jamnadas himself. Thank you.



Question put. That the Bill be agreed to.



Ms B T MATHEVULA: I was suggesting that we should have two people who are counting so that we can be sure there is no electoral fraud with regard to numbers. [Interjections.] It can’t be that one person is counting ... [Interjections.]



The CHAIRPERSON OF THE NCOP: Yes, but they are here ...



Ms B T MATHEVULA: We don’t want to be robbed, Chair. [Interjections.]


The CHAIRPERSON OF THE NCOP: Okay. Thank you very much. I think everything is being done orderly. Order, hon members. Yes.



Mr J J LONDT: Chairperson, firstly ...



The CHAIRPERSON OF THE NCOP: What is your point of order?



Mr J J LONDT: I want us to confirm the number that was written down because I don’t want us to have a query at the end. So, I want us to confirm the number that was written down now, then we can vote for the other one. We are also embarrassing ourselves when we actually have a system that is supposed to work and we cannot even get the system to work properly. [Interjections.]



The CHAIRPERSON OF THE NCOP: Thank you very much, hon member. Please allow the process to continue. Can we now have people who are voting against the motion to ...



Mr J J LONDT: Chairperson, you are ignoring the request on the first count. [Interjections.]


The CHAIRPERSON OF THE NCOP: We will give you the total at the end. We will announce the result at the end. [Interjections.] Thank you very much. Can we proceed with those who are against.



Mr J J LONDT: Chairperson, you have two people from the same party that are did the count. Now you want us to just trust. It’s like ...





... maak wolf skaapwagter.





How does that work? [Laughter.]



The CHAIRPERSON OF THE NCOP: Members, I asked for the Whips to assist as it’s the practice. Can those who want to vote against the motion raise their hands? [Interjections.] Can we ... Landsman? ... Just a plea, hon members. I request that we please make the task a bit easier and smoother. I am urging you to really assist. We are again going to count the numbers of all hon members who are opposed to the motion. Can you please raise your hands? Yes, Mokause, what is your point or order?


Ms M O MOKAUSE: Chairperson, we all know that your party is well known for rigging votes. [Interjections.] And even here, it happened. Can we have party agents from different political parties? We all know how you rig votes. [Interjections.] No, it is only fair that different political party’s agents count the votes here. [Interjections.]



The CHAIRPERSON OF THE NCOP: Order, hon members. No, just relax. Order, hon members. Can I please ask you to sit down, hon member? Please, please, please. No, no, no, for now I don’t need assistance

- maybe in future or some other time and so on. Can I request members who are opposed to the motion to please raise their hands? [Interjections.] Hon Landsman? Hon Landsman, please sit down. Please take your seat.



Mr J J LONDT: Chairperson, we have done it before in the NCOP. I propose a physical division and it will make it a lot easier to count the votes. We have done this before and it is the precedent set to allow for a physical division and then vote later. [Interjections.]



The CHAIRPERSON OF THE NCOP: Please, please, just a minute. [Interjections.] Hon members, let’s proceed. [Interjections.] What’s


your point of order? [Interjections.] Thank you very much. For the sake of just concluding this process ... [Interjections.] Can we now proceed? Hon member, can we now proceed and have those members of the House who are opposed to the motion lifting their hands. [Interjections.] Please don’t raise two hands, just one hand. [Interjections.] We are done. Thank you very much; we will now proceed to the next step. Can we have those members who are abstaining raise their hands? [Interjections.]









Bill agreed to in accordance with section 75 of the Constitution.



The Council adjourned at 14:42.