Questions and Replies

Reply:

According to the information received from SOCs:

ALEXKOR:

Alexkor had good returns from the sale of diamonds in the 2022/2023 reporting period and there are sufficient reserves to continue operating in the next 12 months without reliance from the fiscus.

DENEL:

• Denel has tabled a comprehensive turnaround plan dealing with all aspects of the business with the following objectives:
• Reduced costs and increased revenue
• Engaged staff who are performance orientated
• Increased customer base
• Ensuring effective supply chain procedures
• Optimized planning and production
• Partnerships and joint ventures

This plan and actions were underpinned by a recapitalisation programme from Government and Denel is currently executing this plan and will not require any additional bailouts from the Government.

SAFCOL:

SAFCOL has implemented cost curtailment measures since the start of the second quarter. Through this, revenue-generating and compliance expenditure is prioritised. The impact of these cash preservation measures is closely monitored on a monthly basis. Due to this intervention, SAFCOL’s total expenditure at the end of September 2023, was 16% below budget and continues to show positive variances in the forecast for the remainder of the year.

SAFCOL has no government guarantees in place and relies on the robustness of its own balance sheet. Currently, there are no indications that any bailouts would be necessary in the foreseeable future.

 

 

Remarks: Approved / Not Approved/Comments

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from these intities

 

ESKOM:

ALEXKOR:

Awaiting response.

SAFCOL:

	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
(i)Air Travel					R265 581.39	R132 180.16	-	-	R16 436.16	R26 831.83
(ii)Ground Transport					R137 214.98	R238 656.14	R3 441.79	R120 591.39	R250 519.36	R58 048.71
(ii)Hotel Accommodation					R132 112.70	R116 742.76	R6 579.62	R41 398.20	R85 254.27	R8 783.21
(iii) Residence Maintenance					None	None	None	None	None	None

 

 

Remarks: Approved/Not Approved/Comments

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

(1)(a) The total envisaged capital expenditure budget for the Transnet National Ports Authority (TNPA) over the next three (3) year period (FY24/25 – FY26/27) for the ports of (i) Cape Town, (ii) Saldanha Bay, (iii) Boegoebaai, (iv) Durban and (v) Port Elizabeth is R 7,221 bn. The proportion of the capital budget per port is shown in Table 1 below.

Table 1: Ports Capital Expenditure (FY2024/25 – FY2026/27)

Ports	Budget 2024/25 (Rm’s)	Budget 2025/26 (Rm’s)	Budget 2026/27 (Rm’s)	Total Budget (Rm’s)
Cape Town	520	792	668	1,980
Saldanha	311	321	269	901
Boegoebaai	0	310	590	900
Durban	489	1,488	1,205	3,182
Port Elizabeth	81	99	78	258
Grand Total	1,401	3,010	2,810	7,221

(1)(b) The nature of planned capital expenditure for the next three financial years for the respective ports is allocated in terms of segments. Table 2 below indicates the breakdown of the budget per segment for the respective years.

Table 2: Budget Breakdown Per Segment Cumulative 3 Years

Segment	Total Budget 3 Yrs. (Rm's)	% of Total Budget
Auto	168	2.3%
Bulk Services	1,120	15.6%
Container	321	4.5%
Energy	626	8.7%
Fleet	1,238	17.3%
Infrastructure	2,116	28.8%
Iron Ore	110	1.5%
Liquid	468	6.5%
Manganese	900	12.5%
Other Segments & Supporting Infrastructure	155	2.2%
Grand Total	7,221	100.00%

2. TNPA prioritizes investment with a two-step system as detailed below:

• The capex portfolio undergoes a process that provides a view of strategic alignment and funding readiness.

• The projects are then vetted through a ranking and prioritization model, which provides an ascending rating scale to indicate project prioritization. This ensures strategic alignment, driving TNPA’s intended strategic direction, and consistency in admitting projects onto the CAPEX plan.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

(aa) The total salaries, travel, and accommodation of employees in the department for the last three financial years is shown below:

2020/21 Financial Year:

Expenditure Items	(a)	(b)
	Total budget allocated	Actual expenditure
i) Salaries	184 177 000,00	141 165 000,00
ii) Travel	3 924 000,00	2 384 000,00
iii) Accommodation	501 000,00	275 642,00
Total	188 602 000,00	143 824 642,00

 

2021/22 Financial Year:

Expenditure Items	(a)	(b)
	Total budget allocated	Actual expenditure
i) Salaries	158 954 000,00	140 046 805,00
ii) Travel	9 607 000,00	5 130 416,00
iii) Accommodation	1 410 000,00	872 699,00
Total	169 971 000,00	146 049 920,00

2022/23 Financial Year:

Expenditure Items	(a)	(b)
	Total budget allocated	Actual expenditure
i) Salaries	178 741 000,00	142 026 534,00
ii) Travel	12 510 000,00	7 232 659,00
iii) Accommodation	1 769 000,00	920 170,00
Total	193 020 000,00	150 179 363,00

Total for the 2020/21 to 2022/23 Financial Years:

Expenditure Items	(a)	(b)
	Total budget allocated	Actual expenditure
i) Salaries	521 872 000,00	423 238 339,00
ii) Travel	26 041 000,00	14 747 075,00
iii) Accommodation	3 680 000,00	2 068 511,00
Total	551 593 000,00	440 053 925,00

(bb) The total salaries, travel, and accommodation of employees in the department from 1 April 2023 to 30 September 2023 is shown below:

Expenditure Items	(a)	(b)
	Total budget allocated	Actual expenditure
i) Salaries	167 311 000,00	77 341 594,00
ii) Travel	13 970 000,00	7 002 339,00
iii) Accommodation	1 616 000,00	443 595,00
Total	182 897 000,00	84 787 528,00

 

Remarks: Reply: Approved/Not Approved/Comments

Melanchton Makobe P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

1. As at end September 2023 – the payment collection levels on 12 months moving average basis are as follows:

(a)(i) Municipalities = 87.3 %

(ii) All other customers combined = 99.9%

(b) The number of prepaid user customers as of September 2023 on Eskom’s Customer Care & Billing system is 6 803 462.

(c) The 2022-23FY non-technical losses are 13 396GWh and are equivalent to R5 607 441 692.

 

Remarks: Approved / Not Approved

Adv. Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

The Eskom Curtailment Framework involves the controlled reduction of electricity supply output from renewables (wind and solar) plants in response to system-security needs or temporary transmission capacity constraints. Eskom has developed this new approach to curtailment to allow for additional generation capacity to be built at points on the grid that had previously been shown as fully committed. It will therefore unlock scarce grid capacity in high-potential renewables regions ahead of Eskom’s grid investment roll-out. It is widely used by system operators to facilitate the introduction of renewable generators in a context of grid constraints. This involves the cumulative assessment of the new generation applications and ensures that the projects which are readiest for project implementation are prioritized for grid allocation. The framework could be implemented now that the updated Generation Connection Capacity Assessment is released.

The Generation Connection Capacity Assessment (GCCA) is an assessment of the generation that can be accommodated on the transmission system, at a given time and a a given location, without adversely affecting grid reliability and without requiring significant infrastructure upgrades. The GCCA aims to assist customers in making more informed decisions about where to pursue generation projects by providing information about the generation connection capacity that will be available on the transmission grid in a specific year, assuming that all planned projects are completed on time.

(1)(a) The curtailment framework has been approved within Eskom. A submission is being finalised by Eskom to NERSA on curtailment and other initiatives for noting and information. Detailed mechanisms and procedures to effect the curtailment framework are still to be finalised.

(b)(i) The Generation Connection Capacity Assessment 2025 was published on 31 October 2023 and can be accessed on the Eskom website:

GCCA Transmission Network – Eskom.

(ii) The curtailment framework will become official upon Eskom’s receipt of NERSA’s written response on the submission, as stated above in (a).

 

Remarks: Approved / Not Approved/Comments

Adv. Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

a) Over the preceding three financial years, Transnet National Ports Authority (TNPA) made a capital projects investment of R 2.7 billion in the ports of Cape Town, Saldanha Bay, Durban and Port Elizabeth. No capital investments have been made into the development of the Port of Boegoebaai thus far since only conceptual studies have been conducted. Table 1 provides (a) the total amount (detailed breakdown) of the capital expenditure over the past three financial years.

Table 1: Capital Expenditure over past three financial years

Ports	Expenditure 2020/21 (Rm’s)	Expenditure 2021/22 (Rm’s)	Expenditure 2022/23 (Rm’s)	Total Expenditure (Rm’s)
Cape Town	86	280	141	507
Saldanha	70	123	187	380
Boegoebaai	0	0	0	0
Durban	133	954	508	1,595
Port Elizabeth	31	65	128	224
Grand Total	320	1,422	964	2,706

b) Tables 2 and 3 below offer insight into (b) the nature of the capital expenditure for the same period. In expansion projects (Table 2), a new asset is either constructed/ acquired or an existing asset is extended. Whereas in sustaining projects (Table 3), an existing asset is replaced or refurbished.

Table 2: Investment on Expansion Projects over past three financial years

Ports	Expenditure 2020/21 (Rm’s)	Expenditure 2021/22 (Rm’s)	Expenditure 2022/23 (Rm’s)	Total Expenditure (Rm’s)
Cape Town	0.8	238	15	254
Saldanha	0.1	1.5	22	24
Boegoebaai	0	0	0	0
Durban	12	711	98	821
Port Elizabeth	0	0	0	0
Grand Total	13	951	135	1,099

Table 3: Investment on Sustaining Projects over past three financial years

Ports	Expenditure 2020/21 (Rm’s)	Expenditure 2021/22 (Rm’s)	Expenditure 2022/23 (Rm’s)	Total Expenditure (Rm’s)
Cape Town	85	42	126	253
Saldanha	70	121	165	356
Boegoebaai	0	0	0	0
Durban	121	243	410	774
Port Elizabeth	31	65	128	224
Grand Total	307	471	829	1,607

 

Remarks: Reply: Approved / Not Approved

Jacy Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

1. Private sector participation that Transnet has incorporated in its Reinvention and Growth Strategy is not intended to result in job losses. Rather, the involvement of private sector is to attract capital required to fund expansion programs and unlock growth in exports for key sectors such as manganese, chrome, and iron ore; and accordingly, growth in the overall economic activities in the country.

Transnet is also able to attract skills and competencies to accelerate efficiencies in its ports and terminals operations, which have been identified as one of the areas of concerns by the customers and shipping lines, as reflected in poor rankings of South African ports, especially in the container segment.

2. Transnet Management continues to engage with labour representatives, particularly addressing concerns around employee protection in implementation of the PSPs, such protection is also translated into agreements with the potential partners.

Remarks: Reply:Approved/Not Approved/Comment

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

1. The South African government, through the Department of Public Enterprises (DPE), continues to emphasise that involving the private sector in State-Owned Enterprises' (SOEs) operations should not be regarded as a departure from a state-led approach to public enterprises. One example of a partnership with the private sector that enhances Transnet's logistical value chains is the Mamathwane loop. This partnership brings in capital investments, expertise, and/or competences.

The state continues to play a major role in the management, oversight, and ensuring that the mandates of the SOEs are in line with the country’s socio-economic goals. Prior to the implementation of private sector participation (PSP) transactions, the DPE and other government departments evaluate and authorise these transactions in accordance with the PFMA and other legislative requirements.

Furthermore, the Cabinet's approval of the National Rail Policy (NRP) in March 2022 and the presidency's subsequent development of the Freight Logistics Roadmap set the stage for the country to move towards a more liberal rail market—a move that will necessitate major structural reforms. By allowing 3rd party private operators to operate on the national rail network, these changes are expected to encourage competition. This shift in policy will increase the effectiveness and performance of logistics, promote the development of rail-based support services (such as rail-focused warehousing), and draw in capital (via the acquisition of rolling stock).

For the first time, Transnet Freight Rail (TFR) will no longer be the sole provider of freight rail services, as private train operating companies (TOCs) will be able to operate on the freight network. TFR must be vertically separated into its component parts, namely operations and infrastructure, as part of the envisaged policy reforms and the Freight Logistics Roadmap's recommendations. The appointment of the interim rail infrastructure manager (RIM) on 1 November 2023, is proof that this process is well under way. In order to foster stronger cooperation between Transnet and the private sector and develop a vibrant rail sector, the establishment of a RIM is essential.

2. Transnet’s strategy is based on repositioning the organisation to deliver against the economic needs of the key market segments that it serves. There is a considerable opportunity to expand volumes (+/- 60 million tonnes of additional volumes) in the bulk mining commodity space, particularly in respect of iron ore, manganese, ferrochrome, and magnetite, in the next three to five years.

In order to provide industrial segments with more access to global trade and commercial networks, Transnet is repositioning its rail network and terminals to improve operational efficiency and capacity expansion. This is supportive of the Port of Durban being repositioned as a hub port for containers and automotives and Richard's Bay as an effective bulk commodities port.

Consequently, Transnet is driving capacity expansion and improving and transforming the key market segments that it serves by leveraging private sector participation in concert with Transnet's own assets and skills. Transnet's current corporate plans, which were submitted to Parliament, National Treasury, and the shareholder representative, clearly outline the nature and approach of private sector participation.

In addition, Transnet developed a comprehensive Joint Investment and External Partner Selection (JIEPS) framework that guides the involvement of the private sector in the business. To determine whether the private sector will offer any value, for instance, an extensive business case is developed that also includes a detailed financial model. A decision is taken at that moment on the suitability of working with the private sector partner.

The private sector’s is also not limited to ownership but involves other considerations such as capital contribution (for example, by customers through upfront payment or tariff adjustments), operations, and management.

Remarks: Reply: Approved/Not Approved/Comment

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

The triangular rail shuttle between the Transnet Port Terminals (TPT) of Ngqura (NCT), the Port of Port Elizabeth (PECT) and the TFR Deal Party container Terminal (PEG) started in June 2023 and continues to operate.

a) Progress made:

During June

The route between NCT and PECT (1480 TEUs) runs 15 trains that are made up of 50 wagons per train. The Reefer containers are all 40-foot containers which is equivalent to two x 20-foot containers. A single wagon carries one x 40-foot container and a total of 50 containers. The above scenario will remove 740 trucks from the road.

During September / October

The route between PECT and NCT based on 3 trains is equivalent to the removal of 150 trucks off the road.

b) The Inter-Terminal rail shuttle is an ongoing service that is based on customer demand. The service is not only restricted to the citrus season (reefer containers) but is a service offering throughout the year for general-purpose (GP) containers.

c) Stringent security measures have been instituted to ensure minimal security-related disruptions to the rail service. The Reefers are first inspected at the handover point at all Terminals by TFR Security Services. The Railway Police were called in as reinforcement when the service began operating in June 2023 to mitigate against the high-risk hotspot areas for criminal activity, which includes New Brighton.

 

Remarks: Reply: Approved / Not Approved

Jacy Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet:

a) An emergency procurement process was followed for the acquisition of disposable mouthpieces for alcohol breathalyzer straws.

b) The Executive Manager for Group Continuity and Disaster Management and the Executive Director for Safety were central to the procurement of the breathalyzer straws.

c) An internal disciplinary process was instituted in respect of the two employees central to the procurement of the breathalyzer straws. At the conclusion of this process, they were both dismissed. The matter was also reported by Transnet to the Directorate of Priority Crime Investigation (DPCI) on 5 October 2021 in terms of Section 34 of the Prevention and Combating of Corrupt Activities Act 12 of 2004. A referral has also been made to the National Prosecuting Authority. Transnet also referred the matter to the Special Investigating Unit (SIU) for further investigation in terms of Proclamation R23 of no 2020 published on 23 July 2020 in Government Gazette No. 43546. The SIU has launched an application in the Special Tribunal to review and set aside the contracts awarded to the 3 service providers. The two employees central to the procurement have been cited as respondents in this application.

Remarks: Reply: Approved / Not Approved

Melanchton Makobe P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

The smart meter installation programme is an Eskom Distribution wide programme which was implemented in all the provinces to ensure alignment to the Distribution key initiatives of growth, efficiency and servicing the customers better. It is not confined to Gauteng and Fourways only.

(1)(a) The total number of houses identified for the smart meter installation programme in Gauteng was in excess of 35 000, in Sandton, Midrand and Soweto.

(b) A total of 30 597 customers in Gauteng acceded to the installation of smart metersand in Fourways approximately 10 000 meters were installed as part of the smart meter programme. Furthermore, approximately 8 000 houses also acceded to the load limiting pilot that required the use of smart meters.

Load limiting seeks to manage the demand during periods when emergency is declared such as when the system is constrained (during load shedding Stages 1 to 4), while at the same time ensuring that customers experience a reduced impact during loadshedding (customers have enough power for lights and electronic appliances during load shedding).

(c) The total number of smart meters installed for the Gauteng smart metering project is 30 597. Of which approximately 10 000 were installed in Fourways.

(2)(a) The smart meters were installed by Landis+Gyr, which was the successful bidder following an open tender procurement process.

(b) The details entail the installation of meters, data concentrators (DC), and customer interface units (CIUs). The cost associated with the installation is approximately R96 million.

Remarks: Approved / Not Approved

Ms Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

1. Battery storage is used by Eskom to support the network during peak loading and ancillary services such as frequency regulation and voltage support.

However, gas is used as mid-merit or peak generation, depending on the prices. Gas can power the network on a continuous basis.

The costs of battery storage cannot be directly compared to those of gas, as battery storage has charging and discharge components. Charging costs and discharging costs differ.

Gas costs are only for electricity generation.

In addition, the use of gas would require new pipelines and gas distribution networks to Eskom substations. The country would have to invest in new gas pipeline networks, and these would need to be built underground and protected which would further increase costs.

2. Storage that would be currently required is about 70% of the installed solar photovoltaic (PV) and wind capacity to ensure power supply continuity equivalent to baseload generation. The storage capacity must accommodate load shedding cycles to be effective. The battery storage costs are in the peak generation range. Using current battery energy storage costs of R11bn for 200M/800MWh, an installed PV base of 5000MW would require 3500W/14000MWh a day at an estimated installation cost of over R192bn noting that this excludes operational costs.

 

Remarks: Approved / Not Approved

Ms Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. (a) State capture was characterized by intensive levels of political interference, with Eskom and Transnet emerging as focal points of this concerning phenomenon. These SOEs faced undue external influence, compromising their governance structures, decision-making processes, and overall operational integrity. Political interference led to the appointment of key executives and board members who were compromised, resulting in leadership that was not best suited to address the complex challenges the SOEs faced.

However, various interventions were made to ensure operational viability and sustainability of Eskom and Transnet.

The interventions to date include:

​1.1 Eskom

I have instructed the Board to expeditious address the following issues:

• 1.1.1  Management Structure / Skills
• Review and enhance leadership team to capacitate all subsidiaries for effective objective execution.
• Expedite filling critical vacancies.
• 1.1.2 Restructuring - Eskom Roadmap 2 and Implementation
  • Develop a revised Eskom Roadmap guiding the restructuring process.
  • Ensure the plan addresses external dependencies.
  • Capacitate the executive team with the right skills.

• 1.1.3 Finance
  • Develop a comprehensive allocation policy for assets and debts post-restructuring.
  • Continue cost-cutting exercises with defined targets discussed with the Department.
  • Capacitate the Treasury team to ensure compliance with debt relief conditions for loan-to-equity conversion.

• 1.1.4 Forensic Investigations
• Conduct robust forensic investigations to isolate irregularities.
  • Implement consequence management for those found in the wrong.
  • Test the internal control universe to ensure timely detection and prevention of irregularities.

1.2 Transnet

On 1 September 2023, I directed the Transnet Board to urgently address and report on its decisions and recommendations in respect of, inter alia the following:

• 1.1.1 Operational transformation: Develop or enhance a turnaround plan to radically transform the operational performance of each of the business areas, including the restructuring of the entity to deliver on its mandate more effectively and efficiently.
• 1.1.2 Root causes: Identify the root causes of the inability of management and staff to meet the performance targets and a plan to deal with the deficiencies.
• 1.1.3 Stringent / rigorous accountability Oversight: Transnet to develop, with the DPE and National Logistics Crisis Committee (NLCC), a new framework for transparency and accountability through detailed reporting on the successful execution of the turnaround strategy.
• 1.1.4 Digitisation of systems: Mechanisms to speed up the automation and digitisation of performance reporting systems to prevent deliberate and wrongful manipulation of data.
• 1.1.5 Rigorous system of controls: Implement urgently the controls identified by the Auditor General reports.
• 1.1.6 Private sector participation: Transnet is in the process of getting private sector involved in various capital projects. For example, a reputable international private sector partner has already been identified for the development and operation of a container terminal at the port of Durban.

2. There is no leadership vacuum at both SOEs as there is an adequate complement of the Board with Acting Group Chief Executive Officers and Acting Chief Financial Officers. Of importance is that in respect of Transnet the focus is on operational and financial performance that the Minister needs to address as per the statement dated 1 September 2023.

3. In relation to Eskom, it is noteworthy that the former Group Chief Executive Officer (GCEO) operational performance has deteriorated under his watch.

4. It is important to indicate that the recruitment process for the Group Chief Executive Officer (GCEO) is carried out by the Board in accordance with the provisions outlined in the Memorandum of Incorporation, which aligns with the standard procedures across the Department of Public Enterprises (DPE) portfolio. The Board will run the recruitment process including the advertisement, shortlisting and interviewing of candidates. The Board will then present to the shareholder three appointable candidates. The shareholder will then approve the appointment of a candidate.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

No!

Each SOE is on a challenging recovery path, and each has met with some success. The boards are working diligently to overcome the effects of State Capture and restore the entities to effective operations.

Eskom

Eskom is making remarkable strides toward energy stability and sustainability. Their Generation Recovery plan has already recovered 1,535 MW between April and September 2023, with a goal of achieving a 65% Energy Availability Factor (EAF) by March 2024. This progress is poised to reduce the intensity and frequency of load shedding while increasing grid capacity. Furthermore, Eskom has significantly improved Energy Availability in coal-fired stations and accelerated maintenance at the Kusile Power Station, bringing units online earlier than scheduled and reducing the impact of load shedding. Their partnership with independent power producers (IPPs), which will add 9,421 MW of renewable energy capacity, underscores their commitment to clean energy solutions. Eskom is also actively restructuring the company into three subsidiaries to promote efficiency, accountability, and the adoption of new technologies. The recent debt relief package from the government, along with efforts to strengthen the transmission grid and combat corruption, further solidifies Eskom's position on the path to a sustainable and reliable energy future for South Africa.

In addition to these advancements, Eskom has made significant progress in addressing financial challenges and enhancing its corporate structure. The debt relief package of R254 billion from the government and measures to write off municipal arrear debt demonstrate Eskom's commitment to financial sustainability. Their focus on strengthening the transmission grid, with a special emphasis on the first 1,000 km of power lines, underscores their readiness to accommodate power from independent producers. Importantly, Eskom's anti-corruption efforts have led to a number of arrests, the recovery of substantial assets, and the pursuit of criminal cases, affirming their resolve to protect the integrity of the company and public funds. These combined efforts paint a promising picture of Eskom's commitment to a more stable, sustainable, and accountable energy future, ultimately benefiting the people of South Africa.

Transnet

On 1 September 2023, I directed the Transnet Board to urgently address and report to the shareholder on its decisions and recommendations within the next few weeks in respect of, inter alia the following:

1. Operational transformation: Develop or enhance a turnaround plan to radically transform the operational performance of each of the business areas, including the restructuring of the entity to deliver on its mandate more effectively and efficiently.
2. Root causes: Identify the root causes of the inability of management and staff to meet the performance targets and a plan to deal with the deficiencies.
3. Stringent / rigorous accountability Oversight: Transnet to develop, with the DPE and National Logistics Crisis Committee (NLCC), a new framework for transparency and accountability through detailed reporting on the successful execution of the turnaround strategy.
4. Digitisation of systems: Mechanisms to speed up the automation and digitisation of performance reporting systems to prevent deliberate and wrongful manipulation of data.
5. Rigorous system of controls: Implement urgently the controls identified by the Auditor General reports.
6. Private sector participation: Transnet is in the process of getting private sector involved in various capital projects. For example, a reputable international private sector partner has already been identified for the development and operation of a container terminal at the port of Durban.

Alexkor

• Alexkor is solvent and does not have any interest-bearing debt. Alexkor’s financial position has limited financial risk as the largest liability will be settled by ring-fenced funds.

In January 2022, I appointed an interim board to restore governance amid years of instability. The appointment process for a permanent CEO and CFO is underway.

In 2019, we initiated a forensic investigation into allegations of maladministration and corruption. This led to significant findings, prompting President Cyril Ramaphosa to authorize the Special Investigating Unit (SIU) to delve into corruption and maladministration in Alexkor and joint venture diamond operations on December 10, 2021. We remain resolute in our commitment to transparency, justice, and ethical governance as we pave the way for a brighter future.

South African Airways

There have been notable strides in the SAA Strategic Equity Partner (SEP) transaction. The recent approval of the transaction by the Competition Tribunal offers the potential for a significant turnaround. It provides the opportunity for SAA to comprehensively address and overcome its longstanding financial difficulties, with the added benefit of mitigating the compounding effects of the COVID-19 crisis. By securing a strategic equity partner and fostering collaboration, SAA may embark on a path towards financial stability and long-term viability, marking a pivotal moment in its recovery journey. Currently, it has expanded its route network 11 destinations and increased a number of aircraft 9 with further expansion expected over the short and medium term. It also plans to commence international routes with the first flight to Brazil expected shortly.

SAFCOL

SAFCOL's unqualified audit and INFLOMA's clean audit underscore SAFCOL’s financial responsibility and transparency. With a notable R285 million profit, SAFCOL is not only stable but also positioned for growth, especially as it pursues projects like CHP to mitigate load shedding risks. SAFCOL’s initiatives further highlight its commitment to social responsibility. SAFCOL is a thriving, responsible organization, ready to embrace future opportunities and challenges.

Denel

In the past three years, Denel was faced with significant viability challenges. The malfeasance linked to State Capture and poor management decisions resulted in a steep decline in revenues and profitability since 2017/18, reversing a 7-year trend of good governance, growth, and profitability. This culminated into in a weak balance sheet, declining order book, poor operational performance, unpaid salaries and suppliers which resulted in an erosion of key defence industrial capabilities and loss of critical skills.

Government has made significant interventions to stabilize the SOC. In the past five financial years, the State has injected into Denel approximately R9 billion., including settling guaranteed debt which was keeping Denel in a debt trap due to high interest payments. The intervention has resulted in an appreciable improvement in the market sentiments (employees, clients, partners, financial institutions, and suppliers) regarding the clarity of Government’s strategic intent with respect to Denel.

The focus in the near term, the Department is inducing Denel to optimise on short term revenue opportunities to ensure that the SOC can fund its operational requirements and deliver on existing contracts.

Despite the challenges of the prior years, the interest by both local and international entities as well as governments to collaborate with Denel on various defence technologies has not remains high.

 

Remarks: Reply: Approved / Not Approved

Melanchton Makobe P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Transnet has a full complement of Board Members, save for the vacancy resulting from the recent resignation of Mr. P Molefe for personal reasons.

Remarks: Reply: Approved / Not approved

Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from SAA

(1)(a) The record shows that during Coleman Andrew’s tenure as CEO, the Board on 14 April 2000, considered the sale and leaseback of B737-200 aircraft and approved:

1. The sale of 13 B737-200 ADV aircraft (11 passenger and 2 freighters) to SafAir, or a party nominated by SafAir acceptable to SAA.
2. That SAA enters a 5 and half year leaseback in respect of each aircraft.

(1)(b) The total amount as per board resolution was.

1. Each aircraft sold for USD5.5 million.
2. Lease costs were R686 425 per aircraft per month, subject to changes in interest rates and foreign exchange rates.

2. With regards to the assessment of the state of the aircraft, SAA does not have records for answers to this question. Whilst the airline has the resolutions relating to that period (some 20 years ago) the requirement for record retention is limited to 7 years.

 

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Both the government and Transnet are promoting private sector participation and the introduction of private capital in various projects.

According to the information received from Transnet

Regarding recent statements by the International Monetary Fund (IMF), Transnet acknowledges that it has encountered several challenges that have led to a decline in the operational efficacy of the railways and adversely impacted economic growth. The organisation is implementing targeted interventions aimed at resolving the challenges, and as part of this process, aims to improve collaboration with the private sector. Transnet believes that private sector partnerships (PSPs) are critical to our future and will provide the organisation with access to the additional skills, human resources, and capital required to reposition it. Furthermore, the active engagement and participation of various Transnet stakeholders across the work streams of the multi-stakeholder National Logistics Crisis Committee (NLCC), which includes the private sector and industry experts, exemplifies the nascent improvement in collaboration.

Going forward, Transnet' strategy (Reinvention for Growth) identifies private sector collaboration as one of its key levers for enhancing immediate performance and positioning the organisation for medium-term growth. As an essential component of the strategy, the private sector partners will play a crucial role in enhancing Transnet's capacity to execute quality services, develop and/or expand infrastructure, and unlock growth in industries such as mining, manufacturing and agriculture that contribute to job creation and GDP growth.

The rail reform process and the introduction of private train operating companies (TOC) on the freight network are essential components of the improved collaboration between Transnet and the private sector. This liberalisation process will enable the private sector to invest in rolling stock and establish freight railroads, which will have a significant impact on the market structure as TFR will no longer be the sole provider of freight rail services and will face competition from the private sector. In April 2024, the process of integrating private TOC will be formally initiated by inviting interested parties to acquire available slot capacity on the network. In addition, the reform will result in the establishment of a separate rail infrastructure manager, Transnet Rail Infrastructure Manager (TRIM), to oversee the network's management and ensure the equitable allocation of capacity to prospective TOCs. The establishment of TRIM is progressing well, and there is an expectation that the new OD will be established by the end of October 2023.

While most PSPs are long-term initiatives with benefits expected in the next 3 to 5 years, significant progress has been made in the development of these initiatives.

The recent announcement of a partnership between Transnet Port Terminals (TPT) and International Container Terminal Services (ICTSI) demonstrates the organisation's dedication to implementing this crucial lever. Several other initiatives are already in the partner selection process (request for qualification or request for proposal stages), and these include the Container Corridor Operating Lease; the Transnet Engineering Rolling Stock Leasing Company (TE Lease Co); the Ngqura Manganese Export Terminal (NMET) technical solution for the appointment of an EPC turnkey service provider; and Boegoebaai Port and Rail Development.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

Ms Derby’s comments, which were in response to a question from the floor, related to the huge growth in trucking in SA as result of the poor performance of rail and boom in global coal demand, have been taken out of context. The issue raised was what would happen to the trucking industry when rail returned to full operability. (Please refer to the statement issued by the Chairperson of the Board of Directors in this regard, as attached.)

Ms. Portia Derby has since resigned.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from Eskom

1. The emergency transition that led to the appointment of the certain company in July 2022 was allocated a budget of R500 million. The total actual spend was, however, R304 669 040.00 (including VAT).
2. The certain person was placed on precautionary suspension pending finalisation of Eskom’s internal investigation into the transaction. The scope of the investigation includes all the individuals who took part in the transaction. The investigation is close to being finalised.

.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

1. As at end September 2023, Eskom had over 6,6 million meters that required recoding with a new Key Revision Number (KRN). A strategy was developed with the following deployment components:

• The do-it-yourself (DIY) approach which ensures that customers are (i) issued with a pair of KRN key change tokens at the time when the customer purchases their normal top-up electricity or (ii) collects free basic electricity via any of the Eskom-approved vending channels and outlets.
• Customer support through a comprehensive communication campaign using regional radio live reads, community print and radio notices, radio interviews, newspaper and radio articles, leaflets, posters, Facebook, X posts, YouTube videos, community forums, customer communiques and the Eskom chatbot.

2. The 5 800 meters that were rolled out were part of a pilot programme for Eskom to gather information and insights on how to best implement the project. Following the pilot, Eskom developed, the automatic update process and prepared for project implementation. As a result, Eskom recently completed the first phase of deployment which ran from August 2023 to September 2023 to clear all the initial teething issues. Based on the results of this roll-out phase, Eskom is confident that the project will be successfully implemented. Key change tokens issued during the first phase are 671 653, and this is additional to the 5 800 that were issued during the pilot phase.

Eskom has developed pamphlets on how to recode (step-by-step- guides) the meter in all official languages and also posted step-by-step guides on social media platforms. Furthermore, Eskom personnel are deployed in areas where the roll-out is taking place to assist with queries, and a dedicated queue has been created to direct customers with KRN-related queries at the contact centre. The number to be used is 0860 037 566. Frequently asked questions have been loaded on the Eskom Alfred Chatbot. In addition, Eskom has ensured that additional personnel are trained to assist customers with queries.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) Takatso is currently managing the process. Unfortunately, the Department does not have access to information regarding the negotiations with the minority shareholder. However, once the process is completed, Harith, as the majority partner of Takatso, will inform the Department accordingly. 

Furthermore, if the Competition Tribunal approves the divestiture, the public will be informed of the outcome.

b) The stake by the minority shareholder is valued at 10.2% as that was the agreed shareholding by the parties in the Takatso consortium. The investment in the national airline will be made at the close of the strategic equity partner transaction.

Remarks: Reply: Approved / Not Approved

Jacy Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

The Cost Containment measures issued by National Treasury on August 31, 2023, to assist National Departments, Public Entities, and Provinces do not apply to Transnet. Nevertheless, Transnet is aware of fiscal challenges and is implementing prudent measures in this regard. There is no moratorium on the recruitment of critical skills in Transnet.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

Yes,

According to the information received from Transnet

Question	Response
a) How NLCC assisted Transnet in addressing operational challenges.	Transnet Operating Divisions (TFR, TNPA, and TPT) together with Business 4 South Africa (B4SA) technical experts, the private sector, and customers, have formulated Corridor Recovery Teams (CRT) to address Transnet operational challenges. The operational teams are progressing in implementing governance structures that will assist in the execution of the NLCC’s plans. This has assisted in the development of the Transnet turnaround strategy, which has identified deliverables for each corridor (Coal, Chrome and Magnetite, Iron Ore, and Manganese).   In addition to the rail and ports operations, work-stream 1, the following supporting work-streams have been established so far: Work-stream 5, which focuses on addressing challenges in the procurement system, including local content requirements as well as legislative changes/exemptions to improve efficiency in the freight and logistics procurement process. Work-stream 7, which deals with securing railway infrastructure, including addressing cable theft and vandalism on the container corridor, the coal line, the ore line, and pipelines. Work-stream 8, which focuses on communicating the NLCC/Transnet Strategy to the public in a coherent and effective manner, including regular progress updates. Work-streams 4 & 6 are on the structural rail reform of the freight and logistics system and financing and are yet to have their inaugural meetings. The workstreams are at an early stage and it is anticipated that significant results in operations will be achieved in 2024.
b) How NLCC has addressed the concerns of exporters	The Corridor Recovery Teams will cover both importers and exporters, and their concerns will be addressed in the Transnet turnaround strategy.

This is still work in progress and further detailed reports will be made public in the next few months.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

There are some countries and regions where the management of the railways and logistics interfaces such as ports falls under one authority, this integrated approach can help improve the efficiency of transportation and logistics. One notable example is China, where state-owned companies like China Railway Corporation (CRC) oversee both railway and port operations. Other countries have varying degrees of integration between rail and port management, depending on their specific transportation and economic needs. These varying degrees of integration could be classified into several models, each with different levels of coordination and shared management, ranging from Full Integration models to Public-Private Partnerships models, or models based on geographical proximity (ports and rail situated closely) and models based on the country-specific regulatory frameworks. Another model is that of independent Operations, i.e. where railways, ports and pipelines remain entirely independent of each other with minimal coordination. While the latter may not optimize transportation efficiency, it could be the result of historical structures, regulatory hurdles, or a lack of incentives for integration.

Examples:

1. Full Integration: China Railway Corporation (CRC) – high level of integration.
2. PPP: United Kingdom (e.g., London Gateway Port involves a partnership between DP World and the UK government).
3. Geographic Proximity: Netherlands
4. Regulatory Framework: Singapore
5. Independent Operations: Russia, has a vast geography (historical and logistical reasons for separation).

In terms of Rail

The separation of the infrastructure manager is currently taking place. This will ensure that equal treatment and access are provided to all operators. The objective of the rail reform white paper is to ensure that the infrastructure manager has no bias towards TFR. Transnet is in the process of setting up an Infrastructure Manager outside Transnet freight Rail which is in line with the rail reform process. Private sector operators will therefore be guaranteed unbiased access to the network.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The decommissioning of power stations is informed by the age of power stations which have a lifespan of 50 years. In addition, the IRP outlines the decommissioning dates of power stations. The repurposing of the power stations was driven by the fact that, power stations to be decommissioned can be repurposed to integrate renewable energy given that infrastructure is already in place. However, the energy crisis necessitated the review of the decommissioning of the power plants. The review is to enable a just energy transition wherein the power plants will be decommissioned and repurposed once new capacity has been added to the grid. The delays in the decommissioning of the power plants is part of the measures to minimise the impact of the power crisis.

Eskom is expanding the grid to enable connection of renewable capacity that has been approved under respective bid windows in the Renewable Energy Independent Power Producer Programme (REIPPP).

Since the outbreak of various conflicts in the North, many countries have indicated that (as SA has) their commitment to the NDC stands. However, each country’s domestic circumstances will dictate the path to decarbonization. This remains SA’s position.

The issue of funding for developing countries transitions, access to renewable technology, and the concrete plans to ensure the transition is/must still require further efforts.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

(1)(i) The Department obtained Cabinet approval to publish the National State Enterprises Bill in the Government Gazette for public comments. The Bill was published for public comment on 15 September 2023 until 14 October 2023. The Bill incorporates Presidential SOE Council (PSEC)'s recommendation that South Africa adopts a centralized shareholder model to improve the management and oversight of South African State-Owned Enterprises (SOEs). This includes establishing a Holding Company (HoldCo) for strategic SOEs.

HoldCo will be established through the National State Enterprises Bill.

(ii) PSEC has reviewed and assessed 37 entities. Furthermore, the business and turnaround plans for 21 entities and 8 Water Boards were reviewed. PSEC has not yet finalised its work.

(b) PSEC is finalizing its report on recommendations of which SOEs to retain, consolidate and/or dispose.

2. PSEC has developed an evidence-based criteria for which SOEs to retain, consolidate and/or dispose.

3. The criteria will be made available when PSEC has finalised its work on which SOEs to retain, consolidate and/or dispose.

4. PSEC will present its report to the President as soon as it is completed. The President will determine when and how the report will be made public.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from Eskom:

1. Eskom cannot disclose the electricity pricing arrangements, as these are customer confidential and commercially sensitive information. The electricity pricing arrangements for the South32 aluminium smelter were approved by the National Energy Regulator of South Africa (NERSA). A new tariff structure was approved by NERSA in 2021 and complies with all the provisions of the Interim Long-Term Negotiated Pricing Arrangement Framework issued by the Department of Mineral Resources and Energy (DMRE).

A globally competitive tariff that considered the sustainability of the smelter and Eskom’s cost of supply was structured, as it was recognised that closure would have a negative impact on the South African economy and continue the trend of deindustrialisation and unemployment with which the country continues to grapple with. The tariff approximates the higher end of energy prices that aluminium smelters are paying and covers all applicable variable costs, with an additional contribution made to fixed costs.

In the absence of the smelter, contributions made by it to fixed costs would have to be borne by other consumers, resulting in an increase in other consumer prices. Several of the technical and financial benefits result from the large smelter baseload consumption and the interruptibility made available to the national System Operator that reduces the severity of load shedding.

 

Remarks: Approved / Not Approved/Comments

Adv. Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The progress in the transaction between Takatso Consortium and SAA is as follows:

a) On 25 July 2023, the Competition Tribunal approved the 51% disposal of SAA Government Shares to Takatso with conditions of minority shareholders divesting from Takatso Aviation and SAA not to retrench within 2 years of approval.

B) The subsequent steps are;

• 1. Aviation Regulatory Process: Apply to relevant aviation regulators for licensing approvals;

1. Repeal of the SAA Act, 2007: The process has started. The Department is in the process of seeking Cabinet approval for introducing bill in Parliament;
2. Fulfilment or Waiver of Conditions Precedent: Prior to the transfer of shares, ensure all conditions precedent are either fulfilled or appropriately waived to maintain the legality and integrity of the transaction;
3. Valuation of SAA: New valuation of SAA is being undertaken considering the lapse of time since the last valuation;
4. Revision of Transaction Structure: Considering the above valuation exercise, Parties are reviewing the structure of the transaction;
5. Transfer of Shares: Execute the legal transfer of shares from current shareholder to new strategic equity partner with all necessary documentation;
6. Establishment of New Governance Structures: Set up new governance structures for effective management and decision-making under the Strategic Equity Partner (SEP). This may involve forming a new board of directors and executive leadership; and
7. Implementation of Agreed-upon Strategies: Collaborate to develop and implement strategies for the national carrier's growth and development, focusing on areas such as operational efficiency, market expansion, and customer service improvements.

2. The allocation of funds to SAA, similar to other government funding needs has to go through a budgeting process based on Government priorities.

3. The funds of R85 million that was not transferred to Mango, are still with SAA until the Mango business rescue has been concluded. It is not being utilized by SAA for expansion purposes.

4. The audited annual financial statements for SAA for 2018/19 to 2021/22 financial years are currently going through the Board approval processes. They will be tabled in Parliament soon after the Annual General Meeting, scheduled in November 2023.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

13 On 13 September 2023, Cabinet approved the publication of the National State Enterprises Bill in the Government Gazette for public comments. The Bill was published for public comments on 15 September 2023.

In response to the valuable feedback received from public comments, the Department is diligently engaged in the refinement process for the National State Enterprises Bill. The ongoing refinement efforts are specifically aimed at integrating the insightful public comments into the fabric of the legislation. Central to this endeavour is the Department's commitment to crafting a revised Bill that not only addresses the concerns raised during the public commentary period but also establishes a comprehensive and inclusive framework for the appointment of boards within State-Owned Enterprises (SOEs).

The envisaged revisions seek to go beyond a mere legal framework. The Department aspires to codify a board appointment process that embodies the principles of transparency, equity, and fairness. By emphasizing these core values, the Department aims to instil a robust and accountable mechanism that stands as a testament to the commitment to good governance and stakeholder inclusivity.

(2) The envisaged processes for appointing board members to SOEs are expected to be comprehensive, designed to uphold transparency, fairness, and meritocracy. This will necessitate a thorough evaluation of candidates based on qualifications, experience, and alignment with the strategic objectives of the relevant SOEs. The government remains steadfast in its commitment to ensuring that appointments adhere to established legislative frameworks, including the Public Finance Management Act 1 of 1999 (PFMA), Companies Act 71 of 2008, and other pertinent statutes governing SOEs.

The government maintains vigilance in refining and improving existing processes to address challenges and enhance efficiency. Continuous efforts are made to draw lessons from experiences, both domestic and international, adapting best practices in governance.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

1. Eskom has been rolling out the residential load management pilot in Gauteng, in areas such as Beverley, Lonehill, Craigavon, Magaliessig, Dainfern Valley, Witkopen, Fourways, and Douglasdale. The load limiting pilot is implemented in areas where customers already have smart meters. Therefore, there are no additional costs associated with the current pilot in the areas mentioned above, as Eskom had already installed smart meters in those areas. Eskom is leveraging functionalities embedded in installed meters for the benefit of both customers and Eskom. Thus, load limiting can be rolled out in all areas with smart meters at no additional cost.

2. Eskom is not aware of any concerns raised by users that are part of the load limiting pilot that Eskom is trying to control their electricity usage remotely. On the contrary, the participants are receiving the programme very well.

Eskom would like to highlight that the purpose of load limiting is not to remotely control the customer’s electricity usage. Load limiting is intended to provide customers with the benefit of using some appliances such as lights, refrigerators, televisions, and Wi-Fi routers, as long as the load remains below 10 Amps during load shedding Stages 1 to 4.

An hour before the start of load shedding, the system prompts customers to reduce their

consumption from 60/80 Amps to 10 Amps by sending a message to the customer interface unit (CIU) or cell phone. Customers are provided with four opportunities to reduce their consumption, and thereafter, if the load has not been reduced, the meter automatically switches off the electricity for 30 minutes.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The Strategic Equity Partner (SEP) process started during 2020/21 financial year, the period when the impact of COVID-19 had a debilitating effect on the aviation sector. As a result, some parties that had expressed interest could not provide capital required to operate SAA as required. The Government required an SEP that could provide all the finances for SAA following the exit from Business Rescue.

The transaction advisor assessed and evaluated the EOI’s of potential SEPs. However, there were no suitable SEP that could be identified as none of the potential SEPs had an offer that could be accepted by the Department. The entities were not showing evidence of immediate funding to restart SAA’s operations. RMB and the Department in January 2021 agreed that the SEP transaction was unlikely to be successful, the mandate of RMB ended and the Shareholder Department took over the process.

A proposal by Harith General Partners, which had been engaged in the RMB process, and Global Aviation which later became the Takatso Consortium (Takatso) was made to the Department together with other proposals from other interested parties. After evaluating the proposals, Takatso was then appointed as the preferred SEP. Takatso had the requisite combination of financial and operational capabilities required for the successful relaunch of SAA. Their composition would advance the transformation agenda. The preferred SEP was thereafter approved by Cabinet. This offer satisfied the Department’s requirements including the ability to provide the funding needed to restart operations.

2. Takatso has agreed to meet SAA’s working capital requirements. An initial funding of R3 billion is projected for SAA’s growth path leading to stability. All financial obligations will be borne by Takatso, absolving the government of further funding support. The fulfillment of this financial commitment by Takatso is critical as without it, the transaction cannot be concluded.

3. The initial valuation of SAA was undertaken in 2020, a time when the company was not operational due to the business rescue process and the effects of the COVID-19 pandemic, which inevitably impacted its assessed value. A subsequent valuation was carried out in October 2021, just as SAA was resuming its operations and the overall aviation industry outlook was still uncertain.

Given that Takatso was selected as the preferred partner in June 2021 and more than two years have elapsed since, another valuation of SAA is prudent to ensure alignment with prevailing market conditions, for an updated and equitable value for the state. In light of this, the Department of Public Enterprises has initiated a new valuation to accurately ascertain the company's present status and prospective worth in the existing market environment.

4. The price that Takatso will pay for the 51% stake in SAA will be determined through negotiations, taking into account the updated valuation of the 51% share. This ensures that the settled amount accurately reflects the current worth of the stake, providing a fair transaction for both parties involved.

5.  Takatso Consortium has agreed to engage in negotiations aimed at finalizing a transaction amount, contingent upon and reflective of the revised valuation. This ensures that the concluding agreement is based on the prevailing market conditions.

The public and Parliament will be informed of all details once all processes have been concluded. It is also quite evident that current dominant entities and other proxies would not like any serious competition which could cause a reduction in fares to customers.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

Transnet debt increased by R76.4 bn from R58.1 bn in 2012 to R134.5 bn in 2016. The current debt is approximately R130 bn. The increase in debt relates to capital investment on infrastructure, locomotives or rolling stock procurement.

A portion of the debt was raised to fund the procurement of 1064 locomotives, which has been subjected to the state capture enquiry.

The operational performance has constrained the company’s ability to reduce its debt levels. The revenue generated, informed by tariffs charged and volumes moved over the years has not been sufficient to repay a significant portion of the debt raised in the years 2012 to 2016.

Currently, the board and financial experts are engaged in a process to develop a plan in this regard. This includes meeting with the National Treasury. Furthermore, in terms of the statement I made on 1 September 2023 (copy attached), the Board and management must also engage in a process of cost reduction.

 

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The white paper specifically calls for the separation of the infrastructure manager to be outside of Transnet Freight Rail to ensure that equal treatment and access are provided to all operators. The objective of the rail reform white paper is to ensure that the infrastructure manager has no bias towards TFR operations. Transnet is in the process of setting up an Infrastructure Manager that is an entity outside Transnet freight Rail which is in line with the rail reform process. Private sector operators will therefore be guaranteed unbiased access to the network. This is in line with the DoT and the Interim Rail Economic Regulator.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

This question should be referred to the Minister of Forestry, Fisheries and the Environment.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

The process to reconfigure Government is underway. DPE participates in this process which is coordinated by Presidency. The steps to start the handover / reconfiguring of Government will be informed by this process.

 

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Recently released data by Eskom suggests that from March 2022 until the first quarter of 2023, the amount of electricity generated by Small-scale Embedded Generation (SSEGs), in the form of solar panels, has risen 350%. This increase in reliance on renewable energy is a welcome development for the environment, but poses a significant challenge to municipalities, which derive the majority of their income from electricity sales. Figures from Buffalo City Metropolitan Municipality reveals that SSEGs have cost the municipality R350 million in electricity sales.

The City of Cape Town is currently at the forefront of exploiting this situation for maximum public benefit, by implementing feed-in tariffs, which pays private owners of SSEGs for electricity redirected into the grid, which can then be sold to other consumers at a profit. Energy experts suggest that feed-in tariffs, along with the installation of smart-meters, are the most feasible strategy to overcome the potential losses to municipal income. Much of the Energy Action Plan’s recent (although questionable) successes hinge upon a decline in electricity demand. Reliance on SSEGs significantly drive down demand, and therefore also account for progress made in the fight against nation-wide load shedding.

(a)

The uptake for embedded generators including small-scale systems like rooftop photo voltaic (PV) systems, has been driven largely by customers seeking alternative energy sources due to loadshedding, followed by those wanting to buffer against the upward annual electricity tariff trends, and those that are pursuing greener options aligned with climate change objectives.

The current year’s uptake has been further accelerated by incentive programmes like the SARS tax rebates, attractive distributor feed-in-tariffs as is the case with the City of Cape Town, and the National Treasury energy bounce-back loan guarantee scheme making funding more accessible.

The uptake of small scale embedded generators (SSEGs) has resulted in the displacement of traditional grid-supplied energy volumes. The Eskom Transmission System Operator has established models that estimate the installed capacity of PV on the national grid (i.e. include the SSEGs but exclude government independent power producer programmes) to be 4 841 MW at the end of August 2023 which is estimated to be 2 500 MW more than the previous 12 months window. This translates into an erosion of 2.3% (4.5TWh) of the sales base and 1% (R3.3bn) erosion in the margins (i.e. retail revenue less wholesale purchases) in the window period. The uptake is on an upward trajectory and the Gauteng Province is the largest adopter of SSEGs in the country.

(b)

Eskom Distribution pursues an SSEG framework that is attractive to customers and will ensure network safety, recovery of network costs through unbundled tariffs, retention of customers with new grid services (i.e., net-billing, wheeling and banking) and will offer the Standard Offer Programme which is a form of Feed-In-Tariff that seeks to procure customers’ electricity generation in a competitive manner.

Customers with SSEG installations realise a reduction of about 39% on their overall electricity bill, which translates into a 21% impact on the Eskom margin (i.e. retail revenue less wholesale purchases). This impact on margins is projected to improve from a 21% decline to an 18% decline on average through grid services revenue generated via administration charges (i.e. use of system, offsetting and banking) and ancillary charges.

As the penetration of SSEGs increase, it will necessitate a more dynamic Distribution System Operator (DSO) capabilities to manage supply and demand in real-time through the trading of flexibility energy services (FES) and virtual power plants (VPP).

While there are mechanisms to contain revenue and margin decline due to lost sales and volumes resulting from SSEGs, there are plans to enable and harness the DSO and trading capabilities to offset these revenue losses into the evolving energy future.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Department of Public Enterprises

(a)

(i) (aa) The cost for Annual Report 2020-21 F/Y was R62 504.80. This amount was for design, layout, editing, proofreading and printing of 100 copies as well as 2 USB format.

(b) Fineart Printers

(c) 100 printed copies

(bb) The cost for Annual Report 2021-22 F/Y was R 69 080.00. This amount was for design, layout, editing, proofreading and printing of 100 copies as well as 2 USB format.

(b) PulseMag

(c) 100 printed copies

(cc) The cost for Annual Report F/Y 2022-23 F/Y is an estimate at +R70 000. 00. As the number of pages and print run has not yet been finalized.

(b) Pulsemag

(c) 100 printed copies

According to Information Received from SOCs

ALEXKOR SOC LIMITED:

(a)(ii)(aa) 2021-22: The integrated report (IR) was printed in-house for AGM attendees only.

(bb) 2021-22: The external audit was delayed due to the decision to request the AGSA to opt-in. The audit opinion for this reporting period was presented to the Board on 31 August 2023 and the IR will be printed in-house for AGM attendees before the end of September 2023.

(cc) 2022-23: An extension was granted for the submission of the AFS and IR for external audit to 31 August 2023. The IR will be printed for AGM attendees upon completion of the external audit.

(b)(aa) 2020-21: Nexus Sustainability (Pty) Ltd provided editing services to Alexkor SOC for R81 909.00 which was not inclusive of printing.

(bb) 2021-22: The IR will be printed in-house.

(cc) 2022-23: The IR will be printed in-house.

(c)(aa) 2020-21: 10 copies were printed.

(bb) 2021-22: Not yet printed.

(cc) 2022-23: Not yet printed.

DENEL SOC LIMITED:

(a)

(ii) Kindly note that the finalisation of Denel SOC Ltd Annual Reports has been delayed due to liquidity constraints. No Integrated Annual Reports for the said financial periods have been finalised and printed yet.

(b) The supply chain process to appoint a service provider is still underway.

(c) No Integrated Annual Reports for the said financial periods have been finalised and printed yet.

ESKOM SOC LIMITED:

a) (ii) Eskom has incurred the following costs for printed copies of its annual reports for the financial years shown below:

 

Annual reports for the year ended	31 March 2021 Actual (aa)	31 March 2022 Actual (bb)	31 March 2023 Budgeted (cc)
Integrated Report	R91 517.64	R96 554.61	R107 070.30
Annual Financial Statements	R73 892.94	R91 672.39	R78 602.40
Sustainability Report	R17 966.67	R19 142.44	R23 054.40
Total cost (excluding VAT)	R183 377.25	R207 369.44	R208 727.10

Note: In each case, the annual reports are printed and published in the subsequent financial year (i.e., annual reports for the year ended 31 March 2022 were printed and published in the 2023 financial year).

Eskom has not yet published its annual reports for the year ended 31 March 2023 and therefore has not incurred any related printing costs. The budgeted amount has been shown instead.

b) The supplier contracted for design, typesetting, proofreading, and printing of the annual reports for the years ended 31 March 2021 and 31 March 2022 was HKLM Hlapa JV (Pty) Ltd. The printing services were subcontracted to Law Printing (Pty) Ltd (Lawprint).

The reports for the year ended 31 March 2023 will be produced by Ince (Pty) Ltd.

c) The total number of copies printed for the annual reports are as follows:

Annual reports for the year ended	31 March 2021 Actual	31 March 2022 Actual	31 March 2023 Budgeted
Integrated Report	205	205	200
Annual Financial Statements	210	210	200
Sustainability Report	55	55	50
Total number of copies	470	470	450

SAFCOL SOC LIMITED:

a) The total amount by entity

	(aa) 2020-21	(bb) 2021-22	(cc) 2022-23
(i) N/A
(ii) SAFCOL	R46 806,88	R51 134,29	R54 713,69 (estimate)

The service provider was appointed for a period of three years; the total contract value is R1 457 775,82. The Financial year 2022-23 amount is an estimate because page numbers are not finalised nor has the print run been confirmed but it’s included based on last year's amount. The integrated report is being prepared for finalisation soon.

b) Suppliers per financial year

2020 -21	2021-2022	2022-23
SILVAPOD (PTY) LTD	SILVAPOD (PTY) LTD	SILVAPOD (PTY) LTD

c) Total number of copies of the report printed per financial year

2020-21	2021-22	2022-23
200	200	200

SOUTH AFRICAN AIRWAYS SOC LIMITED

For the period 2020 to date, South African Airways (SAA) are still having its final statements audited, as such the airline did not print copies, nor procured the services of a printing company for the printing of its integrated annual reports.

TRANSNET SOC LIMITED

The table below indicates the amounts paid by Transnet for the printed copies of the integrated annual reports and the number of copies printed in each of the financial years under question.

Year	Service Provider (b)	Number of copies (c)	Amount (a)
(i)and(ii)
(aa) 2020-21	Magnific	490	R225,693
(bb) 2021-22	Magna Carter Corporate Advisory Services	490	R295,693
(cc) 2022-23	Ince	260	R169,636

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

1. (a)

The Karpowership projects are three of 11 preferred bidders selected under the Risk Mitigation IPP Programme (RMIPPP), which have applied for and been provided Budget Quotations in line with the procurement process and the associated grid application process. There is therefore no prioritisation of these projects over others.

1 (b)

Please see answer 2 below.

2. (a) and (b)

It is acknowledged that the Risk Mitigation IPP Programme has faced delays due to the changes in global economic conditions which have impacted these projects’ ability to reach commercial close. As a result, the Department of Mineral Resources and Energy (DMRE) as procurer, has communicated a long stop date for the RMIPPP of 31 December 2023, by which time the projects under this programme will have to achieve legal close. Accordingly, the Budget Quotations issued to all the remaining preferred bidders under the Risk Mitigation IPP Programme have been extended to 31 December 2023, to enable these projects to achieve legal close.

3 (a)

It is to be noted that Eskom has not concluded on the issue of reservation of capacity, thus there is no policy that defines reservation of capacity. However, in terms of section 22(2) of the Electricity Regulatory Authority (ERA), the licence holder is permitted, with the concurrence of NERSA, to discriminate for objectively justifiable and identifiable reasons. The purpose of the reservation of capacity, to the extent that it is approved by the relevant stakeholders including the Regulator, will be to secure an orderly allocation of access to the grid.

The context is that currently there is saturation of the grid by private parties. Often, private parties request access to the grid without shovel-ready projects and this prejudices those projects that can demonstrate readiness, including the government section 34 programme, which ought to go through, among others, regulatory and other approvals (e.g., PFMA), whereas private parties are not subjected to these onerous processes.

The formal IPP programmes are initiated following the section 34 determinations issued by the Minister of Mineral Resources and Energy in terms of the Electricity Regulation Act and concurred to by NERSA, which are administrative actions. The preferred bidders to these programmes therefore apply for and are provided with Budget Quotations. Any extensions to the Budget Quotation validity for the section 34 IPP preferred bidder projects are taken in line with a request from the preferred bidder and having due consideration of the time required for the attainment of certain approvals (required by either the Procurer or the Buyer) and the associated legal and financial commercial close dates as communicated by the Department of Mineral Resources and Energy.

3 (b)

Please see the response under Question 2.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from TRANSNET

Background:

Transnet prefers retaining the container corridor and to sell slots to third party operators whilst operating some slots but in the absence of immediate financial support for the maintenance of the infrastructure, both the current and the backlog, entering into a 20-year operating lease with a private company is the best option available to keep this important corridor open. Transnet approached the market for a partner to enter into an operating lease for 20 years in order to invest in and grow freight on the corridor that is the backbone of the country’s manufacturing sector. Careful consideration was given to the profile of the potential private partner for the planned Container Corridor Operating Lease. The ideal partner must have an established presence in the supply chain; the ability to leverage Transnet and other rail terminals in rail-based logistics solutions; have access to inexpensive capital and the ability to introduce more efficient procurement.

The Container Corridor is 100% electrified. The challenges with the electrified sections of the rail network are two-fold, namely energy insecurity and the increasing (high) levels of copper cable theft. Transnet has invested and will continue to invest in back-up power generation in areas of its business most affected, within its financial means.

As indicated during the SONA 2023 address, Transnet must implement the following actions to comply with the approved National Rail Policy:

Introduction of an Infrastructure Manager, independent of the Train Operating Companies by October 2023 is a prerequisite to allow network access for private train operating companies by April 2024, and

Set up the necessary structures and processes to comply with impending regulation of the Infrastructure Management function as set out in the Economic Regulation of Transport Bill.

In accordance with the terms of the Operating Lease agreement that Transnet will enter into with the private sector partner, it will allow Transnet to ensure operating and efficiency standards are maintained with requisite penalties for non-performance. The Infrastructure Manager will be responsible for ensuring compliance with the conditions of the lease.

Notwithstanding the above, the Board of Transnet will review the appropriate responses to the challenges of the container corridor.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

According to the information received from Eskom

1. On 27 July 2023, Ditsobotla Local Municipality (the Municipality) and other Eskom customers were affected by a loss of supply due to a pylon that fell onto the 88kV powerline between Watershed Transmission substation to the Lichtenburg Distribution substation.

2. As the fallen structure was being repaired, Eskom observed oil leakages on Transformer 2 at Lichtenburg substation. Upon investigation it was discovered that the transformer was damaged in order to steal copper. As a result, the transformer required replacement.

3. Supply was restored to the substation and surrounding areas via Transformer 1. However, during this period only 10 MVA out of the 17 MVA that is required for peak capacity was available to the municipality to supply its customers.

4. A new replacement transformer was identified in Gauteng, with an estimated cost of R6.9 million inclusive of the transport, installation and commissioning.

5. Transformer 2 was installed but not energised, as the Municipality had not paid its current account in full since April 2022. By way of background, a court order in 2017 ruled for eight (8) applicants who are customers of the Municipality, to pay their electricity bills directly to Eskom. These eight consumers are embedded in the Municipality’s electricity network and Eskom relies on the Municipality, as the co-respondent in terms of the court order, for the availability of supply and billing for electricity.

6. Eskom therefore requested that the Municipality pays for the cost of replacing the transformer, their current account, and three months' accounts in advance before the transformer would be energised.

7. Whilst negotiations regarding payment arrangements were underway, it was discovered that Transformer 1 at Lichtenberg substation was experiencing oil leaks.

8. A decision was taken by Eskom to switch on Transformer 2 and remove Transformer 1 for repairs.

9. Engagements with various stakeholders were held and following the repair and commissioning of Transformer 1, the supply to the Municipality was restored.

10. Eskom confirmed that discussions are continuing with the Municipality, the North-West Province, organised business and other stakeholders to find a sustainable solution for electricity supply to the businesses and residents of the Municipality.

11. There is no evidence of “alleged unconstitutional practices” nor “unethical business practices”.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

ESKOM REPLY:

In January 2022, Eskom’s Forensic and Anti-Corruption Department received a complaint via email from an anonymous whistle-blower, which highlighted concerns regarding a procurement transaction for Electrostatic Precipitators (ESP) at Tutuka Power Station.

A detailed preliminary investigation was conducted, and the preliminary findings revealed that the matter warrants a full investigation. The matter is currently outsourced to an external service provider, and it is envisaged that the investigation will be completed by the end of November 2023. Eskom will share the findings and recommendations of the investigation with the DPE. If the investigation uncovers fruitless and wasteful expenditure, Eskom will initiate proceedings to recover losses. Eskom will also further engage with law enforcement agencies if any criminality is uncovered.

DPE REPLY

The department has a process in place to oversee that recommendations emanating from forensic reports are implemented. The department shall monitor that the commitment made by Eskom to finalise the investigation. Accordingly, the department shall apply itself to the report to ensure that all recommendations are fully implemented should the allegations be confirmed; and that relevant parties are held accountable in line with the laws of the country. Furthermore, the department shall through the Shareholder Compact, hold the board accountable in ensuring that whistle-blower reports Eskom receives are addressed speedily; that forensic investigations are initiated and completed within a reasonable timeline and that recommendations are fully implemented within reasonable timelines.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The financial obligation with respect to the development of the National State Enterprises Bill is borne by the Department of Public Enterprises. For 2023/24, budget has been allocated and ring-fenced for the necessary external project support and expertise under the Departmental funds for the processing of the Bill. Working capital of the Holding Company will need to be secured, and consultation with the National Treasury is on-going in this regard.

2. (a) Preliminary costing of the HoldCo has been done on the basis that it shall become self-sustainable in the short term. The Holding Company will derive dividends from its subsidiary companies and it is envisaged that this income stream will be sufficient to cover its operational costs.

(b) The closure, merger or restructuring (some which is already happening, e.g. in Small Business Portfolio) will be considered by government on the basis of recommendations of the PSEC.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Wheeling refers to a regime where private generators are allowed to sell directly to eligible customers by signing a use of system agreement with the transmission and distribution network owners. For eligible customers connected to the Eskom network, the process for entering into a wheeling agreement requires an amendment to the customer’s existing supply agreement with Eskom, which will allow the customer’s electricity bill to be adjusted (to be credited) to take account of wheeled energy. This type of wheeling requires an amendment to the customer’s existing supply agreement is called traditional wheeling, and it is limited to connections on the high voltage and medium voltage networks.

Virtual wheeling, however, eliminates the need for amendments to supply agreements and expands wheeling to customers connected at low voltage networks. This enables entities like banks, hotels, corporate offices, and retailers to wheel energy from private generators.

Virtual wheeling is designed to work alongside traditional wheeling arrangements, not replace them. Additionally, Eskom will contract the buyer of energy directly, without the need to contract with off-takers (load customers), including municipalities. As a result, there will be no impact on municipal revenue, and this distinguishes virtual wheeling from the traditional wheeling approach.

Currently, the project will be executed on a pilot basis between Eskom and Vodacom to enable Eskom to test the systems and resource capabilities before the official country wide roll-out.

The smart meters and cables that will be required by buyers and offtakes of electricity are already supported by a local market.

(b)

There is no requirement for municipalities to invest in large-scale systems and cloud servers. Eskom will invest in a digital tool known as a virtual wheeling platform to facilitate the virtual wheeling and this will integrate with buyer platforms. This wheeling platform is required to support the aggregation, processing and provision of generation and consumption data to calculate the wheeled energy refund.

Virtual wheeling requires the measurement and reporting of energy generated and consumed on a time-of-use basis and this is allocated by buyers of electricity to their off-takers. All off- takers will need to be equipped with the necessary meters capable of supporting these functions. The investment will need to be made by the buyers and/or off-takers (load customers) and not municipalities.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from SAA

(a)(i) All the response are analysed using PowerBI tool which allows SAA to gain deeper insights, accurate reports, and route analysis.

(a)(ii) The information is used to measure Customer Satisfaction and Net Promoter Score and guides customer service improvements.

(b) It takes about 2 days to collate the information and investigate where necessary.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from SOCs

ALEXKOR:

a) 2018 FY- Vehicles

2019 FY- Plant and machinery

              - Motor vehicles

              - Furniture and fixtures

              - Computer equipment

2020 FY- Motor vehicles

              - Furniture and fixtures

2021 FY-Plant and machinery

             - Motor vehicles

             - Furniture and fixtures

             - Computer equipment

2022 FY- No disposals

2023 FY- No disposals

b) Year Type Value Number of assets sold

2018 FY - Motor vehicles R 120 125 1

2019 FY - Plant and machinery     R1 623 504 3

- Motor vehicles             R   337 248 5

- Furniture and fixtures   R        8 441 2

- Computer equipment     R      91 906 6

2020 FY - Motor vehicles               R      57 520 1

- Furniture and fixtures    R    120 890 26

- Plant and machinery       R      81 136 1

- Capital work in progress    R      22 110 1

2021 FY -Plant and machinery  R      26 119 1

- Motor vehicles                     R    248 509 5

- Furniture and fixtures         R      30 878 12

- IT equipment                         R        2 866 1

2022 FY - No disposals

2023 FY - No disposals

c) 2018 FY - Motor vehicle R 229 301

2019 FY - All      R      71 400

2020 FY - All R 155 400

2021 FY - All           R 1 168 811

2022 FY - No disposals

2023 FY - No disposals

*** The information provided is provisional. Alexkor is in the process of reconciling assets to records, including disposals as there has been a lack adequate asset management and monitoring systems for the past five years.

d) List of assets sold Gereedskapwerks winkel

Lifting bags

Booster pump-grundfos

Toyota hilux s/cab bzd791nc model 2003

Toyota quantum 2.5 d4d chf836nc

Toyota hilux 3.0 d4d 4x xtra cab

Apple imac 21.5 2.7ghz computer

Managerial work station - 1800x80x22mm worktop

Mecer computer with 18.5 samsung monitor

Adobe acrobat professional

Swivel chair CEO office Joburg

4200x1200mm boardroom table Inc conflex leg system

PA workstation 100x800x22mm worktop and credenza

Chairs x36 black mesh, fixed arms, back bar, black base

Round table 1800 steel base with teak top

Computer mecer pentium 4

Union screen 1

Union screen plant 2

Infieldscreen upgrade

Toyota hilux double cab cdd520nc

Truck mounted crane

Toyota fortuner 30 d4d 4x4 2007 cdr052nc

Toyota hilux 2.5 d4d chd206nc Ben Kotze

Isuzu kb diesel kb 250 regular cab

Toyota corolla quest 1.6

Nissan np300 hardbody 4x4 SC

Toyota Quantum minibus 2.5D

Nissan NP200 1.68V

Toyota fortuner 2.4gd-6

Reconditioned samil 100 6x6.

DENEL:

(a) 753

(b) Book value R15.6m

(c) R32.6m

(d) Computers, furniture, vehicles, and equipment surplus to operational requirements or beyond economic repair.

ESKOM:

1. Eskom has sold 4 169 assets since 2018.
2. The total value of all 4169 assets at the time of sale was R269 052 207.
3. The total proceeds received from the sale of these assets were R463 309 568.
4. The types of assets sold can be seen in the table below.

South African Airways:

SAA has disposed of the following assets post business rescue:

(a)(b)(c)(d)

Property at the previous Durban airport precinct was sold to Transnet. The selling price was slightly above the value placed on it by an independent valuer.

x A340 aircraft (4 x A340-600’s and 3 x A340-300’s) that are no longer part of SAA’s fleet requirements were sold via a tender process. These aircraft were dully depreciated by SAA and fetched market related prices according to the age and condition of the aircraft.

As a result of the business rescue plan, a few SAA offices were closed in countries across the globe and the office furniture and equipment was disposed of in the respective country. Generally, these items had little value and were fully depreciated in SAA’s books.

SAFCOL:

From 2018 to 2023, the South African Forestry Company SOC Ltd (SAFCOL) has not sold any assets. The company however, has assets on the non-current asset list that are ready to be auctioned off to workers and the public through an external auction.

TRANSNET:

(a) There is a total of 24 disposals of non-core properties, six (6) sold and registered, and fourteen (18) approved but still in the process of registration. Details of the disposals are contained below:

Table 1: List of registered properties (assets) sold

	Property	Purchase Price	Date Registered
1	Erf 940 Ext. 7 Mandini	R 610 000	13 July 2018
2	Erf 550 Vryheid	R 450 000	16 November 2018
3	Portion 3 of Erf 265, Piet Retief	R 605 000	4 December 2019
4	Erf 8719 Richards Bay	R 25 000 000	7 February 2020
5	Erf 369, Wasbank	R 165 000	15 February 2018
6	Erf 1979, Edendale (Mbali Lodge)	R 60 000 000	8 March 2022

Table 2: List of properties sold – registration pending

No	Property	Purchase Price	Date of Sale
1	Transfer of Erf 16600, 16601, 16463 Vredenburg	R 27 490	May 2019
2	Transfer of Ptn of Rem of Erf 4668 Montague Gardens	R 1 050 000	July 2019
3	Transfer of Ptn of Erf 2409 Barberton	R 300 000	August 2019
4	Transfer of Ptn 781, 782 & 783 of farm Doornfontein	R 5 300 000	September 2019
5	Transfer of Ptn 45, 46, 47 of the farm Kaapmuiden, Mpumalanga	R 18 810	December 2019
6	Transfer of 24x vacant stands in Crosby	R 5 100 000	September 2020
7	Ptn 165 (Ptn of Ptn 53) of the Farm Nelspruit	R 3 450 230	March 2021
8	Ptn of Erf 2315 Rustenburg	R 120 320	July 2021
9	Ptn of Rem of Erf 21, Ptn of Erf 80, Ptn of Erf 8, Erf 11, Erf 79, Erf 7 Kaalbaskraal, Western Cape	R 2 000 000	March 2022
10	Erf 470 Kalbaskraal	R 350 000	August 2022
11	Erf 1277 Stellenbosch	R 1 980 000	June 2022
12	Erf 964 and 965 Stellenbosch	R 850 000	April 2023
13	Naval Hill - Bloemfontein	R 25 800 000	April 2022
14	Willow Bridge	R 120 000 000	April 2023
15	Park Chambers - Johannesburg	R 10 240 000	May 2023
16	Stella Mansion - Johannesburg	R 4 330 000	May 2023
17	Ptn of Rem of Erf 4668 Montague Gardens	R 943 200	March 2023
18	Montclair Lodge - Durban	R 34 200 000	March 2023

(1) (b)(c) (d) as per Tables 1 & 2.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) In terms of the Share Purchase Agreement signed between the Department of Public Enterprises and Takatso Aviation (Pty) Ltd, the required funds will only be provided towards the conclusion of the transaction and after obtaining all the necessary regulatory approvals, including the report of the Competition Tribunal.

b) SAA funded the business rescue practitioners’ receivership obligations from its working capital.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Department

The board is responsible for ensuring that:

1. Eskom has procurement policies and procedures that comply with procurement laws applicable in the public sector; and
2. any procurement initiative that the company undertakes is done consistently with prescripts.

The department does not get involved in operational activities of Eskom, including procurement of goods and services by the company. However, the department has a process in place to oversee that when allegations of maladministration are reported concerning the affairs of Eskom, an investigation is conducted; and should the allegations be confirmed, recommendations are fully implemented.

To this end, the department is monitoring Eskom’s investigation into the matter as part of the process that is in place to track forensic investigations and implementation of recommendations emanating from them. If the board of a SOE is unable to comply with the PFMA provisions, the failure to comply must be disclosed to the Minister of Public Enterprises. The Department of Public Enterprises is not aware of any investigation concerning the affairs any of the SOEs under the Ministry that is funded by private companies and/or through donor funds. Records available to the department indicates that none of the SOEs are conducting any investigation that is funded by a private company or through donor funding. The department is aware of investigations conducted by law enforcement agencies into the affairs of SOEs, and is actively monitoring progress relating to this, including implementation recommendations emanating from them.

According to information received from ESKOM

Eskom has its own Forensics and Anti-Corruption Department which provides an independent and objective forensic service into fraud, corruption, and general and financial irregularities in the company. Our internal capacity is augmented by a panel of external investigators. This service, including the costs of the panel, are funded from Eskom’s own operating account, and no investigations are funded by external entities or private donors. In cases where our forensic investigations uncover criminal conduct, these are referred to law enforcement agencies for further investigation.

Furthermore, the Eskom Forensic Department is already investigating the security tender and the question raised is part of what will be looked into. Eskom will public the findings of its investigation once the process has been concluded.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

(1)(a) The reason for the reduced capacity for the period of 8 – 21 May 2023 (two weeks) was the increase in theft and vandalism of railway infrastructure which reduced TFR’s operational capacity. The frequency and scale of theft increased beyond previous levels. We experienced back-to-back incidents, not allowing adequate time for repair and resumption of the train service. Longer spans were stolen, thus increasing the Mean Time-to-Repair (MTTR).[1] For three consecutive days, every 6 – 8hrs an incident occurred. Ten (10) spans stolen requires more time to replace than two (2) spans.

Further, the heavy rains in Durban and surrounding resulted in sand washing over the railway lines which required inspection and clearance before the opening of the line and the resumption of the rail service. Typically, TFR would have on average between 6 – 10 trains staged across the corridor; however, between 6 - 21 May 2023, the average number was between 27 – 33 staged trains.

(1)(b) TFR’s Security and Forensics department continues to work closely with law enforcement agencies to reduce theft and vandalism of railway infrastructure. The process of implementing additional security interventions within TFR has commenced and resulted in a reduction in incidents. TFR has undertaken several actions to improve operational efficiencies by implementing performance-based contracts with specialised security service providers, including the use of technology and improved business intelligence and information management.

In addition, TFR will ensure continued implementation and exploration of alternative funding models for rolling out additional security technology to protect committed volumes, in partnership with other law enforcement agencies and other relevant stakeholders, as part of its security improvement rollout plan.

(2)(a) The line was operational from Monday 22 May 2023, where TFR focused on clearing staged trains to deliver consignments to customers and decongest the system. The line was operational at 50% capacity, indicating that the system had stabilized, with seven (7) trains staged along the line. Operational recovery can take up to three (3) days, dependant on the scale of the disruption. In this case, on the 27th of May 2023, we reduced the staged trains from 28 to 8.

(2)(b) The impact on the economy has been not quantified. However, given that the Container Corridor transports time-sensitive cargo (Containers, Automotive and Fuel makeup 90% of the volumes moved on the Corridor), delays of this scale have a significant impact on supply chain services across the corridor.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

1. As a safety precaution, repair teams are required to sufficient rest to mitigate the risk of fatigue. ↑

Reply:

1. The role and responsibilities of a Shareholder Representative on behalf of the Government requires that the negotiated Shareholder’s Compact, is agreed to between me and the Board, annually. My role is, therefore, to assist the Board to meet these targets within the context of the State-Owned Companies (SOC’s) operating environment. As a Shareholder Representative such support is extended to the CEOs and considered critical to ensure success. My support to the Chief Executives of the SOCs is therefore underpinned by good governance principles as espoused in the PFMA, 1999, and the Companies Act, 2008. As a Shareholder Representative, I continue to support the leadership of Eskom, working with stakeholders, to ensure sustainable improvement in performance.

2. In terms of Eskom’s governance framework, the Chief Executive’s employment and performance contract is with the Board of Directors and not with the Shareholder Representative. The Chief Executive is responsible and accountable to the Board for his performance, strategy implementation and the management of the affairs of the company. According to Eskom, the performance indicators for the Group Chief Executive are agreed to at the beginning of each financial year.  These indicators are based on the Shareholder’s Compact.  Performance at year-end is based on the achievement of the shareholders compact. During the tenure of the former Chief Executive, it is extremely disappointing to note that Eskom’s power stations Energy Availability Factor (EAF) was 78% in 2018.  The EAF declined to 69.9% in 2019 and has continued to current levels (May 2023) of 52%.  At the time of announcement of the resignation of the former GCE, in December 2022, EAF was 57.2% with different levels of loadshedding daily.

As the Executive Authority, I intervened to assist in improving EAF. I have met with Power Station Managers on numerous occasions as well as Power Station Cluster Managers in order to assist in improving the EAF performance.

I reiterate that the entire recruitment process was managed by the then Board in 2019. The Board formulated a shortlist of candidates. The Board conducted the interviews. The Board submitted two candidates for the shareholder to consider. Both candidates were engaged with by four Ministers, whereafter the concurrence of Cabinet was obtained.

Ultimately the Board is responsible for the performance of the CEO and management team. Despite the many efforts, as set out above, to assist the team, it would appear that, the CEO’s focus was misdirected. This is now receiving the attention of the new Board.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date: