Questions and Replies

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:

The former CEO of Eskom indicated in passing that he was undertaking an investigation into corruption in Eskom.

I did not approve any “R500 million security tender”,

I do not get involved in tender issues by SOEs,

I did not approve, nor was I asked to approve any investigation.

It is now a well-established fact that massive corruption took place during the State Capture period by foreign and local companies and individuals within Eskom. Some of these activities continue to occur, involving both “outsiders” and “insiders”.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Department

The Public Finance Management Act prescribes that the boards of State-Owned Enterprises (SOEs) must:

1. Exercise the duty of outmost care to ensure reasonable protection of the assets and records of the company.
2. Act with fidelity, honesty, integrity and in the best interests of the public in managing the financial affairs of the company.
3. Comply with tax laws, which include donor funds.
4. Have and maintain an effective, efficient, and transparent system of financial, risk management and internal control.
5. Have and maintain an appropriate procurement and provisioning system that is fair, equitable, transparent, competitive and cost-effective.

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 of any of the SOEs under the Ministry that is funded by private companies and/or through donor funds. Records available to the Department indicate 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 of recommendations emanating from them.

ALEXKOR

No private investigations are being conducted and no funding was received from private donors or companies. The only investigation, which is currently underway, is that of the SIU under Proclamation No: R. 42 of 2021.

DENEL

Denel SOC Ltd is not conducting any private investigation that is not linked to the SA Police Services and that is funded by the companies and/or private donors.

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 Eskom. Eskom’s internal capacity is augmented by a panel of external investigators. This service (including the costs of the panel) is funded from Eskom’s own operating account, and no investigation is 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.

Eskom Group Security did not conduct, is not conducting nor has it authorised any private investigation that is funded by other companies or private donors to date. The Security Department, through its internal investigation mandate, has contracts in place for outsourced specialised investigation services focusing on high impact crimes such as coal, diesel, and fuel oil crimes affecting Eskom or infrastructure crimes. These types of contracts are fully funded by Eskom. All Eskom criminal investigations are conducted by the SAPS.

SAA

South African Airways (SAA) is not conducting any private investigations. SAA does conduct internal investigations, which could result in internal disciplinary and/or criminal referrals and/or civil referrals. SAA does not rely on funding from other companies and/or private donors. The airline funds its own internal investigations from working capital when these are required.

SAFCOL

The South African Forestry Company SOC Ltd (SAFCOL) and its subsidiaries do not conduct private investigations that are unrelated to the SA Police Services and are funded by companies and/or private donors. SAFCOL investigates questionable cases internally and, where feasible, appoints investigators using current procurement procedures.

TRANSNET

Transnet Corporate Centre

Investigations at Transnet which pertain to fraud and corruption (Financial Crimes) are conducted by the Investigations Function which resides within the ambit of Transnet Group Security. The mandate to perform these investigations is derived from paragraph 25 of the National Treasury Irregular Expenditure Framework which states that, “the accounting authority must conduct an investigation if he/she suspects any possibilities of fraudulent, corrupt criminal acts emanating from the incurrence of irregular expenditure”. Allegations which relate to fraud and corruption are initially conducted either by in-house Transnet personnel or by firms which have duly been appointed and serve on a Forensic Investigations Panel dedicated to investigating such matters. The forensic panel is paid by Transnet like any other creditor and is not financed in any way by private donors. All matters which are found to have a criminal bearing are reported to the South African Police Service or the Directorate Priority Crime Investigations where such matters that are related to the Prevention and Combatting of Corrupt Activities Act 12 of 2004.

Transnet Freight Rail

Investigations at Transnet Freight Rail, which pertain to network theft and sabotage, as well as Goods in Transit Theft, are conducted by the Investigations Function supported by service providers. The mandate to perform these investigations is derived from the following policy regulations:

• National Railway Safety Regulator Act 16 of 2002. (Specific reference to Section 38)
• Criminal Procedure Act 51 of 1977 (Specific reference to Sections 40 to 42).
• Critical Infrastructure Protection Act 8 of 2019 (Specific reference can be made to Chapter 4, Section 24).
• The Prevention and Combating of Corrupt Activities Act, Act No. 12 of 2004 (Specific reference to Section 34(1) of the Act, Sections 3 to 16, 20 to 21 and Section 34) and
• Public Finance Management Act 1 of 1999 (PFMA).

Transnet is authorised to investigate any incident or occurrence where prima facie evidence indicates any reasonable possibility that Transnet is, or maybe, the victim of a criminal, unlawful, or irregular act. Transnet will be regarded as a (potential) victim of a criminal, unlawful, or irregular act if such an act (potentially) causes loss of or damage to, Transnet`s assets, reputation and/or if it endangers the safety or well-being of Transnet personnel in their official capacity.

An incident or occurrence is investigated/attended to, either by in-house Transnet personnel or by service providers duly appointed. Information gathering, evaluation, business intelligence, and investigation is conducted for each incident of theft and/or sabotage.

Matters of criminal nature are reported to SAPS for investigation. The process involves compilation of identification statements done. This is in addition to comprehensive dockets comprising incident detail, photo albums, witness statements, and impact statements. Transnet provides support to SAPS during investigations. The above must be considered in terms of national occurrence and is relevant to network theft and sabotage as well as Goods in Transit Theft, thus showcasing the task of effectively combating network theft and sabotage.

The service providers are funded by Transnet like any other creditor and are not financed in any way by private donors. All incidents and business intelligence gathered that is found to have a criminal bearing are reported to the South African Police Service for their finalisation.

Transnet Pipelines (TPL)

Forensic Investigation – referred to as Group Forensics.

1. Security Incident investigations (Pipeline breach) – Contracted Security Service Provider provides a suite of services, amongst which, Security incident investigations are included.
2. Security Incidents in TPL buildings and offices (laptops and other personal effects Theft, etc.) – TPL investigator (junior employee) investigates these matters.

Transnet Engineering (TE)

All investigations emanating from security breaches are reported to SAPS as per the PFMA. TE’s investigation function works closely with the appointed detectives from SAPS. The TE’s team’s role in investigations is to identify and close existing security gaps. All “white collar” investigations are undertaken by Group Security Investigations where that portfolio is centralized. Contractors or independent panels are in the employ of Transnet to extend its arm and act as Transnet contractors. These independent contractors are fully funded by Transnet.

Transnet National Ports Authority (TNPA)

TNPA neither makes use of any private investigation firms or receives any funding from private companies or donors to conduct investigations. Any inquiry is conducted internally when necessary.

Transnet Port Terminals (TPT)

TPT does not have any investigations being conducted by private investigators. Any security incident is investigated by the in-house security personnel to identify root causes and control failures to put corrective measures in place. Where necessary, criminal cases are opened with SAPS for investigation.

Transnet Property (TP)

1. Forensic Investigations are referred to Group Forensics.
2. Security Incident investigations are investigated by internal resources and or appointed security service providers through the open, fair and transparent procurement system as approved by National Treasury. These service providers are normal creditors.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

Eskom is currently embarking on various strategies, including revitalising its Energy Advisory Service, to assist customers through these challenging times. In addition, the cost to connect photovoltaic (PV) systems to the grid is being reviewed in terms of affordability and the time it takes to connect.

Eskom is also engaging various businesses and agricultural forums and their members on ways to mitigate the impact of load shedding.

The demand management initiatives that are focused on the industrial, commercial, and agricultural sectors reduce demand during the constraint evening peak periods. Customers benefit from a tariff perspective, whilst Eskom reduces expensive generation costs in the short term while delaying generation expansion in the long term, providing a win-win solution.

Furthermore, Eskom is driving Demand-Side Management (DSM) programmes to guide the industry, including small businesses, on the efficient use of energy and on minimising the impact of load shedding through communication and the dissemination of marketing material.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister of Public Enterprises

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:

1. There are varying estimates of the cost of load shedding to the South African economy. It has been widely reported that the South African Reserve Bank estimates that Stage 3 (up to 6 hours a day) and Stage 6 (up to 12 hours a day) load shedding detracts between R204 million and R899 million respectively on a daily basis from the South African economy.

1. The impact of load shedding on economic activity differs depending on its severity (stage) and duration (number of days). Additionally, the impact on various economic sectors is also not the same with electricity, gas, water and electricity-intensive mining and manufacturing generally being the most impacted. It is recognised that the calculation of the cost of load shedding to the economy is a complex matter.

3. However, we can all agree that the negative effects of load shedding are pervasive, affecting every part of our economy and all walks of life. In particular low-income households and communities often lack the financial means to afford alternative energy sources or the additional energy costs during load-shedding and cannot access basic services such as healthcare, education, and social services. Quality of life is suffering as a consequence.

4. President Ramaphosa has stated that it is our overriding priority to end load shedding and achieve energy security. It is not good enough to merely implement measures to reduce the severity and duration of load shedding to minimise economic impacts, we must end it.

5. In his address to the nation on 25 July 2022, President Cyril Ramaphosa announced a bold set of actions to address loadshedding and achieve energy security. The President subsequently established the National Energy Crisis Committee to ensure that the Energy Action Plan is fully implemented and appointed a dedicated Minister of Electricity in the Presidency to provide a single point of execution for the energy crisis response.

6. There are five (5) key interventions to end load shedding, comprising of the following:

a) Fix Eskom and improve the availability of existing supply

b) Enable and accelerate private investment in generation capacity

c) Accelerate procurement of new capacity from renewables, gas, and battery storage

d) Unleash businesses and households to invest in rooftop solar

e) Fundamentally transform the electricity sector to achieve long-term energy security

7. The Minister of Electricity will be responsible for overseeing all aspects of the electricity crisis response and driving the various actions being coordinated by the National Energy Crisis Committee to end load shedding as a matter of urgency.

8. The immediate measures to alleviate load shedding and the impact on the economy are to improve the performance of the existing Eskom base load fleet, maximise the performance and output of peaking stations and reduce demand through an aggressive demand side management programme.

9. Additionally, measures are being taken to substantially and urgently increase the construction of new generation capacity. The reforms already implemented have resulted in a significant increase in investment in new generation projects, with many more in the pipeline.

10. Finally, it should be recognised that the System Operator only imposes load shedding to the severity and duration required to protect the National Power Grid and as a last resort, once it has exhausted all of the other Generation, Emergency and Demand Side resources at its disposal. We are, in fact, on real-time basis mitigating the impact of load shedding on the South African economy by only effecting the level of load shedding necessary to maintain a stable and reliable electricity supply and avoid a Grid collapse, which would have much more dire consequences for our country and the economy.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The Department of Public Enterprises and entities it is responsible for, maintain a wide network of relationships with international and national institutions.

The purpose of such relations is the exchange of information, tracking innovations and technology development for various relevant fields.

Eskom, for example, has affiliate status with State Grid Cooperation of China (SGCC), in a memorandum of understanding (MOU) which was finalised in 2015 and more recently, a tripartite MOU was signed with China Development Bank (CDB), SGCC and Eskom.

A Transnet delegation has just visited Germany to understand the operations of Deutche Bahn.

In order to deepen our understanding of the framework and operations of the Holding Companies and their relationship with SOEs, we have interacted with TEMASEK, KAZANAH (Malaysia) SASAC (China) and OECD.

During the visit to China, I interacted with SASAC and several energy - related companies including China Energy, State Grid and The National Energy Administration.

State Grid has investments and experience in many jurisdictions: Brazil, Portugal, Philippines. State grid also has a long-standing MOU with Eskom, which will be reviewed. Eskom and State Grid have had technical cooperation and exchanges.

We were introduced to some of the technological advances that have been made in China. Similar, exchanges will also be undertaken with Germany and similar jurisdictions.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

President Cyril Ramaphosa mandated the Department, together with the members of the Presidential State-Owned Enterprises Council (PSEC/ the Council) appointed in June 2020, to support Government in repositioning state-owned enterprises (SOEs) as effective instruments of economic transformation and development. This work entails strengthening the framework governing SOEs through, among other initiatives, the introduction of an overarching Act governing SOEs, and the determination of an appropriate Shareholder Ownership Model.

The Department is the shareholder representative for Government, exercising direct oversight over 6 SOCs in its portfolio (namely: Alexkor, Denel, Eskom, SAFCOL, SAA, and Transnet), and serves also as Secretariat for the Council. The President, at the 2022 State of the Nation Address (SONA) announced that Government will adopt a Centralized Shareholder model for its key commercial SOCs. During the 2023 financial year, preparatory work was underway to establish a state-owned Holding Company that will house strategic SOEs, and exercise coordinated shareholder oversight.

The Department is developing legislation in conjunction with the Council. The South African State-Owned Companies Bill will undergo a coordinated consultative process within Government and Stakeholders. Department is also working closely with PSEC workstreams to identify SOEs that will be retained, consolidated, rationalized and/or disposed of.

This work will continue through the 2023/24 financial year.

The work being undertaken by the SOCs in respect of their contributions to economic and developmental outcomes, is continuing, as is evident below:

ALEXKOR:

The focus for the short term has been to stabilise the operations and strengthen governance structures at the joint venture operations. Following years of facing financial sustainability challenges the joint venture is set to post a profit for the 2022/23 financial year. Whilst the favourable global rough diamond market played a significant role in turning around the fortunes of the joint venture, it has not resolved the long-term sustainability challenges of the company.

In this regard the Department is undertaking an in-depth analysis of Alexkor’s diamond assets with a view to identifying an appropriate model that will ensure the State derives maximum value and benefit from ownership of its diamond assets. The study is expected to be completed by September 2023. The outcome of the study will accordingly serve as base for Government to engage relevant stakeholders towards a decision on how best to exercise ownership of diamond resources.

DENEL:

The Department has made notable progress in terms of the restructuring of Denel.

Denel has appointed a Chief Restructuring Officer to enable Denel to develop its strategic restructuring plan focused on the operational and balance sheet restructuring. The Minister was informed by the Chairperson of Denel for his information. The latter has seen Denel receive payments for guaranteed debt, enabling Denel to save on substantial interest payment costs, and R3.4 billion recapitalisation allocation announced in October 2022.

These funds have significantly improved the SOC’s balance sheet, stabilising the entity, allowing for the restart of income generating activities, honouring payment plans and thereby gradually restoring its reputation as shown by renewed interest, from international entities, in partnering with Denel.

ESKOM:

The Department is implementing the restructuring of Eskom as per the “Roadmap for Eskom in a Reformed Electricity Supply Industry”: It stipulates that Eskom is to be divided into 3 independent entities, namely generation, transmission, and distribution. As part of the broader reform process, in December 2022, the National Transmission Company of South Africa (NTCSA) was created as a subsidiary of Eskom. Eskom is awaiting the decision of a license application from the National Energy Regulator of South Africa (NERSA) to begin trading. The NTCSA will soon be operational with an independent board. The National Electricity Distribution Company (NEDCSA) of South Africa was registered in November 2022 and work is underway to establish legal separation of NEDCSA. Eskom has finalised the due diligence report for the establishment of the new Generation Company of South Africa. The due diligence report will inform the structure of the new Generation Company.

SAA:

The airline exited the business rescue process in April 2021 after 16 months. It commenced operations in September 2021 and has been in operations for 21 months. The airline is expected to report a profit in the 2022/23 financial year.

A private sector partner (Takatso Aviation) has been identified to provide SAA with a capital injection. Agreements are in place for Takatso to be a 51% shareholder in SAA. It is anticipated that this partnership will promote SAA’s ability to service both the domestic and regional markets, which will have significant spin-offs for both the domestic and regional economies.

SAFCOL:

SAFCOL remains in a strong solvency and liquidity position and continues to sustain itself without financial support from Government. The previous financial year saw SAFCOL declare a profit and pay a dividend back to Government.

TRANSNET:

During the 2023 SONA, the President announced that Government is developing a Transnet Roadmap that includes the restructuring of Transnet Freight Rail to create a separate infrastructure manager for the rail network by October 2023. Work on the Roadmap is underway through a cross functional team led by Operation Vulindlela which includes the DPE, DOT, National Treasury and Transnet. The Roadmap will articulate the required institutional and structural changes required in order to enable the required policy reforms in ports and rail and to improve the competitive environment within these sectors. This will include amongst others, establishing the National Ports Authority as an independent subsidiary of Transnet, and creating an enabling environment for 3rd party rail operators. Transnet and private sector companies will conclude partnerships at the Durban and Ngqura container terminals, to enable new investment in our ports and improve their efficiency. There has been great success in repositioning the Port Elizabeth Automotive Terminal, which has more than doubled its capacity and has already seen an increase in exports.

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) Significant maintenance, modifications and any necessary repairs are performed

when a Koeberg unit is shut down for refueling (generally every 15 months per unit).

(b) The Koeberg Unit 1 delays being experienced in the current shutdown, Outage 126 (O126), are related to the execution of the project to replace the steam generators, which is not a standard maintenance activity, but rather a significant first-of-a-kind construction project seen by Eskom as a pre-requisite for Koeberg life extension.

The steam generator replacement was deferred from outages 225 (due to poor preparedness displayed in the initial phases on execution, and the unacceptable schedule updates influenced by the state of readiness of some of the facilities).

The delays during the current steam generator installation on Unit 1 are mainly due to overly optimistic planning in establishing the original base plan and the emergence of unexpected plant conditions (technical challenges). Due to the size of the project, the contractor sub-contracted and trained local companies to participate in the project, at various skill levels. Unfortunately, the efficiency of the local workforce to operate within the nuclear environment was over-estimated resulting in constant schedule slippage. It is important to note that the quality of the welding being performed by the local contractor has been of an exceptionally high standard, and therefore there has been no delay due to the actual workmanship.

(2) The replacement of the steam generators is the last of the major and largest plant

components that require replacement as part of the nuclear regulatory licence application to extend the operational life of Koeberg. The other large components were replaced a few years ago in previous outages.

The steam generator replacement was originally meant to be performed in the previous

outages on each unit, but it was postponed to the current outage on Unit 1 (O126) and the upcoming outage on Unit 2 (O226), due to a lack of readiness to execute, as the delay could be tolerated without impacting the licence application.

(3)(a) The cranes in use at Koeberg were installed during the construction of the plant in the early 1980’s.

(b) These cranes have routinely undergone the required maintenance and testing to ensure safe usage. Furthermore, the cranes being used during the steam generator replacement on Unit 1 were all serviced, and load tested prior to use during the current outage.

(c) Only one of the cranes had a defect and this caused a minimal contribution to the overall delay. The delay due to the crane was mitigated by the interim use of a mobile crane.

1. Eskom and the contractor(s) are integrating the lessons learnt from the current Unit 1 outage into the planning and preparation for the upcoming intervention on Unit 2 (O226). The technical challenges that were experienced will be anticipated and the planning will reflect a more realistic schedule for this intervention, which is a significant undertaking in the life of Koeberg.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

According to the information received from SAA

1. 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.
3. That SAA leases an additional 3 B737-200 aircraft from SafAir if required by the Airline; and
4. That SAA leases 2 new generation narrow-body aircraft from SafAir provided the terms were equal or better than the other offers received by SAA.

Note that SafAir is a South African aircraft leasing company and there was no declaration in the minutes that this company was owned by Mr. Andrews.

1. Based on the above Board resolution, the sale was authorized by the Board at the time.

.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom:

The National Nuclear Regulator published its detailed requirements for the Koeberg Nuclear Power Station (KNPS) long term operation. Eskom is working diligently to meet these stringent conditions. Eskom has submitted the required licence application to the National Nuclear Regulator, which is now in the process of assessment.

The DPE has established regular feedback sessions with the KNPS team to engage and monitor progress of the associated life extension project activities on a monthly basis.

Eskom has made significant progress in the replacement of the three life-limiting components (i.e., refuelling water storage tanks, reactor pressure vessel head and steam generators) which have been identified by the National Nuclear Regulator as crucial to the life extension programme. The refuelling water storage tanks and the reactor pressure vessel heads have already been replaced in both units. Eskom is currently in an outage to replace the three steam generators on Unit 1.

Thereafter the replacement of the remaining three steam generators on Unit 2 will commence in the latter part of this year.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

The Presidential State-Owned Enterprises Council (PSEC) was appointed by the President to advise on the reforms of SOEs. PSEC is in the process of identifying SOEs that are to be consolidated, restructured and/or repurposed.

Any further announcements on the PSEC’s final recommendations will be made by the Presidency.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Department of Public Enterprises

(aa) PROCUREMENT ALLOCATION FOR PUBLIC ENTERPRISES 2021-2022

CATEGORY OF BUSINESSES	TOTAL RFQ AND BIDS	ALLOCATION NUMBER	ALLOCATION PERCENTAGE
(i) SMME’s/EME	60	55	91.67
(ii) Cooperatives	0	0	0
(iii) Township Enterprises	0	0	0
(iv) Rural Enterprises	0	0	0

(bb) PROCUREMENT ALLOCATION FOR PUBLIC ENTERPRISES SINCE 1 APRIL 2023

CATEGORY OF BUSINESSES	TOTAL RFQ AND BIDS	ALLOCATION NUMBER	ALLOCATION PERCENTAGE
(i) SMME’s/EME	3	3	100
(ii) Cooperatives	0	0	0
(iii) Township Enterprises	0	0	0
(iv) Rural Enterprises	0	0	0

 

According to the information received from all SOCs

(b) - (i – iv). SOCs are currently reporting Specifically on activities relating to Broad Based Black Economic Empowerment and development of Small- Medium- and Micro-Enterprises. Although SOCs may have supported cooperatives, township enterprises and rural enterprises such as in the case of Safcol that has supported close to 30 cooperatives, 24 township enterprises and 63 rural enterprises the information on % spend is not available due to SOC systems only capturing Exempted Micro-Enterprises and Qualifying Small Enterprises.

Tables 1 and 2 provide a detail procurement spend related to transformation.

Table 1: 2021-22 SOCs measured procurement and transformation spend.

% Allocated	Alexkor	Denel	Eskom	SAA	Safcol	Transnet	Total	Total on transformational initiatives
Total Measured Procurement Spend	-	R636m	R177bn	-	R575m	R23bn	R201bn	R129bn
Small- Medium- and Micro-Enterprises	-	20%	30%	0.3%	-	28%	R59bn	64%
Qualifying Small Enterprises (QSE)	-	6%	15%	-	10%	10%	R24bn
Exempted Micro-Enterprises (EME)	-	2%	15%	-	15%	18%	R25bn
Black Youth Owned	-	2%	2%	0.3%	11%	6%	R1bn
Black People with Disabilities (BPD)	-	1%	1%	-	2%	0.3%	R341m
Black-owned enterprises (BOE)	-	15%	3%	0.6%	68%	43%	R10bn
Black women owned (BWO)	-	8%	9%	0.5%	27%	25%	R6bn
Cooperatives	-	-	-	-	-	-
Township Enterprises	-	-	-	-	-	18%	R4bn
Rural Enterprises	-	-	-	0	-

 

The above table provides an indication of the Total Measured Procurement Spend per SOC with the percentage of total procurement on each transformation initiatives. For the Financial year 2021/22 SOCs within the Department portfolio reported a total spent of R129 Billion on Transformation initiatives. Of the R129 Billion, 45% was on procurement from SMMEs, 18% on Qualifying Small Enterprises (QSE), 19% on Exempted Micro-Enterprises (EME), 8% on Black women owned (BOE), 5% on Black women owned (BWO), 1% on Youth owned Enterprises and Black People with Disabilities (BPD), while spent on Rural and Township Enterprises was 3%.

Table 2: 2022-23 SOCs measured procurement and transformation spend.

% Allocated	Alexkor	Denel	Eskom	SAA	Safcol	Transnet	Total	Total on transformational initiatives
Total Measured Procurement Spend	-	R889m	R206bn	R1.0 bn	R644m	R30bn	R239bn	R191bn
Small- Medium- and Micro-Enterprises	-	36%	30%	0.6%	-	31%	R70bn	80%
Qualifying Small Enterprises	-	-	15%	0.1%	22%	13%	R31bn
Exempted Micro-Enterprises	-	-	15%	0.1%	50%	18%	R30bn
Black Youth Owned (BYO)	-	3%	2%	0.2%	10%	8%	R6bn
Black People with Disabilities (BPD)	-	0.8%	1%	0	1%	0.2%	R2bn
Black-owned enterprises	-	33%	16%	0.3%	71%	43%	R35bn
Black women owned (BWO)	-	15%	7%	0.2%	29%	34%	R17bn
Cooperatives	-	-	-	-	-	-	-
Township Enterprises	-	-	-	-	-	-	-
Rural Enterprises	-	-	-	-	-	-	-

The above table provides an indication of the Total Measured Procurement Spend per SOC with the percentage of total procurement on each transformation initiatives for the financial year 2022/23.

For the 2022/23 financial year SOCs within the Department portfolio reported a total measurable procurement spent of R239 Billion. Of the R239 Billion, R191 Billion was spent on Transformation initiatives. Of the R191 Billion, 37% was on procurement from SMMEs, 17% on Qualifying Small Enterprises (QSE), 16% on Exempted Micro-Enterprises (EME), 18% on Black-owned enterprises (BOE), 8% on Black women owned (BWO), 3% on Youth owned Enterprises and Black People with Disabilities (BPD), while spent on Rural and Township Enterprises was not reported.

(aa) and (bb). The set-aside policy has been discontinued by the National Treasury as from 16 January 2023 following a legal challenge. It is, thus, no longer applicable. The new Public Procurement Bill will seek to address this policy gap.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from the Eskom

(1)(a)

Eskom is buying diesel at the wholesale list price published by the Department of Energy on a monthly basis. Eskom then pays the wholesale list price less the negotiated discount.

(1)(b)

Delivered price: Wholesale list price less discounts.

(2)(a)

Eskom obtains negotiated discounts below the wholesale price list that varies across the suppliers.

• Astron
• BP
• Engen
• Shell
• PetroSA

(2)(b)

The discounts are contractual between Eskom and Service Providers and not for public consumption. In addition, there is a new tender currently undergoing internal approval process hence the sensitivity of sharing discount rates.

(3)(a)

All contractors have been contracted for 5 years: 01 October 2019 to 30 September 2024.

(3)(b)

Price follows monthly fluctuation as per the price list issued by the Department of Energy.

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

a) Transnet Freight Rail faces three major challenges that impact its ability to deliver reliable rail services to all its customers on virtually all the corridors, with some more impacted than others.

1.1 Locomotive availability and reliability have decreased significantly on all the key corridors but especially on the North and North-East corridors that primarily rails coal, chrome and magnetite. In 2017/18 when TFR railed 226 million tonnes (mt), TFR had a total of 2215 locomotives available whereas in 2022/23 it has 1533 locomotives available and 364 so called long-standing locomotives at the end of May 2023.

The tender to return to service the long-standing locomotives has closed with Alstom and Wabtec proposing a return to operations schedule for the speedy return to service of their locomotives. Negotiations with CRRC loco are ongoing. The impact of reduced locomotive availability is estimated to cost TFR approximately R16 million per day in lost revenue.

​1.2 Infrastructure: Systemic underinvestment over the years has resulted in decreased reliability of infrastructure leading to increased derailments and speed restrictions that reduce available capacity on rail. To ensure the availability of cash to fund the maintenance of infrastructure, TFR is working on submitting an application to the interim rail regulator for full cost recovery tariffs. Furthermore, Transnet has taken the decision for TFR to exit all loss-making flows to ensure the profitability of all corridors. Lastly the operating lease on the container corridor is intended to curtail the losses on this corridor.

1.3 Security: Crippling theft & vandalism of key infrastructure and locomotives resulting in significant operational disruptions and additional unbudgeted costs associated with these repairs further reducing the funds available for scheduled maintenance. During the Covid shutdown period theft of copper cable escalated significantly. During the period 2016/17 to 2021/22, security related incidents increased by 179%.

TFR implemented various security initiatives ranging from the introduction of drones to support surveillance, customer partnerships to increase the deployment of security resources, specialised task teams in identified hotspot areas and various other initiatives that resulted in a 30% reduction in cable theft incidents during the 2022/23 financial year. Notwithstanding the improvement over the past year, the incidents remain high. Over 1000 km of copper cable was stolen during the 2022/23 financial year, costing TFR R310m to replace which is a reduction from the loss of nearly 1500km the previous year at a replacement cost of R462 million.

In 2021/22 and 2022/23, the majority (44% and 39%) of the cable theft incidents occurred on the Container Corridor. The scale of the theft of Overhead Track and Equipment (OHTE) is also the highest on the Container Corridor – 522km for the past year compared to an average of 130km per corridor for the rest of the system. During May 2023, the Container Corridor was severely impacted by unprecedented levels of theft and vandalism, resulting in a significant loss in available capacity. The situation was further exacerbated by the heavy rains during the same period that made repairing the network difficult. Operations have since resumed and improved following the implementation of additional security measures. TFR security has deployed ground forces in the targeted hotspot areas. This is an interim measure as engagements continue with law enforcement agencies to assist in the policing of the rail infrastructure.

TFR in isolation is not able to deal with the theft and vandalism of the rail infrastructure and made recommendations via the Industry Crime Forum (ICF) to the Non-Ferrous Metal Crime Combating Committee (NFMCCC) to support the following recommendations to the Natjoint:

1.4  The establishment of a dedicated crime court for criminal matters involving essential infrastructure,

1.5 The establishment of dedicated specialised essential infrastructure task team (EEIT) units in each of the provinces, which includes members from visible policing, crime intelligence, and crime detection, dedicated to the protection of essential infrastructure and;

1.6 For every SAPS station nationally to make available a dedicated small unit from visible policing, crime intelligence, and crime detection to focus on essential infrastructure related crime.

b) Security: the tender of Outcomes based Security closed with the roll out beginning shortly. In the case of the container corridor, given the potential operating lease, TFR has commenced the process to identify an Outcome Based Security service provider for 1 year on the Container Corridor.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

Eskom and the Department of Mineral Resources and Energy (DMRE) are continuing to provide electricity to communities that do not have electricity. The Eskom and DMRE Electrification Programme has progressed well in the last financial year and has exceeded its annual target achieving 102 590 connections. In addition, alternative electrification technology called microgrids is being used to electricity areas that are not easily accessible through the conventional grid such as Zwartkopdam in the Northern Cape to speed up access to electricity.

Furthermore, Eskom is undertaking the refurbishment of old infrastructure, substations, lines, and transformers including introduction of smart meters to improve and increase access to electricity for citizens.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The President of the Republic of South Africa is empowered to appoint Ministers and also in terms of the powers vested in him in terms of section 97 of the Constitution may transfer to a member of the Cabinet any power or function to any member of Cabinet. The President exercised his powers to appoint the Minister of Electricity to carry out all powers and functions in section 34(1) of the Electricity Regulation Act, 2006 as a broader strategy to deal with load shedding.

In recent weeks, the President has gazetted the specific role of the Minister of Electricity (Annexure A)

The President is on record having stated that the delineation of powers and functions is directed at ensuring effective coordination and dedicated focus to deal more effectively and urgently with the electricity crisis.

In addition, the structure and operations of the National Electricity Crisis Committee ensure optimal coordination among all government entities.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The Minister did not conduct a site visit to Denel on 12 May 2023. On that specific week, the Minister was on an official visit to the People’s Republic of China. Site visits to operations of State-Owned Enterprises (SOCs) are part of the oversight mechanisms available to the Minister, Deputy Minister, and the Department to get a first-hand appreciation of the state of operations at each SOC and to interact with management and employees at the shopfloor level.

2. The primary purpose of the visit was not about inspecting weapons produced by Denel. The visit was part of the induction process for the Deputy Minister since his appointment in March 2023. The visit has given the Deputy Minister an opportunity to engage with management and employees of the Denel divisions and to visit the operations. The display of weapons on the day was the initiative of Denel to showcase the capabilities to the Deputy Minister and their relevance to national security.

3. Yes, all the weapon systems in the custodY of Denel are known by the Department. These are reported on in Denel’s Corporate Plan, Quarterly Reports and Annual Reports. Denel’s portfolio of weapons and weapon systems is regulated through the National Conventional Arms Control Act.

(4) Yes. Denel’s presentation outlined all the capabilities and product portfolio of the two divisions. Denel management confirmed to the Deputy Minister that Denel has not sold any military hardware or product to the Russian Federation.

The Ambassador of the United States to South Africa, has, in recent weeks, apologized for his unfounded claims.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom:

1. The failed transformer PAMS 65 that is referred to by the Honourable Mr Singh was replaced on Saturday 13 May 2023 according to the process where all customers who had tampered with their meters to avoid paying for electricity had paid the required fine and illegal connections had been removed. Some customers were found to have converted themselves to prepaid meters and had installed sub-meters.

Eskom did not disconnect or suspend electricity to this area; however, the transformer had overloaded and isolated itself due to overload caused by illegal connections, bypassed meters, and vandalism of the infrastructure.

Eskom is experiencing a very significant increase in transformer failures in residential areas due to meter tampering, illegal connections, and vandalism of Eskom’s infrastructure. Replacement of infrastructure without addressing the root cause has become unsustainable, costly, and unsafe for Eskom’s technicians and members of the public, specifically also innocent children.

In such cases, Eskom has an obligation to eliminate the associated safety risk before a transformer is replaced. The replacement of transformers without resolving the problem leads to repeated failures and unsafe conditions for the technical team and the community, and this is also financially unsustainable.

The existing infrastructure has been installed to cater for the supply requirements of Eskom’s legally connected customers.

(a) and (b) In addition to the Electricity Regulation Act and its licence conditions, Eskom is required to comply with, among others, NRS 047 Part 1: Quality of Service (“NRS 047”) and the Distribution System Code (“the Distribution Code”), attached to this as Annexures A and B, respectively, which regulate matters pertaining to unplanned supply interruptions. Clause 4.5.3 of NRS 047 regulates the restoration of supply after unplanned interruptions. Under “normal circumstances”, Eskom would be required to follow the restoration period provided in NRS 047. This provision must be read together with paragraph 18.4(1) of the Distribution Code, which requires customers to comply with instructions from Eskom before the supply of electricity is restored. Paragraph 3(1) of the Distribution Code, furthermore, states that Eskom is required to take remedial action to relieve any condition that may jeopardise the reliability of the Distribution system.

Therefore, before the transformer can be replaced and supply restored, an audit must be conducted. In line with the regulations and Eskom’s processes, community members who are found to have tampered with their meters are issued with tamper fines of R6 052.60 per tampered meter and all illegal connections are removed.

2. The response provided above adequately addresses the matter.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

No.

Only six SOEs fall within the Department of Public Enterprises mandate. A large number of SOEs are the responsibility of other departments.

The following are some of the steps taken by the SOEs to fight corruption and stabilize their finances and operations:

Since 2018, the department has launched initiatives to eradicate fraud and corruption in the SOEs. This includes holding perpetrators of state capture and corruption to account. Progress to date in fighting corruption is as follows:

1. Eskom

• 1. Contracts amounting to R14.7 billion were subject to state capture.
  2. R4,8 billion is being claimed against former contractors and Eskom’s former directors.
  3. Eskom and SIU successfully recovered R2 billion unlawfully paid to contractors.
  4. Eskom has opened 11 criminal cases for investigation by law enforcement agencies with the view to ensure that perpetrators of state capture are prosecuted.
  5. 2 cases of corruption are before the courts, one relates to ABB and another one relates to former Acting GCE Mr. Koko.
  6. Consultations with CIPC and law enforcement agencies are unfolding to imminently launch director delinquency proceedings against 13 former directors of Eskom.
  7. 25 names of former senior executive of Eskom have been identified for inclusion into a state-wide central database of officials implicated in state capture and other administrative corruption.
  8. A central database to be used to monitor that individuals do not resurface elsewhere in the state is being established.
  9. DPE’s complaint laid with IRBA resulted in Mr. Aaron Buyiswa Mthimunye being fined R5.1 million and being barred from practicing as an auditor for incorrect audit opinion in respect of Eskom’s 2016 audit.
  10. The complaint laid with SAICA against Mr. Anoj Singh resulted in him being barred from practicing as an auditor and fined 50% (exact figure not provided) of the costs of the disciplinary hearing.
  11. The MOI of Eskom was revised in 2019 and all board tender committees were done away with.

1. 12. SIU launched investigations into 14 coal transportation service provider concerning payments from 2016 to 31 January 2021.

• Five employees were suspended, one resigned during the interview with the investigating team and one resigned prior to commencement of the investigation.
• The official who resigned during the interview received R3.1m from one of the vendors under investigation.
• The SIU Tribunal issued an order in October 2021 to freeze R11.5m held in a bank account of an entity, which a senior Eskom official was a signatory, and the official was dismissed.
• 15 criminal cases are being investigated in relation to coal transport contracts.

1.13 Four diesel suppliers are implicated in potential wrongdoing are under investigation. SIU has referred 5620 matters to Eskom for institution of disciplinary proceedings as follows:

• 5464 for failure to submit financial declarations that are integral in preventing and detecting conflict of interest concerning the management of Eskom's resources.
• 135 for failing to declare or get approval for doing work outside of Eskom.
• 11 officials red flagged through lifestyle audits.
• 10 officials referred through whistle blower reports.
• 14 officials referred concerning findings from build contract investigations.
• 1 official in relation to coal transportation contract.

1.14 Contracts cancelled by Eskom as a result of SIU’s investigations:

• CSA - R6.955bn.
• Build contracts – R4.128bn.
• Total – 11.083bn.

1.15 Contracts declared invalid by the courts:

• CSA - R3.7 bn.

1.16 Savings/Losses Prevented

• CSA: Setting aside Brakfontein CSA – R2.684 bn.
• CSA: Cancellation of Koorfontein CSA - R5.550 bn.
• Build Contract matter before Dispute Arbitration Board (Stefanutti Stocks) - R400m.
• ABB: Prevention of future losses – R1.45bn.

1.17 Evidence referred to assist Eskom in Defence contractors' claims before the Dispute arbitration Board:

• Stefanutti Stocks R.6 bn.
• Tubular - R60m.
• Tenova – R300m.
• ABB – R1.45 bn.
• Total R3.41bn.

2. Transnet

• 1. The total value of tainted contracts identified by the Commission amounted to R41.2bn.
  2. Transnet successfully recovered R744m from CRRC and Liebher R1.181bn.
  3. Transnet opened 12 criminal cases for investigation by law enforcement agencies with the view to ensure that perpetrators of state capture are prosecuted.

1. 4. The value of contracts under investigation is as follows:

• Procurement of 1064 locomotives - R49,46bn;
• Liebherr crane contracts - R1,084bn;
• ZPMC crane contract – R961m.
• Regiments and Trillian advisory services contract - R1.49bn;
• Nedbank interest rate swaps transaction facilitated by Regiments that has cost Transnet R2.339bn payments and interest rate of around R531m and fees of R146m paid to Regiments;
• Neotel contract for installation of CCTV cameras in ports with potential civil recovery of R834m;
• Global Software Solutions (GSS) contract for wagon optimisation project amounting to R250m;
• Commission paid to GSS for facilitating the IT contract awarded by Transnet to SAP on a R165m contract; and
• Zestilor for cession of Transnet hardware from T-Systems to Zestilor contract valued at R154,2m.

2.5 Value of successful civil recovering:

• R18m paid to CRRC for an advanced payment made for spares that were not delivered; and
• R54m paid to Liebherr for the crane contract.

2.6 Transnet and SIU progressing with litigation to:

• Review and set aside of1064 locomotives contract and just and equitable relief;
• Review and set aside of ZPMC 1064 locomotives contract and just and equitable relief;
• Review and set aside Neotel CCTV cameras contract and just and equitable relief;
• Review and set aside Liebherr crane contracts where just and equitable relief sought is that the settlement agreement of Liebherr is just and equitable remedy;
• Claims of R521,37m against Trillian and Regiments (both in liquidation) and former Transnet officials related to the transaction advisory services; and
• CRRC interdict and forfeiture of CRRC funds in South Africa (SARS has executed against R4.9bn and it is unclear what will remain after tax assessments are completed).

2.7 The DPE is currently finalising consultations with CIPC with the view to imminently launch director delinquency proceedings against 25 former directors of Transnet.

3. South African Airways

3.1 Value of contracts tainted by state capture that are under investigation amount to R1.8bn.

3.2 10 criminal cases have been opened with law enforcement agencies for investigation.

3.3 SAA and SIU are progressing with launching of the following civil claims:

• ARR/JM Aviation – R1.bn relating to corruption between third parties, board members and employees of SAA;
• Recovery of R14m emanating from disposal of Ground Processing Units at a loss of R5.64m;
• Motion papers filed at Special Tribunal to set aside a contract and recover R85m plus interest pertaining to leasing of aircraft from FlyoFofa Airways;
• Airbus/Pembroke - R824m regarding tender irregularities and contract non-compliance issues on sale and lease back agreement of aircraft; Zonkesiswe/IEPS Protection Services – R985m regarding irregular payments and contract extensions.

3.4 R130m savings registered concerning cancellation of a contract amounting to R170m that was awarded irregularly to Ugandra/TATA (Tata Consultancy Services).

3.5 McKinsey (Sale of obsolete stock)- SIU facilitated civil reimbursement of R14m contract by McKinsey.

3.6  former director (Yakwe Kwinana) was fined R6.1m and barred from practicing as a CA subsequent to a complaint laid by the department.

3.7 The MOI of SAA was revised in 2019 to do away with all board tender committees.

4. Denel

• 1. Former board chairperson implicated in state capture referred to Law Society to prevent them from practicing.
  2. All recommendations of criminal contained in the state capture report are under investigation by law enforcement agencies.
  3. DPE is currently finalising consultations with CIPC with the view to imminently launch director delinquency proceedings against 9 former directors of Denel.
  4. Former director (Daniel Mantsha) referred to LPC for discipline.

5. Alexkor

• 1. State capture report currently being analysed and cases being prepared for referral to law enforcement agencies.
  2. All recommendations of criminal cases contained in the state capture report are under investigation by law enforcement agencies.
  3. DPE is currently finalising consultations with CIPC with the view to imminently launch director delinquency proceedings against 25 former directors of Alexkor.

In addition, many other initiatives are in place (e.g., the intervention of government to take part of Eskom’s debt onto the sovereign balance sheet) to stabilize the SOEs.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The Government is appealing the rationale of the decision of the High Court to exempt schools, hospitals and police stations from load shedding as the implementation of this decision is impractical. Load shedding is a measure that is implemented to protect the Grid from collapsing and the schools, hospitals and police stations do not have an isolated connection to the Grid and are rather part of the integrated Grid system which makes it difficult to only switch on those institutions during load shedding.

In addition, it is worth noting that where possible Eskom is able to exclude some of those institutions from load shedding. To date, Eskom’s number of supply points identified are 196 police stations, 22371 public schools and 2960 public health establishments. Also, most of the hospitals and SAPS offices do have generators to enable them to circumvent load shedding.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The Department of Public Enterprises does not consider itself liable for jeopardizing the health rights of patients in public hospitals as the implementation of load shedding is a protective measure implemented by Eskom to avoid the posibility of a grid collapse. The costs of opposing the North Gauteng High Court order are minimal compared to the consequences of a grid collapse. If the grid system is left unprotected it will lead to disastrous consequences for the whole country, including patients in hospitals.

It is worth noting that the line function departments as well as Eskom are working on putting measures in place to protect the health facilities from being affected by load shedding. Eskom is currently working on a plan to exclude more health facilities and the line function Departments such as the Department of Health are procuring as much generators within their constrained budgets to alleviate the effects of load shedding.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

(a) Most of Generation’s coal-fired stations are currently operating at below aspiration, leading to a fleet Energy Availability Factor (EAF) of 52.6% year-to-date as of 22 May 2023. The Generation Operational Recovery Programme, with the support of Eskom’s Board, aims to sustainably recover the performance of the plants over the next 24 months. The return of the three (3) units at Kusile before the end of 2023 will improve the situation significantly by adding up to 2 160 MW to the grid.

(b) Funds for Generation activities are sourced from operations, i.e., from income allowed in NERSA revenue determinations.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom:

(1) At present, Eskom is engaging with both the Department of Health and the Department of Water and Sanitation regarding their points of supply in the Eskom supply area identified as critical. Once this has been completed, where possible, measures will be implemented to mitigate the impact of loadshedding as far as practically possible. Currently, Eskom exempts or partially exempts 25 public health establishments within its area of supply.

(2) Where a facility is deeply embedded in the network, partial exemption at lower stages of loadshedding has been granted. Eskom has concluded a preliminary assessment of establishing dedicated feeders for certain hospitals. This assessment has been shared with the Department of Health, and discussions on implementation are ongoing. A similar approach will be followed for other critical infrastructure.

(3)(a)(b) The implementation time is envisaged to take between 12 to 24 months, after the investment decision, depending on the type of solution and other factors such as environmental approvals and land acquisition. The impact on grid stability is minimal, as the System Operator will continue to balance demand and supply.

(4) The Minister has decided to file an urgent appeal to set aside the judgment. Therefore, the application by the Minister to appeal will suspend the operation and execution of a judgment of the High Court, pending the outcome of the application.

However, Eskom continues its endeavours to provide whatever relief is possible, given the design of the grid that the hospital or essential service is connected to. All of the above, is, of course, dependent on the total megawatts available from the generation system. It is the latter that is the fundamental cause of the current limitations on energy availability.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

(a)(i)

In the 2021/22 financial year, 571 295 617 litres of diesel were used.

(a)(ii)

In the 2022/23 financial year, 937 508 149 litres of diesel were used.

(b) The total cost of diesel consumption in FY21/22 was R6,407 million and R21,356 million in FY22/23.

Note that the R6,407 million included the rebate of R2,297 million, which was retrospectively written off for the FY21/22 in the FY22/23. Excluding the rebate, the total cost of diesel consumption was R8,704 million.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) The role of the Shareholder representative is to ensure that the Board of a State-Owned Company (SOC) is held accountable and the Board in turn holds the Executive accountable. In the case of Eskom, the shareholder was concerned about the devastating impact of loadshedding on the households, businesses and the South African economy. On 30 September 2022, a new Eskom Board was reconstituted with a task to reposition Eskom to play a key role in the energy sector. Furthermore, the new Board had to deal with immediate loadshedding issues, procurement, elimination of corruption and ensuring that there is reliability of energy supply in the medium to long term.

It is for that reason that the Board had to evaluate the tenure of the former Eskom Executive management including Mr Andre De Ruyter to account for his tenure as the Eskom Group CEO. Unfortunately, in the course of the process, Mr De Ruyter choose to resign before the Board evaluation process.

b0 That was not for the shareholder to determine as explained in the above response, that was for the Board to determine unfortunately, Mr De Ruyter chose to resign before that evaluation process by the Board could commence.

Nonetheless, there were many engagements with the Board, Management and CEO on the declining performance of generation and my concerns about the lack of improvement in output of generation plant.

Remarks: Approved / Not Approved

Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

Eskom is of the view that the approach related to Econ Oil and ABB was carried out fairly, within the prescripts of the law and to protect Eskom’s financial and reputational interests as is required by the Public Finance Management Amendment Act (PFMA). Eskom is of the view that there was no mistake in the of supplier discipline process and the correlating sanction imposed on Econ Oil and its director.

Ms Madokwe focuses on just two companies, being Econ Oil and ABB. Eskom is currently working through a backlog of ~230 supplier disciplinary matters and has, within the past two months, initiated ~50 supplier disciplinary actions. All may not translate into a deregistration from Eskom’s supplier database, however various sanctions including deregistration, may be levied once the disciplinary process for each supplier is finalised.

As relates to the action taken against Econ Oil, Eskom is dealing with a highly litigious company which is exercising its legal rights through “forum shopping” by initiating action in multiple judicial fora tying up Eskom in spurious litigation. Eskom acknowledges that Econ Oil has the constitutional right to seek just and equitable legal remedy and is accordingly dealing with these matters (despite the time and cost) as they arise.

The ABB matter is distinguishable from Econ Oil in a number of respects. ABB was awarded the contract for the supply and installation of the Control and Instrumentation Systems at Kusile Power Station (the Project).

ABB made a voluntary disclosure in respect of conduct relating to the Project and is cooperating in all relevant criminal investigations related thereto, which has been facilitative of criminal charges being brought against implicated Eskom officials, including Mr Matshela Koko, Eskom’s former Chief Executive Officer. In addition, in December 2020, ABB repaid approximately R1.56 billion to Eskom. In December 2022, ABB agreed to repay an additional R2.5 billion to the NPA. The ABB matter is also distinguishable as ABB was midway through performing an existing Scope of Work as related to the Project, which Eskom requires ABB to compete.

Nevertheless, ABB is flagged on the Eskom supplier database and is unable to bid for future contracts. As such, ABB is effectively in the same position as Econ Oil and cannot be awarded future contracts. Once all relevant processes have been completed in respect of ABB, ABB will be taken through Eskom’s supplier disciplinary process and the consequent time period of its removal from the Eskom Supplier Database will be determined.

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ. Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from, Alexkor; Denel; Eskom; Safcol, SAA and Transnet

ENTITY	RESPONSE
DPE	(a)The Department of Public Enterprise does not have any current contracts with the security company G4S. (i)(ii) Not applicable
Alexkor	(b) Alexkor SOC Ltd does not have any contracts with the security company G4S. (i)(ii) Not applicable
Denel	(b) Denel has not procured any services from the said companies since the 2018-19 financial year. (i)(ii) Not applicable
Eskom	(b) G4S is not a security service provider to Eskom or any of its subsidiaries. (i)(ii) Not applicable
SAFCOL	(b) The SA Forestry Company (SAFCOL) Ltd and its subsidiaries have not signed contracts with the security firm G4S. (i)(ii) Not applicable
SAA	(b) SAA does not have any contract with G4S (i)(ii) Not applicable

The following table provides details of the current contract with the security company G4S in Transnet.

(b) (i) & (ii)

Transaction Advisor/s (Supplier Name)	Operating Division (OD)	Contract Description	Contract Expiry Assessment	Contract Start End	Contract End Date	The monetary value of contract
G4S Secure Solutions (SA)	Transnet Port Terminals	Supply and installation and commissioning of Embedded Application Biometric Readers (EABR)	Contract Expires in 31 - 60 Days	Friday, February 3, 2023	Wednesday, May 31, 2023	R 758,825.22

Remarks: Approved / Not Approved

Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. There is no reference in the final Annual Financial Statements for each of the financial years ended 31 March 2018 to 31 March 2021 of any dividend having been paid by Alexkor SOC Ltd. There is not a dividend declaration included in the currently unaudited Annual Financial Statements at 31 March 2022. Given that Alexkor SOC Ltd (nor its 51% owned joint venture PSJV) has not addressed maintenance backlogs and both fatal and non-fatal non-compliance with the Mine Health and Safety Act requirements for the past 6 years, it will not be possible, or financially prudent to pay a dividend at 31 March 2023.

2. There has been no government bailout in the specified period.

According to information received from DENEL

a) Denel has not paid any dividends to the Government over the past five years.

b) Denel received the following amounts from the Government 

Year ended 2018/2019 -

2019/2020 1,800,000,000.00

2020/2021 576,000,000.00

2021/2022 3,068,886,261.73

2022/2023 3,582,700,000.00

9,027,586,261.73

According to information received from Eskom:

ESKOM HOLDINGS SOC LTD
	a) Dividends (Rand)	b) Government support (R’ billion)
FY2019	0	23
FY2020	0	49
FY2021	0	56
FY2022	0	31.7
FY2023	0	21.9
Total	0	181.6

According to information received from SAFCOL:

Financial Year	Dividend Amount	Government Bailouts
2022/23	R1 Million (declared at AGM of 2021/22).	None
2021/22	None	None
2020/21	None	None
2019/20	None	None
2018/19	None	None

According to information received from SAA

a) Dividends over the past five years:

b) Shareholding funding to SAA is as follows:

YEAR	AMOUNT
2018/19	R5.0bn to fund operations and working capital
2019/20	R5.5bn to fund working capital and lender debt
2020/21	R18.275bn to fund business rescue
2021/22	R6.778bn (R4.078bn to fund legacy debt and R2.7 bn for subsidiaries
2022/23	R1.583bn to fund legacy lender debt

According to information received from Transnet

a) No dividends have been paid by Transnet to Government in the past five years.

b) Transnet received R5.837 billion in January 2023, with R2.937 billion representing disbursement for the repair of flood damages suffered by Transnet during April 2022 and R2.9 billion to accelerate the repair and maintenance of freight rail locomotives.

Remarks: Approved / Not Approved

Melanchton Makobe PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

(1)(a)&(b), the following two tables provide a summary of the ferrous and non-ferrous scrap sales by auction.

a) Table 1: Auctioned ferrous scrap by type, buyer, tonnage and value.

b) Table 2: Auctioned non-ferrous scrap by type, buyer, tonnage, and value.

(2) (a) and (b) table 3 below provides a summary of ferrous scrap sold to three contracted private companies (foundries), following a procurement process in February 2022.

(2)(c) Table 3: Ferrous scrap sold to the three contracted foundries, by types of material, tonnages, and value sold.

Remarks: Reply: Approved / Not Approved

Melanchton Makobe P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

The department is aware of findings and recommendations set out in the report published by the Commission of Inquiry into State Capture (Commission). The department’s consultation with law enforcement agencies on the implementation of the Commission’s report revealed that all referrals on criminal and civil matters concerning Transnet’s affairs are under investigation. The implementation of the recommendations is monitored through implementation plan the President published in response to the state capture report. The department also monitors that Transnet supports law enforcement agencies in their investigations concerning all recommendations in the report. This includes monitoring that Transnet institutes civil proceedings to recover all resources that were illegally diverted from company to ensure that they are used to benefit the country’s citizens.

According to information received from Transnet:

Mr Shane and Integrated Capital Management (ICM) were included in the recommendations of the Judicial Commission of Inquiry into allegations of State Capture, Corruption and Fraud in the Public Sector Including Organs of State including Organs of State that were directed towards law enforcement agencies for investigations. Accordingly, the Minister of Public Enterprises and the Department are aware of allegations regarding Mr Shane and ICM. In particular, the Minister has noted that the Commission recommended in respect of 39 cases that ”(t)he law enforcement agencies [should] conduct such further investigations as may be necessary with a view to possible prosecution” of named individuals and entities.

No recommendations on Integrated Capital Management (ICM), its directors Marc Chipkin, Clive Angel, and Stanley Shane were directed at Transnet for action. However, where further investigations present a case for civil recovery, Transnet will act accordingly. Transnet is assisting all the law enforcement agencies in all matters being pursued by the agencies.

Mr Shane ceased being a director on the Transnet Board on 28 June 2017. He no longer serves in any capacity at Transnet. He was removed as chairperson of the Transnet Second Defined Benefit Fund (“the Fund”) upon his resignation as a director on 28 June 2017 and no longer serves on the board of trustees of the Fund.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

I would like to confirm that South African Airways (SAA) has indeed (a) leased aircraft since 1 September 2021. No aircraft have been (b) purchased or (c) otherwise acquired during this period. The details of the leased aircraft are as follows:

SAA has leased a total of 6 aircraft, which include:

1. One (1) Airbus A330-300 (Wide body aircraft) from a reputable lessor:

(i) (aa) Description: Airbus A330-300

(cc) Type: Wide body aircraft

ii) Date received by SAA: 17 August 2021

iii) Lessor: [Lessor name withheld for confidentiality reasons]

iv) Lease cost: Power by the Hour agreement

v) Full terms of lease: [Cannot be disclosed due to confidentiality reasons]

2. Three (3) Airbus A319 aircraft (Narrow Body aircraft) from another well-established lessor:

(i) (aa) Description: Airbus A319

(cc) Type: Narrow body aircraft

ii) Dates each aircraft was received by SAA: 30 March 2022;

iii) Lessor: [Lessor name withheld for confidentiality reasons]

iv) Lease costs: Power by the Hour agreement

v) Full terms of each lease: [Cannot be disclosed due to confidentiality reasons]

3. Two (2) Airbus A320 aircraft from a third reputable lessor:

i) (aa) Description: Airbus A320

(cc) Type: Narrow body aircraft

ii) Dates each aircraft was received by SAA: July 2021

iii) Lessor: [Lessor name withheld for confidentiality reasons]

iv) Lease costs: Power by the Hour agreement

v) Full terms of each lease: [Cannot be disclosed due to confidentiality reasons]

While we understand the importance of transparency and the need to provide comprehensive information, the full terms of the lease agreements cannot be disclosed due to several reasons. The primary reason is the confidentiality and non-disclosure clauses present in the lease agreements signed between South African Airways (SAA) and the respective lessors. These clauses are standard in commercial agreements to protect the interests of both parties involved.

Moreover, the aviation industry is a highly competitive market, and disclosing detailed information on the lease agreements could potentially compromise SAA's negotiation power for future aircraft leases or acquisitions. Revealing such information may expose sensitive financial and strategic data, which could be used by competitors to gain an advantage in the market. By maintaining confidentiality, SAA aims to protect its commercial interests and maintain a competitive edge in the aviation industry.

Additionally, disclosing the full terms of the lease agreements may also inadvertently breach the privacy and proprietary rights of the lessors. Sharing such information could potentially damage the professional relationship between SAA and its lessors, hindering future negotiations and collaborations.

It is important to emphasize that parliamentary questions should not be used as an opportunity to compromise the interests and confidentiality of involved entities. In summary, the full terms of the lease agreements cannot be shared due to the confidentiality clauses in the contracts, the competitive nature of the aviation industry, and the need to protect both SAA's and the lessors' commercial interests. However, we assure you that all lease agreements have been entered into following due process and with the best interests of SAA and the South African public in mind.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

SAA sold the A340 aircraft, it owned, through a very competitive tender process. The first aircraft was delivered to the buyer and SAA will deliver the second A340 this month. The other A340s will follow as they complete their checks with SAA Technical (SAAT).

In March 2023, SAA returned three A319 aircrafts to the lessor as we had reached the end of the contract. The aircrafts were flown to their final destinations by SAA Pilots and SAA covered the costs of the SAA Pilots (accommodation, catering on the flight for the Pilots and their flight tickets back to Johannesburg) and overflying/landing rights. SAA also did normal preflight minor maintenance actions, before departure of each flight, which came at no additional cost to SAA.

SAA has refrained from providing commercially sensitive information in this response, as we operate in a highly competitive environment. It must be noted that while we are not at liberty to divulge commercially sensitive information in a public forum, our shareholder, the government, does have access to this information through the relevant department.

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 Denel

Please note that Armscor as the acquisition agency for the Department of Defence (DOD) will be in a position to provide the required information. Denel is not authorised to provide this information.

The contractual relations between Denel and Armscor is managed, among others, by commercial agreements which contain confidential information provisions. These provisions preclude Denel from disclosing such information. Therefore, Armscor as the acquisition agency for the Department of Defence (DOD) will be in a position to provide the required information. As per the existing commercial agreements, Denel is not authorised to provide this information.

However, we must emphasize that Denel is positioning itself to execute orders from and commitments to, both the SANDF and other customers. We must also point out that recovering from the damage caused by State Capture and the loss of skills is a challenging journey. Nevertheless, Denel is considered an important asset by government.

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

a) Relevant details of the 56 MW nuclear project under the private or non-DMRE REIPPP programme.

This is an Eskom Holdings Steam Generator Replacement (SGR) project. The Grid Access Unit within Distribution processed an application received from Koeberg Nuclear Power Station (KNPS) to increase its power output.

The existing KNPS operating licence expires in 2024, and its continued operation thereafter depends on critical refurbishments which include among other things, the SGR project.

The conclusion of the project will add 20 operational years to the KNPS and increase its power output by approximately 56 MW.

(b) Reason that the project is a private REIPPPP project

All projects that are not participating in the government-regulated generation capacity procurement programme managed by the IPP Office in the DMRE, are considered private REIPPPP projects.

The IPP Office is the sole procurer of generation capacity required for the growth of the economy on behalf of the government.

Therefore, the Eskom nuclear project is not part of the regulated generation capacity procurement programme under the IPP Office.  

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

There are currently 6 Boards within the Department’s portfolio of State-Owned Companies, comprising 50 Board members. To date, all the Directors have been inducted.

Board induction process is undertaken jointly between the Department and the SOC when a new Board is appointed. This is not a compulsory process in that there is no legislative requirement prescribing Board induction. Rather, it is a good governance practice that has been adopted and implemented by the Department.

In addition, an introductory meeting is held with the Minister and the Board wherein key issues pertaining to inter alia Shareholder’s expectations are outlined. Moreover, the Company itself prepares and undertakes an ongoing Board training programme upon identification of individual Board members’ areas of development.

Further, the Company reports on its Board training and development to the Shareholder on a quarterly basis as part of its Quarterly Report to the Shareholder, to enable the Department to monitor both the Board and Company’s performance against set targets.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The work done since 2018 to date to address corruption within Eskom is as follows:

a) Contracts cancelled by Eskom because of SIU’s investigations:

• Coal Supply Agreement (CSA) - R6.955 bn.
• Build contracts – R4.128 bn.
• Total – 11.083 bn.

b) Contracts declared invalid by the courts.

• Tegeta – Brakfontein/Majuba Coal Supply Agreement - R3.7 bn.

c)  Savings/Losses Prevented

• CSA: Setting aside Brakfontein CSA – R2.684 bn.
• CSA: Cancellation of Koorfontein CSA - R5.550 bn.
• Build Contract matter before Dispute Arbitration Board - R400 m.
• Prevention of future losses – R1.45 bn.

d) Evidence referred to assist Eskom in the defence of five contractors' claims of R7.2 bn before the Dispute Arbitration Board.

e) Approximately R4,8 bn is being claimed against suppliers and former directors of Eskom.

f) Eskom and SIU successfully recovered R2 bn unlawfully paid to Trillian, Deloitte, ABB, and Meagra Transport CC.

g) SIU launched investigations into 14 coal transportation service provider concerning payments from 01 January 2010 to 31 January 2021.

• Five employees were suspended, one resigned during the interview with the investigating team and one resigned prior to commencement of the investigation.
• The official who resigned during the interview received R3.1m from one of the vendors under investigation.
• The SIU Tribunal granted an order in October 2021 to freeze R11.5m held in a bank account of an entity, which a senior Eskom official was a signatory, and the official was dismissed.
• 15 criminal cases are being investigated in relation to coal transport contracts.

h) Four diesel suppliers implicated in potential wrongdoing are under investigation.

i) SIU has referred the following 5620 matters to Eskom for institution of disciplinary proceedings:

• 5464 for failure to submit financial declarations that are integral in preventing and detecting conflict of interest concerning the management of Eskom's resources.
• 135 for failing to declare or get approval for doing work outside of Eskom.
• 11 officials were red flagged through lifestyle audits.
• 10 officials referred through whistle blower reports.
• 14 officials referred concerning findings from build contract investigations.
• 1 official in relation to coal transportation contract.

j) Eskom officials who failed to declare their conflict of interest and/or who conducted business with Eskom:

• 334 officials have been identified who are potentially linked to entities that are Eskom’s vendors with 161 of them potentially linked to entities that received payment from Eskom.

k) Total of 134 officials were referred for disciplinary proceedings relating to conflict of interest. 116 cases have been finalised as follows:

• 67 guilty.
• 18 not guilty.
• 19 resigned.
• 4 retired.
• 8 withdrawn.
• All cases are being evaluated to determine the prospects of civil recoveries.

l) 11 Eskom officials were red flagged through lifestyle audits and referred for disciplinary proceeding. The cases were finalised as follows:

• 7 guilty.
• 2 not guilty.
• 1 resigned.
• 1 retired.

m) Eskom has opened 11 criminal cases for investigation by law enforcement agencies with the view to ensure that perpetrators of state capture are prosecuted.

n) 2 cases of corruption are before the courts, one relates to ABB and another one relates to former Acting GCE Mr. Koko.

o) The SIU has recommended the restriction of 76 vendors who are linked to Eskom officials.

p) A total of 112 referrals have been made to the NPA.

• Conflict of interest: 14 matters referred.
• Build contracts: 73 matters referred.
• Coal procurement/transportation: 15 matters referred.
• IT contracts: 10 matters referred.

q) A total of 65 referrals have been made to the Asset Forfeiture Unit.

• Build contracts – 61 matters referred with restraint orders totalling R1.48 bn obtained.
• Coal procurement/transportation – 15 matters referred.
• IT contracts – 10 matters referred.

r) The DPE is currently finalising consultations with CIPC with the view to imminently launch director delinquency proceedings against 13 former directors of Eskom.

s) 25 names of former senior executive of Eskom have been identified for inclusion into a centralised database of individuals dismissed for their involvement in state capture or who resigned from Eskom to avoid accountability for state capture. The database will be used to monitor those individuals who abused their positions of authority in one sphere of government and/ or entity, do not resurface in another.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Yes, I have full confidence in the Board.

Eskom is currently facing very constrained energy availability:

1. Kusile units 1, 2 and 3 are not available until later in the year, due to the damaged flue. This removes 2100MW.
2. Koeberg unit 1 is offline and undergoing refurbishment to extend the life of the unity by 20 years.
3. There are a number of units on outages - both planned and unplanned (plus not being returned to service on time). This results in a total unavailability ranging between 15000MW and 18000MW.

In addition, renewable energy projects which are under construction at present do not, yet supply an adequate number of megawatts.

Nonetheless, the Board and management of Eskom have developed a Recovery Plan for the next 18 months, which will ensure incremental gains at each power station.

The public – both residential and areas and business, can also make an important and sizeable contribution to reducing demand by a careful use of geysers, lights and other water heating equipment.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. There have been many initiatives in Eskom after the State Capture period to identify corrupt individuals, contracts and payments. A number of individuals and companies have been charged, dismissed or required to pay back money that was earned through illegal or improper means. Among these are ABB, McKinsey and others. The above is a result of the work of SIU, DPCI and Eskom’s own investigations.

2. In terms of section 34 of PRECCA, I am advised that:

• a) Mr De Reyter is a “person who holds a position of authority” as the Chief Executive Officer of Eskom and therefore bears a duty to report corrupt transactions to the DPCI in terms of that section; and
• b) I am excluded from the definition of such persons in section 34(4) of PRECCA.

3. In addition, the following law enforcement and other actions relating to Eskom should be noted:

a) Various measures taken by the Department of Public Enterprises and reported to Parliament regarding the implementation of the recommendations of the Zondo Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector, including Organs of State regarding Eskom in particular;

b) The cancellation of coal supply agreements and construction contracts by Eskom with a value of approximately R11 billion ;

c) Litigation by Eskom that declared invalid coal supply agreements to an approximate value of R3.7 billion;

d) Preventing further losses of approximately R10 billion to Eskom by setting aside other coal supply agreements and constructions contracts;

e) Eskom defending arbitrations brought by contractors with an approximate value of R7.2 billion;

f) Eskom pursuing claims with a value of approximately R4.8 billion against suppliers and former directors of Eskom;

g) Eskom recovering approximately R2 billion unlawfully paid by Eskom to service providers;

h) SIU investigations and Eskom disciplinary action regarding 14 coal transportation service providers concerning payments from 01 January 2010 to 31 January 2021;

i) Ongoing internal investigations into 4 diesel suppliers to Eskom;

j) SIU referrals of 5,635 matters to Eskom for institution of disciplinary proceedings against employees for their failure to submit financial declarations, declare or get approval for doing work outside of Eskom, as a result of lifestyle audits, whistleblower reports and other internal investigations;

k) Pending criminal cases or referrals to the National Prosecuting Authority by law enforcement in at least 125 instances and a further 65 referrals to the Asset Forfeiture Unit relating to Eskom;

l) The Department of Public Enterprises finalising external advice regarding it launching applications to have several former directors of Eskom declared delinquent; and

m) The inclusion of at least 25 former senior executives at Eskom in a database of individuals dismissed for their involvement in state capture and corruption at Eskom.

4. When Mr De Ruyter advised me of this further investigation, I understood that law enforcement (specifically, the Directorate for Priority Crime Investigation) was involved in the investigation.

5. I have no additional knowledge or evidence of “criminal activities by a senior government official in relation to Eskom coal contracts” referred to in the Question.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The key objective of the study is to provide National Treasury with independent advisory services on the operational challenges impacting on the appropriate interventions that will turn around the operations of the entity. The service provider “will be reviewing and advising on the operational challenges being experienced at the existing power plant level, appropriateness and effectiveness of maintenance regime being implemented, the level capital expenditure required for the existing power plants”. The service provider will be required to visit all the power plants in the Eskom network and engage with various divisions within Eskom and the Department of Public Enterprises.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

According to the information received from Denel:

a) Mr. Ntsihlele was put on precautionary suspension with full pay as per Denel policy on 18 November 2022.

b) The cumulative salary paid from November 2022 to March 2023 is R 360 325.13.

c) Denel Dynamics is expected to conclude its disciplinary processes against Mr. Ntsihlele in May 2023.

I would like to emphasize that Denel's policy on precautionary suspension aligns with the Labour Relations Act, which mandates employees to be suspended with full pay while investigations into allegations against them are being conducted. Denel remains committed to ensuring that its disciplinary processes are carried out in a fair, transparent manner and in compliance with the law.

As the Minister of Public Enterprises, I will continue to closely monitor the situation and take appropriate action to address any concerns that may arise.

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) No guarantees were used by SAA for lease of aircraft since 2 September 2021.

b) No guarantees were used by SAA for purchase of aircraft since 2 September 2021.

c) No guarantees were used by SAA to acquire aircraft since 2 September 2021.

The reason guarantees were not used for any of the above is because the conditions for recapitalization of SAA requires that all government guarantees to SAA should be cancelled upon disbursement of funds from government.

Remarks: Reply: Approved / Not Approved

Ms. Jacky Molisane PJ. Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information provided by Eskom, I can address your questions as follows:

a) Contractors: Eskom has conducted a search of their Vendor Master system and found no direct contracts between Eskom and Chancellor House. Please note that this search is limited to formal business relationships on record and does not include any informal relationships Chancellor House may have with any of Eskom's suppliers.

b) Contract: Not applicable, as there are no direct contracts between Eskom and Chancellor House according to the search conducted by Eskom.

c) Time: Not applicable, as there are no direct contracts between Eskom and Chancellor House according to the search conducted by Eskom.

d) Total amount: Not applicable, as there are no direct contracts between Eskom and Chancellor House according to the search conducted by Eskom.

Eskom has assured me that they follow proper procurement processes, in alignment with the principles of section 217 of the Constitution of the Republic of South Africa. These processes are designed to ensure transparency and prevent potential conflicts of interest. If you have any concerns and evidence. Kindly make such evidence available to me about potential indirect connections between Chancellor House and Eskom's contractors, further investigation may be necessary to identify and address any such relationships.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the Information received from SAFCOL

1. The SA Forestry Company (SAFCOL) SOC Ltd has not entered into joint venture contracts with any companies in the last five years. Strategic partnerships are part of the company’s growth strategy; the joint ventures opportunities are currently in the identification and selection process.

a) N/A

b) N/A

2. N/A

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The 2019 Integrated Resource Plan (IRP) provides for participation of State-Owned Companies (SOCs) and the private sector to provide generation capacity currently and in the foreseeable future. Through the 2019 IRP, Government procures power from independent power producers who play a significant role in the provision of power to the national grid as Eskom. The Department of Mineral Resources and Energy (DMRE) continuously models the future generation outlook as part of the IRP review and the degree that private sector will contribute to security of supply.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

(1) The turnaround time to fix a dispatched work order is 7.5 hours and for auditing a meter that is flagged as a low buyer, it is seven days.

Customers across all areas are classified into various categories, each with its own threshold per month. The threshold for identifying low buyers in this area, is R300 per month. This customer on average buys R50 electricity a month.

Eskom experienced a high volume of faults over this period and the customer in question falls within the lower buyer category and further investigation had to be conducted. The investigation has been concluded, and it revealed that the cable to the premises was stolen. The cable has been replaced and the supply was restored on 3 April 2023.

(2) Alfred Chatbot is working. In case of a downtime, the problem gets fixed within a reasonable timeframe, so as not to inconvenience our customers. Each case is assessed according to the need of the request and differs per circumstance.

(3) As stipulated in question 1, it is also dependent on a number of factors such as investigations that need to be conducted. The referred to community has since had their cable replaced as at 3 April 2023.

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)

There were adverse weather conditions, storms and lighting in the area since October 2022, which resulted in various faults on that 22kV network. These MV faults included poles and cross-arms being hit by lightning and the failure of insulators.

In January 2023, a decision was taken by Eskom’s Aliwal North Technical Team to patrol that section of the line and conduct a line inspection in order to consolidate the number of defects caused by these storms.

(2)(a) and (b)

After completion of the line patrol and inspections, the following outage and maintenance plan to

upgrade the inline 22kV DOT-1 was put in place:

• 14 – 16 February 2023: Eskom’s Live Work Teams carried out defect clearance on the affected section.
• 28 February 2023: Another update work was carried out on the affected section of the 22kV line by Eskom’s construction teams.
• The outage was successful as Eskom managed to clear 80% of the defects on the accessible areas.
• The continuity of electricity supply in the area has since improved since the work that was executed between 14 – 18 February 2023.
• The plan is to get Eskom’s Live Work and Construction Teams back to clear the rest of the defects.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

Eskom is continuing to work on implementing the legal separation of the transmission entity (or unbundling), which remains a key strategic priority and aspect of Eskom’s Turnaround Plan envisaged under the Department of Public Enterprises (DPE) Roadmap.

According to the roadmap:

• The corporatisation of Transmission was completed in December 2021. A legally binding merger agreement was entered into between Eskom and its wholly-owned subsidiary, the National Transmission Company South Africa SOC Limited (NTCSA).
• Reasons for the delays in unbundling Transmission substantively relate to external dependencies such as obtaining lenders’ consent, acquiring electricity licences, and designation of the Transmission Entity as a Buyer.
• The next step is to operationalise the NTCSA, and this is subject to the satisfaction of certain suspensive conditions, which include, but are not limited to:

(a) the National Energy Regulator of South Africa (NERSA) granting all applicable licences required for NTCSA to operate the Transmission business; and

(b) Eskom obtaining all applicable creditor consents to the transaction.

Future phases of the legal separation will be dependent on legislative changes, which are currently being driven by the Department of Mineral Resources and Energy (DMRE) and the DPE. These changes include the amendment of the Electricity Regulation Act (ERA) regarding licensing and the Electricity Pricing Policy (EPP) of the South African Electricity Supply Industry. The amended Electricity Regulation Act (ERA) is expected to be in place during 2023.

Efforts to accelerate the addition of new Transmission capacity through expansion of the grid are being addressed through the implementation of the Transmission Development Plan (TDP) with the support of the government through, among others, the NECOM structures.

Since the launch of the DMRE Independent Power Producer (IPP) programmes (Bid Windows 1 – 4), close to 6.1 GW of new generation capacity has already been integrated into the power system. Following the announcement of the preferred bidders for Bid Window (BW) 5 / 6, there have been IPPs that participated in the private procurement process, who quickly secured grid capacity, mainly in the Western, Eastern and Northern Cape areas. The Transmission network capacity in these areas has been taken up, as per grid code requirements, which require Eskom to provide non-discriminatory open access to the grid. This has resulted in network constraints, and this will require substantial augmentations before new generation capacity can be connected to the system.

To address this, the 10-year TDP 2022, identified the new infrastructure that would be required to implement the IRP 2019 and Eskom’s 2035 Corporate Strategy. However, it takes time to establish new transmission infrastructure (especially the building of long lines and substations) mainly due to servitude acquisitions and constructability challenges. Eskom is aware of these challenges and is making every effort to expedite the build programme by engaging key stakeholders in government, as well as the private sector.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from Eskom:

1. Mr Makwana is currently serving as an Independent Non-executive Director at Nedbank Group Ltd since November 2011. He previously served as Lead Independent Director and Acting Chairperson at Nedbank Group Ltd and was later appointed Chairperson of the Board at Nedbank Group Ltd on 2 December 2021.

2. In terms of section 75 of the Companies Act and Eskom Conflict of Interest Policy, non-executive directors are required to disclose or declare any interests they have. Where a conflict exists, such conflict should be managed. One of the mechanisms to manage a conflict of interest, is to request the director not to participate in decision making relating to that interest, including excusing him/herself from meetings where such interest is discussed.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

1. The Enon area in Sundays River Valley Local Municipality has reliable Eskom electricity networks, but they are frequently negatively affected by acts of theft and vandalism. There were no major faults affecting the area during the said period of December 2022. Eskom has, however been dealing with an increase in vandalism, stolen power cables, stolen airdac cables and stolen reclosers in the area. Eskom has identified that there is a high number of stolen airdac cables on the Sunday’s River and Greater Kirkwood areas of Moses Mabhida, Msengeni, Enon and Beshiba.

(2)(a) Eskom started by replacing airdac cables on the Moses Mabhida and Msengeni area on 15 February 2023 and that project is now completed. The observation is that in these areas, the customer airdac cables are being repeatedly stolen as soon as they are being replaced.

The focus of replacing airdac cables in now on Enon and Beshiba areas where there has been a spate of cable theft. The stealing of airdacs is an on-going issue which Eskom has been dealing with for a long time now.

(2)(b) Eskom Distribution Eastern Cape has been mitigating the theft of power and airdac cables by:

• Replacing all copper airdac and power cables with aluminium cables.
• Embarking on community mobilisation and co-operation (a plan is now being finalised to launch a community co-operatives programme with Sundays River Valley Local Municipality).
• Strengthening of security initiatives.

Prioritisation of faults considers the circumstances around a particular fault; and the channel used does not have any influence on how a fault is handled. Customers are encouraged to continue using Eskom’s digital platforms. The two cases highlighted in paragraph 2(b) are being investigated and resources will be assigned to ensure that they are attended to should it be found that the customers are still without supply.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date: