Questions and Replies

Reply:

1. Firstly, it is necessary to clarify that the Presidential State-Owned Enterprises Council (PSEC), of which the Department of Public Enterprises (DPE) is the secretariat, has suggested that South Africa adopt a centralised shareholder model for the management and oversight of SOEs. In furtherance of this model PSEC has recommended that South Africa should create a Holding Company (HoldCo), into which selected strategic SOEs would be amalgamated.

The DPE supports this proposal. The Holding Company will house selected strategic SOEs, in furtherance of a centralised shareholder model. The PSEC believes that housing SOEs in a centralised structure will promote professionalism, decrease politicisation and enhance good governance practices at SOEs, amongst other benefits.

Also, it is important to note that PSEC is not the first State initiated advisory body to call for the SOEs to be managed in terms of a centralised shareholding model. The Presidential Review Committee (PRC), chaired by Ms Riah Phiyega, was established in 2010, with a mandate to make recommendations pertaining to the reform and strengthening of the SOEs. Amongst the recommendations of the PRC were that:

• The Government should develop an overarching long-term strategy for SOEs;
• The Government should enact a single overarching law (State-owned Entities Act) governing all SOEs;
• The Government should develop a framework for the appointment of SOE Boards;
• The Government should develop a common performance management system;
• The Government should rationalise its holdings by focusing on those SOEs that provide public goods and those deemed to be strategic, namely serving national interests, national security and priority sectors;
• Government should address the issue of non-financially viable commercial SOEs; and
• The Government should develop an integrated reporting, monitoring and evaluation capacity for SOEs across all spheres of Government.

Additionally, The PRC highlighted the need to clarify the roles of the state in its capacity as (i) shareholder in, (ii) the regulator of, and (iii) the operational and regulatory policy-maker for SOEs. The PRC Report, in other words, highlighted the need to separate the shareholding, regulatory and policy-making functions of the State as they pertain to SOE management and oversight. Additionally, the Report also drew attention to the fact that there is a lack of clarity in SOE mandates; coupled with the fact that SOEs’ accountability channels and mechanisms can be opaque, with there often being multiple accountability frameworks (from differing oversight Departments or legislative frameworks) that SOEs need to comply with. This situation creates inefficiency and duplication of efforts by oversight bodies, facilitating unnecessary political interference in SOEs.

In a similar vein, the Commission of Inquiry into Allegations of State Capture, chaired by Judge Raymond Zondo, also highlighted (inter alia) the need for:

• SOE governance frameworks to be consolidated, and possibly augmented into one – by enacting a single SOE Act; and
• There to be a clear division between the State’s shareholding, regulatory and policy-making functions.

Consequently, the President’s announcement on the establishment of a National Holding Company (HoldCo) constitutes the enactment of recommendations put forth by the PRC, the Commission of Enquiry into Allegations of State Capture and PSEC. Furthermore, the establishment of a National Holding Company, in furtherance of a centralised shareholder model, is in alignment with growing international trend(promulgated by an OECD Report on the ‘Corporate Governance of State-owned enterprises’) that a centralised shareholder model is the optimum model for SOE management and oversight; with Chile, China, Finland, France, Hungary, Malaysia, Paraguay, Peru, Poland, Singapore and Spain being amongst the countries that have adopted this model for the management of the SOEs.

The main benefits from the experience of the above countries of a centralised shareholder model for SOE management and oversight, are:

• Separation of the state’s ownership functions from its policy-making and regulatory or supervisory functions, to help avoid or minimise potential conflicts of interest;
• Minimising of the scope for political interference and bringing greater professionalism to the State’s ownership role, by pooling specialised capabilities and scarce resources;
• Promotion of greater coherence and consistency in applying corporate governance standards and in exercising the State’s ownership role across all SOEs;
• To manage state assets in a way that protects shareholder value;
• To achieve greater transparency and accountability in SOE operations through better oversight and performance monitoring.

In acknowledgment of 1) the importance of SOEs to South Africa’s future economic growth on the one hand, and to the government’s ability to deliver on its developmental mandates on the other hand; as well as 2) the fact that South Africa’s SOEs are currently in need of reform revitalisation, PSEC has recommended that South Africa establish a National Holding Company, as the mechanism to implement a centralised shareholder model for SOE management and oversight. Only selected strategic SOEs, that are currently financially viable, will be incorporated into HoldCo at the outset. The inclusion of additional SOEs into HoldCo can be possibly be considered, once SOEs have demonstrated to be sufficiently financially stable

Briefly, PSEC has been working on classifying the SOEs along 2 lines: 1) whether they are strategic or not; and 2) whether they are in crisis or not. PSEC has used frameworks and matrixes to determine each SOE’s status for this categorisation. Furthermore, PSEC has commissioned financial analysts to undertake deep dives into the SOEs. Information arising from the deep dives has also been utilised in categorising the SOEs. In short, four conditions need to be met for an entity to be deemed strategic. The conditions are that:

• 1. The function provided by the SOE is not adequately or appropriately provided by the private sector;
  2. There needs to be a natural monopoly in the industry or sector the SOE operates in;
  3. Disruption of the SOEs activities would have a high economic impact; and
  4. The SOEs function is critical for developmental purposes and state security.

On the other hand, in determining whether or not an SOE is in crisis, both financial and non-financial considerations are assessed. Financial indicators that point to an entity being in crisis include: (i) the entity carrying an unsustainable debt burden; (ii) the entity being unable to make payments on their debt/s when they are due; and/or (iii) then entity having a negative cashflow and/or negative equity over a sustained period. Non-financial indicators that point to an entity being in crisis include: (i) the entity having experienced serious governance breaches; (ii) the presence of procurement corruption within the entity; or the entity continually being ineffectively managed and thus continually exhibiting operational non-delivery.

Financial indicators	Non-financial indicators
Unsustainable debt burden Negative cashflow over a sustained period and/or negative equity Inability to settle liabilities when due	Serious governance breaches Procurement corruption Continued operational non-delivery and ineffective management

As noted above, only SOEs that are both strategic and not in crisis will be eligible for inclusion into HoldCo.

2. The prospect of SOEs being financially independent, and not reliant on on-going bailouts from the fiscus, is one that the DPE is committed to. Furthermore, the DPE is of the firm believe that, under the guidance of PSEC, SOEs can be restructured and repurposed so that they both (i) advance the country’s developmental objectives and (ii) cease being reliant on the fiscus.

 

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

SAA restarted operations on 23 September 2021 flying 6 routes. Lagos restarted in December 2021, Durban and Mauritius were launched in March 2022 and Windhoek and Vic Falls resumed operations in December 2022. SAA currently flies 10 routes: Cape Town, Durban, Accra, Kinshasa, Harare, Lagos, Lusaka, Mauritius, Windhoek, and Vic Falls. The 11th route to Malawi will commence on 16 March 2023.

Over the past 18 months, SAA has flown over one million passengers across our route network.

The average monthly load factors are between 60% and 80% load factors.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

1. (aa)Table below display international travel for Minister Pravin Gordhan

(a) Destination	b) (i) Total Costs	(b)(i) Accommodation	(b) (ii)Travel	(b)(iii) Other costs
India	R 158 307,16	R 82 829,98	R 75 477,18	-
Russia	R 280 430,93	R 158 237,00	R 106 462,93	R 15 731,00
New York	R 168 420,90	R 48 000,00	R 120 420,90
Washington/United Kingdom	R 177 819,18	R 45 267,86	R 100 104,90	R 32 446,42
Dubai	R 226 892,73	R 71 290,40	R 110 542,65	R 45 059,68
Total	R 1011 870,90	R 405 625,24	R 513 008,56	R 93 237,10

1. (bb) Table below display international travel for Deputy Minister Phumulo Masualle.

a) Destination	b) Total Costs	(b) (i) Accommodation	(b) (ii)Travel	(iii) Other costs
Abidjan	R 98 446.62	R 5 536.88	R 71 041,44	R 21 868,30
Dakar, Ghana
Total	R 98 446,62	R 5 536,88	R 71 041,44	R 21 868,30

2.(aa) The total cost incurred for domestic air travel for Minister Pravin Gordhan

The total cost incurred for domestic air travel for Minister from June 2019 to January 2023 is R 899 213,99

2.(bb) The total cost incurred for domestic air travel for Deputy Minister Phumulo

Masualle

The total cost incurred for domestic air travel for Deputy Minister from June 2019 to January 2023 is R 2 587 419,62

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

According to the information received from Eskom

1. The two fundamental facts need to be clarified at the outset:

The IRP19 makes clear reference to a mix of energy sources: for example, coal, nuclear, hydro, gas, renewables.

In some of these instances plans are in place to acquire energy from these sources.

2(a) The responsibility for ensuring that the country has adequate capacity for the “country’s industrial and domestic needs” rests with the Department of Mineral Resources and Energy (DMRE) as prescribed in the National Energy Act 34 of 2008, which empowers the Minister of Mineral Resources and Energy to plan for and ensure the security of supply for the energy sector.

(2)(b)

The table below illustrates the intended shutdown dates of the first and last unit of each coal-fired power station and compares this to the assumptions in the Integrated Resource Plan (IRP). From this, it can be seen that, with the exception of Tutuka Power Station, shutdown dates are in line with the IRP2019 assumptions and in many cases, the shutdown dates of some of the older stations have been extended.

Eskom’s plans on the JET are aligned with the country’s plan towards carbon reduction in transitioning to net zero emissions by 2050. In this regard, the Eskom JET Strategy recognises the financial prudence of investing limited capital budgets towards establishing new generating capacity from renewables, rather than investing in aged coal plants to extend their lives or to make them environmentally compliant. Many coal plants are non-compliant with national minimum emissions standards requirements.

The continued operation of these plants would require extensive refurbishments of aging equipment, as well as the retrofitting of flue gas desulphurization (FGD) to achieve full environmental emissions compliance.

Thus, a full retrofit and refurbishment of the fleet would cost approximately R400 billion. In addition, refurbishments and retrofits would also require significant periods of shutdown: life-extension retrofits would take, at minimum, two years to complete, while FGD retrofits could take up to seven years to complete. Such work would reduce supply and thus exacerbate the supply deficit currently causing loadshedding in South Africa.

Since the cost of Renewable Energy (RE), specifically large wind and solar photovoltaic (PV) plants, has become far cheaper than the cost of a new coal plant, and RE plants can come on- line far sooner; investment in wind and PV represents the lowest-cost and most expeditious option to address the capacity shortage. Notably, Eskom is not able to finance capital spend for new coal plants as funders have already communicated a policy decision not to fund coal or coal-related initiatives. It must be reiterated that renewables will form part of the energy-mix reflected in IRP’19.

An important consideration is that Eskom will only shut down coal plants when they are no longer economical to continue operating. Eskom will continue the operation of Medupi, Kusile, Lethabo, Matimba, Kendal, and Majuba Power Stations well beyond 2040, and the Eskom JET Strategy does not call for premature shutdown of any of these plants. Therefore, Eskom will still be utilising coal as a fuel source well into the 2040s.

It must be emphasized that South Africa will ultimately have the mix of energy sources reflected in IRP’19 and its subsequent updates. South Africa decarbonization path and the Just Energy Transition (JET) will take into account of our global commitments and our own specific needs.

3.

Reducing carbon emissions is a global project and necessity, for the future of the planet and its inhabitants. Climate change is an undeniable reality.

The United Nations convenes annual meetings of all countries in the global community- UN climate Change conference (copy 27 in Egypt being the most recent). Various agreements and conventions are agreed at these meetings (and, also, not agreed)

At Cop 26, each participating country presented its National Determined Contribution to achieving the 1,5 degrees global warming target for 2050. However, the recently published report of the International Panel on Climate Change (IPCC), which is attached for your reference raises serious concerns about global warming and its implications for humanity.

In this regard extensive and inclusive consultations, research and discussions took place within and by the Presidential Climate Commission. This included the agreement on the NDC, consultations with various stakeholders, and interactions with communities.

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

according to information received from Alexkor:

(a)

(i) The Interim Chief Executive Officer of Alexkor SOC Limited earns a monthly salary of R107 536,00 per month based on 100% utilization in accordance with the hourly rates provided in column B-22 of the DPSA guide on hourly rates for consultants, published in July 2020.

(ii) The salaries of the top executives are tabulated below.

Executive Title/Position	Total Cost to Company
Chief Financial Officer (Vacant)
PSJV Executive Positions
Environmental Manager	R1,306, 838,28
Safety and Health Manager	R1,184 165,64
Security Manager	R779 309,02
Mine Manager	R1, 739 424,00
Chief Financial Officer
IT Manager	R1,149,172,44
Mine Engineer	R1,626,682,97

(b) No additional monies or meeting fees are paid to Executives to attend meetings.

 

reply according to information received from Denel:

(a)

(i) The Interim Group Chief Executive Officer of Denel SOC Limited is paid R 2,800,000 per annum

(ii) The salaries of the top executives are tabulated below:

Executive Title/Position	Total Cost to Company
Interim Group Chief Financial Officer	R 1,760,000
Chief Restructuring Officer	R 2,860,000
Group Chief Operations Officer and Interim Chief Executive Officer: Denel Land Systems	R 3,000,000
Interim Group Executive HR and Transformation	R972,328
Chief Executive Officer: PMP	R 2,800,015
Interim Chief Executive Officer: Aeronautics	R 1,546,083
Interim Chief Executive Officer: Vehicle Systems	R 1,133,600
Chief Executive Officer: Aeronautics	R 2,800,000
Chief Executive Officer: Dynamics	R 2,100,000
Chief Executive Officer: OTR	R 1,400,000

(b) No additional monies or meeting fees are paid to Executives to attend meetings.

REPLY ACCORDING TO INFORMATION RECEIVED FROM ESKOM:

(a)

(i) The former Group Chief Executive Officer of Eskom Holdings SOC Limited until 28 February 2023, Mr AM de Ruyter, was paid an annual salary R7,040,010,00

(ii) The salaries of the top executives are tabulated below:

Executive Title/Position	Total Cost to Company
Group Chief Financial Officer, Executive Director (GCFO)	R4,900,000
Chief Operating Officer:	R5,496,000
Group Executive: Legal	R3,100,000
Group Executive Government & Regulatory Affairs:	R3,100,000
Group Executive Human Resources:	R3,339,000

(b) No additional monies or meeting fees are paid to Executives to attend meetings.

REPLY ACCORDING TO INFORMATION RECEIVED FROM SAA:

(a)

(i) The Interim Group Executive Chairman of SAA SOC Limited is paid R 3 780 000 per annum

(ii) The salaries of the top executives are tabulated below:

Executive Title/Position	Total Cost to Company
Chief Financial Officer (Executive Director)	R2,851,000,00
Chief Audit Executive	R2,800,000,00
Chief People Officer	R2,592,000,00
Chief Commercial Officer	R2,160,000,00
Chief Airline Operations Officer	R1,572,148,00

(b) No additional monies or meeting fees are paid to Executives to attend meetings.

REPLY ACCORDING TO INFORMATION RECEIVED FROM SAFCOL:

(a)

(i) The Chief Executive Officer (CEO) of SAFCOL SOC Limited is paid R3,414,642,57 per annum

(ii) The salaries of the top executives are tabulated below:

Executive Title/Position	Total Cost to Company
Chief Financial Officer (Executive Director)	R2,735,954,48
Chief Audit Executive	R1,730,560,00
Chief Risk Officer	R1,881,394,32
Executive: Strategy and Commercial	R1,951,595,78

(b) No additional monies or meeting fees are paid to Executives to attend meetings.

REPLY ACCORDING TO INFORMATION RECEIVED FROM TRANSNET:

(a)

(i) The Group Chief Executive Officer (GCEO) of Transnet SOC Limited is paid R8,500,000 per annum

(ii) The salaries of the top executives are tabulated below:

Executive Title/Position	Total Cost to Company
Group Chief Financial Officer (Executive Director)	R5,800,000
Group Chief Executive: Transnet National Port Authority	R5,900,000
Chief Executive: Transnet Port Terminals	R5,100,000
Chief Executive: Transnet Freight Rail	R6,100,000
Chief Executive: Transnet Property	R4,600,000
Chief Executive: Transnet Pipelines	R4,200,000
Chief Executive: Transnet Engineering	R5,100,000
Chief of People Management & Learning	R5,100,000
Group Chief Information Officer	R4,500,000
Group Chief Procurement Officer	R4,500,000
Group Chief Officer: Strategy & Planning	R5,100,000
Group Chief Legal Officer	R5,400,000

(b) No additional fees or monies are paid to the Executives, to attend meetings. Other Group Executive members attend Board meetings on invitation and are not remunerated for same.

 

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the Information received from Alexkor

1. The position of the Environmental Manager was filled in 2012 and the one for General Mine Manager in 2020.
2. There were no new appointments as these positions were filled in 2012 and 2020 respectively.
3. There were no new appointments made to these positions the appointments of 2012 and 2020 were on a permanent basis.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

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

 

SOC	REPLIES
Alexkor	1. Alexkor SOC Limited has not sponsored any sport teams outside the Republic of South Africa in the past five years. 2. There were no teams sponsored.
Denel	1. Denel has never spent on sponsorships for teams outside the Republic of South Africa in the past five years. 2. N/A
Eskom	1. Eskom has not sponsored any sports teams outside or inside the Republic in the past five years. 2. Not applicable.
SAFCOL	1. SAFCOL has not sponsored any sports teams outside the Republic of SA. 2. N/A
SAA	1. South African Airways (SAA) has not sponsored any sporting teams within nor outside the Republic of South Africa in the past. 2. N/A
Transnet	(1) Transnet has not sponsored any sporting teams within nor outside the Republic of South Africa in the past. (2) N/A

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) The Department of Public Enterprises has not sourced a legal opinion. Please see my response to your question 237.

 

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Eskom

1(a)

Reasons why Eskom is unable to provide the transmission capacity when it was aware of the President’s commitments:

Since the launch of the IPP programmes (Bid Windows 1 to 4), close to 6.1 GW of new generation capacity has 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 and quickly secured grid capacity, mainly in the Western, Eastern, and Northern Cape. The Transmission network capacity in these areas has been taken up according to grid code requirements, which requires Eskom to provide non-discriminatory open access to the grid. This has resulted in network constraints, requiring substantial augmentations before new generation capacity can be connected to the system.

To address this, the 10-year Transmission Development Plan (TDP 2022) identified the new infrastructure 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 because of servitude acquisitions and constructability challenges. Eskom is aware of these challenges and is making every effort to expedite the building programme by engaging key stakeholders in the government, as well as in the private sector. A number of servitudes have already been acquired. Funds will also have to be mobilised for the capital expenditure. Different mechanisms are currently being explored.

1(b)

Reasons for the Generation Connection Capacity Assessment (GCCA) being incorrect:

At the time of publishing the GCCA 2024 in March 2022, based on information on the successful bidders from BW 1 to 5 of the DMRE IPP Procurement Programmes, the GCCA provided a correct indication of the potential capacity available on the transmission network to facilitate the connection of new generation projects. In summary, the potentially available capacities for the connection of new generation projects, taking into consideration the interest expressed by IPPs, as well as the environmental impact, is as follows:

• Southern regions of the country accounted for ~ 4.5 GW (Western and Eastern Cape, Hydra Cluster, excluding the Northern Cape that had already run out of capacity)
• Northern regions of the country accounted for ~ 12.1 GW (Free State, North West, Limpopo, Mpumalanga, and Gauteng)

While the regulated procurement process, which was managed by the DMRE/IPP office and their timelines for BW 6, was progressing with procuring 4.2 GW of generation capacity, mainly from wind and solar. The privately procured IPPs secured most of the available capacity in the southern regions by following the due processes associated with grid connection applications. This resulted in a significant reduction in the generation capacity procured via BW 6 to around 1 GW.

The GCCA report was accurate at the time of release based on the snapshot view of committed generation projects and network assumptions. The national capacity published is based on the assumption of known generation commitments at the time of publication. Between publications, various applications for connections were made by IPPs that participate in the DMRE-/IPPO-regulated procurement programmes and the private sector IPPs.

2(a)

Which locations in the Republic does Eskom’s transmission grid have capacity to connect additional renewable energy from the IPPs:

Based on the GCCA 2024, approximately 12 GW of transmission network capacity is available in the northern regions of the country, for example, Free State, North-West, Mpumalanga, Limpopo, and Gauteng, as indicated in Figure 1 below.

Figure 1: Available grid capacity for renewable energy (RE)

2(b)

What justification can be given for the prioritisation of a long-term Karpowership deal over adding new capacity through wind:

The DMRE determines the supply options for the country and what takes priority. Eskom or DPE has NO role in this process, kindly direct all questions on “Karpowership deal” to DMRE.

Eskom must be an off taker of power and sign the required Power Purchase Agreements with parties determined by DMRE/IPPO. The role of Eskom Transmission is to provide open and transparent access to the interconnected power system for both load and generation customers. All applicants that require a connection to the transmission system follow a grid connection application process, as required by the South African Grid Code. In the case of Karpowership, the DMRE/IPPO procurement process for RMIPPP was followed, and on the announcement of their successful bid, transmission network capacity was allocated on the basis that all conditions for connection were met. In the event that the DMRE/IPPO or, for that matter, the IPP decides not to go ahead with the project for whatever reason, then the transmission capacity that was allocated for the project would be released back into the pool for other potential IPPs to consider.

3(a)

How does the grid have the transmission capacity in the Western Cape for power supplied by ships and/or barges but not by wind:

Following on from (2b), Transmission capacity is reserved on the announcement of preferred bidders by the DMRE/IPPO. Because of the lack of transmission network capacity in the broader Cape region, as explained above, no new generation capacity can be connected until new transmission infrastructure, as identified in the TDP, is implemented.

3(b)

What reforms are going to be put in place to restructure the bid procurement process so that IPPs are able to assist in the energy crisis as soon as possible:

The IPP procurement process is managed by the DMRE / IPPO. Eskom’s Grid Access Unit (GAU) is reviewing its processes and is coordinating on behalf of the electricity supply industry the introduction of Grid Capacity Allocation Rules to “level the playing field” in allocating grid capacity. It is expected that these rules shall require the sanctioning by NERSA’s structures, such as the Grid Code Advisory Committee, for implementation. These rules will facilitate the connection of projects on a ‘first ready – first connected’ principle which will result in a faster connection of new capacity to the grid.

We will ensure that further details on the implementation of the Transmission Development Plan and relevant timeframes are publicized as soon as possible.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from SAFCOL

(1)

SAFCOL contacted the Department of Forestry, Fisheries and the Environment (DFFE), and various other stakeholders for expanding its plantable area in the form of lease agreements. The stakeholders consist of:

	Stakeholders	Potential Plantable Area (ha)
1.	DFFE Plantations in Mpumalanga	4 086
2.	Mkhondo Municipality	2 528
3	Msunduzi Municipality	1 452
4	Madlangeni Community	1 100
5	Land under traditional authority	10 000
	Total	19 166

(2)

SAFCOL has formalised a land lease agreement with the Mamahlola community to operate their successfully claimed land as a timber estate as part of SAFCOL’s Woodbush plantation. A silviculture services contract has been ring-fenced for the community to allow them to participate in the timber farming activities on their land.

SAFCOL is in the process of negotiating with the Madlangeni community to lease their successfully claimed land for the purposes of re-establishing a commercial forestry estate (reforestation).

SAFCOL has formalised a Memorandum of Understanding with the nine communities in Entabeni to operate their claimed land as a timber estate as part of SAFCOL’s Entabeni plantation. SAFCOL’s information from the Land Claims Commission is that the transfer of the title deeds of the land to the communities are imminent. Upon transfer, SAFCOL will enter into a lease agreement with the communities. A sub-contracting opportunity to allow the communities to participate in timber logistics services has already been implemented.

SAFCOL has ring-fenced a silviculture services contract for the Kaapschehoop community to allow them to participate in timber farming activities on their claimed land. SAFCOL’s information from the Land Claims Commission is that the finalisation of the land claim is eminent. Upon finalisation and subsequent transfer of the land in title to the community, SAFCOL will enter into a lease agreement with the community.

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Eskom is being restructured into three subsidiaries Generation, Transmission and Distribution, wholly owned by the Eskom Holdings SOC LTD. The debt will remain with Eskom Holdings SOC Ltd. Each entity will be allocated its portion through an intercompany loan account. The allocation is based on a pre-agreed methodology.

These matters are currently being resolved in discussions with National Treasury.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

a) Eskom lenders plays a critical role in ensuring that the entity access required funding in the capital markets. Therefore, it is important that all lenders are taken through the restructuring process and assured that their investment is safe. All lenders from whom consent is required, have been contacted. Lenders have indicated that more clarification regarding the debt take-over by National Treasury is required before consent could be considered. This is currently being processed.

b) PIC, World Bank, Chinese Development Bank.

 

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. The relocation of state-owned enterprises to the respective departments is the prerogative of the President.

In addition, in the State of the Nation Address of 2022 and 2023, reference was made to the work and recommendations of the Presidential SOE Council and, the global trend towards a centralised shareholder model as highlighted by the Organization for Economic Cooperation and Development (OECD) and various country experiences.

The lessons of State Capture and recommendations of Chief Justice Zondo, among others, must be taken into account to proactively prevent corruption.

 

Remarks: Reply: Approved / Not approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the Information received from Eskom.

(1)

The quality of coal exported by South Africa is completely different to that utilised by Lethabo Power Station. Lethabo Power Station was designed to run on approximately 16 CV coal (low-grade coal) while the coal quality typically exported ranges from 22 CV to 27 CV (higher-grade coal). The adjacent tied cost-plus mine has enough coal to supply the burn requirements for the power station.

From around 15 February 2023, the coal supply from New Vaal Colliery (NVC) to Lethabo Power Station began to reduce significantly because of several unexpected challenges.

• Mine production had decreased because of the following:
  • Rain – the mine recorded 186,5 mm of rain from 1 February to 14 February 2023.
  • The flooding of the Vaal River and the subsequent increase in the river level affected the safety risks on one of the mining faces close to the river. The coal seams being mined were below the increased river level. This created a scenario where it could have been potentially catastrophic if the risk of flooding materialised. The mine had to manage this risk responsibly.

The second mining face was inaccessible because the ramps used by the haul trucks to access the mining pits were flooded. Additional time was also required to construct new ramps to access this coal.

• • This meant all coal required by the station had to be reclaimed from the coal stockyard. During the rainy season, the mine and power station keep live stockpiles at around 10 days of station burn requirements as a mitigation against continual rain. The opening balance of live coal on the strategic stockpiles was approximately nine days (total stock days were more than 30 days). Because of the continuous rain during February, this nine day of stock was steadily being depleted. To replenish this, coal needed to be reclaimed from the strategic stockpiles and moved to the stockpiles, which are 150 m to 200 m away. The continuous rain resulted in the stockpiles getting extremely wet with the mine loading wet coal on the conveyor belts, which was blocking the chutes and transfer points of the conveyor belts (coal becoming sludge), which resulted in the coal belts being stopped continuously to clean the chutes and transfer points that were getting blocked. This resulted in the throughput to the power station significantly decreasing.
  • A continuous breakdown of one section of the two overland conveyors also severely affected the mine’s ability to supply coal. The repairs to the conveyors were also delayed at times because of the impact of lightning, which became a safety risk.

• With regard to rain preparedness, the biggest mitigating factor is the coal stock and strategic stockpiles that store dry coal, which is then used to feed the conveyors when the mine is not producing coal. There is also a Generation Engineering initiative involving a multidisciplinary team that conducts site assessments and recommendations to manage stockyard reclamation during rainy periods. The quantum of rain received, however, coupled with the other challenges, posed significant challenges to the mine to maintain the coal supply to the power station in February. The mine is now assessing the challenges experienced and the lessons learnt to improve the management of the stockpiles for future periods. (This particular stockyard is managed by the mine and not Eskom). These include reviewing the layout of the strategic stockpiles, reinforcing the haul roads within the mine to be able to move coal during inclement weather.

(2)

The Department of Mineral Resources and Energy (DMRE) is best placed to respond due to the fact that it is a coal regulator department.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Eskom diesel funding until the financial year was addressed through the approval by National Treasury Guarantee for the entity to borrow additional R4 billion to R5 billion in the capital markets. Any further assistance will depend on the financial projections for 2023/24 and NERSA’s decision on what may be recoverable in tariffs. The challenges presented by the pricing policy of PetroSA and the fate of the license application by Eskom to be designated an importer will also have a bearing on this matter.

It is absolutely self-evident that the cost of diesel usage pales into insignificance compared to the compared to the cost imposed on the economy and citizens by excessive loadshedding.

 

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

Department

There were no services procured from Sihlesive Trading, Rally Business Consulting and Siyakhula Forestry Contractors JV Zumda Trading during the 2018/2019 to 2021/2022 financial year.

According to the information received from Alexkor

1. The service providers did not render any services to Alexkor SOC Limited
2. – (5) All subsequent questions are not applicable

According to the information received from Denel

1. Denel has not procured any services from the said companies since the 2018-19 financial year.
2. – (5) All subsequent questions are not applicable.

According to the information received from Eskom

1. Eskom has never done any business with the companies in question. Should there be a need for Eskom to do business with them, then a proper procurement process will be followed which will be aligned with the principles of section 217 of the Constitution of the Republic of South Africa.
2. – (5) All subsequent questions are not applicable.

According to the information received from SAFCOL

1. Yes, SAFCOL procured services from the three companies:

Service Provider	a) Services Procured
Sihlesive Trading	Provision of silviculture services
Rally Business Consulting	Provision of silviculture services
Siyakhula Forestry Contractors JV Zumda Trading	Provision of silviculture services

b) Total Amount Paid

Service Provider	Amount inclusive of VAT
Sihlesive Trading	R73 434 659
Rally Business Consulting	R76 294 287
Siyakhula Forestry Contractors JV Zumda Trading	R101 795 895

2. Whether the amounts paid to the three service providers were found to have resulted in irregular expenditure; if not, what is the position in this regard; if so, what total amount was declared and/or disclosed in each case;

a) Yes

b) Disclosed Irregular Expenditure Amounts: 2018-2019 to December 2021:

Service Provider	Amount inclusive of VAT
Sihlesive Trading	R73 434 659
Rally Business Consulting	R76 294 287
Siyakhula Forestry Contractors JV Zumda Trading	R101 795 895

3. Whether any investigations were conducted to identify employees responsible for irregular expenditure; if not, why not; if so, what total number of times were the investigations conducted;

SAFCOL carried out and finalized an investigation in accordance with the prevailing irregular expenditure framework, in relation to the financial years 2015-16 up to and including 2021-22.

4. Whether investigations were conducted in-house or outsourced; if outsourced, what total amount was paid in each case since the 2018-19 financial year;

The investigation was outsourced to be carried out by an external service provider at a cost of R344, 850 inclusive of VAT.

5. Whether any members of the board and/executive were held accountable for irregular expenditure; if not, what is the position in this regard; if so, (a) what are the names of such members and (b) will furnish Mr S Tambo with the investigation report with its recommendations?

The company is currently in the process of implementing consequence management based on the external service provider’s report in preparation for submission for condonation where applicable. None of the members of the Board and/or Executive were implicated in the irregular expenditure report.

According to the information received from SAA

1. South African Airways (SAA) have no record that the airline had any business relations with the three service providers mention, namely, Sihlesive Trading, Rally Business Consulting and Siyakhula Forestry Contractors JV Zumda Trading.
2. – (5) All subsequent questions are not applicable.

According to the information received from Transnet

1. The identified business entities are not registered on Transnet’s database. Transnet cannot trace any procurement of services from the identified companies.
2. – (5) All subsequent questions are not applicable.

 

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. (a)(b)(c) and (d)

There is a total of 231 staged locomotive, comprising of both new and legacy fleets.

New Fleet: there is a total of 151 staged locomotives, where the top 3 impacted fleets are 22Es, 21Es, and 19Es.

Legacy Fleet: there is a total of 80 staged locomotives, where the top 3 impacted fleets are 18Es, 10Es, and 7E2s.

2. The table below summarises the locomotive types and the reasons that they are staged. More detail, such as the date that the locomotives were stopped, can be seen in annexures A and B

Fleet	Main reasons for locos being staged
NEW	BT23E, CRRC20E, CRRC21E, CRRC22E	Delays in procurement of material. Most of the parts are purchased from Original Equipment Manufacturers (OEM), thus resulting in Local Content (LC) issues. There are also contractual issues due to current litigations
	GE43D, GE44D, 43 Class	Delays in procurement and for contracted items there is a long leadtime from the OEM in terms of delivery.
	MITSUI19E	Delays in procurement.
LEGACY	GE34D, GE36D, 10E, 37D, 7E1, 18E, 34D, 35D, 37D, & 39Ds	Delays in procurement.

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

1. This is a matter under consideration. No decisions have been made, safe that the President has indicated that the reconfiguration of government will occur after the next election in 2024.

2. No, I have not.

 

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)

Eskom did not “take the foot off the pedal in terms of maintaining its current fleet” in 2018, 2019 and 2020. Eskom was and remains committed to executing all the required maintenance within the constraints at the time.

The well-documented shortage of capacity and funding meant that Eskom was forced to prioritise the maintenance that was executed and correctly focused on safety and statutory requirements, above performance enhancement and improvement work.

(b)

The current maintenance plans are still heavily impacted by the capacity and financial constraints and Eskom remains committed to executing the maximum possible maintenance as well as improving the quality, efficiency, and effectiveness of the maintenance within the many constraints which Eskom is facing.

(c)

We are already seeing the impact of many years of the inability to execute all the required maintenance, coupled with very high utilisation of an ageing fleet, along with many other factors, in the current performance of the coal fleet.

The recovery of the fleet requires three levers; additional capacity nationally, an improved EAF, which requires increased maintenance, and the addressing of various external levers, including improved liquidity, not least by delinquent municipalities paying their overdue accounts

Currently, an enhanced Generation Recovery Plan is being implemented under the guidance of the board. This plan covers three main areas of intervention:

• Plant: a systematic and strategic approach to maintenance,
• Process: a more disciplined approach to operational, procurement and related process,
• People: supplementing management and operational skills and initiating a fundamental culture change.

In addition, the excellent efforts for the law enforcement agencies, under the aegis of the National Electricity Crisis Committee, to arrest and charge those involved in corruption and sabotage, is beginning to make an impact.

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)(i)(ii)(iii)

Post the announcement by the President of South Africa to unbundle Eskom, Eskom concluded the Eskom Restructuring Consultative Framework (“RCF Agreement”) with NUM, NUMSA and Solidarity dated 20 April 2021. The framework also gave way to a Restructuring Consultative Forum (RCF), whose purpose is to consult with all the representative trade unions namely; NUM, NUMSA and Solidarity (collectively referred to “the trade unions”) on how Eskom intends to deal with the Transmission division’s employees during the separation.

(b)(i)

The first meeting was convened on 25 May 2021, and we have subsequently convened an additional 13 meetings since then.

(b)(ii)

In principle, the trade unions appear to be against the unbundling of Eskom.

To date, we have already had two disputes. At the last steering committee meeting held on 9 February 2023, the trade unions resolved to suspend the RCF and engage directly with the Group Executive Human Resources (GE HR), whom they consider as the custodian of this process.

In terms of our Recognition Agreement and RCF Agreement, the unions reserve the right to engage with the GEHR. Eskom will be prioritising such an engagement to determine the way forward.

Both Eskom and government will continue to engage the unions to provide both clarity and reassurances, where required.

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

i) Table below display the vehicle information for Minister Pravin Gordhan

a) Make	b) Model	(d) Cost	(e) Purchase date
Audi	A6 2.0 TDI S Tronic Audi A6	R 783 909,98	2021/03/19

ii) Minister Pravin Gordhan has been the only Minister since 1 June 2019.

iii) Table below display the Vehicle information for Deputy Minister Phumulo Masualle.

a) Make	(b) Model	(d) Cost	(e) Purchase date
Audi	A6 2.0 TDI S Tronic Audi A6	R 783 909,98	2021/03/19

iv) Deputy Minister Phumulo Masualle has been the Deputy Minister since 01 June 2019.

The car of the former Minister in Tshwane is also currently used when there is the need and equally the one in Cape Town is still being used. No new car was purchased for the Minister in Cape Town.

The former Minister and Deputy Minister were no longer in office on/from 1 June 2019.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

1. Yes, the person was suspended,

(a) The employer believed that the presence of the official may jeopardize the investigation into alleged misconduct and / or endanger the state property.

(b) Charges were gross negligence, in failing to take appropriate remedial steps against a subordinate on alleged breaches of policies in respect of to appointments, salary upgrades, a approving job evaluation recommendations which led to improper salary upgrades and approving an invoice which led to irregular expenditure.

(c) None of the charges relates to irregular appointments by the official.

(d) None of the charges relates to irregular appointments by the official.

2. The resignation letter did not state the reasons for resignation.

3. The Department does not have any records tabled at Cabinet in relation to the appointment of the official. The Department of Public Service and Administration maybe in a position to respond on how processing of the appointment of the official was facilitated including reference checks.

4. Parties (DPE and the official) reached a settlement agreement to all disputes between them. As a result, the settlement extinguished any misconduct issue DPE had against the official in which Section 16(4)(b) could not be applied because there was no longer any pending case against the official which needed further processing to enable the transferring of the matter to the Department of Public Service and Administration.

5. The Department of Public Service and Administration is the sole custodian of records of any appointments done by them. The Department of Public Enterprises is not in a position to assist in validating the said appointment due to restricted access to the records system of the Department of Public Service and Administration.

 

Remarks: Reply: Approved/Not Approved/Comments

q

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

(1) The settlement agreement, dated 11 December 2019, was approved in terms of a court order of 22 June 2020, and became unconditional in July 2020. It provided for members of the PRASA sub fund to receive certain lumpsums (unconditionally) and to receive certain special pension increases subject to certain rule amendments.

The pension increases have not been paid yet, but the agreement (and court order) contemplates a possible delay and provides that if the increases are made later for Transnet and SAA sub fund members, they will still be made with effect from the same date and may be made as additional lumpsums. Since the agreement does indeed contemplate a delay, it is incorrect to say that the agreement or court order have not been implemented – it is more correct to say that they are being implemented but the delay in passing the PRASA sub fund rule amendments is taking longer than the members anticipated.

This expected delay was also set out explicitly in the Class Notice that was issued in terms of the court order to educate members of the Fund about the terms of the settlement. Accordingly, the rule amendment process is part of the process of implementing the court order. For as long as it is underway there is no disregard of the court order. The process is receiving the necessary urgent attention

(2) It is noted that the Minister of Public Enterprises’ and the Minister of Finance are currently assessing the rule amendments and that once all the government processes have been adhered to and finalised, the Departments of Public Enterprises will revert to Parliament to provide a final response.

Reply:

According to Information Received from Eskom:

(1) Eskom makes use of various security measures (human and technological), and various detection and monitoring systems (covert and overt), to monitor movements and secure areas within the plants. (In order not to disclose and compromise security measures, details thereof are deemed sensitive and are thus limited for disclosure.)

(2) Eskom Security is in the process of screening all active contracts, including employees of contractors employed at Eskom sites and companies against whom investigations (criminal, civil or disciplinary) have been launched, conducted/completed, or are in progress. The law enforcement agencies, particularly the State Security Agency, is also engaged in assisting Eskom in conducting the screening of contractors and suppliers to Eskom.

In addition, Eskom has instructed that the SAPS security clearance checks are required for contractors, prior to granting admission to Eskom sites. Eskom Security is compiling a database of companies and persons to enable the listing/red-flagging of individuals and entities as part of due-diligence investigations.

Eskom has a risk-based approach to perform contract reviews in which all flagged contracts are subjected to a preliminary investigation to empower management to make informed decisions. The flagging instruments are in the form of contract management in which, contract performance is monitored; the Fraud Hotline where stakeholders can report suspicious contracts; internal and external audit findings; as well as complaints against the Procurement & Supply Chain Management system.

Eskom is enforcing controls on new contracts and those which are being targeted for modifications or review. In addition, where there is irregular expenditure on contracts, they are reviewed for elements of fraud and corruption

Reply:

According to the information received from Transnet

(a) The role of ports in South Africa as transport nodes is of strategic regional and economic importance. TNPA operates eight (8) commercial ports spread across different provinces in South Africa as outlined below:
Western Ports: Saldanha Bay, Cape Town, Mossel Bay
Central Ports: Port Elizabeth, Ngqura, East London
Eastern Ports: Durban, Richards Bay

Ports serve their hinterland and neighbouring landlocked countries, thus fulfilling an important role within the economy of the local and hinterland region along South Africa’s coastline to accommodate major economic zones served by adjacent ports. Complementary ports such as the Port of Cape Town must work in unison with the entire port system to reduce the cost of doing business.

In line with the Transnet Segment Strategy, the Port of Cape Town will continue its existing role as primary container and general cargo port for the Western Cape region, with the Port of Saldanha Bay playing a complementary role as the region’s primary dry bulk and liquid bulk port. The port system’s complementary and regional integration results in integrated development with the following benefits: Connected and efficient logistics corridors that are economically active which support regional communities;
A vibrant, borderless regional economy;
Encouraged regional specialisation;
Stimulated economic activity; and
Catalyst for growth.

(b) Not applicable.

Reply:

According to Information Received from Eskom: (a) The Renewable Energy projects for Komati consists of Photovoltaics (PV), Battery Energy Storage Systems (BESS) and Wind power. At this point, the PV and BESS projects are still in commercial development and will go to market in 2023. (b) The date is subject to the market response, therefore the first power to the grid could be expected in 2026.

Reply:

According to information received from Eskom:

NB – The responses are based on Eskom records and exclude municipalities that provide Free Basic Electricity (FBE) directly to their areas of supply.

(a) Municipalities that
(i) have applied to provide FBE for indigent households? According to Eskom’s records, there are 248. Some municipalities may have merged and are yet to update their records with Eskom.
(ii) are currently providing FBE for indigent households? The number of municipalities serviced by Eskom and providing FBE is 233.

(b) The total number of municipalities that are providing such FBE. If not, why not, and if so, what are the relevant details? The total number is 233, and of the 233, 15 municipalities have been de-configured for reasons indicated below:

Find here: Name of municipality

Reply:

Sound governance happens only when leaders lead with integrity, when directors act in the in the interest of the of the company, and when major organizations are held to the highest standards of accountability by vigilant stakeholders and informed individuals. Corporate governance regulates the exercise of power (that is, authority, direction, and control) within a company to ensure that the company’s purpose is achieved by:
a) ensuring compliance with legal and regulatory obligations;
b) implementing processes to minimise risk and to ensure the sustainability of business; and
c) the development of policies and practices to ensure accountability.

SOEs are governed collectively, and to the extent applicable by
a. their founding legislation;
b. The Companies Act, 2008;
c. The PFMA and the Treasury Regulations;
d. The King Code of 2016 (King IV); and
e. The Protocol on Corporate Governance for State-Owned Enterprises, in addition to being subject to overarching duties in terms of the Constitution of South Africa.

The governance and operation of SOEs must comply with the requirements set out in section 195(1) of the Constitution, 1996. The standards and requirements for directors are regulated in section 76 of the Companies Act and requires, amongst other qualities that, a director of a company, when acting in that capacity, must exercise the powers and perform the functions of director:
a. in good faith and for a proper purpose;
b. in the best interests of the company; and
c. with the degree of care, skill and diligence that may reasonably be expected of a person.

Despite this inherent obligation, the Commission of Inquiry into State Capture (the Commission) specifically highlighted shortcomings in the governance and performance of State-Owned Enterprises, which are directly linked to noncompliance with prescripts regulating SOEs.

The Commission confirmed state capture concerning the affairs of Eskom, Transnet, Denel, SAA and Alexkor. To date, all these SOEs are still dealing with the negative effect of the systematic looting that was led by board members and senior executives that were installed to perpetuate state capture. The Commission found that the appointment and removal of members of the board and other senior executives in SOEs as one of the key causes of state capture. The appointments of board members and executives were mostly done on an irrational manner and in conflict with legislative requirements. Across DPE’s SOEs, the pattern suggested a disjuncture between the fiduciary duties of State-owned enterprises board members and the profile, skills and expertise of incumbents, pointing to inadequate criteria for appointment and dismissal or inadequate application of these. The lack of compliance, transparency and accountability in the appointment of Board members seems to have flaunted the standards required for their appointments as directors and failure to comply with fiduciary obligations. The President published govern-wide state capture response plan, which also details the work the department is currently seized concerning implementation of the Commission’s recommendations. The work is meant to ensure that there is no repeat of state capture.

Remarks:
Jacky Molisane
Acting Director-General
Date:


Reply: Approved / Not approved
PJ Gordhan, MP
Minister
Date:

Reply:

I certainly empathise with the impact of load shedding on small businesses. The shortage of energy in South Africa is a long-standing problem which the present administration is addressing, together with the recovery from State Capture. Eskom will continue to endeavor to reduce load shedding and its impact on small businesses.

Reply:

(a)

To contribute to the National Just Energy Transition framework, the Department developed a Just Transition framework for Eskom. The purpose of the framework is to guide the SOC within the department’s portfolio in developing a response plan/strategy to the global call to reduce emissions by developing their own plans on how they can contribute to South Africa’s climate change plans.

(b)

To date, only Eskom and SAFCOL submitted draft plans to transition in their respective environment, While Transnet, Alexkor and Denel’s plans are in the process of being developed.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

SAA faced a myriad of challenges over the years resulting in the airline’s inability to generate enough revenue to sustain operations and relied on debt to fund operations.

SAA had been incurring losses for an extended period which resulted in the airline being placed under business rescue by the SAA Board in December 2019. The business rescue period coincided with the country being placed under lock down due to the outbreak of Covid-19 pandemic in March 2020, resulting in all airlines’ suspension of commercial flights.

The airline successfully exited the business rescue in April 2021 and subsequently resumed operations in September 2021.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

a) The service provider that was appointed to conduct an investigation into DPE information and data leak on Ms Borotho’s recruitment process including matters of a personal matter to the media was Abacus Financial Crime Advisory (Pty) Ltd.

b) The report concluded that there was a concerted and intentional release and dissemination of confidential DPE information and documentation to the media.

c) R281 168.00

d) (i) Establish whether there was a concerted intentional release of secure or private/confidential information to an untrusted environment (the media);

(ii) Collect evidence to fully understand the scale and the impact of a breach;

(iii) Identify the source of the leak and identify where DPE can be assisted in respect of data and information leakage;

(iv) Whether or not any matter should be referred to the South African Police Services (SAPS) or any other law enforcement agents, and

(v) Provide recommendations on the outcome of the investigation.

2. It was recommended that disciplinary action be considered against the official who shared her password with the official who leaked the information.

The official who shared her password and against whom disciplinary action is recommended left the Department a while back and it is therefore impossible to act against her.

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

All the appointments of personnel in public sector positions are made in accordance with relevant legislation. No structure outside of these prescribed in legislation can determine the deployment of personnel in public sector positions. Where the legislation requires me to make an appointment, I apply myself to the requirements of the entity concerned, the legislative prescripts and the merits of candidates for the positions.

As part of building a capable state, I make all reasonable efforts to strengthen the skills mix in those public sector appointments within my remit. I therefore carefully consider the suitability of candidates on the information available to me and the need to have a diverse set of skills and experiences on an entity’s board.

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

1. I have not appeared before or met with the Deployment Committee of any political party.
2. Not applicable

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

a) A conviction was obtained for coal procurement fraud against Meagra Transport CC and an Eskom employee, for coal procurement transactions. The company was contracted to transport coal for Eskom and generated fake invoices for which they were paid for coal that was never delivered. The conviction followed a fraud case where Eskom suffered a loss of approximately R35 000 000.00.

There are currently seven (7) transport companies that are under investigation by the Hawks for coal procurement fraud and theft against Eskom.

b) There are several matters pending before the South African Police Services (Hawks), Special Investigating Unit (SIU), National Prosecuting Authority (NPA) and Asset Forfeiture Unit (AFU) involving coal transport contractors and coal supply agreements. Civil and criminal litigation are being pursued against the various offenders.

The former Director of Meagra Transport, Victor Tshabalala and the former Eskom employee were found guilty in the Palm Ridge Specialised Commercial Crimes Court (Case no. SCCC232/2019) for fraud against Eskom and sentenced on 29 March 2022, to an effective twenty (20) years imprisonment respectively. Meagra Transport (Pty) Ltd was also subjected to an internal supplier review process (disciplinary) and the outcome led to the supplier being deregistered and restricted from doing business with Eskom and other state entities for a period of five (5) years, with effect from 1 September 2020. A preservation and forfeiture of property order was also granted by the Gauteng High Court on 9 November 2021 against the properties owned by both Victor Tshabalala, as well as the former Eskom employee, Bernard Moraka.

Eskom has recently contracted the services of a dedicated specialised investigative capability to focus on coal procurement fraud and theft investigations. In the recent months several criminal cases for coal theft and fraud have been opened by Eskom and are with the South African Police Services (SAPS) for investigation. The most recent incidents under investigation involved the theft of coal and fraud at Kendal and Camden power stations, respectively where three contractors to Eskom were arrested and are facing criminal charges.

Eskom reports all allegations of coal procurement fraud and theft to the SAPS for criminal investigations. The SAPS currently refers all cases of Eskom coal procurement fraud and theft to a dedicated team within the Directorate of Priority Crimes Investigations (DPCI), commonly known as the Hawks, for further investigation and prosecution.

 

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

a) The total cost associated with the activities needed to support the licence application for long-term operation is projected to amount to an estimated R21 billion.

b) The installation schedule of the specific project to replace the steam generators has moved to coincide with the outage starting in December 2022 for Unit 1 and the outage for Unit 2 starting in October 2023. This change to the installation of the steam generators still aligns with the overall schedule and the milestones associated with the Eskom licence application to operate Koeberg for an additional 20 years. This schedule has not changed.

 

 

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

a) The Transmission Development Plan (TDP 2022) identified the new infrastructure required to implement the Integrated Resource Plan (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 government and private stakeholders.

In the interim, Transmission has taken the following steps to assist Independent Power Producers (IPPs) and expedite the TDP implementation programme:

1. The Grid Connection Capacity Assessment (GCAC 2024) document on Eskom’s website provides an indication of available network capacity elsewhere on the system that could be considered for integration of renewable energy (RE) projects.

While network capacity may be limited/restricted in the broader Cape areas, there is available capacity inland, for example, Free State, North-West, Mpumalanga, and Limpopo provinces, that can be considered for the integration of future RE IPPs.

2. Transmission is currently taking measures to “fast-track” projects across the network, especially in areas with interest and potential to integrate RE resources. These include the following:

2.1 A Programme Management Office (PMO) has been established that tracks, monitors, and reports on the deliverables from the various work streams.

a) There is positive movement in the engagements with DPE/DPWI to address servitude challenges by implementing expropriation with compensation at market value. Steps are in place to expedite the process going forward.

b)  Engagements with the dtic/NT to address opportunities for localisation and in cases of challenges with the local manufacturing and industry capacity, for example, for large transformers, exemptions are being considered to source from international suppliers.

c) Engagements with industry associations, for example, The Powerline Association of South Africa (POLASA) and the Steel Manufacturers Association (SMA), to increase preparation capacity to meet the TDP build requirements,

d) The majority of the capital expenditure for the first five years of the TDP was secured from Corporate Finance

e) Supplier engagement forums were held with industry participants to share the transmission build programme.

2.2 The TDP prioritised list of projects has been escalated to the PICC and SIP10 as critical infrastructure requirements for the country.

2.3 Ongoing and close working relationships with the DFFE to expedite the Environmental Impact Assessments (EIA) processes.

2.4 Ongoing discussions with DMRE/IPPO on the transmission network requirements to meet the RE procurement programmes.

2.5 Transmission is represented on the Electricity Crisis Committee (Natjoints Stream1) that was recently established to address Transmission grid strengthening challenges.

2.6 Finalising the Owner’s Engineer (OE) and EPC (turnkey) strategy to leverage our in-house capability to expedite the TDP roll-out programme.

(b) Eskom is placing a strong focus on the implementation of projects over the next five years. The analysis carried out reflects a requirement of approximately 2 890 km of extra high voltage lines and 60 transformers, requiring a capital investment of approximately R51 billion by FY2027. This requires that some challenges beyond Eskom’s full control, such as the lead time to obtain servitudes, among other relevant authorisations, and the country’s resource capacity be urgently addressed.

As at the end of October 2022, the total portfolio of Transmission’s expansion projects equated to 224 and is summarised as follows:

• There are 45 projects in the execution phase that are under construction.
• There are 56 projects in the definition phase that are finalising servitude acquisitions and detail engineering designs before achieving execution release approval.
• There are 123 projects in the pre- and concept phases, that are projects in the early stages of development requiring EIA and conceptual level designs.

 

 

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from Eskom:

a) Eskom is experiencing a very high number of incidents of illegal connections, meter bypassing and tampering, unauthorised operations on the network, infrastructure vandalism and theft, and the non-payment and non-purchasing of electricity tokens. This number is constantly on the rise. Over the years, Eskom repeatedly replaced and repaired failed equipment without holding customers accountable, even when the failure was because of illegal electricity activities. Eskom has since implemented stringent control measures, as it is financially unsustainable for Eskom to replace this equipment continuously, especially without any return on investment. The debt levels, however, continue to grow, and the operational costs, on the other hand, also keep accelerating exponentially, while the business takes further financial strain as Eskom has to keep repairing, refurbishing, or replacing infrastructure that breaks or is frequently vandalised. Eskom has also reinstated the Deferred Payment Arrangement (DPA) to accommodate customers who cannot immediately settle the R6 052,60 remedial fee for tampering with Eskom infrastructure, to allow those customers to pay the balance over a maximum period of six months.

Sixty per cent of customers who have been issued with remedial charge sheets must have made the upfront payment of R500 before supply can be restored. The 60% threshold is aimed at ensuring that most customers honour the payment to avoid repeated equipment failure.

It should also be noted that in Ivory Park there are a number of customers have illegally connected transformers to the Eskom network and are refusing Eskom entry into the area to remove these illegally connected transformers. Out of 158 failed transformers, Eskom has replaced 107 and is in the process of replacing the remaining 51. With that said, Eskom is not refusing to replace the failed transformers in Ivory Park, but merely following the equipment replacement process it has implemented for the reasons mentioned above.

(b)(i) The Eskom network is not configured according to wards. Therefore, Eskom is unable to provide the customer base according to wards. However, Eskom has a total of 24 446 customers in Ivory Park, of whom 12 001 are zero buyers (prepaid customers). This means that 49% of customers in Ivory Park are not buying electricity from registered electricity vendors.

(b)(ii)The frequent equipment failures unfortunately inconvenience law-abiding and paying customers of electricity in these areas, while costing Eskom billions of rands in damaged infrastructure and lost sales. Furthermore, to try and protect the customers who are paying for electricity, Eskom has tightened its existing measures, such as audits, maintenance, education and awareness campaigns, to avert failures that lead to unplanned and extended outages and also to influence and change the culture of non-payment and non-purchasing of electricity tokens.

Over and above trying to prevent inconveniencing paying customers, these control measures are also aimed at combating illegal connections, meter bypassing and tampering operations on the Eskom network, infrastructure theft and vandalism and other electricity-related crimes.

 

Remarks: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

The Commission of Inquiry into State Capture Report revealed that boards and senior executives were installed to systematically to collapse governance in Eskom, SAA, Transnet, Denel and Alexkor.  According to the Report, Board members and senior executives worked tirelessly to benefit the architects of state capture “by providing long term contracts, increasing scope and budget while completely flouting public procurement prescripts”.  The report published by the Commission indicates that “The evidence heard by the Commission revealed quite clearly that part of the reason why some of the state-owned companies have performed as badly as they have and why some rely on Government bail outs year in year out is the calibre of some of the people who are appointed as members of the Boards of these companies or who are their Chief Executive Officers and Chief Financial Officers”. The report unequivocally indicates that good governance was systematically and deliberately collapsed to enable the illegal diversion of resources from SOEs, which affected their financial and operational sustainability. The department and SOEs are working tirelessly to undo the impact of state capture by improving performance and the quality of service, some of which may take years to see the fruits thereof. 

It should therefore be noted that the factors that affect the ability of State-Owned Companies (SOC) with the Department of Public Enterprises (DPE) to submit audited Annual Financial Statements (AFS) within the stipulated time are not as a result of decline in quality of service and their performance, but usually beyond the control of either the SOC or DPE. The main driver is going concern which requires funding. Therefore, SOC experiencing liquidity challenges have to develop mitigating factors and demonstrate sources of funding to ensure that they will be able to operate as a going concern over a period of twelve months.

The following have been the circumstances for specific SOCs with plans to remedy the situation:

1. SAA

The airline could not complete the AFS on a going concern basis for the 2017/18 financial year. This resulted in the airline being placed under business rescue from 6 December 2019 to 30 April 2021. The 2017/18 AFS were completed after the entity exited the business rescue. The Auditor-General is currently auditing the 2018/19 to 2021/22 AFS.

2. Denel

Denel continues to face liquidity challenges, which has resulted in the 2020/21 and 2021/22 AFS audits not being finalised. However, Denel has been allocated R3.4 billion to implement its turnaround plan. It has also commenced on disposing off non-core assets. This has enabled it to develop plans to conclude the outstanding audits over the 2022/23 and 2023/24 financial years.

3. Eskom

Eskom experienced delays in publishing the Group's 2022 Annual Financial Statements (AFS) due to the delay in the appointment of the new external auditor. The entity anticipates publishing the AFS not later than 31 December 2022 once the audit is completed.

4. Alexkor

The AGM relating to the 2020/21 financial year was only held in May 2022. As a result, there was a delay in appointing external auditors to audit Annual Financial Statement for the year ended 31 March 2022.

 

 

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ. Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to information received from Eskom:

See the table below for the requested information.

Period: 1 January 2021 to 20 November 2022
Station	a) Operating hours	(b) Electricity generated (GWh)
(a)(i) Gariep	24 724.7	2 230.0
(a)(ii) Vanderkloof	15 895.8	1 928.7

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to Information Received from Eskom:

a) Generation’s power plant units are required to undergo maintenance outages periodically to prevent future failures, address load losses, meet statutory requirements, and fix broken equipment.

The table below summarises the projected outages over the next five years in accordance with the capacity plan published in October 2022 and the plant maintenance philosophies of the stations.

FY of outage start and type of outage (count)
Type of outage	FY23	FY24	FY25	FY26	FY27
General Overhaul (GO)	15	12	12	6	13
Minor Overhaul (MO)	18	14	12	7	5
Interim Repairs (IR)	16	14	15	18	13
Inspections (IN)	16	11	20	9	12
TOTAL	65	51	59	40	43

 

b) The required outage budget for the next five years, FY2023 to FY2024, was R46 713 billion, compared to an affordability cap of R41, 800 billion (what Eskom could afford), resulting in an R4,913 billion financial constraint. Since then, the Chief Financial Officer has raised the affordability level to R44, 700 billion, reducing the gap to R2, 013 billion.

Eskom is working hard to stay within this restriction; but there are risks presented by this funding plan that may result in plant reliability challenges if all maintenance scopes are not completed. In addition, it does not allow for any scope variations in case of additional maintenance requirements discovered during outages.

 

Remarks: Approved / Not Approved

Jacky Molisane Pravin Gordhan, MP

Acting Director-General Minister

Date: Date:

Reply:

According to the information received from Transnet

The salary increases will be funded through a combination of cost control measures, improvement of operational performance and the rebasing of tariffs in line with tariff methodology or customer contracts which allow for salary increases as pass-through costs.

Cost control measures have been implemented across the business to preserve cash without limiting expenditure in critical areas of the business.

Improvement in operational performance will be supported by the initiatives that are strategically driven to unlock the current binding constraints i.e., locomotives availability, theft, and vandalism challenges as well as the focus on infrastructure maintenance backlog.

Remarks: Reply: Approved / Not Approved

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister of Public Enterprises

Date: Date:

Reply:

1. The Department is working closely with Eskom and other Government Departments as part of the President Action Plan to address electricity crisis in the country. DPE participates In the National Energy Crisis Committee (NECOM) workstreams that aims to improve Energy Availability Factor (EAF) to reduce loadshedding. Department of Mineral Resources and Energy (DMRE) is also part of NECOM, and the creation of the new state-owned power company is still speculative. Minister of DMRE is best placed to respond on the creation of the new state-owned power company.

2. The Minister of Mineral Resources and Energy will be appropriate to respond to the question of comparative analysis of creation of new State-Owned Company.

According to Information Received from Eskom:

3. Context – key insights and lessons learnt

Eskom has, over time, reviewed and reflected on the diverse challenges and key lessons learnt in the up-front conceptualisation, strategic decision-making, planning, and execution of the Eskom new build programme. The following Eskom key lessons and initiatives have been recognised to improve management and delivery in the Eskom new build programme and mega capital and investment projects:

• International benchmark lesson: engineering development of mega projects
• Adequate front-end engineering development (FEED) of mega projects: the approach taken in comparable benchmarked projects shows that investment in FEED reduces execution time, reduces capital expenditure, and increases schedule certainty.
• Key benefits of FEED are the development of comprehensive and complete engineering assumptions that significantly improve scoping, planning, plant designs, project schedule delivery, and execution integration and result in significant reduction in contractor claims and improvement in cost efficiencies through effective commercial, procurement, and tender award processes.
• Timely up-front investment decision-making and securing of project funding
• The decision to embark on the Eskom massive and complex new build programme, with three mega projects (Medupi, Kusile, Ingula) executed at the same time, and the national energy supply crisis of 2008 (that is, the loadshedding situation) led to the hurried executive decision for Eskom to start the construction of Medupi and Kusile power plants, which presented multiple risks, including a capital funding shortfall. The Kusile Project was suspended for several months due to a capital funding shortfall. In addition, some gaps were identified regarding a lack of suitably qualified, skilled, and experienced resources from both Eskom and contractors that were not readily available in the market (locally and internationally).
• At the time of the commencement of these mega projects, Eskom had not executed any projects of this magnitude and scale for decades, hence the lack of skills and experience. The critical skills and experience lacking from both Eskom and contractors included engineering planning and design, contracting and contracts management, commercial and procurement management, programme/project management (scheduling and monitoring), and construction management.

• Furthermore, the choice of the engineering, procurement, and construction (EPC) management multiple contracting strategy versus turnkey in the execution of the Ingula, Medupi, and Kusile Projects, to partly fulfil Eskom’s socio-economic mandate, introduced a project/contract management risk that resulted in ineffective co-ordination/management of the many contracts and contractors. The appointment of experienced and proven global execution partners was intended as a mitigation measure to provide assurance of successful delivery of the projects. Despite the appointment of the execution partners to assist Eskom, the projects experienced significant cost, schedule, and scope overruns. The cumbersome procurement approval processes in Eskom and government were a contributing factor.
• The hurried project development and shortened time spent on front-end engineering loading, with shortcuts taken in design and engineering, led to uncertainty, avoidable design changes, and integration issues, accompanied by significant mega project schedule delays, design defects, and cost escalations. The current major new plant defects are a significant consequence, impacting on the availability and reliability of the commissioned units. This situation, furthermore, led to outstanding licences and approvals that had to be obtained during the execution release approval (ERA) phase, as was the case with land acquisitions, which ultimately had a negative impact on the overall project completion time. Notwithstanding the aforementioned, Eskom managed to deliver the mega projects within the overall range of international benchmark time frames and overnight costs.
• An ineffective contracting strategy and framework, including an insufficient contractual penalties and claims management strategy, contributed to low levels of contractor performance (productivity).
• Ineffective project execution resulted in excessive cost, schedule, and scope overruns in the mega projects due to challenges and inefficiencies in several functional areas: engineering planning and design; project scheduling and controls; commercial and procurement management; contractor management and monitoring; and low levels of performance by execution partners, contractors, and Eskom staff. This inadequate project construction oversight of contractor performance resulted in significant rework (that is, major plant defects).
• Ineffective project governance, oversight, and compliance management resulted in serious non-compliance with Eskom governance processes in the areas of contracts, procurement, commercial, engineering, and National Treasury policies and guidelines, leading to the high incidence of financial irregularities, wasteful expenditure, malfeasance, and corruption.

• Ineffective management of the project statutory and regulatory requirements and risks related to safety, health, the environment, and quality, resulting in delayed project statutory and regulatory approvals (that is, water use licences, permits), with approvals obtained during the ERA phase, and leading to significant disruption and changes to the sequence of the construction schedule.
• Ineffective management of the project industrial relations and social developmental issues resulted in various site worker protests and local-to-site community protests, significantly contributing to project cost and schedule overruns.

Steps to prevent recurrence (Eskom improvement initiatives in the management and delivery of mega projects originating from the referred-to global benchmark and new build programme lessons)

In 2021, based on the key insights and lessons learnt from the disastrous outcomes of the execution of these mega projects, Eskom decided on the Engineering, Procurement and Construction (EPC) lump sum (turnkey) strategy for the execution of any future mega projects. This strategy was chosen to ensure the achievement of the best possible project results (that is, cost, schedule, scope) and to maximise the return on capital investment, while minimising risks to the owner (Eskom).

Eskom, through the EPC turnkey strategy, will outsource the critical front-end engineering development (FEED) scope and project execution and completion scope (construction, commissioning, and handover) to a proven, best-in-class, competent EPC turnkey contractor. The EPC turnkey contractor shall establish a single procurement contract to deliver the project for Eskom.

Key benefits of the EPC turnkey strategy for Eskom: the EPC turnkey contractor will appoint and manage subcontractors, which will address the various risks and challenges that Eskom experienced in the execution of the new build programme, while improving project delivery and improving the security of energy supply of the national grid. It will limit and avoid the reoccurrence of corruption, malfeasance, major plant defects, and reputational damage and improve the return on capital investment for Eskom. Eskom’s responsibility shall be limited to conceptual, basic engineering work as part of the Eskom project development function.

In addition, Eskom has created and implemented a project management system, informed by the high-performance utility model (EHPUM) and project life-cycle model (PLCM), with strong capabilities, processes, systems, and tools. The latter forms the basis for a structured approach to improve the management and delivery of mega capital and investment projects.

Progress on fixing the major defects at Medupi and Kusile

The roll-out of the major boiler plant defect solutions agreed with the contractor in 2020 for Medupi and Kusile has been completed. The results are encouraging, showing an improved average energy availability factor (EAF) of 82% over the six months (excluding Unit 4) at Medupi.

At Medupi, the gas air heater, pulse jet fabric filter (PJFF), and boiler plant modifications by the boiler contractor have been implemented on all six units, except for the long-lead milling modifications on all units and the duct erosion modifications on Unit 6.

The first phase of the roll-out (PJFF, GAH mechanical, mill short-lead items) has been completed for all Medupi units and for Kusile Units 1, 2, 3, and 4.

At Kusile, the major boiler plant modifications have been completed on four units (Units 1 to 4). Modifications on Units 5 and 6 are being rolled out during construction before commercial operation.

 

 

Reply:

According to the information received from Transnet:

a) An assessment was done by the Department of Transport, the Department of Home Affairs (Immigration Department) and the TNPA, and agreement was reached that there is currently no need for new infrastructure. Thus,

1. No new customs facilities will be built; and
2. No new infrastructure will be built to allow passengers to get off the specified ships for tourism facilities.

b) A few requirements were identified for the Port of Saldanha to attain Port of Entry Status. The requirements included identifying a suitable site and a housing facility to accommodate the relevant government departments; as well as an area to process the arriving passengers.

(i) The site identified and allocated for the Government Departments already has a housing facility equipped with running water, electricity, and connectivity. The identified housing facility is currently leased to the Department of Public Works on behalf of the Department of Home Affairs (Immigration Department). The assessing team has confirmed that the site meets the requirements from the TNPA for Port of Entry Status. Upgrades will only be undertaken as and when required.

ii) A temporary passenger facility will be erected as and when there is a need. Three sites have been identified for such erection and processing. As and when the demand proves necessary for permanent infrastructure development, new infrastructure will be developed to process passenger arrivals.

 

Reply:

According to Information Received from Eskom:

a) The US$497 million (approximately R9 billion) World Bank concessional loan facility to Eskom for the repurposing of Komati Power Station, comprises US$439.5 million from the International Bank of Reconstruction and Development (IBRD), a US$47.5 million facility from the Canada Clean Energy and Forest Climate Fund (CCEFCF) and a grant of US$10 million from the Energy Sector Management Assistance Program (ESMAP). The IBRD and CCEFCF facilities are both 20-year facilities, with the IBRD facility bearing an interest rate of SOFR (six months average secured overnight financing rate) plus 0.86% (approximately 2.88% all in as of 7 November 2022) and the CCEFCF facility bearing interest at a rate of 0.75%. The loans have a capital repayment grace period of five years and are then amortised over the remaining 15 years. The IBRD facility has a commitment fee of 0.25% per annum of the undrawn balance and a front-end fee of 0.25% of the full loan amount.

b) The loan allows Eskom to finance the repurposing of Komati Power Station at a concessional cost of funding and create jobs and opportunities for workers and communities that are impacted by the decommissioning of Komati.

c) The loan will be used to finance the decommissioning of the Komati Power Station, repurposing and repowering of the station and other elements of the Just Energy Transition (JET), including provision for the training of Eskom employees, community development and stakeholder initiatives. The repurposing will install 150MW of photovoltaic, 70MW wind generating capacity, 150MW from a Battery Energy Storage System and a synchronous condenser.

d) In line with the IRP 2019, Eskom plans to decommission and repurpose coal-fired power plants at Camden, Hendrina, and Grootvlei. In alignment with Eskom’s JET Strategy, repurposing of the retired capacity will mean replacement with renewable generation capacity, while considering the economic, social, and environmental challenges of the transition. The repurposing of these power stations is estimated to cost circa US$2.6 billion.

e) The funding is anticipated to come from a combination of development finance institutions, climate funds and the private sector.

 

 

Reply:

According to the information received from Transnet

The top five capital projects for the Port of Saldanha are listed in the table below. These projects form the bulk of the R182m investment committed for 2022/23. The table includes the planned completion dates and link with the Saldanha Bay Industrial Development Zone.

Port of Saldanha Top 5 Projects (a)	Planned Project Completion Date (b)	Link with Saldanha Bay Industrial Development Zone (SBIDZ) (c)
1. Bulk Electrical Power Supply and ancillary installation	30 June 2023	Project makes allowance for a tie-in of SBIDZ switching station with Port’s new main intake substation for supply of 16MVA electrical power to the SBIDZ over next 16 years
2. Security Requirements to Maintain ISPS Accreditation - Fencing	30 June 2023	None
3. Purchase of Fire and Emergency Services Appliances	01 June 2023	None
4. Dredging Requirements in the Port	30 May 2023	Planned dredging to maintain berth depth requirements associated with TNPA/ Saldehco Facility Operator Agreement, as per concluded Section 56 process. SBIDZ has sub-leasing agreement with Saldehco of 20ha.
Port of Saldanha Top 5 Projects (a)	Planned Project Completion Date (b)	Link with Saldanha Bay Industrial Development Zone (SBIDZ) (c)
5. Refurbishment of Quay and Jetty Infrastructure - Fenders	14 March 2023	None

 

Reply:

According to the information received from Eskom

(a)

When the last operating unit at Komati Power Station was shut down on 31 October 2022, this removed a potential 114 MW from the system. Before the shutdown of the Komati units, all nine units had a nominal capacity of 884 MW.

(b)

Eskom plans to add 150 MW solar, 150 MW wind and 70 MW wind power to replace this shut down capacity. Eskom notes that it is not expected that the full capacity of the coal stations to be shut down could be replaced on a 1-to-1 basis by repowering and repurposing with renewables. The responsibility of ensuring adequate capacity lies with the Department of Mineral Resources and Energy (DMRE) and those plans are reflected in the latest Integrated Resource Plan (IRP 2019). The shutdown of Komati is in line with the assumptions in the IRP and in fact, the IRP assumed that 4 888 MW of coal stations would already be shut down by the end of 2022.

Eskom is, however, committed to both improving the performance of the Generation fleet and introducing additional capacity, comprising both renewable and low carbon technologies, in order to assist the DMRE in guaranteeing adequate capacity to meet the electricity demands of the nation.

Reply:

No one has been found to be guilty of any misconduct with regards to the proposed sale of shares in SAA. There have been and continue to be, efforts to undermine the saving of the airline and sustain the national flag and brand.

If the negative forces succeed, some 900 jobs will be lost, the assets of the airline will be sold to competitors cheaply, and capacity will be reduced in South Africa and the traveling public will be exploited.

 

Reply:

According to Information Received from Eskom:

The Eskom Academy of Learning was referred to as the Eskom College and was established in 1984. During the last few years, it went through changes and recently the mandate of the Eskom Academy of Learning (EAL) is: “To build critical capabilities in order to create a highly responsive, multi-skilled, flexible and innovative workforce that adapts to future markets and the new world of work, through cross cutting learning offerings, while simultaneously leveraging the hospitality and capabilities”.

(a)(i) Training that is offered at the EAL is tailor-made for Eskom employees and Year-To-Date (YTD), October 2022, 30 717 employees attended various training interventions.

(a)(ii) The Eskom Academy of Learning provides the following learning and development

offerings:

1. Leadership development:

Offers a suite of leadership development programmes tailored for Supervisors, Middle Managers and Senior Managers. These include but are not limited to:

• 3X core Management Development Programmes (MDP) across all leadership segments.
• 16X short courses. Most frequently booked: mentorship, tough conversations, personal resilience for leaders, leadership mindset.
• 3X Transition Programme for new Senior Managers, Middle Managers and Supervisors.
• Customised leadership offerings to address specific leadership competencies.

2. Functional training:

Offers training which is intended to enable employees to perform their duties and to ensure regulatory and legal compliance. These include, but are not limited to:

• Project Management
• Contract Management and Supply Chain Management e.g., suite of NEC, PIE, and Warehousing.
• Safety, Environment and Quality courses.
• Customer Services courses e.g., Care for Customers and Customer Revenue Billing.
• Finance e.g., Cost Centre Owner and Forex.
• Human Resources e.g., Performance Management and Employee Relations.
• Legal and compliance e.g., Ethics and PFMA.
• Security: National Key Point Management and Firm Arm handling.

3. Technical Training

The EAL offers on-site artisan training which comprises of Control, Measurement & Instrumentation, Electrical, Electrical Line Mechanic, Mechanical and Welding. Engineering training is also taking place at the EAL and at various sites of Eskom.

(b) On-job training is taking place within the different divisions at Business Unit level.

(c) The below table represents the overall Eskom training budget at organizational

level which is inclusive of the EAL’s budget.

Eskom annual training budget – R’m

FY	Budget
(aa) 2019-2020	1 225
(bb) 2020-2021	1503
(cc) 2021-2022	1 154
(dd) 2022-2023	1 141

 

 

 

Reply:

According to Information Received From Eskom

Eskom is critical to the economy of South Africa, and it is thus imperative that Eskom is enabled to provide consistent and reliable electricity to the country. In order to achieve this, assistance in addressing Eskom’s unsustainable debt is required from the Government and this will be done as committed by the Minister of Finance in his Medium-Term Budget Policy Statement on 26 October 2022.

Secondly, additional capacity is urgently required nationally, not only to address the current shortfall, but also to provide Eskom enough maintenance space to execute essential reliability maintenance and to replace the capacity of its coal units that are to be shut down.

Thirdly, Eskom will improve its operational performance and increase its generation capacity through a number of interventions, including:

• Bringing the remaining two (units) at Kusile online and expediting the return of Medupi unit 4;
• Implementing reliability maintenance through focus on quality, recruitment of experienced staff, and the utilisation of the Original Equipment Manufacturers (OEMs);
• Addressing Eskom debt to enable required investments;
• The use of climate funding to invest in repurposing and repowering of stations to be shut down;
• Coordinated efforts with law enforcement to address sabotage, theft, and fraud at power stations; and
• Focus on six (6) priority stations (Duvha, Kendal, Kusile, Matla, Majuba and Tutuka) where the maximum benefit can be achieved by improved performance.

Fourthly, the Presidential Energy Action Plan was developed to address Eskom generation challenges. The root causes of the current performance are due to late decision by the Government to allow Eskom to build new generation capacity and many years of sub-prudent and efficient cost reflective tariffs which led to over a decade of “running the stations very hard” with less-than-ideal reliability maintenance and mid-life refurbishments.

The “Rescue Plan” of Eskom requires inadequate capacity and inadequate funding as well as availability of the Generation fleet to be addressed.