Questions and Replies

Reply:

(1)(a)(b)&(c) The SAPS has sufficient stock of the three (3) mentioned items and there is currently a process in place to replenish stock thereof (see attached information note for the Minister).

(2)(a) 13 water cannons are currently owned by the SAPS.

(b) 10 of these water cannons are currently operational and the other 3 are booked in for repairs.

 

(3)(a) As on 31 October 2015 the following number of these items have already been issued and are serviceable but they are not kept in stock (for (i) and (ii) only) - for (iii) & (iv) please see the disclaimer in the table;

Description	Quantities	(b) Current Supplier
(i) Tactical Goggles	3 249	No contract in place.
(ii) Protective Gear:
Jackets body protective gear	3 075	No contract in place.
Arm protective gear	2 852	No contract in place.
Leg protection gear	2 784	No contract in place.
Riot shields	38 102	No contract in place.
Tonfa rubber baton	168 924	No contract in place.
Riot helmet	18 545	Lightsaver the Intelligent Flashlight.
(iii)Anti-Riot Boots The SAPS does not have specific Anti-Riot Boots	0	N/A.
(iv) Bullet proof vests Current quantities issued and in stock	203 962	The specification has been upgraded and is in process for a new contract.

(4)(a)(b)&(c) There is no specific boot approved to be used by the SAPS Special Task Force.

(5)(a)(b)&(c) - see table below;

 

Name	Specification	Current Supplier
Polyester Canvas Type Holster	Please see attached	There is no current contract.

Please note- this type of information is not normally given out of the organization.

Reply:

The SAPS does not have any embargos against any country for the procurement of goods and services. The SAPS, in terms of government policies, satisfies requirements by procuring from the local market but should a requirement arise that is not locally available the Department will enter into procurement actions directly with international companies.

Reply:

1. No, the Department is not aware of the strategy but would appreciate an opportunity to provide some comments.
2. Please refer to (1) above.

Reply:

Question 1

The number of learners that were progressed from Grade 11 to Grade 12 in 2015 is presented in the table below. In September 2015, the Department of Basic education (DBE) responded to a similar question presented by the Honourable Lovemore, and the figures have decreased since September 2015. It was indicated in the September response that those were preliminary figures, which had to be verified. The figures presented below are the verified figures.

PROVINCE	PROGRESSION NO
Eastern Cape	12 618
Free State	8 172
Gauteng	8 501
KwaZulu-Natal	10 633
Limpopo	14 390
Mpumalanga	5 228
North West	3 673
Northern Cape	2 283
Western Cape	4 813
National	70 311

Data from National Senior Certificate (NSC) Main Frame Exam system as per 27 November 2015.

 

Question 2

The number of learners who have opted to complete their National Senior Certificate (NSC) examination over two years or more, will only be available after the writing of the examination and after the data has been captured on the system. This will provide the final number of learners who have in fact taken advantage of this opportunity.

Question 3

National and provincial pass rates are based on two aspects i.e. overall pass rates and subject pass rates. Given that these candidates would not have completed the full subject package as at the end of the 2015 NSC examination, they cannot be included in the determination of the overall pass rate, but will be included in the reporting of the subject pass rate. Therefore, these learners are not excluded from the reported data relating to the 2015 NSC examinations.

Question 4

The specific criteria for the implementation of the Progression Policy has been approved by the Council of Education Ministers. The Department of Basic Education (DBE) has commenced with the finalisation of policy regarding this matter and the first step in the process is the call for public comments on the criteria. This will be completed by the end January 2016, and thereafter, the comments will be incorporated into the proposal and gazetted as policy by the Minister.

 

Reply:

(a-c)

The White Paper on the Transformation of the Public Service (1995) noted that the first democratic government inherited a system with poor integration and coordination. Hence in 1996 the Presidential Review Commission recommended a stronger cabinet secretariat, therefore Presidency was restructured in 1999 and a new system was put in place, including a new Cabinet cluster system and clusters of the Directors General.

SUB-COMMITTEES OF THE JCPS CLUSTER

The NATJOINTS is a Sub-committee that has been established to assist the JCPS DG’s Cluster. The sub-committee serves as the primary instruments for coordination at the officials’ level on key safety and security matters and promote integration.

National Joint Operational and Intelligence Structure (NATJOINTS) is responsible for the development and implementation of operational safety and security plans, provide a safe and secure environment at big events, prioritise peace and stability of the country. The Committee is chaired by SAPS, Co-Chaired by SANDF and SSA, and meets every month providing regular reports to the JCPS DG’s. The Committee contributes to Outcome 3 of the MTSF (Sub-Outcome 1: Reduced levels of contact crime and Sub-outcome 5: Ensure Domestic Stability)

Reply:

1.

(a) The provinces did assess the drought conditions prior to declarations requests. The verifications was done by the National Disaster Management Centre (NDMC) together with provincial departments and Department of Agriculture Forestry and Fisheries (DAFF) in arriving at the total costs. The Comprehensive Agricultural Support Programme (CASP) and Ilima/Letsema grants are used to assist small scale, subsistence and commercial farmers. These grants are approved for transfer to provinces for the implementation of CASP and Ilima/Letsema programmes in the 2015/16 financial year. A maximum of 20 percent has been prioritised from the fourth quarter transfers due to current drought conditions in the country, considering the magnitude of the occurrence based on the available information.

(b) Provinces were then requested to reprioritise 20% of their (CASP) and Ilima / letseme conditional grants to respond to the drought. The ultimate amount allocated to each province is determined by the province in terms of how much the province can make available through the reprioritization process to a maximum of 20%.

(c) Each province receives a different CASP amount as per normal National Treasury budget allocations linked to the individual business plans. Therefore the 20% amount allocated will differ from province to province.

(d) The provincial Heads of Department as the receiving authority in provinces are responsible for the management of the prioritised CASP funds. DAFF will monitor the implementation of the drought relief scheme employing the Drought Relief Scheme Framework.

(2) Drought assessment reports and beneficiary lists obtained through information gathered from physical visits and reports from affected farmers will determine who qualifies for drought assistance.

Reply:

Question 1

The total budget for the National Education Evaluation and Development Unit (NEEDU) for the (a) 2012-13, (b) 2013-14, (c) 2014-15 and (d) 2015-16 financial years is indicated in the table below:

FINANCIAL YEAR	TOTAL BUDGET
2012-13	17 082 858
2013-14	21 100 197
2014-15	26 280 460
2015-16	15 205 357

Question 2(a)

The total budget for the NEEDU that was spent on staff salaries in the (i) 2012-13, (ii) 2013-14 and (iii) 2014-15 financial years is indicated in the table below:

FINANCIAL YEAR	TOTAL BUDGET SPENT ON STAFF SALARIES
2012-13	11 673 619
2013-14	14 159 257
2014-15	20 801 075

Question 2(b)

The total budget for the NEEDU that was spent on staff salaries since 1 April 2015 is indicated in the table below:

FINANCIAL YEAR	TOTAL BUDGET SPENT ON STAFF SALARIES
2015-16	10 763 014

Question 3

The establishment of an independent government component, such as the Office of Standards and Compliance for Basic Education (OSCBE), is a lengthy process and it involves the Department of Basic Education (DBE), the Department of Public Service and Administration (DPSA), the National Treasury and the Presidency. This has been the main cause for the delay in completing this process. The NEEDU will become the OSCBE when all the processes, as indicated below, have been completed:

Following the Minister’s correspondence with the Ministers of Finance and the Public Service and Administration, certain developments have transpired. These are as follows:

• • Consultations with the National Treasury and the Department of Public Service and Administration (DPSA) to establish NEEDU as an independent government component, under the title of Office of Standards and Compliance for Basic Education (OSCBE);
  • The formulation of the relevant documents with the support of DPSA and the preparation of business case with the support of the National Treasury;
  • Preparation of the Regulations for the establishment of OSCBE for consideration and approval by the Minister;
  • The approval of the Regulations for the establishment of OSCBE after close examination and scrutiny by the Chief State Law Advisor, who finally declared that “the draft Regulations are consistent with section 11 of the National Education Policy Act, 1996 (Act No. 27 of 1996)” in May 2015; and
  • The approval of the Regulations for the establishment of OSCBE by the Minister in May 2015 after they were endorsed by the Chief State Law Advisor.

What remains to be done includes the following activities:

• • Approving the Regulations for the establishment of the OSCBE by the Council of Education Ministers.
  • Declaring the establishment of OSCBE through the promulgation of the Regulations (via the Government Notice) by the Minister.
  • Submitting the updated business case and promulgated Regulations and Government Notice to the DPSA [by NEEDU].
  • Arranging a meeting of the Interdepartmental Assessment Committee to make recommendations on the organisational form for the OSCBE—with DBE (NEEDU) participating as a member in the Committee and making a presentation to the members [by DPSA];
  • Preparing a submission to inform the Minister for Public Service and Administration and the Minister of Finance of the Committee's recommendation and obtain the concurrence of the said Ministers for the establishment of the OSBE as a government component [by DPSA];
  • Preparing (following concurrence from said Ministers) a Presidential Proclamation to list the OSCBE in schedule 3 of the Public Service Act, so as to establish the OSCBE as a government component [by DPSA].

Question 4

The Minister is currently considering the most suitable candidates to lead the NEEDU and will appoint the best candidate in due course.

Question 5

NEEDU will submit the draft report to the Department for comments by 30 November 2015. In 2014, NEEDU evaluated 183 schools (93 schools offering Grades 7-9 and 90 offering Grades 10-14), 25 districts and nine provinces. A total of 217 reports, one for every site visited, were prepared. These reports had to be collated into the national report. This entails extensive analysis of large volumes of both qualitative and quantitative data. The analysis of data took longer because, unlike in the previous evaluations, the 2014 systemic evaluations involved two phases (senior and Further Education and Training). Because NEEDU did not have the capacity to do complex statistical analysis of the quantitative data that was collected from schools, districts and provinces, a service provider was appointed to analyse the data. The procurement process in appointing the service provider also added to the delays in finalising the 2014 Report. In addition, two staff members, including the Chief Executive Officer, left and this meant that the remaining staff had to carry more workload.

A draft report has been prepared. The NEEDU is doing the final editing before it is submitted to the Department for comments. In terms of the NEEDU protocol, each site visited (including schools, districts, provinces and the national office) is given four to six weeks to comment on the NEEDU draft report before a report is finalised. This practice, which was followed before when the 2012 and 2013 NEEDU Reports were finalised, will also be followed with regard to the 2015 Report. It is only after NEEDU has carefully considered all comments made by the Department that the report is finalised and submitted to the Ministry.

Upon receipt of the NEEDU Report, in line with the provision of section 7(1)(g) of the Regulations for the Establishment of the Office of Standards and Compliance for Basic Education (OSCBE), currently known as NEEDU, “the Minister may publish the report.” This provision empowers the Minister to publish NEEDU reports at the Minister’s discretion.

Reply:

(1) A process of consultation with role players is underway.

(2) Depending on the outcome of the consultations, the department proposes to prioritise the former non-statutory force members who did not qualify for Special Pensions from 1996 and destitute World War military veterans in the provisioning of pension.

(a) In instances where the value of the Special Pensions is lower than the value of the military pension’s value, top-up is proposed.

(b) and (c) Special Pensions does not pay a standardized pension amount to the beneficiaries but utilizes a formula which considers the age of the beneficiary and the years spent in service.

(3) Whilst there are on-going consultations, the view of the Department is that any pension granted to Military Veterans may be offset against other benefits received from the State, such as the Special Pensions.

(4) During the 2014-15 financial periods, the department made contingency provisions to provide pension to 500 Military Veterans at an estimated cost of approximately R23 million.

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

I have already briefed the Portfolio Committee on Defence and Military Veterans on the implementation plan for milestone 1 of the Defence Review on the 26th November 2015.

I have also undertaken to provide regular briefings to the Committee on the progress made at each stage of the implementation plan. I have similarly recently met with the Defence Service Commission and the Military Ombud.

DATE OF SUBMISSION: 12 DECEMBER 2015

Reply:

I do not engage suppliers. Armscor continually interacts with all suppliers on a range of projects with an aim to ensure that suppliers honour their contractual obligations at all times.

.

Reply:

(1) The reason why the target was not achieved is because the Department relies on the military veterans to approach the department with requests to update their records. It is assumed that those Military Veterans who are not updating their records, their personal details have not changed.

(2) As per the Act the listing of Military Veterans in the National Military Veterans database is a permanent function which is not expected to end as it caters for the transition of members of the defence force who exit service.

(3) The 21 322 updated files completed was not broken down as per former force, at the time of reporting, due to the nature of our system we may not be able to go back at the end of the reporting period to track the composition of the batch. With the current improvements on the system, we will make sure such a break-down is provided in future.

 

 

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

Both Department’s Accounting Officers and Senior Officials responsible for housing portfolio for Military Veterans met to reconcile housing targets over the Medium Term Expenditure Framework and agreed on delivering 2000 houses which is a realistic figure.

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

a) Yes, Annual financial statements of the Special Defence Account (SDA) were always tabled with the Annual report of the Department of Defence as required by the Appropriations Act, and the last SDA Annual financial statements for the 2014/15 financial year were tabled in Parliament on 29 September 2015 with the tabling of the annual report of the Department of Defence.

b) The next Annual financial statement of the SDA will be for the financial year 2015/16, and the tabling thereof will be done with the tabling of the Annual Report after the financial statements have been completed and audited, which is usually around September/October each year

DATE OF SUBMISSION: 12 DECEMBER 2015

Reply:

For 2014/15 financial report the department had met the 2% disability target. Female representation on SMS level has reached 42%, the deviation is caused by the number of vacant post at SMS level, where resignations of female SMS members had an impact on the focused target.

 

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

(a) The Department of Military Veterans still has a number of medals in stock to be awarded to members of the non-statutory force of uMkhonto we Sizwe for whom the first set of medals were designed and cast. At present the Department of Military Veterans has gone into negotiations with the former APLA for approval of designs of medals for their organisation.

(b) There have been no medal parades since 2012 to honour any military

Veterans.

(i) No medal parades were held nor planned to honour Statutory Forces.

(ii) The Department held three medal parades to award medals to uMkhonto we Sizwe non-statutory force.

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

1. Yes,

(aa/ab) During July 2015, a meeting was held between the Minister, management of the Department and officials from Auditor General in which Supply Chain Management and Performance Information management were discussed.

(ac) The Contract Management Sub-Unit has been established, this Sub-Unit has a Practitioner and interviews for the Assistant Director: Contract Management will be conducted in December 2015. In addition to this the Director: Supply Chain Management has been appointed with effect from 01 December 2015. The appointment of these officials will not only secure stability in Contract Management in the Department but will also ensure consistent administration and management of contracts, e.g., the database of contracts kept in Supply Chain Management will be monitored and reviewed monthly by the Chief Financial Officer.

(ac)(i) The Supply Chain Management directorate had experienced capacity constraints however this was addressed through the appointment of contract employees.

(ac)(ii) In terms of oversight responsibilities, the Chief Financial Officer will ensure that there is regular monitoring and reviews of the contract administration and compliance with Supply Chain Management policies and procedures.

Reply:

(1) (a) Advertisements have been placed and short listing is underway.

(b) VACANCY RATE AS AT 01 APRIL 2014 TO DATE

SN	POST TITLE	SALARY LEVEL	TOTAL COST
1	Personnel Officers x 2	5	R 264, 798
2	Senior personnel Officers x 3	6	R 476, 955
3	Admin Assistants x 3	7	R 588, 834
4	Admin Officer x 1	8	R 243, 747
5	Assistant Director x 1	10	R 361, 659
6	Deputy Director x 1	12	R 674, 979
7	Director x 1	13	R 864, 177
8	Chief Director x 2	14	R 2, 085, 000
9	DDG x 2	15	R 2, 535, 612
10	DG x 1	16	R 1, 656, 618
GRAND TOTAL	R 9, 752,379

(c) The Department of Military Veterans (DMV) in collaboration with the Department of Public Service and Administration (DPSA) developed its Service Delivery Model (SDM) which is fundamental to the design of the organogram. Discussions are underway to fine tune the first draft of the organogram.

 

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

This question must be redirected to the Minister in the Presidency responsible for Performance, Monitoring, Evaluation and Administration. In addition the Minister is the current Chairperson of the National Conventional Arms Control Committee (NCACC)

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

There has been no attempt to persuade the Minister of Finance to establish a Tourism Development Fund. The tourism development aspects raised in the question are funded through existing funding mechanisms in the department provided for by the National Treasury within the current appropriated budget. These include inter alia the Tourism Incentive Programme (TIP), the Social Responsibility Implementation (SRI) Programme and the Strategic Partners in Tourism initiative.

Reply:

1. (a) During the 2014-15 financial periods the Department had planned to build 1000 houses for the benefit of Military Veterans through its partnership with the Department of Human Settlements.

(b) The R31.9 million top-up transfer to the Department of Human Settlement was in respect of the planned construction of 400 houses.

2. The Department of Human Settlements plans as agreed with the Department was for the building of 400 houses in the following provinces:

• Kwa-Zulu Natal
• Eastern Cape
• Free State and
• Mpumalanga3. 

3. Questions 3-5 must be redirected to the Department of Human Settlements as they have the constitutional mandate to address housing issues in the Republic of South Africa.

DATE OF SUBMISSION: 11 DECEMBER 2015

Reply:

It is the duty of the political parties to ensure that their voters turn out to vote on Election Day.

 

Reply:

(1) Buffalo City Metropolitan Municipality (BCMM) was allocated R713.1 million for the 2015/16 financial year and R285.3 million was transferred to the municipality on the 9th of July 2015. The municipality spent an amount of R69.1 million on Urban Settlements Development Grant (USDG) programmes as outlined in the table below as at 30 September 2015. The National Department of Human Settlements is therefore not aware of any funds allocated to BCMM in the 2015-16 financial year that have been utilised for activities or programmes or purposes for which they were not intended.

The departmental information is that the funds were budgeted and spent for the purposes which are illustrated below as at 30 September 2015:

 

(2) The department has utilises the USDG Framework and Division of Revenue Act No.1 of 2015 to regulate the use of its grants. The Grant Framework and the USDG Policy clearly outlines and guides municipalities on the scope of the utilisation of the USDG and this includes:

• Increase in bulk infrastructure capacity
• Increase in the basic services to poor households, specifically in informal settlements, including water, sanitation, electricity, refuse removal and transport access
• Increase in land provision for informal settlement upgrading, subsidy housing, or mixed use development in support of catalytic projects
• Increase in access to socio-economic amenities
• Improved dwelling unit densities within an improved spatial integration framework

The Division of the Revenue Act Section 17 (1) states that “despite anything to the contrary in any other legislation, an allocation referred to in Schedules 4 to 7 may only be utilised for the purpose stipulated in the Schedule concerned and in accordance with the applicable framework section”. Section 18(1) states that “a transferring officer may withhold the transfer of a schedule 4 or 5 allocation or any portion thereof, for a period not exceeding 30 days if (a) the province or municipality does not comply with any provision of this Act.

It is to be noted that in terms of relevant procedure, the Auditor-General also audits expenditure and application of grants by Provinces and Municipalities and these reports are provided to the Department and will be used take corrective action if there is misuse of the grants.

The Department through its Financial and Monitoring and Evaluation units also undertake quarterly visits as well as quarter review sessions with municipalities and provinces, and these also present the Department with an early warning opportunity if there is inappropriate use of grants.

(3) No. However, the Honourable member is encouraged to provide me with details regarding his area of concern.

Reply:

(a) My understanding of red tape is that it is bureaucratic delays in the administration processes that impede and hamper service delivery. We have simplified all business processes for the work of my Department in order to have swifter turnaround times for example, processing of water use licenses. We have reduced the turnaround times for decision makers with regards to Supply chain processes for bid evaluation and bid adjudication processes.

Refer below for response from Entities:

NO.	NAME OF ENTITY	RESPONSE
1.	Amatola Water	(a)(ii) Amatola Water Board defines red tape as “official routine or procedure marked by excessive complexity which results in delay or inaction” (b)(i)(ii); (aa); (bb) & (bbb) Amatola Water Board has governing structures internally that ensure an effective and efficient decision making process that reduces red-tape. The governing structures of Amatola Water Board have policies and procedures to give guidance and, to maintain sound control environment. Amatola Water Board is an active stakeholder that participates in various water sector forums and committees that are lead by Department of Water and Sanitation which are aimed at reducing the decision lag processes (e.g. DG’s Forum, PROWAF, SAAWU). The Shareholders Compact (SHC) which serves an agreement between the Water Board and Minister of Water and Sanitation is aligned to the corporate objectives of the water board. This SHC creates a common space for understanding and execution of strategy. The SHC also forms part of the performance system and monitoring is on a quarterly basis in order to take an immediate corrective action against adverse performance results.
2.	Bloem Water	(a) (i) N/A (ii)Legal mandate by Executive Authority, which is the Board appointed by the Minister, following the Delegation of authority to CE and further to staff. (b)(i) (ii) (aa)(bb)This includes Policies approved and procedures implemented to function in such a way to minimise and reduce processes, costs and red tape. (aaa) (bbb)N/A
3.	Lepelle Northern Water	(ii)Red Tape- excessive bureaucracy or adherence to official rules and formalities. (i) (ii) (aa)(bb) Our internal processes do not have red tape challenges. (aaa) (bbb) N/A
4.	Magalies Water	(a)(ii)Red tape is defined in Magalies Water within the context of normal managerial functions. This is such that management activities are executed in a certain sequence which follows planning within a formal authority of hierarchical decision making. (b)(i)-(ii)A materiality and significance framework and the Delegations of Authority (aa)-(bb)-(aaa) N/A (bbb)The above instruments do neither identify nor reduce red tape but facilitate effective decision making processes within the organisation. The materiality and significance framework facilitate decisions on material transactions by the Board and on significant transactions by the Minister of Water and Sanitation. The delegations of authority facilitate internal decision making processes at various managerial levels.
5.	Mhlathuze Water	(a) (i) N/A (ii) Our understanding of the word “red tape” is that it is a term used to describe excessive regulation that hinders timeous action or decision-making. (b) (i) (ii) (aa) (bb) MW has recently reviewed its business processes in order to streamline all its processes for effective delivery of services. MW policies are reviewed regularly to ensure that they are still effective and relevant in achieving service delivery. (aaa)N/A (bbb)It should however be noted that statutory compliance takes precedence over internal processes, policies and procedures.
6.	Overberg Water	(a) (i) N/A (ii) Overberg Water is not experiencing any red tape in our engagement within and with the external stakeholders. (b) (i) (ii) (aa) (bb) N/A (aaa) (bbb) N/A
7.	Rand Water	(a) (ii) There is no definition of red tape in terms of the law. (b) (i) (ii) (aa) (bb)To improve efficiencies within Rand Water’s Supply Chain Management we are continuously reviewing our systems and policies and currently participating in the review of the Preferential Procurement Act in order to improve economic transformation and participation of previously disadvantages entities in the business of Rand Water. (aaa) (bbb) N/A
8.	Sedibeng Water	a) (i) N/A (Applicable to the department) (ii) Red tape is when processes to approve and authorize activities of the entity are held hostage due to long authorization and approval processes. (b) (i) The necessary processes are still undertaken as per the prescripts of the legislation and business best practices, however business processes mapping was undertaken to respond to the legislation, policies and procedure are defined to enable business efficiencies. (ii) Systems implemented to identify red tape are (aa) The time taken to authorize transactions is checked against the target set to authorize and process; the level of authorization required in terms of the delegated authority; the number of people who hold the requisite authority to transact (bb) reduce red tape in: (aaa) N/A (Applicable to the department) (bbb) A shared services model and automation of the business processes systems was implemented. Reviewing the delegation of authority to allow back up and acting positions taking into account the level of understanding on accountability.
9.	Umgeni Water	a) (i) N/A (ii) Red tape is when processes to approve and authorize activities of the entity are held hostage due to long authorization and approval processes. (b) (i) (ii) (aa) (bb) Umgeni Water has developed systems of internal control that include approved policies and an articulate delegation of powers framework. The framework gives appropriate officials powers to implement decisions at various and appropriate levels. (aaa) N/A (bbb) These systems assist the organisation to quickly dispatch resources and make business decisions without having to wait for executive and accounting authority meetings. However the accounting authority exercises appropriate oversight on decisions taken by management / officials.
10.	Trans-Caledon Tunnel Authority	(a) (i) N/A (ii) TCTA is a service provider to other water management institutions.  It does not regulate (i.e. grant permission to an organisation /individual to carry out an activity) or provide a service over which it has a monopoly to others electricity water etc. (b) (i) (ii) (aa) (bb) (aaa) (bbb) N/A The questions are, therefore, not of relevance to TCTA.
11.	Water Research Commission	(a) (ii) Definition of Red Tape. The term red tape is not used. (b) (i) The WRC has had no specific interventions or (ii) systems implemented. The WRC has a fairly efficient deal flow system with our research management system and while we continuously seek improvement, we have had no complaints about unnecessary red tape. The legislative requirements and regulations that apply to the WRC have been effectively integrated into the operations to ensure smooth process flows. (aaa) (bbb) N/A
12.	Inkomati CMA	(a)(ii) Red tape is defined as complicated official rules and regulations, especially when these are considered unnecessary: excessive bureaucracy (b) (i) (ii) (aa) (bb) Not for the entities to respond to. (aaa) (bbb) N/A
13.	Breede-Gouritz CMA	(a) (i) N/A (ii) The BGCMA defines red tape as excessive impediments that require compliance and conformity to formal rules either in terms of established rules within the organization, policy, compliance register, regulations, Treasury Instructions or applicable legislation. These impediments can prevent the BGCMA from making a timeous decision. (b)(i) If it is a rule or policy the BGCMA applies either a deviation route having obtained the necessary approvals but if it is the legislation there is strict compliance. (ii)The performance process flow and compliance register define and identify areas of compliance plus the extent required to implement those. (bb) Depending on the nature of red tape, relevant officials are given specific delegations and if it is a governance issue the Board or the Minister is approached. (aaa) (bbb) N/A

---00O00---

Reply:

(1) I wish to advise the Honourable member that the legal responsibility for recovering monies belonging to government and which have been misappropriated lies with the heads of the provincial departments affected. This recovery can be done once an investigation has established legal liability on the part of the relevant contractors and officials. The details that the Honourable member seeks cannot be provided at this stage because the SIU submits its reports to the President in terms of the SIU Act. My department has not received a copy of the reports. A proper assessment will be conducted once the full reports have been received. In the meantime, the SIU has advised my department that an estimated amount of R747 530 961. 75 has been identified by the SIU as the amount that can be considered by the affected provincial departments recoverable from the liable contractors and/or officials. The SIU further advises that those departments have been informed of their options regarding these matters.

(2) (a) The SIU advises that it has referred a total of thirty-two (32) cases against implicated individuals and/or entities, that are not state owned entities or employed by the state, to law enforcement agencies, for criminal investigation and possible prosecution. It does not have further details of progress in that regard

(b) (i) & (ii) The SIU has further referred a total of thirty-five (35) cases against implicated government officials to law enforcement agencies, for criminal investigation and possible prosecution.

(3) (a) The SIU has further advised that it has finalised 30 investigations in respect of 91 low cost housing projects.

(b) One investigation in respect of a subsidised housing project in the Western Cape has not yet been completed, as the services of a Quantity Surveyor has had to be procured to conduct a value-for-money exercise in respect of this subsidised housing project, to complete the investigation report.

Reply:

Yes, the National Treasury has formally written to all national and provincial departments who have outstanding debts with municipalities. Please note that the notification was done through a letter by the Director-General: National Treasury who wrote to all Directors-General on 21 July 2015 conveying the message and I reiterated the matter with correspondence on 13 August 2015 to all the executive authorities alerting them of the arrears owed to municipalities.

It is important to understand that the process of addressing these unsettled accounts is being co-ordinated through the President’s Co-ordinating Council (PCC), where Premiers of provinces, Cabinet Ministers, and Accounting Officers of departments have committed to directly address the issue and give regular feedback to the PCC. The written communication from the National Treasury to departments and provinces is part of this high-level process.

The Section 71 of Municipal Finance Management Act (Act No. 56 of 2003) report for June 2015 shows that various departments owed municipalities as per the table below.

Table 1: Age analysis of debt owed to municipalities by National Departments

Section 71 of Municipal Finance Management Act (Act No. 56 of 2003) for June 2015 see the link: http://www.pmg.org.za/files/RNW4066-151210TABLE.docx

Section 71 of Municipal Finance Management Act (Act No. 56 of 2003) for June 2015 see the link: http://www.pmg.org.za/files/RNW4066-151210TABLE.docx

(a) All departments listed above were written to by the Minister of Finance on 13 August 2015.

(b) At the time of writing, the following debts were owed to municipalities by national departments amounted to R1.7 billion and provinces owed R2.5 billion.

(c) In addition, the report shows that a majority of the debt has been outstanding for more than 90 days.

(d) The Department of Public Works has initiated a process to verify the outstanding amounts owed by government in order to resolve problems with contested bills. This process is being undertaken to ensure that all outstanding amounts reported by municipalities are legitimately due by the named departments and to correct any undue errors. This process of verification is a work-in-progress and the outcome is not yet available. The report will also indicate a more accurate picture of progress made with payments of outstanding amounts by departments and province.

(e) Once the outcome of the work done by Public Works is made available, this will inform the actions to be taken.

Reply:

1. Yes, the Correctional Supervision and Parole Board considered the mentioned offender and his profile report was received by Head Office during September 2015 and submitted it to the National Council for Correctional Services (NCCS). As soon as the recommendation of the NCCS is available, it will be submitted to the Minister for consideration.

(2)(a) & (b) See (1) above.

(3)(a)&(b) The offender was not denied to be considered for possible parole placement by the (a) Minister and (b) Correctional Supervision and Parole Board.

(3)(i) & (ii) Parole applications are submitted in accordance with and in compliance to section 42(2) (d) of the Correctional Services Act, Act 111 of 1998, as amended. Amongst others, during the said period the offender did not participate in Victim Offender Dialogue and the Department in collaboration with the offender was in the process of tracing his victims. Furthermore, his support system was also not positively confirmed.

Reply:

(1)(a) According to the Correctional Services Act, Act 111 of 1998 offenders sentenced to life incarceration before 1 October 2004 had to serve a minimum detention period of 20 years before being eligible for consideration for placement on parole. However, on 15 July 2011 the North Gauteng High Court handed down a judgment in the Van Wyk case which had the effect to change the minimum detention period for offenders sentenced to life incarceration before 1 October 2004 prior to them being eligible for consideration for placement on parole. The implication was that the previous credit system was also applicable to those offenders sentenced to life sentences from 1 August 1993 up to 30 September 2004 and after allocation of the maximum number of credits advanced their consideration dates from 20 years to 13 years and 4 months.

(1)(b)(i) & (ii) Section 63 of the Correctional Services Act, Act 8 of 1959; and section 136 of the Correctional Services Act, No 111 of 1998 determines the minimum periods of sentence that must be served before consideration may be given for possible placement.

(2) The mentioned offender was sentenced to life imprisonment on 11 January 2002 and is eligible for consideration for possible parole. However, parole applications are submitted in accordance with and in compliance to section 42(2) (d) of the Correctional Services Act, Act 111 of 1998, as amended. As soon as the requirements of the aforementioned section are complied with, the Case Management Committee will submit the profile report to the Correctional Supervision and Parole Board (CSPB). The CSPB will then make a submission to the National Council for Correctional Services for a recommendation to the Minister.

(3) See (2) above

(4) See (2) above

Reply:

1. The Chairperson of the Municipal Demarcation Board (MDB) wrote to the Minister of Finance on 16 March 2015 requesting the National Treasury to provide the MDB with inputs on a number of matters including a definition of municipal viability, indicators to measure viability and an analysis of the potential impact of each of the proposed boundary re-determinations.

In reply to the specific questions asked:

(i) No date was specified for the requested information to be provided to the MDB.

(ii) The Municipal Demarcation Board published notices in provincial gazettes in early July 2015 formally announcing the details of proposed re-demarcations that they were consulting on. The National Treasury conducted a thorough analysis of these proposals and the Minister of Finance wrote to the Chairperson of the MDB on 6 August 2015 to provide the Board with the information requested.

(iii) National Treasury did not make recommendations to the MDB. The inputs submitted provided information on the affected municipalities and analysis about potential impacts of the proposed boundary redeterminations, noting that in advance of the actual implementation of the proposals it is not possible to know with certainty what the impact will be. This information was provided, at the request of the MDB, to contribute further to the information on which the Board made its decisions.

2. The report compiled by the National Treasury and submitted to the MDB explored a number of different aspects of municipal viability that could be affected by boundary redeterminations. These included financial viability, institutional viability, economic viability and service delivery viability. Again, no recommendations were made to the MDB.

Reply:

The Department of Home Affairs does not have information about this alleged appeal. A request from an organisation such as Cage Africa to the South African government should follow proper channels and be submitted through the Department of International Relations and Cooperation (DIRCO).

Reply:

The total costs incurred to date amounts to R1 717 351-52 calculated as follows:

Disciplinary hearing R1 088 193-54

Review of the disciplinary hearing (SAPS) R 226 062-00

Review of the arbitration (Maj Gen Booysen) R 403 095-98

TOTAL R1 717 351-52

Reply:

There are no records of any investigation pertaining specifically to the entity in question at any of the DPCI Components.

Reply:

(a) Three (3) sectors.

(b) SECTOR 1: (Township), Jiyana, Isivana, Isishjetweni, Ibaxa, Welamlambo, Ethafeni

SECTOR 2: (Informal Settlement) Vusimuzi and hostels, Vusimuzi squatter camp, Enhlanzeni,Tembisa Plaza, Thiteng and Tembisa Taxi Rank, Mpho and Lekaneng.

SECTOR 3: (Township) Moedi, Khatamping, Endayini, Umnonjaneni, Esiqongweni, Entshonalanga, Umthambeka Ext 5, Umfuyaneni.

(c) The total population of Tembisa South policing area is 111 926. The population figures per sector is not available.

(d)

Police vehicles (i)	Police officers (ii)
03	06

 

Reply:

Visible policing in Vusimusi informal settlement is usually conducted by means of foot patrol mostly during the weekends. The 4 X 4 double cabs are also utilized to patrol the area.

Reply:

Due to the nature of the information that is required, SAPS is not able to provide the full details within the given time frame as the information is not readily available. A request is hereby made for an extension of time in order for SAPS to provide quality and correct information as soon as it is received.

Reply:

This information has been requested from the Mangaung Metropolitan Municipality and will be communicated to the Honorable Member when it is available.

 

Reply:

Due to the voluminous nature of the information requested, I would recommend that the member approaches the Chairperson of the Portfolio Committee on Defence and Military Veterans and request to have this information tabled in a meeting of the Portfolio Committee in one of their sessions in 2016

DATE OF SUBMISSION: 08 DECEMBER 2015

Reply:

The SANDF is not aware of any Military Shop in Pretoria that sells military medals. The SANDF remains the custodian of all the South African military medals.

 

DATE OF SUBMISSION: 08 DECEMBER 2015

Reply:

1. Analysis of this blood sample has been completed. For the record, the correct reference numbers are: Brits CAS 489/07/2015 and Brits mortuary DR 274/2015 and seal number PMK 206017/8.
2. (a) The Johannesburg Forensic Chemistry Laboratory (FCL) has an ante-mortem blood alcohol analysis backlog. The post-mortem blood alcohol, backlog has been wiped out.

(b) The FCL’s do not provide reports to family, only to the client, which in this instance is the Brits mortuary. .

END.

Reply:

This information has been requested from the metropolitan municipalities and will be communicated to the Honorable Member when it is available.

 

Reply:

1. The widespread incidents of violence and destruction of property during protests is a cause for major concern. I have spoken about this matter many times in public platforms. The violence in our society is inherited from the violence perpetrated during the apartheid system and the violence response it engendered.

There are studies that have been undertaken to understand factors that contribute to a culture of violence in our society. Some of the studies have been undertaken by organisations outside government. Others have been commissioned by government itself. For instance, a few years ago the Justice, Crime Prevention and Security Cluster contracted the Centre for the Study of Violence and Reconciliation to undertake research on the violent nature of crime in South Africa.

The critical step that we need to take is not so much to commission more studies because there is already some research that has been undertaken. What is important is taking steps to turn the tide against violent protests and the destruction of property.

2. There are various important initiatives government will implement to address the matter next year. These include educating society about the rights and responsibilities of citizenship. This education campaign about rights and responsibilities of citizenship is important considering that next year (2016) will be the 20th anniversary of the signing of the Constitution of the Republic by former President Nelson Mandela. It will also be the 40th anniversary of 16 June 1976 student uprisings.

Studies show that violence in our society affects mostly women and children. Government will use the year 2016, which is the 60th anniversary of the Women’s March to the Union Buildings to mobilise society against violence that is committed against women and children.

Other measures will be announced in due course.

Reply:

The information can be processed through the Portfolio Committee on Defence and Military Veterans in the new year, as the beneficiaries names are considered confidential.

DATE OF SUBMISSION: 08 DECEMBER 2015

Reply:

(a)(i)(aa), (bb), (cc) and (ii) Refer to Annexure 1

(b) The sentence length of each of the 21 239 offenders referred to in Annexure 1 is available however, a hard copy of the information will consist of ±433 pages. The Honourable Member may confirm if this high volume information is still required.

Reply:

1. We launched the Academy for Leadership and Management in Health Care (the Academy) in December 2012 and tasked and Advisory Committee to guide its establishment. The Academy has not yet been established. The organizational model and governance structure of the Academy has been approved by the National Health Council Technical Advisory Committee on 14 October 2015 and will be presented to the next National Health Council meeting for approval.
2. For the reason stated above, the Academy has not been functional formally since it has not as yet been formally established. The Advisory Committee has been supporting the National Department of Health with induction programmes for new CEOs and further training for CEOs. The Advisory Committee has also worked with the Department of Health to develop the prototype of a unique training methodology, the “Knowledge Management Hub”. The Advisory Committee has also worked with the Department of Health to develop competency frameworks for District Managers and Hospital CEOs.

The Advisory Committee submitted its recommendations for establishing the Academy to the Director-General of the Department of Health and the National Health Council Technical Committee (NHC-TAC) in May 2015. The recommendations of this were followed up in August 2015 by a presentation to the NHC-TAC on the concept of the Academy’s Knowledge Hub and the prototype for use.

3. The activities of the Advisory Committee were originally funded by the Department of International Development (DFID) and subsequently by the Public Health Enhancement Fund. These organizations have their own financial reporting systems. Financial information can be obtained from these organizations.

END.

Reply:

1. Yes, the intentions of the strategy to address air pollution in dense and low-income settlements are supported.

The effects of indoor air pollution to human health as a result of the use of solid fuels remain of grave concern to the Ministry of Health. Many households still cook and heat their homes using wood, coal and even dung, in open fires and leaky stoves, and these practices contribute to premature death and illness from respiratory and cardiac conditions and also results in burns, injuries and poisoning from fuel ingestion. We support an approach that addresses the social determinants of health and sustainable development.

The Department aligns with strategies that ensure healthy air in and around the household. The Department of Health supports programmes for clean household energy in contributing towards addressing child and maternal health as a core preventative public health measure.

The intersectoral approach, including roles for critical departments and national, provincial and local government, is supported to address air pollution effects and the Department of Health will continue to partake in programmes aimed at addressing such effects.

2. Yes.

The Department of Health is involved with the assessment and control of biological agents in the environment and improving social concerns and thereby addressing the ongoing health impacts of domestic fuel burning through ongoing Environmental Health programmes. Environmental Health Practitioners are trained on monitoring of Indoor Air Quality and capacitating members of the public through awareness creation. Health awareness campaigns focus inter alia on improved ventilation and lighting.

Within the National Department of Health, Environmental Health has recently been elevated into a Chief Directorate to prioritize prevention of ill health that is caused by environmental factors. The relevant Manager has been tasked with engaging with the Department of Environmental Affairs as well as Non-Governmental Organizations to address the environmental determinants of ill health. Government is committed to the increased use of renewable/subsidized residential housing. It is acknowledged however that more is required to effectively respond to the dangerous energy sources burned in dense low-income communities.

While we collectively work with our partners to prevent ill health caused by environmental factors my Department will also ensure that good health care is provided to poor communities that are forced by poverty to continue burning unsafe fuels that cause ill health.

END.

Reply:

I wish to share three points with the Honourable Member.

First, on job performance in the third quarter of 2015, the StatsSA Quarterly Labour Force Survey shows the following:

• Total employed persons in the SA economy numbered 15, 8 million at the end of September 2015, which is the highest level it has ever reached.
• There were 625 000 new entrants to the age cohort 15-64 in the past 12 months, and the number of jobs created (712 000) for the 12 month period was significantly larger than this.
• However, the labour force increased by 979 000, as a result mainly of a significant rise in the number of previously discouraged work seekers who re-entered the labour market (278 000).
• As a result, robust jobs growth over the period nevertheless translated into an increase in the unemployment rate from 25.4% to 25.5% over the year.
• The number of new jobs created for the quarter was 171 000.

Second, global growth prospects have weakened further over the past six months, with the October IMF projections revising growth prospects downward for the global economy as well as for the African continent.

In April of this year, the IMF projected 2015 growth of 3.5% for the global economy and of 4.5% for Africa. It has now revised those projections down to 3.1% for the global economy and 3.8% for Africa. The April projections were already a downward revision of October 2014 projections.

Third, to address the backlogs in jobs and address the needs of new entrants to the labour market, we need higher growth and more labour-intensive growth, driven by broader economic participation and by re-industrialization centered on a dynamic, internationally competitive manufacturing sector.

Recent actions such as the agreements signed with the People’s Republic of China to invest in industrial and infrastructure activities in South Africa and the rest of the continent, are measures to respond to this economic framework. Of particular relevance for the Economic Development Department were two agreements signed by the Industrial Development Corporation: namely to work towards establishing a new BAIC auto-assembly plant in South Africa with an investment value of R11 billion and to set up a Fund with a R10 billion commitment by the China Construction Bank to invest in the domestic and regional economy.

During the debate in Parliament on the state of the economy in August this year, I addressed the question of government’s overall response to the global economic slowdown and the headwinds facing the local economy, which I summarise below:

The two global storms, in the mineral and steel sectors, are what we have to navigate with as little damage as possible, recognising that production and job losses in these sectors can have a multiplier effect on the economy.

To respond to these conditions and to address the still-continuing high levels of unemployment, we are doing the following:

Public investment

We are maintaining a high level of public investment in infrastructure, which is a true game-changer for the economy. We are spending close to a quarter trillion a year, or R1 billion rand per working day, on economic, industrial and social infrastructure. The BRICS New Development Bank is a major potential source of new funding for South African and regional infrastructure.

Trade and regional integration

We are expanding trade with the rest of Africa, particularly exports of South African made cars, machinery, iron and steel and food products.

Exports to the rest of the continent now account for 244 000 direct jobs and it has been estimated as much as 885 000 total jobs; that last year, Zambia was our number one global export market for televisions, Zimbabwe for plastic products, Mozambique for clothing and the DRC for electrical equipment.

Domestic economic actions

We are implementing actions in the domestic economy, summed up in the 9-point plan announced by the President in the State of the Nation Address in February.

The nine priorities are:

1. Resolving the energy challenges through practical actions, including cogeneration, new IPPs and completing the public energy-build programme
2. Revitalising the agriculture and agro-processing value chain
3. Advancing beneficiation through adding value to our mineral wealth
4. More effective implementation of a higher impact Industrial Policy Action Plan
5. Unlocking the potential of small business, cooperatives and township and rural enterprises
6. Stabilising the labour market
7. Scaling up private sector investment
8. Growing the Oceans Economy and
9. Diversifying and boosting the economy through science, technology and innovation, expanding transport, water and ICT infrastructure and reforming state-owned companies.

To respond to the steel industry's problems:

• We fast-tracked a tariff investigation by the trade authorities on three steel products
• We completed a competition commission probe into steel pricing by the dominant company
• We extended short-term industrial funding of R150 million to one steel-mill to give it the space to restructure rather than close its doors
• We appointed a panel of steel industry experts to identify options for steel that would not damage downstream factory users, and
• We are meeting with business and labour to identify further steps to be taken,

To respond to the mining industry's problems:

• We convened a dialogue with stakeholders to consider options to reduce or avoid job losses
• We are investing in technologies and innovation to boost demand and localisation, such as platinum fuel-cell pilot projects
• We have initiated a Mining Phakisa to address the future of the industry

To respond to the clothing and industry's challenges:

• We implemented a tariff increase on finished products at the start of the previous administration
• We set a reference price on imported clothing to identify smuggling and import-fraud
• We created a competitiveness fund that has already invested over R3 billion in new technologies and work organisation to boost output and jobs.

IDC funding

The IDC expanded its industrial funding envelope over the past five years, particularly in green energy, putting some R14 billion into the Independent Power Producer programme that has already seen almost 2000 megawatts of energy coming onto the grid.

The IDC is now focussing on expanding investment in manufacturing, agro-processing and new industries.

Autos

During a time of declining mineral exports in dollar value, our auto exports have actually accelerated after 2011 and now constitute one of our top five exports, speaking to the success of the partnership built with investors.

Competition and anti-monopoly actions

To boost competitiveness, the competition authorities have acted against monopolies and cartels in sectors such as fertilisers, bread and poultry, steel, construction and telecomms.

Industrial relations

To promote partnership, the Deputy President has led discussions with the business community and trade unions on reducing workplace conflict, including the role of strike ballots, action against violence in strikes and picketing rules. To reduce income inequality in the workplace, proposals for a national minimum wage are under discussion.

Skills

To boost youth employment, government is revamping its skills and entrepreneurship support programmes to make them more effective. The President convened a meeting with the business community in August this year at which stronger partnerships on skills development and work placement were considered.

Partnership

As we navigate our way through the minerals and steel turbulence and storms generated by falling global demand, we need to pull South Africans together, address domestic challenges such as energy and labour-business partnerships and speak with one voice.”

-END-

Reply:

This information has been requested from the Mbombela Local Municipality and will be communicated to the Honorable Member when it is available.

The Honorable Member should provide CoGTA with any concrete information in his possession that could assist in any investigation – which will be initiated if there is a prima facie basis in existence.

 

Reply:

a) The National Integrated ICT Policy White Paper will be tabled in Cabinet for approval by the end of the financial year.

b) The Department intends to gazette the draft National e-Strategy before the end of the financial year.

c) SAPO currently needs financial assistance from Government.

SAPO has been given a guarantee of R1.67 billion in the past financial year and R2.5 billion in the current financial year. The Post Office uses these guarantees to raise cash from the financial markets.

Moving forward SAPO's Strategic Turnaround Plan (STP) has been developed and approved by Cabinet. Its effective implementation requires effective leadership and funding. As part of supporting SAPO's turnaround, the Department has recognised the need to stabilise SAPO's leadership. The board and the Group CEO have been appointed. To date, there has been more focus on the implementation of cost cutting initiatives. There is currently a need to implement revenue generation initiatives and these require funding. Effective implementation of the STP will enable the entity to be economically viable.

 

Reply:

1. Payments to contractors for the removal and disposal of waste to state hospitals and clinics is collated in Annexure A by province and by payment date. Facility data is not provided as service providers cover a range of facilities and are remunerated as such. Where specific payment dates are not available an annual cost is provided. Departments of Health in provinces do not deal with the disposal of laboratory waste.

1. The amounts paid to contractors and outstanding amounts for the financial years 2013-14; 2014-2015 and from 1 April to October/November 2015 are also outlined in Annexure A.

END.

Reply:

1. The Memorandum of Understanding was executed in September 2014.

a) The terms of reference include undertaking and completing a pre-feasibility study (“PFS”) for a new low cost steel production facility in South Africa (the “Project”) that will meet international environmental compliant standards using raw materials that are locally and regionally available. The envisage Project had to be a profitable low cost producer of a broad spectrum of steel products required by the South African and Sub-Saharan markets

Furthermore, it envisages the establishment of a down-stream industrial park to process some of the steel products to finished goods for domestic and export markets.

b) The estimated total capital outlay of the envisage plant is USD 5 billion which is R70 billion at R14/$. The Project will be funded partly with debt (up to 60%) and partly with equity (40%). The objective of the IDC is to play a catalytical role in the establishment of the facility and not to have a controlling interest in the project.

c) The plant will be designed to have a capacity of 5 million tons of steel per annum. During the detailed feasibility study, consideration will be given to the option to build the Project in two phases of approximately 2.5 million tons each.

d) The labour force to construct the Project is estimated to peak at around 11000 and construction will span over a period of at least 42 months. The operational labour requirement for the Project is estimated at 3 500.

An earlier pre-feasibility study was completed, based on the use of a Rotary Hearth Furnace (“RHF”) technology. Since Hebei seeks to use a different technology, further pre-feasibility studies will be conducted. For details of the earlier pre-feasibility study outcomes, the attention of the Honourable Member is drawn to the reply submitted to Parliamentary Question 4138.

-END-

Reply:

A pre-feasibility study (“PFS”) was conducted by the IDC in August 2012.

The key findings of the PFS include:

• A new low cost iron and steel plant with annual capacity of 2.5 million tons based on low cost iron ore and coal resources in South Africa, is viable.
• The preferred process route would be the Rotary Hearth Furnace (“RHF”) technology. The primary advantage of this technology is that it does not require coking coal and subsequently has the lowest operating cost. The downside is the high capital cost of an RHF project and relative high electricity consumption.
• The second best option is Blast Furnace (“BF”) technology. Although it is the most proven route worldwide for iron making, it requires coking coal which is not currently available in South Africa and was therefore considered second best to RHF.
• Beneficiation of the magnetite could be done at a facility at Phalaborwa.
• Middelburg would be a suitable location (and significantly better than Phalaborwa) based on availability of coal, raw material transport logistics, infrastructure including water, rail and electricity as well as proximity to inland domestic market.

After the PFS was concluded, IDC embarked on a process to find a strategic equity partner which led to the Memorandum of Understanding executed with China’s Hebei Iron & Steel Group (HBIS) in September 2014.

HBIS’s participation is conditional upon using their core competence which is based on BF technology as well as to increase the target size of the project to 5mtpa of which a substantial portion will be exported, to other Sub-Saharan African markets. The BF process necessitates the use of coking coal that would need to be imported (possibly from Mozambique). The capacity change, new markets identified and raw material import requirements may put an inland site such as Middelburg at a competitive disadvantage. Therefore, they are considering a coastal site as an alternative.

HBIS and IDC are currently conducting additional prefeasibility studies to assess the economic viability of BF technology, increased size and the project location. Depending on the outcome of these additional prefeasibility studies, a detailed feasibility study will be conducted before a final investment decision is made.

-END-