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20 May 2022 - NW1728

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Msimang, Prof CT to ask the Minister of Public Enterprises

What is the (a) length of tenure to date and (b)(i) annual remuneration and/or (ii) cost to company of the current Board of Directors at Transnet in each year?

Reply:

According to the information received from Transnet

The information as requested is reflected in the table below. The cost in terms of question (b)(i) and (b)(ii) is the same and therefore depicted as (b)(i) in the table.

Member

Date of entry

Tenure

(a)

Annual remuneration FY2018/19
R 000

(b)(i)

Annual remuneration FY2019/20
R 000

(b)(i)

Annual remuneration FY2020/21
R 000

(b)(i)

PS Molefe (Chairperson)

May 2018

4 years

1 078

1 278

1 278

LL Von Zeuner

May 2018

4 years

647

777

840

DC Matshoga

May 2018

4 years

566

671

575

UN Fikelepi

May 2018

4 years

485

675

671

GT Ramphaka

May 2018

4 years

472

656

671

FS Mufamadi

May 2018

4 years

550

671

671

AP Ramabulana

May 2018

4 years

472

575

575

ME Letlape

May 2018

4 years

517

671

834

FY2021/22 annual remuneration figures will be issued following finalization of the audit and other governance approvals.

20 May 2022 - NW1729

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Msimang, Prof CT to ask the Minister of Public Enterprises

What is the (a) length of tenure to date and (b) (i) annual remuneration and/or (ii) cost to company of the current Board of Directors at Denel in each year?

Reply:

According to the information received from Denel

The following are the names of the current Board, their tenure and Remuneration:

Name

Tenure

Remuneration

Gloria Serobe

9 April 2018 (appointment date) 2018/19

R616 000

 

2019/2020

R389 000

 

2020/2021

R240 151

 

2021/2022

R1 042 340

Mandla Mnisi

9 April 2018 (appointment date) 2018/19

R385 000

 

2019/2020

R269 000

 

2020/2021

R161 259

 

2021/2022

R217 775

Thami Magazi

9 April 2018 (appointment date) 2018/19

R693 000

 

2019/2020

R751 000

 

2020/2021

R325 882

 

2021/2022

R275 994

Temba Matanzima

9 April 2018 (appointment date) 2018/19

R112 000

 

2019/2020

R326 000

 

2020/2021

R105 216

 

2021/2022

R231 390

Tshidi Mokgabudi

25 June 2021 (appointment date)

2021/2022

R 12 873

Tryphosa Ramano

23 February 2022 (appointment date)

2021/2022

R21 337

20 May 2022 - NW1425

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Van Dyk, Ms V to ask the Minister of Public Enterprises

What is the status of tender 0412021/2022 of his department?

Reply:

Bid number DPE07-2021-2022 relating to the Appointment of Service Provider to assist with determining the Optimal Operating Model for the State’s Diamond Assets

Status: It was cancelled due to the changed of circumstances, there is no longer a need for the services requested.

20 May 2022 - NW1686

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

(a) What process was followed by his department to set up a team to deal with the report of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State and (b)(i) what are the names of the external lawyers who were appointed to form part of the project team, (ii) on what basis were they appointed and (iii) what is the (aa) term and (bb) total monetary value of each specified contract?

Reply:

(a) The appointment of the legal team was handled by the Office of the State Attorney according to its procurement processes.

(b)(i) Advocate R Schorn, Advocate SJ Coetzee SC and Advocate P Nonyane.

(ii) They were appointed to advise the Department on the actions to be taken by the department or the specific entity based on the findings and recommendations of the Judicial Commission of Inquiry into Allegations of State Capture particularly those that relate to the State-Owned Enterprises within the Department’s portfolio.

(iii)(aa) The appointment is product-based. Once the advice has been provided, the instruction will automatically terminate.

(bb) There is no monetary value set for each contract. Counsels are paid on the submission of an invoice submitted to the Office of the State Attorney for the work done.

29 April 2022 - NW1218

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

(1) Whether he has been informed of Eskom employees who had recently resigned and are now part of the Global Consulting Direct International contract which is carrying out construction at the Kusile Power Station; if not, why not; if so, has he found it to be regular for former employees to take over as private contractors; (2) which responsibilities were the specified employees directly associated with while being Eskom employees?

Reply:

According to the information received from ESKOM:

1 Eskom does not have a contract with Global Consulting Direct International at Kusile and across Eskom.

2. Not applicable.

29 April 2022 - NW1209

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

Whether Transnet has taken a decision to issue tenders without preferential criteria such as broad-based black economic empowerment, exempted micro-enterprise and/or qualifying small enterprise and minimum 30% sub-contracting requirements; if not, why not, in each case; if so, what is the (a) reason for this and (b) implication of the decision on transformation?

Reply:

According to the information received from Transnet

a) Pursuant to section 217(2) of the Constitution, the Transnet SOC Ltd (Transnet) Board of Directors has approved an addendum to the company’s Supply Chain Management (SCM) Policy – effective 25 March 2022 - to allow Transnet to include specific provisions for preferential procurement in its procurement processes.

The Board of Directors resolved to continue applying the 80/20 and 90/10 preference point system provided for in section 2(1) of the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA) – in order to promote preferential procurement in its processes, demonstrating the company’s continued commitment to transformation and empowerment.

The Board has determined monetary thresholds for the application of the 80/20 and 90/10 preference point systems that will continue to provide certainty to bidders and Transnet’s procurement processes until new Preferential Procurement Regulations are promulgated or the Constitutional Court judgment is clarified.

This approach aligns with the Constitutional Court ruling that the policies of organs of state should take charge of driving transformation and preference in procurement to give effect to section 217(2) of the Constitution.

b) Transnet’s transformational objectives will be achieved. Transnet’s amended policies will ensure that the SOC continue to provide certainty to bidders and Transnet’s procurement processes until new Preferential Procurement Regulations are promulgated or the Constitutional Court judgment is clarified.

29 April 2022 - NW708

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Phiri, Ms CM to ask the Minister of Public Enterprises

(1)      In light of the fact that the Government has provided funds to Mango’s business rescue and yet the finalisation of the process has not yet been concluded, on what date is it envisaged that the business rescue process will be concluded; (2) whether the rescue plan is intended to find the buyer and/or the investor for the airline; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The business rescue process is at an advanced stage. The Department has transferred the last tranche of R399 million from the total of R819 million that was allocated to the airline for restructuring purposes. The last tranche was transferred on 28 March 2022 on conditions that not only should the business rescue process be completed around the end of April 2022 but that a viable strategic equity partner for Mango is identified that has financial capacity to fund the airline after it exits the business rescue process.

2. The process of identifying a suitable Strategic Equity Partner (SEP) for Mango is part of the conditions for transfer of the last tranche of R399 million as indicated above. The process which was initiated on 2 December 2021 is expected to be finalised in the next few months.

 

29 April 2022 - NW1292

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Lees, Mr RA to ask the Minister of Public Enterprises

What are the details of the (a) agreement entered into by his department to dispose of 51% of South African Airways shares to a certain preferred strategic equity partner (SEP) (name furnished) and (b) concerns that the National Treasury has with some of the terms and conditions agreed to between the preferred SEP and his department?

Reply:

a) The negotiations to conclude the SEP process has reached an advanced stage. The agreement contains sensitive commercial information which if shared publicly may affect the conclusion of the deal. Furthermore, the Department of Public Enterprises has signed a Non-Disclosure Agreement with Takatso to keep the details of the agreement confidential until such time that the process is concluded. We are therefore asking that the Department be given a chance to conclude this agreement. The information will be submitted at an appropriate time when the process has been concluded.

b) The National Treasury has not raised any concerns with the Department that have not been responded to satisfactorily. The department and National Treasury are constantly sharing information with regards to the SEP process.

 

29 April 2022 - NW1219

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

Whether he has been informed that the contactors who are now part of Global Consulting Direct International, terminated employment contracts of a number of workers who had been working on the construction of Kusile Power Station; if not, why not; if so, has he engaged the specified company to find out the reasons for terminating the contracts of mainly black workers?

Reply:

According to the information received from ESKOM

Eskom does not have a contract with Global Consulting Direct International at Kusile and across Eskom.

 

28 April 2022 - NW1093

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Boshoff, Dr WJ to ask the Minister of Public Enterprises

(a) How much diesel has been used in the generation of electricity at Eskom since 1 January 2022, (b) what was the total cost thereof and (c) how was the total price that Eskom paid for the diesel calculated?

Reply:

According to the information received from ESKOM

a) From 1 January 2022 to 24 March 2022, Eskom utilised 110 141 069 litres of diesel for the generation of electricity at two of its OCGT stations.

(b) The total cost of the amount in (a), above is R1 385.9 million.

(c) The price indicated is the moving average price for each month. The price is the wholesale price less rebates and discounts where applicable. In addition, tank rental costs are included monthly, and these are approximately R4 million per month for both stations. There were no demurrage costs in this period.

Note that the usage and costs are verified at the end of each month. The March values and thus the totals in (a) and (b) above may therefore be subject to change.

12 April 2022 - NW857

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Engelbrecht, Mr J to ask the Minister of Public Enterprises

What total amount in Rand has been spent on (a) catering, (b) entertainment and (c) accommodation for (i) him, (ii) the Deputy Minister and (iii) officials of his department since 29 May 2019?

Reply:

(i) Ministry

2019/20

2020/21

2021/22

a) Catering

0.00

0.00

0.00

b) Accommodation

332,786.78

0.00

0.00

c) Entertainment

0.00

0.00

0.00

(ii) Deputy Minister

 

 

 

  a. Catering

0.00

0.00

0.00

b. Accommodation

514,163.56

40,843.43

179,559.59

c. Entertainment

0.00

0.00

0.00

(iii) Official of his department

 

 

 

a. Catering

140,637.33

60,205.34

37,312.53

b. Accommodation

2,877,798.90

349,562.74

600,764.83

 c. Entertainment

0.00

0.00

949.00

05 April 2022 - NW885

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Lorimer, Mr JR to ask the Minister of Public Enterprises

What (a) is the total number of incidents of (i) sexual harassment and (ii) sexual assault that were reported in his department (aa) in each of the past three financial years and (bb) since 1 April 2021, (b) number of cases (i) were opened and concluded, (ii) were withdrawn and (iii) remain open or pending based on the incidents and (c) sanctions were meted out against each person who was found guilty?

Reply:

(a) DPE has a zero / No cases

(aa) there was zero reported in the past three financial years.

(bb) there was zero reported since 1 April 2021.

(b) Number of cases opened and concluded:

  1. There was zero opened and concluded.
  2. There was zero withdrawn.
  3. Zero remained opened or pending based on incidences.

(c) There was zero sanctions meted out on guilty findings.

Remarks: Reply: Approved / Not Approved

Kgathatso Tlhakudi P J Gordhan, MP

Director-General Minister

Date: Date:

05 April 2022 - NW1032

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

What is the projected return on investment for the (i) Medupi and (ii) Kusile Power Stations, and over what period?

Reply:

According to the information received from Eskom

a) ( i & ii)

In terms of the economic regulation framework applicable to the regulated parts of the Electricity Supply Industry (ESI), all investments should earn a return equal to its weighted average cost of capital (WACC), on the depreciated asset value, over its full life cycle – in line with globally-accepted regulatory practice.

This is dependent on the initial asset construction cost, as well as the ongoing annual operating and maintenance cost, and the performance of the asset being assessed as prudent and efficient.

The electricity regulator assessed the %WACC for Eskom for the current MYPD4 revenue cycle as 7.1% pre-tax ‘real’. The regulator also commented in a Reasons for Decision and a subsequent affidavit that the overnight construction cost of Medupi is approximately 6% above the international benchmark norms, and that of Kusile fell within the international benchmark norms. The current operating and maintenance costs are at or below international benchmark norms. After some initial teething problems, Eskom is confident that both Medupi and Kusile will perform according to their design parameters.

Therefore, once the electricity price reaches the level of cost-reflectivity the power stations should earn a return on investment of equal to the %WACC, which for the current MYPD4 revenue cycle is assessed as 7.1% pre-tax ‘real’. However, in the interest of a gradual transition to cost-reflective electricity prices the electricity regulator is not yet awarding the full return on investment in its revenue and price determinations.

For the current MYPD4 revenue cycle the electricity regulator awarded a return of 1.5% on the regulatory asset value, however due to the regulator having reduced the revenue by the amount of the government equity support of R23bn per year the actual returns are close to zero.

(b) In terms of the economic regulatory framework applicable to the regulated parts of the ESI, the return on investment on the depreciated asset values should annually be equal to the %WACC, over the full life cycle of the asset. This will apply once electricity prices are cost-reflective.

05 April 2022 - NW739

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

Whether he has done an assessment of the livelihood impacts on the lives of the employees of the (a) SA Airways, (b) Denel and (c) Mango resulting from the inability of the specified companies to pay their workers; if not, why not; if so, what responsibility is he taking for such impacts?

Reply:

a) South African Airways Response

South African Airways has been paying all its retained employees their full salaries since December 2020 on or about the 28th of the month, every month.

There was a six-month period in 2020 when salaries could not be paid as the airline was not operating as there were travel restrictions put in place by Government in response to the Covid 19 pandemic. An agreement was reached with the majority of the unions and non-unionised employees, that three months salary be paid as a full and final settlement, i.e. the employees were to forego salaries for the months of June, July, August, September, October and November for the proposed settlement. This offer was extended to both the retained employees and those who accepted Voluntary Severance Packages (VSP) and ultimately exited the company in September 2020.

Due to delays in getting funding from the fiscus, the full and final settlement was made in the first quarter of 2021. There is a small number of employees who have still not signed the agreement for the settlement, and these will be paid as soon as they sign.

b) DENEL Response

An assessment of the livelihood on the lives of employees was not done as those:

  • Who received VSPs were paid the agreed package amounts in full; and
  • Those who were retained have been getting paid in full since December 2020.
  • Continuous assessment of the SOC financial and operational is done. This is also done through engagements with SOC leadership (Board and Management), organized labour and relevant Government departments. Through these engagements, valuable information, and appreciation of the depth of social impact and challenges encountered by the employees and their families as result of the partial payment of salaries.
  • The situation at Denel has necessitated the need to reset and re-purpose Denel’s value proposition and to support its balance sheet. The Minister of Finance has approved approximately R3 billion to settle Denel’s guaranteed debt. This will enable the SOC to significantly reduce its interest payment burden which was over R200 million per annum.
  • The focus is on core business growth and partnerships, disposal of non-core businesses and assets. The cash raised from the disposals will be used to re-capitalize operations, settle outstanding salaries and other creditors. This will also enable Denel to restore its credibility with employees, suppliers, and clients (existing and potential).

c) Mango Response

  • At the start of business rescue, Mango’s employees were owed on average about 8 months’ salaries, which in total amounted to approximately R125m.
  • Immediately after the appointment, the BRP prioritised the issue of unpaid salaries and as of today the only arrears remaining, which need to be paid in March 2022, is approximately R1.8m.

05 April 2022 - NW738

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

Given that the SA Airways (SAA) currently has revenue of R543 million, but needs R2,3 billion for operations, (a) how will he ensure that the SAA is able to operate despite the challenges and (b) what contribution will the Strategic Equity Partner be bringing to ensure that the SAA is financially sound? NW913E

Reply:

a) SAA commenced operations in September 2021, after exiting the business rescue process. It has therefore incurred costs from the beginning of the financial year and only generated revenue from September 2021.

The operating costs are being funded from the working capital that was allocated as part of the R10.5 billion funding for SAA to implement the business rescue process.

b) The contribution by the Strategic Equity Partner (SEP), is to provide approximately R3 billion as operating capital as soon as the transaction is concluded. Further financing will be determined by the new board.

 

05 April 2022 - NW737

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

What (a)(i) steps has he taken to make the management of Eskom account for the R900 million for the appointment of a service provider that was declared as irregular expenditure by the Auditor-General and (ii) is the name of the service provider and (b) steps has he taken to recover the specified money?

Reply:

According to the information received from Eskom

(a)(i)

The incident occurred prior to 2018, and the Eskom management team during the period in question, is no longer at the helm. In the meantime, the investigation was finalised, and processes are underway to recover the monies.

(a)(ii)

The name of the service provider is Econ Oil & Energy (Pty) Ltd.

(b)

On 14 December 2020, Eskom received an interim forensics report. On 17 December 2020, Eskom instituted arbitration proceedings against the supplier to recover the sum. The parties held a first pre-arbitration meeting on 30 April 2021 and agreed on the timelines for exchanging documents. Econ Oil applied for the issue on prescription, to be separated from the merits. The arbitrator ruled in Eskom’s favour. On 17 September 2021, Econ Oil filed a notice of appeal against the arbitrator’s ruling, which was dismissed on 16 February 2022. The Eskom legal team will now liaise with Econ Oil’s attorneys regarding dates for delivery of further and better particulars and to provide all the witness statements.

05 April 2022 - NW655

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Whitfield, Mr AG to ask the Minister of Public Enterprises

(1) With reference to the Waterfront development of the Transnet National Ports Authority in the Port of Port Elizabeth, what (a) is the current timeline for the completion of each phase of the development and (b) are the relevant details of how the development will be financed; (2) whether his department plans to renegotiate the Southernport lease of land within the development footprint; if not, what is the position in this regard; if so, what is the current (a) value of each parcel of land leased to Southernport and (b) rental paid to Transnet by Southernport; (3) whether Southernport has submitted any proposals for the development of any of the parcels of land; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

According to the information received from Transnet

1. Waterfront Development

(a) The timelines for completion of the Waterfront development would be based on the business case, market demand and appetite, which will only be ascertained once a Request for Proposal (RFP) has been issued to the market. The development is scheduled in terms of phases commencing with the development of bulk infrastructure, which is common user infrastructure, the benefit of which should be accessible to all Port Users and phase II, which is constituted by the development of commercial top structures. Based on the bulk services required for the development, Phase 1 is envisaged to be completed within 5 -10 years and Phase 2 within 10 -15 years of commencement.

(b) The provision of bulk services required in Phase 1 will be financed by TNPA. It is envisaged that the development, operation, and maintenance of the Waterfront facilities will be financed by the developer/s that will be appointed by way of a competitive tender.

2. Southernport Lease

(a) TNPA is not able to publish the values of the land parcels because these values are issued in negotiations with third parties. Publishing such information would be commercially prejudicial to Transnet’s commercial obligations.

(b) Southernport has not paid any rental to Transnet, due to the fact they have not taken occupation of the leased land.

3. Southernport submission of proposal for the development

a) In 2014, Southernport submitted a draft site development plan to TNPA for consideration. TNPA was not satisfied with the information contained therein and accordingly responded calling for further information from Southernport in this regard which was not responded to positively.

(b) In April 2021, Transnet, through its operating division, Transnet Properties, sought to find an amicable solution to the impasse with Southernport, by tabling to Southernport, a proposal for co–development of the Waterfront and provided them with a copy of the Master Plans for the proposed Waterfront development. TNPA and Transnet Properties requested Southernport to provide their proposed development plans, which to date have not been provided, reasons of which have not been shared with Transnet.

05 April 2022 - NW704

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Tshabalala, Ms J to ask the Minister of Public Enterprises

(1)What are his department’s current initiatives that are intended to address the instability of community structures in Richtersveld that impacts negatively on the operations and effectiveness of Alexkor; (2) whether, besides the mining strategy that seeks to address the lower diamond production that impacts negatively on Alexkor’s balance sheet, there are any plans to diversify Alexkor given the diamond price volatility; if not, why not; if so, what are the further, relevant details?

Reply:

1. The task of normalising the functioning of Richtersveld community structures is that of the of the Department of Agriculture, Land Reform and Rural Development (DALRRD). This question is therefore best directed to the Minister of DALRRD.

2. The Richtersveld region has seen continued decline in the diamond industry in the area. De Beers West Coast and Transhex operations have depleted their resources and closed. Alexkor on its own cannot be the saviour of the region.

Alexkor was established as an alluvial diamond company and that will be its mandate until the diamond resource is deemed unviable or the State exits the business, as was envisaged by the Deed of Settlement with the Richtersveld Communities agreed in 2007.

An interim board appointed in January 2022 has been tasked to ensure in the short term:

  • Financial Sustainability
  • Operational Effectiveness; and
  • Restoration of Governance

The economic viability of the Richtersveld will require all stakeholders including the communities, the municipalities, provincial and national government to work together in developing an economic development plan for the Region. Projects like the development of Boegoebaai Port and the Green Hydrogen Special Economic Zone are an example of what is needed to diversify economic activity in the region.

The District Development Model driven by the Department of Cooperative Governance and Traditional Affairs (COGTA) could be a platform for achieving the objective of mitigating the eventual run out diamond mine operations.

05 April 2022 - NW654

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Whitfield, Mr AG to ask the Minister of Public Enterprises

What (a) are the reasons for the delay in relocating the fuel tank farm from the Port of Port Elizabeth to the Port of Ngqura, (b) by what date is it envisaged that the relocation will be completed and (c) what plans are in place for the rehabilitation of the current site in the Port of Port Elizabeth?

Reply:

According to the information received from Transnet

a) The delay in the relocation of the fuel tank farm was due to the inability of an operator that was appointed in terms of Section 56 of the National Ports Act, to achieve a commercially viable business case for the proposed terminal, and thus a decision was taken to discontinue the project. Subsequently, Transnet supported the Coega Development Corporation (CDC) in developing the liquid bulk facilities in Zone 5 of the Special Economic Zone (SEZ) in view of the advanced progress the CDC had made with the development of their liquid bulk storage facility.

b) The Transnet National Ports Authority (TNPA) has given termination notice to Astron Energy (Pty) Ltd, Engen Petroleum Ltd, and Total Energies Marketing South Africa (Pty) Ltd (Oil Majors) who operate the Liquid Bulk Terminal in the Port of Port Elizabeth, effective 30 April 2022. As a result of this termination notice, the Oil Majors have lodged an appeal to the Ports Regulator of South Africa (PRSA) contesting this termination.

A firm timeline for the relocation cannot be determined until such time that:

1. TNPA and Astron settling the PRSA matter; and

2. There is a firm commitment from the Oil Majors to commit to commercial offtakes with the CDC or a liquid bulk storage facility operator appointed by the implementing agent CDC.

c) In October 2020, the Department of Forestry, Fisheries and the Environment (DFFE) issued a Remediation Order in terms of Part 8 of the National Environmental Management: Waste Act of 2008. This Remediation Order will regulate how the Oil Majors will undertake the decommissioning and remediation of the Port of Port Elizabeth’s liquid bulk terminal. TNPA has initiated negotiations to conclude a Decommissioning and Remediation Exit Agreement.

The Oil Majors have cited that this Agreement cannot be finalised without the PRSA appeal being determined and for realistic timelines for the relocation to the Port of Ngqura/CDC SEZ being agreed to.

05 April 2022 - NW706

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Dlamini, Mr NE to ask the Minister of Public Enterprises

(1) Whether, in light of the fact that Transnet entered into a R54 billion contract to procure 1 064 locomotives with four original equipment manufacturers, including the contract with the China North Rail which was declared unlawful and subsequently set aside, one of the cited reasons being that the chassis do not fit the body of the locomotives, there are any plans in place to repurpose the chassis to get value out of the money spent; if not, why not; if so, what are the relevant details; (2) whether Transnet has identified new original equipment manufacturers to fill the gap left by the China North Rail; if not, what is the position in this regard; if so, what are the further relevant details? NW844E

Reply:

According to the information received from Transnet

1. Transnet and the Special Investigating Unit (“the SIU”) have applied to the High Court to set aside the contract but no judgement has yet been delivered. China North Rail was contracted to deliver 232 diesel locomotives but only delivered 22 locomotives - Transnet suspended the contract in December 2019. The suspension is not due to any technical failures but followed evidence of kickback agreements with Gupta entities overseas.

2. In the review application by Transnet and the SIU, Transnet is tendering the return of the 22 locomotives delivered by China North Rail. These locomotives were defective and were never taken into service by Transnet. Currently, Transnet is exploring all options to acquire as many locomotives as it can to meet the demand in the country.

03 March 2022 - NW217

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Komane, Ms RN to ask the Minister of Public Enterprises

How far is the process to convert some high schools into maritime schools to expose learners to careers in maritime at an early age, as it was indicated to the Portfolio Committee on Public Enterprises seven years ago during an oversight visit to Transnet, that Transnet was in communication with the Department of Education and Training?

Reply:

According to the information received from Transnet

A Task Team comprising officials from Transnet National Ports Authority (TNPA), the South African Maritime Safety Authority (SAMSA), South African International Maritime Institute (SAIMI) and the Gauteng Department of Education (GDE) has conceptualised a programme on maritime schools.

In 2019, a secondary school in Sedibeng Municipality – Sharpeville in Vereeniging was converted into a maritime school, renamed Mohloli Maritime School. Two (2) maritime subjects were introduced, with the aim of introducing key aspects of the blue economy to the educators and learners.

Between 2018 and 2019, further preparatory work was done with other schools in Gauteng, Western Cape, Eastern Cape and KwaZulu-Natal. TNPA and SAMSA participated in several engagements organised by the GDE to map out the process and progress on reorganising the remaining schools in the six (6) identified corridors.

TNPA has also launched several initiatives which culminated in a programme where a group of grade eleven (11) and twelve (12) boys from these schools are invited to TNPA under the theme, “Tomorrow’s men - Bring a Boy Child to work” in parallel with the “Take a Girl Child to Work Day”, to create awareness and exposure to the maritime environment where the learners are engaged and introduced to career possibilities in the maritime sectors.

The Maritime School of Excellence (MSoE) conducts roadshows to create awareness on career opportunities in the maritime sector. Furthermore, to encourage learners to meet the requirements to study maritime-related subjects while schools are in the process of being converted, the Port of Durban has donated a science laboratory to Ndukwenhle High School and Smart Boards to Seven (7) adopted Schools in the South Durban Basin.

03 March 2022 - NW35

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Van Dyk, Ms V to ask the Minister of Public Enterprises

(1)Whether, given that more than R1billion of taxpayers’ money has been spent on the establishment and upkeep of the Joint Venture between Alexkor and the Richtersveld Mining Company, known as the Pooling and Sharing Joint Venture (PSJV), of which the entity has proven to be a dismal failure because of the lack of transparency and public accountability, he has found that it was appropriate to spend over R1 billion in taxpayers’ money in circumstances where there will be no accountability; if not, why not; if so, what are the provisions of the Public Finance Management Act (PFMA), Act 1 of 1999, he relies upon; (2) whether the PSJV is a Schedule 2 Major Public Entity; if not, what is the position in this regard; if so, what are the relevant details; (3) whether he has taken any steps to ensure that the PSJV subjects itself to the jurisdiction of the PFMA and gives Parliament a full account of the financial misconduct that has taken place for the past decade (details furnished); if not, what is the position in this regard; if so, what are the relevant details?NW39E

Reply:

1. The settlement agreement reached between Government, Alexkor and the Richtersveld Community comprised of the following obligations:

  • Transferral and restoration of portions of land by the State and Alexkor to the Richtersveld Community.
  • The transfer of Alexkor’s land mining rights to Richtersveld Mining Company and the setting up of Alexkor RMC PSJV. The State through Alexkor would capitalise the Alexkor RMC PSJV with R200 million in order to restore mining operations.
  • The transfer of Alexkor’s mariculture and agricultural assets to the Richtersveld Agricultural Holdings.
  • A sum of R190 million to be paid as reparation to the Richtersveld Investment Holding Company (RIHC) over three years.
  • R50 million development grant to be paid as a lump sum development grant to the RIHC for agriculture and mariculture.
  • R45 million to be paid to the Richtersveld Property Holding Company (RHPC) as compensation for Alexkor’s occupation on transferred residential properties for ten years.
  • The establishment of a township at Alexander Bay including the upgrade of the municipal infrastructure to be handed over to the Richtersveld municipality.
  • Environmental rehabilitation of historical mining areas.

Only R200 million was provided to the Alexkor Richtersveld Mining Company Pooling and Sharing Joint Venture (PSJV) as recapitalization loan to resuscitate the diamond operations following the protracted legal proceedings.

R200 million is a loan and is repayable, to date the PSJV has made payment of R14 million.

2. The PSJV is an unincorporated entity and does not qualify as a national public entity or a national government business enterprise based on the definition of the two by the PFMA namely the PSJV is not juristic entity nor under the ownership control of the national executive.

Given that the PSJV is not a public entity that it could not be listed in either Schedule 2 or 3 of the PFMA. Section 3 of the PFMA provides that the PFMA applies to departments, public entities listed in Schedule 2 or 3, and constitutional institutions. The PSJV is none of these and the PFMA does not apply to the PSJV itself in its own name.

3. Despite the PJSV not being subjected to the PFMA by virtue of its arrangement, the department referred the matters of financial misconduct, corruption and mismanagement to the Special Investing Unit (SIU). On 10 December 2021, the President Cyril Ramaphosa signed the proclamation authorizing SIU to investigate affairs of Alexkor SOC which extend to the PSJV.

03 March 2022 - NW166

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De Villiers, Mr JN to ask the Minister of Public Enterprises

Whether he and/or his department ever received correspondence from a certain political organisation (details furnished), via email, WhatsApp, hardcopy and/or in any other format of which the original file is dated June 2020; if not, what is the position in this regard; if so, (a) on what date was the specified correspondence received, (b) who was the sender of the correspondence and (c) what steps were taken by his department in this regard?

Reply:

Neither the Minister nor the Department of Public Enterprises received the correspondence referred hereto.

(a)(b)(c) not applicable.

11 January 2022 - NW2499

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Clarke, Ms M to ask the Minister of Public Enterprises

(1) Whether the board members of Denel (a) are currently receiving their salaries and (b) have been paid since 1 June 2020 up to the latest specified date for which information is available; if not, what is the position in each case; if so, what are the relevant details; (2) Whether the (a) Chief Executive Officer and (b) Group Chief Executive Officer (i) are currently receiving their salaries and (ii) have they been paid full salaries since 1 June 2020 up to the latest specified date for which information is available; if not, what is the position in this regard in each case; if so, what are the relevant details in each case; (3) What number of designers with experience in artillery are currently in the employ of Denel? NW2920E

Reply:

According to the information received from Denel

(1). Members of the Denel Board of Directors (Non-Executive Directors) have received Directors’ fees for official meetings attended for the following periods:
​(a). The payment of Board fees made in full:

i). Quarter 2 of 2020/21 financial year;
ii). Quarter 3 of 2020/21 financial year
iii). Quarter 4 of 2020/21 financial year;
iv). Quarter 1 of 2021/22 financial year; and
v). Quarter 2 of 2021/22 financial year

(b). Board member’s fees for Quarter 3 of 2021/22, are still outstanding in full and committee fees for Quarter 1, Quarter 2 and Quarter 3 of 2021/22 financial year are still outstanding due to Denel’s liquidity situation.

(2). 

(a). (i) Denel has a total of 5 (five) divisional Chief Executive Officers (CEOs). All 5 of them have been receiving partial salary payments since June 2020.

(b). (i) The Interim Group Chief Executive Officer is currently receiving a partial salary.

(ii) The Divisional CEOs and the Interim Group Chief Executive Officer have outstanding salary and other related payments due to them from Denel for the period under question.

(3). Denel Land Systems (DLS) currently has (1) one employee with artillery design experience. The employee works with 4 (four) other employees, who have been subcontracted from the group’s Engineering Department.

11 January 2022 - NW2670

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

(1) Whether, with regard to the media briefing on 19 November 2021, wherein the Chief Executive Officer (CEO) of Eskom discussed a plan by alleged saboteurs to shut down some of the units at Lethabo Power Station, he will furnish Mr E M Buthelezi with the full, relevant information on the comments by the CEO of Eskom that the entity is being sabotaged from within by low-end managers; if not, why not; if so, what are the relevant details; (2) Whether his department is investigating any of these allegations; if not, why not; if so, what are the relevant details?

Reply:

  1. The Hon Member will be supplied with Eskom’s media briefing record of the 19th November 2021, regarding loadshedding.
  2. The Department will also contact your office for further clarity and then respond accordingly.

11 January 2022 - NW2622

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Komane, Ms RN to ask the Minister of Public Enterprises

In light of the announcement by the Minister of Finance in his Medium-Term Budget Policy Statement that the State will no longer be bailing out state-owned enterprises (SOEs), (a) which SOEs has he found will be affected the most by this decision and (b) what are the relevant details of his plan for ensuring that the specified companies continue to function?

Reply:

  1. Denel will be most affected, if no further funding is made available for SOC.
  2. However, Denel is not looking for a bailout but to fund a new operating model to deal with high fixed costs and improvements of internal controls to respond better to the shrinking local defence budget and growing competition in its traditional markets. This funding will also come from disposing of non-core assets and entering into strategic partnerships.

11 January 2022 - NW2565

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Clarke, Ms M to ask the Minister of Public Enterprises

What (a) are the names of the (i) persons and/or (ii) companies who are the biggest buyers of diamonds from the State Diamond Trader (SDT) and (b) total revenue has been raised in the past two financial years by the SDT through diamond sales?

Reply:

This question should be directed to the Ministry of Mineral Resources and Energy, as the competent authority over the State Diamond Trader (SDT).

11 January 2022 - NW2564

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Clarke, Ms M to ask the Minister of Public Enterprises

What percentage of diamonds in terms of Alexkor is set aside for the State Diamond Trader to sell on behalf of the Government?

Reply:

According to the information received from Alexkor

The allocation that ALEXKOR set aside for State Diamond Trader is ten percent (10%) of the saleable goods at the time of the tender.

11 January 2022 - NW2741

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

(1) Whether, in light of the R402 billion debt saddling Eskom, he will furnish Mr. E M Buthelezi with the reported new comprehensive and unified approach in turning around Eskom; if not, why not; if so, what are the relevant details; (2) Whether he has been informed of a forensic report that was supposedly ignored by Eskom in January 2020, which shows how employees and contractors of the entity colluded to make more money by inflating their overtime bonuses and sabotaging the infrastructure in collaboration with crime syndicates; if not, why not; if so, what are the relevant details?

Reply:

According to the information received from Eskom

(1) In the absence of the free cash flow or equity from the shareholder to execute the recent build program, Eskom has had to, in the main, fund the program using debt. Even though funding with debt was not ideal, the build program was needed and has been executed for the benefit of the country. The burden of debt now sits with Eskom.

If Eskom receives a cost reflective tariff, recovers arrear municipal debt, manages internal costs and deals with its current excessive leverage, Eskom’s reliance on future Government support will be minimised. Currently the debt service costs cannot be adequately covered by the amount left from operations. Eskom can afford to service a debt of approximately R200 billion. This means that the balance sheet needs to be deleveraged by R200 billion.

Eskom has communicated the need to reduce its debt by at least half its current level to its shareholder representative. Details on the unified approach toward a solution is in the ambit of Government and will in due course be communicated.

(2) Besides the aforementioned forensic report, there have been many other investigations that Eskom Management conducted at Tutuka Power station, leading to criminal charges and arrests of implicated employees and suppliers.

Some senior employees are still on suspension and are being subjected to internal disciplinary process, while some are referred to authorities to deal with the fraudulent and criminal activities committed during their tenure at Eskom.

11 January 2022 - NW2775

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Siwisa, Ms AM to ask the Minister of Public Enterprises

Whether, with reference to Transnet, that has a lot of vacant buildings which have turned into hubs for criminal activities: (1) There are any plans in collaboration with the Department of Human Settlements to turn the buildings into low cost housing facilities for middle-class citizens who cannot afford to buy houses and/or who do not qualify for RDP houses, to occupy and provide a safe environment for their children. (2) If not, why not; (3) If so, what are the relevant details?

Reply:

According to the information received from Transnet

(1). Transnet is engaging with the Department of Human Settlements and the Housing Development Agency with the aim of facilitating the disposal of its mass housing portfolio and some of the vacant pieces of land to municipalities, so that they can be used for human settlement purposes.

(2). N/A.

(3). A portion of Transnet’s property portfolio is reclassified as non-core as it is not required to support operations. Transnet entered into a Memorandum of Understanding with the National Department of Human Settlements to create housing opportunities across the country and facilitate the release of vacant land, buildings and hostels to convert them into liveable residential accommodation.

To this end, Transnet has made available vast tracks of land across the country to various municipalities and other state organs for the development of human settlements.

Engagements between Transnet, the National Department of Human Settlements, Housing Development Agency and municipalities are ongoing to conclude the release of the hostels portfolio for human settlements.

11 January 2022 - NW2497

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Clarke, Ms M to ask the Minister of Public Enterprises

Whether Denel has negotiated bringing independent power producers (IPPs) on board in terms of international interests when it comes to Denel Pretoria Metal Pressings, popularly known as PMP; if not, why not; if so, what role has his department played in the negotiation of such a deal?

Reply:

According to the information received from Denel

Denel Pretoria Metal Pressings (DPMP) has not approached Independent Power Producers (IPPs). The IPPs do not form part of Denel’s overall strategy at this stage. However, as part of a strategic review, these options will certainly be considered.

11 January 2022 - NW2498

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Clarke, Ms M to ask the Minister of Public Enterprises

Whether Denel Pretoria Metal Pressings, popularly known as PMP, is currently solvent and tax compliant; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

According to the information received from Denel

PMP, like other divisions of Denel, has been experiencing liquidity challenges. From a tax compliance point of view, PMP is not a legal persona but an operating division of Denel. Therefore, PMP uses the tax credentials of Denel SOC Ltd. Denel is in discussions with South African Revenue Services on its overall tax compliance matter.

11 January 2022 - NW2557

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Mey, Mr P to ask the Minister of Public Enterprises

(1) Whether, with reference to the settlement of the class action on 11 December 2019 between Transnet and the Transnet pensioners who are members of two pension funds, namely the Transnet Second Defined Benefit Fund and the Transport Pension Fund, which, in spite of the implementation of the specified settlement in 2020, still has not been implemented for members of the Passenger Rail Agency of South Africa (Prasa) Sub Fund, notwithstanding a court order (details furnished) to the effect, and which matter has apparently been escalated to his department by the Department of Transport for urgent intervention, as the proposed rule amendments to the Prasa Special Rules to enable the implementation of the mentioned court order were already circulated to the Office of the Transnet Chief Financial Officer on 12 April 2021, as per the reply of the Minister of Transport on 19 November 2021, he will provide the full, relevant details on the (a) reason(s) for the delay and (b) date by which it is envisaged that the delay will be addressed, with an indication of the necessary deadlines in order to prevent legal action from being taken against his department for disregarding the specified court order; if so, what are the relevant details in each specified case; if not, (2) whether he will soon take steps to determine (a) what the reasons for the delays are and (b) how to address the delays, with an indication of the necessary deadlines in order to prevent legal action from being taken against his department for disregarding the specified court order; if not, why not, in each case; if so, what are the relevant details in each case; (3) whether he will make a statement on the matter?

Reply:

(1)

(a). The Ministry of Public Enterprises and the Ministry of Finance are currently assessing the submission. Once all the government processes have been adhered to and finalized, the Departments of Public Enterprises will revert to parliament to  provide a final response accordingly.

(b). Refer to (a).

(c). Refer to (a)

(2)

(a) Refer to 1 (a)

(3) The Minister of Public Enterprises will not be making any statement on the matter.

 

 

Remarks:                                             Reply: Approved / Not Approved

 

Jacky Molisane                                     P J Gordhan, MP
Acting Director-General                      Minister of Public Enterprises
Date: 11/01/2022                                   

07 January 2022 - NW2795

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

How will the ruling of the Gauteng High Court that ordered the National Energy Regulator of South Africa to process Eskom’s revenue for the 2023 financial year, affect ordinary South Africans, especially on the roll-out of load shedding?

Reply:

The order by the Gauteng High Court requires the National Energy Regulator of South Africa (NERSA) to fulfil its mandatory role in accordance with an approved methodology. This is a normal process that NERSA undertakes whenever a price adjustment application is made. When NERSA makes its decision in February 2022, it will give an indication of the price adjustment that electricity consumers will experience.

07 January 2022 - NW2485

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

Whether he will furnish Mr E M Buthelezi with the relevant details of the current lack of consensus between his department and the Chief Executive Officer of Eskom on the way forward regarding Eskom’s R402 billion debt and the just transition to renewable energy; if not, what is the position in this regard; if so, (a) on what date and (b) what are the relevant details;

Reply:

According to the information received from Eskom

There is no misalignment between Eskom and the Shareholder Representative.

The solution on R 402 billion debt remains work in progress – parliament and other stakeholders will be informed of the strategy on the debt as soon as the necessary processes have been completed.

  1. A significant proportion of funding offered by the international partner group countries (the so-called USD 8.5 bn) is expected to be used for Eskom’s just transition plans. In particular, these funds will be utilised to support Eskom’s plans to repower and repurpose coal plants that are shutting down, with renewables,

battery storage and gas. This financing will not (and cannot) be used for financing the legacy coal debt. The DPE has been fully supportive of Eskom’s JET plans,

  1. including its renewable energy aspirations, and was part of the task team, coordinated by the Presidency between August-November 2021, that put together the plan accepted by the international lenders. Furthermore, to ensure alignment between the Eskom JET plans and the DPE’s JET framework, Eskom and the DPE have a regular monthly meeting between the relevant teams.
  1. Eskom’s Loss Control function was established in 1 April 2021. Management is working with the business to ensure that all possible PFMA items are registered with the Loss Control function for assessment and determination. Once a determination is completed, and if any indication of fraudulent activities is identified, only then is it referred to the Assurance and Forensic Department for investigation. However, the Assurance and Forensic environment has limited resources and is currently in the process of being capacitated to deal with the workload.

(3)(a) Eskom does not have a fully-automated record-keeping system, and as a result, records were and are, maintained manually. During our annual audit processes, there are limited audit turnaround times which are not always adhered to. However, Eskom is focusing on addressing the automation issue.

(3)(b) We acknowledge the fact that at times it takes long to finalise some matters. This is mainly due to the complexity of the matters and the shortage of internal capacity to deal with the volumes of disciplinary actions. The process to outsource some of these matters is rigid due to the governance process required by National Treasury. This notwithstanding, there has been significant progress made in addressing these matters.

07 January 2022 - NW2416

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Whitfield, Mr AG to ask the Minister of Public Enterprises

How many tonnes of manganese ore have been shipped from the (a) Port of Port Elizabeth and (b) Port of Ngqura in each year since 1 April 2015;

Reply:

According to the information received from Transnet

(1)

Manganese Tonnes

Financial Year

Port of Port Elizabeth

Million Tonnes

Port of Ngqura

Million Tonnes

2015/16

6 139 602 Mt

0

2016/17

7 446 310 Mt

0

2017/18

8 979 026 Mt

0

2018/19

9 100 464 Mt

984 901

2019/20

9 397 272 Mt

1 770 486 Mt

2020/21

8 347 956 Mt

2 918 683 Mt

(2) (a) The Bulk Ore Terminal at Port of Port Elizabeth will cease to operate at the end of the 2026/27 financial year. The Decommissioning application process to the Department of Environment, Forestry and Fisheries for a Record of Decision will commence in the financial year

2024/25. The Decommissioning will start in 2027/28 thereafter a remediation process will take place. The entire process takes place within a period of 4 years.

(b) The Ngqura Manganese Ore Terminal will be commissioned by January 2026 in a phased manner, until the Port of PE Ore Terminal is phased out in March 2027.

07 January 2022 - NW2329

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Whitfield, Mr AG to ask the Minister of Public Enterprises

What (a) is the total number of private logistics companies contracted to provide transport services for manganese ore to the port of Port Elizabeth, (ii) volume of manganese ore is transported by road, (b) are the details of the logistics companies transporting manganese ore including the total number of trucks used by each company, (c) is the total value of the contracts for transporting manganese ore by road and (d) is the frequency rate of trucks arriving with manganese ore in the port of Port Elizabeth for each financial year since 1 April 2015;

Reply:

According to the information received from Transnet:

REPLY TO NA PARLIAMENTARY QUESTION No. 2329

Question No.

Question

Response

1

What (a) (i) is the total number of private logistics companies contracted to provide transport services for Manganese Ore to the port of Port Elizabeth?

Total No: 4

 

What (a) (ii) volume of manganese ore is transported by road?

Volume:

Year:18/19: 500 000 Tonnes

Year: 19/20: 2,100 000 Tonnes

Year: 20/21: 3,500 000 Tonnes

 

What (b) are the details of the logistics companies transporting manganese ore including the total number of trucks used by each company?

Name of Company

Number of trucks used

   
  1. Tradekor
  1. Autoforce
  1. Black Magic
  1. Nexus

1) 200

2) 100

3) 150

4) 120

 

What (c) is the total value of the contracts for transporting manganese ore by road?

R 5 100 000(incl. Vat)

 

and what (d) is the frequency rate of trucks arriving with manganese ore in the port of Port Elizabeth for each financial year since 1 April 2015?

April 2015: 30 - 50 Truck per day

April 2016: 30 - 50 Truck per day

April 2017: 30 - 50 Truck per day

April 2018: 30 - 50 Truck per day

April 2019: 30 - 50 Truck per day

April 2020: 10 - 15 Truck per day

April 2021: 10 - 15 Truck per day

2

What is the (a) total number of trains used to transport manganese ore to the port of Port Elizabeth?

Total No:

1 187 trains (2020/21) COVID-19 pandemic reduced capacity.

+ 1400 trains (2019/20) Capacity restricted due to current rail infrastructure. Plans underway to increase capacity

 

What is the (b) volume of manganese ore that is transported by rail?

Volume:

7 776 861 tons (2020/21) COVID-19 pandemic reduced capacity

+ 9 200 000 tons (2019/20) Capacity restricted due to current rail infrastructure. Plans underway to increase capacity

 

What is the (c) frequency of trains arriving with manganese ore in Port Elizabeth?

Frequency: 4/5 trains daily carrying 6552 tons per train

 

and what is the (d) total cost to the department (Transnet not the department) of transporting manganese ore by rail to the port of Port Elizabeth for each financial year since 1 April 2015?

April 2015: R 942 694 147 (Excl. Vat)

April 2016: R 1 258 868 403

April 2017: R 1 333 216 868

April 2018: R 1 466 192 336

April 2019: R 1 757 581 402

April 2020: R 2 478 138 165

April 2021: R 2 547 559 998

07 January 2022 - NW2293

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Clarke, Ms M to ask the Minister of Public Enterprises

Considering that contracts must be managed properly by suitably skilled and qualified persons to ensure that expiring contracts are identified timeously and that the appointment of contractors is done through an open market process, what (a) processes are in place at Eskom to ensure that this is done, (b)(i) total number of contractors are currently in place on Eskom’s sites and (ii) have they been appointed to do, (c) total number of expiring contracts are coming up, (d) number of the appointed contractors did not adhere to the specifications and (e)(i) measurers were put in place to deal with defaulting contracts and

Reply:

According to the information received from Eskom

(a) Eskom appoints contract managers with delegation, after contract award and upon confirmation that the individual has the necessary pre-requisite training as prescribed in the Procurement Procedure. Eskom has an approved Contract Management Competency Development Program, that is run with the Eskom Academy of Learning.

In compliance with the National Treasury regulations and other legislative prescripts, Eskom has its approved Procurement Plans which serve as the basis for monitoring expiring contracts in accordance with project plans. Monthly reports on Procurement Plans provide the status of each contract and flags contracts expiring, thus enabling the business to commence with the procurement process of replacing/placing new contracts in advance.

Guided by the Eskom Procurement and Supply chain Management procedure, various

procurement mechanisms are applied when acquiring the services of contractors depending on the nature of the service or product. The mechanisms include inter alia Open tender, Closed tender, Single/sole source, Urgent and Emergency procurement as well as Informal tendering. In instances where the confined market/tendering mechanisms (i.e. Closed tender, Sole/Single source) must be applied, approval is sought from National Treasury prior to commencement with the procurement process.

(b)(i) As at 1 November 2021 there 4547 active contracts at Eskom. Annexure A provides the number of contracts by plant code i.e. Divisional plant/operating unit/grid area.

(b)(ii)Eskom does not have readily available reports with description for each of the 4547 contracts.

However, contracts across the business will vary, for example, Eskom Distribution will mainly have electrification, operations, and maintenance, vending and asset creation contracts.

  1. Of the 4547 active contracts:
    • 537 of these contracts have an expiry date between 0 and 3 months.
    • 1094 of these contracts have an expiry date between 0 and 6 months.
    • 1920 of these contracts have an expiry date between 0 and 12 months; and
    • 2627 after 12 months.
  1. Eskom does not have consolidated records of contractors who did not adhere to the specifications. Defects are dealt with through contractual remedies in accordance with the specific contract, as explained in (e)(i) below.

(e)(i) When Eskom enters into a contractual agreement with a contractor a performance evaluation criteria forms part of the agreement, against which the contractor’s performance is measured. Should the contractor not deliver according to the agreement, the contractor is given an opportunity to correct.

Non-conformance is addressed within the provisions of the contract via the Non- Conformance Request (“NCR’s”) process. When an NCR is raised, consultations take place with the contractor and if an agreement is reached the NCR is either closed (i.e. satisfactorily rectified) or voided/withdrawn (no longer regarded as a NCR). An NCR will remain open until it is resolved or rectified. In cases where there is failure to rectify, a dispute is raised, and contractual dispute processes are followed.

(e)(ii) The names of contractors who did not adhere to the specifications will not be disclosed as the information is commercially sensitive and may compromise the resolution and rectification initiatives. Further, the confidentiality provisions of the contracts must be followed in order to release contractual information.

03 December 2021 - NW2355

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Komane, Ms RN to ask the Minister of Public Enterprises

(1)Whether he will furnish Ms R N Komane with a list of the consultants who were paid R24 million by his department in the 2020-21 financial year; if not, why not; if so, what are the relevant details. (2) what was each consultant appointed to do?

Reply:

The Department spent a total amount of R24 million on consultants as shown below:

Service Provider (1)

Service Rendered (2)

Amount

Matsei Technology

Development and implementation of the enterprise architecture

912 640,00

Tipp Focus holdings

On Demand IT Technical Services

169 883,77

R. Kalidass

Provision of co-sourced internal audit and forensic investigation services

291 121,35

Full Stream Business

Development of the ICT Security Strategy

819 057,41

21st Century

Conduct SOC Remuneration Survey

1 202 400,00

Vortex

Development of the Board Evaluation Framework

543 950,00

Government Technical Advisory Committee

Development of the Risk Management Framework

1 691 754,70

Seabury International

SAA Business Rescue

17 486 565,00

Basadzi Personnel

Recruitment and Selection

192 648,00

Quest Staffing Solutions

Recruitment and Selection

17 725,00

Gijima Holdings

Recruitment and Selection

16 882,00

Mogoma Research and Development

Recruitment and Selection

21 200,04

Audit and Risk Committee Members

Audit and Risk Committee meetings

676 356,58

Azile Resources

Impact Assessments of Corporate Social Investment Projects

145 600,00

Total

24 187 783,85

03 December 2021 - NW2343

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

With regard to Transnet’s recent financial statements which show that the company has suffered revenue losses of over R8 billion, and that irregular expenditure was more than R100 billion, with over 3 000 employees forced to take severance packages, what (a) were the causes of the mismanagement lapses at Transnet and (b) plans has he put in place to turn the entity around?

Reply:

According to the information received from Transnet

Financial performance

For the 31 March 2021 financial year, Transnet experienced challenges due to the nationwide lockdown resulting in subdued volume demand as well as operational challenges.

  • Transnet’s revenue decreased by 10,5% to R67,3 billion (2020: R75,2 billion), due to a:
  • 13,7% decline in rail freight volumes,
  • 26,4% decline in pipeline volumes, and
  • 11,5% decline in port container throughput mainly as a result of the nationwide lockdown.

Transnet performance was at a backdrop of South Africa’s real GDP that had contracted by 7% in 2020 after GDP growth of only 0,2% was recorded in 2019. In a historic context, it was the worst SA GDP performance since the great depression years of the 1930’s.

In addition, net operating expenses increased by 16,2% to R47,8 billion (2020: R41,2) mainly due to:

  • fixed costs that have not decreased in line with the reduced activity - personnel costs, maintenance, and security costs,
  • unbudgeted third party claim provision and increased environmental provisions relating to pipeline spills arising from product theft incidents, which also resulted in increased security costs (R5,6 billion),
  • unbudgeted Covid-19 related expenses of R232 million, and
  • lower operating income due to the lower sale of scrap, lease recoveries and PRASA recoveries.

The 2022 YTD results indicate that recovery is further evident in the steady improvement of revenue achieved (96,2% of the plan).

Management has also implemented cash preservation measures to safeguard financial performance and cash flows over and above the plan. Key focus areas include amongst others:

  • Collections from overdue customers;
  • Revenue initiatives;
  • Sale of non-core properties;
  • Sale of scrap;
  • Procurement optimisation;
  • Moratorium on discretionary and other costs;
  • Review of contract spend; and
  • Capital investment optimisation.

It is important to note that no employee has been forced to take severance packages, however, employees voluntarily selected to leave the company.

Irregular expenditure

The Company has embarked on a PFMA improvement programme which has both a long-term ( STATE CAPTURE LINKED IRREGULAR EXPENDITURE) and short-term emphasis, which collectively focusses on addressing the audit qualifications and improving internal controls, to ensure a sustainable process is in place where all information required by the PFMA are identified, actioned and reported timeously.

The PFMA improvement programme was implemented through an enhanced 2021 financial year remedial plan to deal with the root cause and the recommended remedial action that is required to create sustainable solutions around people, processes and systems in the procurement environment and to reduce the occurrence of irregular expenditure.

Planned outcomes of the PFMA remedial plan include:

• improved procurement processes;

• reduction in PFMA transgressions; and

• improved completeness and accuracy of PFMA reporting through implementing sustainable solutions embedded within the business.

Transnet remains committed to continuing to enhance consequence management efforts and investigating PFMA related transgressions. As a result, the forensic investigations process has been centralised. The centralisation was to enhance the coordination and efficiencies of the investigation process, to ensure consistent application of corrective action throughout the organisation that resulted in areas of improvement.

Challenges exist due to the history in managing and reporting PFMA transgressions which make it impractical for Transnet to disclose all irregular expenditure reliably. The National Treasury accepted the impracticability judgement for the historic periods up to and including 31 March 2021, given the legacy of state capture that this process will take time to complete. However, Transnet will still need provide evidence to demonstrate the impracticability assertion and for the Auditor General of South Africa to assess its applicability.

Transnet will continue engaging the National Treasury to find a way to ring-fence the legacy issues of irregular expenditure as these do not impact on the fair presentation of the annual financial statements.

03 December 2021 - NW2342

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Ceza, Mr K to ask the Minister of Public Enterprises

What measures has he put in place to assist Eskom to ensure that loadshedding is stopped?

Reply:

There are a number of factors (and therefore, government departments) that are possible contributors to ultimately, to ultimately resolving the challenge of loadshedding.

The government is working closely with Eskom to reduce the duration of loadshedding. Cabinet has acknowledged the inconvenience loadshedding has caused and National Treasury is working with Eskom to grant it the appropriate exemptions to acquire the spare parts needed for repairs and maintenance.

Government notes that Eskom is making progress in re-employing skilled personnel – including plant managers – to help the organisation make headway at individual power stations and across other operations.

In addition, government is making every effort to bring new power generation capacity online in the shortest possible time. While Cabinet is aware that the current energy challenges are frustrating and counterproductive to economic growth, it is confident that the practical actions to restructure and strengthen our electricity system will eventually improve South Africa’s energy capacity.

We are very mindful of the economic constraints and social (and political) negativity unleashed by loadshedding.

We should always be mindful of the operational and technical damage done by those involved in state capture – their priority together with insiders and businesses, was to steal, to overprice services and parts and engage in other forms of malfeaseance. The parliamentary enquiry conducted in 2017, exposed many of these shenanigans.

03 December 2021 - NW2297

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Lees, Mr RA to ask the Minister of Public Enterprises

(1)(a) What are the details of the appointment of Themba Mc Clain, (b) his pilot training and (c) his previous employers including dates of employment, positions held and reasons for leaving each employer; (2) what are the details of (a) any investigations into how the specified person obtained his pilot licence and (b) the findings and recommendations of any such investigations; (3) what are the details of the person’s employment at SA Airways (SAA) including (a) the date he was (i) employed as a pilot and (ii) appointed a captain and (b) his flight training at SAA; (4) What are the detailed reasons for appointing the person as the SAA Chief Pilot?

Reply:

According to the information received from SAA

 

1. (a) Captain Themba McClain was appointed at SAA as a Captain on 1 June 1992. He held the position of Chief Standards Pilot during his career at SAA.

(b) During his employment with the airline he received and completed training required for the execution of his duties as a pilot, as required by all pilots. Captain McClain’s training as a Commander with SAA, commenced on 29 January 2007.

c) This information is of a confidential nature

2. (a) & (b) No investigations or findings thereof are known to SAA. The SACAA in their role as regulator approves all pilots license. It is Important to note that the Chief Pilot position is a regulated post holder in terms of CARS 121.06.2, and all incumbents acting for a period in excess of 30 days are approved by the CAA. Captain Themba acted as the Chief Pilot from 8 November 2016 until 31 December 2017. He was approved by the CAA on the 3 November 2016.

3. Please refer to responses in (1) and (2) above.

4. Capt. Themba McClain was offered the position of Chief Pilot at SAA, which he declined.

03 December 2021 - NW2292

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

(1) Whether, with reference to the decision by the National Energy Regulator of South Africa to increase the electricity tariff by 15,3%, he has found that this decision will enable Eskom to avoid loadshedding, destabilisation of the national grid and defaulting on its borrowing costs; if not, what is the position in this regard; if so, what are the relevant details; (2) whether Eskom’s position can change on renewal producers, in light of Eskom’s position that providing generation facilities to renewable projects, comes at a cost of coal miners, their communities and potentially the economy as a whole; if not, what is the position in this regard; if so, what are the relevant details; (3) with reference to Eskom announcing its unbundling process, will this affect the new build program?

Reply:

According to the information received from ESKOM

1. With respect, the two issues are not linked.

The increased tariff contributes to the revenue of Eskom and its financial performance. Eskom has managed to meet its debt commitments and not defaulted on its debt commitments. There are various factors that contribute to this including the equity support that Eskom has received from Government. The increase in the tariff will improve cash from operations and will assist in strengthening Eskom’s financial position.

The load shedding minimization and impact on the national grid is not related to the price increase. Various other issues, from a technical operational point, need to be considered in this regard.

2. Eskom will work together with the private sector and IPPs to rollout renewables. Our plans and strategies are not mutually exclusive. An important part of our strategy is to ensure we deal with the socio-economic impacts of transition from coal. We are working on repowering and repurposing options, as well as plans to drive localisation, in collaboration with other industry players. This is meant to spur economic growth and grow local manufacture and industrialisation.

3. The unbundling process will not affect the completion of the new build programme.

  • At Medupi, following the Commercial Operation (CO) of the last unit (Unit 1) on 31 July 2021, focus is now on completion of the remaining issues on the balance of plant (outside plant), including but not limited to the ash dump facility, ash silos, coal stockyards and building structures with their associated systems.
  • At Kusile, the three remaining units (Units 4, 5 and 6) are under construction, with the last unit (Unit 6) targeted for completion in May 2024.

03 December 2021 - NW2291

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Clarke, Ms M to ask the Minister of Public Enterprises

(1)Whether, with reference to a certain Scarlet Skye Investment, he will advise if an (a) application for a licence was made for (i) another company and/or (ii) new contractors to deal with diamonds and (b) independent valuator was appointed at the time; if not, what is the position in each case; if so, (aa) what was the name of the valuator and (bb) for what period of time was the person appointed; (2) whether he will (a) furnish Mrs M O Clarke with a list of diamond purchases from a certain company from 2015 up to the latest specified date for which information is available and (b) advise if the diamond law was enforced around the specified purchases; if not, why not in each case; if so, in terms of the law, will he furnish Mrs O Clarke with a list of purchases, broker notes and invoices for the past five years as prescribed within the law?

Reply:

According to the information received from ALEXKOR

1. (a) Scarlet Skye Investment (SSI) does not possess a diamond marketing licence instead a licence belonging to the company Daniel Nathan Trading (now called) Alexander Bay Diamonds) was used. Daniel Nathan is the director of SSI.

(b) The valuator was appointed by SSI. Alexkor does not have the records of the

valuators details.

(c) Alexkor SOC obtained a diamond marketing licence in May 2020. Alexkor SOC has since assumed the function on behalf of the Alexkor RMC PSJV.

2. (a) The brokers notes are provided to individual companies who have a contract with Alexkor and PSJV. These are subject to confidentiality, Alexkor is unable to provide these without consent from the Alexkor RMC PSJV and contractors.

(b) The fact that SSI did not have the licence, Daniel Nathan Diamonds was used which made the selling of diamonds legal. As for Brokers Notes and Invoices, these are private and confidential information Alexkor SOC is unable to provide

these without consent from the Alexkor RMC PSJV and contractors.

 

The DPE will attempt to obtain the necessary consent for disclosure.

03 December 2021 - NW2127

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Schreiber, Dr LA to ask the Minister of Public Enterprises

Whether a certain person is currently employed in any state-owned enterprise; if not, what is the position in this regard; if so, (a) on what date was the specified person employed and (b) what is the person's current (i) position and (ii) annual salary package?

Reply:

According to the information received from ALEXKOR

  1. Not Applicable
  2. (i), (ii) Not Applicable

According to the information received from DENEL

  1. Not Applicable
  2. (i), (ii) Not Applicable

According to the information received from ESKOM

  1. Not Applicable
  2. (i), (ii) Not Applicable

According to the information received from SAFCOL

  1. Not Applicable
  2. (i), (ii) Not Applicable

According to the information received from SAA

  1. Not Applicable
  2. (i), (ii) Not Applicable

According to the information received from TRANSNET

  1. Not Applicable
  2. (i), (ii) Not Applicable

 

Remarks: Reply: Approved / Not Approved

Kgathatso Tlhakudi Pravin Gordhan, MP

Director-General Minister of Public Enterprises

Date: Date:

03 December 2021 - NW2405

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Clarke, Ms M to ask the Minister of Public Enterprises

(1) What percentage as a stakeholder and state-owned entity (a) does Alexkor and (b) the Pooling and Sharing Joint Venture (PSJV) hold; (2) whether, in view of the fact that Alexkor and the PSJV are reliant on Government funding and should be open and transparent to the public, the two specified entities are bound to comply with the provisions of the Public Finance Management Act (PFMA), Act 1 of 1999, when making their financial decisions; if not, why not; if so, what are the relevant details; (3) whether the PSJV forms part of a schedule 2 Major Public Entity in terms of the PFMA; if not, what is the position in this regard; if so, (4) whether he has found that the PSJV must then comply with the provisions of the PMFA; if not; why not; if so, what are the relevant details?

Reply:

According to the information received from ALEXKOR

1. Alexkor and Richtersveld Mining Company (RMC) Pooling and Sharing Joint Venture, known as Alexkor RMC PSJV, is an unincorporated joint venture where Alexkor holds 51% interest and RMC holds 49%.

The settlement agreement reached between Government and the community of Richtersveld directed that land-based diamond assets previously owned by Alexkor be transferred to the community and Alexkor to retain the marine based diamonds assets

The Alexkor RMC PSJV is led by a board composed of three (3) members from Alexkor and three (3) from the communities.

2. In terms of the settlement agreement, the court ordered that R200 million be expended to the recapitalisation of the diamond operations post the prolonged court proceedings.

The terms of repayment are outlined in the settlement agreement. No further funding has been provided to the PSJV nor Alexkor

Alexkor is a Schedule 2 company bound by the PFMA. Alexkor RMC PSJV is not Schedule 2 company therefore it is not bound by PFMA provisions.

3. Alexkor is a Schedule 2 company bound by the PFMA. Alexkor RMC PSJV is not Schedule 2 company therefore it is not bound by PFMA provisions.

4. The Alexkor RMC PSJV is an unincorporated entity and does not qualify as a national public entity or a national government business enterprise based on the definition of the two by the PFMA namely the Alexkor RMC PSJV is not juristic entity nor under the ownership control of the national executive. Given that the Alexkor RMC PSJV is not a public entity that it could not be listed in either Schedule 2 or 3 of the PFMA. Section 3 of the PFMA provides that the PFMA applies to departments, public entities listed in Schedule 2 or 3, and constitutional institutions. The Alexkor RMC PSJV is none of these. It is therefore advised that the PFMA does not apply to the Alexkor RMC PSJV itself, in its own name.

03 December 2021 - NW2404

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Clarke, Ms M to ask the Minister of Public Enterprises

Whether there has been any process initiated to sell off Denel Pretoria Metal Pressings, popularly known as PMP; if not, what is the position in this regard; if so, what are the relevant details with regard to the (a) tender processes followed and (b) companies that tendered for the sale of the state-owned entity?

Reply:

According to the Information Received from Denel

Denel SOC has no intention to sell off Denel Pretoria Metal Pressings. This part of business remains strategic to both Denel and THE Department of Defence. The development and manufacturing of small and medium caliber munitions are core to Denel’s business model of Denel. However, the SOC overall structure and business model required for sustainability is under review.

03 December 2021 - NW2392

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

Whether he will furnish Mr E M Buthelezi with the relevant details on how a crime syndicate was able to steal R100 million worth of oil and/or fuel on a monthly basis without detection; if not, why not; if so, (a) on what date and (b) what are the further relevant details?

Reply:

According to the information received from Eskom

(a) and (b)

Investigations on the fuel oil crime syndicate are ongoing and at a critical stage therefore we are unable to offer any more information on the matter at this stage.

Eskom issues media statements to the public, and reports progress on investigations into cases of suspected fraud and corruption to the Standing Committee on Public Accounts, on a regular basis.

The media statement issued on 5 November 2021 on the fuel oil crime syndicate is attached.

03 December 2021 - NW2391

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Buthelezi, Mr EM to ask the Minister of Public Enterprises

(1) With regard to the R131 billion recently secured for renewable energy, how will Eskom show accountability and transparency in the just transition when corruption, fraud and theft are at the centre of the entity. (2) (a) what amount has been lost to corruption at Eskom in the past financial year and (b) how far has the loss jeopardised the mandate of the organisation to keep the lights on in the Republic?

Reply:

According to the information received from Eskom

Eskom’s current leadership is committed to rooting out fraud and corruption and addressing issues related to past corporate governance breaches, in order to restore Eskom's reputation as a trusted corporate citizen and further, to improve the organization’s financial and operational sustainability.

(1)

There are a number of safeguards built into the operationalization of the JET financing facility. Firstly, we see the facility, and disbursement of funds being managed by a strict governance committee comprised of the lender group. Financing will be released in tranches, based on project milestones being met. This means if we do not meet project deliverables and timeframes for deliverables, the financing will not be released.

(2)(b)

The total amount identified through investigations conducted by the Eskom Forensics team is R3 448 024.

(2)(b)

While loadshedding cannot ALWAYS BE attributed to corruption, the financial losses due to corruption have had a negative impact on Eskom’s overall financial position. This in turn negatively affect Eskom’s ability to reliably provide electricity.

For instance, the underlying cause of Eskom’s poor operational performance is insufficient maintenance on Generation plant over the years which is now resulting in poor plant performance. There is an increase in mechanical power station breakdowns.

Therefore, the sum of R3 448 024 which was lost due to maladministration could have been used to perform much-needed maintenance on Eskom’s power generating units.

 

We also provide details of Eskom’s response to the fraud and corruption challenge:

  • Eskom is making good progress in the implementation of the Fraud Risk Management Plan, to maximise fraud prevention and enhance good corporate governance practices. The Anti-Fraud and Corruption Integration Committee monitors the implementation of this plan and ensures integration between forensic, legal, ethics, industrial relations and supplier review functions, with progress reported to Exco and the Audit and Risk Committee (ARC) on a regular basis.
  • In financial year 2020/21, our fraud prevention and whistleblowing policies were revised to enforce our zero-tolerance approach to fraud, strengthen our whistleblowing processes and ensure compliance with changes to relevant legislation. Furthermore, a whistle-blowing procedure has been developed to provide step-by-step guidance to report incidents of unethical behaviour through an independent, confidential hotline. As an additional measure, we also encourage reporting through DPE's whistle-blowing channels.
  • Ethics and fraud awareness programmes have been enhanced and remain mandatory for all employees. To complement these, anti-fraud training has been developed for managers and supervisors to ensure that they understand their roles and responsibilities in the management of risks associated with fraud, corruption and irregularities. Fraud awareness for suppliers was also implemented during the year.
  • Our Assurance and Forensic Department and Human Resources Division are collaborating to improve consequence management and disciplinary processes. Feedback on disciplinary cases is reported regularly to executive management. Disciplinary action is monitored, particularly where line managers and supervisors have decided not to take action against an employee despite findings from an investigation.

11 November 2021 - NW1962

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Maotwe, Ms OMC to ask the Minister of Public Enterprises

What steps has he taken against the Chief Executive Officer at Transnet Engineering who refused to sign a revenue-generating project contract for building wagons for the Mozambique railway company, Caminhos de Ferro de Moçambique (CFM)?

Reply:

According to the information received from Transnet:

We have not been provided with sufficient information to respond. The member is, therefore, requested to provide more precise information on the project, including the wagon type and year of contracting.