Questions and Replies

Reply:

 

1. (a) In 2007, Transnet divested its interest in SA Express when the airline was established in terms of the SA Express Act (No. 34 of 2007), promulgated in December 2007, which provided for the transfer of SA Express shares and interests from Transnet to the state. The Act further granted the conversion of SA Express into a public company with share capital. In 2009, Government took 100% shareholding in SA Express.

 

The Company is a pre-existing company as contemplated in Item 2 of Schedule 5 of the Companies Act, (No 71 of 2008), as amended, and was incorporated in accordance with the Legal Succession to the South African Transport Services Act No. 9 of 1989 to and, in terms of its enabling legislation.

(b) There are no private shareholders who currently hold shares in SA Express. The company is also subject to the provisions of the Public Finance Management Act, 1999, (PFMA) as amended. The government is the sole shareholder of the shares in the company and the rights attached to those shares are exercised by the Minister of Public Enterprises.

 

1. The Memorandum of Incorporation (MOI) provides that the company is authorised to issue 1000 (one thousand) Shares. The 2013 MOI provides that the shares in issue are 452 (four hundred and fifty two) ordinary shares, all of which are held by the shareholder, as represented by the Minister of Public Enterprises.
   1. shares traded where 102 shares
   2. share seller was Transnet

c). share purchaser was Government, represented by the Minister of Public Enterprises

d) amount paid was R140 million.

The company received a total of R1 549 000 000.00 during the 2018/19 and 2019/20 financial years. The company was required to provide the Minister with a commensurate request to increase the authorised and issued shares, accordingly. The process was not finalised and the provisional liquidator will only be able to address the matter, subject to prescribed requirements.

Reply:

(a) The Rand Merchant Bank had been appointed as transaction advisor to oversee the Strategic Equity Partner (SEP) transaction of Air Chefs by SAA, the Department of Public Enterprises (DPE) expanded the scope in line with procurement prescripts to include a similar scope on the SAA group, in line with Treasury Regulation 16A6.6.

(b)The contract value is capped at R12 million as retainer fee and R25 million as success fee for concluding a partnership for S

(c) The deliverables are;
i. Initial evaluation
ii. Due diligence and agreeing heads of agreement
iii. Final Due Diligence, definitive Transaction agreements, Transaction approvals and closing

(d) The timeline for the contract is 12 months. But the project may be concluded earlier due to the urgency of the matter, and the Department of Public Enterprises (DPE) has an option of exiting within 15 days, a month’s notice or by mutual agreement.

Reply:

According to the information received from Eskom

(a) The Grievance was attended to in line with the Eskom HR Management priscipts and the outcome was provided to the aggrieved employee.

(b) The advert that had been provided initially was the copy of the working draft. The error was corrected when it was posted out. There were no material differences between the working draft and final version published.

 

Table 1: Comparison of pdf copy of the advert vs advert on the Eskom recruitment site

 

Advert on the pdf copy

Advert  on       the  Eskom        recruitment portal

Position: GM TREASURY Position Task Grade: EEE – GENERAL MANAGER Purpose: Ensure Eskom has necessary policies, strategies, processes and systems to optimize Eskom’s financial liquidity through providing an effective Treasury function. Business Unit: Office of the CE/Chairman Location: Megawatt Park Reference Number: 041120191 Closing Date: 07 November 2019 Line Manager: Jabu Mabuza

Position : GM Treasury Task Grade : E-Band Area of Specialization: Ensure Eskom has necessary policies, strategies, processes and systems to optimize Eskom’s financial liquidity through providing an effective Treasury function. Department : Chief Financial Officer Business Unit : Office of the CFO              Location : South Africa (Gauteng)              Reference Number : 041120191 Closing Date : Monday, 11 November 2019

 

(c) The Eskom recruitment and selection process make provision for a subject matter expect to form part of an interview panel. Ms Ramos was brought in on this basis.

None of the candidates of the candidates interviewed expressed discomfort or objected to discomfort with the composition of the interview panel.

Reply:

(1) No the Department of Public Enterprises and its entities do not provide free basic electricity under programmes other than the Free Basic Electricity (FBE) programme.

(1)(a) Not applicable (1)(b) Not applicable

(2)(a) Under the FBE programme, installation and maintenance of electricity prepaid meters is not subsidised.

(2)(a)(i) and (ii) Not applicable

(2)(b)(i) and (ii) The installation of electricity prepaid meters is free under the Government’s Integrated National Electrification Programme (INEP). INEP is funded by the Department of Mineral Resources and Energy as per the Division of Revenue Act, 2013 (Act No.2 of 2013) schedule 6.

Eskom maintains prepaid electricity meters. Eskom has a maintenance budget for repairs and maintenance for its infrastructure and this is allocated from the tariff.

(3) Eskom does not prescribe electricity tariffs and rates to any of its customers but charge all its customers tariffs approved by the National Energy Regulator of South Africa (NERSA). The Electricity Regulation Act prohibits Eskom from charging its customers any other tariffs other than those approved by NERSA.

(3) (a) Not Applicable

(3) (b) Not Applicable

Reply:

According to the information received from Transnet

No, Transnet is not planning to sell assets to the private sector. However, it is in the process of considering how its asset base is best positioned to deliver on the requirements of the business. We are however looking for opportunities to partner with the private sector. This is in order to promote economic transformation and to mobilise private sector capital for important projects.

(a) Not applicable

(b) Not applicable

(c) Not applicable

Reply:

According to the information received from Eskom:

(1)(a) In terms of the Collective Agreement, Eskom engages with organised labour at various

participative structures. National structures include - Strategic Forum, Central Consultative Forum and Central Bargaining Forum. There are also Group Structures and Business Unit Level. The purpose of these structures is for Eskom to engage (share information, consult and bargain) with organised labour on matters that have direct impact on the employee’s conditions of employment in line with legal prescripts.

Post the publication of the Eskom Roadmap in October 2019, Eskom has had two formal consultative meetings with the leadership of NUM, NUMSA and Solidarity where Eskom shared the Strategic Turnaround Plan and Operating Model, the latter detailing the divisionalisation plans in support of the Eskom Roadmap. The table below lists engagements that have taken place as well as those planned.

Eskom is also party to the NEDLAC process where only NUM is in attendance as prescribed by the NEDLAC regulations.

Consultative Forum	Dates of past meetings	Discussions	Organised labour representation	Planned meetings
Strategic Forum (SF)	26 May 2020	Eskom shared the Eskom Strategic Turnaround Plan and Operating Model.	NUM/NUMSA/Solidarity leadership. The engagements are targeted at Secretary General level.	26 November 2020
	21 July 2020	A follow up meeting to engage further on issues tabled at the meeting.
Central  Consultative Forum (CCF)	-	The Eskom Turnaround Plan as shared at the Strategic form meetings of 26 May and 21 July.	NUM/NUMSA/Solidarity The engagements are targeted at local leadership.	The CCF meeting is scheduled to take place on 22 September 2020. With another meeting scheduled for 3 December 2020.
NEDLAC	15 October 2019 4 December 2019 11 February 2020	The Roadmap for Eskom in a reformed electricity supply industry 2019	As per NEDLAC’s prescribed regulations.	Dates and agenda is set by NEDLAC.

(1)(b)The recognised trade unions at Eskom are National Union of Metalworkers of South Africa

(NUMSA), National Union of Mineworkers (NUM) and Solidarity.

(2)(a)In line with the divisionalisation decision, proforma financial statements: income statement

and balance sheet, etc. have been formulated for each of the units to enable proper performance monitoring by the established divisional boards. However, the decision on the group debt remains an outstanding matter and a solution will be finalised before the debt is allocated to each division and prior to attainment of the legal separation.

(2)(b) The decision on a long term solution will include engaging and reaching agreement with

the creditors, after taking into account the regulatory methodology and the profitability of the proposed subsidiaries. It would be premature at this stage to provide a definitive decision on this matter, as the work has not been concluded.

Reply:

According to the information received from Eskom

The term of the Eskom Pension and Provident Fund (EPPF) Board, ofwhich Ms Mantuka Maisela was the Chairperson, expired on 31 May 2020. However, because the governance process was not in place on 31 May 2020 and Eskom did not want to be the cause of a non-constituted Board, which had been a finding of the Financial Sector Conduct Authority (FSCA) against the EPPF previously, Ms Maisela and the other two trustees were appointed to avoid such an occurrence.

The appointment letters were drafted to appoint them for a full term because the rules of the Fund did not provide for temporary appointments, but for replacements, where Eskom had the right to replace an employer board member at any time on reasonable grounds.

In a letter dated 29 May 2020, Ms Maisela was informed that her appointment was subject to the finalisation of the governance process and that it was to be read in conjunction with rule 3.5(1) of the EPPF rules, which provides that an employer board member could be replaced by Eskom at any time on reasonable grounds.

Eskom followed an appointment process for the EPPF Chairperson position with the assistance of an executive search company. Shortlisted candidates were interviewed by an Eskom panel that consisted of the Chief Financial Officer (CFO), Senior Manager Human Resources, and Recruitment Manager, and all internal governance processes were adhered to. Ms Maisela was not part of the process because she was not shortlisted.

In its decision not to extend Ms Maisela’s appointment, Eskom also considered the fact that Ms Maisela had acted in various roles on the EPPF Board since 2004, which made a total of 16 years, for 12 of which she had been appointed by Eskom. This tenure considerably exceeded the recommended period for a non-executive director in terms of governance processes.

Eskom took the above into consideration and decided that it would not be in the interest of good governance for the EPPF and Eskom to reappoint Ms Maisela as the Chairperson of the EPPF Board.

The CFO recommended the successful candidate’s name to the Group Chief Executive (GCE), and the GCE, in consultation with the Chairman of the Board, recommended the appointment to the People and Governance Committee (P&G), a subcommittee of the Board, for approval. The P&G approved the submitted name and recommended approval of the appointment by the Minister. It must be noted that this is merely a formality as the Minister is not involved in the process identifying new members of the Board. There were delays in soliciting the P&G approval due to the lockdown. The P&G recommendation reached the Minister on 15 May 2020.The Minister approved the recommended candidate on 9 June 2020. Eskom appointed the Chairperson with effect from 1 July 2020, and the name was submitted to the EPPF Board for final approval.

The EPPF Board approved the appointment of Ms Caroline Henry on 15 July 2020, and therefore, Eskom did not have authority to extend Ms Maisela’s appointment beyond 30 June 2020.

It should be noted that Ms Maisela was not the only trustee who was replaced in terms of rule 3.5(1) of the EPPF rules on 30 June 2020, as she was replaced along with two other trustees.

Reply:

According to the information received from Eskom

(a) and (b)

The table below captures the details requested for each person.

Title	Initials and surname	Designation	Qualification	Verification by
Mr	A M	de Ruyter	Group Chief Executive	Bachelor of Arts in English and Psychology - (University of Pretoria) Bachelor of Civil Law - (University of Pretoria) Bachelor of Law - (University of South Africa) Master of Business Administration - (Nijenrode University - Netherlands)	Lexis RefCheck
Mr	C	Cassim	Chief Financial Officer	Bachelor of Commerce - (University of Natal) Honours Bachelor of Accounting Science - (University of South Africa) Masters in Business Leadership – (University of South Africa) Member of the South African Institute of Chartered Accountants	Internal recruitment department - 2006

Title	Initials and surname	Designation	Qualification	Verification by
Mr	J A	Oberholzer	Chief Operating Officer	Bachelor’s degree in Electrical Engineering - (University of Pretoria) Master of Business Leadership - (University of South Africa) Executive Leadership Programme - (University of Michigan – USA) Electrical Engineering Certificate of Competency (SA)	Internal recruitment department Previously employed by Eskom since 1983
Mr	N	Harris	Senior Manager: Information Management	Bachelor of Commerce Education - (Rand Afrikaans University) Diploma in Data Metrics - (University of South Africa) Master of Business Leadership – Brunel University, UK – (Henley Management College)	Internal recruitment department. Previously employed by Eskom since 1982
Mr	R	Vaughan	General Manager: Treasury	Bachelor of Commerce – (Rhodes University) Higher Diploma in Accountancy - (Rhodes University) Member of the South African Institute of Chartered Accountants	LexisNexis Risk Management

Reply:

According to the information received from Eskom:

As at 13 July 2020, Eskom appointed 139 employeessince the appointment of the Group Chief Executive, Mr André de Ruyter.

The breakdown is as follows:

• 25 external appointments, of which 18 were T-Systems employees who were transferred into Eskom in accordance to Section 197 of the Labour Relations Act, 1995. Only 7 were true external recruits.
• 114 were appointed on Fixed Term Contracts.

Annexure A provides details, according to (a) race, (b) position, (c) qualification, (d) salary level, (e) experience and (f) gender.

Reply:

The only company in business rescue is South African Airways SOC Limited (SAA).

SA Airways City Centre SOC (Limited) has been placed in voluntary liquidation before the business rescue proceedings.

None of the other companies in the group are in business rescue as the boards have not placed the companies under voluntary business rescue, nor has any other process in terms of the Companies Act been given effect to.

Reply:

According to the information received from Eskom

1. The R5.5 billion is the total value of Eskom’s claim against Tegeta Resources and Exploration, which is in business rescue.

Relevant details are as follows:

Tegeta is a company owned by Oakbay which is a Gupta related company. Tegeta owns the Optimum coal mine.

The Business rescue proceedings of the Optimum coal mine commenced in February 2018 when the Optimum Board of Directors resolved to place the company under voluntary business rescue and proceeded to file a notice of commencement of business rescue proceedings with the Companies and Intellectual Property Commission on 19 February 2018. The Optimum coal mine had been supplying coal to Hendrina Power Station.

Eskom has submitted a claim of approximately R5.5 billion against Optimum in these proceedings, composed of undelivered coal and poor quality of delivered coal:

A. pre - commencement (of business rescue) September 2016 to January, 2018 = R1,1 billion ( 1,1 million tons)

B. post – commencement (of business rescue process) February, 2018 to December, 2018

= R4.4 billion (3.8 million tons of Coal)

At a meeting of creditors convened on 10 December 2019, the quantum of Eskom’s claim was challenged and it was resolved to refer Eskom’s claim for determination by an independent expert. Creditors contended that Eskom’s claim is inflated and as such Eskom should not have been afforded voting rights on the contingent and disputed part of its claim in Optimum. Eskom’s disputed claim was determined by way of an expedited arbitration presided over by retired judge Fritz Brand, jointly appointed by the creditors.

At the arbitration hearing held in March 2020, the majority of creditors (excluding Oakbay – also a creditor in Optimum), Eskom and the BRPs reached an agreement regarding the quantum of Eskom’s claims. Eskom’s claim, both pre- and-post-business rescue, was determined to be the sum of R1 276 031 278.48 (one billion two hundred and seventy six million thirty one thousand two hundred and seventy eight rand and forty eight cents). Eskom’s voting share was determined at 24% to be exercised by Eskom in any manner it wishes to do.

Current Status of BR proceedings:

During the arbitration hearing in March it was also agreed that the revised business rescue plan would be published on or before the 2 April 2020. It was further agreed that the meeting of creditors, to vote on the preferred offer and adopt the business rescue plan, would be convened on or about 20 April 2020. The BRPs did not publish the plan in April due to the 2 remaining bidders, namely Lurco and IZM, failing to secure funding to acquire the mine.

In light of the above, in May 2020 the BRPs invited other prospective bidders to submit proposals to acquire the mine. Bids were submitted mid-June 2020 and the BRPs are currently reviewing the offers received from the 3 bidders. Eskom currently awaits the outcome of the review. Preferred bidders will be incorporated in the revised BR plan to be published in due course.

Towards the end of June 2020, the BRPs also received an alternative proposal to rescue the mine. The alternative offer was submitted by Centaur Ventures Ltd, one of the largest creditors of Optimum. According to the BRPs, the alternative plan, if supported by the BRPs and creditors, will also be incorporated in the revised business rescue plan and be triggered in the event that the preferred bidders fail to secure sufficient funding to acquire the assets. Eskom has not yet been furnished with the alternative proposal for consideration.

The BRPs have not committed to a specific date for publication of the revised business rescue plan. In the event that the revised plan is published end July, 2020 then the meeting of creditors for purposes of voting and adopting the plan would have to be convened early August i.e. within 10 days of the date of publication of the plan.

2. (a) Not applicable.

(b) As explained in (1) above, Eskom submitted a claim in the business rescue proceedings which are still underway.

Reply:

According to the information received from Eskom

a) The total debt owed by municipalities as at June 2020 is R43.9 billion, of which R30.9 billion is overdue debt. The details of the age analysis of the total debt owed by each municipality to Eskom, as at June 2020 are set out in Annexure A.

b) (i) and (ii) The total debt of R43.9 billion, is made up of the capital amounts of R32.4 billion, interest of R6.7 billion and VAT of R4.8 billion. The makeup of total debt in terms of capital and interest for each municipality, as at June 2020 is set out in Annexure A.

c) (iii) The total Notified Maximum Demand (NMD) exceedance charge for June 2020 is R46.9 million and R104 million for the financial year to date. This is a penalty for NMD exceedance raised in terms of the NMD Rules approved by the National Energy Regulator of South Africa (NERSA) to discourage future exceedances and is included in the capital amount. The NMD exceedance charge, for each municipality as at June 2020 is set out in Annexure B.

Reply:

Goods and services were procured in relation to Covid-19 pandemic and the information is indicated in the table below.

(a) Name of the budiness	(b) Amount	(c) Service/ Product
Biologica Pharmaceuticals	R26 650.00	Mask surgical
Tripple N Medical	R2 044.00	Mask surgical
Ekhaya Investments	R11 500.00	Mask cloth
Evergreen Latex	R2 517.20	Gloves surgical and examination natural rubber
Lechoba Medicals	R15 187.50	Hand Sanitizers
Promed Technologies	R2 700.00	Disinfectant surface
Promed Technologies	R3 600.00	Temperature scanners
Multisurge	R4 600.00	Temperature scanners
Recreative Creativity	R27 950.00	Dispenser wipes
Oks iInvestment 2009	R89 700.00	Fumigation/ Building sanitization
Bizmak Trading	R17 000.00	Hand sanitizer dispensers
	R39 000.00	Hand spray sanitizer
	R6 000.00	Face shield

(2) Whether there was any deviation from the standard supply chain management procedures in the specified transactions; if so, (a) why and (b) what are the relevant details in each case;

Answer:

There was no deviation from the standard supply chain management procedures.

(3)        What were the reasons that the goods and/or services were purchased from the specified companies;

Answer:

Businesses awarded through request for quotations met the specifications and their prices were the cheapest as compared to other competitors.

Reply:

The government has put in place a support package for small businesses.

The Department of Small Business Development will provide the details of the support available. The support, is available from various departments, for example: Agriculture and Tourism

Reply:

According to the information received from Transnet:

1. For the Financial year 2020/2021 the SAFA Transnet Football School of Excellence has been allocated an amount of R 21 m.

2. The funds for the School of Excellence have been released for this financial year as per Transnet cost centre 1004036.

(3)(a) The budget for the 2020 – 2022 Medium Term Framework is estimated at

R44m, based on a 10% budget increase for the Financial year 2021/2022.

(3)(b) The allocated funding covers the running costs of the School including salaries for the 28 staff members employed by the School.

(4)(a) The School has 28 staff members made up of:

Eight academic staff;

One Head Coach and Five Coaches; and

Fourteen support staff.

(4)(b) The school has produced over 100 professional players. A list of players who

graduated from the School of Excellence is attached.

Reply:

According to the information received from Eskom

1. The table below provides the Eskom OCGT diesel usage.

Financial Year	Rand value, R'm[1]	Megalitres
1 April 2019 up to Jan 2020	3 268	318.6
2018-19	3 768	384.5
2017-18	320	37.8
2016-17	340	10
2015-16	8 690	1 247.8
2014-15	9 546	1 178.6

 

2. At Eskom diesel is used as fuel to open cycle gas turbines (OCGTs) and fleet.

3. As the power stations perform better and energy availability factor (EAF) improves to a higher level, the use of diesel must reach zero level.

1. ↑

Reply:

The following information is provided by the Business Rescue Practitioners of the SAA: see the link

https://pmg.org.za/files/1/RNW374-200608.docx

 

Reply:

The following information was provided by the Business Rescue Practitioners of South African Airways:

SAA advertised and awarded catering tenders from 01 January 2014 to July 2019. The links below include contracts that cover SAA’s global operations (Local, Regional and International):

https://pmg.org.za/files/1/RNW375-200608.docx

Reply:

(1)

Government as a whole is concerned about the number of state-owned enterprises and entities, and their respective governance operational and financial status. A process of review has been discussed and the relevant departments are establishing which entities can be merged, closed or retained. This will be an on-going process with regular reports to government.

Once the Presidential SOC Council begins its work, further measures and initiatives will be put in place.

(2)

As above:

In addition, Boards as the accounting authority in terms of the PFMA, will also be responsible for ensuring operational performance and financial viability of entities.

(3)

Government, in consultation with the relevant Departments, will determine the response to financial and other issues. The example of restructuring of Eskom as a result of the governance, operational and financial challenges arising from corruption and state capture.

Government initiated a process to change the business model, restructure the generation, transmission and distribution components with a view to better transparency, and focus on operational performance and financial efficacy.

The repositioning of state owned entities will continue to receive intense focus – particularly, ensure that dependence on the fiscus is stopped.

Reply:

The following information was provided by the Business Rescue Practitioners of the South African Airways Response:

1. The business rescue practitioners have been paid in accordance with the hours worked and set down rate for business rescue practitioners. The amounts paid to Matuson & Associates and Adamantem as at 26 May 2020 are as follows:

Matuson and Associates – R22 208, 689

Adamantem (Pty) Ltd – R14 002,112

(2) The business rescue practitoners did not benefit from the intervention relating to the DBSA bridge facility, other than payment in the normal course of the business rescue process done based on hours spent on the transaction and set down rate for that practitioner.

Reply:

According to the information received from Alexkor

(1)(a)

The number of employees are currently employed at ALEXKOR is 205 as at end of December 2019.

	Level	Number of employees
(1)(b)(i)	Senior Management	12
(1)(b)(ii)	Middle Management	9

(2)

	Level	Average remuneration
(a)	Senior Management	R3 323 538,75
(b)	Middle Management	R1 411 488,89

(3)

	Level	Amount Salary Spent
(a)	Senior Management	R15 617 673,20
(b)	Middle Management	R4 873 830,00

 

According to the information received from Denel:

(1)(a) As at February 2020 the total workforce of Denel is 3426.

	Level	Number of employees
(1)(b)(i)	Senior Management	45
(1)(b)(ii)	Middle Management	700

(2)

	Level	Average remuneration
(a)	Senior Management	R2,653,454m
(b)	Middle Management	R958,088m

(3)

	Level	Amount Salary Spent
(a)	Senior Management	R76,771,451m
(b)	Middle Management	R684,391,669m

REPLY:

According to the information received from Eskom

(1)(a)

The number of employees are currently employed at Eskom is 45353 as at end of December 2019.

	Level	Number of employees
(1)(b)(i)	Senior Management	372
(1)(b)(ii)	Middle Management	6734

(2)

	Level	Average remuneration
(a)	Senior Management	R1 846 032
(b)	Middle Management	R1 144 138

(3)

	Level	Amount Salary Spent
(a)	Senior Management	R686 723 910
(b)	Middle Management	R7 616 533 256

 

According to the information received from SAFCOL

(1)(a)

The number of employees are currently employed at Safcol is 1479 as at end of December 2019.

	Level	Number of employees
(1)(b)(i)	Senior Management	7
(1)(b)(ii)	Middle Management	82

(2)

	Level	Average remuneration
(a)	Senior Management	R 131 726/ 1580 712 p/a
(b)	Middle Management	R 80 977/ 971 724 p/a

(3)

	Level	Amount Salary Spent
(a)	Senior Management Middle Management	R 7 643 211/ 91 718 532/pa
(b)

 

According to the information received from SAX

(1)(a)

The number of employees are currently employed at SAX is 671 as at end of December 2019.

	Level	Number of employees
(1)(b)(i)	Senior Management	81
(1)(b)(ii)	Middle Management	43

(2)

	Level	Average remuneration
(a)	Senior Management	R1 093 485 per annum
(b)	Middle Management	R598 330 per annum

(3)

	Level	Amount Salary Spent
(a)	Senior Management Middle Management	R16 828 815.00.
(b)

 

According to the information received from Transnet:

(1)(a)

The number of employees are currently employed at Transnet is 58051 as at end of December 2019.

	Level	Number of employees
(1)(b)(i)	Senior Management	1041
(1)(b)(ii)	Middle Management	5296

(2)

	Level	Average remuneration
(a)	Senior Management	R 1 522 753
(b)	Middle Management	R 758 755

(3)

	Level	Amount Salary Spent
(a)	Senior Management Middle Management	R5.6 billion p/a
(b)

Response from SAA is still outstanding and will be submitted as soon as the information becomes available.

Reply:

The following information was provided by the Business Rescue Practitioners of South African Airways: see the link

https://pmg.org.za/files/RNW524-SAA.docx 

 

Reply:

In accordance with procurement regulations, requests for quotations were sourced in relation to Covid-19 pandemic and the information is indicated in the table below.

(a) Name of the budiness	(b) Amount	(c) Service/ Product
Biologica Pharmaceuticals	R26 650.00	Mask surgical
Tripple N Medical	R2 044.00	Mask surgical
Ekhaya Investments	R11 500.00	Mask cloth
Evergreen Latex	R2 517.20	Gloves surgical and examination natural rubber
Lechoba Medicals	R15 187.50	Hand Sanitizers
Promed Technologies	R2 700.00	Disinfectant surface
Promed Technologies	R3 600.00	Temperature scanners
Multisurge	R4 600.00	Temperature scanners
Recreative Creativity	R27 950.00	Dispenser wipes
Oks iInvestment 2009	R89 700.00	Fumigation/ Building sanitization
Bizmak Trading	R17 000.00	Hand sanitizer dispensers
	R39 000.00	Hand spray sanitizer
	R6 000.00	Face shield

(2) Whether there was any deviation from the standard supply chain management procedures in the awarding of the tenders; if so, (a) why and (b) what are the relevant details in each case;

Answer:

There was no deviation from the standard supply chain management procedures.

(3)        What was the reason for which each specified business was awarded the specified tender;

Answer:

No tender was awarded in connection with Covid-19 pandemic. However, businesses awarded through request for quotations met the specifications and their prices were the cheapest from other competitors.

Reply:

The Department is constantly reviewing its IT security. Where weaknesses have been identified, they were corrected. To further strengthen its IT security, a process has been started to have a permanent capacity in the unit.

Reply:

1. Government has decided that settlement of forestry land claim could be informed by the Department of Rural Development and Land Reform (DRDLR) Agrarian Transformation System (Wagon Wheel) which emphasises significant community’s participation in enterprises operating on their land. In this regard, the communities will be prioritised in terms of:

• Guaranteeing that there is community participation in the planning process and subsequent phases.
• Equity participation in the enterprises operating on their land. This would include rights to have input into appointing non-executive and executive directors and senior management.
• Preference for community based enterprises in the subcontracting for goods and services, enterprise and supplier development, and prioritising of the community in corporate social investment spend.
• Recognition of Tribal Authorities, where they exist as competent oversight authorities over the assets acquired by the communities through the land claim settlement process.
• The land post transfer to community should continue to be used for the prime activities that had been on the land. In the case of forestry, approval by Minister should be obtained before the land use can be changed.

2. The forestry land claims have received a priority within government, with the Mkhwanazi land transfer in the Northern KZN effected on 14 October 2018. The next three parallel land claims are Mbonambi, Dukuduku and Nyalazi which are scheduled to be settled and transferred as per DRDLR’s plans.

Reply:

The Department has not used any of the individuals nor the companies as mentioned on the parliamentary question.

Reply:

This response is according to information received from Transnet:

In response to the above questions, there is no agreement between Transnet and Dr Beyers Naudé Local Municipality pertaining to the borehole that supplies water to the community of Wolwefontein in the Eastern Cape.

(a)&(b) The borehole is the property of Transnet and is operated and maintained by service providers appointed by Transnet. Part of the maintenance includes the supply of fuel for the pump. The borehole has been out of service from August 2019 and a service provider was appointed to effect repairs, however, the service provider has been experiencing challenges to restore the water supply for the community of Wolwefontein.

(c) Currently, water is being supplied to the community with a tanker service to provide immediate relief.

(d) A new borehole will be drilled, preferably in front of the police station. The exact location will depend on the water table survey. Water can be restored within six (6) weeks after completion of the drilling of the borehole, considering that quality of water needs to be treated, together with other works that may be required. Until such time that the new borehole is functional, the tanker service will continue to supply water to the community of Wolwefontein.

Lastly, Transnet has no objection to the borehole being transferred to the Dr Beyers Naudé Local Municipality. It must be noted that high level meetings were held in 2013 and 2014, between Transnet and the Dr Beyers Naudé Local Municipality to transfer the ownership of the borehole to the municipality, but no agreement was reached.

 

Reply:

The parliamentary question has been forward to the entities and the Ministry of Public Enterprises awaits their urgent response. Further information will be conveyed to Parliament as soon as the response is received.

Reply:

The parliamentary question has been forward to the entity and the Ministry of Public Enterprises awaits their urgent response. Further information will be conveyed to Parliament as soon as the response is received.

Reply:

The parliamentary question has been forwarded to the entities and the Ministry of Public Enterprises awaits their urgent response. Further information will be conveyed to Parliament as soon as the response is received.

 

Reply:

The parliamentary question has been forward to the entities and the Ministry of Public Enterprises awaits their urgent response. Further information will be conveyed to Parliament as soon as the response is received.

Reply:

At the outset, it must be noted that it will take a long time for Eskom to recover fully from the damage caused by the State Capture.

The Memorandum of Incorporation of Company (including Eskom) sets out the responsibilities, duties and rights of the shareholder and directors. The shareholder, particularly 100% shareholder as in the case with government and many state owned companies, can have a range of rights in relation to the governance of SOEs. The Shareholder Compact, prescribes the various performance targets expected to be met by an entity.

In the case of Eskom, targets will include plant performance (the level of energy availability factor to be achieved), financial targets (reduction in overall costs including primary energy cost) or implementation of various “turnaround” plans. Within these parameters, the Board must hold management to account on delivery of these targets. Likewise, the shareholder department must hold the Board accountable. Where necessary, usually at critical stages of an entity, the shareholder may initiate processes to assist both the shareholder and Board to both diagnose a problem and suggest solutions: examples being the Presidential Sustainability Task Team (to make recommendations on the future direction of Eskom given the challenges and changes in the electricity market) and the Ministerial Technical Review Team (to make recommendations on improving plant performance).

Reply:

The parliamentary question has been forwarded to the entities and the Ministry of Public Enterprises awaits their urgent response. Further information will be conveyed to Parliament as soon as the response is received.

Reply:

According to the information received from the South African Airways:

1. SAA initiated the airlines Re- Accommodation Policy which provide customers with alternatives (Date Changes, Rebooking on other airlines).
2. SAA customers are able to book on partner airlines, including SA Express, Mango, SA Airlink and Codeshare Partner Airlines, as well as Star Alliance partner Airlines.
3. SAA provides hotel accommodation for those passengers who cannot be booked on a flight.
4. SAA book passengers on South African Airways flights for a later date at no extra charge.
5. SAA extends the validity of the affected tickets to a date determined by the airline.
6. SAA offers refunds to customers who decide to cancel their flights.
7. SAA opens multiple channels of communication and extend the Call Centres operating hours.
8. SAA deploys additional resources to assist with passenger interaction at all airports, the airline operates from, with the bulk of resources at SAA’s hub at OR Tambo International Airport, in Johannesburg.

Reply:

According to the information received from SAA:

Yes, the striking unions complied with the law in holding a strike ballot.

(a) Union of Metal Workers of South Africa (NUMSA) and the South African Cabin, Crew Association (SACCA). SAA also deployed its own observers for the supervision.

(b) Yes.

Reply:

This question, I presume is referring to the National Airlift Strategy. The question will be better responded to by the Minister of Transport.

The Department of Transport (DoT) is the custodian of the National Airlift Strategy which is supporting the National Tourism Sector Strategy.

 

Reply:

Accordingly to the information received from Energy Team

The Eskom Generation entity will remain 100% state owned under Eskom Holdings consisting mainly of the current power plant base, which will be separated into a number of feasible smaller generation units.

Consideration for the creation of multiple generation companies (GENCOs) within Eskom Generation is currently under examination with the aim of introducing inter-company competition and drive efficiencies in generation. Each power station will have its own Power Purchase Agreement with predefined, fixed and guaranteed tariffs for energy with the Transmission Entity.

Reply:

According to the information received from South African Airways:

SAA Corporate mainly procures in the following categories: cleaning services, employee assistance services, facilities and maintenance, financial services, insurance, IT services, legal services, recruitment, medical services, security services, rates and taxes etc. These items and services do not fall under the definition of original equipment manufacturing.

All food and beverage is procured from source e.g. wines from Zorgvliet and Weltevreden Wineries, soft drinks from Coca Cola Beverages South Africa and beer from SAB.

The SAA Group buys all fleet vehicles from OEM’s through the relevant channels and using the necessary National Treasury Transversal agreements for ground fleet.

SAA is unable to provide detail per line item on middlemen and premium paid without expending significant man-hours and cost for the following reasons:

1. Due to the current system utilisation, SAA buys most of their items on free text. This makes a procurement history analysis an extremely time intensive exercise [manually matching various different description into a normalised description], then identifying the various vendors and identifying which ones are OEMS and middlemen and then determining an estimated premium paid.

2. SAA is in the process of implementing the SAP ARIBA solution with an expected go-live date of April 2020. This system will enable SAA to provide this information from the transaction history based on master data, within a year after go live.

Subsidiaries

The SAAT utilises the AMOS system that carries item masters for traceability purposes as required by aviation legislation and Air Chefs are more advanced in the utilisation of the SAP system, thus can provide the information as required. Air Chefs uses Bill of materials in procuring their requirement hence this information can be reported by Air Chefs as follows.

Air Chefs, the catering subsidiary of SAA, procures mainly meat, fruit and vegetables, confectionery products and dry groceries in order to produce meals, either directly from producers or from third party suppliers at market related prices. Some third parties have arrangements with producers based on volumes offering better competitive pricing.

Mango: 95% of Mango spend is attributed to fuel, aircraft and engine maintenance by SAA Technical, navigation, property rentals by ACSA, licensing by SACAA, aircraft leases, ground handling services, catering services and advertising services. Mango does not procure through any middle person supplier. Mango contracts directly with suppliers that are supplying the goods and services after a robust procurement processes.

Please find the list of foreign supplier from April 2017 to date:

Aergen Aircraft Five Limited

Airline Tariff Publishing Company

CRED Acro Aircraft Seating Ltd

CRED Amadeus IT Group SA

CRED APB Winglets Company LLC

CRED Aviation Performance Solutions

CRED Aviation Quality Services GmbH

CRED Aviation Safety and Quality Solutions

CRED Celestial Aviation Trading 41 Ltd C/O GE Capital Aviati

CRED ENGINE LEASE FINANCE CORPORATION

CRED ezy Webwekstaden

CRED Flitepartners Ltd

CRED Galley Tours and Safaris

CRED GOOGLE IRELAND LIMITED

CRED HADID International Services FZE

CRED HONEYWELL INTERNATIONAL

CRED JEPPESEN GMBH

CRED Jordan Aircraft Maintanance Limited

CRED Lufthansa Technic AG

CRED Macquarie Aircraft Leasing Services (Ireland) Limited

CRED MOMONDO A/S

CRED PACKAGING USD CONTROL ACC

CRED RESOURCE AND REVENUE MANAGEMENT

CRED SAMA JET INTERNATIONAL FZE

CRED Scaleout Software Inc

CRED START IRELAND LEASING  LIMITED

CRED The Boeing Company

CRED Travelpoint International LTD

SAA Technical (SAAT)

SAAT procured spares/components/material that were sourced from 383 different suppliers during the period under review. A list (Annexure A) with suppliers from whom South African Airways Technical SoC procured equipment, parts, consumables and services is attached containing:

a) full names and (ii) (a) details of the middle person supplier (ii) (bb) name of original manufacturer

b) Value of supplies per commodity per middle person supplier (Annexure B)

c) Estimated premium paid per supplier

Reply:

According to the information received from Transnet:

Fergo Enterprise was issued with PO number 4500441320 dated 04 April 2019, in the amount of R48 300.00 (Incl. VAT) to conduct NDT on the Synchrolift Hoist Base and Main Beams on a quotation issued on 29 March 2019.

Upon receipt of the said PO, Fegro Enterprise informed Transnet National Ports Authority that their quoted prices do not cover the entire scope of works as per the quote issued and explanation in the RFQ briefing session.

A decision was then taken to re-issue the RFQ, to the same initial three (3) companies and Fegro Enterprise quoted price [R91 540.00 (Incl. VAT)] was above the other responses received. (Whilst the other companies did maintain their initial quoted price).

On this basis PO number 4500441320 was then cancelled and a new Purchase Order number 4500447708, dated 26 September 2019, was issued to Entabeni Global Group (Pty) Ltd (Also a Level 1 BBBEEE company) in the amount of R59 028.64 (Incl. VAT).

Reply:

The Ministry is yet to finalize its international engagement programme but ordinarily, Ministers and Deputy Ministers undertake these trips at the request and permission of the President or in response to invitations from the international organizations of relevance to their mandates. Attendance by officials and costs thereof, will depend on the nature of the engagement.

Reply:

The Special Paper on the Roadmap for Eskom in a Reformed Electricity Supply Industry was published on 29 October 2019.

Reply:

Accordingly to the information received from Eskom

a) Eskom does not have specific functions that have been declared non-core. However, a general view of the business refers to the Generation, Transmission and Distribution businesses as core and critical, while functions such as Human Resources, Finance, Information Technology and similar functions as non-core. However, it has to be noted that even functions referred to as non-core are essential to the functioning of the business and will always be required by Eskom. Therefore the use of core and non-core business in classifying functions will mainly be referring to primary business operations and support functions respectively. The primary business operations mainly refers functions such as the design, engineering, construction, operations and maintenance of plants and supply of electricity to end users.

b) Based on the above definition of Eskom critical workforce segments, it is not possible to provide budget details.

c) As explained above, the non-core functions are required by the business to support the operations.

Reply:

According to the information received from Eskom

(1)(a) Eskom had 12 Chief Executives since 2009.

(2)(a)(i)(ii) and (2)(b) Table 1 below provides the nature of appointments of Eskom Chief Executive Officers and the period of each appointment

Table 1: List of Acting Chief Executive and Chief Executives since 2009

Name	Designation	Period	Nature of appointment
P J Maroga	Designate CE	01/02/2007 - 31/04/2007	Permanent
	Chief Executive	01/05/2007 - 30/11/2009
M Makwana	Acting CE	01/12/2009 - 30/06/2010	Non-executive Director
			Non-Permanent
B A Dames	Chief Executive	01/07/2010 - 31/03/2014	Permanent
M C Matjila	Board Member	28/06/2011 - 01/04/2014	Non-executive Director
	Acting CE	01/04/2014 - 30/09/2014	Non-permanent
	Board Member	01/10/2014 - 31/12/2014
T J Matona	Chief Executive	01/10/2014 - 31/05/2015	Permanent

Name	Designation	Period	Nature of appointment
Z Khoza	Interim CE	13/03/2015 - 19/04/2015	Non-executive Director
			Non-permanent
B Molefe	Seconded CE	20/04/2015 - 24/09/2015
	Chief Executive	25/09/2015 - 31/12/2016	Appointed on a 5 year contract
M M Koko	Interim CE	01/12/2016 - 21/06/2017	Permanent
J A Dladla	Acting CE	22/06/2017 - 04/10/2017	Permanent
S Maritz	Interim CE	06/10/2017 - 28/02/2018	Permanent
P S Hadebe	Interim CE	22/01/2018 - 31/05/2018	Interim
	Chief Executive	01/06/2018 - 31/07/2019	Appointed as a contractor
J A Mabuza	Acting CE	01/08/2019 -	Non-executive Director

(3) It is clear to the Department that the attrition rate of CEOs at Eskom has been extra-ordinarily high and is a concern. The appointment of a new CEO, is the beginning of stabilizing the leadership at Eskom.

Reply:

Accordingly to the information received from Eskom

(a)

Eskom would like to confirm that its relationship with the Daily Maverick is no different from its relationship with any other publication or media house. We categorically place on record that we do not have any special arrangements with any media house, including the Daily Maverick.

(b)

There is no media house or publication that consults or provides any communication services to Eskom, with the exception of reporting on our business operations.

Reply:

According to the information received from Transnet:

Transnet embarked on a five year tender for IT Data Services concluded in 2017 where Gijima was identified as the preferred bidder through an open tender process.

The Transnet Board at the time, decided to award the business to the second ranked bidder, however, after a court process, Transnet received a declaratory order in December 2018 to change its decision and award as per the outcome of the process to Gijima.

Following the declaratory order, Transnet has since engaged with Gijima to transition the contract. As part of the contractual process, the services are currently transitioning from T-Systems to Gijima as of the 1st of September 2019. The transition process has been without any interruptions to Transnet business. Currently Transnet is consuming services from Gijima with very minimal issues.

Transnet cannot comment on the statement regarding the 2011 payment as that transaction relates to the “Who am I Online” project under Department of Home Affairs.

Reply:

According to information received from Transnet SOC LTD:

No progress has been made to physically restore the line. Significant planning towards the restoration and re-opening is taking place. (a) A proposal from the private sector has been received and is currently in the final process of evaluation. The earliest time that the proposal can be fully supported and approved will be at the end of the first quarter of 2020. (b) The work towards the restoration will commence at the end of 2020 with initial operations, not on the full extent of the line, will be towards the end of 2021.

 

Reply:

(1) (a) None (b)(i) none (ii) none

(2) (a) Not applicable (b) not applicable

(3) Not applicable

Reply:

(a) The Department did not incur any costs during the inauguration of the President on 25 May 2019.

(i) No costs were incurred;

(ii) Not applicable

(b) The Department did not incur any costs during the State of the Nation Address held in Cape Town on 20 June 2019.

(i) No costs were incurred;

(ii) Not applicable

Reply:

According to the information received from Eskom

1) As at 19 September 2019, the total number of international governments and private companies to whom Eskom provides electricity is 10.

(2)(a) As at 19 September 2019, the total amount of outstanding payments to Eskom by the respective clients is R632 million.

(2)(b) There are three clients who have outstanding payments to Eskom and the reasons for these are displayed in the table below.

	Client	Outstanding Balance Rm	(2)(b) Reasons
1	ZESA Zimbabwe	R322 million	Zimbabwe has economic challenges due to political challenges which have led to it being unable to honour its debt obligations. Eskom and ZESA currently have a payment plan agreement for the settlement of the debt and ZESA is paying off the debt as per the agreement.
2	Electricidade de Mocambique (EDM)	R221 million	Eskom supplies EDM with standby power. The utility has financial constraints due to their generation mix which includes IPP’s which are contracted on a take-or-pay basis.
3	ZESCO Zambia	R89 million	ZESCO owes Eskom due to power supplied during the previous drought period. The country has economic challenges which have led to it being unable to honour its debt obligations. Eskom owes ZESCO for energy imbalance which arises out of managing the regional system. Eskom and ZESCO are currently concluding a payment plan agreement for the settlement of the debt.

(2)(c) All the monies owed to Eskom are not in dispute. Eskom’s clients acknowledge their debt and attribute economic challenges as well as financial constraints as the cause of their delays in settling the outstanding debt.

(3) These funds could assist minimally with Eskom’s cash flows.

(4) Eskom will ensure that future contracts are designed to avoid build-up of debt in future.

Reply:

According to the information received from Alexkor

Information submitted on behalf of Alexkor Head Office:

(1) (a) Security – None

(b) Cleaning – None

1. General workers – None

Information submitted on behalf of Alexkor /RMC JV:

(a) Security - 84 people

(b) Cleaning – Two people;

(c) General Workers – None;

(2) Current budget on the following are part of the staff compliment (permanent workers) as mentioned on PQ 586

(a) Security – None

(b) Cleaning – 2 (Office cleaners at Head Office)

1. General workers – 8 (at the mine)

Alexkor / RMC JV spends R1, 233,487.21 / month on Security Services (this include the portion the mining contractors pays);

Alexkor /RMC JV spends R 10 600.00/month on Cleaning Service

According to the information received from Denel:

1(a) 138 security

(b) 185 (cleaning)

(c) 32 (general worker personnel who work in buildings, facilities and other infrastructure

 

2 Security = R17 433 106.89 per annum

Cleaning = R13 517.92 per annum

General worker personnel = R3 106 365.35 per annum

According to the information received from Eskom

(1)(a)(b)(c)(i) Eskom generally contracts for a service and not necessary personnel; as a result Eskom does not have readily available records on the number of personnel employed through tenders obtained by their companies or third party service providers.

(2) Eskom is not able to provide a spent on personnel employed through tenders obtained by their companies or third party service providers. However, we provide total amounts that Eskom spent on security, cleaning and general worker services for the current financial year in the table below.

Financial Year 2019/20
Security	R225 874 543.32
Cleaning	R241 439 141.14
General Worker	R69 198 544.15
TOTAL	R 536 512 228.61

According to the information received from SAFCOL

1. (a) SAFCOL has 107 security personnel employed through tenders obtained by their respective companies.

(b) SAFCOL has no cleaning personnel employed through tenders. All cleaning personnel are permanently employed by SAFCOL. However, SAFCOL incurred expenses for cleaning materials required through tenders.

(c) SAFCOL has no general worker personnel employed through tenders. All general worker personnel are permanently employed by SAFCOL.

(2) SAFCOL incurred expenses for security personnel employed through tenders obtained by their respective companies as per the table below:

Actual Spent as at 31 March 2019
Services	Amounts
Security personnel	R10 019 283,59

SAFCOL does not have cleaning and general worker personnel employed through tenders. However, SAFCOL incurred expenses for cleaning materials as per the table below:

Actual Spent as at 31 March 2019
Services	Amounts
Materials for cleaning services	R1 458 793,41

According to the information received from South African Express:

1(a) SA Express Airways’ cleaning services and security services are outsourced.

(b) SA Express Airways facilities are taken care of in-house (5 incumbents employed in the facilities department)

(c) None

2. SA Express pays an approximate amount of R67 000.00 per month towards cleaning, facilities and general workers. SA Express pays an approximate amount of R20 000.00 per month towards security services.

According to the information received from South African Airways:

1 SAA utilizes the below number of staff obtained through a tender process from third party service providers;

Function	Number of personnel
(a) Security (Reshebile Protection and Aviation Services)	679
(b) Cleaning and General services (Morena Corporate Services)	368

2 SAA spends (for all stations and premises in SA), the following on the specified services:

Function	Annual Spend
(a) Security	R100 564 693.00
(b) Cleaning and General services	R 25 560 753.00

According to the information received from Transnet

Transnet’s response attached as Annexure A.