Questions & Replies: Public Enterprises

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2012-12-31

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Reply received: December 2012

QUESTION NO.: 3434

DATE OF PUBLICATION: 23 November 2012

3434. Adv A de W Alberts (FF Plus) to ask the Minister of Public Enterprises:

(1) Whether it is in pursuance of the Government's (a) policy of affirmative action in public enterprises and (b) target of representativeness that the African race groups are over-represented in public enterprises, in that the employment rate of the specified race group is above its percentage of democratic representation; if not, what the position in this regard is; if so,

(2) whether such a policy is (a) based on any constitutional or statutory grounds and (b) not discriminatory against minority groups; if not, what steps does she intend to take to manage the situation; if so, what are the relevant details? NW4354E

Reply:

(1) Yes, Africans are designated group as defined by Chapter 1 of the Employment Equity Act No 55 of 1998 (EE ACT). It is in pursuance of achieving the intention as prescribed in Chapter 3 of the EE Act, namely the implementation of Affirmative Action measures to redress the discriminatory practices of the past and more importantly, promote the implementation of Chapter 2 sub-section 9 of the Constitution Act 108 of 1996 of the Republic of South Africa, namely the Right to Equality, that this designated group is 2% higher than the national industry targets set for national Departments based on the national demographic for race groups currently in South Africa.

(2)(a) As indicated above, the practice in the Department is solely based on the prescriptive provisions of the Constitution and Employment Equity Act as alluded to above.

(b) Regarding its impact relating to minority groups, the practice is aligned to the provisions of item (9)(5) of Chapter 2 of the Constitution and item (6)(2). Chapter 2 of the Employment Equity Act also provides fair and justifiable discrimination.

Reply received: December 2012

QUESTION NO.: 3412

DATE OF PUBLICATION: 23 November 2012

3412. Mr K S Mubu (DA) to ask the Minister of Public Enterprises:

Whether (a) his department and/or (b) any entity reporting to him sponsored any (i) event and (ii) promotion hosted by The New Age newspaper since its establishment; if so, in each case, (aa) what was the nature of the event or promotion, (bb) on which date was it held, (cc) what amount was paid, (dd) for what purpose, (ee) from which budget were the funds derived, (ff) what were the expected benefits to his department and (gg) what actual benefits were derived from the sponsorship? NW4327E

Reply:

(a-b) The Department of Public Enterprises and the following State Owned Companies (SOC) Alexkor, Broadband Infraco, SAFCOL, Denel, SA Express and South African Airways have not sponsored any event or promotion hosted by The New Age (TNA) newspaper since its inception. However, Eskom, Denel and Transnet have sponsored events hosted by TNA newspaper. The details are listed below.

According to Eskom:

(b)(i-ii)(aa) Yes, Eskom had a sponsorship agreement with the TNA newspaper to sponsor 6 breakfast sessions during the 2012/13 financial year.

(b)(i-ii)(bb) The dates on which the breakfast sessions were held:

16 April 2012; 14 May 2012; 28 May 2012; 31 July 2012; 3 September 2012; and 21 October 2012.

(b)(cc) The sponsorship package was for 6 breakfast sessions at a cost of R1 197 609.79 per breakfast. The total amount is R7 185 658 74.

(b)(dd) The amount paid covered a package which included the following:

• SABC 2 Morning live coverage of the event from 07:00 to 09:00;

• Radio slots on SABC promoting the events;

• Advertisements in TNA newspaper;

• Two free tables of 10 for Eskom Stakeholders;

• Two seats at the main table with the guest speaker;

• Branding at the events; and

• Sponsors speech before the key note speaker

(b)(ee)The events were paid from the approved 49M campaign budget as all the breakfasts were branded 49M.

(b)(ff-gg) The main benefit for Eskom and the Department of Public Enterprises was brand awareness and highlighting the need to conserve electricity. Furthermore, the breakfasts created opportunities for engagement between Government and the private sector.

According to Transnet:

(b)(i-ii) Yes, Transnet participates in the TNA newspaper /SABC business briefing sessions.

(b)(i-ii)(aa) The TNA newspaper /SABC business briefings are televised on SABC 2 Morning Live show. Guest speakers who have taken part include leading public figures such as President Jacob Zuma, the Leader of the Democratic Alliance and sports personalities (soccer and cricket).

(b)(i-ii)(bb) Dates on which the company participated are as follows:

• 18 November 2011 Johannesburg, Sandton Convention Centre;

• 05 December 2011 - Johannesburg, Sandton Convention Centre;

• 12 January 2012 – Johannesburg, Sandton Convention Centre;

• 10 February 2012 – Cape Town, Market Hall;

• 16 March 2012 – Port Elizabeth, Eastern Cape Training Centre;

• 12 April 2012 – Johannesburg, Sandton Convention Centre;

• 23 April 2012 – Johannesburg, Sandton Convention Centre;

• 21 May 2012 – Johannesburg, Sandton Convention Centre;

• 11 June 2012 – Johannesburg, Sandton Convention Centre;

• 06 July 2012 – Johannesburg, Sandton Convention Centre;

• 06 August 2012 – Johannesburg, Sandton Convention Centre;

• 16 August 2012 – Johannesburg, Sandton Convention Centre;

• 11 September 2012 – Johannesburg, Sandton Convention Centre;

• 21 September 2012 – Johannesburg, Monte Casino;

• 04 October 2012 – Johannesburg, Sandton Convention Centre;

• 11 October 2012 – Midrand, Gallagher Convention Centre;

• 06 November 2012 – Johannesburg, Monte Casino; and

• 13 November 2012 – Johannesburg, Monte Casino.

(b)(i-ii)(cc and ee) The amount is R17 499 970.00 (to date). The funds were derived from branding or advertising budget.

(b)(i-ii)(dd)(ff-gg) The purpose of Transnet's participation, the expected benefits as well as actual benefits are as follows:

• Brand building;

• Brand exposure on the SABC TV – Morning Live show;

• Advertising;

• An opportunity to send key messages to South Africans about Transnet;

• To interact and engage leadership from various industries; and

• To drive and encourage thought leadership.

Reply received: December 2012

QUESTION NO.: 3319

DATE OF PUBLICATION: 23 November 2012

3319. Mr P D Mbhele (Cope) to ask the Minister of Public Enterprises:

Whether Transnet's procurement of 1 064 locomotives is on schedule; if not, what is the position in this regard; if so, how will the procurement of such locomotives benefit the people? NW4210E

Reply:

The acquisition of 599 electric locomotives as well as 465 diesel locomotives (the 1064 locomotive tender) is on track and Transnet expects to receive bids within the first six months of 2013.

The procurement of the locomotives will benefit people as follows:

· It is envisaged that the over-whelming majority of these locomotives will be produced in South Africa;

· The winning bidder(s) will be required to either set up a manufacturing plant in South Africa or partner with local businesses with existing facilities;

· Over the course of the procurement, it is expected that a range of qualitatively new industrial capabilities relevant to the locomotive supply chain will be developed in first, second and third tier national suppliers;

· These suppliers will benefit from significant skills transfers as well as intellectual property transfers; and

This will significantly enhance the contribution of the procurement to national GDP and job creation.

Reply received: December 2012

QUESTION NO.: 3314

DATE OF PUBLICATION: 23 November 2012

3314. Mr P D Mbhele (Cope) to ask the Minister of Public Enterprises:

(1) Whether Transnet has awarded a contract to a certain company (name furnished) for the supply of 95 new electric locomotives; if not, what is the position in this regard; if so,

(2) Whether the contract includes adjustments to local conditions and cultural climate; if not, why not; if so, what are the relevant details;

(3) Whether there are any measures in place to avoid any irregular conduct in the process; if not, why not; if so, what (a) measures and (b) are the further relevant details? NW4202E

Reply:

(1) Yes. Transnet has awarded a contract for the supply of 95 electrical locomotives. The successful tenderer is a consortium led by Chinese manufacturer, CSR Zhuzhou Electric Locomotive (CSR). The bidder is a joint venture between CSR which has a 70% shareholding and Matsetse Basadi which owns the remainder.

(2) The contract requires CSR to achieve a supplier development target of 60.5% of contract value. The parties committed to produce the majority of the locomotives locally. The first 10 locomotives will be assembled in CSR's factories in China, while the remainder will be made in South Africa. In line with Transnet's commitment to the Competitive Supplier Development Programme, localisation; sustainability and skills development had the highest weighting within the tender evaluation stage.

(3) The award to CSR followed Transnet's stringent procurement governance processes that have been developed and implemented. These processes include but are not limited to the high value tender process which requires Transnet Internal Audit (outsourced to Ernst & Young) to monitor and assess the evaluation process.

Reply received: December 2012

QUESTION NO.: 3285

DATE OF PUBLICATION: 16 November 2012

3285. Mrs J D Kilian (Cope) to ask the Minister of Public Enterprises:

(1) With reference to (a) the sixth report of the Committee on Public Accounts of the National Assembly on the annual financial statements of Transnet, (b) the report of the independent auditors on the 2010-11 financial year and, in particular, (c) the finding that irregular expenditure of R8,3 billion arose as a result of noncompliance with group policies and procedures, (i) when and (ii) by whom were the nature and extent of noncompliance discovered and reported to the Executive;

(2) whether he can provide relevant details and reasons for noncompliance with regard to contracts for the supply of (a)(i) engineering, (ii) procurement and (iii) contract management services on capital projects, (b) 32 rubber-tyred gantry cranes, (c) accommodation of staff and (d) rails; if not, what is the position in this regard; if so, what are the relevant details;

(3) whether any corrective or disciplinary action has been taken against executives of the relevant divisions of Transnet; if not, why not; if so, what are the relevant details? NW4176E

Reply:

(1)(a)(i) All issues reported in the 2010/11 Annual Financial Statements in terms of section 55(2)(b) were identified (after an extensive PFMA awareness campaign) and reported to the executive in the 2010/11 financial year; these items related to contracts concluded between 2005 and 2011.

(1)(a)(ii) Management identified the items reported through the PFMA governance and reporting process.

(1)(b-c)(i-ii) See (1)(a)(i) above.

(2)(a)(i) Following an open tender process for the procurement of Engineering, Procurement, and Contract Management (EPCM) services, certain additional criteria not specified in the original tender documentation was used to evaluate bids without communicating the modified criteria to all bidders as required by the internal procurement policy and procedures of Transnet. In another instance the approval to confine a tender to a specific contractor was not approved by the delegated authority.

(2)(a)(ii-iii) See (2)(a)(i) above.

(2)(b) An official signed a contract on behalf of Transnet without the appropriate delegated authority.

(2)(c) Payments were made to numerous suppliers across the country for staff accommodation without following a process to award the business to these suppliers as required by the Transnet supply chain policy.

(2)(d) Prior to the expiry of a contract between Transnet and its supplier, the parties negotiated a new contract rather than extending the existing contract due to certain unfavourable conditions in the existing contract; and a new contract with lower prices and favourable terms was negotiated but not signed by Transnet. There was however, an oversight by the negotiating team to obtain the necessary approvals from the delegated authority to proceed with the confinement of the business and awarding of the contract to the supplier as required by the Transnet supply chain policy.

(3) In relation to (2)(a) and (2)(b) the employees had left the employ of Transnet prior to identification of the matter.

In the case of (2)(c) compliance would have resulted in business interruption and as a result Transnet management does not believe that disciplinary action is required.

In the case of (2)(d) an investigation was done on this matter and closed out with the Transnet Board of Directors. The individual responsible had been dismissed from the employment of Transnet prior to identification of the matter.

Reply received: December 2012

QUESTION NO.: 3270

DATE OF PUBLICATION: 16 November 2012

3270. Mr T D Lee (DA) to ask the Minister of Public Enterprises:

(1) Whether (a) his department or (b) any entity reporting to him, placed any advertisements in The New Age since the inception of the newspaper up until the most recent date for which information is available; if not, in each case, what is the position in this regard; if so, (i) which entity placed the advertisements, (ii) on what date was each advertisement placed, (iii) what was the nature of each advertisement and (iv) what amount was spent on each advertisement;

(2) whether any of these advertisements were placed through the Government Communication and Information System (GCIS); if not, what is the position in this regard; if so, what are the relevant details of the advertisements placed through the GCIS;

(3) whether an independent analysis was conducted by his department prior to placing advertisements to ascertain whether The New Age is read by the intended target market; if not, why not; if so, (a) who conducted the analysis and (b) what were the main (i) findings and (ii) recommendations of said analysis;

(4) whether any independent studies of said advertisements were conducted to ascertain whether they were effective within the relevant target market; if not, why not; if so, (a) who conducted the analysis and (b) what were the main (i) findings and (ii) recommendations of said analysis? NW4159E

Reply:

(1-4) With the exception of Eskom, Transnet and South African Airways, neither the Department, nor the other State Owned Companies (SOCs) reporting to it placed advertisements with The New Age newspaper (TNA), or through the Government Communication and Information System (GCIS). However, it must be noted that SOCs place advertisements in all other newspapers.

(1)(b)(i-iv) Below are the responses by Eskom, SAA and Transnet.

ESKOM: The advertisements, dates and costs are reflected in Tables (1) and (2) (Annexure A).

(1)(b)(ii-iv) Eskom provided the following information:

· 49M and Integrated Demand Management (IDM) – Addresses energy efficiency;

· Corporate related advertisements - highlight Eskom's role in society;

· Energy Losses Management Programme - highlights the dangers of electricity theft and illegal connections; and

· Eskom Development Foundation - highlights charity undertaken by Eskom.

(2) No, Eskom appointed a media buying agency, The Media Shop (Pty) Ltd, which placed the advertisements on behalf of the SOC.

(3)(a) When TNA was launched, Eskom could not do an analysis on the paper, as it was not audited by Audit Bureau of Circulations of South Africa (ABC) or by All Media Products Survey (AMPS). Since then the newspaper has been audited by AMPS.

(3)(b)(i) The audit confirmed that the TNA reached Eskom's intended target market and that they currently have 39 000 readers.

(3)(b)(ii) An independent analysis was not conducted.

(4)(a-b)(i-ii) No, as Eskom's advertising is not for direct response.

SAA

(1)(b)(i-iv) South African Airways' Marketing Department has placed advertisements in TNA. The advertisements were placed for the period 1 January to 16 November 2012. Specific dates and amounts are included (Annexure B).

(2) SAA secures advertising space directly with newspapers and not through GCIS.

(3)(a-b)(i-ii) Readily available statistics based on AMPS (Audience Measurement Survey) guides SAA in the selection of newspapers to advertise.

(4)(a-b)(i-ii) SAA's proof of effectiveness, post placements (not only in the TNA but also on radio and other media platforms) is measured by the effectiveness linked to revenue generated on advertised fares.

Transnet:

(1)(b)(i) Transnet placed advertisements in TNA and the details are attached (Annexure C).

(1)(b)(ii-iv) See Annexure C.

(2) No, Transnet does not utilise GCIS.

3)(b)(ii) An independent analysis was not conducted.

(4)(a-b)(i-ii) No, as Transnet's advertising is not for direct response.

Reply received: December 2012

QUESTION NO.: 3238

DATE OF PUBLICATION: 16 November 2012

3238. Mr M Swart (DA) to ask the Minister of Public Enterprises:

(1) What is the total number of aircraft currently (a) owned and (b) hired by South African Airways (SAA) in order to meet their operational requirements;

(2) how many staff members are currently employed by SAA on a (a) temporary and (b) permanent basis to ensure the smooth running of the airline? NW4126E

Reply:

According to SA Airways (SAA):

(1) SAA's current fleet comprise of 53 aircraft.

(1)(a) 7 aircraft are owned by SAA;

(1)(b) 46 aircraft are operating leases which expire between 2015 and 2021.

(2) (a-b) As at 31 October 2012, SAA employed 829 Fixed Term Contractors and 8130 Permanent staff members.

Reply received: December 2012

QUESTION NO.: 3142

DATE OF PUBLICATION: 09 November 2012

3142. Mr G R Morgan (DA) to ask the Minister of Public Enterprises:

(1) Whether Eskom is currently procuring coal from any mines without water licences; if not, how was this conclusion reached; if so, what are the (a) names and (b) locations of these mines;

(2) Whether anything is being done to rectify the situation; if not, why not; if so, what are the relevant details? NW3980E

Reply:

According to Eskom:

(1) Eskom is currently procuring coal from 21 mines that have submitted water use licence applications which are awaiting approval by the Department of Water Affairs.

(1)(a-b) The power stations for which the coal is being procured are regarded as national key points and accordingly the names and locations of the mines cannot be made public.

(2) Eskom has conducted its own internal due diligence and site evaluations on the related water management risks before contracting with these suppliers. Eskom has engaged with the Department of Water Affairs to expedite the backlog of water use licences for those mines contracted with Eskom and will continue to do so until all mines are issued with water use licences.

Reply received: December 2012

QUESTION NO.: 3135

DATE OF PUBLICATION: 09 November 2012

3135. Mrs J D Kilian (Cope) to ask the Minister of Public Enterprises:

(1)With reference to the (a) sixth report of the Committee on Public Accounts on the Annual Financial Statements of Transnet and (b) report of the independent auditors on the 2010-11 financial year, dated 23 May 2012, (i) who deemed the transaction of R36 million on the procurement of a pneumatic ship unloader to be a fruitless and wasteful expenditure and (ii) what were the reasons;

(2) whether a detailed needs analysis was done before proceeding with the transaction; if not, why not; if so, (a) by whom was such analysis conducted, (b) to whom was it submitted for approval, (c) when and (d) by whom was the decision taken to proceed with the purchase, (e) what tender processes were followed, (f) who was the successful tenderer and (g) when was the purchase order issued;

(3) whether the pneumatic ship unloader was delivered; if not, why not; if so, (a) when and (b) to which harbour was it delivered;

(4) whether any disciplinary action was taken against persons responsible for fruitless and wasteful expenditure; if not, why not; if so, (a) when did disciplinary action commence, (b) when is it expected to be concluded and (c) what measures have been put in place to ensure due diligence and prudent decision-making that would prevent a similar situation from occurring in the future? NW3972E

Reply:

According to Transnet:

(1)(a)(i) The Board of Transnet concurred with Management and the external auditors' assessment that the expenditure falls within the definition of fruitless and wasteful expenditure in terms of the Public Finance Management Act (PFMA).

(1)(a)(ii) No benefit was derived by Transnet from the repair of the Hitachi Ship un-loader. The repaired boom could not be installed as the un-loader was structurally unsound, posing a safety risk to Transnet operations.

(1)(b)(i-ii) See (1)(a)(i) above.

(2)(a) Yes, however, a boom failure constituted an emergency situation requiring the procurement of a pneumatic ship unloader. Immediately following the failure there was a meeting on the ground where the needs analysis was discussed. The analysis took into consideration the business critical need to service a key client and minimize operational penalties for which Transnet was liable for.

(2)(b) The decision to refurbish the telescopic boom was made through the Transnet Port Terminal (TPT) Capital Investment Committee (CAPIC). The Committee decision to refurbish the telescopic boom was based on the critical operational need for the machine to operate optimally and deliver import product to a key client. The reduced delivery of the product to the client (due to the boom collapse) resulted in TPT attracting penalties against the client contract.

(2)(c) The TPT CAPIC meeting was held on 5 March 2009.

(2)(d) TPT CAPIC made the decision to refurbish the telescopic boom was based on the critical operational need for the machine to operate optimally and deliver import product to a key client.

(2)(e) The procurement of the refurbishment work was done through a closed tender issued to two local suppliers being Genmac and Dormac. This was done in line with the Transnet procurement procedures.

(2)(f) Genmac was appointed as the successful tenderer after the evaluation of the Tender through the TCP Acquisition Council.

(2)(g) A contract was concluded with Genmac for the refurbishment project on 16 April 2009.

(3)(a) A pneumatic ship unloader was not delivered as the ship unloader was refurbished.

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(3)(b) The Port of Richard's Bay.

(4)(a) The disciplinary processes which included an internal audit review of the facts and role of individuals involved have commenced during November 2011.

(4)(b) It is expected to be concluded by 31 January 2013.

(4)(c) Following the Hitachi Boom repair, Transnet has implemented preventative controls against all the issues identified in order to prevent a repeat of this occurrence. However, Transnet still awaits the results of the internal audit review to identify specific control weaknesses that led to this incident and further preventative controls will implemented in this regard.

Reply received: December 2012

QUESTION NO.: 3089

DATE OF PUBLICATION: 02 November 2012

3089. Mrs P C Duncan (DA) to ask the Minister of Public Enterprises:

(1) Whether his department is currently subscribed to The New Age (TNA) newspaper; if so, (a) how many subscriptions does his department have, (b) when was each subscription initiated, (c) what has been the annual subscription fee for each specified subscription since it was initiated and (d) what is the exact purpose of each subscription;

(2) Whether a discount was negotiated for any of the specified subscriptions; if so, (a) for which specified subscriptions and (b) what discount in each case;

(3) Whether his department has mass-purchased the TNA on an ad hoc basis since the inception of the newspaper; if so, (a) on what dates, (b) how many copies in each case and (c) why were the papers purchased in each case;

(4) Whether (a) the publishers of the TNA and (b) any other entity donated copies of the paper to (i) his department and (ii) any entity reporting to him; if so, in each case, (aa) which entity donated the papers, (bb) to which entity were they donated and (cc) how many copies were donated? NW3918E

Reply:

(1-3) No, the Department of Public Enterprises (DPE) does not subscribe directly with media houses for the supply of newspapers, but uses an agency.

(4)The publishers of The New Age did not donate copies of the newspapers to DPE or its State Owned Companies that report to it.

Reply received: December 2012

QUESTION NO.: 3076

DATE OF PUBLICATION: 02 November 2012

3076. Mr D C Smiles (DA) to ask the Minister of Public Enterprises:

Whether it is the intention of Transnet Freight Rail to concession any railway lines in (a) Nelson Mandela Bay and/or (b) the Eastern Cape; if not, why not; if so, (i) which lines will be commissioned and (ii) what are the relevant details, including when the concession(s) will occur? NW3901E

Reply:

According to Transnet:

(a-b) Yes, Transnet Freight Rail intends to concession the narrow gauge railway lines in the Nelson Mandela Bay Metropolitan Area and the Eastern Cape.

(b)(i) The following lines in the Eastern Cape have been earmarked for concession:

• Umtata Amabele line;

• Sterkstroom Maclear;

• Stormberg Rossmead lines;

• Dreunberg Aliwal North to Barkley East lines;

• Rossmead Klipplaat line;

• Alicedale Grahamstown Port Alfred line; and

• Barkley Bridge Alexandria line.

(b)(ii) The timelines for these concessions will be an outcome of the engagement processes with stakeholders.

Reply received: December 2012

QUESTION NO.: 3048

DATE OF PUBLICATION: 02 November 2012

3048. Mr P J Groenewald (FF Plus) to ask the Minister of Public Enterprises:

(1) How many (a) people were/are employed by the SA Airways (SAA) (i) in (aa) 2009, (bb) 2010 and (cc) 2011 and (ii) since 1 January 2012, (b) of these people were/are (i) pilots and (ii) flight attendants and (c) airplanes of the SAA were/are (i) operational and (ii) not operational in each of the specified years;

(2) Whether he will make a statement on the matter?

NW3867E

Reply:

According to SA Airways (SAA):

The table below indicates the staff employed by SA Airways from 2009 to date.

(1)(a)(i)(aa) How many people were/are employed by the SA Airways (SAA) (i) in (aa) 2009?

(bb) 2010

(cc) 2011

(ii) Since 1 January 2012 to date

7 406 (and 320 Fixed Term Contractors)

7 411 (and 1 486 Fixed Term Contractors)

7 478 (and 1 730 Fixed Term Contractors)

8 132 (and 861 Fixed Term Contractors)

(b)(i) Pilots at SAA

2009

2010

2011

Since 1 January 2012 to date

785

772

794

793

(b)(ii) Flight attendants

2009

2010

2011

Since 1 January 2012 to date

1522

1498

1719

1882

(c) Airplanes at SAA

2009

2010

2011

Since 1 January 2012 to date

54

54

53

54

(c)(i) Operational Airplanes at SAA

2009

2010

2011

Since 1 January 2012 to date

54

53

53

54

(c)(ii) Non-operational* Airplanes at SAA

2009

2010

2011

Since 1 January 2012 to date

0

1

0

0

* Non-operational = parked aircraft that are not in operation on any route.

(2) No statement will be made.

Reply received: November 2012

QUESTION NO.: 3002

DATE OF PUBLICATION: 26 October 2012

3002. Mrs S V Kalyan (DA) to as Minister of Public Enterprises:

1.Whether the accounting officer submitted the annual financial statements for the financial year ending 31 March 2012 to the Minister by the 31st August 2012 if not, why not, if so, on which date were they submitted; if not; why not;

2. Whether the statements were submitted for tabling by 30 September 2012; if not, why not; if so, on which date where they submitted?

Reply:

(1) Yes, the Annual Report was printed and distributed by 31 August 2012.

(2) Yes, they were submitted for tabling on 13 September 2012 in Parliament.

Reply received: December 2012

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QUESTION NO.: 2941

DATE OF PUBLICATION: 26 October 2012

2941. Mr M A Nhlanhla (Cope) to ask the Minister of Public Enterprises:

Whether his department has put measures in place to incentivize the retention of pilots to avoid losing them: if not, what is the position in this regard; if so, what are the relevant details? NW3698E

Reply:

No, it is not the responsibility of the Department to put measures to incentivize the retention of pilots.

QUESTION NO.: 2941

DATE OF PUBLICATION: 26 October 2012

2941. Mr M A Nhlanhla (Cope) to ask the Minister of Public Enterprises:

Whether his department has put measures in place to incentivize the retention of pilots to avoid losing them: if not, what is the position in this regard; if so, what are the relevant details? NW3698E

Reply:

No, it is not the responsibility of the Department to put measures to incentivize the retention of pilots.

Reply received: December 2012

QUESTION NO.: 2938

DATE OF PUBLICATION: 26 October 2012

2938. Mr M A Nhanha (COPE) to ask the Minister of Public Enterprises:

(1) Whether the tender awarded to Matsetse Basadi joint venture with CSR ZhuZhu of China is intended to create local employment, skills development and the transfer of skills in the next two years of the contract; if not why not; if so, how many locomotives (a) are destined for delivery as complete built units from China and (b) will be assembled locally;

(2) Whether he has found that such short-lived contract terminating in September 2014 is economically viable for such huge contract in all aspects of empowerment and skills transfer; if not, what is the position in this regard; if so, what are the relevant details;

(3)(a) How much does his department intend spending during the duration of the contract and (b) what are the names of the local shareholders of the joint ventures? NW3695E

Reply:

According to Transnet the tender awardedto Matsetse Basadi is a joint venture with CSR Zhuzhou electric locomotive of China which will contribute to the creation of local employment, skills development and the transfer of skills.

(1)(a) Seven (7) locomotives will be assembled in China.

(1)(b) 88 locomotives will be assembled in South Africa by Transnet Rail Engineering (TRE).

(2) The 2 year contract is due to Transnet's urgent requirement for the locomotives. Although the period may be deemed to be short, the long term vision is to ensure that the SA economy benefits from the following:

• TRE being the local assembly partner to CSR Zhuzhou;

• Build capacity at TRE to assemble electric locomotives;

• Build capacity at TRE to cater for planned maintenance and repairs required

during the life of the locomotives;

• Sourcing and repair of components from 'downstream' local suppliers; and

• Increase the possibility of exporting these locomotives on the Continent and the

rest of the world.

(3)(a) None.

(3)(b) The names of the local shareholders of the Matsetse Basadi Consortium are the following:

• Basi Dirang Systems

• Matsetse Industrial Services

• Matla A Batho Community Trust

Reply received: November 2012

QUESTION NO.: 2924

DATE OF PUBLICATION: 19 October 2012

2924. Mr L Ramatlakane (Cope) to ask the Minister of Public Enterprises:

(1)(a) Which statutory provisions did he rely on when he appointed SA Airways (SAA) board members, (b) what criteria was used to select the current SAA board members and (c) what experience does each of the candidates bring which will add value to the airline in light of the fact that it has been running at a loss;

(2) Whether the National Assembly was consulted in respect of the appointment of the current SAA board members; if not, why not; if so, what are the relevant details;

(3) How does he justify the R5 billion guarantee granted by government to SAA before it has (a) appointed a chief executive officer (CEO) and (b) developed an approved turnaround strategy? NW3606E

Reply:

(1) (a-b) South African Airways' (SAA) Memorandum of Incorporation (MOI) provide for a minimum of three (3) and a maximum of sixteen (16) Directors on the Board. The previous Board composition consisted of fourteen (14) Directors on the SAA Board of which twelve (12) are Non-Executive Directors and two (2) are Executive Directors. The term of office of nine (9) Non-Executive Directors of that Board was due to expire at the 2012 Annual General Meeting.

In terms of company law, the rotation, appointment and/or reappointment of Directors is a prerogative of the Shareholder and is subject to annual review. Consequently, the Department recommended to Cabinet the appointment of new nominees, including a new Chairperson, to the Board of Directors. The decision to rotate the Directors was informed, by amongst other things, performance against the agreed Compact targets as well as the need and urgency to turn the airline around. The final decision on the board composition is a culmination of months of intense screening and consultation with Cabinet.

SAA is an international airline with the immediate priority on restructuring, building its balance sheet as well as cost compression to enable routes to be profitable. Therefore, the Board Directors requires a complement of requisite competencies (skills, experience, expertise, and knowledge) and qualifications to enable the company to effectively deliver on its mandate.

To address the skills gap identified, the Department recommended that the SAA Board be strengthened in the areas of, amongst others, business strategy, financial accounting, aviation, transport policy, legal and marketing. In this regard it was necessary to rotate some of the current Non-Executive Directors as their term of office was due to expire at the Annual General Meeting (AGM) To foster continuity of institutional memory and expertise, three (3) Non-Executive Directors, namely; Ms Duduzile Myeni, Ms Yakhe Kwinana and Advocate Lindi Nkosi-Thomas were recommended for re-appointment to the Board.

(c) The annexure enclosed provides an overview of the skills, and qualifications of the SAA Board.

(2) As indicated above, the appointment of the Board is a prerogative of the Shareholder and in the case of SAA, the Executive Authority responsible for the oversight of the State Owned Company (SOC). Accordingly, consultation with the National Assembly is not a legal requirement.

(3) A guarantee was required in order for the SAA's auditors to sign off the 2011/12 financial statements as a going concern and to address the liquidity challenges that airline was facing. This guarantee was granted after extensive negotiations and consultations with National Treasury. Addressing the going concern status was therefore a separate matter and cannot be depend on the need to appoint a new CEO. However, both issues are the immediate priorities of the Board for the next few months.

Reply received: October 2012

QUESTION NO.: 2862

DATE OF PUBLICATION: 19 October 2012

2862. Mr J F Smalle (DA) to ask the Minister of Public Enterprises:

(1) How many power stations are in South Africa, (b) what are their names, (c) where are they located, (d) what are the outputs and (e) how many turbines are operational at each power station;

(2) with reference to each power station, (a) how many times were turbines tripped (i) in the (aa) 2009-10, (bb) 2010-11 and (cc) 2011-12 financial years and (ii) since 1 April 2012 and (b) what was the total amount of kilowatt hours lost? NW3536E

Reply:

According to Eskom:

Number of power stations that are in South Africa and those that had automatic grid separations from 2009 to 2012 is listed below:

(1) Table 1 (attached) sets out Eskom's Power Stations that are in commercial operation.

(2) Table 2 (attached) sets out the required information. Across the fleet of Eskom power stations, the total energy losses due to unplanned automatic grid separations (i.e. trips which resulted in electricity not being supplied to the national grid ) over the past three financial years represents an average energy loss of 0.70% of the energy that can be supplied by Eskom's fleet of power stations.

Reply received: October 2012

QUESTION NO.: 2708

DATE OF PUBLICATION: 21 September 2012

2708. Dr D T George (DA) to ask the Minister of Public Enterprises:

Whether his department has awarded any contracts to a certain company (name furnished) since its establishment in 1996; if so, in each case, (a) when was the contract awarded and (b) what was the (i) nature of the contract and (ii) total accumulative value of the tender? NW3326E

Reply:

(a-b)(i-ii) The Department of Public Enterprises has not awarded any contracts to the company referred to.

Reply received: October 2012

QUESTION NO.: 2623

DATE OF PUBLICATION: 21 September 2012

2623. Mr N J J van R Koornhof (Cope) to ask the Minister of Public Enterprises:

(a) Who are the shareholders of (i) SA Airlink and (ii) SA Express and (b) what percentage of the shares does each shareholder hold? NW3235E

Reply:

(a-b)(i) SA Airlink (Pty) Ltd is a privately owned entity and SAA owns 2.952 % of the shares of SA Airlink (Pty) Ltd.

(a-b)(ii) South African Express is 100% owned by Government.

Reply received: October 2012

QUESTION NO.: 2577

DATE OF PUBLICATION: 14 September 2012

2577. Mrs N W A Michael (DA) to ask the Minister of Public Enterprises:

Whether (a) his department and (b) any of the state-owned entities reporting to him have made any social responsibility contributions in the 2011-12 financial year; if not, what is the position in this regard; if so, (i) to which (aa) initiative and/or (bb) organisation were these contributions made and (ii) what was the (aa) amount and (bb) purpose of the contribution in each case? NW3185E

Reply:

(a)(i)(aa-bb)(ii)(aa-bb) The Department did not make any social responsibility contributions in the 2011/12 financial year.

Alexkor

(b)(i)(aa-bb)(ii)(aa-bb) According to Alexkor, it has contributed R3.4 million to the transportation of employees, meals, cleaning services, ad-hoc donations, community welfare contributions, HIV/Aids and educational assistance to schools in the Richtersveld and Namaqualand areas.

Broadband Infraco

(b)(i)(aa-bb)(ii)(aa-bb) Broadband Infraco did not have any corporate social investment (CSI) initiatives in place for the 2011/12 financial year. Management is in the process of developing a CSR Strategy.

Denel

(b)(i)(aa-bb)(ii)(aa-bb) According to Denel, it has contributed an amount of R3 003 690 to various projects including mathematics and science support, payment of studies and accommodation, educational tours, community home maintenance, Denel Aviation Super Flyer programme, a regional competition and t-shirts for learners and Denel Aviation.

Eskom:

(b)(i)(aa-bb)(ii)(aa-bb) According to Eskom, it has contributed R87 884 087.96 to various projects such as Business Incubators, an Energy & Environmental Programme, Enterprise Development, Infrastructure Development, Education Support and many more. Eskom Development Foundation NPC incorporated (RSA) is the vehicle through which Eskom Holdings SOC Limited (Eskom) channels its corporate social investment. The social investment initiatives are executed through grants and donations.

SAFCOL

(b)(i)(aa-bb)(ii)(aa-bb) According to SAFCOL, it has contributed R8 102 632 to various projects. SAFCOL annually makes social responsibility contributions through its Socio Economic Development Division which focuses on the socio-economic development of communities adjacent to its operations.

All contributions are channelled through the Joint Community Forums (JCFs) in communities adjacent to SAFCOL/KLF operations, where 11 social compacts have been signed. Together with the JCF committee members, community needs are identified and prioritised based on the availability of resources.

The following projects were implemented in the 2011/12 financial year:

· Constructions of educational facilities and provision of support;

· Skills development and training;

· Establishment of a library (Computer Information Centre) facilities;

· Undertaking awareness and educational campaigns;

· Assistance with health care facilities and support;

· Establishment of community infrastructure and recreation and sport;

· Establishment of gardening for food production facility;

· Provision of agricultural support; and

· Other infrastructure e.g. boreholes, etc.

SAA

(b)(i)(aa-bb)(ii)(aa-bb) According to SA Airways, it has contributed R149 802.00 to various projects including National Parks for their Environmental take a Girl-Child to Work Day, learners were flown to Johannesburg from Durban Girls High, Joint Aviation Awareness Programme with flights for young mathematics and science learners to visit SAA Technical facilities at Airways Park, Johannesburg, Shalindra Baros with sponsored tickets for medical relief, Nelson Mandela Children's Fund, SAA Museum, Cancer Association of South Africa, Children of Fire, Liliesleaf Farm Project, Mandela Container Library donation (conversion of the container into a library).

SAX:

((b)(i)(aa-bb)(ii)(aa-bb) According to SA Express, the SOC has contributed R707 000.00to various projects including Rhino Kids Experience, the Popcorn Kidz Foundation, XL Aloe Travel, Mandela Day (in conjunction with SAA), Parkview Golf Club, Tourvest Travel, Masimanye Women's Support Centre, University of the Free State RAG, Zululand Chamber of Commerce and Industry, Hoedspruit Airport Festival.

Transnet

(b)(i)(aa-bb)(ii)(aa-bb) According to Transnet, it has made social contributions to various organizations/projects (See Annexure A).

Reply received: October 2012

QUESTION NO.: 2494

DATE OF PUBLICATION: 07 September 2012

2494. Mr A Watson (DA) to ask the Minister of Public Enterprises:

(1) Whether (a) his Ministry, (b) his department and (c) any entity reporting to him plan to host end-of-year parties; if not, in each case, what is the position in this regard; if so, in each case, (i) for how many persons and (ii) at what cost;

(2) Whether the cost of the specified end-of-year parties has been budgeted for in the current financial year; if not, from where will the funding be sourced; if so, (a) what amount has been budgeted and (b) from which part of the budget will it be incurred? NW3100E

Reply:

(1)(a)(b) (i)(ii) The Department will host the year-end function/Team Building with the intention of building staff morale and to thank staff for their hard work.

(1)(i)(ii) 200 employees are expected to attend at about R250 per head. The cost for the venue is yet to be determined.

(2)(a)(b) Yes, R250 000 has been budgeted for. The funds will be sourced from the Department's budget.

Alexkor:

(1)(a-c)(i-ii)(2)(a-b) According to Alexkor, the State Owned Company (SOC) will not host year-end functions.

Broadband Infraco:

(1)(a-c)(i-ii)(2)(a-b) According to Broadband Infraco, the SOC will not host year-end functions.

Denel:

(1)(a-c)(i-ii)(2)(a-b) According to Denel, the SOC will not host year-end functions.

Eskom:

According to Eskom, their budget includes certain amounts for year-end functions but there are no plans at this stage to hold such functions. Eskom is currently reviewing its approach regarding functions.

SAA:

According to SAA, the SOC will not host year-end functions.

SAFCOL:

According to SAFCOL, the SOC will not host year-end functions.

SAX:

According to SA Express, the SOC will not host year-end functions.

Transnet

(1)(a-b) Not applicable.

(1)(c) Transnet plans to host year-end functions for staff and clients in respect of promoting personnel motivation and developing customer and client relationships.

(1)(c)(i) The year-end functions will be for all 57 000 Transnet employees and approximately 1 000 customers.

(1)(c)(ii) The year-end functions are expected to cost R175 per person and Transnet has budgeted R10 million for the year-end functions.

(2) The cost of the year-end functions has been budgeted for. Although the funds for spending on the year-end functions have been budgeted for, the actual amount will be determined by the number of employees who will attend.

(2)(a) Refer to (1)(c)(ii) above.

(2)(b) The budget will be incurred from the operating budget of the various departments of Transnet.

Reply received: October 2012

QUESTION NO.: 2308

DATE OF PUBLICATION: September 2012

2308. Mr G G Boinamo (DA) to ask the Minister of Public Enterprises:

(a) What steps has he taken to give effect to the performance agreement that he signed with the President in 2010, (b) what outcomes have been measured and (c) what follow-up steps has he taken with regard to each specified outcome? NW2892E

Reply:

Government has adopted 12 outcomes with a view to measure performance and delivery against them.


The President signed performance agreements with all Cabinet Ministers. In these performance agreements, Ministers were requested to establish and participate in Implementation Forums for each of the twelve outcomes. The Implementation Forums have developed delivery agreements for the Outcomes. All departments, agencies and spheres of Government that are involved in the direct delivery required to achieve an outcome, are party to the agreement.

In June 2012, Government released the Mid-Term Review, which focuses on the Government's progress against the delivery agreements for the twelve outcomes.

The Honourable Member is referred to this document which gives a comprehensive account on progress in the areas of national priorities.

Reply received: October 2012

QUESTION NO.:2261

DATE OF PUBLICATION: 24 AUGUST 2012

Mr S J F Marais (DA) to ask the Minister for the Public Service and Administration:

(1) With reference to her reply to question 310 on 13 July 2012 relating to her department's low level of compliance in monitoring the performance of specified public servants, when does she intend to publish her plan to improve performance management in the Public Service;

(2) which (a) directors-general and (b) provincial heads of department have not been evaluated;

(3) whether she has investigated the reasons for the high turnover of staff in senior positions in the Public Service; if not, why not; if so, what measures has she put in place to retain skilled staff;

(4) whether she has investigated the relationship between service delivery and the failure by specified national and provincial government departments to evaluate the performance of their senior staff; if not, why not; if so, what were the findings in each case? NW2840E

REPLY

(1) In my reply to question 310 on 13 July 2012, I indicated my intention to approach Cabinet with a plan to turn around the low compliance levels in the evaluation of Heads of Department (HoDs) in the Public Service. This plan has now been approved by Cabinet

and will be rolled out to ensure that outstanding evaluations for the 2010/2011 and 2011/2012 evaluation cycles are finalised by 31 March 2013.

Essentially the plan proposes a Cluster Evaluation System, with clear due dates and panel members, to finalise the performance evaluations for HODs for the 2010/2011 and 2011/12 cycles. The intention is to conduct the evaluations for both cycles simultaneously and to conclude the evaluations within the current financial year.

(2) Please refer to Annexure A, attached, for a list of HoDs whose evaluation for the 2010/2011 cycle remains outstanding.

(3) The Department of Public Service and Administration is aware that there are perceptions of high turnover of staff in senior positions in the Public Service. This is sometimes based on anecdotal evidence related to isolated incidents in few departments. The total number of SMS members in the Public Service as at 30 June 2012 was 8915. Based on statistics at our disposal, 71% (6329) of SMS members have been in the Public Service for more than 5 years.

In a recent study (2011) conducted by both the DPSA and the Public Service Commission (PSC), it was evident that the extent of turnover may be informed by the average time that an SMS member spends in the same post level over time. In this study, it was established that the average time an SMS member spends in the same post level is 4.2 years.

In 2008 the average time spent by an SMS member in the same post level was 3.6 years; in 2009 the average time was found to be 3.8 years; in 2010, the average time spent was 4.1 years and in 2011 it was found to be 4.2 years. The conclusion that can be drawn is that there is an improvement year on year in respect to the stability of SMS members as a result of improved conditions of service and better retention strategies. It may therefore be concluded that the perception around high turnover at the senior levels may be unfounded.

Measures that have been put in place to retain staff in the Public Service include the introduction of the occupation specific dispensations to positively impact on the attraction and retention of critical/scarce skills, and these are mainly found at senior levels. Furthermore, a manual has been developed to assist Departments in managing the retention of staff.

Notwithstanding the above, it is my intention to pay particular attention to this matter and conduct further assessments to help us understand factors that contribute to this challenge. Understanding the underlying causes would assist in taking appropriate remedial actions to ensure that the staff turnover at a SMS level is reduced considerably.

(4) The DPSA and the Public Service Commission over the past years have regularly reported on the performance assessment outcomes of HODs and senior managers, the performance of government departments and the level of service delivery in the Public Service. The PSC on an annual basis issues the State of the Public Service Report highlighting the actual performance of departments and the performance assessments of HODs and senior officials in the public service.

The issue of organizational and individual performance and its link to the improvement of service delivery was discussed at the last Public Service Summit held in March 2010. Parties to the PSCBC signed the Declaration of the Summit which included a number of recommendations on the management of performance. A number of these areas have since been addressed and others are being incorporated into draft the policies encompassing performance management and development and service delivery improvement.

The DPSA has also developed a draft revised PMDS for HODs that it will soon pilot and test. This is an outcomes-based performance system that will assess both the individual HOD's performance based on his/ her Key Result Areas and Core Management Competencies as well as the organizational performance which will draw on performance assessment reports like the Auditor General Audit opinion and findings and the Management Performance Assessment Tool (MPAT) administered by DPME.

Reply received: October 2012

QUESTION NO.: 2252

DATE OF PUBLICATION: September 2012

2252. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(a) What is the estimated final cost of building the Medupi Power station after all six boilers will have come into operation and (b) when will (i) the first boiler and (ii) all boilers come into operation? NW2830E

Reply:

(a) The current cost to complete the Medupi Power Station is estimated at R98.9 billion excluding interest during construction, but including escalation and transmission integration costs.

(b)(i) In the second half of 2013.

(b)(ii) In 2017.

Reply received: October 2012

QUESTION NO.: 2232

DATE OF PUBLICATION: September 2012

2232. Mrs J D Kilian (Cope) to ask the Minister of Public Enterprises:

Whether a certain company (name furnished) and/or its subsidiaries have been contracted to render services to the SA Airways; if so, (a) what process was followed to appoint the said company and/or its subsidiaries and (b) what is the (i) nature of services rendered in respect of each such contract and (ii) total monetary value of each contract awarded to the company and/or its subsidiaries in the (aa) 2009-10, (bb) 2010-11 and (cc) 2011-12 financial years? NW2807E

Reply

(a-b)(i-ii)(aa-cc) No, according to South African Airways (SAA) they have not contracted with the company referred to for any services required by the airline for the financial periods 2009/10 to 2011/12. SAA are unaware of the subsidiaries of the company referred to.

Reply received: December 2012

QUESTION NO.: 2165

DATE OF PUBLICATION: 17 August 2012

2165. Mr G G Boinamo (DA) to ask the Minister of Public Enterprises:

Whether (a) his department or (b) any entity reporting to him makes use of private security firms; if so, in each case, (i) which firms and (ii) what is the (aa) purpose, (bb) value and (cc) duration of each specified contract? NW2688E

Reply:

As the information requested is subject to contractual obligations to confidentiality between the Department, the entities reporting to it and the firms concerned, only a global figure will be provided without the names and details as requested.

DPE

(a)(i-ii)(aa-cc) The Department of Public Enterprises uses two private security firms for the provision of security guarding services including access control and maintenance of electronic security systems. The values of the contracts are R109 440.00 and R234 600.00 per annum respectively and the duration of the contact is 12 months each.

According to Alexkor:

(b)(i-ii)(aa-cc) Alexkor uses a private security firm to provide security services in the mining area that stretches for more than 80km. The value of the contract is R750 000 per month and the duration of the contact is 12 months.

According to Broadband Infraco:

(b)(i-ii)(aa-cc) Broadband Infraco uses a private security firm to provide security guarding services including access control on premises. The value of the contract is R988 740.00 per annum and the duration of the contract is 18 months.

According to Denel:

(b)(i-ii)(aa-cc) Denel use private security firms in four key points (Irene Campus – Gauteng, Kempton Park Campus – Gauteng, Philippi Site – Western Cape,Lyttelton Campus – Gauteng)forthe purposes of providing effective security services as is required by the National Key Point Act no 102 of 1980 as amended the National Strategic Intelligence Act no 67 of 2002; the Defence Act no 42 of 2002 as amended. The cluster facilitates and accommodates five Denel SOC Ltd entities operating in hi-technology defence projects and higher end-state classified information as is required in terms of security service of national and international standards conforming to the abovementioned National Acts. The contract values for these services are R17 240 436.00, R15 084 900.00, R2 760 000.00 and R1 787 328.00 per annum respectively.

According to Eskom:

(b)(i-ii)(aa-cc) Eskom uses many private security firms for its national strategic assets and to provide security services at its key national strategic assets, protect the organization from security risks by safeguarding personnel, information, property, processes and interests of the organization. The value of the individual contracts range from a minimum of R8,835.00 to a maximum of about R50 million. The contract duration ranges from 30 days to a maximum of three years.

According to SAFCOL:

(b)(i-ii)(aa-cc) SAFCOL uses six private security firms to provide security services in and around the buildings and forest guards roaming plantations to combat theft and poaching and to provide ad-hoc security services and investigation on various matters and complaints and the value of these contracts are R5 655 285.00, R3 527 490.00, R6 685 586.00, R3 531 507.00, R2 075 450.00 and R527 008.89 per annum respectively. The duration of the contract is 31 months for each firm.

According to SA Airways (SAA):

(b)(i-ii)(aa-cc) SAA uses five private security firms. These firms provide a range of services.

Purpose: to provide both regulatory aviation security services, under the Civil Aviation Act and associated civil aviation regulations and physical security for domestic network at Airways Park, SAA Head Office in Johannesburg, SA Technical (Johannesburg & Cape Town) and SA Cargo facilities nationally and in-flight operations at OR Tambo International Airport.

Services provided to SAA and the respective amounts are indicated hereunder:

Aviation protection services

The value of the contract is R 72m per annum and the duration of the contract is 1 year.

Fire and security

The value of the contract is R 621,000.00 per annum and the duration of the contract is 1 year.

Management services (such as CCTV and access control)

The value of the contract is R 6,495 120.00 and the duration of contract is three years.

Cash collection services at Airways Park

The value of the contract is R 175 441.08 and the contract is currently open ended and SAA is in the process of regularizing an end date.

Cash collection services at King Shaka Airport, Durban

The value of the contract is R 314 475.09 and the contract is currently open ended and SAA is in the process of regularizing an end date.

According to SA Express:

(b)(i-ii)(aa-cc) SA Express uses a private security firm for the provision of security services at its head office for access control. The duration of the contract is 3 years and the cost is R23 000.00 per month.

According to Transnet:

(b)(i-ii)(aa-cc) Information regarding private security firms used by Transnet is provided in Annexure A (attached).

Reply received: September 2012

QUESTION NO.: 2122

DATE OF PUBLICATION: August 2012

Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether a certain company (name furnished) has renegotiated its contracts with Eskom with regard to its construction work at the Medupi Power Station; if not, why not; if so, (a) what were the reasons for renegotiating the contract, (b) which clauses were renegotiated and (c) what new agreements have been reached;

(2) Whether the negotiations affected the contract in financial terms; if not, why not; if so, how did the negotiations affect the value of the contract? NW2641E

Reply:

(1)(a-c)(2) According to Eskom,none of Medupi Project's core contractual arrangements or the core terms of the contracts with any of the contractors, including the Medupi Power Station Joint Venture (MPS-JV) have been amended. Variations and claims have been dealt with in terms of the mechanisms provided for within the relevant contract.

As is the case with ordinary construction contracts of this complex nature, the contract includes mechanisms to address and resolve claims and variations. In this instance there were negotiations to resolve contractor claims and variations, relating amongst others to the scope of works and the section description of the works. The resolution of the contractor claims and variation have resulted in financial implications and the reformulation of certain relevant terms and conditions to assist the parties in mitigating the impact of cost and delay risks for the Project. This however, has not changed the overall business case and/or overall contractual risk profile for the Project.

Reply received: September 2012

QUESTION NO.: 2111

DATE OF PUBLICATION: 17 August 2012

2111. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

Whether a new substation will be constructed at Willowvale in Mbashe Municipality; if not, why not; if so, when will construction (a) commence and (b) be completed? NW2630E

Reply:

(a-b) According to Eskom, a new substation is planned for theWillowvale area which falls within the Mbashe Municipality. An Environmental Impact Assessment (EIA) application for the construction of substation was submitted to the Department of Environmental Affairs on 28 June 2012. The commencement and completion dates will be known only once the Record of Decision (RoD) is received in respect of the application submitted.

Reply received: September 2012

QUESTION NO.: 2075

DATE OF PUBLICATION: 03 August 2012

2075. Mr G G Boinamo (DA) to ask the Minister of Public Enterprises:

(1) Whether (a) he, (b) his Deputy Minister and (c) any official from an entity reporting to him will be attending or attended, the 2012 Olympic Games; if so, what is the (i)(aa) name, (bb) rank and (cc) position/designation of each specified person accompanying (aaa) him, (bbb) his Deputy Minister and (ccc) each specified person and (ii)(aa) nature and (bb) official reason for the visit;

(2) What (a) total amount will be spent or has been spent on the trip, (b) is the (i) description and (ii) detailed breakdown of the amounts that will be spent or have been spent on (aa) accommodation, (bb) travel and (cc) subsistence costs and (c) from which budget will these funds be incurred in each case? NW2555E

Reply:

(1)(a-c)(i)(aa-cc)(aaa-ccc)(ii)(aa-bb)(2)(a-b)(i-ii)(aa-cc)(c) Neither the Minister of Public Enterprises nor his Deputy or any official from the State Owned Companies that report to the Department attended the 2012 Olympic Games in London.

Reply received: September 2012

QUESTION NO.: 2019

DATE OF PUBLICATION: 03 August 2012

2019. Mr N J J van R Koornhof (Cope) to ask the Minister of Public Enterprises:

(1) (a) At what price and (b) to whom has SA Airways (SAA) sold its daily landing time slot at London's Heathrow Airport;

(2) Whether the SAA has an option to get it back in future; if so, at what price? NW2495E

Reply

(1) (a) and (b) According to SAA the slot was sold to Singapore Airlines and SAA is unable to disclose the sale amount of the daily landing slot at London's Heathrow Airport. This is in line with a confidential agreement signed between the parties. SAA did request permission to disclose the sale price of the slots in response to this Parliamentary question but the request was declined by the other party.

(2) No, there is no option for SAA to get the slot back. Slots at London's Heathrow Airport are operated on a use it or lose it basis. Slots are not transferable between carriers and can either be leased or sold or will be lost if at least 80% of flights are not operated within a set schedule period.

Reply received: August 2012

QUESTION NO.: 2040

DATE OF PUBLICATION: 08 August 2012

2040. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

Whether the contract between Eskom and a certain company (name furnished) for the supply of electricity has been renegotiated; if not; why not; if so, what (a) were the reasons for renegotiating the contract, (b) clauses were renegotiated and (c) agreements have been made? NW2519E

Reply:

Eskom has three (3) main contracts with the company referred to, of which one contract was renegotiated in 2010. The main reason was to remove the embedded derivative (i.e. replace the Dollar denominated with a Rand (ZAR) denominated tariff structure). With regard to the other two contracts, no agreement has been reached.

Reply received: August 2012

QUESTION NO.: 2037

DATE OF PUBLICATION: 08 August 2012

2037. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether the coal contract between Eskom and a certain company (name furnished) has been renegotiated in the past 36 months; if not, what is the position in this regard; if so, (a) what were the reasons for renegotiating the contract, (b) what clauses were negotiated and (c) what new agreements have been reached;

(2) Whether the price of coal has increased; if not, what is the position in this regard; if so, by how much? NW2516E

Reply:

According to Eskom:

(1) Yes the contract between the parties has been renegotiated.

(a) The renegotiation process arose as a result of a dispute between the parties in respect of penalties raised by Eskom in respect of poor quality coal received. Formal arbitration proceedings were instituted by a certain company and the arbitrator requested that the parties explore a settlement having regard for the issues in dispute.


(b)
Coal quality parameters were renegotiated in respect of the Abrasive Index (AI) and the associated penalty ranges were amended.

(c) The applicable penalty range was reduced from being applied on a weighted average monthly basis to a rolling 7 day average basis.

(2) Yes, the price of coal has increased as a result of the higher risk assumed by a certain company by the limited range in respect of the AI now imposed. Historic penalties raised by Eskom as a result of poor quality coal which was disputed by a certain company was accepted and all penalties have been settled. The pricing cannot be disclosed for commercial reasons as this will prejudice Eskom in future negotiations.

Reply received: September 2012

QUESTION NO.: 2035

DATE OF PUBLICATION: 08 August 2012

2035. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether his department identified a need to procure new steam generators for the Koeberg Power Station; if not, how was this conclusion reached; if so, (a) how many, (b) at what cost and (c) when will these steam generators be procured;

(2) Whether there is a delay in the procurement of these steam generators; if not, what is the position in this regard; if so, what are the reasons for the delay? NW2514E

Reply:

According to Eskom:

(1) It has become the norm in the nuclear industry to replace steam generators that have Alloy 600 Mill Annealed tubing (Koeberg-type). Most utilities that operate pressurized water reactor (PWR) nuclear power plants with this kind of steam generator have replaced or are planning to replace their steam generators. Similarly, Eskom has investigated this situation and determined that it is appropriate to replace the steam generators. Given the processes required in replacement of such equipment and scheduled outages every 18 months, Eskom has decided to commence on the process at this stage.

(a) There are three (3) steam generators for each of the two units at Koeberg – i.e. a total of six (6) steam generators. The project envisages that all three steam generators on each unit respectively will be replaced during a scheduled re-fuelling, inspection and maintenance outage.

(b) The replacement of the steam generators is a multi-billion rand project. The commercial process will determine the cost for the entire project.

(c) The procurement process has commenced.At this stage it is envisaged that the steam generators could be replaced during scheduled outages in 2016 and 2017. The actual outage when the steam generators will be replaced in each of the two units respectively is dependent on the outcome of the commercial negotiations and the schedule contracted with the chosen suppliers.

(2) The procurement is sizeable and complex. Eskom is currently on track with the process as mentioned in (1)(c) above. Following the necessary key approvals, the procurement process has commenced as mentioned above.

Reply received: October 2012

QUESTION NO.: 1977

DATE OF PUBLICATION: 03 August 2012

1977. Mr J J van der Linde (DA) to ask the Minister of Public Enterprises:

Whether any entity reporting to him has budgeted for (a) financial donations or (b) sponsorships in the (i) 2009-10, (ii) 2010-11 and (iii) 2011-12 and (iv) 2012-13 financial years; if not, why not; if so, in each case, what amount was (aa) budgeted and (bb) spent? NW2366E

Reply:

(a-b)(i-iv) According to Broadband Infraco, it has not budgeted for financial donations or sponsorships during the 2009/10, 2010/11, 2011/12 and 2012/13 financial years. The management of Broadband Infraco is in the process of developing a Corporate Social Responsibility (CSR) Strategy.

Details on other State Owned Companies (SOC) in relation to donations or sponsorships are given below.

Alexkor:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by Alexkor since 2009. No financial donations were made.

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R180 000

R160 190

2010 – 2011

R1 660 000

R1 515 204

2011 – 2012

R3 900 000

R3 864 000

2012 – 2013

R4 150 000

Not yet audited

Denel:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by Denel since 2009. No financial donations were made.

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R500 000

R500 000

2010 – 2011

R500 000

R500 000

2011 – 2012

R500 000

R500 000

2012 – 2013

R500 000

Not yet audited

Eskom:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by Eskom since 2009 and as they appeared in the various Annual Reports.

Financial Year

Budgeted amount

(Donations)

Amount spent

2009 – 2010

R 58 000 000

R 58 700 000

2010 – 2011

R 69 800 000

R 62 300 000

2011 – 2012

R 90 200 000

R 87 900 000

2012 – 2013

R 200 000 000

Not yet audited

Sponsorship

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R 18 405 942

R 8 556 983

2010 – 2011

R 19 995 060

R 11 205 346

2011 – 2012

R 16 711 652

R 25 489 841

2012 – 2013

R 67 520 210

Not yet audited

SAA:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by SAA since 2009. No financial donations were made.

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R 142 514 704

R 156 922 484

2010 – 2011

R 143 307 249

R 97 966 937

2011 – 2012

R 82 976 666

R 79 719 609

2012 – 2013

R 55 000 000

Not yet audited

SAFCOL

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by SAFCOL since 2009. No financial donations were made.

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R 216 000

R 216 000

2010 – 2011

R 105 000

R 105 000

2011 – 2012

R 0.00

R 0.00

2012 – 2013

R 0.00

R 0.00

SAX:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by SAX since 2009. No financial donations were made.

Financial Year

Budgeted amount

Amount spent (*)

2009 – 2010

R 600 000

R51 213

2010 – 2011

R 300 000

R71 500

2011 – 2012

R 898 650

R 7 700

2012 – 2013

R 326 700

Not yet audited

(*) The sponsorship policy states that no money will be donated to organisations therefore the airline only sponsors flight tickets.

Transnet:

(a-b)(i-iv)(aa-bb) The table below indicates the amount that was budgeted and spent by Transnet since 2009 and as they appeared in the various Annual Reports.

Financial Year

Budgeted amount

(Donations)

Amount spent

2009 – 2010

R 7 000 000

R 8 000 000

2010 – 2011

R 5 000 000

R 4 000 000

2011 – 2012

R 5 000 000

R 8 000 000

2012 – 2013

R 8 000 000

Not yet audited

Sponsorship

Financial Year

Budgeted amount

Amount spent

2009 – 2010

R 11 000 000

R 11 000 000

2010 – 2011

R 18 000 000

R 13 000 000

2011 – 2012

R 22 000 000

R 27 000 000

2012 – 2013

R 32 000 000

Not yet audited

Reply received: September 2012

QUESTION NO.: 1948

DATE OF PUBLICATION: 03 August 2012

1948. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether service delivery agreements have been signed between Eskom and municipalities where Eskom distributes electricity to consumers within the municipal boundaries; if not, why not; if so, (a) how many (i) have been and (ii) must still be signed and (b) when will the remaining agreements be signed;

(2) Whether he intends to take the matter up with Eskom in order to finalise it as soon as possible; if not, why not; if so, what are the relevant details? NW2337E

Reply:

According to Eskom:

(1)(a)(i-ii)(b) Eskom has not signed any service delivery agreements with any of the municipalities as Eskom supplies electricity within the boundaries of certain municipalities directly pursuant to the terms of the licence issued by the National Energy Regulator of South Africa (NERSA). In the circumstances, the requirement for a Service Delivery Agreement as contemplated in legislation is not applicable in this instance.

(2) Further, Section 77 of the Municipal System Act of 2000 as amended empowers municipalities to elect to use external or internal service provider(s) to render services subject to a council resolution and an appropriate service level agreement being entered in such circumstances.

Where municipalities require that Eskom provide electricity on their behalf, the provision of this legislation would therefore need to be respected.

Reply received: September 2012

QUESTION NO.: 1910

DATE OF PUBLICATION: 03 August 2012

1910. Mr K S Mubu (DA) to ask the Minister of Public Enterprises:

Whether, in light of the plans to promote rail freight as opposed to road freight, Transnet has implemented any measures to mitigate potential job losses within the road freight industry; if not, why not; if so, what measures? NW2299E

Reply:

According to Transnet, its plans relate to improving the freight logistics supply chain and increasing the use of rail to transport commodities that are rail friendly Transnet is not aware of any plans of the road freight operators to reduce their employee numbers. Transnet's R300bn capital investment programme is however expected to create more jobs.

Reply received: September 2012

QUESTION NO.: 1825

DATE OF PUBLICATION: 27 July 2012

1825. Mrs N W A Michael (DA) to ask the Minister of Public Enterprises:

(1) With reference to the decision by South African Airways (SAA) to cancel its Cape Town-London route, what was the average passenger occupation rate, expressed as a percentage, of seats filled for each flight between Cape Town and London in the (a) 2008-09, (b) 2009-10 and (c) 2010-11 financial years;

(2) What was the average passenger occupation rate, expressed as a percentage, of seats filled for each flight between Johannesburg and London in the (a) 2008-09, (b) 2009-10 and (c) 2010-11 financial years;

(3) (a) To what other intercontinental destinations does SAA offer flights from the Cape Town International Airport, (b) what was the average passenger occupation rate, expressed as a percentage, of seats filled for each flight between Cape Town and the specified destinations in the (i) 2008-09, (ii) 2009-10 and (iii) 2010-11 financial years and (c) which intercontinental destinations also have a route between Johannesburg and the specified destinations;

(4) For each route between Johannesburg and intercontinental destinations, expressed as a percentage of seats filled for each flight, what was the average passenger occupation rate per flight in the (a) 2008-09, (b) 2009-10 and (c) 2010-11 financial years? NW2217E

Reply:

South African Airways' (SAA) Response:

(1)The average passenger occupation rate, expressed as a percentage, of seats filled for each flight between Cape Town and London:

Year

Percentage

(a) 2008-09

81%

(b) 2009-10

83%

(c) 2011-12

76%

It is important to note that the performance of a route does not depend only on load factors.

(2) SAA still operates this route (Johannesburg to London) and this information is confidential in order to protect SAA's competitive interests.

(3) (a) At present SAA does not offer flights from Cape Town International Airport to other inter-continental destinations. SAA flew from Cape Town to Frankfurt from the beginning of the period under question (1 April 2008) until October 2008.

(b) The average passenger occupation rate, expressed as a percentage, of seats filled for each flight between Cape Town and Frankfurt in:

Year

Percentage

(3) (b) (i) 2008-09

71%

(3 (b) (ii) 2009-10

none

(3) (b)(iii) 2011-12

none

(c) SAA flies between Johannesburg and Frankfurt.

(4) SAA still operates the Johannesburg – Frankfurt route and this information is confidential in order to protect SAA's competitive interests.

Reply received: August 2012

QUESTION NO.: 1821

DATE OF PUBLICATION: 27 July 2012

1821. Mrs N W A Michael (DA) to ask the Minister of Public Enterprises:

(1) Whether Eskom paid any fees for the seat of its chief executive officer (CEO) at a gala dinner (details furnished) on 25 June 2012; if not, what is the position in this regard; if so, (a) what is the total sum of fees paid and (b) on which provisions of the Public Finance Management Act (PFMA), Act 1 of 1999, Eskom relied in making such payment;

(2) How many times has the CEO met with President Jacob Zuma since 2009? NW2213E

Reply:

(1)(a-b) No, the CEO was an invited guest.

(2) It is normal for the CEO to meet the President whether formally or informally at events.

Reply received: August 2012

QUESTION NO.: 1804

DATE OF PUBLICATION: 27 July 2012

1804. Mr M Swart (DA) to ask the Minister of Public Enterprises:

What (a) is the current backlog of Transnet in the (i) maintenance and (ii) repair of (aa) signals and (bb) infrastructure in respect of freight rail, (b) provision has been made in the (aaa) 2011-12 and (bbb) 2012-13 financial years to deal with these backlogs and (c) progress has been made in this regard? NW2196E

Reply:

(a) (i-ii) (aa-bb) The age of signalling systems deployed throughout the country vary in age from the 1950's to date. Some of the spare equipment required to maintain these systems have become obsolete and these systems/subsystems are currently being replaced (or have been earmarked for replacement). Maintenance and repair are used interchangeably by Transnet. A repair is undertaken when a failure on a system occurs and a maintenance intervention is effected to restore a system to a functional state i.e. repair of a failure. This repair activity is initiated soon after the failure has occurred and failures are not left unattended for a lengthy period of time.

Systems in this replacement category are typically the following:

· Remote control systems;

· Track vacancy detection systems;

· Interlocking systems; and

· Points machines.

There is a backlog typically in the following areas:

· Rail replacement;

· Sleeper replacement;

· Turnout set replacement;

· Ballast screening;

· Rail grinding;

· Bridges; and

· Formation repair.

(b) (aaa) R2.4bn was spent typically on the backlog as indicated above.

(b) (bbb) R2.4bn funding has been allocated and it is envisaged that R2.7bn will be spent on maintenance and repair activities listed above.

(c) Progress made with regards to backlogs in maintenance and repairs of signal and freight rail infrastructure for the financial year 2011/12 is summarised as follows:

· Signals: Expenditure on the replacement of signalling equipment was about R350m;

· Rails: 760km of rail was replaced;

· Sleepers: 365 000 sleepers replaced;

· Turnout sets: 211 turnout sets were replaced;

· Ballast screening: 552km of track was screened;

· Rail grinding: 11 000km of track was grinded;

· Bridges: 7 bridges were refurbished; and

· Formation repair: 10km of formation repair was done.

The current maintenance backlog has been accumulating over a period of 15 years, mainly due to a lack of funding owing to austerity measures of the time. The eradication of the maintenance backlog is a lengthy process and has been projected to take approximately 10 years to eliminate, dependent on the availability of the funds.

Reply received: December 2012

QUESTION NO.: 1771

DATE OF PUBLICATION: 27 July 2012

1771. Dr S M van Dyk (DA) to ask the Minister of Public Enterprises:

(1) Whether (a) his department and (b) all entities reporting to him make payment to (i) suppliers and (ii) service providers within the 30 day payment period as specified by the Public Finance Management Act (PFMA), Act 1 of 1999; if not, in each case, (aa) how many service providers are awaiting payment, (bb) what is the monetary value of outstanding payments and (cc) how long is payment overdue;

(2) Whether (a) his department and (b) all entities reporting to him are liable for any interest charged on overdue payments in any of the cases mentioned; if not, what is the position in this regard; if so, in each case, what is the (i) percentage and (ii) monetary value of interest charged;

(3) Whether (a) his department and (b) all entities reporting to him have negotiated revised payment schedules with each of the service providers mentioned; if not, why not; if so, in each case, what are the relevant details;

(4) What are the reasons for (a) his department and (b) all entities reporting to him not making payment within 30 days as specified by the PFMA;

(5) Whether (a) his department and (b) all entities reporting to him have implemented any measures to (i) ensure full compliance with the PFMA and (ii) facilitate immediate payment for overdue accounts; if not, why not; if so, in each case, what are the relevant details? NW2162E

Reply:

DPE:

(1)(a)(i-ii) The Department of Public Enterprises makes payments to suppliers and service providers within the 30 day payment period as specified by Section 38 (1)(f) and 76 (4)(b) of the Public Finance Management Act (PFMA), Act 1 of 1999 as well as Treasury Regulation 8.2.3 save and except on some occasions for the reasons provided in (4)(a) below.

(aa-cc) All invoices are current.

(2)(a)(i-ii) Not applicable.

(3)(a) Not applicable.

(4)(a) There are instances where payments are not made within the required period of 30 days from the date of receipt of the invoice mainly due to:

- suppliers not having given the Department updated information and/or changes to their banking details;

- invoices not corresponding to the order;

- new orders having to be re-issued in the new financial year after the closure of the financial year in which they were issued; and

- incorrect goods having been delivered to the Department.

Furthermore, the Department has a clause in the agreements it enters into with Service Providers that payment will be due and payable within 30 days from the date of receipt of the invoice and all supporting documents provided there are no queries arising. Therefore, the Department becomes liable for interest payment after 30 days only if there was no query. Furthermore, there have been isolated instances where the Department did not pay within the 30 day period and was not subject to interest payment simply because the service providers did not enforce their rights in this regard and, the Department ensured that payment was effected immediately after the expiry of the 30 day period. Because of this, the Department has not had to negotiate revised payment schedules with any service provider.

(5)(a)(i-ii) The Department has adequate measures in place to ensure full compliance with the PFMA which can be evidenced from monthly reports submitted to National Treasury. The Department ensures that there are no unnecessary overdue accounts outstanding to any supplier

Alexkor

According to Alexkor:

(1)(a)(i-ii)(aa-cc) According to Alexkor, it pays all suppliers and services within 30 days.

(2)(a)(i-ii) No interest is paid or charged.

(3)(a) Alexkor has accepted 30 day terms which all suppliers offer.

(4)(a) Not applicable.

(5)(a)(i) Full compliance is a constant operational goal and benchmark of management and processes are implemented with the assistance of internal and external auditors to monitor and update compliance to PFMA.

Broadband Infraco:

According to Broadband Infraco:

(1)(b)(i-ii)(aa-cc)(2)(a-b)(i-ii)(3)(a-b)(4)a-b)(5)(a-b)(i-ii) The questions above are not applicable to Broadband Infraco, which is a Schedule 2 entity in terms of the Public Finance Management Act 1 of 1999. Broadband Infraco's payments are effected on agreed terms with suppliers, in terms of Treasury Regulations 31.1.2 9 (b), which the Company complies with.

Denel:

According to Denel:

Denel has payment terms with its suppliers which range from 7 – 60 days. Denel manages its working capital efficiently and economically in accordance with the PFMA.

(1)The 30 day period is not applicable, as Denel is not a Department as specified by the PFMA.

(1)(b)(i-ii)(aa-cc) Not all Denel suppliers and service providers are paid 30 days from the date of statement as specified by the PFMA discussed hereunder. The Treasury Regulation 8.2.3 states that "Unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or, in the case of civil claims, from the date of settlement or court judgement."

- Treasury Regulation 8.2.3 is not applicable to Public Entities as per Treasury Regulation 1.2.1(c) which states that the Treasury Regulation applies - "to all Public Entities listed in Schedule 2, but only to the extent as indicated in paragraph 6.1.2 and regulations 24, 25 27 - 29 and 31 - 33.

- As per section 51(c) of the PFMA, the Accounting Authority "is responsible for the management, including the safeguarding of assets and for the management of revenue, expenditure and liabilities of the public entity".

However, despite the non-applicability of the said Treasury Regulation, Denel has payment terms with their supplier, which range from 7 – 60 days. The value of outstanding trade creditors as at 31 March is R490m. This is substantially within the agreed credit terms. Late payments are mostly as a result of incorrect addresses, disputes due to incorrect amount/ quantities billed/credits not processed, incorrect banking details or service delivery issues. Denel manages its working capital efficiently and economically in accordance with PFMA.

(2)Denel is liable for interest charges on overdue payments as per the agreed terms and conditions with service providers/suppliers under normal commercial conditions.

(3)(a-b)Yes. Denel has payment terms with its suppliers which range from 7 – 60 days.

(4)(a-b)N/A to Denel as set out in question 1. However, the payment terms vary from one supplier to another depending on the nature of their businesses. Statement reconciliations and creditors ageing are prepared and reviewed monthly, outstanding invoices are followed up, investigated and escalated at monthly governance meetings, monitoring via exception reports, meeting suppliers to resolve disputes/ queries where required.

(5)N/A. Denel manages its working capital efficiently and economically in accordance with PFMA.

Eskom:

The PFMA does not prescribe 30 days payment for public entities. However, the PFMA prescribes sound cash management for public entities, which refers to "making payments no earlier than necessary, with due regard for efficient, effective and economical programme delivery and the public entity's normal terms of account payment" Paragraph 6.1.2 and Regulation 31.1.12 (b). Eskom therefore makes payments in accordance with supplier contractual arrangements, and these vary from one contract to another.

However, Eskom has more than 17 000 suppliers of goods and services on its data base and there have been instances in the past where payments could have been delayed. Eskom's contracts stipulate various payment terms to a maximum of 30 days payment terms on receipt of a valid tax invoice from its suppliers. For a payment to be processed, it is crucial that proof of receipt of goods or services is in place and that it corresponds with the invoice received from the supplier. Delays therefore, could arise due to suppliers not providing the required information timeously.

There have been instances in the past where interest has been payable on overdue amounts to suppliers of goods and services. However, these have not been significant amounts and they have never been annually externally reported in terms of the PFMA. In all instances Eskom works closely with suppliers and tightens up controls as required.

In addition, since 2010, Eskom has implemented a Back2Basics programme to standardise, simplify and optimise all processes and systems within Eskom and in particular those relating to Eskom's supply chain. Eskom has also consolidated all creditor payments into one centralised shared service.

(1)(a)(i-ii)(aa-cc) Late payments and monetary value have not been significant enough to require reporting thereon. Refer to background above for further information.

(2)(a)(i-ii) Refer to background section above.

(3)(a) Eskom has not had to formally negotiate revised payment schedules with suppliers or service providers but deals with all the issues directly with each of the suppliers to ensure all aspects resulting in late payments are corrected going forward.

(4-5) Refer to background section above.

SAA:

(1)(b)(i-ii) South African Airways has various categories of supplies being:

- Intermittent or ad-hoc suppliers where purchases are done on a 3-quotebasis and/or awarded to non-regular suppliers.

- Contracted suppliers including fuel suppliers where a formal tender process was applied and payment terms negotiated.

- Enterprise Development suppliers are an outflow of SAA's BBBEE supplier base where shorter payment terms apply.

- Gazetted suppliers, i.e. ACSA (Airports Company of South Africa) where 30 day payment terms apply.

Analysis of June 2012 suppliers is reflected below, total number of suppliers were 1 576 and the value of payments effected was R1.4 billion.

(aa) Number of outstanding payments : 165

(bb) Value of outstanding payments : R3.2 million

(cc) Period outstanding: varies from 31-121 days:

61-90 days = 17

91-120 days = 13

121+ days =124

Outstanding amounts are the result of disputed items identified on reconciliation of the suppliers' statements to orders and invoices on the SAA system. These are followed up with suppliers to resolve prior to payment being effected.

SAA is in compliance with the PFMA by effecting payment to intermittent/ad-hoc and gazetted suppliers within 30 days from receipt of invoice.

In the case of regular suppliers, settlement of accounts is done in accordance with negotiated payment terms as stated in 1(b) above. These terms vary from 7, 15, 25 and 30 days from invoice or statement. In some instances payment is due upon presentation of an invoice.

Furthermore, SAA has embarked on a project to expedite payments to suppliers on a turn-around of 7 days from the date of invoice.

SAFCOL:

According to SAFCOL:

(1)(a-b)(i-ii)(aa-cc) SAFCOL and its main operating subsidiary, Komatiland Forests, strive to pay its suppliers within 30 days from the date the invoice is received. To date 90% of its suppliers were paid within the 30 day payment period as specified by the PFMA.

The 10% not paid within 30 days represents the invoices that had queries, were not compliant with the Vat Act hadno order numbers on the invoices or queries from the business units/divisions that had to certify the invoices for accuracy.

(2)(a-b)(i-ii) In respect of creditors, SAFCOL pay interest on overdue accounts. As at end of June 2012 it amounted to R9, 091 (3 months period = 1 April to 30 June 2012) which includes interest paid on banking fleet management from the banks.

(3)(a-b) Not applicable. SAFCOL pay invoices within 30 days of receipt of invoice at finance unless there is a query on the invoice.

(4)(a-b) Examples of queries include suppliers providing invoices that do not comply with the Vat Act, suppliers omitting order numbers on their invoices or queries from the department receiving the goods and/or services.

(5)(a-b)(i-ii) The company processes payments on a weekly basis. The invoices are stamped with a receipt date, when they are received by the Finance section. Suppliers are contacted to correct the invoices to enable suppliers to be paid as soon as possible. There is also an age analysis review to clear any long outstanding invoices, while also ensuring that a proper audit trail is kept for such invoices.

SAX

According to SA Express:

(1)(b)(i-ii)(aa-cc)SA Express pays within 30 days unless the services contracted for were not performed as per the contract.

(2)(b)(i-ii) No interest has been paid.

(3)(b) SA Express has not negotiated any revised payment schedules.

(4)(b) See (1)(b)(i-ii)(aa-cc)

(5)(b)(i-ii) See (1)(b)(i-ii)(aa-cc)

NB: SA Express pays within 30 days unless the services contracted were not performed as per the contract. No interest has been paid.

Transnet:

According to Transnet:

(1)(b)(i) In principle, Transnet suppliers and service providers are paid 30 days from date of statement. The Treasury Regulation 8.2.3 states that "Unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or, in the case of civil claims, from the date of settlement or court judgment."

According to section 8.2.1 of Transnet's Cash Management Policy, "Payment terms with suppliers should be standardised to 30 days from date of statement (i.e. up to 60 days from invoice date) as the default time period as stipulated in the credit policy", and is further emphasised in a directive dated 29 September 2009.

(1)(b)(ii) Since Transnet does not distinguish between suppliers and service providers see the response provided in (1)(b)(i).

(1)(b)(i)(aa) 1 115 suppliers and service providers across Transnet were awaiting payment as at 31 March 2012.

(1)(b)(ii)(aa) Since Transnet does not distinguish between suppliers and service providers, see the response provided in (1)(b)(i)(aa).

(1)(b)(i)(bb) R126 775 699.46 was the monetary value of outstanding payments as at 31 March 2012 as it relates to amounts outstanding in excess of 60 days from invoice date.

(1)(b)(ii)(bb) Since Transnet does not distinguish between suppliers and service providers see the response provided in (1) (b) (i) (bb).

(1)(b)(i)(cc) 90% of the outstanding payments are between 90 days – 150 days from invoice date. Late payments are mostly as a result of incorrect addresses, disputes due to incorrect amounts, quantities billed, credits not processed, incorrect banking details or service delivery issues.

(1)(b)(ii)(cc) Since Transnet does not distinguish between suppliers and service providers see the response provided in (1) (b) (i) (cc).

(2)(b) Transnet is liable for interest charges on overdue payments as per the agreed terms and conditions with service providers/suppliers. Interest charged is settled if it is due to delayed payment processing. Interest charged on disputed amounts/ invoices are only settled based on the outcome of the dispute.

(b)(i) Where interest charges are levied, the percentage charged ranges between 2 % per annum - 14.5% per annum as at 31 March 2012.

(b)(ii) The monetary value of the interest charged is R8 054 087 as at 31 March 2012 for both disputed and delayed payments.

(3)(b) Revised payment schedules are negotiated with service providers for service delivery issues as well as logistical and administrative related issues.

(4)(b) Late payments are mostly as a result of incorrect addresses, disputes due to incorrect amounts, quantities billed, credits not processed, incorrect banking details or service delivery issues.

(5)(b)(i) Statement reconciliations and creditors ageing are prepared and reviewed monthly, outstanding invoices are followed up, investigated and escalated at monthly governance meetings, monitoring via exception reports, meeting suppliers to resolve disputes/queries where required.

(5)(b)(ii) Immediate payment is effected and a credit note will be requested based on the resolution of disputes/queries between all the affected parties.

Reply received: September 2012

QUESTION NO.: 1742

DATE OF PUBLICATION: 17 August 2012

1742. Adv A de W Alberts (FF Plus) to ask the Minister of Public Enterprises:

(1) Whether he, in the light of Treasury having issued two guidelines on corporate governance in the past, subsequent to the publishing of the King I (1994) and King II (2002) reports, has compiled any guidelines on corporate governance in the public sector subsequent to the publishing of the King III report in 2009; if so, (a) when and (b) why it has not been published yet; if not, why not;

(2) whether he intends to compile such guidelines; if not, (a) why not and (b) what measures he intends to implement to ensure that corporate governance in the public sector is conducted properly; if so, when will it be (i) compiled and (ii) published? NW2133E

Reply:

The Department of Public Enterprises is the custodian of the Protocol on Corporate Governance in the Public Sector (the Protocol). The Protocol was approved by Cabinet and published in 2002 for application by all public entities.

The evolution of corporate governance requires that the Protocol be reviewed and updated. However, over the past few years, the evolution of corporate governance in South Africa not only embraces the introduction of the King III Codes, but also the recent legislative developments in respect of company law. Therefore, in reviewing the Protocol, it was necessary to take account of the impact of the Companies Act, 71 of 2008 as well as to ensure greater alignment to best practice in good corporate governance.

In so far as the Protocol is applicable to government as a shareholder with socio-economic objectives, the updated Protocol will continue to require mandatory application by all entities and ultimately lead to improved governance in the public sector.

The Department intends finalising the new Protocol by 31 March 2013.

ervY� e�H����reement as contemplated in legislation is not applicable in this instance.

(2) Further, Section 77 of the Municipal System Act of 2000 as amended empowers municipalities to elect to use external or internal service provider(s) to render services subject to a council resolution and an appropriate service level agreement being entered in such circumstances.

Where municipalities require that Eskom provide electricity on their behalf, the provision of this legislation would therefore need to be respected.

Reply received: July 2012

QUESTION NO.: 1604

DATE OF PUBLICATION: 08 June 2012

1604. Mr S Esau (DA) to ask the Minister of Public Enterprises:

Whether any traffic fines were incurred with regard to any of his official vehicles in the (a) 2009-10, (b) 2010-11 and (c) 2011-12 financial years; if so, what (i) amount in fines was incurred in respect of each specified vehicle in each specified financial year and (ii) are the further relevant details in each case? NW1933E

Reply:

Yes, the Department of Public Enterprises has incurred traffic fines of R750.00 in the 2009/10 financial year. No fines were incurred in the 2010/11 and 2011/12 financial years.

Reply received: June 2012

QUESTION NO.: 1469

DATE OF PUBLICATION: 01 June 2012

1469. Mr N D du Toit (DA) to ask the Minister of Public Enterprises:

(1) When was the current Director-General of his department appointed;

(2) Whether the Director-General was appointed in a permanent capacity; if not, what is the position in this regard; if so, what are the relevant details? NW1746E

REPLY

(1) The current Director-General was appointed on 1 January 2011.

(2) No, the Director-General is appointed on a three year contract basis.

Reply received: June 2012

QUESTION NO.: 1405

DATE OF PUBLICATION: 25 May 2012

1405. Mr S Esau (DA) to ask the Minister of Public Enterprises:

Whether his department has made any donations to a certain rural development initiative (name furnished); if so, (a) on what dates, (b) what amount was donated, (c) which areas of the country will benefit from this donation and (d) what are the further relevant details? NW1674E

Reply:


(a-d) No, the Department has not made any donations to entity referred to.

Reply received: June 2012

QUESTION NO.: 1382

DATE OF PUBLICATION: 25 May 2012

1382. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether he has been informed that the copper matting installed at the Medupi Power Station was tarnished by mud deposits; if so, what is the extent of the damaged caused; if not,

(2) Whether he intends to investigate the matter; if not, what is the position in this regard; if so, what are the relevant details;

(3) Whether (a) the copper matting would need to be replaced and (b) additional costs for the replacement of the copper matting will be incurred; if not, how was this conclusion reached in each case; if so,

(4) Whether the cost of the replacement will be borne by the (a) contractors or (b) his department;

(5) Whether the incident caused further delay in the construction of this power station; if not, how was this conclusion reached; if so, what are the relevant details? NW1631E

Reply:

According to Eskom:

(1) The integrity of the earth mats at Medupi Power Station has not been compromised. This is known due to ongoing integrity testing for the back-energising process of transformers and panels. In addition, Project Management are unaware of the existence of mud deposits anywhere in the vicinity.

(2) The matter will not be investigatedas there were no mud deposits found at the station. Should any problems arise, these are routinely identified, managed and resolved by Eskom's Professional Engineering teams.

(3) The integrity of the earth mats is proven throughout the construction process and any deviations are rectified immediately upon discovery.

(4) Non-conformance processes and systems are in place to rectify any or all non- compliances by the contractors. The cost of the repairs, if applicable, will be for the contractors account.

(5) As no earth mats are known to have been compromised, no delay in construction of the power station is envisaged. Any defect or non-conformance concerning the earth mat's installation or testing is managed on an on-going basis and rectified immediately.

Reply received: June 2012

QUESTION NO.: 1337

DATE OF PUBLICATION: 18 May 2012

1337. Adv A de W Alberts (FF Plus) to ask the Minister of Public Enterprises:†

Whether the Transnet Second Defined Benefit Fund (TSDBF) has invested any funds in any of the financial instruments of the SA National Road Agency Limited (Sanral), including bonds that have been issued to fund both the Gauteng freeway improvement project (GFIP) and the setting up of the Gauteng e-tolling system; if not, (a) what kind of investments does the TSDBF currently hold, (b) when was each of these amounts invested and (c) what is the extent of the investments currently held by the TSDBF; if so, (i) what do the investments in Sanral's financial instruments amount to in total, (ii) which instruments have been invested in, (iii) what amounts are involved with each instrument, (iv) which of the investments create guaranteed proceeds; (v) when, in each case, were the investments made, (vi) on whose advice did this take place, (vii) what considerations did the trustees take into account when the decision to invest the funds was taken and (viii) which trustees voted (aa) for and (bb) against the investments concerned? NW1584E

Reply:

According to Transnet, the Transnet Second Defined Benefit Fund (TSDBF) has not invested in bonds with the South African National Road Agency Limited (SANRAL).

(a) TSDBF have invested predominantly (approximately 70%) in low risk matching assets which are similar to bonds except that the amounts and timing of cash flows have been modified to match the pensions that the TSDBF pays on a monthly basis. The matching asset strategies were concluded from 2007 onwards.

The balance of the assets (approximately 30%) is invested in a combination of equities, property and cash. The current mix of these assets is such that 50% of these assets are exposed to equities (local and foreign) and property, with the rest held in bonds and cash. The majority of the mandates for these assets were selected and implemented in 2007, although changes are considered and made on an ongoing basis.

(b) This strategy was put in place during 2007 with the approval of the Board of Trustees of the TSDBF and Transnet.

(c) As at 31 March 2012 total assets at market value equaled approximately R18.3 billion.

(i-viii)(aa-bb) Not applicable as the TSDBF has not invested in bonds with SANRAL.

Reply received: July 2012

QUESTION NO.: 1280

DATE OF PUBLICATION: 18 May 2012

1280. Mr M Waters (DA) to ask the Minister of Public Enterprises:

Whether he has received any correspondence from Mr M Waters regarding the construction of a transformer in the Edenvale area (details furnished); if so, what was his response to the correspondence? NW1486E

Reply:

The correspondence from Mr M Walters regarding the construction of a transformer in Edenvale was responded to.

Reply received: May 2012

QUESTION NO.: 1278

DATE OF PUBLICATION: 18 May 2012

1278. Mrs N W A Michael (DA) to ask the Minister of Public Enterprises:

(1) Whether he has been approached by certain sub-contractors (names furnished) with regard to irregularities in respect of payment for work at the Medupi Power Station; if so, in respect of each contractor, what are the relevant details;

(2) Whether he has been informed by Eskom regarding the appointment of independent auditors who are investigating financial irregularities in respect of payment of contractors at the said station; if not, what is the position in this regard; if so, what are the relevant details;

(3) What is the current status of the construction of this station;

(4) Whether the construction of this station will be completed in (a) early or (b) late 2013; if not, why not; if so, (i) when will it be completed and (ii) what are the further relevant details? NW1483E

Reply:

(1) No, the Department has not been approached by the referred to companies with regard toirregularities of payment for work at the Medupi Power Station.

(2) No, Eskom has not informed the Minister about these matters since those companies are not contracted to Eskom but to other companies on site.

(3) The construction progress is proceeding according to a very comprehensive programme, which incorporates all the critical activities to achieve the commercial operation of each of the six turbo-generator sets. Eskom Management is coordinating the construction activities of over 200 contractors on site, with full and proactive analysis of all actual and potential threats and risks to the achievement of each critical step in bringing the units to stable power and, ultimately, to commercial operation. Where necessary, mitigations and boundaries have been implemented to ensure that all contributors maintain full adherence to the schedule.

(4) The station will be completed by 2017 and the first unit is planned to supply power into the grid by the second half of 2013 as previously communicated.

Reply received: September 2012

QUESTION NO.: 1250

DATE OF PUBLICATION: 18 May 2012

1250. Mrs P C Duncan (DA) to ask the Minister of Public Enterprises:

(1) Whether, with reference to his reply to question 317 on 9 March 2011, any sign boards were erected on site notifying the residents of the installation of the sub-station; if not, why not; if so, on which date were these sign boards erected;

(2) Whether his department intends to conduct a study into the potential detrimental health effects of the magnetic fields; if not, what assurances will his department give to the residents that there will be no detrimental health effects; if so, (a) when will the study be conducted and (b) who will conduct the study;

(3) Whether he has been informed of any research that indicates that magnetic fields can cause cancer; if so,

(4) Whether he has found that any groups of persons such as (a) children and (b) pregnant women are more vulnerable than others; if so, which groups? NW1390E

Reply:

According to Eskom:

(1) Yes, signboards were erected. During an audit of the process Eskom could not obtain sufficient evidence that this had been done. In the circumstances, Eskom has implemented mechanisms to improve the processes in this regard to ensure a better audit trail for all such processes.

(2-3) Eskom's 132kV substation in question was registered in Eskom's name in 1955 and recently Eskom upgraded the station by installing four transformers (i.e. 1x80 MVA 132/44 kV and 3 x 20 MVA 132/66 kV).

In terms of the National Environmental Management Act 107 of 1998 (NEMA), all new sub-stations must follow a consultation process on environmental impact assessment (EIA). The amended EIA Regulations, 2010 delists certain previously listed activities such as the Distribution and Transmission infrastructure with a capacity of up to 275 kV.

Hence the legal requirement to obtain an authorization from the Department of Environmental Affairs during the planning phase in 2008 was no longer required for this project when Eskom approved the project to proceed and started work on site. The primary reason for this was that the substation was being upgraded, it was not a green fields project and it was below the threshold stipulated in the regulations of activities which require an EIA. The residents' appeal to the Minister of Environmental Affairs was turned down on the grounds that the authorised activities had been delisted.

Eskom engaged in a public participation process with the residents, amongst other verifiable means, as follows:

· Advertisements posted in local newspapers;

· Eskom held an information session (on 26th February 2011) and several other meetings, as well as distributed information brochures discussing concerns from residents about potential health and noise hazards. Whilst an agreement was reached that Eskom would attend the meeting of the Body Corporate to deal with the complaints, Eskom was not allowed to attend as the residents wanted to follow a legal route; and

· Conducted baseline studies reflected below.

On the issue of research, it should be noted that Eskom relies on world best practice in this regard. Research conducted on exposure to Electric and Magnetic Fields (EMF) under the World Health Organizations (WHO) EMF programme are followed and reported on an annual basis. In terms of exposure guidelines being followed in South Africa, most notably the International Commission on Non-ionising Radiation Protection (ICNIRP) guideline which, are in themselves based on extensive research. In certain cases, for further assurance, Eskom conducts base line EMF studies, but this does not constitute independent scientific research.

(4) Subsequent to the IARC monograph study in 2002, the WHO reported in 2007 that a number of reports have been published concerning the risk of female breast cancer in adults associated with extremely low frequency (ELF) magnetic field exposure. These studies are larger than the previous ones and less susceptible to bias, and overall are negative. With these studies, the evidence for an association between ELF magnetic field exposure and the risk of female breast cancer is considerably weakened and does not support an association of this kind.

In the case of adult brain cancer and leukaemia, the new studies published after the IARC monograph do not change the conclusion that the overall evidence for an association between ELF magnetic fields and the risk of these diseases remains inadequate.

For other diseases and all other cancers, the evidence remains inadequate.

Reply received: May 2012

QUESTION NO.: 1214

DATE OF PUBLICATION: 11 May 2012

1214. Mr N J van den Berg (DA) to ask the Minister of Public Enterprises:

What amount has his department spent on (a) catering and (b) entertainment (i) in the (aa) 2007-08, (bb) 2008-09, (cc) 2009-10, (dd) 2010-11 and (ee) 2011-12 financial years and (ii) since 1 April 2012? NW1411E

Reply:

The table below indicates the amount spent by the Department of Public Enterprises on catering and entertainment from 2007/08 to 2011/12.

Description

2007-08

2008-09

2009-10

2010-11

2011-12

Catering

R1 021 000

R 1319 000

R1 195 000

R1 144 000

R1 135 000

Entertainment

R111 000

R197 000

R185 000

R26 000

R62 000

Reply received: August 2012

QUESTION NO.: 1142

DATE OF PUBLICATION: 18 May 2012

1142. Adv A de W Alberts (FF Plus) to ask the Minister of Public Enterprises.

(1)(a)(i) When and (ii) why were the free travel benefits for retired employees of (i) Transnet, (ii) SA Airways (SAA) and (iii) other public enterprises who report to him (aa) changed, (bb) withdrawn or (cc) scaled down and (b) what was the (i) nature of and (ii) reason for the change in each case;

(2) Whether the medical benefits that Transnet offers its members, and pensioners in particular, have been reduced annually while the premiums have increased at the same time; if so, what (a) since 1994 up to the latest specified date for which information is available was the reason for the (i) reduction in benefits and (ii) increase in premiums and (b) was the motivation for each (i) reduction in benefits and (ii) increase in premium;

(3)(a) When and (b) why, in terms of the Transnet Pension Fund Act, Act 62 of 1990, as amended, did the trustees of the Transnet Pension Funds take the decision that Transnet could automatically deduct the medical premiums from the pensions of beneficiaries;

(4) Whether Transnet and the board of trustees of the Transnet Pension Funds at any stage during a meeting (a) proposed or (b) discussed the feasibility of granting pensioners (i) an increase of 5% per annum or (ii) an inflation-linked increase; if so, (i) which proposals were implemented and (ii) what are the further relevant details; if not, (aa) which proposals were not implemented and (bb) in each case, why were they not implemented;

(5) Whether any other proposals in respect of changes to the increase of Transnet's pensions were made; if not, why not; if so, what are the relevant details? NW1330E

Reply:

(1)(a)(i-ii)(i-iii)(aa-cc) The free travel benefits of retired employees of Transnet, South African Airways (SAA) and others have not been changed, withdrawn or scaled down. However, Fringe Benefit Tax has in the meantime become applicable, as well as an Airport Tax which is levied by Airports Company South Africa (ACSA).

Employees on management levels in Transnet relinquished their free travel benefits in lieu of a percentage remuneration adjustment from approximately October 2006 until April 2007, when their remuneration was changed from a basic pay plus benefits dispensation to a total cost to company approach. As their conditions of employment had changed they were required to sign new contracts of employment. Thus, from the date of conversion, they also no longer qualified for travel concessions after retirement. Management level employees who joined Transnet from 2007 onwards were not entitled to free travel benefits. Despite these changes, employees on Non-Management levels have retained their free travel benefits; both during their employment and upon retirement and these benefits have not been changed or scaled down in any way.

(b)(i-ii) Refer to (1)(a)(i-ii)(i-iii)(aa-cc) above.

(2)(a)(i-ii)(b)(i-ii) Some major changes in the Transmed benefits adopted by the Board of Trustees include the adoption of the first Constitution and Rules for "Transmed Medical Fund" on 1 March 1996. The rules were subsequently changed from time to time by the Transmed Board of Trustees where after the changes were ratified by the Transnet Board of Directors. This process was followed up to the registration of Transmed in terms of the Medical schemes Act. The Transmed Medical Fund became a registered medical scheme in terms of the Medical Schemes Act, 1998 (Act 131 of 1998) with effect from 1 February 1999. The first Board of Trustees, of which members of the Fund elected 50% of the Trustees, became operational in August 2000, and is responsible for decisions with respect to premiums and benefits in line with legislation.

The premiums and the rate of medical aid premium increases of Transmed and the other four accredited medical aids are not determined by Transnet. These premium increases are determined by each medical scheme following submission and approval by the Registrar for Medical Schemes. Employees are advised annually of the changes in medical scheme premiums and are provided with expert advisory support should they wish to change their medical aid package.

The amount of the medical aid subsidy is an issue that is the subject of annual negotiation in respect of Transnet's bargaining unit employees. Previously the medical subsidy was 10% of pensionable pay but the subsidy was only payable if the employee belonged to Transmed. Following the 2010 strike, Transnet and the unions agreed to change the medical subsidy by introducing a rand value rate for all employees. It was also agreed to pay this subsidy if the employee joined any one of the five accredited medical aid schemes, with Transmed being one of these schemes.

The difference between the employees medical subsidy as calculated on pensionable earnings and the newly agreed rand value subsidy continues to be paid to employees as a non-pensionable allowance. The introduction of this dispensation has not resulted in a reduction of the benefit.

Transnet pensioners receive R213 per month as a post-retirement medical subsidy. This benefit was only payable if the pensioner was a member of Transmed. Transnet extended this benefit to pensioners if they moved from Transmed to one of the other four accredited Transnet medical aid schemes. The post-retirement medical subsidy has not been reduced. South African Transport Services (SATS) Pensioners receive, on average, R800 per SATS family per month as a post-retirement medical subsidy. In addition to the subsidy, Transnet has, in its sole discretion, funded the deficit between contributions from SATS Pensioners and Transnet, and Transmed's costs in relation to SATS Pensioners since 2010.

(3)(a-b) The provision in the Transnet Pension Fund Act, 1990, to deduct medical premiums due to Transmed has been part of the Transnet Pension Fund Act, 1990, as far as could be established since its inception. The Trustees of the Transnet Pension Funds have not been involved in making this provision at least since the year 2000.

(4)(a)(i) No.

(4)(a)(ii) Exploratory discussions and investigations regarding future pension increases have been ongoing since at least 2007 at meetings of the Investment Committee and the Board of Trustees of the Transnet Second Defined Benefit Fund.

(4)(b)(i) Refer to (4)(a)(i) above.

(4)(b)(ii) Refer to (4)(a)(ii) above..

(4)(aa) The Transnet Second Defined Benefit Fund (TSDBF) has enhanced pension benefits through the payment of ad hoc bonuses since 2007, with beneficiaries receiving increases in excess of CPI since 2009. The total value of ad hoc bonus payments made since 2007 to date is R1.440 billion.

The Transnet Sub Fund of the Transport Pension Fund (TPF) has made bonus payments of R89 million to its beneficiaries since the gazetting of the ad hoc bonus rule in December 2011.

The 2% statutory annual increases as well as the ad hoc bonuses provided by the TSDBF and TPF enabled pensioners to enjoy effective increases in excess of CPI. Transnet and its two defined benefit funds are continuously researching mechanisms to enhance pension benefits to the funds' beneficiaries and will continue to do so.

In addition, Transnet has made ex gratia payments to the poorest of the poor pensioners amounting to R235 million and has provided a further R150 million for ex gratia payments as at 31 March 2012.

Consequently, beneficiaries of the TSBDF and Transnet Transport Pension Fund have received payments in addition to their pensions of R1.9 billion since 2007.

(4)(bb) Refer to (4)(b)(ii) above.

(5) Refer to (4)(aa) above.

Reply received: May 2012

QUESTION NO.: 1014

DATE OF PUBLICATION: 26 April 2012

1014. Mrs N W A Michael (DA) to ask the Minister of Public Enterprises:

Whether he has (a) put any plans in place to track progress and (b) taken any measures to deal with risk management of the construction of the Medupi Power Station; if not, why not, in each case; if so, what are the relevant details, in each case? NW1196E

Reply:

(a) Eskom employs state-of-the-art systems and methodologies to track project progress by specific contract packages (of which there are 38) down to the level of individual critical activities. This analysis includes data which consolidates schedules from all the main contractors and sub-contractors and is a summation of over 200 individual programmes (approximately 400 000 separate line items). Furthermore, the Department monitors progress of the entire Eskom build programme on a quarterly basis through the extensive Investment Monitoring Report provided by Eskom. In addition, the Department and Eskom have established the New Generation Steering Committee, which meets monthly to review progress and intervene in areas that require such interventions.

(b) The latest risk-management processes are applied for both operational and strategic risks, internal and external, to identify and manage project threats pro-actively. Risk management is applied from identification through quantification and mitigation stages, down to specific critical activities, processes and input factors and includes potential and scenario impact investigation. The Department regularly engages with the Medupi focus team comprising of senior Eskom management on progress reports, construction developments and to get an understanding of any bottlenecks in which the Department can assist.