ATC120903: Report of the Portfolio Committee on Public Enterprises on the oversight visit to state-owned companies, dated 7 August 2012
Report of the
Portfolio Committee on Public Enterprises on the oversight visit to state-owned
companies, dated 7 August 2012
The Portfolio Committee on Public Enterprises (the Committee)
undertook an oversight visit to Transnet (Phelophepa Health Train, Transnet
The Committee delegation included the following
Mr Peter Maluleka (Chairperson
of the Committee, ANC), Mr C Gololo (ANC), Dr GW Koornhof (ANC), Ms C September
(ANC), Mr A Mokoena (ANC), Ms N Michael ( DA), Mr E Marais (DA) and Mr J Dikobo
(Azapo). The delegation was accompanied by the following parliamentary
officials: Mr D Mocumi (Committee Secretary), Ms N Magubane (Committee
Assistant) and Mr E Boskati (Researcher).
to Phelophepa Health Train (Douglas)
The Committee was welcomed by the Group Executive for Human Resources at
Transnet, Ms Nkululeko Sishi, and the Project Manager for the Train, Dr Lynette
of the Phelophepa Health Train
The Phelophepa Health Train (the train) is a mobile train that takes
primary health care services to remote and rural areas around the country. The
train started in January 1994 and has reached 18 million people since it was
launched. It has 35 stops throughout the year and has a target of reaching 1 250
patients per week. Transnet pays R41 million a year towards the costs of the
train, and a further R10 million is sponsored by private companies. The train
operates from January to September, and October to December is used for
training and to allow staff to rest.
has technologically advanced medical equipment. Every clinic has a cost centre
budget and there are sound supply chain management and financial systems in
place. The train has received a warm welcome from communities but has received
resistance from private practitioners who claim that the train jeopardised
Interaction with community/patients
Transnet communicates eight weeks in advance with the community to be visited,
and uses community radio stations, local newspapers and public offices to
publicise the train. The staff on the health train is guided by dignity and
respect for the patients. The train has facilities for the physically impaired
and also has pictographs to assist patients who are illiterate. At every
station, Transnet invites the Department of Health to do voluntary counselling
and testing and the Department of Home Affairs to register community members
for identity documents.
creation and skills development
The train has 20 permanent staff members, 40 medical students and 45
local people are hired for the duration of the stay. Transnet will increase the
staff component of the health train and will improve the conditions of service of
workers in order to retain the medical staff. There is a working relationship
with most universities to release medical students for two weeks to work on the
health train. During interaction with the students, the students expressed
their satisfaction with the conditions on the train in terms of accommodation,
food, sanitary facilities, security and opportunities to study. Transnet has
connected wi-fi to enable students to write exams on the health train.
The train offers primary health care (PHC) services to the communities
for free, and patients are only expected to pay R30.00 for spectacles. There
are different clinics headed by qualified medical practitioners, namely dentists,
optometrists, radiographers, psychologists, pharmacists, and others.
The Committee recommended that Transnet should expedite the introduction
of the second train in order to cover as many communities as possible. Transnet
should consider contracting a security company for the health train.
Visit to Port of Ngqura
The Portfolio Committee was welcomed by the Chief Executive for Transnet
Ports Authority, Mr Tau Morwe and the Port Manager, Mr Siyabulela Mhlaluka. The
Port Manager made a presentation in which he gave an overview of the operations
of the port. The Committee interacted with stakeholders such as organised
labour and representatives of local businesses, and undertook a tour of the
Overview of the operations of the port
The construction of
the port commenced on October 2002 and started operating in October 2009.
The port covers 1 250 hectares of land and
can accommodate 7 berths, namely
4 container berths, 2 break bulk
berths and 1 bulk liquid berth. Seventy per cent of the containers handled at
the port are destined for other destinations and include manganese, breakbulk
and liquid bulk. The
There were plans in place to improve security
surveillance and the effectiveness and efficiency of the port traffic control.
The NPA and CSIR were investigating possibilities of getting a 5-day forecast
of the sea level, as it had a bearing on the offloading of the ships.
The challenge identified by the management of
the port was the fact that, according to existing legislation, the operations
of the port will be managed by the private sector.
The white paper on transport separated the
regulator from the operator, and prohibited the National Ports Authority (NPA)
from operating the ports. This would compromise the efficiency of the port,
investment, growth and the contributions towards the advancement of the
developmental goals of the state such as job creation and the support for local
industries. The NPA requested the Committee to consider amending legislation in
order to stop the privatisation of operations in ports.
All stakeholders made a plea to the Committee
to assist in ensuring that the NPA received a licence to operate the port.
There is a shortage of pilots and maritime
specialists in the port and management has plans to recruit young people from
rural areas as part of the skills development programme.
Interaction with stakeholders
The Committee met with representatives of organised labour and
representatives of business.
stakeholders were given an opportunity to explain the relationship with the
management of the port. These were some of the findings of the Committee:
Job creation and skills development
The port has 220
funded posts, of which 133 have been filled and 97 are vacant. Only 26% of the
staff is women but the management has training opportunities for women to study
and be appointed in the male-dominated fields, like crane drivers. There are no
women represented at top and senior management levels.
There are programmes to visit rural
communities in order to educate school learners about career opportunities in
the port and to market the bursary opportunities. For 2012, there are 21 grade
10 learners who are enrolled in Simonstown, 12 students from the
The NPA will turn all non-core employees, such as security officers,
into permanent employees of Transnet. There is a healthy working relationship
with organised labour, and a delegation representing both parties, that will go
on a study tour to learn best practices of port management. The Committee
interacted with a number of employees who have been trained and developed and who
have subsequently been promoted to higher positions in the organisation. One
employee, Ms Nosipho Kale, started as a tea girl at the port, then she studied
logistics management through Transnet bursaries, and was promoted as a planning
Promotion of local small and medium
The NPA was developing a pricing strategy that is in line with the
Industrial Policy Action Plan (IPAP). The aim is to promote local manufacturing
by charging less for processed goods. It will also support the surrounding
industrial development zones and job creation. It has spent 35% of the budget
on BBBEE companies. The port has the potential of assisting small and medium
enterprises and supporting local business if it was utilised to its full
Community involvement and development
The NPA has a corporate social investment plan, and it continuously
monitored the impact on the communities. The port has adopted
The Committee recommended that Transnet should consider improving the
representation of women in senior management positions, and should make an
extra effort to recruit people with disabilities to work at the port. It furthermore
requested Transnet to forward details of the legislative challenges facing the
port and recommendations on how Parliament needed to intervene. The Committee recommended
that all employees who are beneficiaries of Transnet bursaries should visit
their high schools to educate pupils about their professions and the available career
opportunities at the port.
Visit to Port of
The Committee was welcomed by the Chief Executive for Transnet National
Ports Authority, Mr Tau Morwe, and the Port Manager, Mr Victor Mkhize. The Port
Manager made a presentation in which he gave an overview of the operations of
the port. The Committee interacted with stakeholders such as organised labour
and representatives of local businesses, and undertook a tour of the port.
Overview of operations of the port
The port was established in 1976 as a bulk port to export 26 millions
tonnes of coal per annum for the first 10 years. It is the largest port in
The port has a shortage of tug drivers in the port and the port is
generally underutilised. The port has an old and dilapidated fleet of
machinery, some of which was beyond repair or continuously broken. This had a
negative impact on the productivity of the port. For example, out of 117
haulers and tractors, only 64 were available for use (55% availability).
However, there were plans in place to replace ageing equipment in order to
improve capacity and productivity.
Interaction with stakeholders
The Committee met with representatives of organised labour and interacted
These were some of the
findings of the Committee:
Job creation and skills development
The port is characterised by a high turnover rate and is struggling to
recruit and retain professionals, especially women. There are no women
represented in the top management of the port and there was an
under-representation of women and people with disabilities across the
structure. Only two women were trained per year, which was not sufficient, and
none of the trained women have been promoted in the organisation. The other
challenge was that Black women of Transnet in the port were being head-hunted
by big corporate companies in order to address employment equity targets.
The NPA has trained employees through the Seta, and they are still
awaiting certificates of competence from the
Manufacturing, Engineering and Related Services Sector Education
and Training Authority (
They requested the Committee to address the matter with the Department
of Higher Education and Training.
Relationship with union (Satawu)
The union raised serious concerns about the lack of consultation and
involvement in decision making at the port. The union further highlighted the
There was a need to recruit and develop young
There was no career development plan and an over-reliance
on one individual, hence the low morale of employees.
There was a high vacancy rate and the process of
filling vacancies was too slow.
Subcontractors did not comply with the Basic
Conditions of Employment Act.
Transnet National Ports Authority paid better than
the Transnet Port Terminals, promoting salary disparities among divisions of
the same company.
Promotion of local small and medium
There is an alleged complaint from emerging mining companies, as they
are unable to access the Richards Bay Coal Terminal (RBCT), hence access to the
port was largely owned by big mining conglomerates. Furthermore, it was alleged
that the big mining companies do not assist emerging companies with machinery.
The NPA will include developmental clauses in the business contracts before
awarding licences, especially on skills development and support for local
Transnet will undertake a
study tour to
Community involvement and development
The NPA reported that it has a forum with civil society
where they discuss the needs of the communities before the entity decides on
the corporate social investment projects. They will also re-introduce port
festivals and community centres in order to involve communities and assist them
with relevant information.
Health and safety
complained that they were adversely affected by the wood, coal and manganese
particles at the port. They were not satisfied with how the diseases and health
problems were handled at the port. The port has a clinic with two full-time
professional nurses. The nurses complained about the poor co-ordination of
referrals from the Sheq (safety) officers, as they did not refer employees as
frequently as expected for screening. The consulting room was too small and
compromised the privacy and confidentiality of patients. There was a lack of
support in terms of tools of trade, for instance a vehicle to attend to
emergencies on site. The most prevalent health problem that the nurses were
treating was hearing injuries.
The Committee noted that the management of the port was not ready for
the oversight visit, could not answer all questions and lacked motivation. The
Committee recommended that the management should forward a detailed plan on how
it will improve the development of women in the organisation, and how to
address non-representation of women at top management level within 3 months. The
union should be involved in the development of the skills development plan to
ensure that it was linked to the personal development plans of employees. Transnet
should provide workers with protective clothing, especially for dust, and
should consult operators when procuring equipment in order to purchase machinery
which is user friendly, effective and economical. The Committee resolved that
it would communicate with the Department of Higher Education and Training to
address the outstanding certificates of competence which had not been issued by
Visit to South African Airways
The Committee was welcomed by the Chairperson of the Board, Ms Cheryl
Carolus, and the Chief Executive Officer, Ms Siza Mzimela. During the visit the
Committee interacted with the customers of SAA, the staff and organised labour.
It further undertook a tour of the facilities at OR Tambo International Airport,
including Mango offices, Airchefs, SAA Technical, SAA cargo and the baggage
Interaction with staff and customers
The Committee interacted with the staff to find out what challenges were
facing the entity, and with staff to hear how they felt about the service and
what improvements they recommended. These were the issues raised by the
Concerns raised by staff of SAA
Most employees were satisfied with SAA as an employer of choice, but
raised the following concerns: cancellation of the London flight within six
weeks; illegal porters at the port bribing and threatening SAA staff;
overbooking of flights causing abuse of SAA staff by customers; no platform to
engage with management on challenges facing workers; the need for training in
customer service and people management; lack of security for staff at the
counters; the need for comfortable chairs for frontline staff; media support
staff has been on contract for 4 years and the resistance from customers to
comply with aviation rules (e.g. excess luggage).
Concerns raised by customers
Customers expressed their frustrations regarding the cancellation of
flights, the overbooking of flights, flight delays, high airport taxes and the quality
of aircraft from OR Tambo to
The Committee visited the baggage handling facilities to see how baggage
was handled and monitored. The Committee was impressed with the surveillance
cameras and security measures that ACSA had put in place to curb pilferage. The
Committee visited the baggage control room where all the bags were monitored
and tracked. It was informed that all the staff was vetted and screened when
they entered and left the premises. The incidents of baggage pilferage had
since dropped significantly due to the joint approach between law enforcement
agencies, ACSA and SAA.
SAA Cargo is specialising in air transportation of cargo to 35
raised by the union (Satawu)
The union raised concern regarding the unhealthy relations between
management and the union, and highlighted the following as matters that needed
the attention of management: night shift allowance for flight attendants;
bargaining forum was not operational because the funds had been frozen; and
parity between benefits of pilots and other cabin crew members.
with members of the board of directors of SAA
The Committee had a courtesy meeting with the board members of SAA as it
had not met the full complement of the board before. They introduced themselves
and their responsibilities on the board. The Committee could not discuss organisational
matters in depth as there was not sufficient time available to do so.
The Committee resolved that SAA Cargo should supply employees with dust
masks to prevent infections until such time that the facility is upgraded. The
management of SAA should address the concerns raised by the employees,
organised labour and customers listed in this report and provide feedback to
the Committee by 30 September 2012.
Visit to Transnet Rail Engineering
The Committee was welcomed by the Chief Executive of Transnet Rail
Engineering, Mr Richard Vhallihu.
Committee visited the plant to interact with students at the
Overview of the Plant
Koedoespoort was one of the six Rail Engineering
plants in the country and had the following capabilities:
Body assembly of locomotives,
production of small parts of the locomotives and it is claimed to be the
fastest setup production plant in the world.
Capacity to manufacture, assemble and
produce one locomotive every two days.
There are 6 rail engineering plants
and 130 depots in the country.
The first ever new diesel locomotive (Class 39-200) was
Fourty percent of content was produced locally but there was
a move to improve local content.
The school is providing a 3-year Electrical and
Mechanical Engineering training that was accredited by Transport Education and
Training Authority (Teta). There are 383 learners going through the training
and 40% are women.
Transnet recruits through
FET colleges and schools. There were 140 employees who were sent overseas for
advanced training. Transnet has a campaign of taking 300 technogirls from
schools during school holidays, over three years, to expose girls to the field
faced by the School
students raised the following concerns:
Some of the machines required for
training were broken and materials used for training took time before they were
delivered, leaving students idle.
Some learners were being trained as
section 28 learners but were issued with section 13 certificates.
There was a shortage of tutors to
assist students during training.
made the following observations:
There was a need
for Cabinet Ministers to visit the plant (Koedoespoort) and develop a programme
to utilise the plants capabilities optimally.
Teta was not
issuing certificates on time, and some students have been waiting for 8 years
since completion of their courses.
struggling to get funding from Teta. They had requested R5m for training and
only received R250 000. However, Transnet was spending R200m on training
should lobby the relevant authorities for the new locomotives to be built by
Transnet Rail Engineering.
The Committee resolved that Transnet Rail
Engineering should continue with the excellent work it did, and should address
the concerns that have been raised by the learners noted in this report. It
should ensure that there are adequate machines and materials for learning to
take place. It resolved that it would engage the Minister of Higher Education
and Training on the challenges that Transnet was faced with in dealing with the
Report to be considered.
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