ATC090127: Report on Department ‘s Annual Report
Public Enterprises
ANNUAL REPORT OF THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES - 2008
- NAME OF COMMITTEE:
The Portfolio Committee on Public Enterprises.
Chairperson: Ms F I Chohan - From August 2007 to date.
2. CHAIRPERSON’S OVERVIEW:
· Having assumed the chair of the Portfolio Committee in August 2007, I was taken aback by my lack of insight into the work and function of the Department of Public Enterprises, particularly as I have been a public representative for ten (10) years.
· Approximately a year (1) later I am convinced that my initial lack of insight is a common phenomenon amongst Members of Parliament (outside the Finance Cluster) and indeed the general populace.
· I attribute some of the reasons for this state of affairs to inter-alia the following matters:
o The Department of Public Enterprises is not a service delivery department but is the “shareholder department” managing the State’s shareholding in strategically identified public entities.
o It is not a policy-making department either though it plays an indirect role in shaping of policy in the strategic areas of minerals and energy, transport, infrastructure, communications and forestry.
o The public enterprises department seeks to assist the specific utilities to realize their operational gains while securing optimal strategic “spin offs” within the economy.
· These truths make for a unique department with a unique role within the Executive. It is an interface
between Cabinet and the various SOEs, and as such affords government the ability to be an active and important player within the economy.
· That the State composes more than simply the executive, and given the unique role of Parliament within our constitutional dispensation it must be said that while the Executive has since at least 2003 completely re-orientated its capabilities regarding state-owned enterprises in accordance with international best practices – Parliament has not reviewed the mechanism it employs to fully meet its mandate in this regard. Indeed there is much to discuss about Parliament’s mandate in regard to State-Owned Enterprises themselves and the notion of the State as a shareholder.
· A lay assessment of the work of the Committee will make apparent the fact that in regard to its oversight function the Committee lacks an effective legal framework to enable it to have sight of and engage with commercially/legally sensitive material.
· The importance of an urgent review in this matter is made clear when regard is had to the “energy crises” that currently pertains. There is broad political consensus around the fact that the reason for the energy crises is the failure by government to heed the advice of Eskom to proceed with building of new power stations, by all accounts at least in 2000. However, there is no record of Parliament through the Portfolio Committee on Public Enterprises or indeed any other committee at any time raising the issue prior, during, or indeed after 2000. This speaks volumes about the inadequacy of a simple “one-size-fits-all” Portfolio Committee in the same mould as Portfolio Committees designed around service delivery portfolios.
· The Committee engaged during the year on this and other related issues, and was made aware of other models employed by other countries. Some even reserved on the Boards of SOEs ex-officio spaces for MPs. While this may be an option to discuss and debate in the future, it is the view of the Committee that a structure along the lines of the Portfolio Committee on Intelligence is a minimum requirement for Parliament to adequately meet its constitutional oversight mandate.
3 (A) MISSION.
§ To contribute to the effective monitoring of the performance of the State Owned Enterprises (SOEs), including their financial and operational sustainability.
§ To ensure alignment of the SOE business strategies with the sector department policies and regulatory authorities whilst ensuring that SOEs are sustainable businesses that provide economic benefit to the country
§ To monitor the planning, delivery and financing of Eskom and Transnet’s infrastructure programmes, turnaround programmes of Denel and SAA, the establishment of Broadband Infraco, the growth strategy of Alexkor, and the design and development programme for the Pebble Bed Modular Reactor (PBMR).
§ To facilitate public participation in Parliament relating to the above issues.
§ To effectively play a monitoring and oversight role of the Ministry and Department of Public Enterprises
(B) VISION
· Maintaining an effective and efficient Portfolio Committee that is able to legislate and provide oversight of all SOEs, thereby enhancing the consolidation process of a non-racial, non-sexist, prosperous, democratic South Africa.
4. LIST OF ENTITIES REPORTING TO THE COMMITTEE:
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Entities |
Mandate |
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(i) Alexkor |
Committed to the profitable and sustainable development of mineral and natural resources for the economic benefit of the Namaqualand region and all its stakeholders |
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(ii) Broadband Infraco |
Affordable access to long-distance telecommunications network infrastructure and broadband telecommunications connectivity services in South Africa |
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(iii) Denel |
Developing and maintaining a strategic military aerospace and landward defence environment |
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(iv) Eskom Holdings Limited (Eskom) |
Generation, transmission and distribution of electricity to industrial, mining, commercial, agricultural and residential customers and redistributors |
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(v) Pebble Bed Modular Reactor (Pty) Limited (PBMR) |
Development of safe Fourth Generation nuclear energy system for electricity and heat processing applications |
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(vi) SAA |
The national airline carrier delivering sustainable profits and growth through world-class service to customers internally and externally |
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(vii) South African Forestry Company Limited (Safcol) |
Dedicated to growing its business in the forestry and forest products industry |
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(viii) Transnet Limited |
A logistics company with rail engineering and port services capacity including pipeline services |
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- NUMBER OF METINGS HELD AND THOSE CANCELLED:
Meetings held: 17
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Date |
Agenda |
Minutes adopted + date |
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19 February |
Briefing by Department of Public Enterprises on the current energy situation and Eskom’s Build Programme |
Available – not adopted* |
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27 February |
Budget Briefing: Department of Public Enterprises |
Report adopted - 11 June 2008 |
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28 February |
Budget Briefing: Department of Public Enterprises |
Report adopted – 11 June 2008 |
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12 March |
Consideration of Committee Reports and Minutes |
Available – not adopted* |
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20 May |
Briefing by Eskom on Winter Electricity Demand Management Schedule |
Available – not adopted* |
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4 June |
(i) Briefing by SAA |
Available – not adopted* |
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11 June |
(i) Consideration and Adoption of Budget Report and PBMR Report (ii) Briefing by Department on “Rest of Africa” Programme |
Available – not adopted* |
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17 June |
(i) Consideration and Adoption of PBMR Report (ii) Briefing by Alexkor on Update on Restructuring |
Available – not adopted* |
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25 June |
(i) Adoption of PBMR Report (ii) Briefing by Department on Alexkor Township Development Programme |
PBMR Report Adopted |
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5 August |
Consideration of the following Reports: - SAA Report - China Study Visit Report |
Available – not adopted* |
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19 August |
(i) Adoption of the following Reports: - SAA Report - China Study Visit Report (ii) Consideration of Alexkor Study Visit Report |
Reports Adopted |
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26 August |
Annual Report Briefing: Transnet |
Available – not adopted* |
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21 October |
Annual Report Briefing – Department of Public Enterprises |
Available – not adopted* |
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22 October |
Consideration and possible Adoption of: - Alexkor Study Visit Report - SAFCOL Study Visit Report
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Available – not adopted* |
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23 October |
Adoption of: - Alexkor Study Visit Report - SAFCOL Study Visit Report |
Reports adopted* |
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7 November |
Special meeting (Follow-up to Study Visit to Alexkor):
Briefing on outstanding progress report from DPE and Alexkor arising from special meeting of 30 July 2008) (represented by DPE, Alexkor and Richtersveld Community (RVC) |
Available – not adopted* |
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18 November |
Consideration and possible Adoption of: - Report on Annual Report – DPE - Report on Annual Report – Transnet - Transnet Study Visit Report - Committee Annual Report
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Available – not adopted* |
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19 November |
Adoption of: - Report on Annual Report – DPE - Report on Annual Report – Transnet - Transnet Study Visit Report - Committee Annual Report
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Reports adopted |
*The Chairperson requested that the Secretary keep a record of minutes of meetings – but that minutes are not formally adopted in meetings.
Meetings Cancelled: - 12
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Meeting Date |
Agenda |
Reasons for Cancellation |
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23 January |
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Chairperson was attending a workshop of Committee Chairpersons |
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29 February |
Deliberations on Budget |
The Committee concluded its discussion on the Budget on 28 February 2008 |
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26 March |
Oversight Visit to Transnet |
The Committee’s oversight visit to Transnet was received very late and due to time constraints could not undertake the visit - the CEO was also not available at the time |
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2 September 2008 |
Annual Report Briefing: ESKOM |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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9 Sept ember 2008 |
Annual Report Briefing: DPE
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Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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16 September 2008 |
- Annual Report Briefing: PBMR - Briefing on ASGISA Report 2007
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Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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7 October 2008 |
Annual Report Briefing: Infraco + ALEXKOR |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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10 October 2008 |
Annual Report Briefing: DENEL |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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14 October 2008 |
Annual Report Briefing: SAA |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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15 October 2008 |
Consideration and Adoption of Reports |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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16 October 2008 |
Consideration and Adoption of Reports |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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17 October 2008 |
Annual Report Briefing: SAFCOL |
Changes to Parliamentary Programme – Reprioritisation for Committees with Legislation. Permission to convene retracted by Chief Whip, Mr N Mthethwa on 31 August 2008 |
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Explanatory note: Although the Committee’s programme had been initially approved by the Chief Whip and the House Chairperson, permission for the Committee to continue its work was retracted telephonically by the former Chief Whip on the 31 August 2008. The reason given by the former Chief Whip was that there was a political decision to allow only Committees with legislation to continue convening. On this premise, the Chairperson of the Committee cancelled all further meetings on the agreed programme.
- LEGISLATION REFERRED TO THE COMMITTEE: None
- PAPERS (INTERNATIONAL AGREEMENTS, PROTOCOLS, REPORTS) REFERRED :
(7.1) REPORTS:
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REPORT |
REFERRAL DATE |
CONSIDERATION DATE |
REPORT PUBLICATION |
DEBATE IN HOUSE |
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Report on Oversight Visit to Pebble Bed Modular Reactor Limited, Pelindaba |
N/A |
Adopted in Committee on 25 June 2008 |
ATC No 102 – 2008 (Friday, 22 August 2008) |
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Report on Budget Review |
3 September |
Adopted by Committee on 11 June 2008 |
ATC No 84 – 2008 (Thursday, 26 June 2008) |
20 November 2008 |
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Special Report on SAA |
N/A |
Adopted by Committee on 19 August 2008 |
ATC No 147 – 2008 (Friday, 14 November 2008) |
20 November 2008 |
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Report on Study Visit to China |
N/A |
Adopted by Committee on 19 August 2008 |
ATC No 147 – 2008 (Friday, 14 November 2008) |
20 November 2008 |
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Report on Study Visit to Safcol |
N/A |
Adopted by Committee on 23 October 2008 |
ATC No 146 – 2008 (Wednesday, 12 November 2008) |
20 November 2008 |
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Report on Study Visit to Alexkor |
N/A |
Adopted by Committee on 23 October 2008 |
ATC No 147 – 2008 (Friday, 14 November 2008) |
20 November 2008 |
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Report on Study Visit to Transnet |
N/A |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
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Report on Annual Report – DPE |
ATC No. 109 – 2008, dated 3 September 2008 |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
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Report on Annual Report – Transnet |
ATC No. 90 – 2008, dated 31 July 2008 |
Adopted by Committee on 19 November 2008 |
To be tabled in 1st Term 2009 |
N/A |
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(7.1) REFERRALS:
(7.1.1) TABLINGS:
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Strategic Plan of the Department of Public Enterprises for 2008 to 2011 – See ATC No 15 – 2008, dated 18 February 2008 |
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Amendment to Eskom’s pricing structure, tabled in terms of section 42(4) of the Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and supporting documents required in terms of section 42 (3) of the same Act – See ATC No 43 – 2008, dated 15 April 2008 |
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Report and Financial Statements of the Accelerated and Shared Growth Initiative for South Africa (Asgisa) for 2007 – See ATC No 74 – 2008, dated 11 June 2008 (see Point 5 – Meetings cancelled) |
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Eskom’s 2008-09 tariff increase and amended pricing structure subsequent to Nersa’s revision of the 2008-09 Eskom price increase from 14,2% on 18 June 2008, tabled in terms of section 42(2) of the Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and supporting documents required in terms of section 42(3) of the same Act – See ATC No 84 – 2008, dated 26 June 2008 |
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Report and Financial Statements of Transnet Ltd and the Group for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008 – See ATC No 90 – 2008, dated 31 July 2008 |
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Report and Financial Statements of Pebble Bed Modular Reactor (Pty) Limited for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008 – See ATC No 101 – 2008, dated 21 August 2008 |
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Report and Financial Statements of Eskom Holdings Limited for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008 – See ATC No 102 – 2008, dated 22 August 2008 |
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Report and Financial Statements of Alexkor for 2007 – 2008, including the Report of the Independent Auditors for 2007 – 2008 – See ATC No 104 – 2008, dated 27 August 2008 |
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Report and Financial Statements of the South African Forestry Company Limited (Safcol) for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008 – See ATC No 105 – 2008, dated 28 August 2008 |
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Report and Financial Statements of Vote 30 – Department of Public Enterprises for 2007 – 2008, including the Report of the Auditor-General on the Financial Statements and Performance Information of Vote 30 for 2007 – 2008 [RP 156 – 2008] – See ATC No 109 – 2008, dated 3 September 2008 |
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Report and Financial Statements of Denel (Proprietary) Limited for 2007 – 2008, including the Report of the Independent Auditors for 2007 – 2008 - See ATC No 127 – 2008, dated 30 September 2008 |
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(7.1.2) FOR CONSIDERATION:
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Letter from the Minister for Public Enterprises, dated 13 March 2008, to the Speaker of the National Assembly, informing Parliament that Eskom’s pricing structure for 2008-09 would not be tabled on 15 March 2008 as required by section 42 of the Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), but on 15 April 2008 – See ATC No 75 – 2008, dated 12 June 2008 |
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Amendment to Eskom’s pricing structure, tabled in terms of section 42(4) of the Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and supporting documents required in terms of section 42 (3) of the same Act – See ATC No 75 – 2008, dated 12 June 2008 |
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Eskom’s 2008-09 tariff increase and amended pricing structure subsequent to Nersa’s revision of the 2008-09 Eskom price increase from 14,2% on 18 June 2008, tabled in terms of section 42(2) of the Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003), and supporting documents required in terms of section 42(3) of the same Act – See ATC No 123 – 2008, dated 23 September 2008 |
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(7.1.3) FOR CONSIDERATION AND REPORT:
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Report and Financial Statements of Transnet Ltd and the Group for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008 - See ATC No 123 – 2008, dated 23 September 2008 |
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(i) Report and Financial Statements of Pebble Bed Modular Reactor (Pty) Limited for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008
(ii) Report and Financial Statements of Eskom Holdings Limited for 2007 – 2008, including the Report of the Independent Auditors on the Financial Statements for 2007 – 2008
See ATC No 123 – 2008, dated 23 September 2008 |
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Report and Financial Statements of Alexkor for 2007 – 2008, including the Report of the Independent Auditors for 2007 – 2008 - See ATC No 123 – 2008, dated 23 September 2008 |
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Report and Financial Statements of Vote 30 – Department of Public Enterprises for 2007 – 08, including the Report of the Auditor-General on the Financial Statements and Performance Information of Vote 30 for 2007 – 08 [RP 156 – 2008] – See ATC No 134 – 2008, dated 17 October 2008 |
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Report and Financial Statements of the South African Forestry Company Limited (Safcol) for 2007 – 08, including the Report of the Independent Auditors on the Financial Statements for 2007 – 08 – See ATC No 134 – 2008, dated 17 October 2008 |
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Report and Financial Statements of South African Airways (Proprietary) Limited (SAA) for 2007 – 08, including the Report of the Independent Auditors on the Financial Statements for 2007 – 08 – See ATC No 134 – 2008, dated 17 October 2008 |
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Report and Financial Statements of the Broadband Infraco (Pty) Limited for 2007 – 08, including the Report of the Independent Auditors on the Financial Statements for 2007 – 08 – See ATC No 134 – 2008, dated 17 October 2008 |
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(7.1.4) ANNOUNCEMENTS:
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Membership of Committees – Appointed: Meruti, Ms MV – See ATC No 91 – 2008, dated 5 August 2008 |
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- OVERSIGHT VISITS
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Objective |
Date |
Delegation |
Place |
Report adopted |
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Oversight visit to the Pebble Bed Modular Reactor (PBMR) facility to monitor operations and understand the scientific basis for the technology employed in the proposed reactor. This was particularly important as much of the concern of the Portfolio Committee had been around the safety aspects of nuclear reactors. |
19 – 20 March |
Ms F Chohan (ANC) (Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla (ANC), Dr M van Dyk (DA) |
Pelindaba, Pretoria |
25 June 2008 |
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Oversight Visit to Transnet’s Container Terminal, Sentrarand Rail Terminal and Koedoespoort Rail Engineering Terminal to gain insight into operations and discuss some priority issues with key management. The Committee was keen to establish how Transnet was progressing i.r.o Turnaround Strategy. |
26 – 27 May |
Ms F Chohan (ANC) (Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla |
Durban and Johannesburg |
19 November 2008 |
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Oversight Visit to Alexkor to monitor activities in respect of operations and the restructuring. To also get a sense of the social and labour consequences arising from downscaling of operations and the restructuring process. |
29 – 30 July |
Ms F Chohan (ANC) (Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla |
Alexander Bay |
Adopted on 23 October 2008 |
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Oversight Visit to Safcol to gain understanding of their operations and the Corporate Social Investment Projects underway |
11 – 12 August |
Ms F Chohan (ANC) (Chairperson), Ms V Meruti (ANC), Mr E Kholwane (ANC), Mr Z Kotwal (ANC), Mr Y Wang (ANC), Mr C Gololo (ANC), Mr R Nogumla, Ms P Lebenya (IFP) |
Nelspruit |
Adopted on 23 October 2008 |
- INTERNATIONAL VISITS: None
- BUDGET VOTE
|
Referral date |
Briefing by Department |
Hearings |
Report Publication (ATC date) |
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3 September 2008 |
27 – 28 February |
Budget Briefings: Department of Public Enterprises |
ATC No. 84 – 2008 (Thursday, 26 June 2008) |
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- ANNUAL REPORTS OF THE EXECUTIVE:
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Referral date |
Briefing |
Hearings |
Report Publication (ATC date) |
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23 September |
Annual Report Briefing: Transnet |
26 August |
23 January 2009 |
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23 September |
Annual Report: PBMR (meeting cancelled) |
none |
None |
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23 September |
Annual Report: ESKOM (meeting cancelled) |
none |
None |
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23 September |
Annual Report: Alexkor (meeting cancelled) |
none |
None |
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30 September |
Annual Report: Denel (meeting cancelled) |
none |
None |
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17 October |
Annual Report Briefing: DPE |
21 October |
23 January 2009 |
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17 October |
Annual Report: SAFCOL (meeting cancelled) |
none |
None |
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17 October |
Annual Report: SAA (meeting cancelled) |
none |
None |
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17 October |
Annual Report: Broadband Infraco (meeting cancelled) |
none |
None |
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- OUTSTANDING MATTERS:
The following matters are to be taken up in 2009:
· Matters raised in the Chairperson’s overview
· Follow-up engagement with SAA on:
o Turnaround strategy
o VSPs, skills retention and “Retention Premium”
o Operational plan
o Balance Sheet stability
o “The Value/Strategic Importance” of SAA to South Africa
o Outstanding Annual Report Briefings:
· DENEL
· SAFCOL
· ALEXKOR
· Broadband Infraco
· PBMR
· ESKOM
· SAA
o Follow-up meeting with Transnet on tender processes
o Follow-up meeting with DENEL on funding
o Follow-up meeting with ESKOM on tariffs
o Follow-up meeting with PBMR on funding and strategic positioning
o Follow-up meeting with SAA on capitalisation
o Monitoring the resolution of land claims of forested land.
o Monitoring the enhancement of safety and efficiency in Transnet Freight Rail
o Outstanding Oversight Visits to DENEL, ESKOM and SAA
13. SUPPORT STAFF:
Committee Secretary: Mr Llewellyn A Brown
Control Committee Secretary: Mr Johnny Ramrock
Secretary to Chairperson: Ms Loretta Lawrence
Researcher: Mr Eric Boskati
Documents
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