DSI, NACI & TIA 2022/23 Annual Performance Plans

Meeting report

The Chairperson opened the virtual meeting, welcoming Members, the guest delegates and everyone present. The Committee was to receive briefings from the Department of Science and Innovation, the National Advisory Council on Innovation as well as the Technology Innovation Agency.

Opening Remarks

The Chairperson remarked that the Department of Science and Innovation (DSI) has been indicating it has managed to govern and manage its staff sufficiently over the years. Provinces like the Eastern Cape, North West, and KwaZulu-Natal were experiencing issues related to climate change. This is the moment the DSI should be able to assist us as a country to respond to disasters of this nature and also to mitigate such disasters. The Committee wants to see the DSI involved in these disasters and give the nation feedback on their impact. She said that, as they look at the plans of the Department, Members should consider things like transformation – innovation and science for the people by the people. The Committee is alert about the shortage of funds for the Department and many other departments. But it needs to see plans that indicate there would be enough budget for the Department to do its work, and how the Decadal Plan finds expression.

Dr Phil Mjwara, Director-General, DSI, briefly updated the Committee about the TIA review. He stated that the Department had two phases for the TIA review. The first phase was done and the terms of reference requested three things: to review the performance of TIA over the period since its establishment; retrospectively analyse whether TIA has been able to fulfill the role it was set up to play, and to forward recommendations based on the needs of the NSI and changing landscape. The panel focused on the recommendations only. The Minister felt that the other two items of the reference were not fulfilled. The Department then decided to appoint another panel to look at the retrospective analysis and performance review of TIA. The panel has promised to give the Department a draft report at the end of April 2022 and the final report around mid-May 2022. The Department would spend two to three weeks on those reports and then provide feedback to the Committee. The Department would then present the report to the Committee around June 2022, and it would include the spending review of TIA.

Department of Science and Innovation Annual Performance Plan 2022/23

The Department presented the medium term targets it sought to achieve over the medium term strategic framework period (2022/23, 2023/24, and 2024/25). It centred its plans on the undermentioned outcomes.

Outcome One: Transformed, Inclusive, Responsive and Coherent NSI

The Department would like to have a number of formalised partnerships between different category actors of the NSI that advance the Decadal Plan priorities. It plans to introduce a number of societal grand challenges to be adopted by Cabinet to crowd in resources and capabilities across the NSI. It would further introduce a percentage of STI investment support by government, domestic business, and non-governmental sector and foreign/international sources that advances GERD towards 1.1% of the GDP. It would also introduce a number of approved strategies that give effect to the agreed dimensions of transformation to be effected in the NSI.

Outcome Two: Human Capabilities and Skills for the Economy and Development

The Department plans to implement a new postgraduate funding policy that provides for full cost of support for certain groups, namely: the financially needy, students with disabilities, and exceptional academic achievers; to support more than 8 782 Honours, Masters and PhD students across programmes; and mainstream themes in research grants covering all knowledge fields. The Department would support the development of high-end critical skills in selected technology areas such bioeconomy, space science and technology, intellectual property management, robotics, photonics, and areas of technology convergence that are important in building a knowledge society.

Outcome Three: Increase Knowledge Generation and Innovation Outputs

The Department plans to increase South Africa’s research outputs and its world share of publications towards the 1% of global output. It would fast-track interventions aimed at PhD qualification among non-PhD staff, and fast-track interventions to improve the publishing rate of academics at HDIs to increase research outputs per capita. The Department would expand the roll-out of the South African national Research Network to TVETs and increase the total available broadband capacity to 5800 Gbps; and establish IK-Based Bio-Innovation Institute to interface and mainstream African wisdom for applied integral research.

Outcome Four: Knowledge Utilisation for Economic Development

The Department would motivate for the continuation of the Innovation Fund, which would serve as a new financing instrument in partnership between the public and the private sector, with the sole purpose of harvesting and commercialising the South African technology innovations for deployment in national and international markets. It would further participate in the development of sectoral master plans, i.e., agriculture, oceans economy, energy, mining and health. It would also partner with the Department of Mineral Resources and Energy (DMRE) in deploying fuel cells at government buildings and critical infrastructure such as airports and rural formal and informal urban settlements to reduce the impact of rolling blackouts.

Outcome Five: Knowledge Utilisation for Inclusive Development

The Department would expand the multi-tiered package to support commercialisation of grassroots innovations through technology development, compliance with industry standards (where applicable), and protection of IP and mentorship. It would provide a more deliberate focus on IP-related solutions that would enable and improve access to basic services, strengthening the capacity of the state in service delivery and promoting the inclusion of women, youth, and people living with disabilities.

Outcome Six: Innovation in Support of a Capable and Developmental State

The Department would be more deliberate in promoting the expansion of piloted solutions that enable and improve access to basic services such as waste and water management, housing, sanitation, and energy provision that strengthen the capacity of the state in service delivery. The Department would also like to have a rigorous advocacy process on the adoption of locally developed technology in support of the use of innovation in implementing state policies in basic education, health, infrastructure projects, etc.

National Advisory Council on Innovation Annual Performance Plan 2022/23

Dr Shadrack Moephuli, NACI Board Chairperson, briefly took the Committee through the legislative functions of the entity. Amongst other things, it is responsible for: the coordination of science and technology policy and strategies with policies and strategies in other environments; the identification of research and development (R&D) priorities, and their incorporation in the process of government funding of research and development (R&D). It is also responsible for the promotion of mathematics, the natural sciences and technology in the education sector, and it plays a role in the establishment and maintenance of information systems that support monitoring and evaluation of the NSI management and functioning; international liaison and cooperation in the fields of science, technology and innovation (STI); and developments in the fields of STI, which might require new legislation. Further, it develops strategies for promotion of the dissemination and accessibility of scientific knowledge and technology, as well as for promotion of public understanding of S&T and their supportive role in innovation for development and progress.

Dr Mlungisi Cele, Acting CEO, NACI, briefed the Committee on the strategic oriented outcomes and performance information of the organisation. The entity continues to learn from previous experience to improve efficacy, relevance and ensure evidence-based, confidential and timely STI advice to the Minister of Higher Education, Science and Innovation and, through the Minister, to Cabinet. Also, it continues to contribute to the building of NSI monitoring, evaluation and learning capability in order to assess the health of the NSI and its contribution to sustainable and inclusive development. This remains work-in-progress. The main goal is to transform NACI into a smart, efficient and learning organisation. This requires continuous focus on getting a highly capable Secretariat; seizing opportunities of digitisation; quality and turn-around time; communication; knowledge management; skills development; improving internal planning, performance and reporting; and partnerships with NSI actors and international bodies and institutions.

He indicated their short- to medium-term targets were on the renewal and repositioning of NACI in line with the White Paper on STI, to provide advice to government, implement White Paper Tasks, i.e., IMC, forge partnerships and networking, and provide communication and knowledge management. Regarding the provision of evidence-based advice on STI matters, the target is to draft three STI advice reports, produced and engaged by 31 March 2023.

In developing STI central data and information repository from publicly financed data, there is ongoing maintenance and implementation of the NSTIIP and would be finalised by 31 March 2023. Pertaining to ensuring efficient and effective provision of corporate services such as administrative, financial, technical and professional support in order to discharge the core mandate of NACI, the Communication Plan has been updated and would be implemented by 31 March 2023. The corporate governance system has been implemented (2022/23 APP, 2021/22 Annual Report), developed and approved by Minister and would be submitted to Parliament by 31 March 2023. All NACI meetings would be recorded, and transcripts for the 2022/23 financial year would be stored safely in knowledge management system by 31 March 2023.

In his closing, Dr Cele indicated national challenges were presenting opportunities. The renewal and repositioning of NACI would remain a priority. They would continue to strengthen coordination, advisory, planning, analytical and M&E capabilities, including partnerships and networks. They would continue to address organisational and technical capability to deliver and meet predetermined objectives.

[Tables and graphs were shown to illustrate allocations and expenditure – see presentation document.]

Technology Innovation Agency Annual Performance Plan 2022/23

Ms Matsi Modise, TIA Board Chairperson, remarked South Africa needs TIA to succeed and to find solutions for global challenges. People with innovative ideas should know that TIA is there to support them. The organisation is at a point of finding stability in leadership and focusing on its repositioning.

Amongst some of the key issues presented, she indicated the entity was experiencing lack of leadership stature in the NSI (funding and weak commercialisation record); poor coordination and integration of RDI funding instruments; the benefits of innovation were not evenly distributed (spatially; demographics); and there was a low rate of utilisation of scientific outputs for socio-economic benefit. She also cited a decline in experimental development research. Research outputs concentrated within a handful of universities. There has been a positive impact of seed funding and funding gap for commercialisation. The main focus is on innovative funding to reduce dependency on fiscus and intensify private sector partnerships.

Policy considerations would focus on the White Paper on STI, Decadal Plan, DST and DHET reporting to one Ministry, and Economic Reconstruction and Recovery Plan. The TIA Ministerial Review was another process that is ongoing.

She reported the entity received an unqualified audit, with no matters of emphasis for five years in a row and ISO9001 (2015) recertification for four yours in a row. Challenges are on the turn-around time and lack of integration of internal portfolios. Commercialisation has been undermined by lack of effective post-investment support. The budget on average is around R410m. A total of 68 projects were funded to the tune of R650m. All funds have been disbursed, and there is an improved efficiency ratio of 25%.

Dr Vuyisile Phehane, Executive Manager: Bio-economy, TIA, informed the Committee that the South African Indigenous Knowledge Systems was going mainstream. The African Traditional Medicine Platform has been established. TIA made an investment of R35m, while the DST provided co-funding amounting to R10m. TIA approved the China-SA Flagship programme (R500k per annum over three years). The Flagship Programme is between the Beijing University of Chinese Medicines & UFS. SAHPRA approved the PHELA COVID-19 Clinical trial.  This has been the country’s and sub-regional first for traditional medicines controlled clinical trials and clinical trials for COVID-19.

Mr Brian Mphahlele, Executive Manager: Commercialisation, TIA, reported that TIA funded market-facing entity. The IP- fluorination of rare-earth metals, is operating under license from Necsa. Patents have been filed globally by Necsa. Current status: 70 ton/pa Neodymium Fluoride demonstrated with TIA funds in Gemini Natural rare earth price~$40\kg After beneficiaries with Necsa IP ~$150\kg. The company, Rare Earth Refineries, is 26% black women-owned.

Mr Vusi Skosana, Acting Executive: Innovation Enabling, TIA, presented the UNIDO Global Cleantech Innovative Programme-SA. He said that it accelerates and supports entrepreneurs (SMEs) in energy efficiency, renewable energy, green building practices and biotechnology, and provides early-stage financing and support to SMEs from concept to commercialisation. TIA secured $3.4m over five years for Phase II to assist transitioning towards a circular economy and create green jobs. The target is to support 200 start-ups. It has provided support in the establishment of the Clothing and Textile Hub at Tshwane South College – Odi Campus, Mabopane, Gauteng Province. GPED approved funding of R4.65m (capacity building and training; capex for high-end infrastructure).

Also, he talked about investment in infrastructure. The entity co-funded the establishment of the Clothing and Textile Hub at Tshwane South College in Mabopane. TIA collaborated with the Gauteng Province Economic Development Department, which approved funding of R4.65m for capacity development and training; and capex for high end infrastructure.

Dr Phehane talked about working with partners in the NSI. He stated TIA launched the Active Pharmaceutical Ingredients. The DSI and TIA decided to set up an innovative, competitive, and world-class API manufacturing facility. The aim is to support and strengthen South African local research, development and innovation capabilities to manufacture active pharmaceutical ingredients because it has been discovered that SA imports R20bn of APIs per year.

Ms Tandokazi Nquma, Acting Executive Manager: Strategic Partnerships and Stakeholder Relations, TIA, said that the agency launched 2019 an exciting initiative called Industry Matching Fund Programme. Through this programme, TIA is integrating itself in the funding ecosystem. It is investing in early stages of start-ups involved in the technology and innovation space, while working in the ecosystem funding in SA. It is important for South Africa to invest in its own ideas. The fund has invested in more than 24 projects. Nine of the projects have been commercialised. Twelve companies have been created and 76 jobs created. More than R1.5bn has been leveraged at project level. R524m has been leveraged against R43m TIA at fund level. This Fund has accelerated the mandate of the entity.

Ms Modise then informed the Members their priorities for planning were on:
- promoting commercialisation for increased socio-economic impact
- increasing investments in innovation infrastructure
- increasing private sector investments in STI
- promoting transformation and inclusive growth
- promoting partnerships for increased funding
- implementing a revised operating model as per TIA Review

She listed the following opportunities:
- Increased dynastism of the innovation ecosystem
- Increasing participation of the private sector in the development and utilisation of locally developed technologies
- Start-up Act initiative by the investor community
- Strong DSI drive to promote public procurement of locally developed technologies
- Innovation Fund will increase commercialisation of locally developed technologies through the provision of Series A and Series B funding
- Draft Decadal Plan clarifies key STI policy priorities, auguring well for policy certainty.

These are the current challenges facing the entity:
- Uneven participation of PDI institutions in the production of publicly funded research output
- Persistently low innovation activity in underserved provinces
- Fragmentation, silo mentality and avoidable competition amongst funders within the NSI

Ms Modise further presented the three outcomes of the organisation:

Outcome One: Commercialised Innovations
This outcome is aimed at directing more of TIA’s resources to support the translation of locally developed technologies & IP from HEIs & science councils into commercialised innovations. The challenge is around poor translation of public-funded technologies & IP for socio-economic growth development. The Decadal Plan would rejuvenate manufacturing and mining through competitiveness and efficiency improvements and application of new technologies; improve energy supply security and decarbonise the economy through greener energy technologies; and sustainably utilise its natural resources (waste and water) and transitioning to a circular economy.

Outcome Two: Delivering on the Bio-economy Strategy
This outcome is aimed at supporting the translation of bio-based knowledge resources into sustainable bio-based solutions through implementing the Bio-economy Strategy (agriculture, health, industrial biotechnology and IKS). The challenge is around unrealised potential for new bio-based products and processes and the creation of new enterprises and new markets. The Decadal Plan would be revitalising and modernising the agriculture sector through improving economic competitiveness and productivity; leveraging off the circular economy; providing innovation in support of health (optimisation of health systems, improving quality of healthcare, digitisation of healthcare systems); and provide ecosystem-based climate change adaptation and mitigation through technology development and dissemination in key sectors.

Outcome Three: SMMEs Supported through Strategically Informed and Regionally Distributed Technology Stations
This outcome is aimed at promoting the growth of SMMEs and cooperatives, contribute towards innovation-led industrialisation processes, creation of decent jobs, technology start-up enterprises and the support of SMMEs. The challenge is around the structurally high unemployment, especially women and youth; poor SMME startup and survival rates; and fragmented and poorly coordinated NSI. The Decadal Plan would foster inclusive development through SET and enterprise development support to grassroots innovators, cooperatives, entrepreneurs and businesses; and foster transformation through increased spatial footprint to underserved provinces and priority districts.

Lastly, Ms Modise, on key initiatives like the Textile Tech Hub and Special Purpose Vehicle, stated the organisation would establish a clothing and textile hub in partnership with GDED, and develop a business plan to establish an SVP to leverage funding partnerships, respectively. Concerning Biorefinery and Fund Manager Programme, TIA would establish an ALGAL Biorefinery initiative and implement the TIA/SA SMME/SAVCA Fund Manager Development Programme, respectively. Then, on the TIA Accelerator and SBRI initiatives, the entity would establish a TIA Accelerator Programme and implement the Small Business and Research Innovation Programme, respectively.

[Tables and graphs were shown to illustrate allocations and expenditure – see presentation document]

Discussion

Deliberations with DSI and NACI

Ms J Mananiso (ANC) remarked that the presentation has made it very easy to understand the work of the DSI. There is value for money. Science is for development and solutions because of what it has done at the recent floods in KZN.

The section of the presentation dealing with data shows inclusivity within the Department. The Department is exhibiting commitment to transformational agenda. She asked the Department to provide the Committee with its action plans, and indicated she was pleased with its approach to up-skilling and re-skilling. She further indicated it was exciting to learn how NACI has focused on past experience in order to move forward. She asked the entity to forward the Committee its action plans and the number of specifics on the indicators.

Ms C King (DA) asked the Department what the impacts would be on the implementation of its plans seeing that funding is shrinking. She wanted to understand the areas in which the consultants were used; enquired what informed the IPR amendments; wanted to establish what the views of the Department were on shale fracking; and wanted to understand if the Department was giving innovational assistance to SA ports for ease of trade, seeing that the ports were showing a decline on digital communication. Then she asked NACI how the entity was enforcing entrepreneurship to ensure we are moving ahead of time.

Dr Cele, on entrepreneurship, stated two projects were at an advanced stage. Technology diffusion is an area that needs to be given a serious focus. The first part of the other projects has been completed. Patents have been developed. Phase two of the project is about to commence. Once completed, analytics would be added.

Dr Mjwara said the report on shale gas fracking has been presented to Parliament before and would be made available to the Committee. Consultants have expertise they do not have in the Department, especially specialised services that are needed. Expertise, for example, those of a health economist, is not needed in the Department because they are used on a once-off basis.

Dr Rebecca Maserumule, Chief Director: Hydrogen & Energy, DSI, indicated there was a hydraulic monitoring committee for the shale gas fracking. The DSI is still a member of the committee. The Department has held a series of workshops for the public after the review was set in Parliament. She further stated the DSI has received budget cuts due to covid-19. Funds had to be from other programmes of the Department.

Mr Imraan Patel, Deputy Director-General: Socio-Economic Innovation Partnerships, DSI, said entrepreneurship is an area that has been championed by other departments, and it should be introduced in the curriculum at basic level. He also indicated the SA ports are a new area of work on infrastructure the DSI is involved in. The bill is ready. One issue that is being discussed internally has to do with the registration of experts. The matter is expected to be finalised around October 2022. He further indicated funding had decreased across the board. This started eight or nine years ago. Two programmes were grown for the IPR. In the short term, they had to decrease funding in other areas to keep the two programmes alive.

Dr Mmboneni Muofhe, Deputy Director-General: Technology Innovation, DSI, said that, in the past two years, they have deployed innovation funding to meet transformative targets and spatial transformation. The Department started to support entrepreneurs involved in indigenous knowledge. They are incubated in hubs. It is still early days to talk of success stories.

Mr W Letsie (ANC) recounted that the President stated in his weekly newsletter that science and technology have a role to play in the economic recovery and modernisation of industries. The overriding priorities of 2021 would, therefore, remain the same. He commended the DG and his team for focusing on the deliverables to change the lives of ordinary people. He then asked why the Department was spending budget on consultants instead of building in-house capacity to eradicate outsourcing within the Department; asked how science and technology are considered in the Africa Continental Free Trade Area Treaty; what informs the decline in the medium-term expenditure framework; what informs the amendments to the IPR and when would it be tabled to Parliament; what the status is on locally developed technologies and PhD Tracer Study; for clarity on the decline of funding in the astronomy sub-programme. Lastly, he enquired how NACI has fared in repositioning itself and what the timeframes are for the actions.

Dr Cele explained there is a draft discussion document about the renewal timeframes of the entity. It contains practical recommendations for the Department to consider. The timeframes are detailed.

Dr Mjwara said that the Department has made submissions to Treasury about the uptake of locally developed technologies. The Department is embarking on a rigorous advocacy programme on what it offers.

Dr Maserumule said the IPR Act has two outcomes. The review was completed in 2019. It was envisaged the process for amendments would take 18 to 20 months.

Mr Patel stated that the PhD Tracer Study would need a separate presentation. It is work of three months. The study would be made available to the Committee. He further indicated that the Department was in discussion with Treasury to look at all possible avenues to address the shortfall on the astronomy sub-programme. It requires a lot of funding. The requirements are for a short term.

Mr Daan du Toit, Deputy Director-General: International Cooperation and Resources, DSI, reported that South Africa supports continental free trade and the commitment to leveraging this opportunity for the government as articulated in the economic recovery plan and DSI Decadal Plan. It is the Department’s commitment to develop and support the building of the free trade area and South Africa’s opportunity to use those areas. He said that they need to have networks and organisations for science and innovation. He suggested the creation of future Pan African markets in technology-intensive industries and sectors through various Pan African R&D programmes, and engaging in policy dialogues with SA’s counterparts throughout the continent, on policy harmonisation needed in order to unleash the potential of free trade area in science technology and innovation. This could be related to issues like intellectual property and public procurement. He said that they want to position SA, especially the technology-intensive enterprises and entrepreneurs that are being supported through the national system of innovation, to access future market opportunities elsewhere in the African continent. This would create synergy between science and economic diplomacy, and it would be a priority for the Department in the coming years, working closely with the Department of Trade, Industry and Competition.

Ms D Sibiya (ANC) wanted to know if the consultants were more empowered than the DGs.

Mr Robert Shaku, Acting CFO, DSI, stated that the Department requires services from experts it does not have. There are inside committees as well that also provide consultancy work for the Department. Some of the activities are once-off and it would be impossible to hire people for that.

The Chairperson remarked that the Committee was concerned about research investment from the private sector, and asked what the impact of the funding shortfall is on the work of the Department. She asked how the Department was going to ensure the plans of the private sector are aligned to the plans of the Department; enquired about the key impediments the Department was facing; wanted to know if there were any mandates that have not been currently funded in the Department; and asked if the Department would be sending teams to provinces affected by floods, seeing that there were rumours the Department has not gone to provinces affected by floods.

She then wanted to establish from NACI how the two departments (Higher Education and Science and Innovation) could be merged but ensure they do not lose their mandates and areas of focus; enquired what the major weaknesses of NACI are that require the renewal of the entity, and what input the entity needs from the Committee for its renewal.

Dr Moephuli, NACI Chairperson, indicated that support is needed from Parliament because the work of his organisation touches the whole of government. One of the challenges of NACI is the entity is very small and covers the work that is having an impact on the government and society. This has resulted in the renewal of NACI. He further stated NACI has been asked to provide advice on the merger of the two departments. This would not be taken lightly to avoid the swallowing up of DSI by Higher Education.

Dr Cele added that the APPs alluded to the weaknesses of NACI. The institutional location of NACI should be taken into consideration. If NACI continues to be where it is and report to the Higher Education Department, it should be delinked from the Department and stand alone or be located in the Presidency. It is also important to look at the secretariat, as it comes from the Department. The demands for NACI are increasing. Existing competencies in the system are being used. The utilisation of advice also poses a catch-22 situation. The recent policy merger NACI has done, including the White Paper, indicates the direction and advice NACI has taken. The Department is making use of some of NACI recommendations. He also indicated the possible analysis of the merger of the two departments is a matter that has been raised previously. NACI is working with advisors. Once the discussions are clarified, this would provide a huge opportunity that would need to be seized.

Dr Maserumule informed the Committee they have companies that are led by women to do exhibitions for the Department in order to attract private sector funding. The Department has a strong partnership with Anglo, but other partnerships are still needed from companies like SASOL.

Mr Patel stated there are many ways of making the private sector align with the plans of the Department. There is a mining programme that has been co-designed and has attracted people to invest more money.

Dr Mjwara admitted the private sector funding was declining. Now the Department is trying to look at optimising funding from the government so that funding from the private sector could be attracted through various initiatives. He said the KZN floods presented a slot for the team/coordinating structure so that the Department could provide input. The Department would engage with the department of the Premier on what it could do. Lastly, he said the Committee would be briefed about the discussion on the merger of the two departments during quarter three.

Dr W Boshoff (FF+) commented the presentation was stimulating and interesting. He asked what the status is of Kapa-Bio company affair where a company funded by TIA was sold to a US company and then resold to a company in Switzerland at a very high price.

Ms Annalie Woest, Head of Legal Services, TIA, informed the Committee that the Cape Biotech Trust entered into a subscription and shareholding agreement with Kapa-Bio-Systems, which was Kapa US and Kapa Bio Limited – which was in SA on 16 March 2006. Pursuing to that subscription and shareholders agreement, Cape Biotech invested an amount of money in Kapa SA. It was then agreed that CBT (Cape Biotech) would participate in the value of 10% in the shareholding of Kapa US once there is a disposal of funds in the agreement. In 2013, TIA was approached by Kapa US to buy out its 49% shareholding in Kapa SA, which is equated to 10% of the value of Kapa US. Negotiations took place. Subsequently, in 2015 an amount of USD4.93m was accepted, and this was based on an independent valuation by Kapa US. According to that valuation, the value of Kapa was established and it was indicated Kapa was worth $US4.9m. About 10% of that amount was accepted by TIA in terms of the sales of the share agreement entered on 26 March 2015. The amount of $4.93m amounted to R60m, which was received by TIA. Then TIA subsequently learnt through the media that, eight months later, Kapa was sold to a Russian group for $445m. This happened around November 2015. Then, when Kapa became aware of the transaction between Kapa Russia and Kapa US, legal proceedings were instituted against Kapa US. TIA was represented by Adams & Adams Attorneys. The law firm instituted two separate claims from Kapa US, mainly for misrepresentation and breach of contract because it appeared that the initial value communicated to TIA, done by an independent valuator, meant that TIA suffered a great loss around $3.965m.

In terms of the provisions of the sales of shareholding concluded in March 2015, the dispute between the parties must be adjudicated by an arbitrator and the matter currently is in arbitration procedures. On 6 April 2022, there was a pre-arbitration conference between the legal teams of TIA and Kapa Biosystems, and the following outcomes were agreed upon: the final arbitration would be held between January 2023 and February 2023 in Cape Town; the Kapa US legal team confirmed it would provide information on disclosure on request from TIA on 6 May 2022; the parties agreed on the completion date and process of the matter for the exchange of papers for interlocutary related to the issue of the discovery; they further agreed the interlocutory application would be discussed via emails, provided the date of the hearing would not be later than August 2022. Covid-19 regulations also contributed to the delays of this process.  The arbitration process is expected to be completed early next year (2023).

Ms Mananiso asked what could be the cause of the challenges on turnaround time; what the plans around mainstreaming IKS are, as part of the transformational agenda; requested a breakdown of the 26% women black-owned company, and asked if it has people with disability.

Ms Modise stated the turn-around time has been a concern for their stakeholders. The entity should be employing technology to speed up processes.

Mr Abdoola added that, as from last year, they have been busy analysing the causes of the slow turn-around time. Already there are improvements that have been implemented. The turn-around time has been segmented by the value of the projects. Some transactions require due diligence because of their complexity. Investments have been done in order to provide quick feedback/support to stakeholders.

Mr Mphahlele reported the company comprises the following women: Dr Nozi Mjoli (68 years), Ms Thembeka Mjoli (47 years), and Nhlanhla Mjoli (64 years). None of them had any disability.

Ms Sibiya asked how many enterprises TIA has supported, seeing that it has helped in the establishment of a clothing and textile enterprise in Tshwane.

Mr Skosana stated the geographic spread of support is made to communities. The textile hub was motivated by the Gauteng province after seeing what happens in Cape Town. The entity would continue to track data on enterprises that have made progress. This infrastructure is being expanded.

Mr Letsie remarked TIA has a dynamic history with the Committee, which has held numerous meetings with it. That history is not good. A former service provider was appointed an acting CEO of the entity. He said he hoped all those things would belong in the past. The entity would continue to be scrutinised even though the Committee has celebrated the appointment of its female chairperson. He asked how the entity is going to perform when the current budget restricts its appetite to do more; what challenges were existing in the entity within the skillset and how they would be corrected; what progress could be reported against all the actions in the presentations; what districts are being supported; and where is the Skills Fund programme is going to be implemented.

Ms Modise indicated they were aware of the challenges the entity has experienced since 2008, and they are aware of the environment they find themselves in. There is a need to identify a value proposition. The entity no longer wants to rely only on state funding. That is why they are trying to be innovative. The acting CEO would continue to act until the review is concluded.

Ms Mnquma stated they have started to see money coming from the corporates for innovations they are interested in. The entity is looking at different capital sources to deliver on its mandate. That is why the Industry Matching Programme is there to generate more income for the organisation. They are starting to fund more with less through the Industry Matching Fund.

Mr Abdoola added they are exploring the partnership funding model. They are looking at potential funding from the private sector in order to work with it towards delivering the mandate of the entity.

The Chairperson wanted to find out what the short- to medium-term objectives are of the ministerial review process, and what are the root causes that led to the review; how many start-ups have been supported through the Global Clean Tech Programme; if there is any support given by TIA to other entities; what the geographical spread of SMMEs supported is. She also asked for clarity on the performance on lack of leadership structure.

Mr Skosana stated the Clean Technology portfolio has 102 beneficiaries that it continues to support. Some were making it in the markets and making big profit.

Ms Nquma reported the entity has worked with the Western Cape Department of Economic Development; Department of Tourism; Eastern Cape Department of Economic Development on the agro-processing programme. Other entities it has worked with include Eskom, on the Komati Power Station, and the SAB Foundation.

Ms Modise requested to reply in writing to questions around the review, challenges, economic impact, monitoring and evaluation, and geographical spread of SMEs and corporates. She further indicated the entity has many stories that have not been shared with the public but efforts were being made to make the stories known.

The Chairperson remarked that it appears as if the entity has an idea of where it wants to be and how to get there, especially given its history in making unsavoury investment decisions. The Committee needs to look at how transformation has taken place at the entity.

The meeting was adjourned.