Update by DMRE on developments relating to the Ketlaphela State Owned Pharmaceutical Company

Meeting report

The Chairperson welcomed everyone and checked in for the presence of the pharmaceutical companies. Mintek was first in giving a presentation to proceed with the meeting and NECSA would follow.

Briefing by Mintek

Dr Molefi Motuku, Chief Executive Officer (CEO), Mintek, gave the presentation. He began by referring to the value chain of pharmaceuticals. Usually when a person feels sick, they get diagnosed. The treatment gets provided at a later stage. So, Mintek is mainly focusing on the diagnosis side of health.  NECSA deals with the pharmaceutical side. They have two programmes that are complementary to one another but also very distinct. As such, they will first focus on the diagnostic part of the overall programme from Mintek. He briefly took the Committee through the intent of the diagnostic programme, the benefits, and the key pillars of the programme (which are the test kit developments, diagnostic reagents, production and the sanitisers). The Committee was said to have been familiar with some of this information as it was presented before, but the CEO would just be highlighting the progress that they have done so far in respect of the programme. 

The Diagnostic Test Kit Programme

What is important is to establish an expenditure diagnostic device industry in South Africa as well as building local capacity to manufacture these products within the country. This was the motivation behind this programme.

The benefits for the country

Most of the kits address HIV, AIDS, Tuberculosis (TB), malaria and Covid-19, as well as an animal diagnostic kit for animal health. The main aim has been to localise test kits and other related products, as there has always been a problem of a lack within the country. Some of the reasons why there has been a deficit and shortage are because of the World Health Organisation (not producing affordable, user-friendly, rapid and deliverable products). Mintek’s test kits are specifically in line with the assured principle. Although this may sound technical, he said it is important for everyone to understand the steps that the company goes through when it develops these kits.

The high burden of disease in South Africa regarding the abovementioned illnesses has caused Mintek to focus on the existing diagnostic programme to develop test kits for Covid-19. The first part that they call ‘research and development phase’ can normally take from three to ten years. His example was the company’s development of HIV and TB test kits. He said it took them ten years to create. Since they have built up experience and expertise, it took them six months to develop the Covid-19 test kits. So it does differ. What takes longer is when they move into the pilot production, external evaluation, registration and manufacturing stages. Most of their products are sitting at pilot production and external evaluation. They do have some collaborators and investors in South Africa such as the South African National Blood Service (SANBS), the WHO, South African Health Products (SAHPRA), etc.

Dr Motuku then presented information on the HIV test kits that are at the registration stage. He said that the two Covid-19 test kits that they have produced (the Covid-19 antibody and the Covid-19 antigen test kits) have been submitted to be externally evaluated and the results are expected in the next few weeks. They are even planning to start production as early as December or early next year. The one test kit is to test whether you have been exposed to the Covid-19 virus (testing your antibodies), and it is currently being used at Mintek. The second one is to detect the virus itself.

The malaria test kit is also at the registration stage. The Rift Valley fever, TB, brucellosis and bovine TB also have test kits designated to them for animals. However, this is not the only portfolio on test kits that they have. Regarding the TB and brucellosis kits, they are expecting to make production within the next two years (in 2022). The Rift Valley fever, Malaria and breast cancer kits are expected to be in production within the next three years. The cervical and prostate cancer test kits should be ready within four years. This gave a picture of what is in the pipeline and ‘time to market’, for their test kits. When referring to the overall test kit portfolio, in the short term (next three years or so), they expect to have these projections being successful as they are quantitative. The ELISA (antibody test) is expected to be ready within a year and a half.

Medium Term (2023-2025)

Mintek has a variety of test kits that they will bring into the market. What is novel about what they will be doing is that in one test kit, one will be able to detect multiple illnesses; for example, HIV and TB (in one test kit).

Next on this programme would be bovine and brucellosis. As there exists a South African Regulatory Authority, the University of Cape Town (UCT) is doing Mintek’s external clinical validations. They also have a standing committee for the commercialisation of these products. The Department of Trade Industry and Competition (DTIC), Industrial Development Corporation (IDC) and the Development Bank of South Africa (DBSA) are working with them in order to accelerate the commercialisation of Covid-19 test kits. They have the funders and other people who understand the business developmental aspects as a part of this programme. Moreover, they have the support of the South African Medical Research Council (SAMRC), the Department of Science and Innovation (DSI), and the South African National Blood Service (SANBS), who provide some posts for Mintek to run some tests.

As they have indicated, their facility is International Organisation for Standardisation (ISO) certified and this process took them roughly three years to complete. They are happy to announce that the facility to manufacture the test kits is finally ready. It can manufacture up to 25 million test kits per annum. He emphasised that it is still a research facility.

Mintek also has a SAHPRA Manufacturing license for HIV and malaria, and they are busy with the submission of their Covid-19 Manufacturing license to SAHPRA. They have also received additional funding from the SAMRC and from the DSI. Some of the other key members who have also helped to certify this programme were Lloyd's Register (Assurance, Certification, Inspection, Training, etc.) as well as the Certification by ISO, which will be active for the next three years.

Long Term

Mintek is expanding their test kits. In the more distant future, they will be focusing more on quantitative test kits. He said that these are a bit tricky and difficult. They will also be developing antibodies for disease reagents which also focus on TB, malaria, diagnostic peptides and cancer. They will broaden their scope to include general reagents because they are building capacity in order to produce these reagents. He presented a picture which showed the peptides antigens that were already developed and were scheduled to go in for external evaluation soon.

Sanitiser Production

The presentation indicated that Mintek entered this industry because most of the sanitisers available on the market are not of good quality and do not meet the required specifications of an effective sanitiser. Since last presenting to the Committee, Mintek is now busy commissioning a facility for the production of sanitisers. In the past, they had repurposed their research facilities to produce sanitisers, of which he presented a picture of in the meeting too. The facility will be ready by the end of November for full production. Some of the highlights are that they have submitted to the market and they have also adopted a school programme, where they have donated Personal Protective Equipment (PPE) in Cosmo City. They provided sanitisers (a variety of surface and hand sanitisers), dispensary equipment for sanitisers as well as information pamphlets about Covid-19.

The way forward with this programme

They started from the laboratory and they have since learned that the laboratory infrastructure is not ideal when you enter the commercial side of things. They have also seen that with their sanitiser programme, they have a dedicated production plant being commissioned. The test kit production facility is also not adequate enough as a commercial space. Mintek has secured internal funding to establish a market-dedicated, commercially-facing production complex, where they would incubate businesses to make sure that they produce enough quantity to both test and develop the market. They are also market-ready in terms of the regulatory requirements and business practices, to ensure their success. In this facility, they will be partnering with entities that have been mentioned in this presentation and some that they have been in talks with. Here, they will not only be focusing on test kits, but they will also be producing diagnostic reagents as well as other health products. These products include sanitisers, aqueous creams, ointments, multivitamins, etc.

Why multivitamins? Because one of the Department of Health’s (DoH) biggest expenditures is on securing support for the immune system, as such they have to produce many multivitamins. This medication is easy to produce and does not require much expertise so it will not be much of a hassle for Mintek to produce them. Moreover, they have enough people with the acquired knowledge and skills to produce what is needed from a pharmaceutical company. In this facility, they are looking at roughly 100/150 new jobs being created, and the projected revenue between R400 million to R600 million.

Diagnostic Reagents

This is where they develop medical reagents, antigens, antibodies, peptides and nanoparticles, which are all ingredients for developing test kits. These are also important for other medical research.

With antigens and antibodies, they are developing antibodies for SARS-Covid-2 and they are laboratory upscaling. They developed these Test kits and anticipate that between January and May 2021 they will be at the pilot upscaling stage. In terms of antibodies for convalescent plasma for Covid-19, they said that they have been isolated and they will be ready between February and May 2021. Regarding the product portfolio on antibodies, they said they will have the HIV antibodies, diagnostic peptides, etc. ready within the next year or so.

Discussion

The Chairperson made an apology as he assumed that this was a joint presentation, first being Mintek. His concern was that his first time seeing the presentation was on the morning of the meeting, and he hoped that other Committee Members were willing to first familiarise themselves with the presented information. He was also trying to avoid the precedent that reports are to be received at least 48 hours before presentation and before the Committee meeting starts. So, if Members had any rejections, he asked them to please follow principle and procedure by carefully going through the presented documents first.
The Committee agreed with the Chairperson, who proceeded to relieve Mintek till they needed them to answer any questions.

Ketlaphela Presentation

Mr Ivan Radebe, Managing Director of Pelchem, presented on behalf of Ketlaphela about the progress that they have made thus far.  He said that in 2007, the ruling political party adopted a resolution to establish a state-owned pharmaceutical company. In 2009, the then Cabinet took the resolution of establishing the state-owned pharmaceutical company. The country’s pharmaceutical sector is estimated at about R50bn and growing, at an average of seven percent permeated by multinationals and also has little value addition in the country, as most of the pharmaceutical products are imported. Reliance on imports, particularly of pharmaceutical active ingredients, presents a clear opportunity for import replacement in both human and veterinary pharmaceuticals. Moreover, commercial integration means that opportunities do exist in expanding our export.

Ketlaphela is under state procurement power to localise the manufacturer of the API’s and to also expand formulation and packaging capabilities. The spread of Covid-19 has drawn attention to the vulnerabilities of the global medicine supply chains and the heavy worldwide reliance on China for the critical active pharmaceutical ingredients. These ingredients make medicine effective, and the development of Ketlaphela has proven that the Government took an appropriate decision to establish this company – not only as to address market deficiency but it also supports the security of supply. As Mintek has presented, there are two entities which have complementary capabilities and are both collaborating based on the decision that the Minister took. To that end, the Minister directed that these entities work together to bring into fruition, a state-owned pharmaceutical company. The State also owns 38% of Biovac which supplies human vaccines, and the development of Ketlaphela is currently sitting quite well. This is because Section 54 has already been approved by the Minister.

The Department has supported and continues to support Ketlaphela and, together with Mintek, is currently in the process of finalising a supply agreement with the DoH and they are also finalising the necessary approvals with National Treasury. All of this has been progressing very well and the Department is very optimistic that Ketlaphela is expected to realise government objectives by the end of 2021, with new products being presented in 2022 and when all the procedural approvals are in place. He proceeded to hand over to the chairperson of the board of the Nuclear Energy Corporation of South Africa (NECSA) to introduce the topic of NECSA’s team.

Mr David Nicholls, Chairperson of NECSA, introduced the group CEO, Ms Ayanda Myoli, the Managing Director of the Pelchem Group, as well as the Chairperson of the Ketlaphela Group, Mr Ivan Radebe. He asked for the presentation to be uploaded and then they would cover the issues at hand.

Mr Radebe presented the projections on Ketlaphela’s progress thus far. As a way of an introduction, he took the Portfolio Committee through the meeting that was held in August of 2019 when the Committee visited the NECSA facility, located just outside of Pretoria. They had made presentations to the Committee around what was happening with the group and a presentation on the progress of Ketlaphela. Here, they had indicated that there was indeed progress albeit quite slow. Subsequent to that visit, there has been an extensive increase in the pace of the development of Ketlaphela. There was a new board that was appointed by NECSA and the support from the Department has allowed for more improvement. In that regard, he thanked the Committee and the Department for all their assistance towards Ketlaphela.

The main mandate of Ketlaphela is to localise pharmaceutical products, especially for the burden of diseases in the country, as presented earlier in the meeting. Besides the fact that the Cabinet had taken the correct decision in implementing a state-owned pharmaceutical company, there is also a market need for the localisation of pharmaceutical products. They have also seen that the bulk of products that are required by the region and the country are imported from other countries. In South Africa, about 90% of the population is primarily served by the Department of Health. Essentially, the State is the main provider of health services. So, if you want to enter into the pharmaceutical space, the main market therefore becomes the DoH. The business model of Ketlaphela is to leverage the State procurement power by making sure that they are able to attract international partners who have expertise that is unavailable within the country.

Mr Radebe made an example of a patient going to the Doctor for a headache, receives a prescription of a 5mg of paracetamol. When you take the pill, you may find that it weighs roughly 7mg. So what the doctor has prescribed is called the active pharmaceutical ingredient, which is the molecule that will take the headache away. In terms of the pricing of the pills, 60-80% of the pricing on the value of the pills is in the API’s. Most of those API’s are introduced in China and India, and in South Africa there is very little production of API’s. SA is the largest single market for HIV/AIDS, making it the largest market for Antiretroviral Drugs (ARV’s). However, SA is not producing ARV API’s. The current providers to the DoH and to the private sector are in the formulation and the packaging. Most of the value is being exported to China and India. Ketlaphela is there to make and localise the API’s and to do formulation and packaging. As a start, Ketlaphela will begin with the ARV’s for the treatment of HIV and over time, as the capabilities increase through partnerships, they will then move into other products such as treatments for TB and malaria. Later on, they will move into lifestyle diseases and health issues.

Last year, after the Minister viewed and evaluated the costs from the complementary work that NECSA and Mintek had been doing, he directed that both these entities work together. They are busy with test kits (as the CEO has indicated in the presentation of Mintek) and they do treatment diagnostics. Therefore, that makes Ketlaphela capable of providing the test kits and to provide a good service. Being able to build a state-owned company without recourse to the state in the development, the financial model has had to be a project financing model where the offtake agreement on a competitive basis with the DoH is then used to raise project funding. The design of the business model has no financial recourse on Government, which ends up being an asset. The State in turn gains billions of Rands and is also able to generate the much required jobs and the improvement in the balance of trade because pharmaceuticals are the second industry with a negative balance of trade. 

Overview of the value proposition

The Department has seven key priorities and they have determined that Ketlaphela will be able to positively impact on three of them. However, other entities involved with the group will also be able to contribute more.

Besides assisting some of the deficiencies of the market, Ketlaphela is implemented on a commercial basis to increase the security of supply of pharmaceutical products in the country. The Department also anticipates that there will be 700 direct jobs to be created in an incubation and a further 2 100 jobs. From the first period, the localisation of API’s will generate about R1.7 billion a year (starting with the ARVs). Together with Ketlaphela’s partnerships with their Indian partner, they will assist by bringing capabilities that are not within the country.

This partner will bring all the licensing, the technology and the manufacturing know-how. Therefore, as a part of that process, Ketlaphela will be able to capacitate around 200 people per year. Once everything is in full speed, they are also positive that they will be able to fill in the gap in the trade balance at a gradual pace. Ketlaphela, being a member of the NECSA group, is expected to be healthy in terms of cash flows and profitability. It will also enhance sustainability and where there is profit there will be further income taxes, amongst other things.

The proposed Ketlaphela business structure

The Model is that the company remains state-owned. Ketlaphela will have a number of partnerships in the form of joint ventures (JVs). The first one is the largest and most important – the ARV JV. This has already been approved by the Minister in April 2020. Ketlaphela will hold the majority stakeholder position at 51% and the partner form India will hold 49%. The main products that will be manufactured will be ARV’s, and two main molecule ingredients that are in demand by the DoH and the private sector. This is all set to happen by July 2022 after all the regulatory processes have been met and concluded. With Mintek work, they are still finalising the test kits.

They also presented the milestones that have been achieved, and the future milestones that they are set to achieve. The main milestones for 2020 were the approval of the business case, the approval of the transaction, as well as the posts by the Minister. The project has now moved into the operational, which started in May. In August, a rehabilitator pharmacist was appointed and they are looking to hire a licensed pharmacist in the next few months as they prepare for all the licensing processes, including the transfer and permits from Ketlaphela’s Indian partner. From August, the discussions with the DoH have been very fruitful to an extent that a decision by the DoH was to finalise the modality because the working stream has already completed their part. The DoH has also been in contact with the other provinces in order to reach concurrence on the Offtake Agreement and a decision is being awaited on that. There was another engagement from this Department with both the DoH and National Treasury. This engagement was in line with the National Finances Management Act, asTreasury will also have to approve of the procurement of the DoH and to approve and provide concurrence on the transactions that are currently underway.

In November, as part of the process of preparing Ketlaphela to start trading, there was an approval made by the boards to appoint additional Directors. As such, there are five directors who are now setting up all the government structures and to appoint an administrative structure for Ketlaphela as a part of that organisation. It is expected that by February 2021 the formal funding application to IDC as a part of this project will be financed. However, there have been more conversations, with the IDC with the latest one being held the day before the meeting, where the main role of the IDC was discussed (they are one of the main funders of this programme since 2011). They are also looking at other funding such as from the Isibaya Fund, the Public Investment Corporation (PIC) and from the New Development Bank. The Department says that they are very confident with their business case because a few agreements are already in place and they are going to have an engagement with other funding sources. The Transfer is expected for 2021, and the regulatory processes where all the SAHPRA and the DoH approvals should be completed. The main focus in the next financial year will be to get as many resources being put into Ketlaphela as possible in order to support the regulatory process, which is very intensive. There has been engagement with the highest levels of SAHPRA, including with the CEO, to advise them and give good guidance to ensure that the right supply of documents is done at the right time. This is so that SAHPRA is able to process those documents and for Ketlaphela to abide by the regulatory processes. So, next year will be hectic in the regulatory space. The commissioning facilitation should also be completed by next year. He also mentioned that Ketlaphela is built on two important phases. He only went through phase one.

Phase one

The aim of this phase is to import the products through Ketlaphela’s Indian partner to formulate and to do packaging, which would generate the cash flows. This will fund the construction of the API facility. This shows the difference between private and state-owned pharmaceuticals. The API facility will hopefully be ready by next year. Last year it was mentioned that sufficient capacity has been built to compensate for the whole country. The business model that is currently being used has shown to be very successful because it has been tried and tested. It was first used in 2003 where a company called Biovac was able to build a business case to start the production of human vaccinations in Cape Town. Previously, these vaccinations were fully imported but now there is availability of localisation.

There are also risk analysis strategies that are in place. The high level, key major risk was a creep in terms of timelines, a creep in the delay of approvals and the late payments of invoices. They have a mitigation plan set to manage these issues. Should there be delays, they have an overdraft available so that payments can be made. The given payment plan by the DoH is 30 days, so if this time has surpassed the overdraft would come into play. They are also in a process of engaging on the critical timelines in pharmaceuticals. There will be resources seconded by their partner from the beginning, and the employees who will be working on Ketlaphela will be assisted with support, by them leveraging training centres for API’s. This was the end of the presentation by NECSA.

Discussion

Ms V Malinga (ANC) thanked the presenters on both presentations that were conducted in the meeting. She wanted to commend them for not wanting to be the smaller players in the field of producing medical supplies in terms of the ailments that the country is currently experiencing, and she commends them for owning 51% of the shares. She encouraged them to adhere to the timelines so that the results can be seen by the Portfolio Committee.

Ms P Madokwe (EFF) needed clarity on the fourth slide in the presentation. She said that when looking at the timelines, where 2022 is the set date for Ketlaphela branded products, and where in 2027 there will be Ketlaphela pharmaceutical ingredients available. Will the 2022 products be produced by Ketlaphela or just branded by them? Why is there a seven-year waiting period for the Committee to have the production ready?

Mr M Wolmarans (ANC) said that solace must be taken in dealing with certain problems, even though they want to have positive results for the economy and for health. There has been significant progress, and the presentations showed cooperation between Mintek and NECSA, which is great. With the set dates for getting capital, regulations, etc., the dates are in range with how long it takes to work on such a structure. The 51-49% ratio needs a background check and he mentioned what was happening globally with the Indian company, where there were a number of issues and reports where they had uncompetitive behavioural issues. He wondered if the Department looked at this, and what strategies they have in place.

Mr M Mahlaule (ANC) said that after listening to the presentations a year ago, they seemed different from the presentation they received in the current meeting. It gives hope. He acknowledged that the Department is indeed working hard to change what has been a depressing state of affairs.

His first question was on how far they are on appointing a CEO for NECSA. He recounted that during the first time when there was interaction with NECSA, there was a mention about a substance manufacturing that could be part of any spice consumed on a daily basis. A major market for that was the South African National Defence Force. So he asked what happened to resuscitating that market and for that item to enter the consumer market.

Ms C Phillips (DA) was concerned about the direction that Mintek is taking – the focusing on research of medical tests which is consuming their time, where their main purpose is on mineral technology. She said she hopes that they are still covering that platform.

Her next point was on the project at hand and the jobs being created as a result of it. Her concern was on whether there could be any financial implications on government on this matter. 

Mr S Kula (ANC) said that he had two questions as well as a comment. Firstly, on the heavy workload on the major targets that need to be reached by Ketlaphela by 2021, he wanted to know how feasible these targets would be. Secondly, on the risk analysis where there are skill shortages in South Africa and where training is said to be provided for those staff personnel, he asked how long this process will take, and who the target that Ketlaphela is entrusting to drive this project is. His comment was on commending the leadership of Ketlaphela, encouraging them to continue to do their good work as they will be a breath of fresh air in the pharmaceutical industry.

The Chairperson went over the matter of Mintek which Ms Phillips based her question (the focusing on research of medical tests, which is consuming their time) as not being a part of the discussion. He said that the only focus would be on the portfolio at hand. He wanted the Members to only focus on the presentation even though he is not objecting on what she was saying. Compromising the 48-hour compliance and procedure is not allowed.

Responses

Mr Nicholls answered the question on the process of hiring adequate candidates, saying that a recommendation request has been made to the DMRE Board; so he referred the question back to the DMRE board to answer on that request. He then handed over to Mr Radebe.

He started on the question on the July 2022 plan. As per the timeline, they intend, as a first phase, to import the API’s from their partner because at that point in time they will not have the facility ready in the country. They will have the formulation and packaging facility ready. Therefore, when the boxes leave the facilities they will be branded as Ketlaphela. Value will be added along the way, with the biggest value being when the manufacturing will be done.

In answering the question on the seven-year period to complete the whole project, he explained that the project is complex and large. That is why it is divided into two, in order to avoid higher risks and errors. The API is more complex in licensing, amongst other things. The designing of the API facility takes about two years or so and getting it approved by the officials involved also takes time, The API facility uses a lot of hazardous chemicals so there needs to be studies done for the Environmental Impact Assessment (EIA) process structure. Moreover, once the designs and funding are approved, before the facility can be used, there are 12-16 months where the regulatory certification of the facility must also be done. This is to ensure that the facility meets all the requirements. The experience of Mintek in this regard has also been applied because they already have small demo plants.

With regard to doing a background check on the Indian partner, they have followed due diligence. Before conducting business with them, in 2018 there was an international expression of interest made by the Department (it was similar to a tender) to look for a partner to have business with. They were looking for licensed and registered partners who were willing to comply with SA laws and make a minimum of 2 million packages per month. After the evaluation process, an auditor of this tender process helped in choosing the preferred bidder/ partner. Once the business case was completed they appointed a company called Cinga Capital that worked with ENS, and they undertook due diligence on the business case. It was then sent to the Department which also undertook its own checks and reviews.

The Indian partner has been even assisting with the DoH, so they are comfortable with this partnership. Of course there are articles that have been written about their products being retracted, but those products are not a part of what they will distribute within SA. The funding of NECSA for investment projects is available, as well as funding to refurbish the existing facilities. Looking at the loan of R 60 million that has expired, the IDC has indicated that they can reapply, and they have received resolutions to apply again. As soon as the off-take agreement is initiated, they can move forward. The targets are also very tight, but without them putting in more resources into the project then the target will be harder to achieve. So with additional resources they are quite confident that they will be able to reach the targets. There will be long work hours in order for them to achieve this mission for the country.

The first group of people to be facilitated will be given capacity to deliver a service for the packaging and formulating process for Ketlaphela. The second group will be the existing employees of Ketlaphela, as the production of API’s is set to be underway so capacity will be underway for them too. Continuing with the standard, they have a training facility that will also be leveraged for students coming from universities, technikons and colleges, for them to get precise training towards the pharmaceutical sector.

Answering Ms Phillips on the finances being a potential problem, the plan for this project has been for it to have no financial implications on the State. The NECSA group has thus been funding through its own resources, and there is no recourse to the Government. Also, should they need extra funding at a later stage, there would still be no recourse as they have a 10-year agreement with the DoH and the lenders, to continue with such assistance on the project. They do not foresee a need for Government financial assistance. NECSA, working with Pelchem and Mintek, has been exemplary, and when looking at the presentations, there were similarities. Further guidance regarding a way forward is thus expected. 

The Chairperson made an example of the presentation made by the Mine Health and Safety Council (MHSC), where they reported that they have a Centre of Excellence in which this Committee is also close to for doing similar work. MHSC had the issue of finding protective clothing because of the cases being reported for underground work. His fear was that Mintek runs the risk of being caught between what needs to be done and other issues. Mintek was doing similar work in terms of sanitisers and other items, and he does not want them to go through the same rigorous process. He said they should rather focus on the future projections and proactive thinking. Scenario planning can help because Ketlaphela might end up being under another entity whether as a supplier or manufacturer. All processes must be clear. He asked for comprehensive details on all the work that has been done, in a consolidated format. They must share work on certain factors and work together even more, and see if these initiatives will generate an income. He suggested, for example, that they run workshops to go through the nature of work that is being performed by each and build internal capacity. By 2021, the Portfolio Committee wants to see something more joint – shown in one report presentation.

In response to the Chairperson’s request, the Department indicated that there was an agreement that a new joint report shall be formed and presented next year.

Other business

The Portfolio Committee received a letter of request that read as follows:

“Recent reports have indicated a decisive and shift move towards nuclear procurement on the part of the Minister and the Department. This is largely in contravention of the approved integrated resource plan which does not make any allocation for new Nuclear Procurement in the IRP timeframe, and states that SA must commence with this process at the rate and scale that the country can afford.”

The Chairperson said he is concerned that the request for Section 34 concurrence from the National Energy Regulator of South Africa (NERSA) is premature and not keeping in line with the IRP accordingly.  He requested a comprehensive briefing on the subject with a detailed presentation as to what exactly the Department envisages, the timeline of process, the financial implication, etc. Moreover, given the dysfunctionality of NERSA and Eskom, can we afford to give capacity to a new nuclear building at this time? He also wanted to know if there were any consultation processes; if so, for them to be included in this briefing, as well as the alternatives that have been considered.  He went on to say that he looks forward to a prompt response to this request.

Every Member has the right to put a matter up for discussion. The programme of the Committee for this quarter had already been agreed on and adopted. The only matter they could bring forward in the meeting was the programme for the first quarter of 2021. The Chairperson wanted it to be considered when it is scheduled (2021). Amending a programme in the middle of its process, requires a motivation on the urgency of the matter, which is subject to the approval by the Committee, by the House Chairperson, and by the availability of spaces on the virtual platform. 

The letter that the Chairperson read was from the DA Shadow Minister of Mineral Resources and Energy, Mr K Mileham, which he wrote in his capacity as a Member of Parliament and in his capacity as a member of his party. The Chairperson said he has not determined the urgency on anything mentioned in the letter, but he believes that every Member has the right to make requests; so they will hold another meeting and continue from there. He handed over to Mr Mileham, who was unfortunately experiencing a few technical issues. As such, the Chairperson said this had to be rescheduled to the next Committee meeting on Tuesday, 28 November 2020.

Mr Mahlaule had a dispute on this and said he did not think it is fair to place the urgency of an issue on one Member.

The Chairperson responded and said that the determination will be made by the Committee, but the motivation will be made by Mr Mileham and then based on that, the Committee will continue just as they usually do with the programme. He went on to ask if the Members agree to meet on the following Tuesday.

There was agreement.
The meeting was adjourned.