DPE Budget: Committee Report

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Public Enterprises

15 July 2020
Chairperson: Ms J Tshabalala (Acting) (ANC)
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Meeting Summary

Tabled Committee Reports

The Portfolio Committee on Public Enterprises met jointly with the Select Committee on Public Enterprises and Communication for the consideration and adoption of the Adjustment Allocations Of Budget Vote 10: Public Enterprises.

Members raised broader issues outside of the adjustment budget such as the performance of the State-Owned Entities (SOEs). They questioned the impact of the budge deduction on these entities and the meeting of targets. Members felt the recommendations relating to SA Airways needed to be clearer. Other Members were displeased that the Report did not address the issues the country faced regarding the SOEs and what the Department was doing to solve these problems and carry out consequence management with regard to Eskom. The Department should be presented monthly on progress made to the Committee. The EFF said if the Committee were to support this Report that would mean the Department of Public Enterprises is just collecting payments without actually doing any work – it rejected the Report. Other Members felt this was missing the point of the adjustment budget which was specifically to deal with the reduction in budget due to the COVID19 pandemic. The general issues Members were raising were not part of the discussion for this Report. This was countered to say the adjustment budget allows for an opportunity for re-evaluation of the performance of the Department.

The Report was adopted without the support of the DA and EFF.

Meeting report

Election of Acting Chairperson

The Committee Secretary informed the Committee that an acting Chairperson for the meeting must be elected and called for nominations.

Ms C Phiri (ANC) nominated Ms J Tshabalala (ANC).

Adv L Mpumlwana (ANC) supported the nomination.

Ms R Komane (EFF) nominated Ms O Maotwe (EFF).

The Secretary then asked Members to vote in support of their preferred acting Chairperson for the meeting.

Ms Tshabalala received five votes and Ms Maotwe received two votes.

The Secretary declared Ms Tshabalala the Acting Chairperson of the meeting and then handed over to her to carry on with the proceedings of the meeting.

Report of the Portfolio Committee on Public Enterprises on the Adjustment Allocations Of Budget Vote 10: Public Enterprises

The Chairperson started the meeting by welcoming the votes from Members and then requested that the Secretary present the proceedings of the meeting.

The Secretary said that emanating from the meeting held in the previous week with the Department of Public Enterprises (DPE), which was a briefing on the budget cuts, the Portfolio Committee was expected to produce a Report in support of the budget cuts and the new budget of the DPE. In line with that, the Portfolio Committee has drafted a Report that speaks to the budget cuts and the impact of the Adjustment Appropriation Bill and the recommendations. An analysis of the Content Advisor was used to look at the impact of the budget cuts. However, the Content Advisor could not attend the meeting because his father has passed away. The Committee would have to look at the Report observations and recommendations and whether they required amendment.

The Secretary took Members through the observations and recommendations of the Report as per instruction of the Chairperson.

The Chairperson handed over to Members to discuss the adjustment budget Report.

Discussion

Mr S Gumede (ANC) said that under normal circumstances, when the budget was done, the State-Owned Entities (SOEs) were not allocated sizeable funds, so the R61 million decrease is from the budget that was already allocated, and it is something that needs to be accepted by the Committee. The Department needs to explain how it is going to manage the situation when the SOEs have to rearrange themselves internally after the R61 million has been deducted. There will be some programmes that the Department will have to say are not effective because they do not have funds. So that when a performance report needs to be done at the end of the financial year, there will at least be reasons why they may have not reached their targets. The Committee needs to consider the recommendations and be more articulate on them.

Mr G Cachalia (DA) noted the reductions on the budget and they are relatively small especially considering the allocation on business enhancement transformation which has the largest chunk. He said that he would be interested in understanding the intent of that particular budget allocation as the largest allocation in terms of how it can be looked at to see how it can be further reduced in order to assist with the challenge of COVID-19. The recommendation relating to South African Airways (SAA) needs to be clarified as it does not make sense.

Adv Mpumlwana agreed with Mr Cachalia that the amount deducted is not too much and is a small contribution that is being made and something needs to be done.

Ms Maotwe said that the Report is not addressing the issues that the country is facing because out of the seven SOEs, none are performing and the recommendations in the Report are a generalisation. The Committee Report is not a reflection of the reality that is the failure of the SOEs as the recommendations do not say anything about what the Department is going to do in trying to solve those problems. The Committee cannot accept quarterly reports from a Department that is failing, and in fact it should be reporting on a monthly basis to explain what it is doing to make sure the SOEs are performing at their previous level of glory. If the Committee were to support this Report, that would mean the Department of Public Enterprises is just collecting payments without actually doing any work. The EFF rejected the Report.

Ms Komane agreed with Ms Maotwe that the Report cannot be accepted as the Department is not performing and its SOEs are failing. The Report needs to have details on how the Department aims to carry out consequence management for corruption, especially with regards to ESKOM. She also said that the Report should clarify the recommendation relating to SAA.

Mr K Magaxa (ANC) apologised that he could not attend the meeting on time as the Portfolio Committee Chairperson and explained that he was struggling with connection because of load shedding in his area. He then expressed disappointment with the discussion on the adjustment budget Report as he felt Members were not engaging properly with the document. The Report is an adjustment Report from the budget that was already voted for and adopted with the Minister before the outbreak of the COVID-19 pandemic. A certain portion of an amount has been taken from this original budget. Therefore there should not be any issues that are raised on this particular adjustment budget as it is self-explanatory. The issues that Members raised are issues that are well known especially on the poor performance of the SOEs, such as SAA and ESKOM, and there are initiatives to start the process to improve their state. The issue at hand is the adjustment budget that was put in front of Parliament and the portion taken from the Department. He supported the adoption of the Report.

Ms V Malinga (ANC) agreed with Mr Magaxa that the Report is an adjustment Report from the Department. What the Committee needs to do with it is comment on how the discussions were captured in the Report. She then stated that she welcomes the Report and supports the recommendations.

The Chairperson commented on the grammatical errors that were made in the recommendations of the Report and requested they be amended. On the issue relating to SAA on the recommendations, the Department of Public Enterprises provided the Committee with a business rescue plan and that rescue plan has been agreed upon. Since the Department is providing voluntary severance packages, it should expand on the types of jobs included in those packages. The Department should also provide a geologist report on the state of mining and whether there is value for money that can be extrapolated from SOEs such as Alexkor.

Ms C Phiri (ANC) added a recommendation that the Department needs to provide progress reports on the implementation of the strategies for COVID-19.

The Chairperson asked if Mr Cachalia was happy with the explanation regarding the SAA issue and that the Department is requested to provide a business rescue plan.

Mr Cachalia agreed with the recommendation. However, in terms of what Mr Magaxa had said before, the adjustment budget opens the door for re-evaluation in terms of what and where costs can be cut in order to contribute to COVID-19. The amount presented by the Department is not substantiated in terms of why and where it has been taken from so that the Committee can comment on whether it should be more or less. The nature of the recommendations do not apply to the adjustment budget as they are general recommendations which do not necessarily apply to the adjustment budget. There needs to be substantiation for the deductions made in the budget on why they are necessary, so that it can be discussed and made sense of, as well as to make recommendations that will be in line with the budget.

Mr Cachalia stated that he does not support the Report on the basis of the issues that he had raised.

Ms Malinga moved for the adoption of the Report with the amendments that have been made and Adv Mpumlwana seconded the adoption.

The meeting was adjourned.

 

 

 

 

 

 

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