Thank you very much, hon Deputy Chair. Let me deal with the obvious question first. The Minister of Public Enterprises is out of the country at present and I then had to be saddled with the task of responding to the questions to the department. The response is as follows.
You may continue Deputy Minister.
The response to the first question by hon Modise is that the department, as part of its monitoring work, meets with Transnet on a monthly basis as part of monitoring their performance, as well as mitigating actions that are taken to improve the efficiency, reliability and cost effectiveness of freight transportation.
With regard to (a) and (b) of the question, there is a very strong correlation between efficiency and reliability. Specifically, poor reliability of equipment and rolling stock negatively impacts on Transnet's efficiency. Currently, the most significant challenges
negatively impacting on reliability and efficiency are as follows: the maintenance backlog at strategic container terminals; the shortage of critical skills at the ports; the poor state of the rail network, leading to restricted train speeds, and reducing rail capacity and service levels; the poor availability and reliability of rolling stock due to age; as well as security issues on rail and pipelines, including community unrest at times and the theft of cables and locomotive batteries.
The corrective actions being taken to address these include - and are not only isolated to the points I'm making here - the following. We commissioned an independent assessment on the condition of key port equipment; we have also ensured that there is the expedition of the purchase of new port equipment; we have strengthened the manning levels at ports so as to optimise functionality there; we have brought expertise in terms of international port equipment operators that are training and mentoring some of our staff, particularly at Transnet, to achieve the acceptable benchmarks; the leadership capability as well as management in port terminals has been strengthened through the deployment of experienced leadership; the department has also, in conjunction with Transnet, engaged with the Department of Trade, Industry and Competition, as well as National Treasury, with the aim of getting temporary exemptions for Transnet
to accelerate the procurement of critical parts and equipment necessary to address the maintenance backlogs that have been identified; the rehabilitation of the infrastructure network backlog is being fast-tracked; the replacement of rail has been accelerated, particularly targeting high volume, high density corridors; new locomotives are being commissioned and deployed to improve quality, reliability and customer service; work on the build programme is being implemented; equipment is also being deployed to detect and prevent component failures before they occur; and we have also begun engaging with the relevant authorities with the aim of resolving security issues faced at Transnet, particularly at our ports.
With regard to the last part of the question, the department is working with Transnet to identify ways in which to improve cost effectiveness on the country's rails and ports, including increasing port and rail volumes; establishing the single transport economic regulator; realigning tariffs of both ports and rail to remove imbalances; and promoting greater competition in port operations.
Lastly, we have also commissioned a study to investigate the implications of corporatising the National Ports Authority as provided for in the National Ports Act, which is aimed at promoting competition in port operations.
Deputy Minister, thank you for addressing the issue of the maintenance blockage, because most of the time it has serious problems that need to be addressed if Transnet is to improve efficiency and reliability. When is this matter of temporary exemptions going to be finalised because if it's still there we are going to have a serious challenge?
Deputy Minister, did you get the question?
Yes, I got the question. Thank you very much, hon Chair. As I indicated, precisely because of some of the ... [Inaudible.] ... that our procurement regulations require ... for instance local procurement ... promoting of local suppliers ... local industries ... The difficulty arises where the manufacturers are not based in our country, and the time it takes to have them localised ... has an effect of actually impacting on the timeous delivery of some of these projects.
For that reason, Treasury has been approached and we are in concert with them on the need for the exemptions. It's a matter that we are expecting ... not so long from now, because at the ministerial level there is confluence. In fact, the Minister of Finance would've said
that there is a review, particularly of regulations to do with the Public Finance Management Act, PFMA, so as to make ... for these exemptions where they are necessary, particularly where it affects state-owned companies.
So in short, we are expecting in ... because we are regularly working on it. We should conclude that matter in, perhaps a month or less than two months.
Sekela Sihlalo, Sekela Ngqongqoshe, isibalo sabantu abashonayo emigwaqeni kuyimbhangela yamaloli lawa athutha impahla ngoba alimaza umgwaqo futhi iwona enza ukuthi kube nezingozi eziningi emgwaqeni. Ngakhoke, umuntu ulindele ukuthi mhlawumbe uNgqongqoshe asitshele isikhathi okuyisonasona sokusheshisa ukuthi impahla ithuthwe kakhulu ngezitimela kunokuthi ithuthwe emgwaqeni ngoba kubulala abantu abaningi. Ngakhoke, umbuzo uthi, uNgqongqoshe ikuphi abakwenzayo njengomnyango? Ngiyabonga.
Thank you very much. We have accelerated the programme from road to rail - moving goods from road to rail - that we have since adopted, particularly at Transnet.
It is both a function of improving efficiencies in respect of our rail networks and the introduction as well as the implementation of the single transport economic regulator. We hope that will also accelerate that, in that it should open the opportunity for other private-sector players interested in participating in that space to be able to come in. However, the measures that have been instituted are aimed at improving the speed with which goods move from one place to the other. Rail effective efficiency will help to bring some of the goods from road to rail. The point made is that it's a programme already identified. It is being worked on.
Thank you very much Deputy Chair and thanks to the Deputy Minister for the responses given. Deputy Minister, I heard you talking about the study on corporatising the National Ports Authority. I want you to share with us how that study will assist us and when will that study be available?
Thank you very much. As I indicated, we have launched a study and from the study we are hoping to get the recommendations that can suggest as to how the National Parts Authority, in its functioning, can be corporatised.
At the moment, the fact is that all these entities at Transnet are part of a single or a consolidated group. We are looking at a National Ports Authority being a bit of a stand-alone entity able to function independently. We are looking at finding the impact that it would have and how best to go about doing it.
So, until the study results have been received, we can then be able to have the hon House here exposed to what the recommendations are and what decisions would be made in that respect. It is provided for in the National Ports Act, that there needs to be a different functioning of the National Ports Authority. We are investigating that matter and as soon as we have the results this House shall be duly informed.
Hon Deputy Minister, in September 2018, President Ramaphosa ... [Interjections.]
Order! Order! [Inaudible.] [Interjections.] [Laughter.]
... announced an economic stimulus package which was necessitated by a stagnating economy. Fourteen months on, our country suffered a deadly blow as we witnessed unemployment soaring
to about 30%. The stimulus plan has failed, and has done so dismally.
The benefits of moving goods by rail far outweigh those of road freight transport. Yet, your department has failed to make meaningful progress in making use of our rail network. Seeing that plan A has failed, do you have a plan B?
Thank you very much hon Chair. I suspect that, with regard to the failure, it's a matter of perception, but perhaps also a misreading of the timing between the interventions and the results from those interventions. In respect of rail, as well as the functioning of the ports generally, the work that has to be done there includes improvements on infrastructure; it includes the question of management within those ports; and it includes a range of things whose impact in totality cannot be seen in this period of time. Of course, there will be a lag between the time of taking decisions and getting them implemented, and the impact that those decisions have.
I think it's a matter of time. I would take a different view to that of the hon member ... that the stimulus package hasn't worked. It is because it is being implemented. So, the proceeds of the work being
done are yet to be seen. I think my small mind, economically thinking ... is that you will not because you have made an announcement now and tomorrow there is a sudden ... everything changes. In the real world things don't work like that.
Thank you very much, hon Deputy Chairperson. The response to the question is as follows. According to our information received, both from SA Airways, SAA, as well as from SAA, with respect to SAA the SA Civil Aviation Authority, SACAA, reported, as part of its regular monitoring of the airline industry, a number of findings relating to SAA Technical, SAAT, with SAAT being the component within SAA that is responsible for the maintenance and repairs of the aircraft, not just of SAA and SA Express, SAX, but even the others ... Mango Airlines ... I think even the other ... the South African chapter of British Airways ... they use that.
These findings, inter alia, related to the use of service providers not approved by SACAA. It also included noncompliance by SAAT to the approved aircraft maintenance programmes, as well as SAAT's approved manual of procedures. Due to the significant noncompliance or nonadherence with established aircraft maintenance programmes, SACAA
required those aircraft affected by these findings not to be operated until these findings have been addressed. So, that is significantly the reason why SAA's aircraft was grounded. It was because of what was observed in terms of the nonadherence to the standards of maintenance that is required.
So, if I were to answer the second leg of the question, the reasons that SAA aircraft were grounded are not the same as those of SAX. In the case of SAX there were different reasons altogether.
With regard to the last leg of the question, we couldn't find incompetence on the part of directors in this instance as this was largely due to operational shortcomings. There was therefore no indication of incompetence on the part of the directors because this was a matter that operationally, in terms of ensuring that those who were appointed to do the work did have the necessary accreditation ... but also ... they adhered to the procedures, so to speak. So, those were the reasons, and in the view of the department they were not to do with the directors' competence or otherwise.
Thanks Deputy Chair. Deputy Minister, you are dealing with a state-owned entity, SOE, in this case the SAA, with a rather bruised reputation. I will imagine that the grounding of our
airlines two weeks ago did not do SAA any good in so far as reputation is concerned.
Would you tell this Council how much SAA in particular lost during the grounding and how much reputational harm has been caused as a result of this?
If you don't have the exact amounts here, we will not kill you if you request to send it in writing.
Absolutely, I do not have those amounts. I could deal with ... We would agree that there has been a lot of reputational harm that was brought onto the airline because of that, but the quantification of the associated cost, both in terms of ticket cancellations and the inconvenience that people must have suffered ... I don't have the amounts at the moment that I can share with the House. Neither do I think in the immediate, because it may involve much more investigation to be done to arrive at a conclusion as to what the amount could be. So, with your permission, I could request that we come back to the House on that.
Its fine, hon Deputy Minister. Hon Ryder?
Thank you very much, Deputy Chairperson. Thank you, Deputy Minister. Your response to the first part of the question was quite alarming and I think that cognisance must be taken of the fact that the issues have serious implications to the safety of passengers and travellers, as well as to the reputation of South African travel and SA Tourism, and the entities involved.
Now, the reality is that if people are procuring parts that are substandard, whether it be through suppliers or directly, it indicates not to an intervention that some minion down the food chain can change. This is a policy issue. So, if it's not a director that blame can be apportioned to then there must be a senior manager who is directly accountable for this. Has that person been fired yet, Deputy Minister?
Thank you very much, Chair. With respect to your earlier comment, on the contrary though, we may take a bit of confidence in that within the country we have an array of bodies that are capable of giving us the assurance of
the safety, because of course there should be checks and balances across the board.
The SACAA is another entity of state that does oversight and it actually came with these, and it should really give the people the sense that, wherever there could be a slip-up, there is always room to be able to correct that, which is what has happened in this instance. So, it should be reassuring in this sense.
In so far as SAAT having appointed service providers that do not have certification, as well as not following the procedure manuals to the letter, even those of SAAT themselves, it's a matter that is with the management to actually get to the bottom of the matter in terms of the action that must be taken against those who have really brought this situation into existence. So again, it's a matter that we can come back to you with, as to the specific measures in that regard. Definitely, from the Ministry's point of view, we insisted that action be taken upon investigation and the results of that investigation.
Thank you, Deputy Chair. Deputy Minister, I have been partially covered by the previous speaker. It's public knowledge that SAA has not made a profit since 2011. My question is
with regard to you mentioning that the directors were not to be held responsible for this but its people lower down the food chain. Obviously, if you're a director of a company and you are part of management you have to oversee everything that happens in that department ... in this entity like the SAA or SA Airlink. My question is, since the directors are not to be held accountable according to what you said, have any steps been taken to reprimand some of the other managers or departmental heads, to bring them to book with regard to the contraventions that happened?
It's also alarming that you mentioned that slip-ups may occur, referring to the supply chain management and the buying of substandard or alleged substandard parts for the airplanes. We cannot afford this in the airplane industry. If a slip-up happens at 36 000 feet, people will die. Will you then just say ... [Inaudible.] ... it was a slip-up or will someone be held accountable for this?
Thank you very much, hon Chair. I could repeat what I said earlier word for word, except to say with regard to the part to do with a slip-up, I was saying that we can take comfort from the fact that we do have, within the fleet of government or within the fleet of these entities of state, those
that give us the assurance that, whenever there would be an error committed anywhere, you can be able to, through regular monitoring, uncover that so that the appropriate action is taken timeously, in respect of the actions by SACAA.
However, I would concede that I cannot consider that the implication for it, if it is really not corrected, is too grave to just refer to that lightly. I didn't mean it in that sense. I also said that we have insisted on the investigation that should actually tell us, because part of what we are dealing with there is the aftermath of a process in which all of the procurement has been impacted negatively, even the creeping in ... as well as an attempt to institutionalise corrupt practices, which is what is being attended to right now. Even at SAAT, there is considerable work being done to ensure that that entity functions optimally and professionally. Of course, these are some of the things that are being discovered as we proceed with the cleaning act within these SOEs.
Thank you Deputy Chairperson. Minister, the safety of our people is of paramount importance and we must commend SAA for maintaining one of the safety records, not only in Africa but in the world. What precautionary measures is the department putting in place to ensure that we keep this safety record?
Thank you very much. Hon member, the correct title is Deputy Minister. [Inaudible.] As I have indicated, the measures put in place include ensuring that properly qualified people are appointed to these responsibilities and that they are held accountable for their actions, which speaks to the entire chain of leadership within these institutions. These are measures that, of course, together with the external measures that keep interacting with the environment there, give us the guarantee that the safety of our people is taken care of.
You are calling on me. Why are you rising?
I'm rising on a point of order. Chairperson, we really need to be told how you operate because it seems as if you are now noting hands before the person who asks the question can even rise. His hand was up with the understanding that immediately when the person with the question rises, you will note hands. However, you did it before that, and it's very wrong.
I really want to explain because at no stage did I do what you are saying now. ... exactly because it became an issue when the Deputy President was here. While he was still speaking, people started to raise their hands. I didn't do it.
When I was scanning, hon Ryder rose and when I looked your member also rose, but I had already acknowledged hon Ryder. I think that is the issue. I haven't taken hands before ... No, I'm explaining, not because it's a point of order, just because I don't like it when people want to cast aspersions because that is exactly what you are doing. Can we continue?
Chairperson, may I address you on a point of order?
Yes, you are
When I rise here I'm not casting aspersions.
You never know.
Chairperson, I'm rising on a procedural matter. You should've explained that, and that was it.
Oh yes, I have
Yes, but don't have other attachments in your explanation.
You may sit down. Thank you, hon Mokause. You have said what you wanted to say. We are going to the next question, which is Question 218 asked by hon A B Cloete, and we will ask the Deputy Minister to respond to it.
Hon Deputy Chair, the
response is as follows: Part A of the question is that the Eskom management had two meetings with the trade union leadership on 23 August 2019 as well as on 4 October 2019, wherein the management shared the Eskom strategy which included their turnaround plan, the separation milestones and the case for unbundling or separation.
At national government level there is an Eskom leadership task team that will also be engaging with labour with matters related to Eskom.
Part B of the question is that the discussions with the trade union leadership are at the initial phases of consultation and no fixed timelines have been set to date. Eskom has however shared the details of the functional business separation project with the trade union leadership and has emphasised the urgency within which to complete the process. Thank you very much, hon Deputy Chair.
Hon Deputy Chairperson and hon Deputy Minister, government's plan to unbundle or government's unbundling plan merely suggest that we are rather committed to replacing one problem with three more. These state- owned entities, SOEs, will remain in the hands of the state which has shown that it cannot manage the SOEs effectively. Not even you, Deputy Minister can argue with that.
Now if you were to be honest at least with yourself you would know that the recent bailout to Eskom will be eventually be needed again and again and again. Now there have been calls for establishing a market where electricity tariffs are deregulated and the electricity supply is privatised. Any electricity supply will quickly implement
market related prices and delivering market related services. It is a win- win situation, Deputy Minister; any right-minded economist will tell you this, but government clings to Eskom.
We all like to know why, Minister and the only reason the answer how bezaar it may seem that it could be government would rather protect 40 000 Eskom workers who would not necessarily lose their jobs if Eskom is privatised provided they actually do their job.
So, Deputy Minister, the question is: What influence does pressure from unions have in government's clinging approach to Eskom by not privatising the electricity supplier?
Thank you very much, hon member. The answer to that question - because the earlier part was really the statement which does not have to do with the question originally.
Government is determined and informed by its choices in terms of policy and such policies are not necessarily dictated to by any segment within the society. It is a function of government to make the decisions and in this instance the decision is that of
unbundling which will be preceded by functional unbundling. Thank you very much.
Ngwenya): Hon Deputy Chairperson, my question to the Minister, I mean to say the follow-up question: How will this process result in the proper efficient and effective management of Eskom? Thank you.
Hon Deputy Chairperson and hon member, the intention is to firstly achieve efficiencies that are at the moment not enjoyed because these areas of operation are co-joint with the result that where there are inefficiencies, those inefficiencies are spread throughout.
What will be achieved first by making these entities to be separate from each other and then you can be able to focus. Those that are much more profitable so to speak, that can be realised and not can be actually overshadowed by the fact that it is across the entire organisation. You cannot tell where the problems are the most. I think the intention is to proceed with that. Its functional unbundling and from there going forward, the possibilities of allowing participation by the private sector, etc become much more
possible with sense what works best we would be able to determine at that time. Thank you very much.
Hon Deputy Chairperson and hon Deputy Minister, we have been hearing about the unbundling of Eskom. The details are not forthcoming.
Alright Deputy Chair.
So my question is: Is the unbundling entails selling of Eskom to private companies and is that not going to lead to job losses. Thank you.
Hon member, the
unbundling as yet, does not entail necessarily job losses per ser. It is rather optimising effectiveness of the different entities that are part of the electricity supply. Of course, already there is private sector role within the electricity industry that is at play. A large measure of the renewable is a contribution by a private sector to the energy capacity that the country requires. However, largely with respect to Eskom, we cannot preclude a possible of a
private sector involvement in the various stages, but for now that is not primarily there. You would also have noted that there has been released the Eskom Paper that is the roadmap to the end state of Eskom which has now formed part of the discourse within Eskom in terms of how we are working towards that end state. Thank you.
Hon Deputy Chairperson, I wanted to check with the Deputy Minister as to what is the unavoidable consequence of this process to job security of Eskom employees and do we envisage major retrenchments as claimed by those who continue to peddle lies to project the ANC-led government that it does not care about job security when it is the illustrious movement that took it to the street to fight job security and the rights of the workers? Thank you very much.
Hon member, I would
really like to state upfront that the perspective of government as well as policy is that of preserving jobs and creating jobs. However, certainly as we make that statement it should not be that it should be preservation whatever the circumstances are. It should be that the circumstances lead to effectiveness and profitability, so that these entities can be sustainable and can lead to future
jobs being created. It is having these institutions made fit for purpose and I think that is the overriding imperative. Thank you.
regarding Question 238, the response is as follows. For part (a)(i), law enforcement agencies are seized with investigations into Eskom, Transnet, Denel and the SA Airways, SAA, in respect of some of the matters that relates to the malfeasance that have been observed. The Special Investigating Unit, SIU, is currently investigating the affairs of Transnet and Eskom in line with proclamation 11 of 2018. Furthermore, forensic reports concerning state-owned enterprises, SOEs, have been handed over to the Hawks and the SIU in order to determine those who must held liable for the amount stolen from the state. The Department of Public Enterprises as well as the SOEs have presented evidence at the Commission of Inquiry into State Capture. All these efforts are meant to assist the commission in revealing facts regarding allegations of fraud and maladministration in state- owned enterprises.
In the second part of this, as I have indicated the law enforcement agencies are seized with these investigations. The department and the SOEs are actively assisting these investigations and, of course,
once specific individuals are charged announcement in this regard will be made with the relevant authorities.
The following successful recoveries were registered in Eskom. A company by the name of McKinsey repaid R902 million against the civil claim Eskom instituted against company. Eskom successfully persuaded the recovery of R600 million that was illegally paid to Trillian. A full bench of the Gauteng High Court ordered that the funds be returned to Eskom to be used for the benefit of the country's citizenry. The SIU is currently in court on behalf of Eskom to set aside the Tegeta Brakfontein coal supplier agreement to the value of R2,7 billion.
Regarding Transnet, Regiments has agreed to repay R160 million of the R235 million in one contract. There are still negotiations underway with them. There are more funds that have been identified as potentially recoverable and the state-owned enterprises, SOEs, are in the process of perusing them with the law enforcement agencies. The department will be transparent and will provide details as some of these unfolding investigations are successfully concluded and individuals held liable by the courts. Thank you very much, Chair.
Ngiyabonga Sihlalo weNdlu, ngibonge nakuwena Sekela Ngqongqoshe ohloniphekile womnyango, cha, ungiphendulile impela ngoba yilapho bengizobuza khona ukuthi, ngabe lezi zimali ziyakhokheka na?
Engizofuna ukukwazi nje kuphela ukuthi, ngabe osopolitiki ababandakenyayo ekuqoleni wona amabhizinisi kaHulumeni lawa ingabe wona-ke umthetho umnyango uwawuqinisa yini na? Ngiyabonga, Ngqongqoshe.
USEKELA NGQONGQOSHE WAMABHIZINISI OMPHAKATHI: Osopolitiki
abathintekayo njengoba uphenyo lusenziwa nabo abazoyekwa baphathwe ngendlela ehlukile ...
...to the extent that there would have been identified the role each of those individuals played. They are not immune from being held answerable for whatever misdeeds they may have committed. Many of these investigations are still underway. I am sure even the commission to which some of these were reported investigations are still ongoing. Until we have reports then the full exposure of what has happened shall be known. Thank you very much.
Thanks, Deputy Chair. Deputy Minister, in two days time it will be 21 months since the fall of the captain of the state capture, Jacob Zuma, yet the main and supporting actors and enablers of the state capture still freely roam our streets often showing our country the middle finger. One minute they just too sick to appear before Justice Zondo.
Can we really have the question.
Can we have the question.
I am getting there. You better be patient with me. One minute they are too sick to appear before the commission or they don't have money to travel to Johannesburg, or they can't recall what happen in the last 10, yet they can recall with relative ease the events that took place in exile 30 years ago.
Deputy Minister, should the nation wait for the ever expanding workload of the Zondo commission to complete its work before we can see people put behind bars? What co-operation is your department
embarking upon with other state-owned agencies to effect arrests and prosecution of these brazen thieves?
Hon Chair, my answer is very short. I have already indicated what we are doing as the department to support the work undertaken by the Zondo commission, the work we do with the other state agencies and the SIU to expedite recovery as well as punishing those who committed acts that are unforgivable.
The other kind of questions should, perhaps, be directed to another competent authority.
Thank you Deputy Chairperson and Deputy Minister, for your response. There is a marked improvement in the recovering of some money that was fraudulently taken from some SOEs. Is the department strengthening measures to ensure that this kind of corruption does not happen in future? Thank you.
Thank you very much, hon Chair. For these kind of acts to find expression it took undermining governance structures and it took having managers that were not so competent or didn't do their work as they should. Measures have been
taken to strengthen various areas for which competency and proper leadership is required. There has been reinforcement and insuring that proper and fit persons are appointed to the boards.
Secondly, proper and fit persons are appointed as mangers to perform the critical functions of leadership within these institutions, of course, to create an environment of accountability within them. These are lessons that have been learnt as to how state capture has sought to corrode the structures away from their mandates. So yes, measures have been taken and put in place.
Actually, the Deputy Minister has answered the question that I was about to ask. Thank you.
Thank you very much, hon Deputy Chairperson. Response to the question is that it is actually the Department of Energy that has the responsibility of procuring generation capacity as per the integrated plan or the integrated resource plan. Within that integrated resource plan would be found the concept of energy mix that resides with the Department of Energy.
The response to the second part to the question is that the existing laws are adequate in guarding against the scourge. What is required is public officials determined to act accordingly.
I am confident that the Minister of the Department of Mineral Resources and Energy will ensure that there is adherence to the prescripts. Thank you very much.
I don't think we will take follow up or supplementary questions. The Minister of Energy will be coming here; we will ask him the other questions. Hon Nhanha, the Minister said that this question needs to be asked to the Minister of Energy or the Department of Energy because in terms of the integrated ... [Interjections.] Sit down while I am speaking. Give me the necessary respect as I am also respecting you here. [Interjections.] So, that's why I am saying can we defer this one with the supplementary questions because I would be interested to the Minister of Energy to give us all the details. That's why I am saying can we defer supplementary questions. There is another opportunity that we can use to ask these questions. That's what I am asking. Can we then continue?
Thank you very much, hon Deputy Chair. The Ministerial Technical Review Task Team produced a report that was submitted to the Minister of Public Enterprises. The report covers key findings from the assessment of the Eskom operations and provided recommendations for correcting the challenges identified. Some of the findings from the task team are: Firstly, that during the period when Eskom staff count was on the increase, generation staff numbers were reduced compounded by the cessation of investment in development programme and increase in overtime. Further, the recruitment embargo imposed has negatively impacted generation head count on co critical and scarce skills.
It also found that there is anecdotal evidence that the cessation of performance related incentive schemes contributed to low staff morale and reduced the level of responsiveness towards emergency situations. This has increased the attrition rate at station levels.
Eskom generation based-load fleet age averages 37 years and is at the stage where mid-life refurbishment is required. In the last 12 months, plant capability loses have risen at an unprecedented rate. This is attributed to an increase in partial load loses and erratic unit strips.
The load losses are due to the aging plant and several other factors, coal quality, the ability to timorously procure spares and services, practices that impact operations as well as the reduction in generation men per our numbers.
There was also a negative impact on maintenance due to the introduction of various maintenance strategies over the last five years. The adherence to procurement processes from end-users specifications to buyers and contracts management has been found to have at gaps as well as the Nine Point Plan generation while covering the critical areas, people process and plants, lacks ownership to power and station levels as well as it was under- resourced and not dynamic to enable sustainable solutions.
The recommendations were on leadership and performance. A number of recommendations were made like the appointment of key permanent staff lifting the embargo in generation, disciplining as well as ensuring accountable leadership as well as launching of the campaign to improve the Eskom brand and enhance Eskom's communication.
Regarding systems, a number of suggestions were made. There were a number of suggestions and recommendations made in respect of reliability and performance of plant. Of course, the full report has
been provided to Eskom for implementation. The task team has been re- engaged to audit the extent to which the recommendations have been implemented. Thank you very much.
Thanks, Deputy Chairperson. I think the Minister have entirely covered me up. At least it shows that the ANC-led government does not toy- toy away from its challenges. Thank you very much.
Hon Zandamela? [Interjections.] No, people have raised their hands. Hon Nhanha, if you want to be a presiding officer, you must apply for that position. [Laughter.] [Applause.] Hon Zandamela?
Deputy Chairperson, point of order. [Interjections.] Can I double check what you have said Chair, must I apply or must I be voted? [Interjections.]
One thing ...
[Interjections.] ... and don't say I ...
Moet nie s ek is ombeskof nie. Die agb Nhanha praat terwyl hy sy hand opsteek. Ek het hom lankal gedentifiseer. Nou s hy aanmekaar, die mense steek nie hande op nie, die mense ... Is dit nou nie ombeskof nie? Is dit volgens u nou nie ombeskof nie? [Tussenwerpsels.]
Deputy Chairperson, when you are in that chair, you should be the one that hold the decorum in the House. You should be the one who is calm in the House. You should know that, Deputy Chairperson. Now you are 'ombeskof' [rude] again. You are interjecting again.
You should be the last one to tell me that I am rude. After telling me that I am rude, you now want to ... [Interjections.]
You can learn from the hon Thandi Modise on how she handled this House and other chairpersons. You are currently taking this House downwards and you are not calm, Deputy Chairperson, as we expect you to be.
Thank you, sit down. Hon Mmoiemang, you can sit down. All the time, you are telling me that I
am not charring correctly because you want to be identified. Do you think it's not rude to do so? It's very rude. Hon Mmoiemang?
Hon Deputy Chair has addressed the point that I wanted to raise to say the respect of the presiding officer is important. When the presiding office speaks, all of us must take our seat. Thank you. [Interjections.]
Hon Zandamela, don't be like a child, please. I have identified you. [Interjections.] I have identified you and I am saying it for the third time. [Interjections.] I am saying it for the third time. I have identified you. [Interjections.] I am saying it for the fifth time, I have identified you. Why are you nervous? I have identified you. [Interjections.]
Thank you Deputy Chairperson. Deputy Minister was it not a conflict of interest to appoint a British politician and member of a political party in another country who clearly holds a different ideological view and also has interest in mining sector and a potential supply for Eskom? Thank you. [Interjections.]
Not now. You may sit down. After the Minister has responded, it will be you.
Thank you very much. I am not privy to the information that the hon member has in so far as citizenship or membership of a political party etc. Perhaps, if one had access to that we could be able to respond. I am not aware of that. Thank you.
Hon Deputy Chairperson and hon Deputy Minister, my name is Sandlana Smit. I am from the Free State. I am new. Thank you for this opportunity. The question that I would like to just address to the Deputy Minister is that, are you aware sir that call centres of Eskom are currently closed and moved from buildings that belong to Eskom to buildings that they are newly rented, newly since they have been made that they are new people employed. I am just asking, is that really cost containment? This is also now a strain not just on additional expense for Eskom, but it's also additional expenses for the labourers and the employees. Thank you, sir.
Thank you, hon member. Hon Deputy Minister, if it's a total new question, you might give us the information when you get it.
Deputy Chair, the
question was about the task team we had appointed. This is an operational question at Eskom for which I don't have any information about at the moment. Thank you. If it could be referred to us in the appropriate format then we can deal with it.
Thanks, we will do so. We will make sure we get the information and share it with the members.
Thank you Deputy Chairperson. Deputy Minister, Minister Pravin Gordhan in December 2018 and March 2019 was quoted in the media alleging that the rolling load shedding were an act of sabotage and SAPS crime intelligence units were investigating. Did the investigation identified perpetrators of the sabotage and when can we expect the arrest and prosecution? [Laughter.]
Over to you, hon Deputy Minister.
It's totally a new
question, hon Deputy Chair. That has nothing with the question that I was responding to being asked about the work of the task team. That is a new question. We could deal with it in an appropriate way.
Thank you. The Rules at least allow you to do that.
Deputy Chairperson, members of the House, information provided by National Treasury or national department's non-compliance with the payment of suppliers by government does not differentiate between large, small, medium and micro suppliers. It provides for data in terms the payment of the invoices in general without categorisation. This affects reporting in terms data, specific to Small Medium Micro Enterprises, SMMEs, and limits the ability to conduct the necessary analysis, to the extent to which they affected by delayed or non- payment, however according to National Treasury, for the period covering May 2019- September 2019 or non-compliance with the payment of suppliers by government departments. The total rand value of invoices paid after 30 days by national departments amounted to R3 100 354 225, which is a total of 68 566 invoices. The total rand value of invoices older than 30 days on not paid is R6 400 550 731, which is total of 8700 invoices.
In terms of the invoices paid after 30 days at the end of September 2019, the Department of Human Settlements, Water and Sanitation reported the highest rand value which amounted to R1 300 800 579 of
the total of 5375 invoices, followed by the Department of Justice and Correctional Services with total rand value of R681 530 477 of 41 263 invoices. The Department of Defence reported a total rand value of R387 086 304 for 41 532 invoices. On the number of invoices older than 30 days or which are paid, the Department of Human Settlements, Water and Sanitation reported the highest rand value which amounted to R54 000 228 059 for a total of 3099 invoices, while the Department of Public Works and Property Management Trading Entity, PMTE, reported a total rand value of R693 990 070 for a total of 4866 invoices, followed by the Department of Cooperative Governance and Traditional Affairs with a total rand value of R60 674 509 for 352 invoices.
On provincial departments the total rand value of invoice paid after
30 days by the provincial departments at the end of September 2019 amounted to R13 508 307 719, which is a total of 116 780 invoices. The total rand value of invoices older than 30 days or not paid is R2 500 520 003, which is a total of 228 227 invoices. The report indicates that the Eastern Cape Province reported the highest number of invoices paid after 30 days, which a total rand value of R6 200 994 369 for 434 829 invoices, followed by Gauteng Province
with the total rand value of R2 264 683 644 for the total of 25 302
invoices and lastly KwaZulu-Natal with a total rand value of R1 723 862 552 for a total of 10 257 invoices.
The report further indicates the Gauteng Province report the highest rand value on invoices older than 30 days or not paid with a rand value of R8 436 734 513 for a total of 10 155 invoices. This is followed by the Eastern Province with a total rand value of R7 374 927 108 for total value of 57 754 invoices and the Orange Free State Province with a total rand of R1 420 464 240 for a total 6518 invoices. The National Treasury has indicated that ...
...thank you, unless you are concluding.
Yes, I am concluding,
the National Treasury has indicated that regulation 8,23 is only applicable for departments and not applicable for public entities hence it is not a requirement for them to submit information of late or non-payment of invoices, however the public entities are currently applying this provision on best practice. Thank you.
Thank you for the detailed answer, hon Minister it is concerning that billions and billions of rand are going into our
economy, rands that should put food on the table, should employ more people, it is really a concern and I really hope that you can get right that your colleagues in other departments also get back to the 10 day payment period as your department is doing. Just on the positive note, it was firstly disappointing that we couldn't see you in select committee but our Chairperson will write to you and to the other ministers, but I must say you sent a very competent acting director general, DG, there we gave him the compliment, and it was really pleasure working with him this morning. You recently said that your department is working on a database for small to medium enterprises, SMEs, which can be monitored after it's linked up with the central supplier base of the National Treasury. The acting DG said this morning the select committee that one of the proposals that you are looking at, is a automatic fines for late payments and that this fines will then go through the accounting officers and the officials that is responsible for that will be held accountable. By when will this be up and running and the steps that will be taken against these departments that put the livelihood of SMes at risk for the late the payments.
Before you respond Minister, if you don't have all the information immediately you can still submit it to us.
Deputy Chairperson and apologies again to the select committee, we will deal with it when the official communications come and we hope it will not recur. Thank for the compliment for our competent acting DG, it shows that the ANC- led government it's in deed delivering and has officials that can deliver. Also in terms of the proposal to charge interest penalties on late or non- payment of voices we are reliant on National Treasury. I am sure you are aware that the Minister of Finance in the document that he has released, part of the proposals includes the automatic levying of penalty charges on the invoices that have been outstanding for more than 10 days.
I can not on this platform and this forum tell exactly when that will happen because it depends on whether it gets Cabinet approval and complies with the other applicable legislation, but we are the one sponsoring that proposal and we are aggressively lobbying for it and making sure that all the legal impediments are dealt with. Thank you.
Deputy Chairperson, hon Minister the Department of Human Settlements, Water and Sanitation, the Department of Justice and Correctional Services and the Department of Defence are the third worse performers when it comes to the payment of small, medium
and micro enterprises. Wouldn't' you say that Minister Sisulu, Masutha and Ncakula should be held accountable as well because late payments are costing our small businesses a lot and ultimately the buck stops with ministers, not with the officials per se? As political leaders we should hold them to account, so that we can ensure that our small businesses are paid on time, so that they can create jobs to create a sustainable economy. Thank you.
Just before the Minister respond, Nqakulu, who is he? No I was really now, I was even asking members, it seems you are speaking about Minister Nqakula, it's understandable, ok.
Through you Deputy
Chairperson, the last time I checked, the minister for Justice and Correctional Services is Minister Lamula and we got the clarity on Minister Nqakula. I think we need to be consistent as members of the House and also members of the public, that when it suits us ministers us must held accountable for things that officials must execute on. I think what we trying to achieve with all the mechanism we are introducing, we what to hold the necessary officials accountable, because they are the executioner. That's why director generals and head of department are called accounting officers of
the department and they account on how the department executes. A minister at whatever level they sit, they would not be accountable for the administrative clerk in the department who must receive an invoice and process it and make sure that it is signed off correctly and get submitted to the relevant payment authority, it's only the officials that do that. Just on passing by way, I am not the President of the Republic, so do not appoint ministers and can't hold ministers accountable. Thank you. [Applause.]
Deputy Chairperson, Minister has the department look at what are challenges that result in the failure of government departments and state-owned entities to process payments to SMMEs, within 30 days and what measures is it putting in place to address them?
The department continues to look at the measures but there have been a number of factors. There are times when government officials want to manage the cash flow of the department when they have exceeded their procurement plan targets and when they do that then they decide not to pay for certain services and wait for the next financial year, but if you go, there are also other instances where the responsible department is not able to recover and therefore they do not have cash flow to
pay for those services. What the National Treasury is trying to do now is to make sure that there is adherence to procurement planning and adherence to the execution of the procurement plan, so that the cash flow of government is managed and when we do not contribute to stifling or destroying SMMEs. Thank you.
Tona, a le na le tharabololo e e tlhamaletseng eo ka yone le ikaelelang go baakanya seemo se o buang ka sone mo lefapheng le le amegang? Fa e le gore le na le tharabololo, a mme le setse le e diragatsa? Le gore lefapha le na le tekanyetsokabo e e lekaneng go ka diragatsa tharabololo eo?
Fa le fetsa go lemoga gore le ntse le retelelwa ke go ka duela dikgwebo potlana ka nako, tlhalosa gore a bothata ke badiredi ba puso ba ba sa dirang mmereko wa bone wa go duela kgotsa bothata ke matlole?
MINISITA WA MVELEDZISO YA MABINDU MA?UKU: Ndo livhuwa Mufarisa
Mudzulatshidulo, ri na thandululo ya pulane dzashu dza u lugisa u sa badelwa ha vhoramabindu vha?uku. Thandululo yashu i ?anganyisa u isa phan?a ha u thomiwa ha Ombudsman wa dziSMME uri hu vhe na mbadelo ya
nyingapfuma nga murahu ha musi hu so ngo badelwa nga murahu ha ma?uvha o tiwaho nga mulayo khathihi na u ita uri vhashumi vha muvhuso vha khakhaho vha saine dziinvoisi dzi tshi ?a kana u ?ahisa mbilalelo dza uri invoisi a yo ngo ?a nga n?ila yavhu?i, vha farwe vha dzhielwe vhukando uri ri vhe ro kaidza u sa ita mushumi ha vhaofisiri vha muvhuso.
I was trying to tell the hon Motsamai, Setswana is on channel nine neh, for future reference, I am telling you. Thank very much hon Minister.
Hon Deputy Chairperson, the Durban Beachfront is the responsibility of the eThekwini Metropolitan Council and therefore, as a department we are not responsible for interacting with municipalities. We request that the question be directed to the Minister for Co-operative Governance and Traditional Affairs as the Minister responsible for local government. Thank you.
Hon members, it would be difficult to allow follow up or supplementary question on something that the Minister is clearly saying let us defer it to the Minister
of Co-operative Governance and Traditional Affairs because it is actually applicable to the municipalities. So, thank you very much that members agree with that the explanation. Thank you, hon Mfayela and every one.
Hon Deputy Chair, just for clarity. This morning we got feedback that the Ministry is engaging with municipalities more and more and ensuring that there is partnership built with her department and municipalities on the reduction of red tape and better opportunities for small and medium enterprises. I really do not understand how this question based on what we got this morning and now cannot be answered. The response that we got this morning is that there will be a closer working relationship between municipalities and the department.
That is something that is in process and work in progress. I am making my ruling that the Minister does not have to respond to this question and we are not going to take it further. It is a ruling and we are going to the next question. I have made my ruling. Can we go to Question 230?
Hon Deputy Chairperson, on a point of order: If the question was out of order why is it on the Order Paper? Why was
it allowed in the first place? You are simply accepting the word of the Minister that she is got nothing to do with this. Her department has an overarching responsibility right across the country to promote and look after small business development. How can it be that we cannot ask her questions as to how she will encourage the eThekwini Municipality to fast forward small business development? It is on the Order Paper.
Thank you hon Brauteseth, I have made my ruling. Can we continue now?
You are not answering my question, Deputy Chair. How can it be that it is on the Order Paper and now you are just saying it is not valid here and now? How did it make it onto the Order Paper?
Hon Brauteseth, thank you very much. I have made my ruling. Can we allow the Minister to go to Question 230 from the hon Londt. What hon Londt said is understandable and is work in progress. We do not expect the Minister to immediately know everything. Can we continue to Question 230?
Hon Deputy Chair, on a point of order: I want to ask that this matter be referred to the Programming Committee that this does not happen again that the question is put on the Question Paper that is not supposed to be asked for a specific Minister.
That is a request and it is a fair request that can be differed to the Programming Committee so that we discussed it and get into the conclusion. The only thing that I am requesting members is not to discuss it because we have ruled.
Deputy Chairperson, it is envisaged that a small enterprise ombud service will be established in the 2020-21 financial year, as soon as the amended legislation is promulgated and proclaimed.
The department, with the support of The Office of the Chief State Law Advisor, has completed the drafting of the Amendment Bill for the establishment of the small enterprise ombud service. At this point, the draft Bill is undergoing the socioeconomic impact assessment process.
The main function of the ombudsman is to resolve disputes between small businesses and other parties which could be other businesses that are private, and the state, including state-owned entities, SOEs, and municipalities. The proposed functions for the purpose of achieving the objective is to be ... [Inaudible.] It will be set for the ...
The ombud will be competent to investigate, among others, any alleged unfairness in relation to contractual arrangements or other legal relationships between the complainant and any other party to the complaint; abuse or unjustifiable exercise of power or unfair or other improper conduct or undue delay in performing in terms of a contractual arrangement or other legal relationship between the complainant and any other party to the complaint, including one of late payment of an SMME; an act of omission which results in an unlawful and improper prejudice to small enterprises.
The ombud must in any case where a matter was not settled or a recommendation was not accepted by all parties concerned, make a final determination.
Further details will be made available when the draft Bill has been considered by Cabinet for both public comment and parliamentary processes. Thank you.
Minister, I also just ... on your previous ... I actually don't care where competent officials come from, as long as they are competent.
One of the things I am going to ask, if you want to raise the issue of party-political contributions to Parliament ... there's not just one single organisation that has the monopoly on good ideas. In the Fifth Parliament, this exact proposal of the ombudsman was put forward in the National Assembly by my colleagues in the Democratic Alliance and it was shot down by the majority in the House which, as you know, is the ANC. Now this exact same thing is coming back.
So can you please highlight what the differences are between the proposal which was put in the Fifth Parliament and this one which is now at the State Law Advisor?
Is it a question or just an observation.
Just let me answer. I
Okay. The Minister can respond. I was just asking the hon Londt, is it a question or is just something that ... [Inaudible.] [Interjections.]
No, it's fine; she said she will respond.
Luckily, I was not a
member of the Fifth Parliament, and therefore I have no obligation to read through any of the rejected Bills of the Fifth Parliament. So we have tabled the SMME Ombud Service Draft Amendment and that's what we are proceeding with.
We are thuma mina. We are ... [Inaudible.] You should be happy that there is collaborative government and therefore we expect that the other side of the aisle will support the Bill and the amendment, quickly. Thank you.
Hon Deputy Chair, hon Minister, let me firstly welcome and acknowledge the commitment and the speed with which you
are moving to address the issues that relate to the vulnerability of SMMEs through establishing this important office.
Now, in light of that which I have just raised, in your own view, how will this office ... or how will the ombudsman be empowered to protect SMMEs from corporate bullying?
We also need to acknowledge the fact that it's not only government departments that pay small businesses late. We have SMMEs that render services to the mines and other big private companies. They get paid very late. So we are not only addressing the issue in relation to government departments. We want to raise ... in terms of corporate bullying as well as to ensure the enforcement of prompt payment of SMMEs ... Thanks.
Thank you, hon member. That's why we have drafted the draft amendment, to make sure that it's not only applicable to the public sector, but also applicable to the private sector.
If I may give instances ... We have instances where franchisee and franchisor relationships are very onerous to SMMEs and they ... [Inaudible.] ... after they've paid the franchise fee and complied,
they are losing out. They take them to court and they lose a 10-year investment.
So that ombud service is meant to also deal with that.
The second part is that you are correct to say that nonpayment is not limited to government, but is also applicable to the private sector. That is why the SMME ombud service is applicable there. We have given it and hope the parliamentary process will support us to give the ombudsman powers equal to that of a judge and to make a determination if there is no consensus on a mutual agreement basis so that we then short-circuit and remove the litigation from courts for SMMEs because part of the dominant destroyers of SMMEs is the litigation with big business and government which SMMEs always come out ... [Inaudible.]
Deputy Chair, hon Minister, what actions will you put in place to ensure that when you have set up this ombudsman, it will be accessible to rural small businesses too? Thank you.
Thank you, hon member, for the question. In terms of the draft amendment, we are proposing that the SMME ombudsman will be able to appoint deputies who can
then be available in provinces. We are also proposing governance mechanisms of how the rotation into provinces is available. We are also proposing in terms of the detail of the working, how the office should be able execute ... to write complaints ... even when ... to be accessible to people in rural areas.
As part of the relationship we are building strongly with municipalities, we want municipal elite units to become service points for the Small Business Development Agency, Seda, and the Small Enterprise Finance Agency, Sefa, and certain government services that are offered through our department. With those services being available in municipalities we hope we can also use the Local Economic Development units to be points of lodging complaints with the SMME ombud so that it is accessible to our people. Thank you.
Thank you, hon Deputy Chairperson, but I am fine because of the question that was posed by hon Goyiya. [Interjections.]
Okay. No, this was the fourth one. [Interjections.] Okay, ma'am ...
Thank you. There is fifteen billion ...
Chair, can the hon member withdraw the issue that he is raising. He said hon Thandi Modise was better than you Chairpersons. He must withdraw. [Interjections.]
Order, hon members! Order!
Hon member, did you say that?
Isn't that a point of debate? And points of debate are allowed. [Interjections.]
Do you know, members, I don't like this attitude of you ... of undermining us. We are adults. We are Members of Parliament. This style of undermining us because we are women ... we don't like it. Please!
Chairperson, the last time I checked, the hon Thandi Modise is also a woman. So what you have just said supports my point of debate. [Interjections.]
Order, hon members! Hon members, I think we need to continue because I was trying to have ... to be disciplined, but I could see that my discipline is undermined. Therefore I will continue with my question.
The next Question is Question 243.
I'm sorry, we haven't done the fourth question. [Interjections.] Hon Chairperson, there are Rules that govern these sessions. One of the Rules ...
Can you please sit down. I did not allow you to stand.
It's a point of order.
Can you please sit down. I didn't indicate that you could stand. Sit down! [Interjections.]
Hon Minister, we are continuing with our Questions. Before they confuse you, we are on Question 243 that was asked by the hon Myayela.
Truly incompetent! Not even knowing how to apply the Rules! [Interjections.]
Two, three, four!
Chairperson, I am taking Question 234 asked by the hon Mathevula. The department has approved a budget of R4,8 million towards the refurbishment and upgrading of the Tshakhuma Fruit Market in partnership with Makhado Municipality. A total of R2,4 million was disbursed to the municipality as the department's contribution towards the upgrade of the Tshakhuma Fruit Market. However, the upgrade of the Tshakhuma Fruit Market has been put on hold by the parties involved - that is the municipality and the department, due to the fact that the road to Punda Maria is being upgraded by the SA National Roads Agency Limited, Sanral.
The Minister for Small Business Development has since engaged and there is agreement with the Minister of Transport to have Sanral incorporate the Tshakhuma Fruit Market in the road designs and the upgrade programme for the Punda Maria road. The directors-general of
the two departments, the management of Sanral and that of Makhado Municipality will finalise the relevant details. Thank you.
Chairperson, hon Mathevula is not here but we informed you that the hon Zandamela will take the question.
Before she continues, I want to check that with the Chief Whip. Have they reported to you, Chief Whip?
Sihlalo weNdlu, bengicela nje ukubuza laphaya kuNgqongqoshe ukuthi, ngalezingqalasizinda, ikhona na imisebenzi ezodaleka nokuthi izoyisiza kanjani imiphakathi yakuleya ndawo la zakhiwe khona? Ngiyabonga.
MINISITA WA MVELEDZISO YA MABINDU MA?UKU: Ndo livhuwa, makete wa Tshakhuma wone une u sikela vhafumakadzi na vhaswa mishumo vhane vha rengisa khawo. U fha?a kana u alusa makete wa Tshukhuma zwi khou itelwa uri fhethu ha u shumela hu shumee zwavhu?i na u vha khwine. Ndi ngazwo ri tshi khou ri arali ra ita makete thungo, musi bada ntswa i tshi ?a i ?o vha sudzulusela kule na hune zwa zwazwino vha
rengisa hone. Zwenezwo, ro humbela vha Sanral uri ite makete une khawo mabindu avho a ?o kona u engedzea zwenezwi vha tshi khou rengisa mitshelo yavho. Ndo livhuwa.
Chairperson, I am Fred Nel from Gauteng. Minister, if I understood you correctly, you said that about half the money that your department has made available to this project has been paid over to the Makhado Municipality. Has that money been spent on the project or is the money been held by the municipality? How are you going to ensure that that money is not going to be used to pay other debts by the rural municipality and that it will still be available for this project?
When we put the project on role, the municipality has already started with the designs for the market. So, if the money has been spent it would have been spent towards the designs which we expect the money to be used for. That is why we are engaging. I said that the details will be finalised by the directors- general and the respective management committees or management teams because we want the work that is already been done by the municipality to be incorporated into the work that must be completed by Sanral. Thank you.
One of the problems that we face is that when there is infrastructure development being done in municipalities - with the closer working relationship that you are going to forge with municipalities - there is money that get spent but there is no real budget for the maintenance of this project. Is that one of the things you are going to engage the municipalities with to ensure that when there is an investment from your side - or the other R15 billion that government spends on the development of small, medium and micro-sized enterprises, SMMEs - there is actual maintenance plans in place? We don't have to visit a place two, three or four years down the line and realise that it has become dilapidated and it doesn't add any value to the community or contribute in creating jobs.
It is indeed important that when infrastructure is being develop there should be money set aside for maintenance. The partnership in developing the Tshakuma Fruit Market will allow the Makhado Municipality to continue to service and maintain the market when it is upgraded - but also the fact that we are roping in Sanral which will be the developers of the road.
As they maintain the road, we want them to also contribute to the infrastructure maintenance. Maybe I should also add that the District Development Model gives government - more especially the national government, to come in close proximity with municipalities and work closely together. We will not allow infrastructure developed by government to go into a state of dilapidation, but with the Tshakuma Fruit Market the difference is that it is an active working space. It has been there before I was born and continues to be vibrant and growing. It is my home area - by the way. Thank you.
Hon Minister, in line with government's priority of fighting corruption, what are the future policy plans of the department to mitigate risks or fraud and corruption in the future funding model for small business development? Thank you.
As part of measures we have put in place, we are doing three things. The first part is that our assessment of SMMEs in order to offer funding and support to their businesses is not done by one person, but it is done by a committee so that we can avoid fraud. But when we do infrastructure development to support SMMEs - either business spaces or whatever, we also engage in post care or maintenance arrangements that we have put together with the municipalities, departments and various
partners so that we can limit fraud and corruption in the promotion of SMMEs or small enterprises. Thank you.
Chairperson, a major challenge for small businesses is access to business support services - both financial and nonfinancial. Since my appointment, the Department for Small Business Development has introduced or is finalising measures to improve such access for all the small businesses but they will be particularly assisting in supporting and promoting small businesses in rural and township communities.
We are introducing a common application template because the application for support had often been difficult due to the multiplicity of application forms that small businesses had had to complete, which are not even portable or reusable across various SMMME-funding agencies.
The department, together with Small Enterprise Development Agency, Seda, Small Enterprise Finance Agency, Sefa, and National Empowerment Fund, NEF and the Industrial Development Corporation, IDC, have completed a common application template form that SMMEs
will use to apply for both funding across all the Development Finance Institutions, DFIs, commencing with Seda, Sefa and NEF.
I will launch this template on Thursday, on 14 November 2019. The template will say, Small Businesses Time and Money, so that they don't have to contract consultants to assist them with application forms. But, most importantly, if their funding requirements are not covered by one agency - Sefa - the same form can be transferred to the NEF for funding.
The second one is that we are addressing the issue of prompt payment for SMMEs. I had earlier mentioned mechanisms that we are employing to make sure that we pay SMMEs on time. The President, during his state of the nation address mentioned that we are establishing the township entrepreneurship fund.
In a few weeks, I will propose to Cabinet the details of the township entrepreneurship fund whose establishment will assist to stimulate township economies and create dynamic markets in higher opportunity sectors for small businesses. The focus of the fund is premised on the findings of the National Planning Commission - in their 2017 study of township economies, which concluded that
enterprise development is affected by numerous factors, both within and outside the enterprise.
We want to focus on the matter level of the factors, which is addressing the capability of all actors to create favourable conditions for industrial dynamism. The multiplicity of interventions have focused on factors that deals with access to funding, access to enterprise development but they have not dealt with how to create a dynamic entrepreneurship environment in townships and rural areas.
We are experiencing slight delays in announcing the details of the funding due to the current constraints on the fiscus that are confronting the National Treasury: In terms of what are the funding priorities that must be there; and how do we juggle the reprioritisation thereof. Thank you.
Madam Chair, hon Minister, thank you for your answer. It is time for diffused youth unemployment time bomb with sustainable solutions. In what way is this department going to assist SMMEs to tap into an opportunity that exist with the African Continent Free Trade Area agreement, AfCFTA agreement, which is said to be one of the world's single largest markets accounting for
$4 trillion - which is R57 trillion - in spending, an investment across all 54 African countries?
What we are doing is to make sure that South African SMMEs are able to have access to finance to enterprise development but also strengthen their ability to develop products and services can be exported to the African market. On our part, we think that SMMEs should be ready to export to the African continent and they will do that through our support. So, we have specific programmes directed at SMME development, product quality support and also certification of products so that our products are ready for the market and they can meet the right standards... Thank you.
Chair of the session, hon Minister, ...
... metseng ya rona le mahaeng, boholo ba dikgwebo di se di nkuwe ke maqulwana a Somalia, ebile ba sebetsa mmoho ho thusana. Jwale, ha o nahane hore ke nako ya hore dikgwebo tsa bona di ngodiswe, ba patale
lekgetho le bona? Mme, ke batla ho tseba ho tswa ho wena hore na ditlamorao tsa dikgwebo tsa bona ke di feng, hore dikgwebo tsa bo
rona tse nyanenyana tse metseng le mahaeng di kgone ho tswella? Ke a
Before we even talk about registering businesses owned by foreign nationals, Home Affairs must give us an assurance that those foreign nationals are in the country legally because the current legislation says a foreign national who is in this country and doing business must invest in businesses of R3 million upwards, and not less. That is what the law provides for.
Secondly, it provides that refugees can do businesses, but they must apply for licensing. There is a challenge currently with our licensing and registration of businesses; not registration in terms of CPIC, but also registration to make sure that we know who is doing what business where.
To mitigate that, we are proposing an amendment of the legislation. I am working with Office of the Chief Law State Advisor to draft an amendment to the legislation to allow us to regulate two things: Regulate businesses that are strictly reserved for South African nationals; and to also regulate the registration and licensing of
businesses as a way of strengthening municipalities with their bylaws and requirements, to register and licence businesses operating in municipal areas.
The third issue that we are working on is: How do we support our small businesses in the townships and rural areas? You can regulate and ban everybody from doing everything, but if our own people are not ready to take up that space, there will not be an economy. It is not true that South Africans are not entrepreneurial. We have been entrepreneurial. We have been raised entrepreneurs.
We have grown up with shops that were owned by South Africans but we need to strengthen the ability of South Africans to work together. We are working on mechanisms of how to do that. What is good for us is that the Competition Acts exempt SMMEs from working together, co- operating and collaborating to advance their business goals. Thank you.
Chair, Minister, we agree that the development of small business is at the core of government's economic development strategy and the establishment of this department as a stand alone was to leverage small business development across government. In the light of this statement: What are the key challenges faced by the
department in fulfilling its mandate; and what are the plans to overcome such challenges?
The major challenge facing the department is insufficient funding of the department and the agencies that are supposed to support small businesses. To leverage that, we are trying to establish mechanisms of partnering with private sector and the international community on expanding the pool to have funding for SMMEs, as well as support programmes for SMMEs. That has been the major issue facing municipalities.
Also, the second major issue is that there has not been a co- ordination of policy in terms of supporting SMMEs. The private sector does its own things and government also does its own things. Government does not even do it form one point; they do it from across the points. So, we are currently working on drafting an SMME funding policy for South Africa to make sure that how we regulate funding for SMMEs can make an impact across all SMMEs. Not that they should be choosing and picking of particular areas, but we can spread the same across.
The third issue we are working on is that even when we did enterprise development - our incubation or just enterprise
development programme - there has not been a national standard of guidelines, for saying this is how you do enterprise development, either at an incubational level or at a corporate level. So, we are working to develop guidelines and standards that would be adhered to both by private sector enterprise and supply development, and also at incubators by both government and private driven incubation services. Thank you.
Chairperson, Minister, when you start a small business in this country it is usually by a few people, between two and six people within that business. In order to do business, especially in rural areas if you want to do business with government, you have to register as a business.
However, the moment you register as a small business, there is a huge burden on you administratively because; CIPC requests annual from you; Sars also wants annual returns; Stats SA want you to do survey forms; and the banks want supporting documents all the time.
So, it seems as if half your time in small business is used to fill in government forms most of the time and government returns. It takes away from your time to be productive and to grow as a
business. So, what is your department doing in cutting down that administrative burden on smaller businesses?
The matter you are referring to is the challenge of red tape that confronts businesses, but it is burdensome to SMMEs because large businesses have the ability to navigate around that. Together with the Department of Trade, Industry and Competition, we are working to make sure that alleviate the burden or the cost of doing business in South Africa.
As we speak, the Department of Trade, Industry and Competition has launched a base portal that allows businesses wanting to register in South Africa to be able to register in a matter of a day. They also have access to apply for tax, the UIF and all these other applications that are there.
However, on our part, we are launching a national database that gets all the SMMEs to register on that database so that they can access not only the service that are on the base portal but also additional services that makes it easier for them to do business in the country. That database will be used to publish opportunities available both in the private sector and public sector which our SMMEs can utilise.
It also allows us to be able to trace gaps in terms of supporting them. For instance, you find that the SMMEs that are now manufacturing or producing food need to be certified. The ones that are producing goods also need to be certified by the SA Bureau of Standards or some health certification authority.
However, it takes SMMEs months, if not years, to get certifications. So, we want to see what the impact is through that database so that we can then propose intervention mechanisms. We are looking at mechanisms that will include a special dispensation for SMMEs to get certification or accreditation by the SA Bureau of Standards. Thank you.
Chairperson, may I ask hon Londt because the question that he has of red tape I have answered all the issues when we were dealing with the other issues but I can repeat what we have said.
The first part is that we are reviewing and consolidating legislation that impacts on small, macro and medium enterprises, SMMEs, we want to see how does that legislation impacts SMMEs and we are allowed to gazette and publish that to say, this legislation
impacts on SMMEs in a cumbersome manner and those that require review we will propose to review in consultation with the custodian departments.
We are also wanting to enhance the Social Impact Assessments, SIAs process, the social impact assessment that is being done by the Department of Planning, Monitoring and Evaluation to include an impact assessment on SMMEs for all regulations including legislation and policies that goes to Cabinet as part of enhancing that and we do not want to remove it from the Department of Planning, Monitoring and Evaluation, we want the Department of Planning, Monitoring and Evaluation to continue.
We have started to negotiate and we are advocating with municipalities, the SA Local Government Association, Salga, in particular, we are dealing with them at an association ... to standardise certain bylaws so you can remove the burden that the bylaw presents but also have uniformity or flow on things applicable across all municipalities so that you give certainties not only to the SMMEs but also to investors into the country and the engagements are progressing very well.
I have earlier spoken about the common application template that we have introduced that I will launch this Thursday which the SMMEs will use to apply for funding across the Small Enterprise Finance Agency, Sefa, the Small Enterprise Development Agency, Seda, the National Empowerment Fund, NEF, as a start. The Industrial Development Corporation, IDC are doing their due diligence but the Land Bank also wants to come on board and also the packages that are offered by the Department of Tourism, they also want to come on board. I have just mentioned the part of the national SMME database and I have just articulated it earlier on what should happen when that database comes, how it will make it easier for SMMEs to get services across government because we want that database to be a one-stop platform for SMMEs to access government services across ... and it may not start at the right level but we will gradually build it to the right level, we are doing it in partnership with Eskom.
In the previous reply I have dealt with the mechanisms we are doing with the Department of Trade, Industry and Competition on measures on easing burdens of doing business in the country that will also be beneficial to the SMMEs. Thank you.
Minister, I must say it is a fresh breeze having you in this Ministry so I really hope that you are going to be
successful in addressing the challenges we are facing in the country.
And one of the big things that you need to address is to ensure that across government departments we make it easier for businesses to function. The uFiling system that has been rolled out by the Department of Employment and Labour is an absolute nightmare for small businesses. It was difficult to get registered, and then the system went offline and now the small businesses that are being visited by the Department of Employment and Labour officials that are being held accountable for not being on the system and then when they ask these officials, "please come and assist us," these officials say, "but listen, they haven't received training even." There is this one business in Colesberg that was referred to me that had to pay R10 000 to get somebody to register and get everything on board. Now this is a lot of money for small businesses and this is killing our small businesses.
What are you doing in engaging with these colleagues to ensure that stuff like that do not happen and do not risk our small businesses? And what can be done by these businesses to recoup their losses they suffered because of a failed implementation policy by government?
Hon member, through you, Chairperson, the ease of doing business programme that we are undertaking and participating with the Department of Trade, Industry and Competition has now roped in the Department of Employment and Labour so we can address some of the challenges.
So, all the other departments that are implicated, either because their systems are not functional or they are a critical player in a business doing business in South Africa including SMMEs, we are all together in those engagements to try to make it easy. And we should be able through the Department of Trade, Industry and Competition- driven process to give a report of how the relaxations have done. That's why in my earlier reply I have indicated that the problem in South Africa is that the burden of doing business is applicable for both big businesses and small business, R10 000 is not much for a large business but it is a lot of money for a small business. Unfortunately, I can not commit on whether the recoup will be there because they didn't use a government official but what we can commit on is that we are determined to make sure that the environment is easier for SMMEs to operate and where they have to register, they will do it with the most ease. And we are hoping that with time we will build capacity ourselves as the department and the supporting agencies to support SMMEs directly on those.
The introduction of the common application template, we are checking whether it is not possible in all these other application forms whether online or on paper whether we can not use common templates that will make it easier. Our own template, we had to test it for the last two months making sure that it can become easy. It is not perfect, but we have committed to making it easy. Thank you.
House Chair, Minister, thank you for being present today. Considering the challenges that small businesses are facing, I want to know if the Minister would consider seeing that BBBEE forms part of the red tape excluding some people from applying for assistance, if the Minister would consider looking at the sunset clause regarding that, keeping in mind that the small businesses are some of the biggest job creators in South Africa and I think that will be a good thing to look at a sunset clause being implemented in the near future.
Chairperson, I will need to ask what he means by the sunset clause on the BBBEE policy. [Interjections.]
Minister, my question was would you be looking at implementing a sunset clause regarding BBBEE to include all people
to take part in putting small businesses and contributing to the economy despite the fact that they are from different cultures?
I still do not have an explanation of the sunset clause and in terms of my understanding of the sunset clause we require the BBBEE policy to make sure we redress the injustices of the past. But, what we can commit on the BBBEE policy is to make it easier for SMMEs, those who qualify for exemptions, to be granted exemptions without even going to a police station to do an affidavit.
That is what we are working towards achieving. But also with the BBBEE policy, we are looking at the review, part of the legislation we want reviewed, we want a review of the policy and the scorecard to make sure that scorecard it assesses the impact of large businesses on supporting SMMEs in terms of the Enterprise Supplier Development than just scoring points for the sake of taking points because the money that is raised through the what is equity equivalent and all the incentives that are granted for those who are exempted or those who apply for exemption. It is not an enough contributor to SMME development and we want the BBBEE policy to be used to transform the economy effectively to be inclusive by making sure that more SMMEs participate in that space. Thank you.
Hon Zamndela. Hon Zandamela I meant to say.
Sengiwu-Zamndela Sihlalo. [Ubuwelewele.]
AN HON MEMBER: Papa G!
Sihlalo weNdlu, bengicela ukubuza la kuNgqongqoshe ukuthi lama-SMMEs kuyiqiniso kangakanani ukuthi uma ecela ukuthi axhaswe ngemali kwesinye isikhathi abakhoni ukuthi bayithole noma efaka izicelo kuthatha isokhathi eside? Ungayiqinisekisa yini leNdlu na ukuthi ukubolekiswa kwemali, bayicelile imali, kusobala, ayikho into efihlwayo? Siyabonga.
No, I am not going to
answer in Tshivenda and I am not going to answer in Tsonga or Zulu, I will answer in English. The issue of access to money or access to funding, we have made it easy by using the common application form like I have mentioned when the question of what are the major challenges we are facing. There is not enough money available to give to all SMMEs. We can do as much as we can and we are trying to
leverage the private sector and other agencies that are playing in the country to extend the funding.
We are hoping that within this term of office there will not be a rejection of an application for funding but there will be a disbursement of funding to all SMMEs who qualify when we have raised the pot. I am told we need R60 billion to fund SMMMEs to make sure that the economy is really ticking and vibrant. We are hoping we can introduce creative mechanisms of raising the R60 billion without necessarily relying on national government coffers to fund that R60 billion.
And currently the work is that we don't want to turn down applicants because of the weak business proposal or weak business plan. We want to turn back the applicants because of weak business ideas but when the business idea is strong enough; we make a plan of either supporting the business nonfinancially until such time that the money will become available. But, unfortunately, it is not enough to reach everybody at the moment. Thank you.
Ke a leboga Modulasetilo. Ke botsa gore a sentlesentle mo, a re nale batho ba tshwanang le Baganka ba Sesole,
ba ba lekileng ka maatla go kopa yona tshegetso e ya kgwebo potlana go feta dingwaga dile 20, mme ba ntse ba sa bone thuso. E le gore e fiwa batho ba ntseng jang ka gonne batho bao ga ba bone sepe?
LETONA LA NTSHETSOPELE YA DIKGWEBO TSE NYANE: Ke a leboha. Le tla
lemoha hore Lefapha la Ntshetsopele ya Dikgwebo tse Nyane e na le mengwaha e mehlano fela e qadilwe. Jwale, ekasebe hore batho ba entseng dikopo tsa tjhelete dilemong tse 20 tse fetileng lefapheng lena ha ba so fuwe letho.
Jwale, ho batho ba sa fuwang tjhelete, e ka nna yaba lefapha le ne le qala ho thehwa ka nako eo, empa nna ke a tseba hore ho na le letlole le ikgethileng le fuwang dikgwebo tsa di mekaubere ya sesole. Ke ka hoo hona jwale re boletse hore re batla ho tsebisahatsa foromo ya dikopo tsa tjhelete e tshwanang ka hohle hore ho be bobebe hore ba kenye dikopo tsa bona.
Hakere ka nako enngwe mohlomong ba hlolwa ke ho tlatsa foromo ya kopo e nepahetseng, ebe ha ba tlatse tsona. Ka hoo, re entse hore e be foromo ya kope e bonolo hore mang le mang a kgone ho e sebefisa, ba kgone ho etsa kopo ya tjhelete ya letlole leo. Hape seo ke se boletseng ke hore ha re sa batla ho phephetha kapa ho hana ho fa
batho tjhelete ha e le teng ka taba ya hore foromo ha ba e tlatsa hantle.
Re batla ho phephetha dikopo hobane mohopolo wa kgwebo ya bona e se mohopolo o hlwekileng, le ha a ka kenya kopo ka Setswana kapa, Tshivenda, kapa Xitsonga, re batla ho mo thusa hore a kgone ho tlatsa foromo ka tsela e tshwanelehileng hore a kgone ho fumana tjhelete. Hakere di foromo re tshwanetse re di tlatse ka lebaka la taolo, hore Mohlahlobi-Kakaretso a tsebe hore re tlatsitse diforomo, ebile di fihlella maemo a bapisitsweng a molao. Ke a leboha.
The Council adjourned at 16:11 -----------------------