Hon Chairperson, Minister and Deputy Minister of Public Enterprises, members, ladies and gentlemen, please allow the DA to also extend its deepest sympathy to the Maluleka family.
South Africa's state-owned entities, SOEs, are protected from failure. Insolvency is not a concern as government bail-outs are the financial rescue plan in most instances. The threat or option of a takeover bid, which would be viable for a private company, is simply out of the question for our SOEs, which results in possible slumps of management efficiency and the fall into complacency of many board members.
The power of the boards of SOEs is often usurped by the government. Government sets and drives the strategy of our state-owned entities, appoints and dismisses chief executive officers and approves financial and major capital expenditures of our state-owned entities. This creates a complex situation in which various factors contribute to confuse the board as to its powers and their execution.
Research indicates that problems in governance can be attributed to the poor operational and financial performance of state-owned entities in general. An effective government-shareholder management model that addresses the key challenges of state-owned entities governance will improve the performance of state-owned entities and better protect the assets of government. Even modest improvements in the efficiency of state- owned entities in a country could free up financial resources equivalent to 1 to 5% of its gross domestic product, GDP.
No doubt at the front and centre of most South African's minds right now is the worry of our very precarious electricity supply. It is not the DA alone who has raised concerns regarding the electricity situation in our country. The president of the Cape Chamber of Commerce and Industry, Michael Bagraim, said that the business world is worried about the likelihood of Eskom's planned power outages. Bagraim's concerns come after Eskom's CEO, Brian Dames, warned that power cuts could be on the cards this winter. I quote Dames:
We have said and said it consistently: Alone, Eskom cannot give the assurance that the country will not go through load shedding this winter.
Allow me to quote Bagraim's response to Eskom's situation:
I am very worried and the business community is shaking, because the reality is that every time there is a power cut, there is an enormous loss of money.
We cannot expect to grow our economy, create jobs and better the lives of South Africans if we cannot ensure a secure supply of electricity. We are fumbling in the dark when it comes to the building of our power stations. Both the Medupi and Kusile power stations are way behind schedule. Virtually continuous labour disputes at both sites have set the projects dangerously behind schedule. The DA has called for the appointment of permanent mediators at both sites to ensure that future disputes are resolved before crisis levels are reached. We urgently need to boost capacity, for example by allowing independent power producers to enter the market and ease the burden on the state entity.
We must now be realistic. Load shedding will be a fact of life unless we, the public of South Africa, pull together like never before and save energy wherever we possibly can. We as South Africans have been forced into a situation where we have no option but to look to ourselves to dig this country out of this crisis. Should we manage to avert the crisis this winter, it would be thanks to the South African public and the public alone.
Another one of our public entities that flitted from scandal to scandal and crisis to crisis is South African Airways. If it wasn't the clandestine resignation of a board, then it was the allegations of security services spying on board members, not to mention allegations of tampering with legal opinions regarding the suspension of the then acting CEO, Mr Kona.
The DA has called on Minister Gigaba to appoint a task team to urgently investigate all alleged irregularities at SAA and any related matter that is impeding the airline's functioning and to report back to Parliament on its findings. I think it is more than fair to say that the airline's survival has for far too long depended on billions of rands of government bail-out. The national carrier has been shrouded in a veil of secrecy for too long now. South Africans have a right to know what is going on with the national carrier. After all, it is their money that is being used to keep the airline afloat.
Another huge concern remains the issue of the Transnet pensioners. This is an issue that simply cannot be politicised. This is an issue that affects thousands of South Africans who dedicated their lives to bettering the country and are now suffering. The amount of money that these pensioners are expected to survive on is unacceptable.
The situation has reached crisis levels that could have been avoided had the necessary action been taken by the Department of Public Enterprises and Transnet. A parliamentary directive was directly ignored with regard to increases for the pensioners. Excuse after excuse was given for the situation. The DA approached the Public Protector last year in June and requested a full-scale investigation into both pension schemes. I am pleased to inform Parliament that on 25 July 2012 we received confirmation that the Public Protector would investigate the issue. The investigation is ongoing and I look forward to the outcome.
The comments by the Minister of Public Enterprises, Malusi Gigaba, on cadre deployment at the Cape Town Press Club will hamper the government's efforts to professionalise our public service. Minister Gigaba said, and I quote:
I wouldn't apologise for deploying a cadre to a board [...] There will be some rotations on boards, based on people whose time has lapsed.
[Interjections.] We cannot allow our public enterprises to become a revolving door for ANC cadres. We need professional and capable people to make sure that trains run on time, that lights are kept on and that the national carrier does not continue to run at a loss.
Minister Gigaba's comments are also a blatant contradiction of the National Development Plan and will undermine South Africa's fight against corruption. The NDP is clear that the government needs to take steps - and I quote - "to professionalise the Public Service, strengthen accountability, improve coordination and prosecute corruption".
Furthermore, the NDP criticises political appointments by saying, and I quote:
In South Africa the current approach to appointments blurs the lines of accountability. The requirement for Cabinet to approve the appointments of heads of departments makes it unclear whether they are accountable to their Minister, to the Cabinet or to the ruling party.
[Interjections.] The reality is that cadre deployment has undermined the ability of the government to deliver quality services to all South Africans and has effectively been used as a smoke screen behind which wholesale corruption has been allowed.
South Africa needs an efficient and professional Public Service, not a Luthuli House-appointed bureaucracy. [Interjections.] In contrast to the King I and King II reports, the King III report applies to all entities, both private and public, regardless of the manner and form of their incorporation or establishment. By adhering to the King III report's key principles, any entity will practise good governance.
Some principles from the King III report that the DA would like to see implemented in our state-owned entities are the following: The need for an annual integrated report that focuses on the impact of the organisation in the economic, environmental and social context; a statement by the audit committee to the board and shareholders on the effectiveness of the internal financial controls to be included in the integrated report; a consideration of the strategic role of information technology and its importance from a governance perspective; the positioning of internal audit as a strategic function that conducts a risk-based internal audit and provides a written assessment of the organisational system of internal control, including internal financial controls; the governance of risk through the formal risk management process; and the need to follow rescue procedures should it become evident that the entity is distressed. Minister, that would apply to SAA.
Allow me to conclude with a quote by Theodore Sorensen, which, I believe, sums up the importance of the country's need for transparency and of realistic expectations for our country's public enterprises:
If we can but tear the blindfold of self-deception from our eyes and loosen the gag of self-denial from our voices, we can restore our country to greatness.
I thank you. [Applause.]