PetroSA shows further impairments of R1.1 billion, after the R14.5 billion in 2014/15 financial year

Today, the Committee on Energy was told of a further R1.1 billion impairment for current 2016/17 financial year at PetroSA. This is on top of another forensic report that was presented to the Committee on the monumental impairment of R14.5 billion in the 2014/15 financial year, the majority of which was due to the failed Ikhwezi ocean-gas project.
The DA will request the full forensic report so that a second opinion can be provided by another independent law firm on possible prosecutions against those responsible for the billions wasted.  With the value of this loss, a second opinion is completely justified.
An impairment is an expense when the book value of an asset exceeds the recoverable amount of that asset.
We will also call for the Minister of Energy, Tina Joematt-Pettersson, to account for the appointment of the current board who have presided over this further R1.1 billion impairment. Minister Joematt-Pettersson must also fast track the recommendations of the Presidential Review Commission. This must include a review of all contracts to ensure executives are awarded bonuses on performance and not on being retained only.
The two main findings from the forensic report presented to the committee, compiled by SNG, found that the project did not deliver on its gas promises and secondly that there were massive project management issues including changes in contractors, overruns, delays and a disconnect between the board and management.
The only punishment in relation to this R14.5 billion loss was two golden handshakes for the ex-CFO and the ex-CEO and a demotion for the vice president of new ventures upstream, after they were each on full pay and at home pending the outcome of the investigation.
The acting chair of PetroSA, Mr Ngubane, went on to say that the contracts of executives did not link performances to bonuses. This is disgraceful and highlights the critical issue crippling SOEs in SA – poor governance and a lack of oversight.
The main problem surfacing from this whole saga is that the ANC-appointed board was not fit to oversee this kind of project, as they lacked the requisite skills and that the board failed to punish the executives properly.
This trend seems to be continuing with the current impairment of R1.1 billion that will place a further liability on the SOE.
The DA will continue to strive for public money to be accounted for and the people involved in illegal and negligent activities punished.
The DA will continue to push for a comprehensive turnaround plan from PetroSA, which should be backed by detailed research, and include action steps to ensure that the leadership is held accountable.