Resignation of SABS Acting CEO a huge blow to business and consumer confidence

The Democratic Alliance (DA) has been reliably informed that South African Bureau of Standards (SABS) Acting CEO, Garth Strachan, has suddenly resigned after a spectacular fallout with the Department of Trade and Industry (DTI) Director General (DG), Lionel October.

This stems from the portfolio committee’s oversight to the SABS this week where we were told that the entity is essentially bankrupt, will run out of cash in the next financial year and is battling to attract thousands of customers it lost under the previous delinquent Board and management which was dissolved under former DTI Minister Rob Davies.

The DA posed questions on what a ‘repurposed’ version of SABS would look like given the financial realities of impending bankruptcy which would have to involve staff retrenchments and liquidation of assets.

It is clear this question and Mr. Strachan’s answers led to the blow-out between him and the DG who seems completely opposed to this sensible and logical plan for SABS, and is more concerned with pacifying NEHAWU-affiliated employees who have embarked on an unprotected strike this week at the SABS.

There can be no doubt that the departure of Mr. Strachan will have a knock-on effect for exporters who rely on the SABS for quality assurance in international markets and for consumers who expect goods that display the SABS mark to meet minimum standards for health and safety.

This drama in the SABS must be urgently addressed by Minister Ebrahim Patel and for this reason that the DA will write to him and request the full reasons for Mr. Strachan’s resignation to be made known as well as a plan for the way forward.

The DA believes that the SABS has a big role to play in quality assurance to support our exporters and to give local consumers peace of mind which is why we believed in Mr. Strachan’s ‘repurposed’ version of the SABS and will continue to fight for it.

PIC must come clean on dodgy half a billion land purchase

Earlier this week, the Democratic Alliance (DA) submitted Parliamentary questions to the Minister of Finance, Tito Mboweni, asking him to probe and give clarity on a half a billion rand land purchase made by the Public Investment Corporation (PIC) on behalf of the Government Employees Pension Fund (GEPF). Documents since obtained indicate that the PIC appears to have invested R586.5 million on a piece of empty farmland between Klerksdorp and Stilfontein in the North-West province, which it hopes to turn into a mixed-use residential area.

The transaction raises a number of questions, first of which is how the obvious grossly inflated purchase price that the PIC paid for the land was determined. It is difficult to imagine how the valuation could be justified, even if future development is possible, which there is doubt about.

Second, the two investment companies involved in this transaction each have a single director, with both individuals seemingly being the immediate beneficiaries. How were these beneficiaries selected? They have gained value that sharply exceeds the purchase price paid by the pension fund, with both companies, Anglo Saxon Developments and Moedi Bosele Investors, jointly claiming R837 million in value.

Third, what is the basis for the involvement of a military veterans association?

The PIC has argued that the price they paid for the land was fair, with an independent valuation conducted as part of its due diligence protocol. But when asked for the identity of the valuer, and the details of the valuation, the PIC would provide no further detail. This appears to be a suspicious deal by the PIC, and their silence on key questions only raises more suspicion.

The DA will now write to the acting PIC CEO, Vuyani Hako, to request details of the transaction, the basis for the valuation, and the basis for the selection of the beneficiaries.

At a time when the PIC is at the centre of government plans to use pension funds to bailout government corruption, poor investment decisions by the PIC brings into question the asset managers ability to act in the best interests of government employees and pensioners.

DA calls on national government to intervene in Makana Municipality

The Democratic Alliance (DA) has today written to Nkosazana Dlamini-Zuma, the Minister of Cooperative Governance and Traditional Affairs (CoGTA), requesting that she immediately dissolve the Makana municipal council, as ordered by the Grahamstown High Court. Please find the letter and judgement attached.

The DA’s position is that, in terms of s139(7) of the Constitution of South Africa, the national executive is obligated to act, when the provincial executive does not do so.

Section 139(7) reads as follows:

If a provincial executive cannot or does not or does not adequately exercise the powers or perform the functions referred to in subsection (4) or (5), the national executive must intervene in terms of subsection (4) or (5) in the stead of the relevant provincial executive.

The actual High Court order has by and large been ignored, with both the municipality and the provincial executive of the Eastern Cape having sought leave to appeal. This cannot be in the best interests of the citizens of Makana, who are still without the basic services or good governance to which they are entitled.

In addition, the DA has written to the Chairperson of the Portfolio Committee on CoGTA, Faith Muthambi, in the National Assembly, requesting that the municipal leadership and the Eastern Cape MEC for CoGTA, Xolile Nqatha, to be called before the committee to unpack the issues in Makana and what is actually being done to rectify them. Letter attached here.

Only by holding those in power accountable, will we see service delivery improve.

The DA is committed to ensuring that all South Africans receive the municipal services they are entitled to, and that good governance is the norm, rather than the exception.

STRAIGHT TALK: 30 years on, South Africa needs another reset

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When FW De Klerk announced the unbanning of the ANC, SACP and other organisations on 2 February 1990 – thirty years ago this week – South Africa’s “reset” button was pressed and a new era of political freedom ushered in. It required immense personal courage from De Klerk and Mandela, both of whom placed country over party.

But economic freedom did not follow. Instead, the number of unemployed has risen from 3.7 million then to 10.3 million now. This is a major national crisis and far worse is yet to come as Eskom follows SAA into a death spiral, battered by a corrupt, incapable state. Our economy teeters on the brink of collapse.

Looting, bailouts and mismanagement have spun national debt out of control, yet our government continues to spend almost R1000 million more per day than it earns. That is why it is targeting people’s property, pensions and incomes, causing ever more capital and skills to flee our shores. We’re caught in a low-growth, high-debt trap and the situation has become highly combustible.

South Africa urgently needs another “reset”. We need sweeping structural reforms – a radical change to the “rules of the game”. The DA is not alone in calling for this change. Finance Minister Tito Mboweni warned last month: “If you cannot effect deep structural economic reforms, then game over!”

It’s five minutes to midnight. Moody’s is set to downgrade our credit to junk status soon after Mboweni delivers his budget statement later this month. This will raise the cost of future borrowing and accelerate our decline, just as a loss of confidence in SAA has accelerated its descent. As it fell to De Klerk and Mandela in 1990, so it falls to Ramaphosa now. On Thursday 13 February, he will deliver his third State of the Nation Address. This is his Rubicon moment. He can continue to choose dithering over decisiveness and keep playing by the current rules of the game – in which government plays an ever-greater role in the economy and “transformation” is achieved by BEE, EE, EWC and political patronage – or he can change the rules of the game to unleash private enterprise and entrepreneurship.

The current rules are failing South Africa unequivocally and dangerously: inequality and poverty are both growing.

This week, the Democratic Alliance released a draft document titled “Values and Principles” ahead of our policy conference on 4-5 April. It is intended to be the social contract between the DA and the people of South Africa, and the solid foundation on which all in the DA can work towards a common purpose.

It is also the basis for a new set of rules for South Africa, one that would lead to an open, opportunity society for all. It envisages a social market economy in which participants (businesses and consumers) rather than government decide on what to purchase, where to invest, and how much to produce.

Mining Minister Gwede Mantashe’s announcement at the Mining Indaba this week that the government is now preparing to allow mining companies to generate their own electricity speaks volumes. It is simply crazy that we need permission from government to be self-reliant.

Mantashe also proposed a new state-owned power generation company. This is mad, bad idea. South Africa needs an energy market that is open and competitive, in which everyone capable of producing energy can do so and sell it to anyone who wants to buy it, at whatever price they agree upon.

There are plenty of Independent Power Producers in South Africa who are ready and willing to generate electricity, thereby diversifying our energy mix, and making it more reliable and cheaper. Open, competitive markets should be the norm in our society and the DA’s draft document provides the basis for establishing this. I invite you to read it and give us feedback. We have set up an online portal for public submissions, which will go live on Friday.

The path Ramaphosa chooses for South Africa in his address to the nation next week will define his legacy. Whether or not we “reset” South Africa will define our future. I believe the values and principles set out in our draft document hold the key to greater equality and real transformation in South Africa. Poverty and unemployment have been coded into our system and we can code them out with a new set of rules. It’s time to join the DA in building these.

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It’s time to clip SAA’s wings

The fact that South African Airways (SAA) is now only flying one route domestically is a clear indication of how the airliner has all but collapsed.

It seems as though the writing is on the wall for everybody but the ANC government, who is clearly wedded to the continuous waste of public money.

We cannot continue to cling onto SAA for the sake of misplaced “national pride. ” The airline is an unmitigated disaster and has stumbled from one disaster to the next.

It is clear that the status quo at SAA is no untenable, and plans to turn the airliner around are simply pipe dreams.

The Democratic Alliance (DA) therefore calls for the unbundling of the SAA group, the sale of parts with potential and the complete shutdown of parts that have no future:

  • Mango must be separated from the SAA Group and offered for sale preferably by way of a public offer and listing.
  • Mango to take over SAA domestic routes that are profitable.
  • Remaining SAA with international routes to be offered for sale.
  • SA Express to be shut down and Mango to take over profitable domestic routes if any exist.
  • Air Chefs Catering to be shutdown.
  • SAA Technical, given the levels of fraud and corruption, to be shut down.

It is time that the ANC government woke up to this and clipped the wings of the moribund airline.

PIC heard about proposed pension raid through the press

The Democratic Alliance (DA) calls on President Cyril Ramaphosa to repudiate reports that he supports Cosatu’s irresponsible plan for the Public Investment Corporation (PIC) to take over at least R250 billion of Eskom debt. It would be shameful for the President to offer any support to a plan to use pensioners’ money to pay for the ANC’s mismanagement of Eskom.

This while the PIC says no one – neither Cosatu, the President nor Pravin Gordhan – has spoken to them about this plan.

Yesterday the DA received correspondence from PIC Acting CEO Vuyani Hako in which he makes it clear that the PIC has not yet been consulted about plans to use pension funds under its management to pay for Eskom’s debt. Meanwhile, Cosatu is claiming that there is a consensus in support of the plan. This is a lie.

It is now clear that this has been a shameful plan conceived by Ramaphosa and Cosatu, in an attempt to bully the PIC (managing more than R2 trillion of government employees’ pensions) into opening the vault.

That Ramaphosa is taking the lead from Cosatu, instead of driving the real reforms necessary to save Eskom and solve the power crisis, shows how defunct his Presidency has become.

The DA reiterates its call for the Government Employees Pension Fund (GEPF), which gives an investment mandate to the PIC on behalf of pensioners, to reject Cosatu’s proposal unequivocally. It is now more important than ever that the GEPF and PIC should appear before the Standing Committee on Finance in Parliament as soon as possible, to make their position clear on this proposal.

The actions of President Ramaphosa have shown that he is incapable of addressing the threat posed by an imploding Eskom, and instead of seeking real and effective solutions, has rather decided to raid the pensions of hardworking South Africans to pour into the Eskom black hole with no hope of a return.

The DA will not stand for this.

By attempting to force the PIC to give Eskom a free bailout, the alliance between government and Cosatu is putting the financial health of the asset manager at risk of not meeting its liabilities in the long term. This would create another need for a taxpayer-funded bailout, which no working family can afford.

The PIC cannot allow itself to be bullied and pressurised by unions and national government – it has a mandate to protect the future financial welfare of all state employees – and it would do well to publicly reject this proposal, so as to reassure citizens that their pensions are safe from the hands of those who want to use funds to save a sinking ship.

DA calls on Limpopo Education MEC to account for snubbing crucial oversight

The Democratic Alliance (DA) has asked the Chairperson of the Portfolio Committee on Basic Education, Bongiwe Mbinqo-Gigaba, to haul Limpopo Education MEC, Polly Boshielo and other senior Department officials before the Committee to account for snubbing a crucial schools oversight inspection in the province.

Today, in response to the DA’s criticism last week to her, her Head of Department and Chief Financial Officer abandoning the oversight at the last minute to attend an ANC lekgotla, the MEC said: “I am an MEC of education deployed by the ANC. It is clear that when the ANC calls me, I must respond to that call”.

The MEC and her officials should not be let off the hook.

Limpopo recorded the worst matric pass rate in the country, coupled with the most amount of 0% schools. On Tuesday the DA reported on the Thabakhibidu school in Thabazimbi where 57 learners share one classroom. This province’s schools are in a state of emergency and there should simply be no other matters more important for the MEC to concern herself with.

Her decision to choose an ANC lekgotla over attending Parliament’s oversight inspection is akin to dereliction of duty – and her comments today are indicative of her disregard of the Constitution and the rules and values which govern her duties and responsibilities as an MEC.

The DA strongly rejects public office bearers placing their personal political ambitions above the interests of the people who elected them to serve.

A government that can’t provide drinkable water is no government at all

Please find an attached soundbite, by John Steenhuisen MP.

My fellow South Africans

Of all the responsibilities that a government has towards its citizens, the most fundamental are those listed upfront in our Constitution, in the Bill of Rights. And arguably the most important of these is the right to sufficient and clean water.

What we see here in Siyanqoba is a government that has failed in its most basic duty towards its citizens. In a province notorious for water delivery issues, the municipality of Emalahleni is the very worst, with the highest rate of water outages in Mpumalanga and among the highest water losses in the country through leaks. And a place like Siyanqoba bears the brunt of this failure.

As with so many other areas of the country, the ANC government’s solution to the ongoing water delivery issue is makeshift and temporary: They install JoJo tanks and then they truck in water. But even this has brought untold problems to the community here, as the tanks were dirty right from the start, and the water they bring here is not drinking quality. Some residents have even reported worms in the water from the municipal tanks.

The water issue here is compounded by so many other delivery failures. I have been told that, in many places, raw sewage runs between the houses. The build quality of these houses is also clearly way below any acceptable standard. This was a recent government housing development, but you would never say so. Many of them started falling apart as soon as they’d been completed, and residents often have to deal with water streaming in through windows and doors.

This is not how a caring government serves its citizens. But, thanks to decades of systemic corruption and the practice of deploying party-loyal cadres across all government departments, this is the best they can do. What you see here in this community is probably as good as it gets under an ANC government paralyzed by its own corruption and policies.

The bitter irony is that Emalahleni means “place of coal”. It is situated on a massive coal deposit, and not far from here is Kusile, the largest coal-fired power station in Africa and the Southern Hemisphere. This should be a place of industry and commerce; of opportunity and jobs. And yet Emalahleni has constant power outages and this has wreaked havoc in the local economy. The worst example of this was when Highveld Steel had to close its doors two years ago, which led to huge job losses.

This is what happens when a government loses sight of its purpose – when being in power becomes a selfish goal. The needs – and indeed the rights – of people are abandoned and the entire game becomes one of enrichment of the connected few.

That’s why the former mayor of this municipality, and now MEC of sports and culture, Lindiwe Ntshalintshali, thought nothing of appointing her boyfriend in her department. That kind of nepotism becomes the very reason for staying in power, and the real responsibilities of government come a distant second.

That’s also how many of the 20 new traffic cops appointed in the municipality have family or romantic connections to ANC leaders. That’s their business model: Connected insiders get the opportunities and the benefits, and everyone else is left outside.

If you live in a municipality where this happens, then you are not getting the benefit of living in a free and democratic society. You are entitled to so much more. Our Constitution guarantees this. But in order to realise this right, you have to do your bit too. This means using your vote to either reward a government that you think is upholding its end of the deal, or firing them if they have let you down.

This is the only way a democracy can properly function. It has to be a two-way contract between you and government. And in this contract, all the power should lie in your hands. If you feel you’re not getting the service you are entitled to – if there is sewage in your street, if your water is undrinkable, if your power can’t stay on, if you are excluded from opportunities because you’re not politically connected – then the only way to solve this is with your vote.

Let’s start with your pension, Minister Gordhan

Minister Pravin Gordhan has confirmed that he supports using pensioners’ savings, managed by the Public Investment Corporation (PIC), to bail out Eskom. This is a deeply irresponsible policy proposal that should be resisted by government employees and pensioners alike.

We call on the Government Employees Pension Fund (GEPF), which gives an investment mandate to the PIC on behalf of pensioners, to reject this proposal unequivocally. Their highest responsibility is to their members, the millions of hard-working South Africans that contribute to that fund every month. They have no responsibility to the ANC, and no responsibility for bailing out failed state companies.

The GEPF and PIC should also appear before the Standing Committee on Finance in Parliament as soon as possible to make their position clear on this proposal. I have written to the Committee Chairperson today to request such a meeting be called as soon as possible.

It is easy to use other people’s money to solve his problems. But if Pravin Gordhan is happy to risk the pension savings of millions of government employees to bail out Eskom’s debt, he should start by offering his own pension first.

He knows that when Eskom cannot repay the pensioners, it is the public who will have to pay eventually, through crippling higher prices and higher taxes.

The Democratic Alliance (DA) has objected to Cosatu’s proposal to use over R250 billion of the money managed by the PIC to finance half of Eskom’s debt. Gordhan’s support for this proposal shows that this government really has no idea how to deal with the Eskom crisis, and is now clutching at straws.

If the GEPF approves this Cosatu proposed bailout for Eskom, state employee pensioners will never see their money again. They should not in any way rely on the supposed guarantee of their “defined benefit” pensions when this government cannot pay its bills. That is why we will resist this proposal, and call on the GEPF to do the same.

SAA Business Rescue Practitioners confirms talks with UIF over retrenchment packages

The Democratic Alliance (DA) can reveal that South African Airways’ (SAA) Business Rescue Practitioners (BRP), Les Matuson and Siviwe Dongwana, have confirmed that discussions with the Unemployment Insurance Fund (UIF) have taken place “to seek out solutions to alleviating financial challenges to both [SAA] and its employees”. This was confirmed in a letter by Matuson and Dongwana, following the DA’s request for clarity on their intentions to obtain UIF funding to pay retrenched staff packages that would be due to them from SAA.

The DA is of the view that these discussions were completely out of order and the UIF should have shown the SAA Business Rescue Practitioners the door. There can be absolutely no special deal between the bankrupt SAA and the UIF in order for the national carrier to get access to the UIF’s coffers. These funds are held by the UIF on behalf of the hard-working employees and employers of South Africa who have diligently put these monies aside.

If there is a surplus in the UIF it must be returned to its owners – the employees and employers who contribute to the fund. It cannot be used to bail out a bankrupt SAA and subsidise the maladministration and looting that has taken place due to the actions of ANC-appointed cadres at SAA.

Matuson and Dongwana further explain that “at this stage, no agreement whatsoever has been concluded with the UIF to make any funds available for the retrenchments of SAA employees”. These comments do not instill any confidence as it suggests that there may be some sort of an agreement at a later stage.

The DA has therefore written to Thulas Nxesi, the Minister of Labour, to request clarity on the discussions that Les Matuson and Siviwe Dongwana have had with the UIF and to obtain reassurance that there will be no raid on the UIF for funds to prop up SAA.

While we sympathise with the hardworking employees at SAA, we simply cannot condone this clear attempt to gift the collapsed SAA with another bailout by stealth.