National Treasury told an outright lie about Tito Mboweni’s meeting with SANEF

The new Minister of Finance, Tito Mboweni, has now met representatives of the South African National Editors’ Forum (SANEF).

The National Treasury tried to pass off the meeting as part of “normal ongoing engagements with stakeholders in the country”.

This is an outright lie because there was nothing “normal” or “ongoing” about the minister’s meeting with SANEF.

The truth is the meeting was convened after the minister declared “war” on editors during a meltdown on Twitter.

The minister’s damage control is flawed because he is not being open and honest about his meltdown on Twitter.

Rather than trying to resolve this matter in a private behind-closed-doors meeting, and then trying to suggest that the meeting was part of normal and ongoing stakeholder engagements, the minister should be open and honest about his meltdown on Twitter.

The minister could start by:

  • issuing a public apology for his attack on the media and committing to upholding press freedom in our country; and
  • explaining the reasons, including the reasons why he thinks his “rights were seriously violated by unethical journalism”, which culminated in his meltdown on Twitter.

It’s time for the minister to change course and be open and honest with the public about his attack on the media and his meltdown on Twitter.

Bailing out SA Express a waste of taxpayers’ money

Media reports exposing the dysfunctionality and financial mess at the state-owned SA Express, makes a complete mockery of the scheduled taxpayer bailout of R 1,7 billion rand to SA Express.

The DA will propose amendments to the Adjustments Appropriation Bill (Bill 35 of 2018) to prevent the payment of the R 1,7 billion to SA Express.

Reports that SA Express is paying R 40,0 million a month to lease aircraft that are essentially scrap because they have been stripped of useful parts, is mind-boggling and brings into question the wisdom behind National Treasury’s decision to saddle the South African taxpayer with more funding for the airline.

While SA Express cannot find money to keep its aircraft flying and generating revenue, there is no indication that the company’s highly paid board members and executives have had to forego any of their lucrative pay packets and bonuses

Tito Mboweni, the Minister of Finance, announced that the revenue collection for the next three years will be R 85,0 billion less than the February budget and yet he saw it fit to add R 1,7 billion for SA Express over and above the expenditure declared in the February budget.

It is unconscionable that SA Express is kept “alive” with taxpayer bailouts simply to provide “employment” and salaries to highly paid executives and staff. This bailout alone could have been used to pay an extra R 12,00 per month for a full year to Child Grant recipients.

The DA believes that the only moral and logical option is to immediately put SA Express into business rescue, and if this fails, it must be liquidated.

PIC must disclose details of R70bn worth of investments in its “unlisted investment portfolio” in SA

One of the first tests of the new Minister of Finance, Tito Mboweni, is whether he will support the disclosure of detailed information about R70 billion worth of investments made by the Public Investment Corporation in its “unlisted investment portfolio” in 2017/18.

The Public Investment Corporation has disclosed detailed information about investments in its “unlisted investment portfolio” for the past two years before the Medium-Term Budget Policy Statement has been presented in Parliament.

However, this year:

  • no disclosure of detailed information has been made by the Public Investment Corporation about investments in its “unlisted investment portfolio” during 2017/18;
  • no provision has been made for hearings on the Public Investment Corporation’s 2017/18 annual report and annual financial statements by the finance committee in Parliament; and
  • there seems to have been an “about turn” when it comes to greater transparency at the Public Investment Corporation.

The fact is that National Treasury is now opposing provisions that would promote greater transparency that are contained in my Private Members Bill, entitled the Public Investment Corporation Amendment Bill [B1-2018], which is before the finance committee in Parliament.

We have to ensure that detailed information about investments, especially investments in the “unlisted investment portfolio”, is disclosed, because it serves as a major disincentive to “rent-seekers” with political influence who want to raid the Public Investment Corporation.

I will, therefore, write to Dr Dan Matjila, Chief Executive Officer of the Public Investment Corporation, requesting him to disclose detailed information about the R70 billion worth of investments made by the Public Investment Corporation in its “unlisted investment portfolio” in 2017/18.

And I have already written to Yunus Carrim, Chairperson of the Standing Committee on Finance, requesting him to schedule a hearing with the Public Investment Corporation during the fourth term of Parliament.

We will not back down and will continue to fight for more transparency so that the Public Investment Corporation does not become a “piggy bank” for the governing party in South Africa.

DA to lay criminal charges against the PRASA Board following leaked AG report detailing leadership and financial crisis

The following remarks were delivered by DA Shadow Minister of Transport, Manny de Freitas MP and DA Shadow Minister of Police, Zakhele Mbhele MP, at a press conference in Cape Town today. The draft Auditor-General report can be accessed here.

Cities and economies flourish when well-functioning public transportation systems are in place with rail being the backbone of such a system. A reliable and safe commuter rail is crucial to ensuring that people can get to work on time, to allow people to look for jobs and so that residents can access various services and amenities. With the rising cost of living, rail is now the most affordable way to travel.

However, through years of systematic corruption and mismanagement, the Passenger Rail Agency of South Africa (PRASA), which is responsible for delivering passenger rail services, has our rail system on its knees.

The DA has travelled the country to investigate the current conditions on our railways on our #RailSafety tour that included visits to the Western Cape, Gauteng and KZN. Across the board, South Africans are fed up with the current dangerous conditions they are forced to endure by the failing ANC government.

Every day, commuters are forced to deal with chronic and lengthy delays due to ailing infrastructure and vandalism. Just this morning we have seen reports of yet another train set on fire here in Cape Town. This is the seventh train fire in the city in the last few months alone.

Commuters are also unsafe due to a severe lack of safety officials and police to patrol train stations. This allows crime and vandalism to thrive, further compromising the safety of commuters and the stability of the system.

PRASA has been without a full-time Board for more than a year since the end of July 2017, and as the entity lurches from one crisis to another, the response from PRASA and the successive Transport Ministers has been the continued cover up corruption.

A laundry list of serious allegations was laid bare in the then Public Protector’s 2015 “Derailed Report” that described how top officials at PRASA handed out contracts to friends and allies. The real cause of the breakdown of PRASA has been systematic looting, seemingly to pay out ANC cronies.

The Public Protector’s report instructed the National Treasury to investigate these findings. These reports were finalised in December 2016 and were eventually leaked to the public last year.

However, 3 years since the Derailed Report, and after billions have been stolen from the entity, no one has been charged or arrested. In the light the lack of political will by the ANC to ensure accountability for those who have brought PRASA to its knees, the DA laid charges against those implicated.

Leaked Auditor General report on PRASA reveals the total institutional breakdown

One of the key instruments of accountability and transparency is the yearly Annual Report that all entities must provide to Parliament by 30 September each year, as required by the Public Finance Management Act of 1999. This document includes the Auditor General’s Recommendation on the financial affairs of a public entity.

PRASA has not yet submitted last year’s 2016/17 Annual Report which is now 318 Days overdue.

It is now in the public interest to reveal what is contained in this report. The main findings of the report in the DA’s possession are as follows:

Financial viability is in question as the entity has incurred massive losses

The report reveals that PRASA is on the verge of financial collapse that is directly linked to massive losses last year. The report states that “The entity and group have incurred a loss of R1,7 billion and R1,3 billion respectively for the year ended 31 March 2017.” This resulted in a “the accumulated loss as at 31 March 2017 is R4,4 billion for the entity and R4,5 billion at the group level.

The AG comments that “The declining financial performance is further evident in the cash outflows from operations of R2,3 billion and R2,4 billion for entity and group respectively” and “It is further noted that there was no disclosure in the annual financial statements highlighting the financial sustainability challenges faced by the entity and group.”

PRASA systems are inadequate to identify irregular and fruitless and wasteful expenditure

The AG’s report indicates that “During the duration of the audit and prior to submission of the annual financial statements a number of findings identifying irregular and fruitless and wasteful expenditure were identified”.

The AG comments that “As the entity is currently undergoing a number of investigations relating to supply chain management matters and as confirmed by the Acting Group CFO and Acting  Group CEO on 4 December 2017, the PRASA group did not have an adequate system for identifying and disclosing all irregular and fruitless and wasteful expenditure, there were no satisfactory alternative procedures that I could perform to obtain reasonable assurance that all irregular and fruitless and wasteful expenditure had been properly recorded in notes 41 and 42 to the separate and consolidated financial statements”.

PRASA leadership has clearly learned nothing from the “Derailed Report” with irregularities able to continue due to lack of systems of accountability and transparency. There appears to be little or no political will to address this matter.

Tender irregularities continue: tenders do not comply with respective laws and regulations, are not transparent.

The AG took a sample of tenders from PRASA in the financial year 2016/7 which revealed critical issues of the 36 tenders analysed by the AG:

  • All had irregularities related to the method of selection of a service provider and all the tenders had questionable bid processes.
  • In 92% of the cases, internal processes or regulations, as well as relative regulation, law or legislation, were not adhered to.
  • In 33% of the cases, tender requirements were ignored and in 39% of the cases, tender amounts exceeded permissible amounts.
  • In five tenders, the highest scoring bidder did not receive the tender and in five cases, service providers were appointed without contracts.
  • In two cases, the incorrect service providers were appointed.

There are discrepancies between information supplied and information obtained by the AG. The AG noted the lack of consequence management for persons who are liable for irregular and fruitless and wasteful expenditure incurred. This sample and the lack of consequence management speaks to serious mismanagement and continued misappropriation of funds at the entity.

Major issues with remuneration of PRASA employees

From the report, it is clear that some executives received remuneration illegally or incorrectly. One such case is the Intersite and Autopax Company Secretary, Mr Lindikaya Zide who took the responsibility of Company Secretary at Intersite and Autopax and continued to receive an allowance when he was no longer responsible for these positions. This amounted to approximately R250 000 of wasteful and illegal expenditure.

Additionally, declaration of interests were not submitted by suppliers, members of accounting authorities and employees. Twenty-two members are listed as not disclosing their interests and connections to suppliers including the previous Chairman of the Board, Popo Molefe. This is a contravention of the Section 50 PFMA.

The report also mentions although there was a request to pay the AGCEO an annual salary of approximately R6 million the Board could not provide proof of approval for this salary. Without such proof, Mr Letsoalo should not be entitled to this salary and should, therefore pay it back.

In order to get PRASA back on track and to ensure that South Africans have access to a safe and reliable rail system, the DA will take the following steps:

DA to lay further criminal charges against PRASA officials 

As indicated in the AG report the majority of the tenders went “through a system which is not fair, equitable, transparent, competitive and cost-effective as required by Section 217 of the Constitution of the Republic of South Africa and Section 51(1) of the Public Finance Management Act (PFMA), as the appointment was not done through a competitive process.”

According to the Section 86 of the PFMA, an accounting authority is guilty of an offence and liable on conviction to a fine, or to imprisonment for a period not exceeding five years, if that accounting authority wilfully or in a grossly negligent way fails to comply with a provision of section 50, 51 or 55.

Based on the information in this report the DA will lay charges against those implicated in terms of the PFMA which in this case is the is PRASA’s board who serves as the entity’s accounting officer.

PRASA must release Annual Report immediately

PRASA must immediately release the 2016/7 Annual Report to Parliament so the full context and performance of the entity can be assessed as legislated. The DA will write to the Minister of Transport, Blade Nzimande, to ensure the urgent release of the report to the public. The Treasury reports commissioned by the Public Protector should be immediately released including an action plan by the Minister and PRASA executives when those implicated will be face consequences for their actions.

Parliamentary Inquiry into PRASA must commence immediately

Parliament, through the Portfolio Committee on Transport, must immediately begin its Inquiry into PRASA as PRASA and the Ministry has no appetite. This process is crucial to ensure that the rot in PRASA is removed. The Portfolio Committee has already agreed to this Inquiry and therefore, the DA will write to the Chairperson of the Committee, Dikeledi Magadzi, to urgently confirm the dates.

The DA has designed a rail plan that will create a safe and well-managed railway system which put commuters first and will ensure job security. The plan is based on four aspects:

  1. Stabilising and modernising the current rail system –  An urgent update is required to ascertain the progress on upgrading the current signal system to phase out the manual signal to prevent further crashes and derailment.
  2. Merge Transnet and PRASA under the Department of Transport – This means all rail-related passenger and freight services should become the direct responsibility of the Minister of Transport. This will streamline decision making and improve planning and integration.
  3. Ceding control of Metrorail services to Metros – This process will see Metropolitan governments take over Metrorail functions gradually which will ensure integrated public transportation systems and better governance. The Western Cape Government and the City have already committed additional security personal thus ensuring increased protection of commuters and infrastructure at risk.
  4. Diversifying Ownership – While the state should retain ownership of the infrastructure, the DA calls for the gradual privatisation of some railway operations. This will increase competition and choice for transportation in the rail sector.

The DA’s plan is the only alternative to the ANC’s broken public railway transportation system. Our rail plan will put commuters first and ensure job security because it will be safe, efficient and corruption free.

In 2019, South African have the opportunity to choose a government that is committed to empowering South African public transport commuters and ensuring that the rail transportation system puts the safety of South Africans first, ensures that South Africans keep their jobs and are able to use trains to find work.

DA seeks clarity on why Treasury is withholding R508 million in funding to Employment Creation Fund (ECF)

An apparent war between the Department of Trade and Industry (DTI) and National Treasury has seemingly come to a head around the failure of National Treasury to hand over R508 million in European Union (EU) funding to the Employment Creation Fund (ECF), under the DTI.

The ECF supports projects and programmes that have a positive impact on job creation, skills development and capacity building and is therefore vital.

On 24 July 2018, the DA came into possession of a letter written by Mr. Paseka Masemula, the ECF Fund Manager,  in which he claimed that there was a ‘plot’ by National Treasury to ‘undermine African Leadership and more severely to undermine and totally distort the programs of the mass democratic movement on eradication of poverty, unemployment and inequity’.

The DA tabled this correspondence in the Portfolio Committee on Trade and Industry for urgent discussion and the letter was referred to the DTI Director General, Lionel October for an explanation of how this letter could have been sent to the private sector.

Today, the DA has received a response from Mr. October advising that the letter is not an ‘official letter’ of the department and that Mr. Masemula will be facing sanctions for this.

However, Mr. October has failed to deal with the real facts that a ‘civil war’ has erupted between NT and DTI over the remaining R508 million to fund the approved 31 projects which leaves more questions than answers.

Considering how the failure to pay over the funding could impact job creation and given that nearly 10 million people are currently unemployed, the DA requested an urgent joint sitting between the Departments of Finance and Trade & Industry, which has been ignored.

The DA will continue to push for this meeting to take place as soon as possible to ensure that both departments can account for this money and explain how this ‘civil war’ has been allowed to take place for so long without resolution.

At all times, the best interests of the people of South Africa and especially the unemployed should dominate the work of our national departments.


DA-led coalition in Nelson Mandela Bay remains united and focused on delivery

The DA-led coalition in Nelson Mandela Bay remains united and focused on delivering services to the people of the city.

Coalition governments are the future of South Africa and while they can be difficult they are necessary.

The coalition government in NMB has demonstrated its resilience time and time again and always put the people first.

Working together with our coalition partners, and other parties in council, we have put the people first and passed two consecutive pro-poor budgets.

A positive reflection of our financial position is the recent Moody’s credit upgrade to Aa1 as well as the R179 million reward from National Treasury for spending 100% of our USDG funding.

Turning around the chaotic state of the municipality’s finances in 2016 has been a priority and we are proud of the progress we have made.

We have tarred kilometres of gravel roads giving the poorest areas access to the rest of the City.

Some of the highlights from the budget are:

  • R2.2 billion for the provision of a fixed amount of free basic services to indigent households;
  • R138.5 million on resurfacing and rehabilitation of roads;
  • R167.9 million on electrification of informal households;
  • R72.7 million on public lighting;
  • R49 million on upgrades or development of public spaces; and
  • R45 million for the acquisition of land for housing development

Since the DA-led coalition took over, the successes under the leadership of Executive Mayor Trollip speak for themselves.

We have eradicated 9046 bucket toilets of 16 317 we inherited, provided 2188 RDP houses and uncovered R615 million worth of corruption and irregularities.

The Thusong Centre in Motherwell was completed and opened within a year after R12 million was spent.

A total of 5439 EPWP jobs were created and 646 streetlights installed in a number of areas.

The Shotspotter technology installed in Helenvale also proved to be a great success. Within 90 days of its installation, gunshots were reduced by 90%.

IPTS busses are on the road and we’ve also built the highly secured Clearly Park Bus Depot.

We are confident that when disagreements emerge among coalition partners we can resolve them by putting the people at the centre of our discussions.

We are making progress in Nelson Mandela Bay.

DA welcomes charges of corruption against Dudzane Zuma

We welcome the fact that Duduzane Zuma has finally been charged with corruption for his alleged role in trying to bribe former Deputy Minister of Finance Mcebsi Jonas in 2015.

We laid the charges of corruption against Atul Gupta, Ajay Gupta and Duduzane Zuma, in terms of the Prevention and Combating of Corrupt Activities Act (No. 12 of 2004), on 17 March 2016 at a police station in Cape Town [CAS 1200/3/2016].

We did so following a public statement by the former Deputy Minister of Finance, Mcebisi Jonas, on 16 March 2016, where he alleged that members of the Gupta family had offered him the position of Finance Minister, prior to the firing of the former Minister of Finance, Nhlanhla Nene, on 09 December 2015.

We hope that once this matter has been fully investigated that Atul Gupta and Ajay Gupta will also be charged with corruption for their alleged role in trying to bribe former Deputy Minister of Finance Mcebisi Jonas in 2015.

We would be in a very different place today has the alleged plot to capture National Treasury succeeded in South Africa

DA to lay fraud, racketeering and corruption charges against VBS executives

The DA will lay fraud, racketeering and corruption charges against the executives of VBS Mutual Bank following allegations that the bank’s directors and Vele Investments, its shareholder, had defrauded the bank of more than R1.5 billion.

We had previously written to the Registrar of Banks, Mr Kuben Naidoo, asking that he urgently establish a Commission of Inquiry into VBS and municipalities that illegally deposited funds with the bank. We are pleased that the probe has been initiated.

We also called for an investigation by the South African Police Service into whether the bank’s directors paid millions of rands to Public Investment Corporation and Passenger Rail Agency of SA executives, and politicians, to facilitate deposits of public funds with the bank.

Residents of several municipalities now face the prospect of having no access to basic services as a result of this illegal depositing, mismanagement and plundering of public monies. It is therefore necessary that the affairs of the institution and the municipalities involved are probed in the interest of citizens and ensuring service delivery.

Despite the DA and National Treasury warning the municipalities against the illegality of depositing money with VBS, some municipalities proceeded to deposit money with the bank.

The DA have already laid fraud charges against the officials at all 15 affected municipalities in terms of Sections 7 (2) and 64 (3) of the Municipal Financial Management Act for allegedly making illegal deposits with VBS.

Individuals who are responsible for the potential loss of billions of rands in illegal deposits must be held accountable. Corruption has, for a long time, robbed South Africans of efficient service delivery and the VBS saga shows that this situation will not change under the ANC.

A DA-led national government will provide no room for corruption to flourish and will not allow public funds to be looted. By voting DA in 2019, citizens will ensure they have efficient service delivery and that their interests are prioritised.

ANC, Supra cost the people of North West R15.3 billion

The Democratic Alliance (DA) in the North West will write to the newly appointed Premier Job Mokgoro, demanding that he initiate disciplinary action against officials and executive members responsible for the financial mismanagement that led to the squandering of millions of Rands in the office of the Premier.

During yesterday’s National Treasury briefing to Parliament, it was revealed that the North West Office of the Premier has suffered greatly due to irrational executive decisions and poor supply chain management processes.

National Treasury revealed that the ANC provincial government amassed R15.3 billion in irregular expenditure at the end of 2017, meaning that irregular expenditure increased at an average of R2.1 billion per year – in the 2014/14 financial year irregular expenditure sat at R8.6 billion. Furthermore, R10 million that was meant to be spent on social services was diverted.

Instead of delivering services to the people, the ANC used the people’s money to maintain and administer a corrupt patronage network that lined the pockets of those close to power.

The reality is that change will not come to the North West when people like Supra Mahumapelo continue to lead the province from the ANC’s provincial offices, and convicted fraudster Tony Yengeni leads the ANC’s campaign against crime and corruption form Luthuli House. The ANC is not capable of correction. Only a DA-led government can build a North West that work with and for the people.

For too long the ANC has allowed corruption, maladministration, and mismanagement to flourish and become an accepted transaction. It is time for the new Premier to walk the talk; and if he is serious about putting the people first, he must start by taking action against those who were responsible for the abuse of the people’s money.

In order for the province to rebuild we need a change in government that has the political appetite to address the rampant corruption and mismanagement. Failure to do so will only lead to a complete financial collapse and an even greater decline in service delivery.

The people of North West deserve Change that will champion service delivery, build an economy that creates jobs, and keeps our people safe.

Belt-tightening measures save a mere R1.85bn, or 0.03% of consolidated expenditure, over five years in SA

The Minister of Finance, Nhlanhla Nene, is battling to impose belt-tightening measures and cut spending on non-core goods and services such as travel and subsistence, catering and events, and venues and facilities, which cost a staggering R109 billion between 2013/14 and 2017/18.

The belt-tightening measures were originally introduced via National Treasury Instruction No. 1 of 2013/14 which imposed “cost containment measures” aimed at slashing spending on non-core goods and services in all departments, constitutional institutions and public entities.

However, a reply [see here] to a parliamentary question on the implementation of “cost containment measures” reveals that:

  • spending on cost containment items by national departments decreased by R2.6 billion, or -5.3%, between 2013/14 and 2017/18; and
  • spending on cost containment items by provincial departments actually increased by R813 million, +2.0%, between 2013/14 and 2017/18.

What this means is that after imposing belt-tightening measures, for a period of five years, the combined saving, of national government, and of provincial governments, was R1.85 billion, which is a mere 0,03% of consolidated expenditure between 2013/14 and 2017/18.

What this suggests is that, although cost containment measures send the right fiscal signals, they have been ineffective at significantly cutting spending on non-core goods and services, between 2013/14 and 2017/18.

I will, therefore, write to the Chairperson of the Standing Committee on Appropriations, Yvonne Phosa, requesting her to schedule a hearing on how to improve the implementation of cost containment measures in all departments, constitutional institutions and public entities in South Africa.

We cannot afford to be spending a R100 billion plus on non-core goods and services such as travel and subsistence, catering and events, and venues and facilities given the demands for additional spending on education, policing, health and social development in South Africa.