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DA calls for full scale review of all SOEs following Denel woes 

Please find soundbite by Natasha Mazzone, DA Shadow Minister of Public Enterprises. 

The Minister of Public Enterprises, Pravin Gordhan’s announcement in Parliament on Tuesday that a ‘lender’ would pay the remaining 15% of salaries, following revelations that Denel was only able to pay  85% of salaries to its staff for the month of June, is merely a temporary bandage for an entity that is on the brink of collapse.

This unidentified lender, is not a ‘get-out-of-jail-free-card’ but a temporary reprieve. Denel, like other state-owned entities(SOEs), is circling the drain and continues to be plagued by numerous legacy issues that have resulted from years of state capture, mismanagement and graft.

A complete overhaul is required to address the myriad of troubles facing our SOEs. The Democratic Alliance (DA) will therefore write to Minister Gordhan to deal decisively with dysfunctional SOEs by instituting a full-scale review of all state entities.

South Africa has hundreds of SOEs, many of them are either completely dysfunctional, bankrupt, or frankly serve no purpose other than lining the pockets of the connected few. Many of the hundreds of SOEs also duplicate functions and should simply not exist in the first place. They are sucking money from the fiscus and pose a great threat to the South African economy. From bailouts to guarantees, government has risked billions on unproductive and inefficient parastatals.

Now is not the time to throw money at the problem, now is the time to trim the fat. We cannot afford to continue with the status quo, where a government spends billions on bailing out SOE’s instead of spending money on job creation initiatives and service delivery.

SOEs require strong leadership, proper oversight from Parliament and accountability structures that are up to the task, to improve the quality of governance in our SOEs. This will encourage a greater volume of financiers to invest in them ensuring that SOEs work for all South Africans.

We need to stop the continued misuse of SOE’s for political gain.The DA is prepared to work with the ANC government in order to review South Africa’s SOEs and to make them profitable, stimulating job creation and getting South Africa back to working.

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Threat of stage 1 blackouts proof that ANC and Ramaphosa have no plan to keep the lights on

The threat of imminent rolling blackouts today is yet again proof that the ANC and President Cyril Ramaphosa have no plan to keep the lights on.

Eskom today sent out a power alert confirming “a high risk of stage 1 rotational loadshedding from 17:00 to 22:00 today”. The news comes after the Public Enterprises Minister, Pravin Gordhan’s non-announcement last week, where he failed to give any solutions to an ANC-created crisis.

The truth is that the failing ANC government has no political will or durable plans to fix the broken power entity which has been hollowed out by decades of mismanagement and corruption.

The ANC’s scheme of burning through billions of rands of diesel the country cannot afford to keep the lights on until after Election Day has now truly backfired.

Instead of restructuring and unbundling Eskom to make it operationally and financially viable, the ANC placed the interests of their trade union allies above those of South Africans who desperately need the lights to stay on.

Ramaphosa and Mabuza do not know how to provide South Africans with a stable and reliable electricity supply.  Instead of fixing Eskom, the ANC is choosing to engage in dirty electoral campaigns based on anarchy, violence and misinformation.

Last year, the DA introduced the Independent Systems Market Operator (ISMO) Bill or “cheaper electricity bill”. The bill seeks to break Eskom into two separate entities – a generation and transmission/distribution entity. Our plan would see a generation entity which is privatised in an effort to break Eskom’s monopoly on production of energy, allowing independent power producers to compete on an equal footing in the generation sector.

The DA is the only party that can build One South Africa for All where every citizen has access to cheaper electricity and a stable power supply. Only the DA can keep the lights on.

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The DA calls for Eskom’s diesel purchase terms to be released immediately

The Democratic Alliance (DA) has submitted an application in terms of the Promotion of Access to Information Act (PAIA) to demand the release of the terms of agreement of the so called ‘emergency diesel’ for Eskom. This follows Minister of Public Enterprises, Pravin Gordhan’s non announcement yesterday about the scramble for diesel at Eskom in a bid by the failing ANC government to keep the lights on until the May elections.

In a matter that remains a subject of a Hawks investigation, the ANC government is said to have contravened due tender processes when it sold its entire strategic fuel reserve, around 10 million barrels of crude oil at a significant discount to the price at which the commodity traded at that time. The failing ANC government saw fit for the country to expose itself to depleted oil reserves.

Reports now indicate that Eskom’s chairperson, Jabu Mabuza disclosed that Eskom had approached PetroSA with an emergency request for diesel and spent an amount to the tune of R4.5 billion in just six months for diesel, far exceeding their current financial year budget for diesel which is R666 million.

In addition, the DA recently petitioned President Cyril Ramaphosa to release the Special Investigating Unit (SIU) report, which found that South Africa forked out R14.5 billion for Eskom’s ‘self-created emergency coal’ during the first round of rolling blackouts in 2008.  Considering the rank mismanagement and corruption that has gripped Eskom over the past decades, we cannot allow the ANC government to hide the full details of the diesel contracts. South Africa needs full transparency about where the money to secure diesel is coming from, what the terms of the agreements are and whether the procurement processes were followed.  The absence of said information would only cement the perception that there is Bosasa type corruption.

The purchasing of diesel at this scale does not solve the Eskom crisis and South Africa cannot afford Eskom’s spending an estimated billion rand a month on diesel just for a temporary solution that will not prevent us from the impending collapse of the power grid.

So desperate is the ANC that it has now resorted to spending billions it does not have in order create to create a false impression that there will be light at the end of the tunnel. The truth is that Eskom is on the verge of collapse and these temporary measures will not prevent the inevitable. South Africa is facing a dark and cold winter after we have been misled by this government until the 8th of May.

The DA has long proposed to Ramaphosa and the ANC to adopt its long term solutions to South Africa’s energy crisis, which by all indications has a potential to collapse our economy.

The DA will continue its find for an accountable, stable, competitive and functional energy sector that will benefit all South Africans.

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#EskomCrisis: Gordhan’s only plan is to keep the lights on until elections.

Today’s non-announcement by the Minister of Public Enterprises, Pravin Gordhan, confirmed the worst about Eskom and South Africa’s energy landscape. Gordhan has acceded to the fact that the ANC government does not have the political will to fix the broken power entity which has been hollowed out by decades of mismanagement and corruption.

The announcement that Eskom will not be restructured or unbundled to make it economically viable, proves that the ANC has once again placed the interests of their trade unions allies above those of South Africans who desperately need our country to have secure energy supply. What is clear is that this government is more concerned about looking after their electoral prospects by pandering to the unions than they are about keeping the lights on and stemming the jobs bloodbath which will likely follow. This announcement is at odds with President Cyril Ramaphosa’s State of the Nation Address which once again shows that Ramaphosa is not in charge of the ANC but is led by the different factions which include the unions.

The ANC are unable and unwilling to make the difficult decisions which are needed to resuscitate Eskom and South Africa’s future. They have elected not to:

  • Tackle the bloated workforce at Eskom with a promise of no retrenchments
  • Address the monopolistic nature of Eskom through a process of privatisation
  • Halt the cost overruns at Medupi and Kusile, which have doubled in costs and time delays due to corruption and mismanagement

Furthermore, the DA has it on good authority that Eskom have been using a combination of its CAPEX (capital expenditure) budget and a Chinese loan to pay salaries for the month of March. It is now unclear how they intend April salaries considering the financial hole that Eskom is in. This means that money that was designed for maintenance of the power utility has now been diverted to salaries. This will no doubt mean a complete collapse of the grid which will be disastrous for South Africa and the economy. However, the ANC is prepared to plug these gaping holes in an unsustainable manner, just to get to the May 8th Elections before allowing the system to truly descend into dysfunction. This is shameless election ploy which will leave this country in the worst state since the dawn of democracy.

What is clear is that the ANC has no coherent plan to resolve the problems at Eskom. They are also unprepared to make difficult decisions to turn the entity around and will employ temporary measures to delay the inevitable and get through the election period by hiding the truth behind the crisis. They have now blown the CAPEX budget which was designed for maintenance and are burning through diesel which they have procured at double the market price; just to fool South Africans into oblivion until May the 8th.

To add insult to injury, Minister Gordhan called on South Africans who have been on the receiving end of the Eskom crisis to take ‘collective responsibility’ and essentially pay the price for an entity which has been destroyed by mismanagement and corruption by the ANC government and corrupt officials who siphoned money through bogus coal contracts.

The DA has long challenged President Ramaphosa and the ANC government to adopt the solutions we have proposed to provide long term solutions to South Africa’s energy crisis which is a ticking time bomb.

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SAA still overpaying by 200% despite new CEO and Board

Today the Minister of Public Enterprises, Pravin Gordhan, confirmed that fraudulent and corrupt practices at SAA are still ongoing, costing South Africans billions in tax money.

In a written response to my question, Gordhan states that “[c]orruption in procurement is a major problem in both SAA and SA Express”, adding that procurement of some commodities from middlemen inflates costs by 150 – 200%.

Gordhan not-so-reassuringly claims that this fraudulent practice will be stopped entirely soon. But it raises the question: why has this corruption in procurement been allowed to continue despite the appointment of a new CEO and reconfigured Board?

It is outrageous that the ANC government is supporting yet another R5 billion bailout for SAA precisely as this procurement corruption is continuing unabated.

Only last week, SAA CEO Vuyani Jarana admitted that the struggling airline had already spent R3 billion of this bailout on paying arrears, meaning that these very middlemen are being paid even though Parliament has not yet considered or approved the bailout.

Gordhan’s board reshuffle and bailout strategy has not rooted out corruption and inefficiencies at SAA. The only solution is to place SAA under business rescue, where corrupt contracts with dodgy middlemen can be terminated immediately.

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Advocate Glynnis Breytenbach withdraws from consideration for NDPP

The following statement was delivered today by DA Leader, Mmusi Maimane, at a press conference in Parliament, Cape Town. Maimane was joined by DA Shadow Minister of Justice, Adv Glynnis Breytenbach.

After consulting widely with colleagues in the DA and the legal fraternity, and after thinking deeply over the last few days, Advocate Glynnis Breytenbach has decided to withdraw her name from the shortlist for next week’s interview for the position of National Director of Public Prosecutions (NDPP).

Adv Breytenbach would have made an excellent NDPP. She is fearless, brave, utterly independent, and has for most of her life been a professional prosecutor.

Over the last fifteen years, the National Prosecuting Authority (NPA) has had its credibility severely undermined by a succession of appointments in the position of NDPP who have failed to uphold the strict standards of independence and integrity that the office demands. Successive National Directors have used the position to influence politics, pursue factional battles, suppress certain prosecutions and unduly pursue others. In so doing, they have defeated the ends of justice and have undermined that sacred cornerstone of constitutional democracy, equality before the law.

The actions of these Directors have over time cemented in the public mind the perception that the justice system can be easily abused by the politically powerful and connected, and that the NPA answers to political masters, rather than making the corrupt answer to the law. Indeed, it was exactly this kind of abuse that led to Adv Breytenbach leaving the NPA and joining the Democratic Alliance.

The most obvious and egregious example of this abuse is the handling of the prosecution of Jacob Zuma, who has managed to evade trial for corruption for so long despite overwhelmingly strong evidence against him. We continue to this day in our fight to have him held accountable, and we will not give up in this fight until he faces trial.

Other examples include the persecution of Pravin Gordhan, Oupa Magashule and Ivan Pillay in the matter of Gordhan’s early retirement, a prosecution that was instituted solely for the purpose of discrediting, and possibly intimidating, Gordhan at a time that he was standing up against state capture. Similarly, names such as that of Johan Booysen, Robert McBride, Shadrack Sibiya, Anwa Dramat and others can be added to the list.

The politicisation of the NDPP and the NPA is not just an aberration of the Zuma presidency either. It started under the Mbeki Presidency, and is simply the natural consequence of the ANC’s policy of cadre deployment, which has as its explicit goal the capture of the state’s levers of power in order to concentrate power in the party.

This policy of cadre deployment has demoralised professional civil servants who are judged not on the quality of their work, but on their connections and loyalty to the party. It has severely undermined the professionalism of the civil service and has allowed the vast network of corrupt cadres to entrench themselves in every department and state owned entity. We have seen the pernicious effect of this cadre deployment at SARS, at Eskom, at SAA, at Denel, in the SAPS, and indeed at the NPA.

If public faith in the NPA it is to be rebuilt at all, the President must appoint someone who is seen to be totally above party politics. It is not enough to know that the person will act independently. They must also be seen to be independent. And it is this factor which has led to the decision that Adv. Breytenbach has made.

This is an opportunity for the President to demonstrate to the country that the criminal justice system will no longer be abused for political ends, and that every person is equal before the law, no matter their position or their power. This is an opportunity to reassert South Africa’s leadership role on the continent, where the abuse of legal process to protect the powerful is all too common.

The President should use this opportunity to admit that the ANC’s policy of cadre deployment has been disastrous for South Africa, and has led directly to state capture, and that cadre deployment should be stopped.

He must appoint a candidate who is fiercely independent, loyal only to the law and the Constitution, and with a proven track record of acting accordingly.

Over the years, the DA has been a consistent fighter to ensure the NDPP appointed is a fit and proper person, and that they act within the law.

We fought the appointment of Advocate Menzi Simelane to the position of NDPP in 2011 and won. This was a precedent-setting case, in which it was determined that the President, when appointing an NDPP, must choose a person who is fit and proper person, with due regard to his/her experience, conscientiousness and integrity. This case further determined that these qualities are jurisdictional facts that must be objectively assessed, therefore making it open to judicial review.

We have also proposed in the past that the appointment procedures for the NDPP be reformed to limit the power of the President to appoint whomever he or she likes, and to involve Parliament more directly in the process. Specifically, we have proposed a constitutional amendment that will check the President’s power to appoint an NDPP of his choice by requiring that he decides on an appointment only upon the recommendation of Parliament.

This model will be similar to that used for the appointment of heads of Chapter 9 institutions and encourages selection on objective grounds during a transparent multi-party process. The Private Member’s Bill to effect this amendment, proposed by the late DA MP Dene Smuts in 2013, was voted down by the ANC in a Motion of Desirability. The DA has stated before that we intend to re-introduce a Private Member’s Bill on this issue.

We are pleased that the process currently underway to appoint a new NDPP is a step in the right direction, and we support the interview process being public and open to the media.

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ANC Government must come clean on SAA’s future

The Democratic Alliance (DA) has submitted an urgent question for oral reply by Pravin Gordhan, Minister of Public Enterprises, on Government’s plans regarding shutting down South African Airways (SAA).

The Minister is due to reply to oral questions in Parliament on Wednesday the 14th of November 2018 and must use this opportunity to address the confusion surrounding the future of the ailing national carrier.

It is clear that there are divisions in the ANC government as to whether or not to cut SAA loose.

On Monday, Minister Gordhan stated that SAA must be kept going by way of taxpayer bailouts in an attempt to stabilize the ailing airline. The Minister stated that “we are going to put in competent boards, we going to put in the right kind of managers who work and don’t just claim to be managers. They must know enough about the business to make a difference.’’

On the other hand Finance Minister, Tito Mboweni, is of the view that “[SAA] is in a loss-making situation and it is unlikely that the situation is going to be sorted out so we need to close SAA down”.

Clearly the left hand does not seem to be aligned with the right hand. The confusion that must now be reigning amongst SAA suppliers who supply the bankrupt company and the SAA staff must now be considerable.

It is evident that there is a lack of communications between the two Ministers on the vital issue of closing down SAA in order to save the R21.7 billion in taxpayer bailouts that the airline requires to keep operational. SAA continues to run at a loss and has time and again failed to effectively implement turn-around plans, at the expense of the South African taxpayer.

For the DA the answer is simple – SAA must be placed under business rescue without delay.

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DA requests SABC to broadcast Zondo Commission of Inquiry on terrestrial platforms

The Democratic Alliance has written to the SABC Board Chairperson, Bongumusa Makhathini, to request that the public broadcaster flights the Zondo Judicial Commission of Inquiry into State Capture on its terrestrial platforms, including television and radio.

The majority of South Africans are currently only getting mediated coverage of this crucial Commission, and only those with access to satellite television and internet connections that allow for streaming are able to watch the Commission’s live feed on a continuous basis. This leaves most people relying on news agencies to keep them updated on developments throughout the day.

Over the next few weeks alone the Commission will hear testimonies from former and current ministers Nhlanhla Nene, Pravin Gordhan and Barbara Hogan on how the Guptas, in cahoots with Jacob Zuma, tried to capture and pillage state resources. These are crucial testimonies that every South African deserves to hear.

Last week, the DA’s legal representatives wrote to the Secretary of the Zondo Commission, Dr Khotso De Wee, to request confirmation that senior ANC members will testify before the Commission. There have been serious allegations levelled against the party and its members and when they testify all South Africans must have the opportunity to scrutinise their testimonies. Only the SABC has the reach to make sure this happens.

The Zondo Commission is of profound national importance and the SABC, as the public broadcaster, has a duty to dedicate at least one of its terrestrial TV channels and one of its radio stations to broadcasting developments.

Every South African will in some way pay the price for the damage State Capture has done to our state and our economy. It is therefore paramount that the SABC broadcasts the Commission on its terrestrial platforms as ordinary South Africans have the right to know what happened and who is responsible.

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DA to probe basis and details of Abrahams retirement

The DA has taken note of media reports indicating that former National Director of Public Prosecutions (“NDPP”), Advocate Shaun Abrahams, has retired. It is manifestly clear that this is a way for Advocate Abrahams to avoid the consequences of the damage he has wrought on the institution of the National Prosecuting Authority in the past three years.

The DA will therefore probe the rationale for the decision to grant him retirement, as well as the basis on which his benefits will be determined.

While employed as NDPP, Shaun Abrahams demonstrated that he is a deeply compromised individual with an extremely poor grasp of basic legal principles and that he has no respect for the rule of law. His time at the head of the NPA was marked by political persecutions and a weakening of the institution’s independence, which opened the door for the executive branch of the ANC government to exercise undue influence over prosecutions. He also oversaw an exodus of talented and qualified prosecutors who could no longer serve under his compromised leadership.

Earlier this month, his appointment as NDPP was set aside by the Constitutional Court, which court determined that he was never lawfully appointed.

The DA therefore believe that Advocate Abrahams’ retirement benefits should not be those that would be due to a retiring NDPP, but should instead be that attached to Advocate Abrahams’ last held position, that of a senior state advocate in the Priority Crimes Litigation department.

The DA will also question the rationale for Abrahams’ exit from the NPA being processed as a retirement. Ironically, one of the biggest blunders from Abrahams’ ill-fated stint as NDPP was the persecution of Minister Pravin Gordhan and senior SARS officials, Ivan Pillay and Oupa Magashule, over the alleged unlawful approval of Gordhan’s early retirement.

South Africans deserve a criminal justice system that is independent, just, and effective. The NPA under Abrahams was the exact opposite. His exit is a welcome close to an awful chapter. He will not be missed.

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DA welcomes Gordhan’s interventions at SOEs

The DA welcomes Public Enterprises Minister, Pravin Gordhan’s announcement today of the interventions he has made at struggling state-owned entities (SOE).

The Minister announced that Mr Phakamani Hadebe has been appointed as the permanent CEO of Eskom, that a new board has been appointed at SA Express as well as Cabinet’s approval of the new interim board appointments at Transnet and Denel.

The Minister has had a great opportunity serving on the Public Enterprises Portfolio himself and seeing first hand, the many issues that arise.  We are pleased that the Minister has worked closely with the DA and other opposition parties.

We would like to commend the Minister on the speed in which he has implemented interventions at SOEs, especially the good work that has been done by his intervention team at SA Express.

It was revealed today that the Minister’s intervention team discovered that the airline entered into a R5.7 million deal with Gupta-linked, Trillian, for advisory services and capital raising without following due process. Furthermore, the team also discovered a dubious fuel contract worth R67 million at SA Express.

One point of concern is the appointment of Mr Ronald Lamola on the SA Express board as he is an ANC NEC member which presents a possible conflict of interest. It is for the same reason he resigned as Chairperson of the Media Development and Diversity Agency.

Despite these interventions, the DA maintains that our SOEs require a complete turnaround strategy to restore good governance, public trust and most importantly service delivery

The DA has a six-point rescue plan for SOEs which is centred on revitalising our parastatals and restoring good governance. This plan focusses on:

  1. De-politicalising SOEs by doing away with the ANC’s cadre deployment policy. We need to introduce a Code of Good Practice, stringent vetting processes and lifestyle audits to attract skilled and knowledgeable candidates;
  2. Introducing professional expertise in order to create environments in which decisions are made with profitability or sustainability in mind, by revamping employee-compensation systems;
  3. A focus on becoming competitive as SOEs have become bloated and inefficient. SOEs need to have clear mandates that set financial objectives and sustainability as primary goals;
  4. Good governance based on transparency in order to minimise the opportunity for corruption. This can be done by making tenders of a certain value, performance agreements with executives and monthly progress reports public;
  5. Accelerating the introduction of private equity partners. This requires the government to look at the partial or full privatisation of a number of SOEs by bringing in private equity partners and disinvesting from non-core SOEs urgently; and
  6. Streamlining government oversight by dissolving the ineffective Department of Public Enterprises and manage the SOEs under their rightful Departments.

The DA will continue to monitor the progress of SOEs and we will not shy away from holding Minister Gordhan accountable.