Chairperson, the committee considered the annual report of the Department of Public Enterprises together with eight other annual reports of the state-owned companies under its jurisdiction. The report was considered in the light of the department's strategic plan, which has the vision of providing strategic direction to state-owned companies so that their businesses are aligned with the national growth strategies arising out of the New Growth Path. This is in recognition of state-owned companies as strategic instruments of industrial policy and core players in government's policy objectives.
In considering the department's annual report, we paid particular attention to the infrastructure programme that the department oversees, spearheaded by our two state-owned companies, namely Eskom and Transnet, whose expenditure is estimated at no less than R800 billion.
As we considered the annual report of the department, we focused more on government's policy objectives, such as job creation, skills development and employment equity, and on how state-owned companies work in their procurement processes to assist in the promotion of local industries through the supply chain industry. We were pleased with the performance of the department. However, we believe that if the department can be given additional resources to do its oversight work, we could see even better results.
More jobs are being created by the massive infrastructure programme undertaken by the two state-owned companies, that is, Eskom and Transnet. As the committee, we continue to monitor and oversee the skills development initiatives created by the aforementioned state-owned companies in meeting government's policy objectives.
Other areas of focus that the committee looked at in considering the report include the role of state-owned companies in realising the objectives of the New Growth Plan, Industrial Policy Action Plan 2 and partnerships between the state, business, organised labour and civil society for the realisation of the developmental state's agenda. We also considered procurement policies designed to address the interests of small and medium businesses, especially co-operatives, to do business with state-owned companies, with an emphasis on local content; the creation of decent work and sustainable livelihoods through public investment and more labour- absorbing activities; Safco's role in developing rural communities; a need to address the financial challenges facing Denel Aerostructures; challenges facing South African Express - the entity's financial challenges, that is - and accessible and affordable broadband services to underdeveloped or underserviced areas through the state-owned Broadband Infraco.
In adopting this report, we would also like to congratulate the Department of Public Enterprises, under the sterling leadership of Minister Gigaba, the Director-General, Mr Tshediso Matona, and his managerial team and staff for the clean audit reports of the past seven years. This is a commendable performance and we say to the department, continue to do what you do best and remain a good example of a well-run government department.
In conclusion, this morning, in our portfolio committee meeting, the committee noted that since "Gratitude" has just joined "Knowledge" in this department, we think we can expect much greater things to happen. For those who don't know what I'm talking about, the Deputy Minister is Gratitude Magwanishe and our Minister is Knowledge Gigaba. [Laughter.] [Applause.] There was no debate.
House Chairperson, on behalf of the Chief whip of the Majority Party, I move:
That the report be adopted.
House Chairperson, we first request a declaration, if you wouldn't mind.
I will come to that, sir! Requests for declarations have been received. I will allow about three minutes for each party to make a declaration.
Declarations of vote:
House Chairperson, I rise today to tell you that we, the DA, will support this report as it was a true reflection of what transpired in the meetings I attended.
I also rise to inform this House of a travesty of justice of one company in South Africa that is using 7,5% of the total electricity generated in this country, but that only employs 3 000 people and contributes a minuscule 0,01% to the gross domestic product. This company has a secret deal with Eskom called a "special pricing agreement". It is reflected in Eskom's annual report as "embedded derivatives". These terms are just fancy words for theft from the poor and working classes. They are fancy words for ordinary South Africans subsidising an international conglomerate, BHP Billiton, to the tune of R4,8 billion a year - exported from this country in the form of aluminium ingots.
The company consumes cheap electricity, artificially secured through special pricing agreements; imports ore and exports the finished product to Australia, with little or no upstream or downstream benefit for South Africa. The smelters were built when there was an excess of electricity and Eskom wants us to believe that we are stuck with these contracts for another 25 years. Eskom also wants us to believe they were inherited from the apartheid era, pre 1994.
I asked questions in Parliament about this. The answers revealed that some of the deals were signed as late as 2003. Remember that South Africa was hit by blackouts throughout 2008, costing us billions of rands in foregone revenue. Do you want to tell me, Mr House Chairperson, that a company like Eskom and Mr Mick Davis, who signed the pre-1994 contract with BHP Billiton, did not know in advance that we were heading for an electricity supply shortage?
The next question is why someone would effectively sign South Africa's death warrant and why this person took up a director's post at BHP Billiton shortly afterwards? It just does not make sense! The crux of the matter is this: At the time when I revealed this secret Eskom report, the company was paying 13 cents per kilowatt hour or per unit while we are paying an average of 60c/Kwh. The information I have now is that BHP Billiton is paying 8,8c/Kwh to 10c/Kwh - as the aluminium price is at an all-time low - while we are paying 120c/Kwh!
How does this government and this Parliament, after hearing all these facts, still allow this to happen? At the time, Mr Patrick Craven of the Congress of South African Trade Unions said: "We will fight this injustice till the end!" Well, Mr Craven, I have news for you: Nothing happened! I wonder who really is representing the poor and the workers here, in this case. [Interjections.] Why should we continue to subsidise this international conglomerate in making a huge profit on the altar of our suffering? This is worse than the arms deal. In the case of the arms deal, at least only some selected politicians got kickbacks. Here, we can't figure out any benefit to anybody! [Interjections.] [Applause.]
House Chairperson, I rise to make a declaration on this report as I was a member of the committee that deliberated on these issues. I can confirm that it is a fair reflection of our discussions.
However, two issues of this report stand out for me, though. I believe we need to take them up urgently for the sake of our energy future. At present, we are in the midst of an energy crisis, where we are running our peaking plants for over 50% of the time at a cost of over R2,50/Kwh. We are also paying companies millions of rands each month to cut back on production in order to save energy and avoid blackouts.
This is the true cost to our economy of the delays in finishing Medupi Power Station; a delay caused by Hitachi - in which the ANC, through Chancellor House, has a 25% stake - not fulfilling its contractual obligations in the specified timeline. Hitachi must be forced to pay penalties for this delay, which can compensate us for the damage being wrought on the South African economy. [Interjections.]
HON MEMBERS: Hear, hear!
Another company that must be held to account is BHP Billiton. This report called on Eskom to renegotiate all of its special pricing arrangements which are seeing our scarce energy resources being sold at costs that, in many cases, are substantially lower than the cost of producing it.
The one contract that has not been renegotiated is the one with BHP Billiton. It accounts for over 1 700 megawatt - equivalent to the energy requirements of a small city. BHP Billiton has also fought tooth and nail to prevent details of this contract becoming public, indicating that they have something to hide. We want to know who signed this 35-year contract that is costing our country billions of rands. We also want public pressure to be brought to bear on this company in order to force it to the negotiating table so that we can get a better deal for all South Africans. In the midst of an energy crisis, these kinds of special pricing arrangements cannot be allowed to continue and we must fight it with everything we have. [Applause.]
House Chair, I am also rising to make a declaration on this report. Firstly, I hasten to say that Cope accepts this report as is, but there are a few things worth mentioning. One of those things is the status of the department as it stands. Everyone will recall that, essentially, this department was established as a privatisation desk to fast-track privatisation in this country. It's now clear that privatisation is no longer on the table. This department has got to be given enough muscle so that it becomes a fully fledged department. As it stands, the department is working very well and Cope applauds the department and the Minister. However, what really sends shivers up our spines is the mention of the infrastructure build, which will cost this country about R800 billion. I can't help but think of how many of President Jacob Zuma's family members, friends, and his inner core will benefit from this infrastructure build, not even mentioning Chancellor House. [Interjections.]
In my budget debate speech I pleaded with the Minister that an eye needed to be kept on all those who benefited from Zuma economic empowerment, ZEE, his inner core and Chancellor House. [Applause.]
House Chairperson, it's difficult to respond in the sense that three parties are now engaging in political grandstanding. This is an annual report ... [Interjections.] No, no, wait a minute! [Interjections.]
Order! Order, please!
This is an annual report of eight state-owned companies and the department. This department is one of the three best-performing departments in the Public Service. The state-owned companies are rolling out massive infrastructure development programmes, two of them, at least, Eskom and Transnet.
We had separate meetings with both these state-owned entities where the three parties that have spoken now complimented Eskom and Transnet for the tremendous, good programmes that are being rolled out. Now, they come here and say it is not good enough!
The hon Van Dalen had ample opportunity regarding his so-called secret Eskom file to meet with the department and discuss it in meetings. Nothing came of that! Now, when the report needs to be adopted, he indulges in political grandstanding and political point-scoring, whereas in the meetings they complimented Eskom, Transnet and Infraco. So, I think we will, from this side, totally reject these statements with the contempt they deserve. [Interjections.]
Chairperson, I have a point of order.
Hon Greyling ...
Chairperson, I am sorry ...
What is the point order?
Chairperson, the hon member is making a declaration. I assume he is talking to the report. In our particular cases, we have done so, as have all speakers here today have done, as I recall. But you are now making a statement that ... [Interjections.]
Hon member, I was listening to the hon member Koornhof. I think he is being relevant.
Exactly! Thank you for reminding me! [Interjections.] I am talking to the report. Your member is not talking to the report because what he's raising is not in the report. [Interjections.] It's not in the recommendations; it was not in the discussions; it's not in the conclusion. The same goes for the other political parties. So, I really find it very sad ... [Interjections.] ... that we come to an annual report of state- owned companies and members talk about issues that are not even in the report. Do you know why? It is because they didn't read the report. [Interjections.] We reject this with the contempt it deserves. [Applause.]
Mr Chairman, through you to the hon Koornhof, I've never spoken a single kind word regarding Eskom, so I will not be in the same category as those who you think to be guilty. [Interjections.]
Who are we representing here? The hon Koornhof knows that three years ago we had common cause trying to get copies of those contracts. They didn't tell us that those contracts for the aluminium smelters were old contracts, nor that no new contracts would have been made or had been made recently. We are now faced with a situation where we are having a debate on these important issues in Parliament, not as a separate debate on our energy policy, but as an incident to the tabling of a report. That in itself is a problem. We, as Parliament, are not discussing the issue that is most fundamental to everything we care about - economic growth, unemployment, crime - and that is the energy problem! Fix the energy problem and you fix the problem. Fix energy and you fix unemployment.
HON MEMBERS: Hear, hear!
What is happening with Eskom is a national crime - it's an ongoing, rolling avalanche; a catastrophe. We all know it but we have a sense of impotence and, surely, the Department of Public Enterprises is not the place where that can be fixed. The most fundamental problem of this report is that it is a report of a department that cannot deal with problems such as Eskom. Eskom needs to go back to where it belongs - the Department of Energy, even more so now that the Department of Energy has freed itself from also being the Department of Minerals. The Department of Public Enterprises must disappear and each of these state-owned enterprises must be moved back into the line function that can organically deal with the problems and challenges they face.
If we look at the energy crisis facing us today, we know we are embarking on a much greater crisis if we proceed with the nuclear build programme. I admit that I have changed my tune on this matter. In the committee and publicly I have expressed a different view. What is happening in respect of the discovery of the gas potential, not only in South Africa but in the entire region, ought to force a serious debate in this Parliament. I plead with the hon Koornhof; I plead with those who have the power to accept that we should hold, in this Parliament - as a matter of urgency - a serious, proper, in-depth debate of what we are doing about supplying the country's energy needs for the next 100 years. These are decisions that, by default or by volition, we shall carry on our conscience for many generations to come. We are here now, making them. [Time expired.]
Motion agreed to.
Report accordingly adopted.
Chairperson, I just want to say that we welcome the fact that this report, at least, is adopted, not "noted".
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON HOME AFFAIRS - Study tour to Russian Federation FROM 16 - 26 March 2012
House Chairperson, may I speak from here?
Yes, go ahead.
Thank you, Chair. On behalf of the portfolio committee, it gives me pleasure today to present to this House the report of our successful study tour to the Russian Federation. The objectives of the tour were, among others, to learn how best to integrate and attract highly skilled professionals into our country; to focus on immigration policies, particularly in relation to asylum seekers and border management; and also to learn how Russia manages the inflow and outflow of migrants.
From the tour we observed, among other things, that the Russian Federation tracks refugees by recording their biometric features and requiring them to report when they move. It enforces statutory penalties against employers who employ illegal migrants. The Russian government has measures in place to integrate migrants into society, such as language courses. Foreigners who open small shops in Russia have to ensure that their employees are Russian citizens.
The federation has developed an asylum-seeker policy that includes, among other features, temporary accommodation centres for asylum seekers; being able to apply for refugee status while outside the Russian Federation, at the port of entry; within Russia, at the Federation Migration Service offices throughout the country; the automatic provision of travel documents to be able to travel outside the country; and refugees being allowed to obtain employment, become entrepreneurs and attain social security and benefits just like Russian citizens.
There is strong collaboration between the Federal Migration Service and various migrant communities, including religious organisations, to prevent conflict occurring among citizens. There is also established co-operation between the different national ministries, departments and NGOs on migration issues. The state Duma indicated a desire to strengthen its collaboration with the South African Parliament on these and other key issues as part of ongoing relations through Brics.
Russia shares notable similarities with our country in historical and migration challenges. South Africa, in considering a more risk- and state security-conscious model for migration into the country, has much to learn from its international counterparts. Russia has also made it easier for migrants, needed to stimulate its economy, to enter through official means, such as various permits. With such insight gathered, the task of balancing security with the equal imperative for economic development and regional integration can be pursued.
As a leader in its respective region, South Africa, like Russia, has a role to consider the broader implications of a migration policy. Security, economic development and globalisation, trade, tourism, investment, education and labour, among others, should be considered.
The lessons learnt from the Russian study tour provide a broader perspective and examples of best practice in migration policy that will prove invaluable to the Members of Parliament involved as South Africa moves towards formulating its more comprehensive overarching migration policy in the coming year.
Chairperson, that is the report of the Portfolio Committee on Home Affairs. [Applause.]
There was no debate.
Chairperson, on behalf of the Chief Whip of the Majority Party, I move:
That the Report be adopted.
Motion agreed to.
Report accordingly adopted.