Honourable Speaker, Deputy Speaker, Chairperson,
Honourable Minister of Public Enterprises, Mr Malusi Gigaba,
Your Excellencies Ministers and Deputy Ministers,
Distinguished Honourable Members of Parliament,
The Director General,
Senior Officials and Staff of the Department,
Chairpersons and Chief Executive Officers of State Owned Companies,
Esteemed Guests,
Ladies and Gentlemen,
In this centenary year of the African National Congress, I wish to dedicate my address to Parliament to all those visionary men and women, intellectuals, traditional leaders, workers, peasants, revolutionaries, innovators and pioneers, who were brave enough to think differently, bold enough to think that they can change South Africa and talented enough to do so.
Our democracy is founded on their sacrifices, blood, sweat and tears. They shall live forever in our hearts and minds.
We are today grappling with ideas to reconstruct our country and to extend the dividend of freedom to all, a responsibility bequeathed on us by those who came before us.
Today, I will report to you on the progress of the entities under my care, my reflections on their operations and their plans for the future.
Background
Our active monitoring of state owned companies, entails keeping a close watch on matters of governance, performance and Board appointments to ensure the identification of potential challenges early and to mitigate them swiftly.
There are, however, external factors beyond our control that also have a critical bearing on the performance of these companies. Some entities like Alexkor for instance, which are in the commodities sector, are affected by global demand, and any sluggish growth or challenges in the economic climate.
We continue to improve our oversight management of these entities. It is the Department’s ongoing goal to ensure the implementation of proper governance systems within each entity by strict adherence to the Public Finance Management Act and the entity’s Founding legislation. A critical part of our shareholder oversight is to create alignment by each entity to government’s objectives.
Alexkor Ltd
Chairperson, with regard to Alexkor, we are continuing to implement the court order regarding Richtersveld.
To date, all Alexkor and government owned land, including land mining rights have been transferred excluding the township erven. The Pooling and Sharing Joint Venture between Alexkor and the community has been established. R350 million has been allocated in our budget in respect of Alexkor in terms of the deed of settlement. Alexkor, however, requires a paradigm shift.
This entails exploring opportunities for downstream beneficiation to contribute to the creation of new jobs; the development of requisite skills; investment in research and development; economic growth; sustainable development and cost effective support for the broader priorities of government.
This strategy seeks to ensure the company’s long term viability, whilst contributing to the socio-economic upliftment and development of the Richtersveld region.
A blot on Alexkor’s clean sheet has been the matter of its inadequate oversight of the Alexkor Development Foundation (ADF) which was established In 1993.
The Trust has experienced governance challenges over the years attributed to mismanagement by trustees who are members of the Richtersveld community. This includes failure to provide financial statements of the trust to Alexkor and to recover monies owed to the trust.
The Department has intervened and reported the matter to the master of the High Court.
A meeting with the master of the High Court is scheduled for the 31 May 2012 where will explore:
- The removal and replacement of current trustees; or
- The termination of the Trust;
- Any other legal recourse.
Alexkor’s distinctive competitiveness remains its quality of diamonds and its unique land and marine mineral resources. We need to leverage the skills and expertise housed within Alexkor to position it as a major player in its sector, both locally and continentally.
Aventura Ltd
Chairperson, in regard to Aventura, Honourable Members will recall that in 2001, the Government decided to dispose of its non-core assets such as Aventura resorts. After years of protracted litigation by parties, the Department has made significant progress in transferring and registering most Aventura resorts in the names of their rightful purchasers.
An Annual General meeting is scheduled for 28 May 2012 where a resolution to have the company liquidated by the sole shareholder will be passed.
Honourable chairperson,
The South African Forestry Company Limited (SAFCOL). SAFCOL continues to contribute to rural welfare and development. It presently provides approximately two thousand two hundred (2200) permanent jobs and two thousand (2000) contractual jobs, in rural areas in Mpumalanga, Limpopo and Kwa-Zulu Natal which are characterised by high levels of unemployment.
The Department is presently assessing different business models and institutional structures, through which the developmental impact of SAFCOL’s human and financial resources can be optimised. The conclusion of this exercise will provide certainty for the business and a clear direction for the company’s operations. Consultation with key stakeholders is in progress. Downstream economic activities in rural areas, to create jobs and provide skills, from timber-milling to furniture manufacture are focal areas.
Furthermore, as approximately sixty one percent (61%) of land under SAFCOL’s operation is under land claims, the Department is playing a proactive role in facilitating the resolution of these claims, through effective inter-departmental co-operation. The past year‘s preliminary results show that SAFCOL will be posting a profit. A key focus for the year ahead lies in ensuring improved and financial commercial sustainability.
SAFCOL is challenged to explore opportunities and options to ensure its continued sustainability. In this context, the company is examining vertical integration and expansion of operations outside South Africa.
SAFCOL’s expansionary potential is also in the green economy and carbon trading. This will enable it to explore the possibility to partner with Eskom on biomass and with South African Airways, South African Express and Transnet on carbon trading.
All these matters will be finalised between SAFCOL and the Department in this financial year.
Honourable Chairperson,
With regard to The Pebble Bed Modular Reactor (PBMR), esteemed members will recall that due to fiscal constraints and the PBMR’s failure to secure an investor or partner government decided to place the PBMR into care and maintenance to protect and preserve its intellectual property and assets.
Good progress has been made thus far which includes packaging more than eighty six percent (86%) of the intellectual property for preservation. Eskom has hosted the PBMR company since the 1st April 2012, and will do so until the end of its care and maintenance phase in 2013, when a final decision on its future will be taken.
Furthermore, in conjunction with the Department of Science and Technology, the Department has commenced on an intellectual property audit of the PBMR, in order to ensure a sound strategy to protect its future value. A skills audit has also been conducted to ascertain how current expertise could best be utilised in the future nuclear endeavors.
In conclusion, i should like to thank the Minister of Public Enterprises, Mr Malusi Gigaba for his leadership and stewardship of the Department.
I should also like to thank the Director General of the Department Mr
Tshediso Matona, for his diligenence and professionalism, the Department’s senior management and staff for their dedication and work ethic.
I thank you.
