Honourable Speaker/Deputy Speaker/Chairperson
Honourable Minister of Public Enterprises: Mr Malusi Gigaba
Your Excellencies Ministers and Deputy Ministers
Honourable Members
The Director-General and officials of the Department of Public Enterprises
The Leadership of State Owned Enterprises
Esteemed guests
Ladies and gentlemen
The Budget Vote of the Department of Public Enterprises provides an opportunity for us to reflect critically on work under taken by the department.
I wish to focus on four State Owned Enterprises (SOE) delegated to me by the Minister of Public Enterprises. These are Alexkor; Aventura; The South African Forestry Company Limited (SAFCOL); and the Pebble Bed Modular Reactor (PBMR).
The department provides shareholder management of these entities. Our active involvement in monitoring key areas in each of these SOE’s, which includes governance, performance and board appointments, ensures that we can identify potential problems early and can act swiftly to mitigate these.
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 using the applicable legal and regulatory instruments, including the Public Finance Management Act and the entity’s Founding legislation.
A critical part of the governance process for State Owned Enterprises is to create alignment by each entity to government’s objectives and in this context to formulate the strategic intent for each entity in a manner that provides guidance to the board as to the mandate they should assume.
The role that State Owned Enterprises play in the economy is an ongoing issue requiring engagement and assessment. We are confident that the research and outcomes of the Presidential review committee will ensure that the state has a more coherent view of the role that these enterprises should play in the South African economy.
Honourable chairperson: I should now like to give a very brief overview of the state of the enterprises delegated to me.
Alexkor’s: distinctive competencies are its quality of diamonds and its unique land and marine mineral resources. Alexkor remains focused on implementing the Richtersveld land restitution order imposed on it by the Land Claims Court.
The court order obliges Alexkor to transfer land and mineral rights to the Richtersveld community; to establish Alexander Bay as a formal township; to undertake environmental rehabilitation; and to establish a pooling and sharing joint venture with the Richtersveld Mining Company for future mining activities.
To date, significant progress has been made in the implementation of the Deed of Settlement. All Alexkor, State and Northern Cape Provincial land including land mining rights have been transferred, except the township erven.
Furthermore, there has been a redirection of Alexkor’s strategy to ensure that it operates on a commercially viable basis and contributes towards the socio-economic upliftment of the communities and regions in which it operates.
Alexkor has also been mandated to explore opportunities to procure new mining ventures in order to secure new revenue streams and ensure its future growth. 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 policies of government.
This new strategy will ensure the company’s long term viability, whilst contributing to the socio-economic upliftment and development of the Richtersveld region.
With reference to Aventura it is necessary to remember that in 2001, the government decided to dispose of its noncore assets such as Aventura resorts. After years of protracted litigation by parties with vested interests in Aventura properties and land claims that were lodged, the department has made significant progress in transferring and registering most Aventura resorts in the names of their rightful purchasers.
It is anticipated that the final winding up of Aventura resorts will be completed before the end of the current financial year.
Honourable chairperson:
The South African Forestry Company Limited (SAFCOL) continues in its position of contributing to rural welfare and development. SAFCOL presently provides approximately two thousand two hundred (2200) permanent jobs and two thousand (2000) contractual jobs, in rural areas characterised by high levels of unemployment in Mpumalanga, Limpopo and KwaZulu-Natal.
The department is currently exploring a range of different business models and institutional structures through which the developmental impact of SAFCOL’s human and financial resources can be optimised. This will assist in providing certainty for the business and direction for the company’s operations.
Keen consultation with key stakeholders will also be required before taking the matter to Cabinet for consideration. Downstream economic activities in rural areas, from timber-milling to furniture manufacture have also been encouraged.
Furthermore, a process is underway with the Department of Rural Development and Land Reform to dispose of the remaining shareholding in four privatised forestry companies, to the communities surrounding SAFCOL’s forestry operations.
Also, 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 has been a challenging one for SAFCOL. While not dependent on the fiscus, SAFCOL has been reliant on cash reserves and limited usage of debt finance. A key focus for the year ahead lies in ensuring improved financial and commercial sustainability.
Honourable chairperson, I now wish to turn to The Pebble Bed Modular Reactor [PBMR]. 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 preserve its assets. Good progress has thus far been made and it is envisaged that the preservation of intellectual property and the transition to care and maintenance will be complete within this financial year.
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 future nuclear endeavours.
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, Mr Tshediso Matona and the department’s senior management and staff for their professionalism and dedication.
I thank you.
Enquires:
Richard Mantu
Cell: 072 488 1520
