SPEECH BY PROF. EUGINIA CHANG - MP
 

The IFP believes that one of South Africa's biggest challenges is to attain sustainable economic growth and development; clearly we have not yet achieved the growth rates required for sustainable development. Coupled with this a number of issues have to be dealt with head on -

The first issue is Denel. State owned enterprises in South Africa are characterised by massive financial investment as well as investments in labour, technology and infrastructure. Denel, which is South Africa's defence related industry, operates within the context of increasing global consolidation. It is a repository of cutting edge technology and intellectual capital. Honourable Minister, we need to deal with the question that has been raised about whether Denel is a viable state owned enterprise.
Denel's CEO, in a recent presentation to the portfolio committee, said that Denel suffered a 23% decline in revenue and was expecting an operational loss of between R1bn and R1,8bn. He also said that government commitment was needed if it was to ward off insolvency. The chairperson of our committee stated recently that "overseas defence companies flourished when they had political support". It is with the above points in mind that we urge government to provide clarity on the type of support they will provide Denel in order to make it viable.

The second issue is Eskom. It is said that Eskom is one of the most efficient and lowest cost producers of energy in the world. Although this might be true, and we do acknowledge that Eskom has provided electricity to millions of South Africans, the power shortages that parts of the Western Cape experienced have caused great inconvenience and financial losses for many. We therefore hope Eskom has learnt from this unfortunate incident, which has tarnished its image, and is able to prevent similar incidents from occurring as well as meet the growing demand for electricity.

Another issue that is also critical is that of the train violence. There is no doubt that the security guard strike has had a huge impact on the Metrorail and its mode of operations. We have seen too many images of people being thrown off trains and the violence that accompanies it. This cannot be allowed to continue and government and this ministry has to take responsibility.

This brings me to yet another area of concern that needs to be addressed urgently. Honourable members, we cannot ignore the continuous stream of complaints about baggage theft in our airports. I think this situation is clearly out of hand. With the soccer world cup coming to our country in 2010 the world's attention will be focused on South Africa and if the theft of baggage in our airports is not brought under control, the image of our national carrier as well as South Africa will be tarnished. We therefore urge South African Airways, together with the Airports Company South Africa (ACSA) and all the relevant stakeholders to work together and find ways of addressing this serious problem.

And now on to Transnet.  Transnet has to become a focused and efficient organization, here I would like to commend the work of Maria Ramos.
However, this year we saw the Transnet strike: here again it is imperative that there are clear lines of communication open. It is understandable that workers together with unions want to protect their rights and interests.
And rightly so! There is no doubt that the strikes have costs us millions of rands. But our focus should be on growth and employment are the essential objectives now. Inefficiency and under-investment by Transnet is very costly for the whole economy. Hon Minister, better lines of communication are essential with those in the bargaining chamber.

Honourable members, lest we forget, part of our mandate is to act as the responsible shareholder of the entities that we have an interest in.
Government and DPE are supposed to be totally committed to the advocacy, promotion, implementation and development of a culture of sound corporate governance within SOEs. Yet there are times when the SOEs independence, their clearly defined mandates, accounting and reporting in line with the PFMA, corporate governance issues that relate to the remuneration of board members, and the disclosure of remuneration to executives, and so on have to be questioned. Also, the IFP believes that our state owned enterprises subscribe to the values that are expected of responsible corporate citizens in South Africa. In order to guide the SOEs in achieving the above, the Department must actively promote and institute

* Sound Corporate governance, ethics and probity; I cannot begin to emphasis how important this. Reports have to be timeously, and SOEs MUST comply with the PFMA.
* Rigorous performance monitoring of the SOEs; this is where our mandate as the portfolio committee comes into play, in terms of our constitutional oversight and monitoring.

Another challenge to the ministry is Black Economic Empowerment. It is imperative that the public sector plays the leading role in the process of broad based black economic empowerment (BEE). Thus far in the restructuring of state assets significant contributions have been made toward BEE, but here again, we need to know about the beneficiaries, is it some elitist group, and are those who are well connected? Is it those who are already empowered?

The DPE Budget
Here, I would just like to touch on new skills to the personnel complement.
In view of the high level of skill needed to engage with the complex financial, corporate and strategic matters ahead, it will be critical to bring in specialists to assist both with the required expertise and to build capacity in the public service. Clearly, we need to build capacity in the fields of energy, logistics and the defence industry. The IFP supports the
budget vote. Thank you for your attention.