DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NO.: 303

DATE OF PUBLICATION: 19 February 2010

Mrs J D Kilian (Cope) to ask the Minister of Public Enterprises:

(1)With reference to her reply to Question 1476 on 14 December 2009, (a) when will the disciplinary hearings be finalised, (b) which other staff members of Transnet Freight Rail are facing similar disciplinary charges, (c) how will she in terms of the Public Finance Management Act, Act 1 of 1999, and the Tender Regulations, ensure that penalties, including dismissal, will be instituted against any person found guilty of misconduct and (d) what steps will she take to ensure that all state-owned entities which report to her adhere to the provisions of the Act and Tender Regulations;

(2) whether the CEO has been suspended with full pay; if so, what are the relevant details of all payments made to him since his suspension;

(3) whether she has called on the Auditor-General to audit the alleged overpayment on tenders awarded to a certain company (name furnished); if not, why not; if so, what are the relevant details;

(4)whether she will ensure that the Boards of the state-owned entities adhere to the legislative provisions for financial accountability of public funds; if not, why not; if so, how does she intend to ensure sound financial and administrative governance of the state-owned entities?                   NW320E

REPLY

1(a) The evidence and argument to be led in the disciplinary hearing of Mr Siyabonga Gama was concluded on Thursday 25 February 2010. The outcome of the hearing was announced on 5 June 2010.

1(b) Two other employees of Transnet Freight Rail were suspended subject to similar disciplinary charges. The disciplinary hearing in respect of these two employees was concluded on Wednesday 03 March 2010. The externally appointed Presiding Officer found both employees guilty of all the charges leveled against them and recommended a sanction of instant dismissal. These employees were accordingly dismissed with effect from 09 March 2010.

(c)    Transnet will motivate for dismissal as the appropriate sanction, however that issue will be finally decided by the respective appointed presiding officers.

(d)   Section 51 (a) (iii) of the PFMA provides that the Board of a public entity must ensure that the public entity has and maintains an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective. Section 51 (h) of the PFMA provides that the Board of a public entity must comply and ensure compliance by the public entity with the provisions of the PFMA. Thus, it is the responsibility of the Boards of public entities to ensure that the public entities comply with the PFMA, which includes having an appropriate procurement system. SOE are required to report on legislative compliance in the quarterly reports and in their annual reports which must be signed off by their auditors. Section 86 (2) of the PFMA provides that if the Board willfully or in a grossly negligent way fails to comply with section 50, 51 or 55 of the PFMA, the Board is guilty of an offence and liable on conviction to a fine or imprisonment not exceeding five years. Thus, the PFMA provides sanctions if the Board does not comply with section 51 of the PFMA.

(2) Mr Siyabonga Gama was suspended on full pay pending the outcome of the disciplinary process, in accordance with the provisions of section 186(2)(b) of the Labour Relations Act 66 of 1995 (as amended) and has accordingly received his guaranteed monthly remuneration. It is not permissible to suspend an employee without pay pending the outcome of a disciplinary process.

(3) If there is non-compliance with the procurement process the external auditors will report that in the Annual Report. The Department of Public Enterprises will then raise those concerns with the Board of the public entity.

(4) Section 50 (1) (b) of the PFMA provides that the Board must ensure that it acts with fidelity, honesty, integrity, and in the best interests of the public entity in managing the financial affairs of the public entity. It is the responsibility of the Boards of public entities to ensure that the public entities comply with the PFMA. Section 86 (2) of the PFMA provides that if the Board willfully or in a grossly negligent way fails to comply with section 50, 51 or 55 of the PFMA, the Board is guilty of an offence and liable on conviction to a fine or imprisonment not exceeding five years. Thus, the PFMA provides sanctions if the Board does not act in the best interest of the company when managing its financial affairs.

Issued by Parliament, June 14 2010

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