Radebe on a wing and a prayer

Minister in the Presidency Jeff Radebe. File picture: Siyabulela Duda

Minister in the Presidency Jeff Radebe. File picture: Siyabulela Duda

Published Nov 22, 2015

Share

Cape Town - Jeff Radebe looked pained. The Minister in the Presidency for Planning, Monitoring and Evaluation, who moonlights as the cabinet spokesman, had concluded a breezy synopsis of its latest sitting, sharing commiserations on the death of rugby legend Jonah Lomu and congratulations for Eskom on the milestone of 100 days with no load shedding.

Stunned parliamentary correspondents refused to let him off the hook after he glibly suggested the question of management mayhem at SA Airways and the SABC and the likely effect of a request from the airline for yet another government loan guarantee, this time for between R4 billion and R6bn had not come up for discussion.

Could it be true, journalists asked, that in a week in which it emerged that South Africa’s credit default insurance costs were now almost on par with those of Russia, effectively putting it in the company of economies consigned to junk status, the cabinet had not seen fit to wrestle with the very serious implications of the SAA request, amid reports of a stand-off with the Treasury over a deal for the purchase of new aircraft and the axing of its acting chief executive.

Meanwhile, the SABC had announced the suspension of its latest group chief executive, in the job for just five months, with serious questions over the lawfulness of the move by a board with just six members out of 12 remaining.

Radebe changed tack.

These issues had been discussed, he said, in the context of a briefing from Finance Minister Nhlanhla Nene on the 2016 Budget, but the cabinet was not ready yet to share its views with the public.

Given that Nene must make a call on the SAA request in the coming week, that seemed more reasonable. But the episode gave the impression of a cabinet constantly on the back foot, putting out fires consuming the very state-owned enterprises the government considers key to its developmental agenda and plans for building an inclusive economy.

On the day of the cabinet briefing, Parliament’s standing committee on public accounts (Scopa) had been briefed by the Passenger Rail Agency of SA (Prasa) on areas of concern highlighted by the auditor-general in its annual report.

One of these was a R1.3bn increase in its capital commitments relating to the controversial purchase of new locomotives, despite the number of these being reduced from a planned 88 to 70.

Essentially, Scopa wanted to know why Prasa was paying more than a R1bn for 18 fewer locomotives. The briefing came against the backdrop of the public protector’s explosive report on irregularities at Prasa, which resulted in the axing of chief executive Lucky Montana, and the revelation that its chief engineer, subsequently charged with fraud, had never qualified for the job.

It also emerged that the locomotives were not compatible with the country’s rail network, with one having derailed during testing.

Popo Molefe, chairman of a new board, said as it hadn’t been around at the time of the deal being concluded, it was having to piece together events, but it appeared the escalation in costs was the result of management failing to hedge against rand depreciation, causing it to opt for fewer locomotives.

Irregular expenditure of R357m was also related to this deal, the bid process for which had been rigged, Molefe said. “An RFP (request for proposal) was issued, with particular specs. To give an indication, the initial procurement was supposed to be for Euro 3 000 (locomotives) and that would have complied in all respects with South African network standards,” Molefe said.

When the bid evaluation team had scored the bids and handed the results to management, Montana and head of engineering Daniel Mtimkulu changed the scoring to disqualify the Euro 3 000 locomotives in favour of the Afro 4 000 units eventually purchased, without proper design work being done.

“So it’s a massive fraudulent action that has taken place that we are dealing with,” Molefe said.

The committee wasn’t satisfied, however. “There is some degree of resistance to believe, and of course we might be wrong… that for everything that has gone wrong there are only two or three people that should be held to account, and those two or three people are no longer there,” said chairman Themba Godi.

“It created a concern that those who have remained behind can very easily shield themselves through one or two individuals,” he said.

“Yet, this entity has a structure, it has processes, systems, individuals at various levels with the responsibility and the power to take decisions on various things for which we seek accountability.”

He called off the remainder of proceedings so Molefe could provide timelines for when investigations would be completed.

“If we are going to have investigations that do not have timeframes, it may as well mean we cannot engage on these matters, since we have to wait for investigations that might be concluded in June, might be concluded in December next year, or 2017, or 2018,” he said.

The discussions could equally have applied to the problems at SAA or the SABC: there are regulations and laws in place designed to prevent lapses in governance and perversions of procedure, but these are frequently honoured in the breach and when, inevitably, things start unravelling, those responsible are shuffled out, only to land another government job a few months later.

Meanwhile, the skilled and dedicated officials trying to do the right thing frequently fall victim to the sense of impunity of their superiors, leaving an ever-diminishing pool of talent (and integrity) to draw from.

The result is a Treasury that is incapable of keeping to its borrowing targets and increasing scepticism of creditors.

Even if Nene sticks to his guns on keeping bailouts for SOEs “deficit neutral” by funding them through the disposal of non-strategic assets, it ultimately means forfeiting the family silver to keep them afloat. His credibility hangs in the balance and the upshot of Radebe’s briefing is that the cabinet can’t agree on its next move to resolve the serial crises at the SABC, SAA and other SOEs.

Political Bureau

* Use IOL’s Facebook and Twitter pages to comment on our stories. See links below.

Related Topics: