Minister Brown’s remarks to the Select Committee on Communication and Public Enterprises

31 May 2017

Chairperson Ellen Prins
Members of the Select Committee
Officials of my Department and Parliament
South Africans…

Five weeks ago, I poked my nose into a hornet’s nest at Eskom when I instructed the Board to reconsider its proposed pension pay-out of R30m to Mr Brian Molefe.

To say that the consequences of this decision unleashed a storm is to grossly understate the effect. Within moments of publication of the announcement by Eskom chairperson Dr Ben Ngubane that Mr. Molefe was to return as Eskom’s Group Chief Executive, the issue was thrust to the centre of societal and political contestation.

Old allegations have re-surfaced and new ones have been brought to light. These include serious allegations – that are regularly reported, and widely perceived, as fact.

Do I regret interfering in the proposed Molefe pension pay-out? Well, I can’t say I enjoy having my integrity questioned. But, in the end, if our State-Owned Companies are to perform to their true potential at the vanguard of the developmental and transformative state, we must clear the fog of allegations of impropriety that envelop them – one way or the other.

I therefore pay tribute to Members of Parliament, the media (of course we’d like them to be more balanced) and members of the public who have invested time in investigating and reporting these matters, and I encourage others to contribute to setting things straight.

Chairperson

Allow me to give the Select Committee a brief progress report on unfolding issues pertaining to Eskom.

Firstly, I am a deployee of the ruling party therefore I am subject to the decision of the party.

Secondly, the political and government processes: Since Mr Molefe’s return to Eskom I have briefed the top officials, the Deployment Committee and National Executive Committee of the ruling party on the matter. The ruling party requested Government, led by President Zuma, to resolve the matter.

The President established an Inter-Ministerial Committee on Eskom led by the Minister of Justice and Correctional Services, the Honourable Michael Masutha and includes the Ministers of Finance, Malusi Gigaba, Minister of Energy Nkhensani Kubayi and I. The IMC has held several discussions and reached consensus.

I know that members would like me to announce the outcome of these deliberations. But all I can promise is that the announcement will be made soon.

Thirdly, the opposition’s court case: I don’t want to dwell too much on a matter before the court. Let me just say that I have submitted an affidavit, and instructed my legal team to withdraw my opposition to Part A of the relief sought – that I set aside my appointment of Mr Molefe. I will abide by the court’s decision on the legality of Mr Molefe’s return to Eskom. This is consistent with my support for Mr Molefe’s return to Eskom on the proviso that his return is legal.

Fourthly: Let me take the Committee into my confidence on the subject of the Eskom Board. We cannot ignore the fact that the Board is ultimately accountable for the fiduciary duties of the company. To this extent I continue working with the Board to ensure that Eskom’s sustainability is maintained and its developmental contribution to the South African economy is enhanced.

Therefore, as the Shareholder Representative, my relationship with the Board is crucial in ensuring that public and investor confidence is restored as we (Eskom and the sovereign) continue engaging with the investor community to improve our investment rating.

Chairperson

A word or two about Eskom’s performance. It is not all doom and gloom, as some would have it.

The company:

is an important economic driver;

is the 4th largest utility company in the world;

operates the only nuclear power station on the continent;

employs 46 000 people;

has recorded a profit for the 2016/17 financial year;

 is ahead of schedule on its revised build-programme; and

 provides more than 90% of the country’s electricity.

These are not green shoots; they are giant trees.

Finally

Allow me to express our deepest condolences, on behalf of Government, to the family of Thembisile Yende. I have asked my Department to ensure that Eskom provides the appropriate support to the Yende family and the police investigation.

I thank you.

Issued by the Department of Public Enterprises, 31 May 2017