FRIDAY, 14 APRIL 2000 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 09:30.

The Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes -

   (a)  the statements that have been made by the DP on the tense
       situation in Zimbabwe;


   (b)  that political parties have a right to express their opinions,
       but that such a right needs to be exercised responsibly;


   (c)  that the DP statements only serve to fuel emotions and feelings
       of insecurity, especially among white people in South Africa;
       and


   (d)  that this militates against the process of nation-building and
       national reconciliation in our country; and

(2) calls on -

   (a)  the DP to desist from such irresponsible behaviour; and


   (b)  the ANC-led Government to continue to intervene in the
       Zimbabwean situation in a constructive manner that will bring
       stability to Zimbabwe and the region as a whole. [Applause.]

Adv P S SWART: Mevrou die Speaker, ek gee hiermee kennis dat ek op die volgende sittingsdag namens die DP sal voorstel:

Dat die Huis -

(1) kennis neem -

   (a)  van die voortslepende bendegeweld in Bonteheuwel wat die
       afgelope weke reeds die lewe van verskeie mense geëis het,
       insluitende dié van onskuldige kinders;


   (b)  dat Bonteheuwel binne die polisiedistrik van Bishop Lavis val;


   (c)  dat die satellietpolisiekantoor in Bonteheuwel reeds twee jaar
       lank gesluit is nadat 'n polisiebeampte koelbloedig daar vermoor
       is;


   (d)  dat 'n kontakpunt vir polisiëring sedert September 1999 by die
       gemeenskapsentrum in Bonteheuwel beskikbaar is; en


   (e)  dat hierdie kontakpunt nie beman kan word nie as gevolg van 'n
       gebrek aan beskikbare mannekrag; en

(2) ‘n beroep doen op die Minister van Veiligheid en Sekuriteit om -

   (a)  daadwerklik en onmiddellik die minimum van agt polisiebeamptes
       te voorsien wat nodig is om die kontakpunt in Bonteheuwel te
       beman as deel van die komplement van die Bishop Lavis-
       polisiekantoor; en


   (b)  hom toe te spits op en spesifiek aandag te gee aan die
       omstandighede van die polisiebeamptes op straat wat ons inwoners
       veilig moet hou, maar as gevolg van 'n gebrek aan mannekrag en
       swak werksomstandighede gedemoraliseer is. (Translation of Afrikaans notice of motion follows.)

[Adv P S SWART: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the DP:   That the House -

(1) notes -

   (a)  the continuing gang violence in Bonteheuwel, which has already
       claimed the lives of various people in recent weeks, including
       those of innocent children;


   (b)  that Bonteheuwel falls within the police district of Bishop
       Lavis;


   (c)  that the satellite police station in Bonteheuwel has been closed
       for two years now, following the cold-blooded murder of a police
       officer there;


   (d)  that a contact point for policing has been available at the
       community centre in Bonteheuwel since September 1999; and


   (e)  that this contact point cannot be manned as a result of a lack
       of available manpower; and

(2) appeals to the Minister of Safety and Security - (a) decisively and immediately to provide the minimum of eight police officers required to man the contact point in Bonteheuwel, as part of the complement of the Bishop Lavis Police Station; and

   (b)  to focus on and give specific attention to the circumstances of
       the police officers on the street, who have to keep our citizens
       safe but who are demoralised as a result of a lack of manpower
       and poor working conditions.]

Chief M W HLENGWA: Madam Speaker, I give notice that on the next sitting day of the House I shall move:

That the House -

(1) notes the unacceptable state of sanitation at the new housing development at Lot 365, Umkomaas, KwaZulu-Natal, which is giving rise to serious health problems among residents;

(2) further notes that many houses are already dilapidated despite having only been completed in September 1999;

(3) expresses its concern that the Umkomaas transitional local council was warned a year ago that the building contractor was departing from the plans submitted to the housing committee, particularly with respect to the construction of toilets, but failed to take action; and

(4) calls upon the Umkomaas transitional local council to take action now to tackle the serious health hazards arising from the failure of the sanitation system and to ensure that the building contractors responsible rectify any substandard building work or building work that departed from the agreed plans.

Dr R H DAVIES: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the immediate, total and unconditional cancellation of Mozambique’s foreign debt is the key to the long-term reconstruction of that country;

(2) further notes that apartheid destabilisation throughout Southern Africa, made possible by apartheid’s creditors, shattered Mozambique’s economy and made it one of the poorest countries in the world;

(3) recalls that in 1999 South Africa totally and unconditionally cancelled Mozambique’s bilateral debt, recognising that the odious character of that debt was related to the apartheid regime’s war in Southern Africa; and

(4) calls on multilateral and bilateral creditors and creditor countries to work towards the total and unconditional Jubilee debt cancellation for all highly indebted poor countries to facilitate effective and sustainable poverty eradication in the new millennium.

[Applause.]

Mr H A SMIT: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the New NP:

That the House -

(1) debates the following with regard to a reply given to the New NP by the Minister of Defence:

     The alarming incidence of theft in the SANDF, with specific
     reference to weapons and ammunition, for example 245 incidents of
     arms theft since 1 July 1999, including 1 958 weapons, 384
     handgrenades and more than 81 000 rounds of ammunition during the
     past 5 years, and also incidents of fraud as manifested, for
     example, in the recent conviction for cheating in an examination
     of a former female general; and

(2) demands that the report of the appointed ministerial team of investigators be made public as soon as possible and that Operation Clean-up now takes place.

Ms A VAN WYK: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the UDM: That the House -

(1) expresses its heartfelt condolences to the families, next of kin and friends of the three people who died in their car in the river at Umzimkulu earlier this week; and

(2) requests the provincial government to take swift and considerable action in the construction of roads and bridges in that province to avoid further deaths in the near and distant future.

Mr M E GEORGE: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) recognises that most South Africans were dispossessed of their land for centuries, most notably by the inhumane apartheid government;

(2) acknowledges that the ANC Government has put in place land redistribution and restitution policies based on constitutional principles, respecting the rights of all citizens;

(3) notes that over 1 900 claimants removed by apartheid from the west bank of the Buffalo River, where their community had owned land since 1849, will receive land in East London as compensation for this loss in the largest settlement by the Eastern Cape Land Claims Commission; and

(4) congratulates the Minister for Agriculture and Land Affairs, the regional Land Claims Commission, the Nogqongqo Claimants Committee and the people of the west bank for their perseverance and commitment to the solution of this claim.

[Applause.]

Mr I S MFUNDISI: Madam Speaker, I give notice that on the next sitting day of the House I will move on behalf of the UCDP:

That the House -

(1) notes that South Africans are heaving a sigh of relief at knowing the fate of our honourable national soccer coach, Trott Moloto, after hearing and reading so much destructive criticism of him;

(2) takes pleasure in applauding the SA Football Association;

(3) notes that Safa has finally and wisely retained Trott Moloto, a product of the South African game, as senior national team coach and has also lifted the ban on Bafana Bafana players appearing for the Olympic squad;

(4) is of the opinion that it is time South Africans woke up to the fact that foreign does not necessarily mean better since recently, during an African Cup of Nations game, the Pharaohs were easily put to shame;

(5) condemns judging our national coach only on the basis of the African Cup of Nations competition, and recognises that one should judge the bull by its origin and not by its horns …

[Time expired.]

Mrs Z A KOTA: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the Minister of Foreign Affairs, Nkosazana Dlamini-Zuma, has called for the restructuring of the IMF, the World Bank and the United Nations;

(2) acknowledges that developing countries can better utilise these structures to improve the wellbeing of their people;

(3) recognises that rich Western countries dominate these institutions; and

(4) supports the call by Minister Dlamini-Zuma that the process of reforming the IMF, the World Bank and the UN is speeded up.

[Applause.] Mr V C GORE: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the DP:

That the House -

(1) notes -

   (a)  the judgment given by Judge Bertelsmann in the Pretoria High
       Court on Wednesday;


   (b)  that the five unsuccessful bidders for the third cellular
       licence have more time to object to Cell C as the preferred
       bidder;


   (c)  that the bidders for the licence should be informed of Satra's
       decision on the preferred bidder at the same time as the
       Minister of Communications; and


   (d)  that the Minister must consider the decision for five days
       before she decides to accept or reject Satra's recommendation;

(2) applauds the judicial system for bringing some form of transparency to the whole process; and

(3) calls on the Government to ensure that there is no executive involvement now or in the future, because if this is not done -

   (a)  the consequences for foreign investment in South Africa will be
       disastrous as foreign companies and investors lose faith; and


   (b)  the Government needs to take urgent steps to ensure that our
       international reputation is not damaged by the growing scandal
       over the rewarding of the cellular licence to Cell C.

Dr R RABINOWITZ: Madam Speaker, I give notice that on the next sitting day of the House I shall move:

That the House requests the Minister of Health to -

(1) investigate the failure on the part of the Medicines Control Council to respond to the application by Eli Lilly for registration of its latest and most effective antidiabetic drug, Actos TM; (2) propose to the MCC that the application for registration of the drug be fast-tracked since it has been approved by the US Government’s Food and Drug Administration, is experimentally shown to have no side effects, is the largest selling medicine for Type 2 diabetes in the USA and would bring relief to thousands of South Africans, if made available; and

(3) establish why there are extensive backlogs and apparent sloppiness in the workings of the MCC.

Dr Z P JORDAN: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the ANC:

That the House -

(1) notes that a summit, composed of 40 heads of state and delegates from various nations, took place in Havana, Cuba;

(2) further notes that this summit represented poorer nations that have not benefited from the processes of globalisation; (3) echoes the statement by UN secretary general, Mr Kofi Annan, that: ``Many millions experience globalisation not as an agent of progress but as a destructive force capable of destroying jobs, traditions and even society’s cohesion’’; and

(4) endorses the draft resolution calling for the establishment of a more just and fair international economic system that would spread the benefits of globalisation.

[Applause.]

Mr R S SCHOEMAN: Madam Speaker, I give notice that on the next sitting day of the House I shall move:

That the House -

(1) notes with concern the running aground of a prawn trawler off the KwaZulu-Natal coast at Ballito earlier this week;

(2) expresses its sympathy to the family of the crew member Mr Derek Dladla who was lost overboard and is presumed to have drowned;

(3) registers its concern at the environmental and safety hazards posed by trawling taking place so close to the shoreline;

(4) congratulates all role-players involved in the joint operations centre set up by the Dolphin Coast local authority, which resulted in the immediate potential ecological and other negative effects of the shipwreck being minimised;

(5) notes the positive involvement and continuing efforts of the Department of Transport in respect of this accident; and

(6) urges the ship’s owner, its insurers and the authorities concerned to authorise and expedite the sealing, removal from the rocks and, if necessary, scuttling of the vessel at a place and in a manner in line with the environmental policy applicable to the coastal zone.

Miss O N MNDENDE: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the UDM:

That the House -

(1) congratulates Prof Njabulo Nedebele on his appointment as the new vice-chancellor of the University of Cape Town;

(2) notes that the decision of the council to appoint Prof Njabulo was unanimous; and

(3) wishes the outgoing vice-chancellor, Dr Mamphela Rampele, everything of the best in her new position as one of the managing directors of the World Bank.

[Applause.]

Mr J H MOMBERG: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes with consternation the statements made by the hon Holomisa of the UDM in a document given to the Standing Committee on Public Accounts and published on the Internet, and in which he questions the integrity of the Auditor-General;

(2) believes these untested allegations are in contravention of Rule 66 of the Rules of the National Assembly;

(3) supports the criticism of the chairperson of the Standing Committee on Public Accounts that the language used to question the integrity of the Auditor-General was appalling;

(4) calls upon the Speaker to institute disciplinary procedures against Gen Holomisa; and

(5) calls upon the hon Holomisa to -

   (a)  accord the office bearers of Chapter 9 institutions the
       appropriate respect;


   (b)  honour the spirit and letter of the Rules of the National
       Assembly; and


   (c)  respect parliamentary procedures when making allegations which
       cast aspersions on the integrity of those holding high office.

[Applause.]

                   AWARD TO MINISTER OF EDUCATION

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes that the Minister of Education, Prof Kader Asmal, has been awarded the Stockholm Water Prize, the “Nobel” prize of water, by the Stockholm Water Foundation; and

(2) wishes to congratulate Prof Asmal on this enormous achievement, especially since he is the first African and first social scientist to receive the award.

Agreed to.

[Applause.]

                  BIRTHDAY WISHES TO MR COLIN EGLIN

                         (Draft Resolution)

Mr D H M GIBSON: Madam Speaker, I move without notice:

That the House -

(1) notes with pleasure that the father of the House, the hon member Colin Eglin, celebrates his 75th birthday today; and

(2) wishes him and his new wife health, happiness and continuing prosperity.

Mr J H VAN DER MERWE: Madam Speaker … [Interjections.]

The SPEAKER: Order! Hon member, are you moving another motion?

Mr J H VAN DER MERWE: Madam Speaker, on a point of order: I draw the attention of the House to Rule 15(2)(3), Schedule 1, which provides that when the father of the House turns 75, he must give a party for all members of Parliament. [Laughter.]

The SPEAKER: Order! I am very familiar with that Rule, but I think it also says something about members of this House who win international awards, so perhaps you could add that as well! [Laughter.]

Agreed to.

               ACCURACY OF ANSWER OF DEPUTY PRESIDENT

                              (Ruling)

The SPEAKER: Order! Hon members, before proceeding with the rest of the business of the day, I wish to give a ruling.

During Question Time last week, the Leader of the Opposition asked a question about a statement, made during a debate in the National Assembly, by the Minister of Safety and Security. The accuracy of the answer given by the Deputy President to this question was disputed. The issue was whether or not the Minister had, during debate on 15 March this year, stated that the support and co-operation of the opposition was not needed in the fight against crime.

I consulted the Hansard and find as follows: Minister Tshwete’s words, after referring to Mr Gibson by name in the previous sentence, were as follows:

I might as well add that I am not interested in any kind of support that he may want to lend me.

The Minister continued thereafter to refer to his - Mr Gibson’s - support. Later on Mr Gibson stated:

You said you do not want any support from the opposition.

The Minister replied:

That is a complete untruth.

Accordingly, it is clear that the Hansard record supports the answer given during Question Time by the Deputy President. [Applause.]

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, in view of your ruling on the matter, would you not therefore also rule on the suggestion by Mr Gibson, in his utterances that day, that what the Deputy President had said was an untruth.

The SPEAKER: Order! Hon member, I did not notice that. I will consult the Hansard. I certainly was not called upon to rule on that. [Interjections.]

                         APPROPRIATION BILL

Debate on Vote No 23 - Public Enterprises:

The MINISTER FOR PUBLIC ENTERPRISES: Madam Speaker, Deputy President, Cabinet colleagues, hon members, in his opening address to Parliament in February this year, President Mbeki indicated that -

… at no other point in time have we ever been as well placed as we are today to take decisive forward steps towards the creation of the humane and people-centred society for which the organisations that were unbanned 10 years ago struggled for many decades.

In recent months, confidence in the recovery of the South African economy has been reinforced. The recent elevation of South Africa’s credit rating to an investment grade signifies the growing global confidence in our economic policy and fiscal management. Just yesterday, for example, Business Day reported that the International Monetary Fund’s World Economic Outlook predicts an economic growth rate for South Africa of 3,8% for 2000 and 4% for 2001.

This upbeat forecast underscores the economic climate within which the restructuring programme is unfolding. Foreign direct investment is expected to grow considerably over the next five years and portfolio inflows should also remain very strong. I believe that the restructuring programme will make a direct and significant impact on capital inflows into the South African economy. The proceeds from the restructuring programme will enhance the ability of this Government to give effect to the imperatives of socioeconomic development. We will unlock value and resources that will contribute significantly towards the building of houses, schools, hospitals and other infrastructure in poor rural areas.

Our vision for the next four years is to have restructured state-owned enterprises that operate in a globally competitive environment, promoting economic growth and a better life for all South African people. Thus our task is not simply to keep an eye on state-owned enterprises, nor indeed merely to monitor their performance as a passive shareholder. Our aim is to guide, interact and ensure the successful restructuring of these public entities, so that they become more valuable corporate citizens of our country, performing tasks in a manner that makes us, as South Africans, proud, and to show our people and the world that we are capable of responsible, efficient and effective business management. We believe that in specific areas of strategic importance to the economic wellbeing of our country and our people, it is better to co-ordinate and integrate the expertise of private endeavour and enterprise with the necessary developmental direction of our Government.

Let me elaborate a little on this point. It is generally accepted that the state has an overall policy-making and regulatory function, and in those areas where the private sector provides goods and services efficiently and effectively, the role of the state is largely to create an enabling environment for such activities. However, modern economies, including ours, do not simply run smoothly without hiccups, nor do they cater only for those with wealth or privilege one way or another. Market failure is a frequent and ever-present bugbear that has the potential to inflict massive social and economic pain on many of our people who, as we know, fall into class and race definitions that have been shaped very largely in the crucible of uneven, unjust and apartheid-driven laws, codes and cultures.

Therefore, introducing market incentives and practices into the operation of state-owned enterprises is likely to introduce greater efficiency, effectiveness and wealth-generation opportunities. Moreover, the introduction of private sector capital and expertise will provide new impetus to the competitiveness of the state-owned enterprises and will go a long way to improving the economic performance and service delivery.

However, we are still engulfed by a poverty problem that holds back the participation of large numbers of our people and retards the enjoyment of those rights that we South Africans have unanimously endorsed in our Constitution’s Bill of Rights. To give flesh to these rights the state is required, as an instrument of social justice and popular power, to move beyond just being an enabler to being an active participant in the development of our economy, people and region.

It is no accident of history that the major state-owned enterprises in South Africa are located in critical sectors of the South African economy. These are the transport, energy, communication and defence technology areas. It is also patently clear that efficient and effective goods and service delivery in each of these areas is critical not only to our wellbeing now, but to the future of this country and indeed Southern Africa as a whole. Between them Transnet, Eskom, Telkom and Denel account for approximately 91% of the estimated total assets, provide 86% of turnover and 94% of net income, and employ some 77% of all employees in the top 30 state-owned enterprises in the Republic.

It is no exaggeration to state that practically every person living in South Africa bumps into one or other of these state-owned enterprises on a daily if not hourly basis at present. The radio channel, the light bulb and kettle, the train in the distance or the harbour on the coast, sometimes the aircraft in the sky that casts its shadow fleetingly across the highway running through the countryside, and the soya extract one nibbles at, all come to one courtesy of ``South Africa Incorporated’’.

However, these little facts are not meant to make us feel complacent or smug. They highlight the possibilities of what impact can be achieved if these entities perform their tasks even better, with more direction and purpose, and with greater effectiveness than they do at present. Essentially that is our challenge and one that we have chosen to address through the restructuring of state-owned enterprises.

The objectives that we have identified for the restructuring programme can be defined by their relationship to micro and macro economic and social impact. Thus, at the micro economic level, restructuring involves enhancing the efficiency and effectiveness of state enterprises, accessing globally competitive technologies, creating effective market structures in the sectors currently dominated by state-owned enterprises, and mobilising private sector capital and expertise. At the macro economic level, restructuring aims to achieve a reduction in the public sector borrowing requirement, to attract foreign direct investment and to finance growth and provide the requirements of industrial competitiveness.

At the social level, restructuring of these assets seeks to ensure wider participation in the South African economy, particularly of formerly disadvantaged groups and individuals, and to mitigate possible negative social impacts that arise from some restructuring efforts such as marginal job losses, erratic price increases or even the withdrawal of services. Let me make one thing very clear here: there are no easy answers to the difficult questions that a restructuring programme suggests. Although restructuring, and more specifically privatisation, has been practised internationally for more than 20 years now, less so in the developing world, there is still not even consensus about its consequences.

Even though most commentators have indicated that restructuring and privatisation have generally yielded positive outcomes for individual nations, almost all analysts concede that there have been failures as well. This resulted largely from institutional arrangements within former state- owned enterprises, as well as the structural problems associated with the market and financial environments within which state-owned enterprises operate.

We have to be aware of all these factors. Our own brief experience in South Africa in the area has revealed some marked successes, such as the SA- Airways-Swissair deal or the inclusion of strategic equity partners or management contractors with Telkom and the Post Office, for example. However, Sun Air, which has been dealt with at length in this House on previous occasions, has provided us with some valuable lessons.

Partly as a result of the experience of the past five years of restructuring, but more because of our need to experience the benefits of the objectives of the programme I have just outlined, our Government has adopted the definite view that restructuring must be accelerated. This does not only mean that we must speed things up, but it also means that we must embark on a more thorough transformation exercise within the enterprises themselves and ensure that the major players such as Transnet, Eskom, Telkom and Denel proceed with restructuring without unnecessary delay.

Thus I am able to announce today that my department has fulfilled all the initial tasks given to it by Government in November last year. Thus, as we move into the 21st century, we will, firstly, be guided by a coherent, integrated and transparent approach to restructuring as a whole. Secondly, we will co-ordinate interdepartmental efforts around one department, namely the Department of Public Enterprises. Thirdly, we have established a systematic method of monitoring the performance of state-owned enterprises and can ensure that their activities and functions are aligned and in compliance with Government policy and legislation. Fourthly, we will promote the process of internal business re-engineering and/or rationalisation or integration of similar functions between different state- owned enterprises. Fifthly, we will develop a comprehensive approach to public-private partnerships and the use of alternative service delivery as a means of restructuring.

Our Government has adopted seven basic principles that form the backdrop of our restructuring agenda. Thus we believe that the promotion of competition and the development of competitive markets is an integral element of any restructuring agenda. In those business areas where competition is not feasible, such as in residual natural monopolies, a regulatory framework needs to accompany any restructuring initiative.

The Government’s relationship with state-owned enterprises should be spelt out in individual shareholder compacts with enterprises and in a framework for corporate governance for all state-owned enterprises, and accompanied by a clear policy context and programme for restructuring. Furthermore, a range of options is needed to ensure that productivity, profitability, investments and innovation are enhanced. This entails options such as equity sales, and full or partial privatisation to access additional funding, technology or markets. But where this is not required, other approaches to restructuring may also be used. We therefore need to examine and maximise the ultimate return to the shareholder and fiscus through the proceeds from equity sales, dividends and/or tax returns on the basis of adopting the optimal approach to restructuring. In order to better account for public goods and services, restructuring proposals should incorporate a rigorous cost-benefit analysis of their impact on overall social welfare. To overcome undue political influence and avoid soft budget constraints, our Government should also address its social objectives, such as social plans, employment creation, price subsidies, optimisation of public goods, empowerment and so on, through a transparent means, so that all stakeholders can reach agreement on the logic and methods of the restructuring process.

We are currently engaging different Government departments on our draft policy framework, to ensure that we complete interdepartmental consultation prior to presenting the document to Parliament and the public by early May 2000 for their kind consideration and debate. Our experience has shown that our approach of consulting widely with important stakeholders including labour and the business sector, prior to the adoption of strategic policies is a critical component for success.

I have, therefore, initiated the process of engaging nongovernmental stakeholders directly on the process of restructuring and the policy framework that underpins it. All stakeholders, including organised labour, will have the opportunity to participate constructively in this important dialogue. I can give prior notice, of course, that at this stage the policy document includes the following elements: Our Government’s strategic vision for restructuring; the micro economic and social impact of restructuring, promotion of competition and establishment of appropriate regulatory frameworks and mechanisms; the enhancing of empowerment and broadening of participation in the restructuring agenda; improved corporate governance; reorganising of the restructuring process; a review of the four main or key sectors; the identification of our Government’s priorities; and the restructuring timetable for the next four years.

The Department of Public Enterprises is also in the process of completing a database for state-owned enterprises. Currently, this database contains information on some 192 state-owned enterprises and we are busy mopping up the others at this present moment. I expect the database to be completed in the near future, and aim to use it as a management tool that will be updated on a continuous basis. Although the work is still in progress, I can indicate that the amount of information is very impressive. It includes basic details such as the legislation governing a particular state-owned enterprise, whether it is a key national or strategic asset, its competitive environment and ownership, detailed information on the shareholder, management structure, pension funds, medical aid, unions, employment equity compliance, financial statistics, restructuring progress and valuations, and short profiles of each state-owned enterprise. Those who are going to be at the lunch after this debate will have an opportunity of seeing this important national assets register of state-owned enterprises.

Another important development is the finalisation of a policy document, in conjunction with the Department of Labour, that covers a framework for a social plan that is consistent with the Presidential Jobs Summit’s national social plan framework. I am committed to ensuring that any potential negative consequences of restructuring are mitigated by comprehensive social plan measures.

The question of regulation is very critical to the success of any restructuring programme. We understand fully the concerns of consumers and investors alike that a coherent, easily understood and cleanly managed regulatory framework is a necessary requirement to ensure that the benefits of competitive environments are forthcoming, and to ensure a stable investment environment.

The Competition Commission has developed a draft policy framework on the matter, and this is included in this policy framework I have just outlined. Let me just add, too, that the Departments of Transport, of Trade and Industry, of Finance and of Public Enterprises, as well as Portnet, are currently in the process of drawing up a ports policy and regulatory framework, prior to the submission of legislation to Parliament in this regard by September of this year. Work is also well advanced in other areas, such as the energy sector, where changes to the regulatory environment are also needed.

I am also pleased to indicate that the department has presented me with a comprehensive business plan for its restructuring activities that covers the period up to 2004. It includes timeframes and proposals for all the restructuring initiatives that are under way. Some processes will be completed in relative short periods whilst others that involve the more complex entities such as Portnet, the regulated side of Eskom business and the core divisions of Denel, will necessarily take a little longer. I do, however, envisage that the bulk of the process will be completed by the end of this term of the Mbeki presidency.

The reason for the delay is straightforward. It is, first of all, not an indication of any reluctance on Government’s part to proceed with the restructuring. Indeed, it is the very opposite and has everything to do with sound economic principles of making sure that wherever possible, the asset one offers for private participation, public offerings, concessioning or even outright sale is an asset with inherent value that will realise the greatest benefit to the shareholder.

We are not holding back, for example, on the disposal of noncore units within state-owned enterprises. In fact, we have changed the procedures to the extent that boards are empowered to make these decisions within the overall Government framework much quicker. For example, in Denel, besides the noncore units already disposed of, we are currently in the process of disposing of Ambidex, our share in Massey Ferguson, Prohatch, Fibertech and Corboxy Methy Cellulose. Within Transnet, for example, the following noncore assets are being restructured: Production House, Chemical Services, Transmed, Protekon, Apron Services and Airchefs. There is also activity in other noncore areas of state-owned enterprises.

The question of empowerment and restructuring is critical. Again, we have learnt valuable lessons during the past few years. Firstly, we believe that SOE ownership should be expanded through the National Empowerment Fund, using broad-based unit trust type structures that avoid the existing empowerment-related financial engineering. Secondly, operational empowerment can be promoted through outsourcing, partnerships, procurement and easier access to financing. Thirdly, employee share-ownership plans should be piloted to improve enterprise self-management and community involvement, and to raise investment and take advantage of social capital in South Africa.

I will now turn, by way of example, to Spoornet in order to indicate to members the extent to which we have moved with regard to this entity, often described as the problem child of the Transnet family. Spoornet faced increasing competition in its general freight business as a result of the deregulation of road hauliers. This resulted in general freight business having a large negative cash flow. In the past this has been mitigated by strong cash generation by Coallink and, to a lesser degree, by Orex. In addition, the subsidisation of general freight business through the profits generated by Coallink and Orex has resulted in a lack of investment in the two entities, thus diminishing their value and ability to continue generating profits.

Hon members will recall that during the last half of the past year, both management and labour offered proposals for Government consideration. Elements of both sets of proposals were consistent with general Government policies, whereas others were deemed inappropriate, particularly in relation to the extent of job losses and the potential economic impact of a major closure of nonprofitable lines. Therefore our approach was designed to secure the most effective response to a very difficult problem. Thus, it was agreed to augment Spoornet’s management with international expertise, to assist in the development and transforming of management structures and capacity, and to appoint a transaction adviser.

The restructuring plan commences with the corporatisation of the six business units that comprise Spoornet. Thereafter an industry framework will be developed to regulate the restructured entities and the commercial relationships between them. The Blue Train, mainline passenger service, Coallink and Orex will be concessioned for specific periods negotiated with prospective concessionaires. The general freight business will introduce a strategic equity partner, and Linkrail will be concessioned in a number of packages for varying periods. This process will take approximately three months.

The restructuring plan is also based on an analysis of the South African transport policy, together with an analysis of the current financial position of Spoornet. It also accommodates the existing structure of Spoornet’s business in a manner that enables restructuring to proceed more swiftly and with less disruption to the business.

Sound business principles and practices are as important, if not more so, in the public sector than they are in the private sector. Experience over the past few years has shown that it is necessary to revise and establish, more clearly, the relationship between the shareholder and state-owned enterprises, more particularly the management and boards of directors of the state-owned enterprises. The state plays a central role in the South African economy, which depends, as we have seen, to a large extent on the drive, efficiency and social responsibility of state-owned enterprises. While the boards of state-owned enterprises require sufficient freedom to manage the business in a vigorous and enterprising manner, they must exercise that freedom within a framework of effective accountability. For the most part, these efforts take cognisance of legislation such as the Companies Act, the Public Finance Management Act or entity-specific laws.

The Department of Public Enterprises subscribes to the Protocol on Corporate Governance in the Public Service that was adopted in 1997, and steps are being taken at the moment to ensure that boards of state-owned enterprises also formally endorse this protocol. The ultimate objective is to raise the standard of the public services up to and beyond the best available at present and to ensure that those services are equally available to all citizens.

Furthermore, the department believes that, as we are in a transitional period that is marked by various stages of restructuring, there have been instances where the boards and shareholders have not necessarily been on the same wavelength. Thus, over the next two months, each state-owned enterprise will engage with us, so that we can establish a shareholder compact between the board and myself as the Minister. This compact will represent an agreement between Government, as the major or sole shareholder, and the board of each state-owned enterprise as regards performance, expectations and parameters.

Furthermore, it is my intention to develop and sign performance contracts with the chairpersons of boards of directors to ensure compliance with our requirements and to effect more clearly the responsibilities that are outlined in the Public Finance Management Act. I am confident that these combined measures will go a long way in assisting the transformation of state-owned enterprises into truly world-competitive entities in the corporate environment.

I want to reflect briefly on a matter that is of public importance. I refer to the public posting on the Internet of a letter purportedly in the format of a submission to the Public Accounts Committee of Parliament by the leader of the UDM. I have always been, remain and will continue to be an exponent of transparent and clean government. However, I am appalled to see that some of the allegations made in the document are supported in part by documents that emanate from within my own department.

On investigation, I am satisfied that the security of the documents in my department is not an issue, and that the systems are quite secure. It appears that this unauthorised distribution of these particular documents arose from a situation in which one person had access to these specific documents. I have accordingly instructed that the state security agencies be called in to investigate any charges, criminal or otherwise, in this particular instance. This situation is intolerable and extends far beyond the issue of simply whistle-blowing, which in itself is a subject of pending legislation and will follow strict requirements.

In conclusion …

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Minister, your speaking time has expired.

The MINISTER: I will deduct from the speaking time allocated to me at the end of the debate.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Minister, you may speak at the end of the debate during your turn, but right now your speaking time has expired.

The MINISTER: I am saying, Chairperson, that you can deduct some time off the time I am allocated to reply to the debate.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Continue, Minister. [Applause.]

The MINISTER: In conclusion, let me express my pride in the work that is being done by many state-owned enterprises …

The DEPUTY CHAIRPERSON OF COMMITTEES: Order!

Mr M J ELLIS: Mr Chairperson, on a point of order: Quite clearly there are Rules in this House. We were told that the Minister had 30 minutes upfront. Nobody has come to any opposition party and said: ``Can there be a change? Can the Minister take time from the end of the debate?’’ I think this is absolutely unparliamentary. [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, the Whips have agreed to give the Minister some time from the remaining time allocated to him. He is using his own time.

Mr M J ELLIS: Mr Chairperson, on a point of order: Which Whips have agreed to do that? If we had been approached, I am sure we would have agreed to that, but we have not been approached.

Mr J H MOMBERG: Mr Chairperson, I rise to make an explanation. The Minister has got certain allocated time and is using some of that time now, instead of at the end of the debate. I think the opposition is now splitting hairs on this issue.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, the Whips must come to some agreement on this type of situation when it arises. We will now allow the Minister to complete his speech, but he will be using the time allocated to him for this debate.

The MINISTER: In conclusion, let me express my pride in the work that is being done by many state-owned enterprises in extending their expertise, skills and services throughout the African continent. Eskom, Transnet, Telkom and Denel are actively involved in promoting, generating and building the African renaissance. I have seen the results of their work first-hand in many instances, and it is pleasing to witness the empowerment and the improvement in the conditions of millions of our brothers and sisters in Africa through the partnerships these state-owned enterprises are developing throughout our continent. There is much work to be done, but it is a job truly well done.

Joseph Stiglitz, the former chief economist of the World Bank, recently suggested that governments need to devote their scarce resources to areas that the private sector does not and is not likely to enter. Government needs to focus its attention on those areas that represent its distinct advantages, which distinguish it from private organisations. But, that having been said, there are critical issues about both the sequencing and the scope of privatisation. Even if privatisation increases productive efficiency, there may be problems in ensuring that broader public objectives not well reflected in market prices are attained, and regulation may be an imperfect substitute.

To accomplish such a complex task requires leadership built on partnership and teamwork. The reorganisation of our Government’s approach to restructuring and, more specifically, the establishment of the new Department of Public Enterprises, have provided the basic wherewithal to build the team and to establish the necessary leadership to take the programme forward with the speed of an express train without fear of derailment.

I therefore wish to extend my appreciation and thanks to the director- general, Sivi Gounden, and the team he is building in the Department of Public Enterprises. The energy involved in moulding a team of strong-minded professionals is enormous, but immensely satisfying. The results are already obvious. But behind that core group of professionals are support and administrative staff and personnel, including my own security and transport staff around the country, who give us the peace of mind that we need to fulfil our tasks.

The boards, management and personnel of state-owned enterprises deserve a special word of appreciation for a generally magnificent job that is improving on a daily basis. The state-owned enterprises are after all the engine room of much of our economic endeavour. Their strength is our strength. I also want to express my appreciation to the Portfolio Committee on Public Enterprises, especially its chairperson, Sakhiwo Belot, for the marvellous work they are doing, so that we are able to advance this restructuring agenda. To each and everyone, I say thank you. With the music lovers among members in this House in mind, may I invoke Youssou N’dour’s recent song for youth. I cannot sing, so I will recite it:

My hope is in you, I wanna watch your spirit touch the sky, So much more we can do, My hope is in you.

[Applause.]

Mr S T BELOT: Mr Chairperson, Deputy President, Comrade Minister, hon members, the portfolio committee notes with appreciation that our ANC-led Government is building on the foundations laid for restructuring over the past five years. The public enterprise mandate to build a better life for all our people through the restructuring of state assets was reaffirmed last year with the appointment of the hon the Minister and the upgrading of the Office for Public Enterprises to the Department of Public Enterprises. We are aware that Government has embarked on an accelerated programme of restructuring, and we appreciate that.

The question that we ask in the portfolio committee is how the restructuring process will benefit our economy and contribute to the upliftment of the lives of all South Africans, particularly the vast majority of historically disadvantaged people. As we try to answer these questions, we believe that the process of restructuring should be guided by a very clear vision that seeks to unlock embedded values in entities that were created largely to serve the needs of a privileged, white minority. Our task is to ensure that state-owned enterprises are restructured to deliver improved services for all our people.

Most of these entities, for decades, consumed billions of rands of our national resources and were characterised by antiquated bureaucratic tendencies, outdated work regimes and self-consuming debt burdens. Our challenge therefore has been to transform and restructure these entities into centres of excellence that contribute to the development goals and priorities of Government. In the portfolio committee we watch this with keen interest. Our ANC-led Government is, therefore, committed to accelerating this process of restructuring. Given the historic development path of state- owned enterprises and the burden that they have placed on the limited resources of the fiscus, we are aware that a critical requirement for success is to unlock value in the state-owned enterprises by mobilising private sector capital and expertise. This will create new opportunities for growth, development and empowerment. In addition, it will open up the possibility of the recapitalisation of state-owned enterprises that will position these entities as globally competitive centres of excellence that provide improved, efficient and effective services to all our people.

Furthermore, I am confident that the high levels of expertise that reside in some sectors of the private sector can and need to be put to the service of our state-owned enterprises in order to prepare them for competition. We must also be aware that as we pursue our objective of mobilising private- sector capital and expertise at the domestic level, we are also sending out a positive signal to potential international investors that there are indeed viable and attractive opportunities in South Africa for foreign direct investment. Our experience over the past few years in attracting approximately R8 billion in investment through the restructuring process indicates the importance of the objective of restructuring. The portfolio committee, therefore, is aware that the process of unlocking value in state-owned enterprises through restructuring will indeed increase the opportunities for attracting foreign direct investment.

Also, by unlocking value, the restructuring process will free resources that can be directed towards reducing the public-sector borrowing requirements and other development priorities of Government. This will provide billions of rands that will be redirected towards boosting our economic growth and development potential.

I want to state unequivocally that the apartheid legacy of state-owned enterprises as a comfort zone and preserve of mainly white labour is being vigorously challenged. I must congratulate the Minister and the respective state-owned enterprises on the progress already made in this regard. We must continue to demonstrate that we are serious about democratising all sectors of our economy.

I want to make another important point regarding wider participation in the national economy. We are aware that state-owned enterprises have enormous budgets worth billions of rands for the procurement of goods and services. I believe that some progress has already been made in order to champion dynamic and meaningful procurement reform in the state-owned enterprises. But I want to urge the hon the Minister to give this area of black empowerment particular priority because, I believe, this can be a powerful instrument for uplifting our people.

The portfolio committee believes that this is a critical opportunity that cannot and must not be lost. There are many historically disadvantaged women and men entrepreneurs in their own right who deserve such an opportunity. Our Government has the mandate to champion their cause and will not let them down, and the portfolio committee will make sure that this happens.

Allow me at this point to state that many of our state-owned enterprises are already global players of stature and leaders in their respective fields. We may very well ask what the rationale is for restructuring an entity that already works well. I believe I have adequately emphasised the importance of unlocking embedded value. But I want to emphasise another important objective of restructuring.

Hon members are well aware that our state-owned enterprises are competing in a global market and have to come to terms with the dynamic implications of this scenario. The fact is that the committee believes that if we want to retain the lead in the area of our core competencies, or develop and compete in service delivery in other areas, we have to enhance the efficiency and effectiveness of state-owned enterprises.

This means consistently getting better at what we do best. In the fast global arena of competition, there is no space for inefficiency and no value in ineffectiveness. As we perform our work in the portfolio committee, our objective with regard to restructuring comes in to enhance this efficiency and effectiveness of state enterprises, and to improve service delivery and maintain our competitive edge.

It is for this reason that I am pleased to inform the members of this esteemed House that great progress has been made in completing the new protocol on corporate governance. For this, the hon the Minister and his team must be congratulated. I also want to congratulate the hon the Minister on concluding the shareholding compacts that will ensure that state-owned enterprises deliver on the expectations of the shareholder. We look forward to seeing the state-owned enterprises delivering on their performance agreements and we are positive that this will result in improved service delivery to our people.

Another strategy for ensuring that our state-owned enterprises are prepared for competition is through accessing globally competitive technology. By pursuing strategic partnerships, either through equity divestiture or through management partners, we have created a window of opportunity for state-owned enterprises to access high technology and expertise.

We are confident that whatever model of restructuring is pursued, we will be able to create opportunities for sharpening our leading technological edge. As the Portfolio Committee on Public Enterprises, we are aware that some of the areas in which the department is currently pursuing the programme of restructuring have been natural monopolies. The committee is appreciative of their efforts at creating effective market structures in those sectors currently dominated by state-owned enterprises.

We want to assure hon members that we will have an adequate, effective and enabling regulatory environment during and after restructuring, so that issues such as service delivery, safety and affordability are not compromised. We note with appreciation that the ANC’s social partners in labour are important partners and role-players in the restructuring process. They have a tremendous and important role to play in advancing the interests of the women and men that keep the engine rooms of our economy running at full steam.

It is because of this recognition of their role that our Government entered into the national framework agreement that governs the relationship of the two parties in the restructuring process. With their support and co- operation, the restructuring process has come far. I want to refer to the example of Spoornet. Last year Spoornet’s management announced the possibility of the retrenchment of large numbers of people. Labour took up the issue aggressively and submitted an alternative proposal. We support this Vote. [Time expired.] [Applause.]

Ms R TALJAARD: Chairperson and hon members, I can assure the hon the Minister for Public Enterprises that the views that I express at this podium today from my own pen and that I have copyright on them. [Interjections.]

In the summer 1998 edition of the International Finance Corporation publication Impact, S Brian Samuel draws our attention to the critical need to have results-driven privatisation processes. He says, and I quote:

In any country privatisation involves difficult choices, and as always, in Africa there are special circumstances.

Imagine you are a new African leader, brave enough to make the break with a past that is only a generation old. Issues of sovereignty and national self-determination figure strongly in your country’s privatisation debate, and there are many forces opposed to any sort of reform. On the other hand, you’ve seen privatisation work in Latin America and Europe - and now in countries like Gabon, Mozambique and Uganda you’re starting to see the benefits it can bring to Africa too. You need these benefits, right now, because the situation is urgent. But you’re afraid of doing it wrong - and selling out to foreign capital. And you know that the people will not be slow to cast blame your way if it goes wrong.

The best advice? Stay focused on results. What Africa’s people need is more stories like those of Societé d’Energie et d’Eau in Gabon, MTN Uganda and Kenya Airways.

There could hardly be a clearer and more unequivocal statement of where the emphasis should lie: in the results. The results that we do not need are a Government that tries to cling to a golden share and tries to dress itself up as a turn around king in perpetuity. What we do not need is phantom competition in network industries, with Government trying to compete with Government for efficiency gains. [Interjections.] What we do not need is an eking out of revenue through strategic equity and attempts at maximising taxation and dividend payments in industries that are not even breaking even or are making losses.

South Africa, thus, has to not only build the credibility of our own privatisation project, but also the credibility of the privatisation project in our region, given that sub-Saharan Africa is lagging behind in the privatisation stakes globally. Despite this challenge, the examples of burgeoning privatisation in Africa inspire and abound, and we should draw on these inspirations. They include water distribution in Angola, agro- industries, transport, mining, beverages and tourism in Cameroon; more than 100 private firms established in the Congo; palm oil industries in Côté d’Ivoire; electricity and water in Gabon; breweries, mines, resorts and land in Mozambique; miscellaneous parastatals in government services in Kenya; and the list goes on.

Thus far South Africa has lagged behind some of our renaissance- incorporated counterparts. What the people of South Africa do not need are more Sun Airs, Aventuras, Alexkors and Safcols - public offerings that contravene the two cardinal rules of the privatisation process, viz transparency and speed. While in itself not a privatisation, the same can be said of the current controversy surrounding the Cell C licence bid.

Thus far we have witnessed the following key elements as misconceived, misapplied or misdirected hallmarks of our privatisation efforts. Firstly, a severe lack of transparency; secondly, interminable delays, severely impacting on recapitalisation costs; thirdly, political considerations and strategic objectives continuously trumping economic considerations by imposing onerous conditionalities; and, fourthly, a piecemeal divesture of equity in parastatals, leaving Government squarely in control, with the lingering suspicion that it will do everything in its power to retain that last golden share up to the bitter end, as indeed the hon the Minister’s evidence today testified. [Interjections.] As one newspaper aptly remarked:

Partial owners have neither the incentive nor the ability to run companies as real businesses as long as politicians are continuously looking over their shoulders.

The DP is convinced that many a prospective strategic equity partner or investor will give distinct, due diligence to the just announced - we are hoping to get the details of this in the course of September in the policy document - protocol on corporate governance and the strategic compact.

For a privatisation programme to gain momentum early sales have to succeed. These early sales will have to filter into the credibility of the overall programme as one rolls it out into network industries. This suggests privatising the easy candidates first. South Africa’s experience with particularly these four easy-candidate parastatals, as opposed to the big- four strategic industries, gives us clear markers of what to avoid en route to the privatisation of the core enterprises, which formed the focus of the Minister’s speech today.

Thus far the incremental approach to privatisation has moved us from option to option, shifting the goal posts continuously and exacerbating the uncertainty in the investment environment. Alexkor and Aventura, for example, moved from being clearly earmarked for a 100% divesture to mere management contracts, as the underlying political agenda continued to shape developments at these two embattled entities over the past two years.

The hon the Minister has rightly focused on the big four, given their strategic value and sizable role in his portfolio relative to the other parastatals which I have discussed. However, South Africa can ill-afford a repeat performance of these high-profile failures as a template, in broader policy terms, as we roll out the privatisation process in crucial network industries such as Telkom, Eskom and Transnet. We cannot afford any more delays, red tape, shifting of the goal posts, opaque strategies, onerous conditionalities or the nightmare golden share.

As we forge our way forward, we will continue to face the challenges of maximising certainty, predictability and access to profits if we are serious about attracting foreign direct investment, and not paying it mere lip service. Institutional investors have little patience when it comes to onerous conditionalities tailored to a political aim, however laudable that aim may be. The lack of international interest in the world’s biggest forestry privatisation effort with Safcol, despite the imperatives of rural development, proved that beyond reasonable doubt. The onerous conditionalities of continued government control will not be welcomed by the private sector.

In a recent book, The Lexus and the Olive Tree, Thomas L Friedman writes of the electronic herd of faceless traders and the bloodhounds of that herd, the ratings agencies, that dictate the flow of foreign capital daily by the touch of a button on their computer screens. The electronic herd turns the whole world into a parliamentary system in which every government lives under the fear of a no-confidence vote from the herd of investors every single day of the year, however the Moody’s and Standard and Poor’s ratings can be welcomed.

I can assure the Minister that that electronic herd will watch our progress with privatisation every step of the way, inch by inch, industry by industry, sector by sector, and if we do not come up to scratch, the foreign direct investment community and their no-confidence vote will be deafening and will resonate for generations to come whether we like it or not. We cannot expect the patience or indulgence of the electronic herd and expect them to watch politics trump economic considerations in our privatisation efforts as we continue to pursue inherently contradictory aims. The global economic landscape is filled with failed attempts at reforming and rehabilitating public enterprises. Few governments have been able to introduce and keep in place the large numbers of complex and demanding measures needed for effective and enduring public enterprise reforms and turnarounds.

Privatisation is always political in the sense that governments have aims that are noneconomic. Each stage of privatisation has involved and will clearly involve balancing economic and political goals. More generally, the issues of how many shares are sold and to whom are often politically determined. The quality of the company’s future corporate governance is also affected by the dual structure, though even when this appears to have been sacrificed, market institutions sometimes find unexpected ways of working.

Yesterday, the Business Day headline read ``Radebe and the unknown factor’’. Until the Minister releases his overall policy document, the most significant unknown factor will continue to be the rules of the game beyond the golden share. In addition to the sector-specific details, the rules of the game must unambiguously spell out what policy decisions will guide the choice of the initial public offerings, direct sales, concessions, equity carve-ups and further equity partnerships and exactly what will be sold - licences, shares, infrastructural systems or the right to manage these systems.

Only when this degree of explicit detail is forthcoming will we be able to meet the rising expectations of our country’s privatisation performance. We will also face the challenge of forging a more competitive environment for these network industries with sectoral regulators functioning side by side with our new competition authorities to maximise certainty and predictability in the post-restructuring business environment which will increasingly open them to new, upmarket entrants in network industries, in our rail, telecommunications and energy sectors. Whatever was said about the national monopoly status of these network industries, even in that of water, one can use yardstick competition as a measure.

For privatisation to produce substantial and enduring results, it has to be done right. Government’s role is critical. The Minister’s department increasingly, in conjunction with Finance and Trade and Industry and other related departments such as Minerals and Energy, Communications and Transport, will have to devise sectoral policies that introduce and maintain competition; establish and maintain a sound regulatory framework for remaining incumbent monopolies, both public and private; maintain transparency in transactions and convince investors that their investments are secure; negotiate, monitor and enforce contracts with private suppliers of management and financing; ensure that resources from privatisation sales are put to productive use; and manage the inevitable political and social tensions that will arise. In this regard, I welcome the Minister’s clear plans for a social policy.

In the course of all our efforts, we must continue to emphasise the symbiotic link between privatisation and capital market development and the fact that faster rates of privatisation are associated with a broadening and a deepening of the supply of domestic and international capital at a time when our economic expansions will require a very strong economic exchange position. We must do more than stick to the art of the doable. We must capture the imagination of institutional investors with the skill of the politically pragmatic as we forge ahead. Giving investors certainty, minimal conditionalities and transparency will hold the key as we move forward.

Privatisation is not a purely technical task, but also a highly political process. Nowhere is this a more self-evident truth than in our own country. It cannot succeed without the active support from most stakeholders. In this regard it is incumbent on all political parties to increase public awareness of the opportunity costs and negative externalities of poor public enterprise performance, and the benefits of reform that will accrue to all South Africa’s consumers of the services offered by Eskom, Transnet and Telkom, in particular as their industries are open to competition in terms of both our own efforts and also our compliance with WTO liberalisation protocols and obligations in this regard.

In conclusion, I look forward to increased transparency flowing from what the Minister announced about the National Empowerment Fund and increasing transparency about the shares that will be warehoused within the National Empowerment Fund, and also the venture capital that will flow from the fund. [Applause.]

Mr M D MSOMI: Mr Chairperson, hon Deputy President, Msholozi, and colleagues, force is not power - power comes from within. A nation with no vision perishes. We are a nation endowed with a powerful political vision, evidenced by political stability provided by the democratically elected Government since its historic inauguration in 1994.

Now we are facing the greatest challenge after our political emancipation, namely to develop a sustainable state-owned enterprises vision, underpinned by a sound economic policy framework. It is a tribute to the wisdom, lateral thinking and flexibility of the then Government of National Unity, which comprised the ANC and the IFP, that they not only vigorously pursued the implementation of the privatisation policies, but also were both pragmatic and far-sighted in the way they developed the kind of economic policies which created an investor-friendly environment and national determination and drive.

Such a notable, praiseworthy achievement has not occurred without serious difficulties, endless challenges and a serious clash of policies within the Government itself. I submit that the fine quality of this Government is not without a substantial contribution made by the IFP, a partner in Government under the leadership of His Excellency Prince M G Buthelezi, whose party policy directives have gravitated the ANC closer to the IFP on this policy issue. [Interjections.] It is a truism, obviously, that seldom do those who have had the baptism of fire reap the accolades and rewards which they so richly deserve. Instead, calumny, disdain and condemnation are heaped upon their heads, often by the very people who benefit from their policies and actions in the long run.

The IFP went to extraordinary and compelling lengths to inform, consult and mobilise their constituencies behind the strategic intent of the democratically elected Government. I have no doubt that the ruling party appreciated the value of this contribution on the part of the IFP. [Interjections.] Now that the groundwork has been firmly laid, the time has come to develop a truly South African privatisation model, adapted to our unique circumstances and created by the vision of our two parties. I commend the hon the Minister and our colleagues and comrades in the Government benches for their unwavering commitment to what is right, effective and in the best interests of all South Africans.

This morning I intend to deal with three issues of cardinal importance to the restructuring and privatisation process, involving a clear case for certain decisions taken in the past four years and the cardinal importance of black economic empowerment and its application in contemporary South Africa, and a brief, but exciting, glimpse into where the process could take South Africa as we forge ahead into the new millennium. I would like to congratulate the hon the Minister for Public Enterprises, Makhulukhulu, for a carefully selected and excellent team under the leadership of the new director-general, Mr Sivi Gounden, and the manner in which the new director-general has gone about maintaining a balance between the old and the new team in the Department of Public Enterprises.

The Ministry for Public Enterprises is now a fully constituted Ministry and department with a highly qualified, technocratic cadre of experts and specialists, many of whom are on five-year, scrupulous performance contracts worked out by a highly reputable international firm, HSBC. The new Ministry and its department is characterised by professionalism and competency which is a direct result of a mutually beneficial partnership between this department and the HSBC, and we wish them every success in meeting the future challenges.

We as South Africans of different persuasions and coming from different political parties must find a common strategic vision of what our national economic priorities should be and where our state-owned enterprises will be in the next 20 years. Our national Vote which we are debating here today, and which is supported by the IFP, should be the vehicle through which we attain our vision and must be the tool that will shape our state-owned enterprises to bring them in line with the economies of our major trading partners.

Privatisation, as it was known then, originated in the United Kingdom. The government shifted from state-subsidised, inefficient, uncompetitive, overstaffed and unproductive companies plagued by industrial action to private-sector-financed, streamlined, efficient, globally competitive and productive companies which set a trend and an example to the rest of the world. Both Conservative and Labour governments in the UK have pursued the policy of privatisation as an effective antidote to controlled and centralised command economies.

The Ministry for Public Enterprises had inherited an economic nightmare from its apartheid predecessors in the form of state-owned enterprises which were on the brink of bankruptcy and subsequent economic ruin. Whilst critical action was required to turn the tide, such actions required the approbation, perhaps even only by tacit consent, of the governed. A large and important facet of that constituency comprised organised labour and many within the ruling party who had serious doubts about the merits of a free-market, private economic system. The then Government of National Unity was determined that, if South Africa was to survive and become a globally competitive player, the role of the state would have to be dramatically diminished, whilst ensuring that in the process all constituencies and key role-players were consulted.

If we examine the priorities of the Ministry for Public Enterprises now, they include facilitating economic growth, funding the RDP, creating wider ownership in the South African economy, mobilising private sector capital and reducing state debts, whilst enhancing competitiveness, accessing globally competitive technology, creating effective market structures and financing growth and the requirements for competitiveness.

An essential core component of this thus rightfully becomes black economic empowerment - a critical feature of the ongoing economic transformation process and one destined to characterise the period of office of President Mbeki. A vast residue of contemporary expertise and skills resorts within the Government and state-owned enterprises, ranging from e-commerce to engineering and scientific abilities. We need to gear our state-owned enterprises towards a regulatory framework for e-commerce transactions by producing highly skilled people to drive the process of technological innovation and application.

We are committed to pursuing black empowerment strategies - and I could not agree more with my colleague and friend Mr Belot - and must do so with resolution, determination and fortitude. We must also ensure that we marry the black potential with the expertise that whites have at present and transfer the technical know-how and the business acumen to create a pool of the economically active young generation.

The Minister and his team are to be complimented on providing the portfolio committee with a detailed sense of direction and on involving themselves on a regular basis to give detailed briefings and updates on work in progress in terms of the restructuring and privatisation programme. A special tribute is in order for my successor, the hon Sakhiwo Belot, the new committee chairman, for his gracious and inspirational leadership of the portfolio committee. It is an absolute pleasure to work with him. [Applause.]

The Ministry is clearly engaged in a long-term process to maximise our economic productivity and competitiveness, whilst honouring social objectives and obligations, improving corporate governance and establishing shareholder compacts to enhance performance. There can be no substitute for promoting a competitive, free-market, private-enterprise, entrepreneurial environment.

On the macro-economic plan, the Government has chosen wisely to consider optimising shareholder value by restructuring state-owned enterprises in the knowledge that in the longer term a return in the form of taxes and/or dividends can be realised over a more protracted period.

On the micro-economic side a variety of options are available under the restructuring process, including joint ventures, employee share ownership schemes, corporatisation and upright privatisation, by hiving off noncore business entities to kickstart successful black empowerment entities, utilising the National Empowerment Fund to maximise black equity participation in all spheres of state-owned enterprises. It is a sad fact of life in South Africa that most of our people suffer daily deprivation in some form or another. We as the elected representatives of our people must take personal interest in ensuring that our Government does more to alleviate poverty. More direct funding should be allocated to poverty alleviation programmes, and we must ensure that our Government departments spend the allocated funds in an accountable and demonstrable manner in fighting ignorance and a lack of skills and business opportunities. State-owned enterprises should become creators of wealth for all our people. They should become truly global players able to compete at all levels. Finally, they must become guarantors and the security of the youth’s future prosperity. I regret that my time is over. [Time expired.] [Applause.]

Ms N D NGCENGWANE: Chairperson, hon Deputy President, hon members, today I feel proud and honoured to be one of the members of the Portfolio Committee on Public Enterprises debating the budget allocated to this department.

The aim and objective of the Public Enterprises department is to manage the restructuring of state-owned enterprises to maximise its economic impact on our beloved country. This process will be done transparently, with commitment and collective decision. That is why it is imperative for this Government to implement transformation decisively and systematically. This will be of enormous benefit to all citizens of South Africa. The policy will encompass or include proper financial management, asset management, eradication of corruption, stringent monitoring and evaluation strategies.

Today our main focus is on SA Airways, which is part of Transnet. As an introduction, I believe we should take due notice of the following: When considering the restructuring of Transnet, the immediate concern is the debt of the company, which was R27,185 billion at the end of the 1998-99 financial year. Scrutiny of the Transnet records reveals that a principal component of this debt consists of pension fund debts. These debts were largely incurred through postretirement benefits. Thus, the amount paid out to deceased pensioners is more than double the amount paid to living pensioners. This innocuous system was designed by the previous regime to create and secure wealth for the white minorities.

With regard to problems and challenges, the Portfolio Committee on Public Enterprises, during the SAA briefing, learned that some flaws were discovered during 1998. Those included uncompetitive pricing, a flawed route network, limited global alliances, low crew productivity and flawed revenue management. Above all, SAA reported a R30 million loss at the end of the 1997-98 financial year. The SAA management, through hard work and dedication, implemented the strategy for winning initiatives in the second half of 1998. This resulted in a significant improvement in its financial performance for that half of the year. Passenger revenue increased by R686 million, which was about 24% over the first six months of the year. Cargo revenue increased by 35% from R899,8 million in the previous financial year to R1,1781 billion. In a bid to prioritise SAA, Transnet concluded a R1,4 billion deal between SAA and Swissair, with 20% of SAA being sold to Swissair. We must take cognisance of the fact that the good work done by SAA is undone by the great loss in the Transnet performance due to the inherited pension debt.

With regard to black economic powerment and training, it is clear to any traveller on SAA that the company is committed to restructuring at grass- roots level. Increasingly, more cabin crew are sourced from the previously disadvantaged communities. At a higher level, the management of SAA reflects the demographics of the country more and more. Facilities are continuously being upgraded to meet international standards. Should the 2006 Soccer World Cup Tournament be awarded to South Africa, our airports will at least be able to cope with the expected influx of sportslovers from around the globe.

SAA has been able to penetrate the international market. Airline routes have been introduced to Accra in Ghana and Abidjan in the Ivory Coast, bringing the number of destinations in Africa to over 15. As proof of SAA’s commitment to quality, contracts for upgrading are awarded to overseas consortiums where applicable. These efforts not only benefit our own citizens, but contribute towards making the African renaissance more than just a dream. In order to prevent the airline from becoming marginalised in major traffic-producing countries, frequencies on the airline were increased. Only 70 international destinations were served via partners, but with the new alliance, 503 destinations are served.

SAA has made progress in empowering black companies in the country. Herdbouys, a black-owned advertising agency, was appointed to remake SAA’s image. Their brief was to come up with a new identity. Competitors challenged yet another black-owned company, Mafube, that won a five-year contract to publish the in-flight magazine Sawubona. The principal condition of the contract was that the successful bidding company had to demonstrate a black economic empowerment component. At the centre of the legal battle was ABBM, the company that had been publishing the magazine formerly known as The Flying Springbok for 16 years.

To ensure the sustainability of SAA’s growth, vast levels of energy and money are spent on ensuring customer satisfaction. SAA has a very old fleet of aircraft. Some are over 18 years old, but the average world age is eight. The strategy for winning a comprehensive plan for the revitalisation of SAA included the managed upgrade of the SAA fleet. In a move to bring modern aircraft to South Africa, the SAA board announced its decision to obtain 21 Boeing 737 new-generation aircraft.

The new fleet of aircraft could not have come at a better time than now, when flight problems at airports are beginning to loom. For instance, the changing of the times of flights without actually giving reasons for the delay to the customers really causes confusion and frustration for the customers, especially for those who have to catch connecting flights. In some cases, one finds that the public address systems at some airports are not working.

As an indication of SAA’s passion for safety, we need to remind ourselves that it is possibly the safest airline in the world. Even hijackers seem to find SAA’s defences impenetrable. The impact of these service levels on tourism is self-evident. The sustainability of our tourism growth is inherently dependent on the performance of SAA.

When the ANC fought for liberation it won, and liberated all South Africans, black and white. It also liberated sport, education, the economy, etc, bringing South Africa into the fold of the international community. What follows then is that the standards have to be competitive. The policy of ongoing skills training, monitoring and evaluation will ensure the international status and standards of South Africa, thus improving on marketing strategies and viability in the tourism arena.

In conclusion, we all agree that transformation is not an event, but a process. Therefore there are still a lot of loose ends that need to be tightened up and fine-tuned. That, then, is why we have a policy of monitoring and evaluation all the way. I would like to support the budget allocated to the Public Enterprises department to fast-track the process of restructuring the   state-owned enterprises. [Applause.]

Dr W A ODENDAAL: Mnr die Voorsitter, die Nuwe NP steun hierdie begrotingspos met oortuiging en met entoesiasme. Die hooftaak van die departement, te wete die herstrukturering van die Suid-Afrikaanse ekonomie deur die privatisering van staatsbates, is lofwaardig. Veral doelwitte soos die vermindering van staatskuld, die bevordering van ekonomiese groei, die verkleining van die welvaartsgaping tussen swart en wit Suid-Afrikaners, en die bevordering van private inisiatief en ondernemerskap behoort deur alle regdenkende Suid-Afrikaners gesteun te word.

Indien ekonomiese herstrukturering misluk, sal Suid-Afrika soos Zimbabwe moet terugkeer na die platteland om daar ‘n sukkelbestaan te probeer voer. Dan sal ``land-grabbing’’ ook hier posvat om die welvaartsgaping tussen swart en wit te probeer uitwis, en uiteindelik sal bloedvergieting voorkom. Dan sal ons ook almal behalwe onsself vir ons eie slegtigheid blameer. Daar is maar een resep vir sukses: dit is deeglike beplanning, meedoënlose uitvoering van die besigheidsplan, gereelde kontrole en summiere uitroeiing van korrupsie.

Ons het net een kans om te slaag. As die agb Minister verbrou, is daar geen tweede probeerslag nie. Die familiesilwer sal dan reeds uitgemors wees. Ek wens hom sterkte toe met sy taak. Hy moet vasbyt! Wanneer hy uit eie geledere teenkanting kry teen waarmee hy besig is, sal hy vind dat hy meer steun uit ander oorde sal kry as wat hy in eie geledere mag verloor. (Translation of Afrikaans paragraphs follows.)

[Dr W A ODENDAAL: Mr Chairman, the New NP supports this Vote with conviction and enthusiasm. The main task of the department, viz the restructuring of the South African economy by means of privatising state assets, is commendable. Particularly objectives such as the reduction of state debt, the promotion of economic growth, the narrowing of the prosperity gap between black and white South Africans, and the promotion of private initiative and entrepreneurship should be supported by all right- minded South Africans.

If economic restructuring fails South Africa will, like Zimbabwe, have to return to the rural areas to try and eke out a living. Then land-grabbing will also take root here in an effort to eliminate the prosperity gap between black and white, and eventually there will be bloodshed. Then we will also blame everyone except ourselves for our own weakness. There is only one recipe for success: thorough planning, relentless implementation of the business plan, regular control and summary eradication of corruption.

We have only one chance to succeed. If the hon the Minister fails, there is no second chance. The family silver will already have been lost. I wish him every success with his task. He must grit his teeth! When he encounters opposition to what he is doing from his own ranks he will find that he will get more support from other quarters than he may lose in his own ranks.]

It is my duty also to refer to two negative issues concerning this Vote. The execution of economic restructuring in South Africa thus far cannot be called anything but a disaster. The hon the Minister has inherited a can of worms. His predecessor and her senior officials simply made a hash of the job. The evidence before the Joint Standing Committee on Public Accounts all points to mismanagement, maladministration, bad financial planning, a lack of accountability and general incompetence. I wish the hon the Minister good luck in putting these right immediately.

Unfortunately, things kept on going wrong after he took office. One can easily be pardoned for nowadays interpreting the current restructuring of the economy as the destruction thereof. There is still no integrated comprehensive plan for the privatisation of state-owned enterprises. The Minister has just told us now that it will be available in May. Why, then, did he allow this Vote to be discussed now before making such a plan available to members of Parliament? Does the Minister need another year of respite for excuses for future malgovernance? Mr Cyril Ramaphosa, chairing the Commission on Black Economic Empowerment, identifies nonplanning as the main reason for the Government being unable to deliver on its promise of black empowerment.

The Alexkor diamond mining operation is a mess. Both unions operating there blame Mabera, an ANC institution, for its continued bad management. Accusations of nepotism, corruption, the wastage of money and the self- enrichment of a few high-profile ANC loyalists are flying around all over Alexander Bay. [Interjections.] The worst case is that his own department could not furnish the Auditor-General with any set of approved guidelines for the privatisation of state-owned enterprises. In other words, no rules exist! [Interjections.] Thank you, that we now know that it is coming. The New NP will, for the sake of constructive engagement, in future regard the mistakes made up until now as school fees paid for important lessons and let it go at that. There can, however, be no excuses for future malgovernance of state-owned enterprises.

The last point I would like to touch on is the concept of black economic empowerment. We in the New NP support black economic empowerment as an absolutely essential ingredient of any plan to successfully create wealth, with the resulting eradication of poverty in this country. To me black economic empowerment is all about the establishment of a middle class, also amongst black South Africans.

The downstring effect will be the reduction of poverty. The trick to the success recipe is first to elevate the ceiling of wealth to create the necessary vacuum and enable the people to grow from the absence of poverty. The problem is that black economic empowerment has already acquired a bad name, and I quote Business Day:

It is experienced as enrichment of a small ANC clique. It is premised on the acquisition rather than creation of wealth for the lucky inner circle of the ANC. It cannot be established nor sustained without extreme deviation from standard business principles and practice, meaning that blacks cannot compete under the same rules as others.

[Time expired.]

Mr B R MKHIZE: Mr Chairperson, Deputy President, Minister, hon members, it is a great pleasure to present this paper in our budget debate. Let me start by commending the previous Minister for Public Enterprises, Ms Stella Sigcau, and our present Minister, Mr Jeff Radebe, for the successful restructuring and transformation of South Africa’s Denel industrial group.

I must also commend the management team for their strategic restructuring focus towards commercialisation and privatisation based on sound business principles. By choosing the correct strategic equity partners and enjoying the continued support of the South African Government, they could successfully identify the niche focus in the market for Denel.

Over the past four years Denel has proved itself a very successful competitor in the international market in terms of its products. This is mainly due to the downscaling of operations from 18 manufacturing divisions to four, namely aerospace, heavy ordinance, light ordinance and commercial information technology business. The downscaling enabled Denel to improve market access and penetration, advance black empowerment, implement affirmative action, address employment equity, deliver quality, consistent and sustained services, and get involved in development initiatives.

I want to state that Denel’s innovative systems capability has been rated number one - let me repeat that, number one - internationally. Denel is now a world-class player in defence technology and systems. I think we must applaud them for that achievement. [Applause.]

I am also proud to say that Denel’s workforce consists of 50 blacks, of which 20% are women, and most of them are highly qualified. Indeed, they are not affirmative action appointees but qualified to be in those positions. [Applause.] What did Mr Odendaal do? Denel has been in existence for a long time, during his time and that of the DP. He never did anything to put blacks in his businesses. It was private, it was secret and nobody knew what was going on in those companies. [Applause.]

On the finance side, I want to add that local commercial sales showed growth of 20% in the 1997-98 financial year. In addition, export sales grew by 29% in the same financial year. This amount, R3,2 billion to R3,5 billion, is quite a significant amount if we take the turnover of this financial year into consideration.

I will now turn to two divisions in Denel, namely Ariel Technologies and Denel Aviation. After major restructuring in this division, Ariel Technologies has returned to profitability after just six years, but we did not know what was going on during the time of the previous government. [Interjections.] Denel Aviations’ focus shifted from a product focus to a strategic focus and discussions with potential partners, namely Aerospatiale of France, Dasa of Germany and British Aerospace, were very positive.

We must remember that defence is about technology, and not just guns and war, ie what the DP and NP were doing - just fighting everyone. [Laughter.] Now it is a fact that defence is an economic generator and a source of technological wealth of a nation. The Internet, for example, originated as a communication tool from the defence industry of the United Nations. We in South Africa want our people to live in peace, not war. We salute Denel for employing approximately R100 million in the upgrading of its technological base to improve competitiveness and products to customers.

Seven of Denel’s divisions qualified for the 1999 Technology Top 100 competition. Three of these, namely Swartklip, Infoplan and Naschem won prizes for chemicals and pharmaceuticals, information technology, materials and manufacturing, respectively. Denel’s commitment towards the building of people’s power gave rise to investments of approximately R79 million since 1992 in upliftment programmes. These programmes focused on two essential areas: education and training, and engineering and technological skills, which include bursary schemes and human resource development, community development and environmental awareness. Did that happen with the DP and NP? Nothing! [Laughter.]

The Denel Swartklip division has trained about 200 guards since 1995. The courses were free, gratis, mahala. [Laughter.] Denel’s technological mobile eye-care clinic benefited more than 5 000 people. A school costing R2,1 million was built in Qaukeni, Lusikisiki, for Grade 1 to Grade 10 pupils, and Vector, a division of Denel, supplied the steel frames to build that school. About R800 000 was contributed for the building of 500 houses at Phola Park, Johannesburg. Did they ever build houses with their public enterprises? Nothing!

In conclusion, I want to congratulate Denel on the success already achieved, and wish them the best for future endeavours to achieve the African renaissance in their industry in a coherent, systematic and transparent manner. I support the vote.

Labaya mabahlale lapho behlezi khona. Mabalale. Babambezela izwe lethu ukuthi liqhubeke. [Those people must stay where they are. They must go to sleep. They are obstructing our country’s progress.]

Just stay there! Don’t cry for us, Argentina! [Laughter.]

Mr C T FROLICK: Mr Chairperson and hon members of the House, the UDM wishes to congratulate the department on meeting all the deadlines given to it by the Government. However, the crucial phase of implementation still lies ahead, and we sincerely hope that the department, under the guidance of a new director-general, will engage this phase with the same dedication and vigour.

While it is sensible for the department to focus on the big four state facilities, namely Eskom, Telkom, Denel and Transnet, it should be cautious not to neglect the other parastatals where quite a number of outstanding issues need to be addressed. The restructuring of parastatals has the potential to create a great deal of revenue for the state. However, the substantial debt of parastatals such as Transnet could very well dilute these benefits.

The aspirations of black economic empowerment must be taken into account throughout this process. At the same time, the fears of labour can be offset if workers are empowered to start new businesses by acquiring a stake in the restructured public enterprises. In this regard the UDM believes that the privatisation and restructuring programme must be beneficial to all the citizens of this country. Such a programme will accelerate the creation of infrastructure, while attracting investments, providing jobs and enhancing local ownership. For the restructuring of state-owned enterprises to be effective, an integrated plan for restructuring is required with clearly defined objectives on the expected outcomes, as well as a measuring mechanism to assess the progress made in the pursuit of these goals.

Government sensitivity to the word ``privatisation’’ should not be allowed to cloud the issue. The time has arrived for an integrated plan which not only defines the concepts of restructuring, privatisation, outsourcing and equity partnerships, but which also states clearly what role each of these concepts will play. In this regard the finalisation of the audit of state assets is of fundamental importance. The object of restructuring public enterprises should entail directly involving private sector capital and expertise, attracting foreign direct investment through the involvement of strategic equity partners, reducing state debt in parastatals and creating access and ownership in the economy through black economic empowerment and enterprise development.

The challenge facing the department is to strike a balance between restructuring and potential job losses. The proposed restructuring of Spoornet into six corporate entities has indeed unleashed the potential to prevent massive job losses. The proposed lease of Freight Life by Spoornet is an excellent example of how restructuring could well assist in the retention of jobs. Black economic empowerment should focus on providing an opportunity for workers to acquire a stake in these companies. This is the ultimate way of creating a lasting partnership to the benefit of all involved.

The R27 billion Transnet debt burden is a source of concern, as the outcome holds potentially wide-ranging economic implications for the Government and other sectors in the transport industry. Bold plans are needed to address this issue, as it could impact on potential successes in the department. The upgrading of the department, and the appointment of a director-general with a full staff complement, represent a significant departure from the legacy of lack of accountability that was the hallmark of the state of affairs in this department in the previous five years.

The UDM welcomes the admission by the director-general of certain shortcomings in the department, but expresses the profound hope that the necessary measures will be put in place to prevent the verbal appointment of consultants, the loss of documentation due to systems collapse and large- scale institutional incapability. The speedy implementation of an operational plan with checks and balances, as well adherence to the principle of the PMFA will ensure proper accountability of taxpayers’ money. [Time expired.]

Mr V G SMITH: Chairperson, Comrade Deputy President, comrades, hon members, the ANC has declared the year 2000 as the year of the dawning of the African century, a century in which the African renaissance dream of addressing poverty and underdevelopment in Africa must be realised, because, as in the words of the President on 4 February 2000, South Africa has never before been in a better position to achieve this dream. We must, as South Africans, continue to be at the forefront of the struggle for a better South Africa, a better Africa and a better world.

Without becoming defensive or defending the indefensible, the ANC Government in 1994 inherited a country in which the overwhelming majority of South Africans did not enjoy the most basic of services. This situation did not, as some in the DP would want us to believe, start when the ANC assumed power. However, today more than 750 000 houses have been built, electricity has been taken to almost all corners of our country, and over 3 million people have benefited from telephone line connections in both rural and urban areas.

Notwithstanding these achievements, more work still has to be done by all of us. Together we must continue the struggle to create a better life for all our people. It cannot be business as usual. Therefore, this reality has necessitated the ANC-led Government, and correctly so, to carefully address our short-term tactical interventions whilst implementing the longer term political, social and economic objectives. Today we face very serious and urgent challenges, inter alia of job creation, positioning state-owned enterprises so that they become essential components of the infrastructural backbone of the African renaissance, addressing the backlog of service delivery and houses, accelerating the integrated rural and urban renewal programmes and generally opening the economy to greater numbers of South Africans from the unacceptable pre-1994 situation, where approximately 4 million South Africans participated, to a situation where 40 million South Africans must participate meaningfully in the economy of South Africa.

The Minister for Public Enterprises and the department have correctly decided that the immediate focus areas will be the four biggest parastatals, which collectively account for assets worth R144 billion, a turnover of R65 billion and employ approximately 210 000 people. These four parastatals constitute monopolies in their respective industries and consequently the impact on the economy, as a result of any ill-conceived change will have serious repercussions for the country and the region as a whole.

All of these state-owned enterprises, without fail, require major restructuring in order to increase their efficiency and effectiveness and to achieve their own enterprise mission, vision and objectives, as well as that of the shareholder. Therefore the move towards corporatising the enterprises in all likelihood will go a long way towards substantially increasing the shareholder value, rather than Government being forced to sell off these assets at bargain-basement prices.

Restructuring of state-owned enterprises should have as one of its key objectives the turning of these enterprises into profitable businesses, able to reinvest in new technology, as well as upgrading infrastructure and assets critical for improved and reliable service delivery. An added incentive for turning state-owned enterprises into profit centres is that they can then begin contributing towards the national fiscus by way of paying taxes and dividends similar to that of any business.

The bigger state-owned enterprises have the potential of playing a major role in the reconstruction and development of this country and Africa as a whole. Let me remind this House that, historically, these very state-owned enterprises were effectively used to affirm a very small sector of the population, thereby advancing the social and political agenda of the previous order.

This Government can, and must, contribute towards the upgrading and rehabilitation of the economies of the SADC region by imparting, amongst others, managerial skills and technical knowledge. Transnet, Eskom, Denel and Telkom are well- positioned to assist in this regard. We dare not fail in this endeavour, as failure could lead to the possibility of finding ourselves, as the economic powerhouse of Africa, becoming an island of prosperity in a sea of total helplessness. Furthermore, failure to assist in the upgrading of our neighbouring states will increase the pressure on this country to deal with massive migration of people from outside our borders who seek a better life for themselves and their families.

I believe that, as much as the rest of Africa stood with us as we fought to end the system of apartheid, so do we have a moral and political obligation ourselves to contribute to the construction of a better Africa for all humanity. The crucial … [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Donald Lee, we are talking about South Africa. Please, keep it down! Please continue, hon member.

Mr V G SMITH: The crucial issues which we, as South Africans, face at this juncture on the road to total transformation, should not be limited to the sterile debate of private ownership versus public ownership.

The real challenge is creating an enabling environment within the South African economy, coupled with sound regulatory frameworks within which these enterprises should operate. The challenge is ensuring that we move away from a situation of public monopolies. However, we need to guard against the possibility of finding ourselves with unregulated private monopolies that have the potential to hold the transformation of our country to ransom.

We should not be pressurised into falling into the trap of overestimating the benefits of partial or total privatisation whilst underestimating the related costs to our social and political transformation agenda. The challenge is to balance Government intervention aimed at addressing the legacy of apartheid with that of allowing for management experience of the private sector, technological transfer and the extra capital injection to correct the imbalances that confront our people in this country and the continent as a whole.

There is no doubt that there will be those who propagate an accelerated pace for the privatisation of state-owned enterprises without fully considering the consequences for those who still await improvements in their living conditions. Our mission, as stated previously, is to create a better life for all. How we restructure state-owned enterprises is critical in our struggle towards the noble objective of creating a better life for all Africans in general, and all South Africans in particular. To Comrade Deputy President and to Comrade Minister, I say: Aluta continua! [Applause.]

Mr G Q M DOIDGE: Mr Chairperson, on a point of order: Is it in order for a bobbejaan spanner of the DP continuously to shout: ``Zimbabwe, Zimbabwe!’’ when we are in the South African Parliament?

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! That is not a point of order, sir, and I will not allow it. [Laughter.] [Interjections.] Order! Order! Hon Donald Lee, on what point are you rising?

Mr T D LEE: Mr Chairperson, I rise on a point of order. Is it parliamentary for a member to refer to another hon member as a bobbejaan spanner? [Laughter.] [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order!

Mr G Q M DOIDGE: Mr Chairperson, is he admitting to being a bobbejaan spanner?

The DEPUTY CHAIRPERSON OF COMMITTEES: Order, hon member! [Laughter.] Order! Remain at the podium, hon member. It is not parliamentary to call a member or refer to anyone as a bobbejaan spanner, which has different connotations in different languages. Please withdraw the words, sir.

Mr G Q M DOIDGE: A bobbejaan spanner is a useful tool … [Laughter.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Yes, sir, in your language. [Interjections.] Order! In the vernacular, it may be so, sir, but we are speaking in English right now. The term is unparliamentary. Please withdraw it. [Interjections.]

Mr G Q M DOIDGE: A bobbejaan spanner fits all sizes …

The DEPUTY CHAIRPERSON OF COMMITTEES: Are you withdrawing the term? [Interjections.] Order! Withdraw the term unconditionally, sir.

Mr G Q M DOIDGE: Mr Chairperson, I did not call Mr Lee a bobbejaan spanner.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Please withdraw the term. I told you that the reference has different connotations.

Mr G Q M DOIDGE: No, sir, I did not call him a bobbejaan spanner.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Please withdraw the term referring to people here as bobbejaan spanners or using a bobbejaan spanner.

Mr G Q M DOIDGE: Mr Chairperson, I withdraw the words referring to Mr Lee as a bobbejaan spanner. The DEPUTY CHAIRPERSON OF COMMITTEES: Thank you. Please be seated. [Laughter.] [Interjections.] Order! Hon Donald Lee, we do not have time for frivolity in this House. We have state business to conduct and time is of the essence.

Ms C DUDLEY: Mr Chairman, hon Minister and hon members, the ACDP is in favour of Government policy that will institute restructuring and privatisation. It is, however, our opinion that privatisation has not moved and is not moving fast enough. The new privatisation framework will have to address the financial performance of enterprises and corporate governance issues to be successful. Rules for local and foreign investors should alleviate problems such as those we experienced with Sun Air and Aventura.

Ensuring the profitability of corporatised entities is crucial, but this will appear to clash with social needs. According to the Ports sector group chairman, David Jeffrey, lower employment is the inevitable result of privatising, but the longer the Government waits, the greater the problem will become. He told the Maritime Africa 2000 conference that the disadvantages of transferring port ownership to the private sector were largely perceived and were dwarfed by the advantages. More than 90% of the world’s trade passes through ports, and inefficiencies inhibit economic growth. The experience, in the UK, with outright privatisation of ports, shows that capital investments grew by 50% in a decade. Turnover and tonnage of cargo grew by more than 20% each. Labour fell by 40% and profitability grew by 220%. UK ports are among the most efficient in Europe, according to Jeffrey.

The public sector cannot create wealth, but can and must provide the conditions in which wealth can be created by the private sector - this being the private sector’s primary purpose. Many Government departments have gone the route of corporatisation, but a change of structure has, unfortunately, not ensured efficiency and profitability. It is noted that Telkom has done well so far in meeting investment targets, but … [Time expired.]

Dr S E M PHEKO: Mr Chairperson, a liberation which results in a liberated people not controlling their country’s economy is a pseudo-liberation. Wherever there is no economic independence and interdependence, there is a false freedom. The policy of privatising state assets, which is fashionable in this country and elsewhere in Africa, where wealth is moving to the rich and away from the poor is Nongqawuse Number Two. Privatisation is a process of globalisation, promoting free-market capitalism. It will never solve landlessness, unemployment and poverty, or redistribute wealth in this country.

As that great Pan-Africanist Kwame Nkrumah puts it:

The domestic economy must be planned to promote the interests of its own nationals, otherwise a newly independent country may fall victim to the highly dangerous forces of economic imperialism and find that it has merely substituted one kind of colonialism for another.

Through its policy of auctioning state assets to the rich and the foreigners, assets which the long and continuously dispossessed indigenous people of this country cannot buy, this Government is leading to the worst form of colonialism and economic apartheid, which will explode into a revolution by the poor, hungry and jobless workers and peasants, if the process of impoverishing them is not stopped.

The test of progress is not whether we add more to the abundance of those who have much. It is whether we provide enough for those who have little. South Africa is a tale of two countries. While in the World Trade Organisation its classification is one of a developed country, it is one of the most unequal societies, now topping Brazil. It has a dualistic economy comprising six million with a per capita gross national product of US $15 000, while the developing part, comprising the majority of 30 million people, has a per capita gross national product of around US $600. The real beneficiaries of privatisation of state assets are the tightly knit South African corporate structures which were built and flourished on quasi-slave labour for over 300 years.

Economic liberalisation is being offered as a panacea for this country’s ills regardless of its institutional arrangements or historical background, and regardless of the costs involved in the cure. Globalisation, with its neocolonial children, privatisation and deregulation, is a cure for transnational corporations in crisis of overproduction and overaccumulation of capital in their countries. They are in search of new markets. The question is why this Government is responding and subjecting our people to the crisis of capitalism. The reality of this policy is that the Government has made the state a helpless spectator. That ensures increased profit to the rich. It plays no role in the equitable distribution of wealth. The workers, the important role-players in the economy of this country, lose their jobs. There is no global village, nor are we moving in that direction. There is no global factory, nor is it likely ever to exist. Research is still a guarded secret within transnational corporations. Technology remains the property of a few. While 15 million Americans are linked to the Internet, 81% of schools in the Eastern Cape do not have telephones, and 79% of schools in the Northern Province have no electricity. Technology must be used to help in meeting these basic needs of the people and improving their lives, not to provide more luxury and power for the rich.

The PAC will continue to reiterate that this country’s social, economic and political problems will never be solved by moving wealth from the poor to the rich, from the primary producers of this country to the more technologically advantaged Western countries. Unfortunately, this is the vision of Gear. Economic democracy must become a theme in all the country’s economic policy arrangements and implementation. There must be a pluralistic ownership of the economy, its productive resources and facilities.

Economic pluralism involves an ideology that demands that African consumers cannot continue to support industries and producers where Africans are not substantially represented as investors and owners of wealth. African communities should no longer only demand jobs and a few franchises for their support of large corporations, but should demand equity in them. This is the Pan-Africanist vision, the Pan-African vision; it is comprehensive economic social planning to face up to humanity’s basic needs. It is one of the grandest innovations of all times and it must remain one of the prime imperatives of the 21st century. [Time expired.]

Chief M NONKONYANA: Madam Speaker, hon members, the restructuring of Spoornet has recently become a major priority of this Government. Globally, rail restructuring has been provoked by a crisis within the national railway operations. The crisis has been predominantly financial, because the SA Railways have failed to compete effectively with road and air transportation. This has been combined with the requirement for increased capital investment, alongside Government’s desire to reduce public expenditure.

These factors which are so evident in South Africa underpin the priority accorded to the restructuring of Spoornet. The financial results for the year ending 31 March 1999 show that Spoornet was R210 billion in the red. This situation exacerbates the poor financial situation of Transnet. Moreover, of the six business units within Spoornet, only two, Coallink and Orex, are judged to be world-class operations which are highly profitable. The remaining four business units, namely the general freight business, the mainline passenger services, Luxrail, that is the Blue Train, and Linkrail, the brand lines, are all operating at a loss. The most inefficient of these is the general freight business, which has been incurring losses to the tune of R1,6 billion per annum.

These losses have been offset by the profits generated by Coallink and, to a lesser extent, Orex. The danger of such cross-subsidisation is that the ability of Orex and Coallink to generate profits is being undermined by the failure to invest in these entities, resulting in a deterioration of their infrastructure and hence their value. The Government appreciates the severity of the financial situation of Spoornet and it is reassuring that the matter is being addressed wih the urgency it deserves.

An equally important consideration is the extent to which the inefficiencies in the general freight business are undermining South Africa’s global competitiveness. On the economic front, the postapartheid era has been characterised by the imperative of transforming industry to render it globally competitive.

Unless transport services are efficient in terms of both cost and quality of service, efforts to achieve international competitiveness will be undermined. While the transformation currently under way within Spoornet will go a long way in addressing operational inefficiencies, restructuring is the key to turning an inefficient and loss-making national railway into an efficient and cost-effective means of transporting freight.

In the absence of state revenue to redress years of underinvestment in rail infrastructure, a change in the structure of ownership of rail operations is required. The introduction of concessionaires and strategic equity partners will unlock the capital and technology required to rehabilitate the rail infrastructure and enhance its operational efficiency. This, in turn, will generate benefits for the entire economy as the cost of transporting freight by rail declines while the quality of service improves.

The current coverage of the network is a key issue that will have to be addressed in the restructuring process. The primary reason why the general freight business is making a loss of R1,6 billion is that goods are being freighted from remote areas where rail density is very low. Hence the cost of transporting them is not being met by the charges levied from customers. This amounts to a large subsidy for producers transporting freight from remote areas. Unless the state has good policy reasons for subsidising such producers, these hidden subsidies must be abolished.

Indeed, it is the stated policy of the Government that the rail network should be reduced to focus on high-density lines that can be run efficiently and profitably. If users of the low-density lines are not meeting the full cost of the use of rail transport, they will either have to find alternative means of transporting their goods or bear the full cost of using rail. Having outlined the imperatives for restructuring Spoornet, there are a number of challenges that this poses for Government. The first challenge is to ensure that Government maintains the control over rail policy once operations have been transferred to the private sector. In order to do so, the state should maintain a majority stake in the ownership of the rail infrastructure. This will mitigate the danger of a private monopoly being created.

The second challenge is the linking of the restructuring of Spoornet to initiatives to develop transport infrastructure within the SADC region. The SADC region accounts for 12% of South Africa’s exports. The importance of these exports to the South African economy lies in their composition rather than in their volume. They are concentrated in the high-manufacturing, value-added sectors which support high-wage formal employment.

Finally, and in my own view, the most crucial challenge facing Government is to mitigate the impact of job losses that may be an inevitable dimension of restructuring. In an economy burdened with high levels of formal unemployment, every effort must be made to retain jobs in the state sector. While the loss of some jobs may be inevitable, restructuring opens up a range of opportunities for empowerment and redeployment which must be exploited.

Empowerment can be realised through good ownership and operational involvement in restructuring entities. Widening ownership of rail operations can be accomplished through vehicles such as the National Empowerment Fund. It is imperative that black economic empowerment be the central criterion which concessionaires and strategic equity partners have to comply with in winning tenders.

In addition, Government should provide private operators with a range of incentives to ensure that previously disadvantaged South Africans are trained into senior management positions within rail operations. A further instrument for empowerment, though, is, of course, worker equity participation. All these avenues should be vigorously exploited in the restructuring of Spoornet. I would like to implore the hon the Minister to ensure that the restructuring of Spoornet enables the Government to maintain control over policy in this strategic sector, to widen ownership and participation in the rail sector by the previously disadvantaged groups and to mitigate the impact of job losses. For the South African economy to grow, we need to be part of the global market. Given the growing trend of globalisation, we now know that, for our economy to grow, we have to increase our outward focus and therefore we need to promote exports and tourism. South Africa needs to become internationally competitive. It is not sufficient for us to produce goods for export at a competitive cost. The cost of transporting these goods to foreign markets must be competitive as well. The ports of every country have an entry for both goods and people into that country, and these need to be efficient and effective. Our international trading partners must be satisfied that goods can be transported to and from South Africa with a minimum of barriers, on time and at a reasonable cost.

All South Africa’s commercial ports are run by Portnet, as we know. Portnet is a national asset of great strategic importance. We have to ensure that the infrastructure that is there is maintained, and that it grows to meet the needs of our growing economy. If we want to facilitate global trade in South Africa, it is vital that the services offered at our ports are at a level that will meet the needs of the international shipping community.

We also have to realise that our ports do not just serve South Africa, but also many of our neighbours. Many goods destined for Southern Africa are transported through our ports, and then by road or rail from there. Our dream of an African renaissance cannot happen if the economies of the African countries do not develop as well. We have a duty towards our neighbours to ensure that they can also trade cost-effectively and that there are no transport barriers to their trade.

South Africa also requires modern airports that can handle growing numbers of international passengers efficiently, and in such a way that travelling is a positive experience. In addition, our economy is increasingly trading in goods that are transported by air. We now have an international airport that we can be proud of in the Johannesburg International Airport. Many members will have seen in the press that 20% of the Airports Company was sold off to an international strategic equity partner. The state coffers received a significant boost from that sale.

We achieved one of the objectives of restructuring, which is to increase foreign direct investment. At the same time, we have been able to provide better infrastructure facilities and service at the airports. The improvement at the airport can only reassure us that this is the right route to follow. What we need to know now is what the future plans are for the ownership of the Airports Company and what the timing is of any changes. [Time expired.] [Applause.]

Mr M A MANGENA: Madam Speaker and hon members, the majority of our people are poor, but today our Parliament is debating issues relating to our collective wealth, our national assets in the form of state-owned enterprises which are worth billions and billions of rands.

It is to be hoped that several decades down the line our children and their children will come to this Parliament and still find a Portfolio Committee on Public Enterprises. That will only be possible if we do not give in to the temptation and the pressure from Western countries to sell them all off. We know that Western countries preach to us the virtues of free trade and globalisation, while in practice they protect their own farmers and industries against competition from us.

To sell all our companies to them, some of them in strategic areas such as the provision of energy and communication, could be extremely unwise. By so doing we could be weakening ourselves, laying ourselves open to exploitation and manipulation by those who will be owning our entire economy. So far the Ministry for Public Enterprises has done a reasonably good job. Most of the big state-owned enterprises such as Telkom, Denel and segments of Transnet have been turned around from loss to profitability. After such turnarounds - and therefore increase in value - foreign partners have been found to inject capital, latest skills, technology and equipment into these enterprises. Telkom and SA Airways are shining examples of a situation in which foreign partners own a minority stake in the enterprises.

Whereas Telkom, Eskom and Denel are in a reasonable state of health, able to pay dividends to shareholders and handsome taxes to the state, the same cannot be said of Spoornet, which continues to struggle and is expected to register a loss of nearly R400 million in the current financial year. The same state of affairs prevails in other companies in the Transnet family. Their recovery plan is on the table which includes the concessioning of unprofitable rail lines and the bringing on board of Halcro Rail to turn the company around into profitability.

This setup, where state-owned enterprises are made more profitable and where partnerships are formed within the private sector, both local and international, but with the state retaining its major shareholding, is what is desirable and important. We are not saying this state of affairs should be maintained only for reasons of patriotism and national pride, but rather because state-owned enterprises play and continue to play a crucial role in entrenching democracy and moving us towards a fairer and more just society.

Because of the racist policies of the past, black settlements in both urban and rural areas were denied services such as electricity and telephones. Precisely because Telkom and Eskom are state-owned enterprises, Government was able to instruct them to embark on an ambitious programme to provide telephones and electricity to a lot of communities that did not have these before. On the whole, these two parastatals are rising to the occasion very well. If Telkom and Eskom were not state-owned, they would not be obliged to do the job.

With a more integrated transport system, we might be able to regulate and organise our road and rail transport systems in such a way that they complement each other more than they do at the moment. In fact, if road transport in particular could be arranged in such a way that it fed into the rail system, commuter transport in both urban and rural areas could be rendered cheaper and safer. The buses and taxis that congest the roads and kill people at such a high rate could be reduced. The rail track that is already there and built at great cost could also be used profitably for the benefit of the entire nation.

The same argument would prevail with even greater force in the case of the movement of goods. Instead of so many trucks plying our national highways, causing accidents and damaging the roads, we could put greater emphasis on moving more freight by train. In that way, our roads would be safer while, at the same time, our railways are made more profitable.

For these same reasons of national interest, some of us welcome the notion floating around of Eskom, Denel and Transnet teaming up to form a new communication parastatal to compete with Telkom. Alongside our attempts to create a more normal society by increasing black economic control and ownership, there should be a determination to keep the state in the economy by running successful and profitable state enterprises. [Applause.]

Mr B A D MARTINS: Madam Speaker, hon Deputy President Jacob Zuma, hon Minister for Public Enterprises and hon members, the advent of the information age, in which information has become the cutting edge of global competition, has thrust information technology into the forefront of national socioeconomic development.

Information technology has to be recognised as a strategic enabling tool to support the growth of the South African economy as well as to enhance the quality of life of our population. During the past five years, substantial investments were directed towards the improvement of the information technology infrastructure as a step towards establishing a sophisticated network of facilities and services. Consequently, there was an increase in usage of information technology in both the public and private sectors to improve efficiency, productivity and overall economic competitiveness.

A major factor shaping the information revolution is convergence. Before convergence each major segment of the telecommunications industry relied on different infrastructure for transmitting information to end users. A generalised information infrastructure has emerged which encompasses wireline, wireless, packet-switched, coaxial and satellite. Convergence has subsequently resulted in greater flexibility and competitive dynamism in the industry. This, in turn, has led to better services at lower prices than in the past.

Another factor that has shaped the information revolution is the growth of computer-related networks. Less than 10 years ago there were very few such networks. The number has since grown sharply, increasing eightfold over the past three years, to reach an estimated 16 million.

This technological change, whilst offering significant opportunities for development, also poses significant challenges. For instance, internationally, formerly closed telecommunications markets are being opened through deregulation. With the increase in the number of network operators, there was a rapid expansion of telecommunications infrastructure and increased competition amongst them.

To facilitate wider access, efforts were undertaken to encourage the operators to provide modern services at reasonable prices, and to interconnect with each other. Locally, competition is likely to spur telecommunication firms to focus attention on customers, improve service, accelerate expansion, reduce costs and lower prices. Important areas that will have to be given more attention are, amongst others, the provision of access in rural areas, and to the urban poor. More focused attention should also be given to policy and regulation.

By developing a modern information infrastructure, South Africa will be in a position to benefit fully from the process of economic globalisation. A symbiotic relationship, which mobilises private participation for public objectives, will also have to be encouraged. In doing this, productive partnerships should be fostered that will open up opportunities for community-based organisations and entrepreneurs who were marginalised under the apartheid regime.

When all is said and done, essentially the role of restructuring should be to ensure improved service delivery. Better telecommunications services should mean better education, better health care, vastly improved access to information, greater global competitiveness and increased information technology awareness. In sum, this should result in the better life for all that the ANC Government espouses. [Applause.]

The MINISTER FOR PUBLIC ENTERPRISES: Madam Speaker, hon Deputy President and members, it is clear from the input of all political parties which have participated in this debate, including the DP but excluding the PAC, that members endorse the key principles of restructuring that were outlined in my speech this morning.

As is well known, we in the ANC are very proud to have always led innovative and very difficult policy initiatives, including in this arena of the restructuring of state-owned enterprises. I therefore take this opportunity to express my thanks and gratitude to all political parties of this Parliament for their political support of our very challenging restructuring strategy and agenda. I also welcome the opportunity to hear views and opinions - copyrighted or otherwise - and therefore extend a standing invitation to all, including Ms Taljaard, to engage my department at any time.

For the PAC, it is a pity Dr Pheko is not here, because my response to him is to say that maybe he needs to be given political instruction on this issue of restructuring of state assets. Maybe we can start off with the ABC of Marxism to remind him of the famous words by Karl Marx that ``philosophers interpreted the world in various ways, but the most important thing, however, is to change it’’. [Applause.] Dr Pheko should be aware that the times of utopian socialists are well over. It is time to do things for the betterment of the people of South Africa. Maybe it is because they do not live in South Africa, but in Azania. [Laughter.]

Just a few comments on what has been highlighted by some of the colleagues this morning. I would like to start with Ms Taljaard. I do agree with her. What she has said is, in fact, enunciated in some of the seven principles that have been outlined in the speech this morning, and we in the department are working very hard with other Government departments so that we are able to develop common sectoral policies that are already part of this restructuring agenda. When one sees the policy framework document, one will notice this collaborative effort and relationships with sectoral line function departments - be it in energy, transport, telecommunications and defence technology - and that we are doing things in a collective manner.

On the issue of transparency and speed, we want to echo what has been said already. In regard to our accelerated programme, we are willing, in fact, to share the latest information on restructuring that has already been captured on our database on state-owned enterprises. As I have indicated, I am also extending an invitation to all hon members to join us in the department in Room V2 after this Vote debate so that we can have some refreshments. We are also going to highlight some of these state-owned enterprises in a computer programme that will indicate the work that has been done thus far.

Still on Ms Taljaard, who expressed concern about ``phantom competition’’, as she called it, I want to indicate clearly that the restructuring programme that has been outlined by the department is result-output driven. Ms Taljaard should also be aware and know that international experience supports our general approach to restructuring, viz a multifaceted approach to the accelerated agenda that goes beyond the mere sale of state assets. It is, therefore, unclear why Ms Taljaard constantly referred to us as having adopted a golden share as a means of effecting state control in some of the initiatives that are here, because our position is very clear. We are going to be evaluating the restructuring programme on a case-by-case basis and, in fact, in the interest of good co-operative governance and also to protect the public good for our people.

Regarding Dr Odendaal of the New NP, on the claim that the integrated plan for the restructuring of state assets is absent, I need to state very clearly that our Government has always had a plan on the restructuring of state-owned assets. We even had a plan before we went into Parliament in Government on 27 April 1994. We had a document called Ready to Govern, which was developed by the ANC together with its allies, as well as the Reconstruction and Development Programme which is a policy departure point for the restructuring of state-owned enterprises. But more than that, in 1995 the Interministerial Cabinet Committee on the Restructuring of State Assets, approved a document entitled Policy Guidelines for the Restructuring of State Assets, which has been used as a basis for restructuring of state-owned enterprises until now.

The forthcoming document is building on all these policy foundations - from the RDP to that IMCC document - and will also cover the international experience, both bad and good, as well as the domestic experience that we have had in the past five years. It will also ensure that we evolve our own science in South Africa on the restructuring of state-owned enterprises. For those who think that we are just talking, here is a draft document on the policy framework. As hon members are aware, in terms of our protocol and procedures in Government, we will not be able to release this document until Cabinet has signed it off. Of course, this House will have an opportunity in about two or three weeks’ time to have a copy of this document when it has been signed off by Cabinet.

Also, I want to indicate that we have here a business plan of the Department of Public Enterprises for enterprise by enterprise, entity by entity, including the subsidiaries. It shows us what is going to be happening from now until 2004, so that we can ensure that this programme is accelerated and achieved within the timeframes that we have outlined for ourselves. In conclusion, I would like to take this opportunity to thank all those who have supported this programme, and once again to extend the invitation to visit Room V2, where we might even play that song by Youssou N’dour while showing the assets register of state-owned enterprises. With those words, I would like to say: Viva, restructuring, viva!

HON MEMBERS: Viva! [Applause.]

Debate concluded.

The House adjourned at 12:17. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The following Bill was introduced in the National Assembly on 14
     April 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:


     (i)     Administration of Estates Amendment Bill [B 24 - 2000]
          (National Assembly - sec 75) - (Portfolio Committee on Justice
          and Constitutional Development - National Assembly)
          [Explanatory summary of Bill and prior notice of its
          introduction published in Government Gazette No 12081 of 10
          April 2000.]


 (2)    The following papers have been tabled and are now referred to
     the relevant committees as mentioned below:


     (1)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Water Affairs and
          Forestry and the Select Committee on Land and Environmental
          Affairs for information:


          Report of the Auditor-General on the Financial Statements of
          Vote 36 - Water Affairs and Forestry and related accounts for
          1998-99 [RP 160-99].


     (2)     The following paper is referred to the Standing Committee
          on Public Accounts for consideration and report. It is also
          referred to the Portfolio Committee on Justice and
          Constitutional Development and to the Select Committee on
          Security and Constitutional Affairs for information:


          Report of the Auditor-General on the Financial Statements of
          Vote 21 - Justice for 1998-99.


     (3)     The following paper is referred to the Portfolio Committee
          on Public Service and Administration and the Select Committee
          on Local Government and Administration:


          Report and Financial Statements of the South African
          Management Development Institute for 1998-99, including the
          Report of the Auditor-General on Vote 30 - South African
          Management Development Institute.
     (4)     The following paper is referred to the Portfolio Committee
          on Provincial and Local Government and the Select Committee on
          Local Government and Administration:


          Reasons for declaring a state of disaster in Mpumalanga
          Province, tabled in terms of section 2(4) of the Civil
          Protection Act, 1977 (Act No 67 of 1977).

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Reports of the Auditor-General on the -

 (a)    Financial Statements of Vote 17 - Home Affairs for 1998-99 [RP
     141-99];


 (b)    Financial Statements of Vote 28 - Public Works for 1998-99 [RP
     152-99];

 (c)    Financial Statements of the Zoological Gardens of South Africa
     for 1998-99 [RP 65-2000].

1. The Minister for Welfare and Population Development:

 Report of the Department of Welfare and Population Development for 1999-
 2000 [RP 86-2000].