South Africa


Eskom will return to Department of Mineral Resources, says Ramaphosa, without setting a date

Eskom will return to Department of Mineral Resources, says Ramaphosa, without setting a date
President Cyril Ramaphosa responds to questions from MPs during a question and answer session in Parliament, Cape Town, on 9 March 2023. (Photo: GCIS)

The Department of Public Enterprises will cease to exist and the entities it oversees — including Eskom, Transnet and Denel — will revert to line departments amid moves to host strategic state-owned entities in a holding company, President Cyril Ramaphosa told MPs in Thursday’s question session.

It was a fudgy reply among many in Thursday’s almost three-hour Q&A slot where the phrase “line of sight” turned out to be a presidential favourite.  

The National Assembly programming committee, just hours earlier, agreed the House would consider a motion for an ad hoc committee into the Phala Phala farm forex scandal.  

While the date for the motion will be finalised next week, on Thursday it also emerged the Public Protector is close to finalising an interim report into this matter. Practice is for such an interim report to be sent to implicated parties for their responses before a final report is published. 

Earlier this week, the South African Revenue Service said Ramaphosa and his game and cattle farming entities were tax-compliant, a day after the tax authority said the $580,000 used to pay for the animals from the presidential farm had not been declared when brought into South Africa.  

With the Hawks’ criminal investigation and the South African Reserve Bank probe into exchange control violations also under way, the Phala Phala farm forex saga continues to hang over Ramaphosa. 

Ramaphosa gets a break

In the House on Thursday, however, he got a break — it was electricity, or rather the lack of it, and the expanding Cabinet at front and centre.  

And Ramaphosa found himself in a potential political quandary. IFP MP Mkhuleko Hlengwa, also the chairperson of the parliamentary watchdog on state expenditure, the Standing Committee on Public Accounts (Scopa), had asked:  

“Whether he [Ramaphosa] intends to dissolve the Department of Public Enterprises and house state-owned enterprises in their respective line function departments; if not, why not; if so, what are the relevant details?”  

While the ANC 2022 Nasrec conference resolved that Eskom must fall under the Department of Mineral Resources and Energy, Ramaphosa sidestepped governing party factionalism and, as country President, established an electricity minister in the Presidency during his State of the Nation Address.  

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Almost immediately that post was described as a “project manager” by Mineral Resources and Energy Minister Gwede Mantashe, who is also the ANC national chairperson. Public Enterprises Minister Pravin Gordhan, under whose portfolio Eskom still falls, stayed out of this public discourse. 

“Yes, the Ministry of [Public] Enterprises will cease to exist because the entities that are now overseen will revert back to their departments,” Ramaphosa confirmed in the House. And he linked this step to a state-owned (SOE) entity holding company that would “enhance coordination, give line of sight of what’s happening and focus on the economies of scale”. 

The public enterprises ministry “is now in the process of putting together the legislation on the wherewithal this company will function”. 

But it turned fudgy again later. Ramaphosa said the Presidential SOE Council was “crafting their report that they will soon finalise” on the workings of this SOE holding company, but also that line departments would continue to have a say on policy and regulation, while “financiers… are looking very closely [at] how it should be financed”. 

No date when this presidential council report would be completed. No date on when SOEs governance and management legislation is expected. No date on when the new SOEs system will be in place. Or when exactly the merger of departments will be done. 

‘The end is in sight’

“This is work in progress. The end, as far as I am concerned, is in sight,” said Ramaphosa. 

Hlengwa’s question seemed to get up the presidential nose, particularly for the reminder of repeat pledges to rationalise and reconfigure since 2018. “Respectfully, I submit you are not committed to your own commitments,” said the IFP MP. 

“You may want to recall that prior to 2019 we had 34 [ministries]. I reduced that to 28,” replied Ramaphosa, saying it was not possible to go below 28 ministries because of the “existential” issue of electricity and the need to boost state capacity.  

“I decided that we now needed to have a ministry standalone of monitoring and evaluation. That brought us to 30 but not the 34 we had before.”  

Then amid some giggles, came a stab at electioneering. Pointing to the ANC benches on his right, Ramaphosa said, “When this party will be back as the governing party, we will come back with the reconfiguration of the state.” 

While the ANC simply thanked the President for his response and presented sweetheart questions, the Freedom Front Plus highlighted SOEs’ drain on the public purse. 

“A number of SOEs are operating well. And I can cite one I used to be associated with — [risk insurer] Sasria,” Ramaphosa told heckling MPs. Both the IFP and DA referenced a News24 report  that a 2019 plan to rationalise government had been gathering dust in the presidential in-tray.  

Not so, said Ramaphosa. It had inspired the first round of mergers from 34 to 28 ministries before issues emerged around the numbers of directors-general and deputy DGs and joining functions. And the increase to 30 Cabinet ministers was temporary. 

“We said we do more, further reconfiguration and that is what we are doing,” said Ramaphosa. “Watch this space.” DM


Comments - Please in order to comment.

  • Peter Atkins says:

    So what will moving Eskom to the DMRE mean to the unbundling of Eskom? And how will the unbundled entities operate under both the DMRE and the proposed SOE holding company? This is not going to help! Rather split energy supply into a separate Department of Energy and let Eskom report to this DOE. That will stop Mr Mantashe from interfering in energy policy and allow him to concentrate on his job of getting mining into shape. Well, one can dream!

  • Rory Macnamara says:

    Oh well that will be the end of Eskom!

  • Hermann Funk says:

    The muddle they believe equals management and leading demonstrates the incompetence of the ANC and its top brass.

  • William Dryden says:

    The sooner Mantashe is taken away from Eskom the better, he has been a hinderance from day one in his attempts to delay IPP’s from adding to the Eskom grid.

  • Graham White says:

    Mr Minister Mantashe will not let go of Eskom until he gets his way with the powerships and the resultant “benefits” that will come with the deal. He should be instructed by the President to move away completely from Eskom, but he is too powerful in the ANC for this to happen.

  • Johan Marais says:

    Does it really matter? Moving the entities around from one incompetent to the other incompetent by an absent government.

  • jcdville stormers says:

    So in SA s Batman movie, The Penguin is now in charge of energy and Eskom

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