1. QUARTERLY REPORT 01 APRIL – 30 JUNE 2006
DEPT OF PUBLIC ENTERPRISES
QUARTERLY REPORT
01 APRIL – 30 JUNE 2006
PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES
16 AUGUST 2006

2. INTRODUCTION
The report for the first quarter of the 06/07 Financial Year reflects on progress on our MTSF as presented to the Portfolio Committee on 8 May It covers:
Key general achievements
Staff establishment
Spend to date
Progress in respect of key programme outputs 2

3. OVERVIEW OF PERFORMANCE
Implement an effective shareholder management system
Draft Shareholder Management Model completed and being amended based on comments from Minister
Study on Board remuneration completed and draft Remuneration Guidelines submitted to the Minister
Ensure the implementation of the infrastructure investment programme
Investment dashboard developed and being populated
Strengthen SOE balance sheets
Transnet, Eskom and Safcol risk management plans reviewed; others to be completed by end August 2006
Corporate plans reviewed
All Annual Reports analysed
Leverage the Capex programme of SOE to catalyse new economic activities and reestablished industries
Impact analysis reports of Transnet and Eskom capex programmes completed
Supplier development programme underway

4. DPE STATISTICS as at 14 August 2006
Total Posts
157
Approved Structure
Filled Posts
131
Currently filled posts
127 – as at 31 March
12 - appointments made (April to date)
8 - terminations (Exits)
Vacant Posts 26
Current
8 - advertised posts
3 - interviews in process
15 - posts not advertised
10 Level1-10
3 Level 11-12
2Level (SMS)

5. DPE Statistics 2005/2006 Equity breakdown Target for 2006/07
Actual (to date)
African
78.9%
74%
Male 62 41
Female 56
Indian
2.5%
5.4% 2 5
Coloured
8.9%
7.6% 7 8
White
9.5%
13% 12
Total
157
131
Disabilities 6
DPE Statistics 2005/2006

6. EXPENDITURE REVIEW

7. PROGRAMME 1 - ADMINISTRATION
PURPOSE: Responsible for the overall direction and management of the Ministry and the department and provision of administrative support services to the department.
Sub programme
Output
Progress (April-July)
Follow-up action/Challenges
Planning, monitoring & evaluation
Project performance monitoring
Monthly project reporting
Electronic system introduced
Human resources
Performance management system
Balance scorecards completed
Merit awards processed & distributed
Performance agreements to be signed
Corporate services
Document management
system
File plan approved by National Archives
Training on Humming Bird ongoing
Inadequate utilisation of registry and Humming Bird
ICT
Network stability
Network upgrade between Cape Town and Pretoria 7

8. PROGRAMME 1 - ADMINISTRATION
Sub programme
Output
Progress (April-July)
Follow-up action/Challenges
Communications
Effective website
Website re-launched
Content management training
Finance
Unqualified audit
Finance report submitted to the auditors and National Treasury on time
Compiling adjustment estimates
Security Services
Effective security system in place
New access control system in Pretoria offices installed
Internal audit
Internal audit review
Review completed and report presented to Exco
Implementing recommendations 8

9. PROGRAMME 2 - ARM
PURPOSE: The Analysis subprogramme of the Analysis and Risk Management Unit identifies the key performance indicators and targets for inclusion in shareholder compacts and is responsible for a comparative benchmarking programme of SOE.
Output
Indicator
Progress (April-July)
Follow-up action/Challenges
Review the pension and medical aid funds of SOE
Due diligence of SOE pension and medical aid funds
Engaging with SOE
Develop a financial analysis manual
Financial analysis manual
Manual approved. High-level analysis performed on draft financial statements
Standardisation of SOE annual reports
Framework for Annual Reports
Framework for annual reports completed
Annual reports analysed and approved
Awaiting PC comments on key areas that SOE should report on
Create database of KPI and SOE
SOE database with updated, accurate info
Developing an Integrated Electronic System 9

10. PROGRAMME 2 - ARM
PURPOSE: The Risk Management subprogramme of the Analysis and Risk Management Unit reports on systemic risks, vulnerabilities and potential shocks in and across the SOE and advises on mitigations plans.
Output
Indicator
Progress (April-July)
Follow-up action/Challenges
Risk assessment of SOE
Assessment report
Transnet, Eskom & Safcol plans reviewed and approved
Other SOE risk plans submitted late. SAA & Denel currently being assessed; Alexkor & PBMR are outstanding
Manage and reduce risks government is exposed to
Risk management framework
Risk management subcommittee established in May 2006
Target date for framework is October 2006
Effective management of unanticipated risks
Crisis management system
Two workshops done
With members of the four
SOE. Commenced work on a best practice framework 10

11. PROGRAMME 3 - LGT
PURPOSE: Provide clear SOE mandates and ensure alignment of SOE governance systems, compliance and performance with government policy objectives.
Output
Indicator
Progress (April-July)
Follow-up /Challenges
Effective management of litigation risk and contract management
Reduction in outstanding litigation
Six cases under mitigation
All contracts requiring drafting and vetting done
Legal office database established and working
In-house counsel
Swift legal advice
Legal panel established
Very few firms on legal panel utilised so far
Shareholder management legislative framework
Shareholder management framework
Draft framework completed
Document discussed internally and presented to Minister
Comments being integrated 11

12. PROGRAMME 3 - LGT Output Indicator Progress (April-July)
Follow-up /Challenges
Governance workflow
Complete TOR and mapped workflow
None – have other priority projects
Management of SOE fora
Regular SOE Fora meetings
1x Chairpersons’ Forum
2x CEOs’ Forum
1x CFOs’ Forum
1x Risk Officers’ Forum
1x Company Secretary’s Forum
Transaction good practice framework
Harmonised approach to transactions
Development of the guidelines have been outsourced
Transaction execution
Successful transaction completion
EFC Restructuring (first phase of securitisation and disposal complete)
PBMR Corporate Structuring being finalised
SAA separation share sale agreement signed 12

13. PROGRAMME 4 - CSS
PURPOSE:. Define and implement industry structures, public/private service delivery and SOE strategies that will optimise overall industry efficiency, service provision, pricing of services and economic development
Output
Indicator
Progress (April-July)
Follow-up action/Challenges
Performance management of Transnet
Signed Shareholder compact
Approved Annual Report
Signed compact imminent
Progress monitored against strategic KPIs
Annual Report reviewed
Compact to be signed off by Minister & Board
Information flow could be improved
Procurement of private sector participant for Coega Container Terminal
RFP issued and PSP awarded
In principle support from Minister
Alignment with Transnet
Completion of private sector partner framework
Separation of SAA from Transnet
Share sale agreement signed
Share sale agreement signed. Cabinet approved amendment to Transnet pension fund Act
Redefinition of core business and revision of corporate plan 13

14. PROGRAMME 4 - CSS Output Indicator Progress (April-July)
Follow-up action/Challenges
Integrated framework that aligns Eskom’s strategy to government’s objectives
Corporate strategy & Shareholder Compact
Key strategic KPIs identified and agreed to; quarterly reports and Annual Report reviewed
Resolve all outstanding policy issues with the DME & the Regulator
Introduction of private sector participation in energy
Independent Power Producer’s operational plant
Power Purchase Agreement was signed and Bidders will submit their proposals in October 2006
Finalise Bids evaluation strategy and the negotiating team
EDI Restructuring
Operational Six Metro REDs AND One National Electricity Distributor (NED).
The EDI Holdings is finalising the plans on the six metro REDs and the conceptual design of the NED & the business case is done
Approval by the Ministers for DME, DNT, DPLG & DPE and submission of the Cabinet Memo
Eskom build prog
Separate report 14

15. PROGRAMME 4 - CSS Output Indicator Progress (April-July)
Follow-up action/Challenges
PBMR
Successful Demonstration Power Plant and Pilot Fuel Plant
EIA and NNR licensing processes underway
Delays due to EIA and NNR licence; Shareholders Agreement to be concluded
Forestry
SAFCOL mandate and future role reviewed, and in place by March 2007.
Project Plan finalised.
Interdepartmental task team (DWAF, DTI) established.
Initial research on sawlog data and industry structure completed.
On schedule.
Commission further research.
Strategic oversight of SAFCOL
Corporate plan review finalised.
Shareholder compact finalised.
Completed. 15

16. PROGRAMME 4 - CSS Output Indicator Progress (April-July)
Follow-up action/Challenges
Defence
Strategic oversight of Denel
Corporate Plan reviewed
Shareholder compact finalised.
Funding request to Treasury(GCC) finalised.
Due diligence on SAAB Transaction and NIP credits secured (with high level intervention)
Approvals for section 54 disposals
Policy alignment (inter-departmental teams)
Migration functions and budgets for DERI & Armscor finalised.
Acquisition process alignment (buyer + seller processes)
NIP off-set changes finalised.
Defence Fund TOR’s complete and tender process finalised.
Cab Memo (NCACC) market access completed 16

17. JOINT PROJECT FACILITY
Develop cross-cutting projects that enhance the value of an industry or leverage off the assets and/or capabilities of the SOEs to the benefit of those SOE and the economy as a whole
Project name
Project major activities
Target date
Progress (April-July)
Follow-up action
Continental
investments
Review of current SOE investments on the Continent
March 2006
Completed and approved by DG and Minister
Draft report on lessons submitted. Report being finalised
Develop strategy framework and investment implementation plan
November 2006
First draft to be presented to Minister in August 2006
Energy & pipelines
Compile database and review current state of SOE pipeline activities
June 2006
Phase 1 analysis of liquid fuels demand projection and scenario planning complete
Presented to CEO forum in June 2006
Database to be completed by Dec 2006 17

18. JOINT PROJECT FACILITY
Project name
Project major activities
Target date
Progress (April-July)
Follow-up action
Human resources & capacity building
Plan of action based on assessment of current & future training plans
December 2006
Skills requirements of SOE compiled. Audit of training facilities underway
Information Communication Technology
Business plan for broadband infrastructure
April 2006
Complete. Business plan submitted to National Treasury
Awaiting NT outcome
10 call centers
March 2007
Talks held with SA Call Centre Community
Progressing slowly. Only 5 sites suitable; struggling to secure clients 18

19. JOINT PROJECT FACILITY
Project name
Project major activities
Target date
Progress (April-July)
Follow-up action
Properties
Sale of SOE non-core property
2 year project
Disposal framework and BBBEE guidelines approved by Cabinet
Negotiating with government depts eg Dept of Housing and Dept of Education
Development of key sites
Agreement on plans for all projects by July 2006
Implementation by August 2006
On track. The model for the Holding Company/ Development Agency has undergone several revisions this year. 19

20. CONCLUSION Satisfied with overall performance
Continuing to ensure a more integrated approach to monitoring SOE performance within the Department
Institutional strengthening of priorities – including the identification of substantive big bang initiatives 20