5 November 2009
|Themba Maseko, Government Spokesperson
|5 November 2009
|Imbizo Media Centre, Cape Town
Statement read by Themba Maseko
Cabinet held its ordinary meeting in Cape Town yesterday, 4 November 2009.
Cabinet decided to terminate the contract to purchase eight A400 Airbus strategic lift aircraft. This decision follows a review of the contract by the Ministries of Defence and Military Veterans, Finance, Trade and Industry, Science and Technology and Public Enterprises. The termination of the contract is due to extensive cost escalation and the supplier’s failure to deliver the aircraft within the stipulated timeframes. Armscor will be instructed to terminate the programme as soon as possible.
The cost escalation would have placed an unaffordable burden on the taxpayer at a time when the national fiscus is under pressure due to the economic downturn. An amount of R2.9 billion will be refunded to National Treasury as per the contract provisions. Cabinet believes that the interests of the South African taxpayer will be best served by not proceeding with the contract.
The Minister of Defence and Military Veterans will brief the Portfolio Committee on Defence about this decision this morning.
The proposal to issue a temporary Mobile Television Broadcasting Licence was approved. This decision is in line with South Africa’s commitment to provide Mobile Television Broadcasting during the 2010 FIFA World Cup. The licence will expire two weeks after the World Cup Finals. The issuing of a temporary licence will allow the Independent Communications Authority of South Africa (ICASA) the time and space to design a licensing process that will encourage greater competition in the sector,
South Africa’s readiness to participate in the various multilateral forums on global warming ahead of the Copenhagen Conference of Parties was discussed. South Africa, as a responsible global citizen, will engage in these negotiations to support the strongest possible outcome at the Copenhagen conference. Adaptation to the impact of climate change must be given high priority and national adaptation plans and actions must be supported internationally. Minister Buyelwa Sonjica will join us later to elaborate on the climate change discussions and processes.
Cabinet noted Eskom’s multi-year price determination application to the National Electricity Regulator of South Africa (NERSA). The meeting agreed that there are a number of areas that need further consideration, particularly, the social, micro and macro impact of the price increases, before Government can provide the necessary guidance to the industry. The Minister of Public Enterprises will continue to meet with the relevant Ministers, including the Minister of Finance, to consider other options that may mitigate the extent of the proposed electricity tariff increases. The Minister will report back to Cabinet in due course.
The revised Policy on the Health Classification and Selective Deployment of Stable HIV Positive South African National Defence Force (SANDF) members was approved. The new policy provides for the recruitment and selective deployment of HIV positive persons into the SANDF. This decision marks the culmination of a policy review process that was initiated in 2006 and is in compliance with a 2008 High Court decision that ruled that the existing policy was unconstitutional. The old policy excluded HIV positive persons from being recruited and external deployment. The Military Health Services structures will provide the necessary support to SANDF personnel.
The report on the challenges facing the Department of Home Affairs was discussed and noted. The Department’s interventions to address the challenges were approved. These interventions include: the launch of a national campaign to encourage citizens to apply for birth certificates and identity documents; the launch of an anti-corruption drive; the introduction of severe penalties for those who sell identity books; replacement of the old passports with the new and more secure passport; and the extension of the track and trace system to all enabling documents for better security, management and improved service delivery.
Cabinet approved the new international marketing logo for South Africa. The new logo replaces the logos that were primarily used by the International Marketing Council and SA Tourism to market South Africa abroad. This decision marks the beginning of a new era in nation branding as South African entities will now go out to the world under a single, colourful, dynamic logo and positioning. This decision takes the country’s marketing to new heights, as we get ready to welcome the world to our shores as hosts of the 2010 FIFA World Cup Finals. (A copy of the new logo is attached)
The meeting welcomed and supported the Minister of Basic Education’s initiative to introduce changes to the National Curriculum Statement. These changes flow from the report by a panel of experts that was appointed to review the curriculum statement. The panel recommended the development of a coherent five year plan to improve teaching and learning across the schooling system; streamlining and clarifying policies; clarifying the role of subject advisors; addressing teacher workload and administrative burden; assessment; transition and overload in the Intermediate Phase; Learning and Teaching Support Material; and teachers and training. Minister Angie Motshekga is expected to make a statement on the curriculum changes in the National Assembly this afternoon.
Cabinet believes that these changes will go a long way towards improving the quality of education across all our schools as they address the concerns from various stakeholders, particularly teachers, parents, learners and academics.
The extension of the concession to treat Rwandese students studying at South African universities as home students for purposes of fees was approved. The three-year concession will apply to a hundred students who are on the Rwandese government funded scholarship programme studying science, commerce and engineering. The concession will cost approximately R5.5 million over the three-year period. This concession will be part of an agreement to be signed between the Ministry of Higher Education and Training and the Rwandese authorities. Universities will be informed accordingly
Government calls on all South Africans to support this year’s 16 Days of Activism for No Violence Against Women and Children. The Campaign will be from 25 November (International Day of No Violence against Women) to 10 December (International Human Rights Day).
The launch of the ‘Football Friday Campaign’ for the public service by Deputy President Mr Kgalema Motlanthe was welcomed. Cabinet endorsed the call for South Africans to support the campaign by wearing Bafana Bafana jerseys every Friday until the end of the 2010 FIFA World Cup finals.
The Public Participation programme will be from 9 to 15 November 2009 in various parts of the country. This programme is aimed at providing platforms for members of the Executive to interact with communities to discuss ways to improve service delivery. No less than 25 events will take place around the country at which Ministers, Deputy Ministers, Premiers, MEC’s, Mayors and councillors will be interacting with communities. The list of events will be published on the government website by midday on Friday, 6 November 2009.
The Ministerial Clusters will be holding media briefings on government’s key priorities. The briefings will take place over the next week. Details of the briefings will be announced later. There will be a link-up between Pretoria and Cape Town for the briefings.
Ministers committed themselves to ensure that all outstanding parliamentary questions are answered before Parliament rises. However, the total number of outstanding parliamentary questions stands at 396 as opposed to the reported number of 510 that was mentioned in the National Assembly. The Deputy President’s office will continue to monitor this matter to ensure that questions are answered within the stipulated timeframe.
Cabinet wishes Ms Zou Kota-Fredericks, the Deputy Minister of Human Settlements, a speedy recovery following her involvement in a car accident. Cabinet also extends its condolences to the family and friends of the father and son who lost their lives in that accident.
Cabinet wishes Ms Gill Marcus well as she assumes her role as the new Governor of the South African Reserve Bank.
QUESTIONS AND ANSWERS
Journalist: You spoke about the termination of the Airbus contract. Just exactly how much would it have cost?
Themba Maseko: We can give figures, Government has already paid R2.9billion. The original cost was in the region of R17billion and the escalation would have taken the cost to about R40billion.
Journalist: Did Cabinet have any advice or suggestion on Gill Marcus... (inaudible)
Themba Maseko: Nothing specifically we just know she is the right person for the job and she will do a sterling job to the satisfaction of all South Africans.
Journalist: Further to the Airbus does the industrial participation part of the Airbus contract still stand? Is that in any danger or has that been a problem and does the Government owe any monies towards that?
Themba Maseko: I don’t have the exact details about whether Government still owes any money. The termination of the contract will obviously have implications that would have to be spelt out over the next few days or weeks. Our hope is that because the contract was not just about the acquisition of the Airbus aircraft but it was also to get the SA industry to supply Airbus’ global programme. So in cancelling the contract it’s possible that Airbus may say because you are no longer purchasing our products we are not going to participate in the programme. But there is no final decision on that matter. It’s something that still needs to be looked at as the contract is concluded.
Journalist: In terms of the implications is there going to be a penalty fee and if so how much?
Themba Maseko: At this stage as far as I understand the contract there is no penalty fee. The agreement basically said if Airbus is not able to deliver according to the specific timeframes South Africa would have the option to pull out of the contract and at this stage the original deal was that Airbus would have delivered the first aircraft in 2010 but we can check the date. So they have missed the deadline. So I’m not aware of any penalties at this particular point.
Journalist: Are we considering buying other airplanes. The reason why we bought this was to have an airlift capability. Now we won’t have that. Have alternative purchases been discussed?
Themba Maseko: The Airforce is going to have to do an assessment. Clearly one of the reasons why the decision was taken to acquire this aircraft was to strengthen South Africa’s airlift capability and especially our peacekeeping missions in the continent. So the Airforce will have to do an assessment and if it does require more aircraft a proposal would have to be tabled before Cabinet for a decision to be taken.
Journalist: Can you explain the R192m that was mentioned in the Budget Policy Statement a fine that was incurred by Denel as a result of the delays. Is that money also part of the refund?
Themba Maseko: Let me apologise I don’t have details of that. In Cabinet that matter was not raised so I’m not able to answer that one.
Journalist: In the whole process of pros and cons on deciding whether to cancel or not what were the arguments against cancelling obviously there’s the finance thing. What implications will it have for the Airforce not to have these aircraft? If you can paint the scenario of the decision making process.
Themba Maseko: It was an extensive review. One of the immediate implications is the fact that the Airforce will have to go back to the drawing board to look at its own airlift capabilities. It may have an impact on South Africa’s participation in a number of peacekeeping efforts in the continent. So that would be the obvious implication but when the Minister speaks to the Portfolio Committee this morning, she will maybe give more details on that one.
Journalist: On Airbus, have we already paid something, I am under the impression that South Africa has already had to put payments in on that. Have we any idea how much that was and the other is two weeks ago you told us Cabinet had taken a view on Airbus. Is the decision you are announcing the same view they took then or has there been a change. Has Cabinet changed its view in the past two weeks?
Themba Maseko: Cabinet did take a view the past two weeks. However it said because of the complication of this decision and its implications, the Minister of Defence was given the task to go back and do some more homework on this matter; interact with the various Departments that participated in this decision; talk to Armscor and Denel; and understand the full implications especially the cost implications of that decision. She was able to give that report yesterday and Cabinet was satisfied that she did look at the possible implications of the decision. So yesterday’s meeting confirmed that view that was adopted at the last meeting which we could not announce. We also had to make sure we communicate with the relevant parties especially Airbus itself because you can’t enter into a contract with somebody and get them to hear about a decision to pull out through the media and that is why we delayed it. The amount already paid is R2.9bn and it will be refunded. The contract makes provision for that.
Journalist: Another one on Airbus was there an indication that costs might escalate beyond R47bn if we decided to go on with the contract?
Themba Maseko: It was not specifically discussed at yesterday’s meeting. It’s possible that the costs could have escalated but no figures were mentioned at yesterday’s meeting.
Journalist: There is a Denel delegation in Europe at the moment. Did they discuss that?
Themba Maseko: No, that matter was not discussed at the meeting.
Journalist: The Minister of Health, Aaron Motsoaledi, was supposed to brief us this afternoon about the National Health Insurance (NHI) and HIV. This was cancelled, why?
Journalist: What happened to the Hercules C130 aircraft that was renovated in 1990s? Is there a sense that those can still be used and we didn’t need the Airbus in the first place?
Themba Maseko: I have to apologise as I don’t have those details. We will have to get back to the Ministry on that issue.
Journalist: I just want clarity the Minister’s report to Cabinet, did the Minister recommend in the report that the contract should be cancelled.
Themba Maseko: Precisely yes. The Minister met with a lot of Ministers; a lot of Departments made inputs; we talked to Denel; we talked to Armscor so that the process led to a recommendation for the cancellation.
Journalist: The Minister said she was embarrassed that the figures had come out in Parliament. So will there be any disciplinary action against her.
Themba Maseko: No there was no discussion of any disciplinary at this Cabinet meeting. However the Minister said she is concerned about numbers being released in public before any thorough process is conducted but no disciplinary action.
Journalist: Are there any diplomatic fallout from this fences to mend in the sense that the Minister indicated that South Africa was embarrassed when the figures came out. And in the sense that NATO approached South Africa to be involved in this Airbus process.
Themba Maseko: I would imagine there would have to be some interaction at different levels to explain the rationale for this particular decision. I don’t have any specific details about who will be spoken to but I do expect some discussions to take place between the SA Government and various Governments.
Journalist: Was there a view in Cabinet that went against the Ministers’ view that we should cancel. Were there any other views that said no we should go ahead with the deal?
Themba Maseko: The matter was discussed extensively. The pros and cons were looked at but the decision which is what this briefing is about was that we should actually go for the cancellation. At this particular point I am not able to say that this view or that view was expressed. Cabinet’s decision was that cancellation was the best way forward. There are quite a number of issues taking place today and the Minister of Health briefing would have clashed with too many things happening in Parliament. So we should actually dedicate a special session for the Minister of Health to make an announcement. The decision of the HIV AIDS programme of Government is quite exciting. There are major decisions that have been taken by Government which represent some changes and we are really looking forward to the opportunity to do the briefing. So the Minister was indeed ready to do the briefing today but we thought there was just too many issues on our agenda and we will not do the briefing today.
Journalist: On the Eskom issue you spoke about Government saying there are still areas that have to be considered and you spoke of Government giving some ideas. How does that process work? Can Government override Eskom? Who has the final say NERSA or the Government?
Themba Maseko: The process is basically Eskom makes an application to NERSA but also submits similar information to SALGA and National Treasury. All the parties then have the opportunity to look at that application. NERSA made a commitment to conduct public hearings but the final decision will be a NERSA decision. However Government wants to express its own view on the application but the final decision will be a NERSA decision.
Journalist: Still on the Eskom issue, did President Zuma intervene to stop the CEO from being fired and also did he intervene in the release of the mercenaries.
Themba Maseko: Talking about the issue of the Eskom CEO I can’t tell you what the situation is. So I am not aware if there was any intervention by the President on that particular issue. All I am aware of is that the Minister of Public Enterprises is in constant contact with the Eskom Board and also the CEO to make sure the matter is resolved as quickly as possible. On the mercenaries, the President was not at the meeting yesterday so I am in no position to say whether there has been any intervention by the President.
Journalist: This mobile TV broadcasting licence, did they discuss that and the Home Affairs cost calculation?
Themba Maseko: Home Affairs cost escalation was not discussed at the meeting. The Minister has indicated that for her to achieve her objectives of transforming the Department she would have to have a separate discussion with National Treasury to discuss the full implications of the changes that are required there. But the meeting expressed full support for her initiative because it was agreed that Home Affairs plays a strategic role in Government. It manages very essential data including the population register, identity documents etc. So it’s a Department that can’t be allowed to fail and that is why Cabinet supported the decision. The cost of the temporary Mobile Television Broadcasting License was not discussed at the meeting. The policy was approved and Cabinet does not decide who gets allocated the contract. It’s something that has to be dealt with separately. So it’s not a Cabinet decision.
Journalist: The deployment of HIV positive soldiers? It’s my understanding that the United Nations have a requirement that soldiers on peacekeeping should be HIV negative. Has this been discussed with the UN at all and what influence will this have on our peacekeeping missions elsewhere in the continent?
Themba Maseko: I am not aware of a UN decision on this matter and the matter did not arise at the meeting. All I am aware of is that there is a court decision. We have to comply with the policy that says that in making these deployments South Africa will have to make sure that we look at the conditions under which these soldiers will be performing; what sort of facilities are available in the places where the soldiers will be deployed; and what sort of support will be required. So there will be all those considerations but remember the court said all policies were constitutional so we are complying with that decision. So the UN aspect was not looked at.
Journalist: What was the budget for this new logo? When would be a good time to expect Doctor Motsoaledi to give us that briefing for which today was too busy?
Themba Maseko: The cost of developing this logo was not specifically discussed at this meeting but I can tell you well it’s a beautiful logo. Isn’t it? The process took place over a three year period involving consultations and discussions with a variety of stake holders, public and private sectors. We can get the cost for you and tell you how much it has cost. The briefing by the Minister of Health we will be fit it in during the Ministerial Cluster Briefings next week.
Journalist: Why was it felt necessary to drop the name Imbizo or is Imbizo for public participation and change it?
Themba Maseko: The view was that the name of the campaign must focus on more what we are seeking to achieve and it was felt that public participation is the primary objective of this campaign. And therefore calling it exactly what it is was felt it would be a good thing for this Government. As you are aware this is a new administration it wanted to make sure that all the challenges and weaknesses we have identified during the Imbizo programme is actually addressed and changing the name is part of that. The fact that in some instances there was complaints that Izimbizo would take place but not enough feedback would be given to communities. So those are some of the things we are trying to address and changing the name will also send a clear signal to communities that we do things slightly differently.
Themba Maseko: Thank you for your patience.
Themba Maseko (Government Spokesperson)
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Issued by Government Communications (GCIS)