Breather for blacklisted South Africans

For those who cannot find jobs or accommodation due to blacklisting please take note and grab the opportunity:

A proposed new credit amnesty could benefit up to two million blacklisted South Africans, the department of trade and industry told MPs on Wednesday.

“At this stage, research indicates that around two million people could benefit,” said deputy director general Zodwa Ntuli.

He spoke after briefing Parliament’s portfolio committee on trade and industry.

Ntuli said the department would, within a month, present the committee with final proposals on how to introduce a new amnesty, seven years after the last reprieve, to those with bad credit records.

She said officials were finalising deliberations on independent research findings carried out by the Matlotlo Group, commissioned by the National Credit Regulator.

NCR chairperson Trevor Bailey said it had shown that the removal of adverse credit information under R10 000 would benefit 86% of people earning less than R15 000, which translated into about two million people.

He said the object would not be to write off existing debt or to enable people to take on more credit if they could not afford it.

Rather, it was to give some of those blacklisted in the past a clean slate so that they could have access to housing and jobs. This would stimulate economic growth, he said.

“It cannot be about creating more debt, but done rationally and responsibly, an amnesty can create growth impetus and give people access to accommodation and employment.”

Indications were that the amnesty could also help the property market pick up.

Ntuli said the next meeting should result in the department making recommendations about the thresholds and the time-frames for people to qualify for an amnesty.

The department argued that if criminals were pardoned and released from prison, it was only fair that those with a poor credit record should also be allowed a second chance.

She said a new amnesty would not alter the workings of the National Credit Act.

“Other countries come to us to learn from our act, so we will never do anything that can harm it.”

Portfolio committee chairperson Dumisani Gamede said he hoped to see the amnesty in place by year’s end.

“We hope that by Christmas we will have a Christmas present for the consumer.”

Breather for blacklisted South Africans


Vodacom heading for cultural crises and suicide

WirelessG CEO Carel van der Merwe says that Vodacom has reached a state of total incompetence.

WirelessG said that Vodacom failed to meet the requirements laid down by Deputy Judge President Willem van der Merwe for their answering affidavit in the ongoing legal battle between the two companies, showing that it has reached a state of “total incompetence”.

WirelessG and six other applicants filed an urgent court application against Vodacom in January, arguing that Vodacom is not in compliance with its shareholding agreement with WirelessG.

The court application focussed on three main issues, which WirelessG argues is costing them millions in lost revenue and damages.

  • Vodacom is not permitted to provide WiFi independently from WirelessG – WirelessG said that Vodacom is offering WiFi services, and is using other companies to offer WiFi without giving them first right of refusal as agreed upon;
  • Vodacom is obliged to offer WirelessG’s WiFi as an integral part of its data bundles – Vodacom is not doing it, which WirelessG said has cost them R174 million, to date, and R7 million per month; and
  • Vodacom has to provide WirelessG with a data price equal to Vodacom’s best wholesale data price – WirelessG said that this is not happening, which has caused damages of R20.5 million and counting.

Vodacom was required to submit a response on 11 February. According to WirelessG the response fell far short of what was required – hence the specific directives issued by the Deputy Judge President Willem van der Merwe.

WirelessG highlighted in a legal letter that:

  • The affidavit of Mr Shameel Joosub CEO of Vodacom has not been signed. This means that “The content thereof could at this stage either be amended by him or parts thereof deleted or aspects inserted.”;
  • The answering affidavit was not served on our office as per the directive of the Deputy Judge President and the telephone conversation between our Mr Jacobs and your Mr Conradie in which it was agreed that service will be affected by hand on or before 17h00 on 11 February 2013; and
  • We only received extracts from your answering affidavit via e-mail on 11 February 2013. We record that we have up to now neither received your answering affidavit nor did you comply with the directive of the Deputy Judge President.

According to WirelessG “condonation for the late filing of your affidavit will need to be asked for”.

WirelessG added that this is merely another attempt by Vodacom to unnecessarily delay the proceedings.

“Vodacom heading for cultural crises and suicide”

WirelessG CEO Carel van der Merwe

WirelessG CEO Carel van der Merwe

WirelessG CEO Carel van der Merwe said that Vodacom is heading for a cultural crises and suicide.

“They have reached a state of total incompetence. They renege on agreements and now even think they can operate above law,” said van der Merwe.

“They cannot execute their CEO’s instructions to execute a shareholder’s agreement, neither can they execute the directives provided by court to deliver their response in time and according to good practice.”

MyBroadband tried to get feedback from Vodacom about their legal reply yesterday, but the company sidestepped questions about their reply.

Vodacom was also asked about the alleged poor response and that it did not follow the directives issued by the judge, but the company did not respond by the time of publication.

Vodacom heading for cultural crises and suicide: WirelessG

The reason why business confidence is low in SA

The reason why business confidence is low in SA, it is because fundamentally businesses are there to make a profit by funding economies that yield positive and sustainable results.

Business is not there to fund private and personal economies of politicians.

I hope our government understands that and engage business in a manner that will entice them to re-commit to the vision of a progressive economy. So far government confuses legislative power with economic muscle. Government has power of promise and business has the resources to transform that promise into physical reality…So far, it would seem like business is not convinced that our government has the capability to run a delicate economy like ours. So let’s not be surprised if countries like Angola, Malawi, Nigeria, Congo become pregnant with investments from SA businesses…

Just a thought!!!

Xolani Majola

Policy Analyst

Loondispuut by Dairy Belle-aanleg

’n Gewelddadige loondispuut sleep al byna ses weke voort by Dairy Belle se aanleg op Bloemhof.

Loondispuut by Dairy Belle-aanleg

Sowat 75 000 liter melk is afgeskryf weens dié staking. Foto: ROBERT SOUTHEY

Sewe verdagtes het Woensdag (16 Januarie 2013) in die landdroshof op Bloemhof in Noordwes verskyn op aanklagte van openbare geweld en opsetlike saakbeskadiging na aanleiding van ’n staking by die Dairy Belle-aanleg op die dorp. Die verdagtes is aangekeer nadat een van die onderneming se afleweringsvoertuie Maandag (14 Januarie 2013) met klippe en ’n petrolbom bestook is.

Mnr. Gerhard Oosthuizen, kommersiële direkteur, sê sowat 300 werkers staak by die aanleg. Hulle eis ’n verhoging van 18% en word deur ’n vakbond verteenwoordig.

Luidens ’n polisieverklaring is die vragmotor toegetakel terwyl die bestuurder die aanleg verlaat het ná ’n aflewering. Lede van ’n private sekerheidsmaatskappy het rubberkoeëls afgevuur in ’n poging om die skare uitmekaar te jaag. Volgens die polisie het ’n wettige optog op Woensdag 16 Januarie 2013 na die aanleg plaasgevind. ’n Griefskrif is aan die bestuur oorhandig.

Miljoene se skade

Volgens Oosthuizen het die maatskappy reeds miljoene rande se skade weens die staking gely. Kort nadat die staking begin het, is die paaie rondom die aanleg afgesper en ’n besending van sowat 75 000 liter melk moes afgeskryf word. Die maatskappy moes ’n hofbevel kry om stakers te verhinder om paaie te versper.

Op 21 Desember is ’n pakhuis aan die brand gesteek. Die skade was tussen R5 miljoen en R10 miljoen. Weens die staking kon verskeie aflewerings nie betyds gedoen word nie. Oosthuizen sê die verliese as gevolg daarvan kon nog nie bepaal word nie.

“Ons is veral bekommerd oor die voortslepende aanvalle met klippe en petrolbomme. Gister (Dinsdag 15 Januarie 2013) is twee petrolbomme oor die muur gegooi. Al ons voertuie word nou ook deur private sekerheidsbeamptes vergesel wanneer hulle die aanleg verlaat,” sê Oosthuizen.

Deur ALANI JANEKE – 16 Januarie 2013

Loondispuut by Dairy Belle-aanleg

Gold Fields to Spin Off South African Mines as Strikes Add Costs

Gold Fields Ltd. (GFI), the fourth-biggest producer of the metal, will spin off part of its South African business as a wave of strikes and above-inflation pay gains add to costs and curb output for mining companies in the country.

Sibanye Gold Ltd. will trade in Johannesburg and New York and include the Kloof-Driefontein Complex, Africa’s largest gold operation, and the Beatrix mines, Gold Fields said today in a statement. The company will keep South Deep, its second-biggest facility, and mines in Peru, Ghana and Australia. The stock rose the most in 14 months in Johannesburg.

The company is partly reacting to rolling wildcat strikes that began in South Africa’s platinum industry, before spreading to gold, iron-ore, coal and diamond mining. About 29,000 Gold Fields workers walked out in the past two months, winning pay gains that added to rising power costs and capital spending.

“If anything, the strike has accentuated the need for a different focus so that we can stop a decline in production and increase in costs,” Chief Executive Officer Nick Holland said. “This is something we’ve been thinking about for some time.”

Gold Fields has won approval from the South African Reserve Bank for the spinoff and is waiting for the Johannesburg Stock Exchange, where Sibanye will begin trading in February, he said.

Gold Fields gained 5.7 percent to 108.60 rand by the close, the most since Sept. 19 last year. The stock is still down 15 percent since the end of 2006, while spot gold prices have almost tripled.

Equities Stuck
“We’ve seen a gold price that’s gone way beyond our wildest dreams in the last five or six years and yet our equities are stuck in the mud, not just Gold Fields,” Holland told investors on a call. “If that continues into the future, then this industry will be in for a massive shakeup.”

AngloGold Ashanti Ltd. (ANG), the third-biggest producer of the metal, retains the option of splitting off its South African operations, CEO Mark Cutifani said Nov. 21. “Nothing has changed,” Alan Fine, an AngloGold spokesman, said today by phone. “He’s been consistent in that message.”

About a third of AngloGold’s metal comes from South Africa, the continent’s biggest economy, where it employs about 35,000. The company’s stock rose by the most in three weeks, gaining 3.9 percent to 275 rand.

Labor unrest this year will lower economic growth in the country and cut exports by more than 12.5 billion rand ($1.4 billion), the National Treasury says. Mining, contributing 6 percent of the economy and employing almost half a million people, will take a year to recover from job losses after the strikes, Finance Minister Pravin Gordhan said Nov. 26.

Largest Creation
The newly created Sibanye will be the largest gold-mining company in South Africa and be headed by Neal Froneman, who is resigning as CEO of Gold One International Ltd. (GDO), according to Gold Fields.

“There will be opportunities for regional consolidation,” Froneman said. Gold One won’t initially be looked at, he said.

The South African share of Gold Fields’ total output will fall to 13 percent from 47 percent after its unbundling, the company said. That proportion will grow to 28 percent in 2016 with the planned increase in production at the South Deep mine.

“The KDC and Beatrix gold mines, which are being hived off, are cash-generative and the plan is to use the cash to extend the mine life of these assets and pay a dividend,” John Meyer, a mining analyst at SP Angel in London, said in a note. “This may also enable international investors who do not want to own South African assets to retain a holding.”

Gold Fields’ dollar-denominated debt will remain with the company and it won’t have a stake in Sibanye, Holland said.

Sibanye Gold will retain Gold Fields’ net debt of around 4 billion rand, while about $1.4 billion of offshore debt will be retained by Gold Fields, the company said in a statement.

Credit Suisse Group AG and JPMorgan Chase & Co. are acting as financial co-advisers on the transaction, while Credit Suisse is also an underwriter of the company’s debt facilities.

To contact the reporters on this story: Jaco Visser in Johannesburg at; Paul Burkhardt in Johannesburg at

To contact the editor responsible for this story: John Viljoen at

SourceGold Fields to Spin Off South African Mines as Strikes Add Costs

Eskom driving South Africa out of business

“South African business is at a tipping point,” – Energy Intensive User Group

Ten years ago the cost of energy was 50% the cost of maintaining a hospital. This year, for the first time, the cost of electricity is equivalent to the cost of maintaining a hospital, according to hospital group Mediclinic. Similarly, a decade ago electricity accounted for 0.8% of sales at Shoprite. It now accounts for 2% and the retailer expects this to rise to 4% of sales.

At African Rainbow Minerals, an 18% increase in sales generated a 2% rise in headline earnings, because electricity and wage increases swallowed the profits. And Astral Chickens has suspended wage negotiations during its most difficult period in 30 years. Rising electricity costs means the company has little wriggle room in the face of other industry related challenges.

The food industry is set to impose a 10% price increase as profit margins are eroded by rising input costs like fuel and electricity.

These are the stories of big, listed companies with resources to lessen the impact of cost increases. The difficulties faced by the small entrepreneurial businesses are untold. But all the stories, it would appear, are falling on deaf ears.

“South African business is at a tipping point,” says Mike Rossouw, chairman of the Energy Intensive User Group (EIUG). “Energy pricing is pricing capacity out of business. There is no doubt in my mind that further price hikes will push companies out of business.”

His comments come as the window for written comment on Eskom’s multi-year price determination application – for tariff hikes over the next five years – closes. Public hearings on the MYPD3 will take place in January and final decision will be tabled in parliament by the middle of March 2013.

Tuesday also saw Eskom release its results for the six months to end September 2012. Revenue increased to R73.4bn, up from R63bn last year. This was largely thanks to the tariff increase which the National Energy Regulator (Nersa) granted Eskom earlier this year. Net profit fell marginally to R12.6bn. Eskom ascribes this to the 2.9% drop in electricity consumption.

The profits are reinvested in full in Eskom’s business to service debt and support the funding of its capacity expansion programme.

Eskom’s growing financial stability does not ease business’s pain. “The mining sector accounts for about 22% of the gross domestic product and 55% of direct foreign investment. We should protect that investment at all costs,” says Rossouw. “Instead our miners and energy-intensive manufacturers are being approached by the likes of the US, Canada and China.”

Eskom driving South Africa out of business

Eskom electricity prices (Courtesy of Professor Anton Eberhard and Chris Logan)

The EIUG consists of 38 of the largest energy consumers, covering 40% of South Africa’s electricity use. Rossouw notes that more and more companies are approaching for support, saying they cannot sustain their businesses.

They are not just mining companies. “There seems to be an immense insensitivity and lack of concern that the effect of input costs, especially electricity, has on South African manufacturers,” founder and chief executive of Pan-African Capital Holdings, Dr Iraj Abedian, said at the Manufacturing Circle 2012 third quarter bulletin and survey results last week.

The survey reflects the views of South African export manufacturers across various industries, including ArcelorMittal, Saab Grintek, Altron and others.

“In my little circle I know in excess of R20bn of investment that is on hold for one simple reason: lack of energy. Not lack of energy today, but the lack of a credible energy policy,” Abedian said. “Remember, somebody who wants to invest is investing for the next 20 to 30… 50 years.”

What international competitiveness South Africa has retained is being eroded by the rapid rate at which the domestic electricity price is rising

Eskom and the department of Energy have sold the story that the price increases are necessary to build and pay for new infrastructure the country needs so desperately.

But there are alternatives and Tuesday’s interim results presentation from Eskom was revealing.

“Eskom is determined to stick to a cost reflective model,” says investment analyst Chris Logan. “This is despite the increasing evidence which suggests its price path should emphasise productivity and efficiency. Cost reflective tariffs take away any incentive to cut costs.”

Eskom’s operating costs, measured per kilowatt hour increased by 23% over the last year. These were driven up by extraordinary costs such as running its two highly expensive open cycle gas turbines and electricity buy-backs from the ferrochrome producers. “It is questionable whether Eskom needed to do these buy-backs considering they sold less electricity than budgeted for.”

Logan notes that the number of employees increased by 7.5% in the last year and average remuneration per head jumped. “If Eskom is producing the same amount as it was seven years again, why have employee numbers risen by 37% – it violates any notion of productivity.”

Also worrying is the fact that Eskom aims to earn 7% to 8% return on assets within the next three or four years. “For a company like Eskom which is government guaranteed and a monopoly, that is far too high,” Logan adds.

While the regulator may have reduced Eskom’s previously approved tariff increase of 25.9% to 16% for 2012/13, this does not address the problem. The time to avoid and postpone difficult decision making has gone. “Government needs to take a very serious look at all the aspects in MYPD3,” Rossouw says. “Nersa does not have capacity to scrutinise that application to the extent it needs to be scrutinised.”

One of the objectives of the supply of efficient and reasonably priced electricity is to drive economic growth, which in turn lifts living standards. But according to Rossouw government has mixed its objectives. It is also using electricity sales as a source of funding for social development objectives. According to Rossouw, roughly 14% of an industrial tariff is for non electrical charges – including free basic electricity and other items. A similar amount is levied to municipal customers.

Until the cost of electricity is addressed in a substantive manner, it won’t only be heavy electricity users who will find it increasingly difficult do business in South Africa, he says. Rising electricity costs make it difficult for businesses from small ice cream makers to industrial manufacturers to overcome their many challenges.

SourceEskom driving South Africa out of business

Eskom posts massive profits

Eskom has reported an interim profit for the six months to end-September 2012 of R12.6bn.

The state-owned power utility reported a net interim profit of R12.8bn for the first six months of 2011 and R13.2bn for the full 2011 financial year.

Eskom’s revenue for the period increased to R73.4bn, up from R63bn in the same period in the previous year. This was driven mainly by last year’s 16% increase in electricity tariffs.

Eskom CEO Brian Dames said all profits are reinvested in full in Eskom’s business.

“The profits are used to service debt and support the funding of our capacity expansion programme.”

He said profits for the full 2012 financial year are expected to be lower, with breakeven at best during the second half of the year, when Eskom must take advantage of lower summer demand to do higher levels of maintenance on its power stations.

It was also announced on Tuesday that Paul O’ Flaherty, Eskom’s chief financial officer, will leave the company in July 2013 after serving in this capacity for three years. O’Flaherty said he wants to move on to new challenges.

“My job was to put in place the financial foundation for a new era of growth and improvement. Today Eskom is ready for that new era and it is an opportune and logical time for me to move on.

“To stay longer would require a commitment to a much longer time frame than I had envisaged. My job is done and my successor can take it further,” he said.

Eskom recently submitted its application to energy regulator Nersa for a third multi-year price determination (MYPD3), requesting a further average 16% tariff increase per year over the next five years.

Since 2005, Eskom has spent R156bn (excluding capitalised interest) on its build programme, which has so far already added 5 776 MW of generation capacity to the national grid, as well a 4 327 km of transmission network and 22 445 sub-station transformers.

“We are working hard to deliver on Eskom’s new build programme, with a special focus on bringing in the first unit of Medupi online next year,” Dames said.

Eskom’s funding plan is well advanced and about 80% of the funding needed for the new build programme has been secured. Eskom’s gross debt stood at R213bn at end-September 2012 and is expected to go as high as R360bn.

The embedded derivative liability at end-September 2012 was just under R5bn.

This is in effect a loss reported by Eskom due to a special pricing agreement it has with BHP Billiton’s aluminium smelters in KwaZulu-Natal. Eskom has submitted an application to Nersa to review these special pricing agreements.

SourceEskom posts massive profits

Telkom’s profits taking a knock

Johannesburg – Telkom warned late on Wednesday that its profits could take a knock of up to 83%.

“Telkom SA SOC Limited
(Registration Number 1991/005476/06)
ISIN ZAE000044897
JSE Share Code TKG

Updated trading statement for the six months ended 30 September 2012

Further to the trading statement released on 20 September 2012 and in accordance with
section 3.4 (b) of the JSE Listings requirements, Telkom hereby advises shareholders
that headline earnings per share from continuing operations for the six months ended 30
September 2012 are expected to be between 78% and 83% lower than the comparative

Basic earnings per share from continuing operations for the six months ended 30
September 2012 are expected to be between 62% and 67% lower than that of the prior

Telkom’s interim results for the period ended 30 September 2012 will be released on or
about 19 November 2012.

This trading statement has neither been reviewed nor reported on by the company’s
external auditors.

14 November 2012

Sponsor: UBS South Africa (Pty) Ltd”

Date: 14/11/2012 07:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

SourceSENS News

In the above trade update released after the markets closed on Wednesday, the telecommunications giant said it expected headline earnings per share from continuing operations for the six months ended September 30 2012 to be between 78% and 83% lower than the comparative period.

Basic earnings per share from continuing operations were expected to be between 62% and 67% lower.

The trade update was followed by an announcement that the parastatal appointed Jabulane Mabuza and Kholeka Mzondeki to its board on Wednesday.

Six board members, including CEO Nombulelo Moholi and board director Neo Phakama Dongwana, resigned earlier in November.

The election of a new chairperson may be contested by board members, especially those appointed by government, Business Day reported on Thursday.

Communications Minister Dina Pule voted off four board members at Telkom’s annual general meeting in October. The meeting was last chaired by Lazarus Zim, who announced his resignation as Telkom chairperson in September.

Moholi had rejected speculation that she intended resigning after Zim left.

Telkom’s share price had fallen by 10% since Moholi’s resignation.

The parastatal is expected to release its interim results on or about November 19.

SourceTelkom warns on profits

Corruption in South Africa

The cost of financial misconduct in government departments has increased, but reports about such transgressions have dropped. This would be a simple statement if it did not signal the devastating extent of state corruption in South Africa and talk of the moral bankruptcy of senior public servants.

How can those entrusted with state treasures end up looting them? To whom can ordinary citizens turn?

This week, the Public Service Commission (PSC) briefed parliament’s portfolio committee on corruption trends. Dr Richard Levin, the PSC director-general, recommended that public servants be banned from doing business with the state through their own businesses. He also recommended that lifestyle audits of key personnel be conducted to curb financial misconduct in the government.

Levin’s tough stance followed his shocking revelations that in 2010/11, public servants robbed the state to the value of almost R1-billion – and bear in mind that the 2012 statistics have not yet been added to the already astronomical figure attached to corruption in the state.

The PSC’s mind-boggling figures stated that:

  • The national Transport Department had 31 senior managers with direct stakes in companies that were awarded state tenders;
  • Traditional Affairs had 37;
  • Health had 13; and,
  • Human Settlements had 21.

“What is clear is that the trend of corruption taking place on a senior level means we need better and more ethical leadership in the public service,” said Levin.

Corruption Watch’s executive director, David Lewis, also didn’t mince his words. About the PSC’s analysis, he said: “This report vindicates our consistent demand that public servants should, firstly, not be permitted to undertake any paid work in addition to their employment in the public service.

“Secondly, under no circumstances should public servants or members of their families be entitled to own a company that provides goods or services to the department in which they are employed. The report of the PSC clearly establishes that these constitute gross conflicts of interest and are a major source of corruption.”

While Levin wants to see greater accountability for non-performance, Corruption Watch would like to give title of super zero of the week to all those public servants who do business with the state through their multiple companies.

How could you steal what you were hired to protect, we may ask.

As it would have been naïve not to take the imbalances of the past into consideration, the PSC’s presentation highlighted that during our history of subjugation and dispossession, the black and particularly black African population was excluded from access to markets and condemned to lives of poverty.

In the post-apartheid context, there is greater reliance on the state, not only for welfare but for patronage.

This reflects the popular tenderpreneurs’ saying: “It’s our time to eat.” But stealing from ordinary South Africans will not correct the imbalances of the past.

SourceWho guards the guardians

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