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Global South African News Wrap

Could the ANC survive seven more years of Zuma? Dignitaries’ dinner tribute to Dlamini-Zuma Probe into Marikana approved by human rights commission Zuma visits radio telescope site Zuma, Peters ‘will meet power target by 2014’ Motlanthe nomination jars ANCYL leaders Zuma applauds SKA project ‘R800m was not donated for Nkandla’ The R582m road to Nkandla Political risks to watch in South Africa Two get ready to go Zuma seen as favourite to win Strike to hit us harder Service-delivery protests getting uglier – report ANC branches ‘have last word on leaders’ Former DA leader backs united opposition Chairwoman of Parliament’s transport committee quashes Nkandla queries Madonsela red-flags ‘systemic’ tender fraud in public sector Zille ‘shreds’ ANC in London Zuma battles with due process in appointments Gordhan rues graft in municipalities SAA crisis deepens as Mzimela joins exodus Parallel structures divide the ANC ANC leadership 'deal' on the cards Sheriff attaches Malema’s assets Simelane could still become national prosecutions chief ‘Political affiliation’ is NUM’s stumbling block Only public anger can stop Nkandla splurge Strikes, ANC battles to hog headlines Motlanthe book claim rattles ANC race SAA money woes worse than feared, report shows An end to the chaos GP rejects Mbalula

10 October 2012 Business Day Page 9 Allister Sparks Could the ANC survive seven more years of Zuma? TWO things have occurred in the past fortnight that could profoundly influence the course of events in this country. The first is the mounting evidence that President Jacob Zuma is going to be reappointed as leader of the African National Congress (ANC) in December; the second is Democratic Alliance (DA) leader Helen Zille’s call for the formation of a new opposition party. It is the interaction of these two events, if they occur, that I find interesting because that could transform our entire political landscape. I have in fact speculated about both at different times over the past two years, but now they are part of the public debate and could conceivably come about in the relatively near future. The near certainty of Zuma’s reappointment at Mangaung is no surprise, despite the recent opinion polls showing the majority of urban blacks — especially the youth, who are the constituency of the future — would rather see Deputy President Kgalema Motlanthe become leader of the ANC. The fact is, as we saw at the national congress of the Congress of South African Trade Unions (Cosatu) last month, the ruling alliance is so riven with factionalism that the widespread expectation is that, come the crunch, senior ANC members will arrange a managed reappointment rather that risk a disruptive fight on the conference floor. That is why the gaping rift between affiliate unions wanting to dump Zwelinzima Vavi as Cosatu’s general secretary, while others wanted to keep him, were papered over and the whole executive was simply re-elected en bloc — and why Vavi, who everyone knows would like to replace Zuma with Motlanthe, advised the ANC to do likewise at Mangaung. So Zuma it will almost certainly be. Unfortunately. For, to be frank, Zuma’s first term as president has been a disaster. Watching the decline of our brave new SA during his three-and-a-half years at the helm has been heartbreaking. He has shown himself to be a flawed personality and an inept leader. On his watch, the ANC has sunk from being an iconic liberation movement admired the world over to a faction-riven shadow of its former self, while his government has declined into an incompetent, ideologically confused and morally corrupt kleptocracy. Zuma has presided over a widening wealth gap, a dysfunctional education system, a chronic shortage of skills, a potentially explosive level of unemployment, a disintegrating public health system, service delivery failures across the board, a confused foreign policy, and a declining national economy that has been crippled by a negative attitude towards the private sector to the point where a major rating agency has now downgraded it together with some of our most crucial parastatals.

Worst of all, Zuma has revealed an alarming misconception of the meaning of democracy, as well as an inadequate understanding of, or even respect for, the constitution he is sworn to uphold. He has said on several occasions that the constitution should not be able to frustrate the will of the majority in Parliament, which of course is precisely what a democratic constitution must do if the government violates the founding law of the country. Then, in a condescending lecture to the young leader of the opposition in Parliament, Lindiwe Mazibuko — addressing her as "young girl" and speaking to her as one would to a child — he presented the astonishing concept that democracy means a majority has greater rights that a minority. Can the president of a country as significant as SA really be ignorant of the fact that the very essence of democracy is that all have equal rights? Yet this manifestly inadequate man is about to be given a second term. If that happens, Zuma will be president of SA for the next seven years, twice as long as we have already had him. I doubt whether the ANC could survive that. This is what makes Zille’s call for the building of a new opposition party — what she calls a coming together of all those concerned about the alarming drift in our national affairs — so timely. It was much more than a commercial move for her own DA. It was a bold and considered analysis of the critical state of the nation and the inability of the present line-up of political parties to turn things around. As she put it, all the key parties have deeply embedded brand names, rooted to a degree in identity, which keeps apart millions of people who really belong together. She identified two broad political groupings — those committed to nonracialism (on the basis of reconciliation and redress, as she put it), constitutionalism and a marketdriven economy on the one hand and those who believe in racial mobilisation, power abuse and state control on the other. "The ANC colossus stands in the middle," she said, "pulled in both directions but unable to move either way without falling apart." On a more specific note, Zille referred to the diagnosis of the country’s economic problems presented by the National Planning Commission and its proposals for dealing with them, which she said closely resembled her own party’s economic programme but which stood little chance of being implemented because to do so would tear the ANC apart. Essentially, what Zille is doing is reaching across party lines with a call for a new and more logical political line-up. She is doing so in the belief that the conflicts, contradictions and rivalries within the ANC must lead it at some point to "implode". Some analysts dismiss this as wishful thinking on the part of the government’s critics. Maybe so, but I have come to the view that another seven years of a Zuma presidency is more than the ANC can endure. He is just too tainted, too inadequate and too unpopular. To cite one example, can Trevor Manuel sit out another seven years as a wallflower in the Presidency, wasting what should be the peak years of an illustrious career, smouldering with frustration while his fine National Development Plan gathers dust? He surely can’t go back to his old job as finance minister, or accept any lesser one in the Cabinet.

So what’s left? Overseas maybe, but he has probably missed the bus at the World Bank and the International Monetary Fund now that the South African economy has lost its lustre. The best offer may be something like SA’s ambassador in Ouagadougou. And what about Finance Minister Pravin Gordhan, another who must be hugely frustrated watching all the wasted expenditure on pet personal projects such as Nkandla? And Motlanthe, whose new biography makes his own criticisms of Zuma’s stewardship clear and who knows most South Africans would prefer him at the top? After a brief spell as president himself, will the prospect of 10 years as bridesmaid to a lesser man seem appealing? There are plenty more who will not relish another seven years under Zuma. I sense that the 2014 election will turn out to be a catalytic event. The Zuma-led ANC is likely to perform poorly, its percentage of the vote possibly sinking into the alarming 50s, giving an indication of its longer-term prospects. Yes, the ANC may have strong bonds of history and identity, but there is nothing quite like the sense that a ship is sinking to see rats and politicians jump. 10 October 2012 Business Day Page 3 Nick Kotch Dignitaries’ dinner tribute to Dlamini-Zuma WHEN she heads off to her new life in Addis Ababa at the weekend, Nkosazana Dlamini-Zuma can have no complaints about the quality or the warmth of the send-off she received at a state banquet in her honour. Her former husband, President Jacob Zuma, led the dignitaries who sang her praises, saying that South Africa’s loss was Africa’s gain. "A great woman indeed, a great leader, a great cadre of the African National Congress (ANC)," Mr Zuma said in his tribute on Monday night to the woman with whom he had four daughters when they shared a life in exile. Hundreds of leading lights from the government, the ANC, business, the arts and the diplomatic corps dined at the Sandton Convention Centre for the farewell party of the new African Union (AU) Commission chairwoman. After a drawn-out and often acrimonious duel with Jean Ping, the Gabonese incumbent, Ms Dlamini-Zuma was elected in July to the job of running Africa’s expanding and heavily criticised institutional panoply.

She is drawing the curtain on 18 unbroken years as a minister, in charge successively of health, foreign affairs and home affairs. Speakers hailed her performance from the day when former president Nelson Mandela first appointed her in 1994. Hard work, determination and loyalty were popular words in the flow of encomiums from former colleagues and subordinates. "By releasing one of our best, we are proving our commitment to Africa. Fare thee well, dear comrade and sister," said Maite Nkoane-Mashabane, her successor as foreign affairs minister. Trevor Manuel, one of her closest Cabinet allies and now a minister in the Presidency, compared her imminent transfer to the AU headquarters in Ethiopia to a second life in exile after the 14 years she spent abroad in the apartheid era. "She is going to turn around the fortunes of our mother continent," Mr Manuel said. Mr Zuma said the heads of state of the 54 AU member countries took the decisions but these were meaningless unless they were actually implemented. "We need to change the way the AU works. It must not continue as if the world is not changing. Dr Dlamini-Zuma represents that change," he said to applause. "We must demonstrate that we can change that institution and make it serve the continent," he said, describing Ms Dlamini-Zuma as a hard taskmaster in her professional life. Sources in Addis Ababa reported a level of nervousness among some AU commissioners and public servants about the arrival of their new boss. There are frequent calls from around Africa for an urgent turnaround of the AU and sister bodies such as the Pan-African Parliament, the New Partnership for Africa’s Development and the African Peer Review Mechanism. Yet the AU is the oldest of these groups, aged only 10, and when it was created, under the impetus of Mr Zuma’s predecessor, Thabo Mbeki, it was billed as a radical change from the Organisation of African Unity (OAU). The OAU, founded in 1963, was by the end of its existence in 2002 often dismissed as a cosy club whose members were mostly life presidents or military strongmen. Mr Mbeki, who was not at Monday’s banquet, has pointed out that Ms Dlamini-Zuma does not have free rein in her AU job. Presidents and prime ministers are in charge of policy and their governments can be expected to defend the interests of compatriots posted to Addis Ababa, even if she wants them out, African diplomatic sources said. It remains to be seen whether the bruising battle with Mr Ping’s supporters has left lasting scars. The new AU Commission chairwoman was careful not to echo the occasionally triumphalist comments made by some speakers at the banquet. She said she would serve the whole of Africa and was confident about the continent’s future.

"I wouldn’t say it has taken off but, from where I sit, it is taxiing very fast on the runway," said Ms Dlamini-Zuma.

10 October 2012 Business Day Page 3 Carol Paton Probe into Marikana approved by human rights commission THE South African Human Rights Commission has decided to go ahead with its own investigation into human rights abuses at Marikana, despite the strong misgivings expressed by Parliament’s portfolio committee on justice on Tuesday. The commission, which met the committee to discuss the matter a month ago, has decided it "will continue with our investigation into allegations of human rights abuses". It said it had received two complaints to trigger this action: one from a nongovernmental organisation ; and another referred by the public protector. The complainants cannot be named unless they choose to reveal their identity. "It is in the public interest to proceed with an investigation," the commission said on Tuesday. The objections from the portfolio committee were that such a investigation would be a "waste of resources" as it would duplicate the work of the Farlam commission. Spokesman for the commission Isaac Mangena said on the basis of its own inquiry the commission would make a submission to the Farlam commission, which is the official judicial inquiry established by President Jacob Zuma. The human rights commission did agree with other criticism raised by the portfolio committee that it should withdraw its brief to the Legal Resources Centre, which was to represent it at the Farlam commission. However, the human rights body would continue to work very closely with the centre on other matters involving human rights violations. The parliamentary committee had argued that the centre was also representing other parties — such as the families of victims — in the hearing. ANC member of the committee John Jeffrey said members believed that this would pose a possible conflict of interest.

10 October 2012 The New Age Ina Skosana Zuma visits radio telescope site The sleepy town of Carnarvon was flooded by visitors from across the country as President Jacob Zuma paid it a visit yesterday. A five-hour long drive from Kimberley, Carnarvon is the town where the Square

Kilometre Array (SKA) radio telescope is located. The SKA will be a revolutionary radio telescope made of thousands of receptors linked together across an area the size of a continent. The total collecting area of all the receptors combined will be approximately one square kilometre making the SKA the largest and most sensitive radio telescope ever built. Newly appointed Minister of Home Affairs Naledi Pandor has been at the forefront of ensuring South Africa won the bid to host the SKA on the continent. Pandor used the opportunity to hand over the project to the new Minister of Science and Technology, Derek Hanekom. Thousands of community members gathered at the Carvarvon Primary School to listen to Zuma’s address. Zuma delivered the speech after his first visit to the SKA site where an “engineering prototype” KAT7 is situated. Addressing his community members, Jason Slarerse, a Carnarvon high school pupil, said he was excited to have access to the SKA project. “This project has really brought hope to our community,” said Slarerse. Slarerse said that thanks to the project his school had received a cyber-lab worth R750000. According Zuma, there was development on the cards for the vast province of the Northern Cape. Said Zuma: “The location of the SKA site augurs well for government’s plan to build the first university in the Northern Cape province. “It is also a major boost for the Karoo region which has been described as prime location for radio astronomy. “I am pleased to note that the SKA project has also contributed to government’s priority of job creation and has also created extensive business opportunities for local people.”The President called on the community to support the SKA project. “We hope that this project will open many more opportunities and will also herald a new era in the future development of the Northern Cape and South Africa as a whole,” said Zuma. “Minister Pandor and Minister Hanekom, I thank you and your team for your active participation and providing steady steer on the direction of this project.” 10 October 2012 The New Age Siyabonga Mkhwanazi Zuma, Peters ‘will meet power target by 2014’ The Department of Energy is on track to meet its targets of electrifying thousands of homes and providing solar water heaters as part of government’s effort to increase

the use of renewable energy. The department told MPs yesterday that the delivery targets set out in the agreement between President Jacob Zuma and Energy Minister Dipuo Peters would be met. However, the department said that the use of energy was increasing in the country and they wanted more people to use solar water heaters. Deputy director-general for hydrocarbons Tshidiso Maqubela said that they were targeting one million households to used solar water heaters. Currently, there were 270000 families that use solar water panels he said. Maqubela said they would soon reach that target. The department had secured R4.7bn from the national Treasury to ensure that they reached the target of one million homes by 2014. “The programme is expected to create 14000 jobs,” he said. Maqubela also told the committee they wanted to reduce the backlog of the electricity distribution infrastructure. He said they wanted to cut down the backlog from R27.4bn to R15bn in the next two years. He also told MPs that they wanted 92% of households to have access to electricity by 2014. As part of the programme of reducing infrastructure backlog, the department had identified 23 district municipalities that would benefit from the programme. Maqubela said the district municipalities cut across all nine provinces and had specific needs that the department had identified. These municipalities would be prioritised. MPs welcomed a decision by the government to enter into a partnership with the Democratic Republic of the Congo to share the Grand Inga Hydroelectric Power Project to produce 4000MW of electricity for the two countries. 10 October 2012 The New Age Warren Mabona Motlanthe nomination jars ANCYL leaders Some irate members of the ANCYL’s national executive committee (NEC) yesterday said they were still waiting for a response from the league’s leadership and the ANC on the process that led to the nomination of Deputy President Kgalema Motlanthe for the governing party’s presidency. A senior NEC member who asked not to be named told The New Age that she would push for an answer through ANC structures. Another disgruntled NEC member said: “I’m still waiting for a response and there is nothing else I can do at this stage. But we will get together and decide on the next

step if they don’t respond to us this week.” More than five NEC members, as reported in The New Age on Monday, wrote letters to the league’s deputy secretary general Kenetswe Mosenogi and ANC secretarygeneral Gwede Mantashe last weekend. They demanded answers from the league and the ANC’s intervention in the nomination process after accusing the league’s leadership of not following proper channels when nominating Motlanthe. They said the whole process was carried out within a forum called the extended national working committee of the Youth League. ANC spokesperson Keith Khoza denied any knowledge of such letters. “I don’t know if there were any complaints from the league because we have not been briefed about them.” ANCYL spokesperson Magdalene Moonsamy asked for a written enquiry and promised to respond later. Motlanthe has not yet publicly responded to the ANCYL’s nomination.

10 October 2012 Cape Times Page 5 Michelle Jones Zuma applauds SKA project Pretoria - The implications and benefits for SA of hosting the Square Kilometre Array (SKA) are mind-boggling, says President Jacob Zuma. He was speaking on Tuesday at the Northern Cape site where the telescope is to be built between 2016 and 2024. “We must be excited. It means we are moving ahead, developing infrastructure by science. I never thought that infrastructure development could take place in the middle of nowhere,” he told the assembled group of journalists. Seven dishes of the KAT-7 radio telescope have already been built. Zuma said the residents of the nearby town of Carnarvon should feel proud and fortunate as they would benefit from the project with job creation, study opportunities and economic growth. Zuma added that the world would begin to see SA and Africa in a new light, as worldclass destinations at the cutting edge of science and engineering. It was announced earlier this year that SA, with eight partner countries, and Australia, paired with New Zealand, would share hosting duties of the radio telescope.

But SA will get the majority of the R20 billion project. SA had been chosen as the preferred location, but the SKA organisation wanted the benefit of infrastructure already in place in Australia. The next project to be built at the site is the MeerKAT, which is to comprise 64 dishes, and will eventually be incorporated into Phase 1 of the SKA. On Tuesday afternoon, Zuma attended a public meeting at Carnarvon Primary School to tell residents what SKA would mean to them. “I am pleased to note the SKA project has also contributed to the government’s priority of job creation and has created extensive business opportunities for local people. “We hope that this project will open many more opportunities and will also herald a new era in the future development of Northern Cape and [SA} as a whole. We count on your support to make this project a huge success.” Bernie Fanaroff, SKA SA project director, said the hard work was just beginning. “[We] thought we were working very hard on the bid. We realise that was the easy part. This is not coming to us on a plate, we have to work hard to implement it.” Fanaroff said now came the “nitty gritty” of finalising what was required of SA as hosts and who would provide funding for the project. Work on the infrastructure was going ahead at the site – roads were being built, an airstrip created, trenches dug and cables laid. “We are… convinced the infrastructure will go ahead.” Fanaroff said the reality was only now sinking in of what SKA, which is to comprise 3 000 dishes, meant for those working on it. “The reality has now come to people. This is a project much bigger than anything that has been built before. This thing is actually enormous and complex.” Fanaroff said SA had people who were capable of such an enormous project. “We’ve shown the rest of the world [that] young people in SA have got the skills.” SKA was exciting because of how it would change perceptions. “I just like the idea. Who would have thought of Africa like that before? Now let’s think about Africa in a different way.” - Pretoria News

10 October 2012 Cape Times Page 4 Melanie Gosling

‘R800m was not donated for Nkandla’ Cape Town - Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson has denied her department gave R800m to the Nkandla “Zumaville” development project.

She was responding to questions from MPs in the portfolio committee meeting on agriculture, forestry and fisheries on Tuesday, when the department presented its annual report. “There is no R800m that was allocated, no R100m allocated, so if certain political parties like the DA and the media want to run agriculture… we will not allow our agenda to be set by the DA and media,” she said. “There is no R800m. It is fictitious and subject to the wild imaginations of certain people.” The department’s acting director-general, Sipho Ntombela, added: “We need to lay to rest this story of R800m. It never happened, but it never dies. We need to bury this and appeal to the committee to help us bury this story.” City Press reported in August that a government document showed the minister would contribute R800m to the Nkandla project. The department received an unqualified report from the auditor-general for the 2011/12 financial year and had spent 99 percent of its R5bn budget. However, the auditor-general said it had failed to achieve 51 percent of its targets in the 2011/12 financial year. Other problems were that the accounting officer had not taken effective steps to prevent irregular and fruitless expenditure; no human resource plan was in place; the financial statements were not all prepared in accordance with the requirements and the department’s management did not “exercise oversight responsibility over reporting and internal controls”. The auditor-general said the department had not always prepared regular, accurate and complete financial and performance reports. DA MP Annette Steyn said “we cannot sit here and praise” the department for spending 99 percent of its budget when there were so many problems in agriculture on the ground. “I’m not trying to be negative, but we get a report that looks kind of nice - until we get on the ground… we saw tractors in the Free State that had been standing there for three years with the seats still covered in plastic,” Steyn said. These were tractors meant to help poor farmers. Other problems in agriculture MPs raised were: * An agriculture extension officer in the Eastern Cape had to hitch-hike or ride a horse to distribute rabies vaccines to farmers as there were only two vehicles between 15 officials. The “cold chain” was broken as the vaccines had to be carried in a backpack. * Provincial and municipal officials were charging poor farmers to use the tractors, which were intended for their use free of charge. The Eastern Cape government charged farmers R1 800 a hectare; the OR District Municipality charged them R200 a hectare and the Amatola District Municipality charged them R600 a hectare.

* Tractors that were handed over in the Eastern Cape in June had not yet been distributed. * There was a mismatch between what poor farmers needed and what the department supplied: a shearing shed had been built in an area where the sheep raised did not get sheared and a piggery had been built where no one farmed pigs. Another major problem was that the number of farmers had dropped from 120 000 in the 1990s to a mere 40 000 today. The average age of these farmers was 62. Not enough young people were moving into farming, which threatened the country’s food security. Cape Times

10 October 2012 Cape Times Page 1 Sipho Khumalo

The R582m road to Nkandla Durban - President Jacob Zuma’s rural homestead of Nkandla has benefited from another development worth a whopping R582 million, thanks to taxpayers. This time the sprawling village of KwaNxamalala has been given two new road networks which were unveiled by the provincial government on Tuesday. The official launch, a stone’s throw from Zuma’s homestead, took place amid huge controversy over the reported R203m upgrade of Zuma’s private residence in KwaNxamalala village. It emerged last week that the Zuma homestead was being upgraded at a cost of between R203 m and R238m, with more than 90 percent of the tab being picked up by taxpayers. Political parties have slated the splurge and demanded a probe into how taxpayers’ money was being used to upgrade the president’s private home. Public Works Minister Thulas Nxesi, whose department is responsible for the upgrade, has defended the expenditure, arguing that the ministerial handbook on spending of public funds does not apply to the president. Zuma has access to presidential residences in Durban, Pretoria and Cape Town. The Nkandla upgrade apparently includes features such as a helipad, waterborne sewerage works, roads, a clinic and accommodation for security staff. Public Protector Thuli Madonsela confirmed this week that her office was probing this matter and the DA has called for a Parliamentary debate on this issue.

The two roads link the presidential village to the Zululand towns of Eshowe, Nkandla and Kranskop. The network forms parts of a project dubbed the Tale of Four Cities as it links Ulundi, Empangeni/Richards Bay, Durban and Pietermaritzburg. Government spokesmen have contended that the roads, built by the KZN transport department, had nothing to do with the upgrade of the presidential complex which is being undertaken by the national department of public works. Transport MEC Willies Mchunu also opened two pedestrian bridges across the iNsuze and Mposa rivers linking other villages to schools which are in the greater KwaNxamalala area at a cost of R4.5m. The new roads feed the growing perception that the presidential village is getting preferential treatment in the delivery of services. There is even talk that a new town dubbed Nkandlaville is in the pipeline. Several other projects have already been built near KwaNxamalala village. These include the Mamba One Stop Development Centre, built for R12.8m and spearheaded by the former KZN social development MEC, Meshack Radebe. A similar facility, called Tulwane One Stop Development Centre, was built in a nearby tribal village by Radebe’s department. The facilities were both opened at lavish functions attended by Zuma and Radebe, in the run-up to 2009 elections. This triggered angry reactions from the DA, which charged that public funds were being abused to campaign for the ANC. However, at the time, Radebe hit back, saying that Nkandla’s residents were not going to be punished by being excluded from service delivery just because Zuma happened to be from the town. The road linking the village to Kranskop, the P15, is a 32.4km stretch built at a cost of R290m while the road from Eshowe, linking it with the village and the town of Nkandla, is 54.4km long at cost R292m. In his speech, Mchunu said that while the projects were conceived before Zuma became the president, the provincial government was happy that the road to the president’s home was now tarred. However, DA MPL and its transport spokesman, Radley Keys, said he had raised questions with the KZN transport portfolio committee members on why Nkandla seemed to be getting a lot of attention. “There are vast areas of the country that do not even have gravel roads. I said clearly there is an agenda here and it could be that it is because Nkandla is home to the president. Areas such as uMkhanyakude, Dumbe and Nquthu (in Zululand) and others have roads in a terrible state. “The building of the roads past the president’s home led one to conclude that it was at the expense of development in other areas.”

However, Mchunu said the two roads had been prioritised for development a long time ago – one in 2003 and the other in 2006. “Zuma was not president in 2003 and 2006. In fact former president Mbeki identified Nkandla and Msinga as priority areas needing development. This has nothing to do with President Zuma.”

10 October 2012 Reuters Political risks to watch in South Africa South Africa has been rocked by a wave of wildcat strikes that has swept over the crucial mining sector, sent the rand spiralling and raised worries about growth prospects for the continent's largest economy. Moody's downgraded South Africa's government bonds a notch late last month, saying President Jacob Zuma's ruling African National Congress (ANC) is having trouble managing an increasingly complex economy. Despite turmoil the central bank governor says is pointing to a rapidly deteriorating outlook and job losses, the ANC has focused its attention on a year-end party vote where Zuma is seeking re-election as leader of the century old former liberation movement that now dominates politics. If Zuma wins the party race, he is poised to remain as the country's president until 2019, continuing what critics say are ineffective policies for bringing down chronic unemployment and fixing a broken education system eroding competitiveness. LABOUR UNREST The ANC and its governing alliance partner, the COSATU labour federation, have kept a lid on strikes for years by pushing deals for incremental wage raises, thereby guaranteeing a steady labour supply. The strikes are now often beyond their control as fed-up workers feel union bosses are more concerned about political relations than fixing shop floor problems. Workers have been holding out for big pay rises, in some cases double or triple their salaries, and telling union bosses to stay out of the wage talks. What to watch: - A spread of the labour contagion that has hit hard platinum mining firms as well as gold and manufacturing. MINE VIOLENCE

Zuma's government appears vulnerable as more details emerge about police abuses in the Aug. 16 shooting at Lonmin's Marikana mine in which 34 protesters were killed by police in deadliest security incident since the end of apartheid in 1994. The National Union of Mineworkers, a long-standing ally of the ANC and a breeding ground for party leaders, has been called into question with many miners signing up for the militant AMCU union and holding companies hostage with wildcat strikes. What to watch: - The violent rise of upstart unions challenging the unwritten pact at the heart of the post-apartheid settlement - that unions aligned to the ANC deliver modestly higher wages for workers, while ensuring labour stability for big business. NATIONALISATION With Zuma on the ropes, he is more vulnerable to calls from leftist elements in the ANC and COSATU to take greater control of parts of the mining industry, undermining confidence in a sector that employs about half a million people. Some in the ruling party want to see coal deemed a "strategic asset", which could hinder exports, and return struggling fixed-line operator Telkom to government control, allowing Pretoria to dictate the country's Internet infrastructure build-out. What to watch: - Proposals to expand the funding and mission of the state mining company that would shift the competitive balance. SLOWING CHINA, SLOUCHING EUROPE China is South Africa's biggest single trading partner and the main destination for its mineral exports. Signs of slowing growth in the Asian economy could translate into sluggish growth and job losses for South Africa. The European Union, mired in debt woes, is South Africa's largest trading bloc partner. Europe is also the main destination for its exports of manufactured goods, a sector that accounts for about 15 percent of South Africa's economy. What to watch: - Shock moves in the value of the rand caused by a volatile euro. CORRUPTION South Africa has slid in the Transparency International gauge of perceived corruption from 38th in the world in 2001 to 64th in 2011, with many worried the government is turning a blind eye to deals that benefit the politically connected. The Zuma government has placed before parliament a raft of legislation critics say would make it easier for corrupt officials to hide graft while setting up a small and largely unaccountable cabal around the president who would control the flow of classified information.

What to watch: - Growing protests from the poor, angry at graft and shoddy government performance. The protests could destabilise the ANC.

11 October 2012 The New Age Siyabonga Mkhwanazi Two get ready to go The last two provinces who have not yet pronounced on the ANC’s succession battle will hold their provincial executive committee (PEC) meetings this weekend. Even though the Western Cape and Northern Cape have not formally said who they support for the position of ANC president it is known that the former is divided between President Jacob Zuma and Deputy President Kgalema Motlanthe while the latter is backing Zuma. ANC Western Cape provincial secretary Songezo Mjongile said yesterday discussions were still underway in the province to decide who to support for the top job. He said the PEC would meet in the coming weeks to decide on the names of the top six officials that they support to lead the ANC for the next five years. Mjongile said no formal position had been taken by the province as there were differences on who to support. He said that once discussions had been finalised the PEC would meet to decide on its preferred leadership. The ANC in the Northern Cape also said that it has not settled on the name for the next leader of the organisation. ANC provincial secretary Zamani Saul said yesterday that the PEC will meet tomorrow to decide on the names for the top six. He said following tomorrow’s meeting the province will know where its stands. The meeting of the last two provinces has signalled that Zuma stands a chance of winning the party’s presidency for a second term. After bagging the Eastern Cape on Tuesday Zuma is close to sealing the race. Zuma has received support in Mpumalanga, KwaZulu-Natal, North West, Free State and the Eastern Cape while his rival Motlanthe has only been backed by Limpopo and Gauteng. Even though the Northern Cape has not officially endorsed Zuma the province met with KwaZulu-Natal leaders recently in Kimberley to discuss their support.

This was after Zuma had delivered the Chief Albert Luthuli Memorial Lecture in Kimberley last month. The decision of the Eastern Cape to back Zuma has almost closed the door on Motlanthe as the province has the second biggest delegation to the conference. The support for Zuma in the other four provinces, that have formally endorsed him, has swelled the number of delegates who will support him at the conference. The ANC will have 4500 voting delegates at the conference with 91.2% of those delegates coming from branches. The rest of the delegates, which is 8.8%, will come from the ANC Veterans League, the Women’s League, the Youth League, the national executive committee and the provinces. 11 October 2012 The New Age Warren Mabona Zuma seen as favourite to win President Jacob Zuma’s chances of being re-elected as the president of the ANC are high – despite recent calls for change of the organisation’s leadership, it emerged yesterday. Political analyst Prof Andre Duvenhage of the University of the North West said Zuma had consolidated his position in the ANC structures. He said opponents of Zuma’s election for a second term – from the ANC and its youth league – were still strong but did not pose any threat to Zuma. “The most likely scenario is that Zuma will win and I have no doubt about that. The expression of the ANCYL is still there, but most of the support will go to Zuma. His win will not be made possible by his performance in government, but his control of the ANC structures and the way he consolidated his position,” Duvenhage told The New Age. Another analyst, Prof Steven Friedman, agreed, but said Zuma’s victory would not depend entirely on the level of support he got from the provincial executive committees but from its branches. “Obviously, Zuma is a very strong candidate and he might even stand unopposed. But you cannot predict his win by reading provincial endorsements for him,” Friedman told The New Age. He said at the ANC conference held Polokwane in 2007 Gauteng endorsed Mbeki while branches voted for Zuma. Three provincial executive committees - North West, Mpumalanga and Eastern Cape, have so far announced their official endorsements for Zuma while Gauteng and Limpopo opted for his deputy, Kgalema Motlanthe. KwaZulu-Natal, which is widely known to be behind Zuma, is among the provinces that are yet to pronounce their positions. Zuma’s chances were further bolstered by seven of the provincial ANC Women’s League (ANCWL) declaring their support for the president.

The ANCWL in Gauteng and Limpopo have not yet announced their preferred candidates for the ANC presidency. According to Friedman, Motlanthe’s prospects for a win would also depend on how many nominations and votes he would get from the branches. “I don’t think Motlanthe will run for the presidency. Basically, branches are the ones that have much more power and his win will depend on how many branches will vote for him,” Friedman said. 11 October 2012 The Times Page 9 Canaan Mdletshe

Strike to hit us harder Consumers face more empty shelves and dry petrol pumps this weekend as negotiations between the South African Transport and Allied Workers' Union and Road Freight Employers' Association remain deadlocked. "There are no changes. Negotiations have failed to yield any results and we are now forging ahead with our planned rail and ports strike," the union's general secretary Zenzo Mahlangu said. Workers are demanding a 12% wage increase, but the employers' association is offering 8%. The union has indicated its willingness to go down to 10%. "As things stand, we are busy mobilising our members for a one-day mass demonstration tomorrow," said Mahlangu. Though the union denies violence, two truck drivers are currently fighting for their lives after they came under attack while on duty. One was shot while driving on the N3 Johannesburg-bound near Cato Ridge in the KwaZulu-Natal Midlands late on Tuesday evening. ER24 spokesman Derrick Banks said the driver, who is in his late 40s, underwent emergency surgery for his injuries. The man drove himself about 10km to the Camperdown Police Station to get help. "Paramedics arrived at the scene and found the driver inside the station. "They assessed him and found he had a gunshot wound to the leg and that he had lost a lot of blood," Banks said. He was transported to Hillcrest Private Hospital for further medical care.

In Cape Town, a truck driver was set alight, allegedly by protesters, in Manenberg on Monday. The driver, 62, sustained burns on his face, lips and hand. He also suffered brain trauma as a result of a lack of oxygen, and is in a critical condition. On Monday, truck driver Gary Stewart, 41, died when life-support machines were switched off. He was a passenger in a truck travelling on the N2 in Cape Town when strikers stoned the vehicle and hit him on the head with a brick.

11 October 2012 The Times Page 2 Nashira Davids Service-delivery protests getting uglier – report Protest activity rose dramatically in the first eight months of this year, according to a report by the Multi-Level Government Initiative. About 80% of the protests were violent. The Multi-Level Government Initiative, which tracked protests between February 2007 and August 2012, released its protests barometer in Cape Town yesterday. The research corroborates the findings of local governments and data collated by intelligence service Municipal IQ. It shows that there has been an unprecedented increase in the number of protests and in the use of violence by protesters. Western Cape felt most of the protesters' wrath. "Protest" is defined by the researchers as "any complaint or issue cited by protesters in reports, whether related to the delivery of municipal services or not, over which citizens decide to, and actually engage in, [sic] organised public protest activity". Findings included that:
• • • • •

Protest activity rose dramatically in the first eight months of 2012, with 226 protests; If current trends continue, this year will have more than twice as many protests as last, and more than in 2010 and 2011 together; Western Cape surpassed Gauteng as the province with the highest number of violent protests this year; Before 2012, Western Cape recorded its highest protest activity during an election year; Western Cape, Eastern Cape and Gauteng accounted for 56.98% of protests; and

Land and housing were the most cited issues, 303 in the six-year period. Poor service delivery was second, with 218 protests. Grievances related to broken promises and government officials ignoring protesters' complaints have risen exponentially since 2010 but account for less than 10% of complaints.

This year , Western Cape shot past Gauteng as the province with the biggest number of violent protests. Professor Nico Steytler, director of the Community Law Centre at the University of Western Cape, said there were invariably more protests in winter. "Often it is because the grievances are most severely felt in winter, such as housing, electricity and access to roads," said Steytler. But researchers have warned people not to draw hasty conclusions from the study and that more research is needed. The head of the research project, Professor Jaap de Visser, said the researchers had begun collecting information on a very complicated issue. "Let us build up our knowledge about protests over a period of time. "The government should put serious effort into analysing protest activity and use the information to improve its performance and engagement," he said.

11 October 2012 The Times Page 1 Graeme Hosken

Madonsela's report pins Malema down Expelled ANC Youth League president Julius Malema's world is crumbling fast - he might face another string of criminal charges, involving millions of rand. Two weeks after his appearance in the Polokwane Magistrate's Court on moneylaundering charges - which carry a maximum sentence of 15-years' imprisonment Malema might soon be charged with the more serious crimes of fraud and corruption. His troubles with the law are mounting. He already faces a R16-million tax liability and a sheriff of the court is listing his property and assets for possible attachment. Releasing a damning report in Pretoria yesterday, Public Protector Thuli Madonsela was hard-hitting about Malema's involvement in a lucrative roads and bridges tender, saying he improperly benefited from the Limpopo government contract. "Our primary question was: Did Malema benefit? We are saying 'yes' - an emphatic yes."

The report is the result of investigations launched in July last year after Madonsela received complaints about the awarding of a multimillion-rand tender to On-Point Engineering, a company from which Malema subsequently resigned as a director. The investigation was into whether a tender for the construction of roads and bridges - valued at more than R50-million - was unlawfully and improperly awarded to OnPoint by the head of the Limpopo government's roads and transport department, Ntau Letebele. Malema's business partner, Lesiba Gwangwa, is On-Point's chief executive. "What we present here today is the truth based on sound and irrefutable evidence," Madonsela said. This evidence is to be handed to the state agencies - including the Hawks investigating Malema. The Limpopo department of roads and transport paid R43-million to On-Point and Madonsela found that:
• • • • •

On-Point paid R2.17-million through R100000-a-month dividends into Malema's Ratanang Family Trust over 17 months; The trust also received R200 000 in "unspecified loans"; Five days after one of the alleged "kickbacks" to the trust was made, R1million was withdrawn and paid towards the purchase of a farm; Amounts of R160000 and R100000 were paid from the trust to "Sandton Property" and "Sandowns Property" respectively; and There was evidence that the trust "was probably used as a vehicle for the transfer of funds obtained through an unlawful process".

Madonsela found that Malema used his political position to influence the awarding of the tender that benefited his trust. Malema yesterday accused Madonsela of finding him "guilty in absentia", according to an SABC radio report. "You can't find a man guilty in absentia," Malema said at Slovo Park informal settlement, west of Johannesburg. "He complained he was never interviewed," said Madonsela. "But when I invited him for an interview he never took up the opportunity." Madonsela' s report was handed to the police yesterday. The Treasury and the SA Revenue Service have been advised to recoup millions from Malema and others. Madonsela found a series of contraventions of Treasury regulations by the Limpopo government. "The awarding of the tender to On-Point by the department was unlawful, improper and constituted maladministration," she said.

Madonsela's report - On the Point of Tenders - found that guidelines for the awarding of tenders were ignored and called the way in which they were awarded "mindboggling". She said that, despite stark differences between the bid document and On-Point's tax clearance certificate, the company was not disqualified from tendering. The tax certificate was from a five-month-old shelf company. "You had companies disqualified because they did not put the right documents in the correct envelopes, yet On-Point - using a tax clearance certificate of a shelf company - somehow mysteriously qualified. "In effect, On-Point existed only on paper," she said. Madonsela said none of the "disqualifying red flags" raised the alarm about the possibility of fraudulent activities. She said central to her investigation was how Malema's trust benefited improperly from the On-Point contract. She said On-Point's bid for the department's project management unit was deliberately and fraudulently misrepresented. "The company's profile, composition, experience and functionality were totally misrepresented. "On-Point claimed to be a well-found company with nine years of experience, complete with management teams, professional staff and a list of 'evidence' showing that it was up to the task." She, however, said none of this existed. "There was nothing. No staff. No key management structures and no proof of any work done. The conduct of On-Point as the department's project management unit which entered into agreements with Mpotseng Infrastructure, Baitseanape Consulting Engineers and HL Matlala and Associates - constituted corruption. "On-Point developed 'back-to-back' agreements in which it received payments from contractors that the company was meant to manage and supervise. "The company's shareholders, who include the Ratanang Family Trust, benefited improperly from the tender it was awarded." Madonsela said there was evidence showing Gwangwa established On-Point specifically for the tender even before it was advertised, that the bid committee consisted of people who should not have been there and bank statements showing that money paid to On-Point was withdrawn five days later and paid to Malema's trust. "What I can say today is that On-Point should never have been awarded the tender by a long shot," said Madonsela, adding that: "This entire process was unlawful. The agreements led to millions of rand worth of kickbacks."

She said the Treasury had been asked to recover the funds paid to On-Point, and the state attorney was advised to institute legal proceedings against On-Point and its shareholders.

11 October 2012 Business Day Page 4 Setumo Stone

ANC branches ‘have last word on leaders’ AS THE African National Congress (ANC) provincial executives rush to announce their preferred candidates for the party’s national electoral conference, the ANC’s secretary in Gauteng, David Makhura, says such leaders have no status to make final nominations. The official opening of leadership nominations last week has seen ANC provincial structures releasing a flurry of candidate lists, seemingly intended to influence the decision of branches. Speaking at a media briefing on Wednesday, Mr Makhura said leadership preferences expressed by provincial executives were not binding on party members. However, provincial leaders had a responsibility to provide guidance on all organisational matters. ANC branches were expected to be the final arbiters over leadership nominations ahead of the party’s national electoral conference in Mangaung in December. But this was often not the case, as some provincial leaders with personal interests in the outcome of the elections have often sought to unduly influence the decisions of branches. Several ANC provincial structures, including in Gauteng, North West, Mpumalanga and the Eastern Cape, have recently gone public about their preferred candidates in Mangaung. On Sunday, following a special provincial general council in Gauteng, the provincial leadership announced that it had proposed to branches that deputy president Kgalema Motlanthe replace president Jacob Zuma. The practice appeared to be a top-down approach, seen to be limiting the rights of the branches to freely nominate their preferred leaders. Speaking in a radio interview on Tuesday, political analyst Aubrey Matshiqi said some provincial leaders were declaring their support in a bid to publicly display their allegiance. An insider in Gauteng said this was done to avoid "faceless" people confusing branches over the positions of provincial leaders.

Of 4,500 voting delegates expected to elect the party’s new leadership, 4,103 would be delegates from the branches. Mr Makhura said the views of provincial leaders only counted when expressed in their capacity as voting delegates. "In the (Gauteng) leadership we have agreed that the process is now with our branches," Mr Makhura said. While Mr Motlanthe was yet to indicate whether he would challenge Mr Zuma, ANC Gauteng spokesman Nkenke Kekana said nomination from only one province was enough to secure a candidate’s name on the ballot. 11 October 2012 Business Day Page 3 Bekezela Phakathi

Former DA leader backs united opposition FORMER Democratic Alliance (DA) leader Tony Leon on Wednesday backed calls by the party’s incumbent head, Helen Zille, for opposition parties to unite. However, he warned that a grand alliance had its drawbacks. Mr Leon said joining forces with other parties could alienate some of the DA’s core supporters. Ms Zille last month called for the "realignment" of South African politics in a bid to create one large political movement to challenge the ruling African National Congress (ANC). The DA hopes to unseat the ruling party by 2019 — not necessarily on its own, but most likely as part of a coalition. The party has already joined forces with Patricia de Lille’s Independent Democrats. Mr Leon said there was a need for political leaders to have a conversation with the electorate and present them with choices. "If you want to create a bigger party by merging everyone together, that has its own consequences. "If you create a party that is very strong on values then you might (lose) some of the allies you want to go on with. Nick Clegg got to be deputy prime minister in the (UK) but as far as his voters are concerned he sold them out. "There are a lot of people who vote for the DA for reasons of belief, ideology and identity — you cannot take them for granted. Equally, the voters and supporters of other parties (do the same). "The DA has got to do the whole thing (work with other opposition parties); we did it once before (otherwise) the DA would not have governed the Western Cape." Mr Leon said the real reason the DA governed the Western Cape was because of the coloured vote. Most coloured voters found a political home with the New National Party, which was in coalition with the DA.

"I have got the scars on my back; between 2000 and 2006, we took enormous amount of punishment to create an effective governing party that could govern Cape Town in 2006 and the Western Cape in 2009," Mr Leon said. The New National Party was in a short-lived alliance with the DA that ended in 2001. Mr Leon further said that the DA continued to grow and its "diverse leadership" was only good for the party. The DA has been on a drive to attract more black vote s and some analysts believe that the election last year of Lindiwe Mazibuko as parliamentary leader could give the party "black appeal". In addition, the appointment of Mmusi Maimane also last year as party spokesman was seen as an attempt to promote more black leaders in the party. On Wednesday, the party’s youth leader, Makashule Gana, said he would accept the nomination for the position of federal council deputy chairman. "If I am elected, I would like to use this position to strengthen our presence on the ground. I believe I will do well ," he said. The DA is due to have its national conference next month. Mr Leon recently returned to the country from Argentina where he had been the South African ambassador since 2009.

11 October 2012 Business Day Page 3 Linda Ensor Chairwoman of Parliament’s transport committee quashes Nkandla queries RUTH Bhengu, chairwoman of Parliament’s transport committee, on Wednesday refused to allow the Democratic Alliance (DA) to question government officials about the reported R583m being spent on roads to service President Jacob Zuma’s home village in Nkandla. She said the issue was a "witch hunt" driven by media reports. Ms Bhengu argued that the questions would only be legitimate if posed within the context of a holistic discussion of road infrastructure development in rural areas. One area should not be singled out. The spending on roads in Nkandla has heightened the controversy over the R238m revamp of Mr Zuma’s private homestead which the DA has asked Public Protector Thuli Madonsela to investigate. DA spokesman on transport Ian Ollis said he would ask Ms Madonsela to extend the investigation to include the road-building programme. She should establish whether essential roadworks in other parts of the province had been sacrificed.

Deputy Minister of Public Works Jeremy Cronin — formerly deputy minister of transport — was also drawn into the fray when DA MP Anchen Dreyer questioned him during a meeting of the public works committee. Mr Cronin said he could not confirm the figure that the national government would spend on the homestead. "That’s one of the things we need to look at," Mr Cronin said. "There are different figures being bandied about and some might not even be for the account of public works." Mr Cronin undertook to keep a close watch on expenditure on the Zuma homestead. This would be to ensure that no irregularities in the award of tenders or any "inexplicable overruns" on costs occurred. He said once he was privy to details about the development of the Zuma homestead, he would do his best to be transparent. Mr Ollis criticised Ms Bhengu’s ruling that no questions should be posed on the issue of roads being built in Nkandla. Information about the expenditure was clearly in the public interest. If MPs were not able to ask questions about the budgets for specific items then he did not understand what their role was, Mr Ollis said. But Ms Bhengu insisted that media speculation would not drive the committee’s agenda and that she would not allow it to be used to play political games. "I am not saying that those issues do not need to be entertained, but at a particular time when we have information on these things," Ms Bengu said. "If we don’t have information we cannot use this meeting to get that information." The director-general of the Department of Transport, George Mashilela, said road development in Nkandla had been on the provincial government’s agenda since the mid-1990s. Nkandla is a huge area linking one side of KwaZulu-Natal to another. Mr Mashilela said the roads were vital to economically integrate the areas of Nkandla, Msinga and Graskop.

11 October 2012 Business Day Page 1 Natasha Marrian and Karl Gernetzky

Madonsela red-flags ‘systemic’ tender fraud in public sector PUBLIC Protector Thuli Madonsela said on Wednesday that she suspected failure to conduct due diligence when awarding lucrative tenders — as had occurred in the Limpopo government — could be "systemic" in the public sector. Handing down her findings on the awarding of a R50m contract by the Limpopo roads and transport department to On-Point Engineering — linked to expelled African

National Congress Youth League leader Julius Malema — Ms Madonsela provided a detailed case study of huge governance failure in awarding a state tender. In Limpopo, five departments, including roads and transport, were placed under administration after serious financial mismanagement emerged. Ms Madonsela is also probing its health and human settlements departments. She found that there had been a complete failure by roads department officials to vet On-Point Engineering. The company had claimed that it was well established when it appeared to have been set up solely for the purpose of securing the tender. She said department officials should visit the premises of bidding companies to ensure there was the necessary infrastructure for completing contracts. In the case of On-Point, "it did not happen", Ms Madonsela said. "We suspect this sort of approach is systemic." She said the Treasury should "compel and guide the accounting officers of organs of state to perform a proper due diligence investigation into the profile, composition, status and financial viability of bidders during the procurement process". In the section of her report on remedial measures, Ms Madonsela instructed the Treasury to add On-Point to its blacklist of companies prohibited from receiving state tenders. The Treasury has 60 days to report back to the public protector on instructions it will issue in terms of the Public Finance Management Act to compel and guide accounting officers of state organs to perform "a proper due diligence investigation into the profile, composition, status and financial viability of bidders during the procurement process". At the time of going to press, the Treasury had not responded to requests for comment. Ms Madonsela said it was "too early to say" whether On-Point was an example of how politically connected businessmen could milk the state. The Limpopo roads and transport department said in response to her preliminary report that "there was no requirement or system in place obligating the bid evaluation committee, the bid adjudication committee or the head of the department to conduct a due diligence investigation before awarding the bid". Ms Madonsela said the response was "inconsistent" with the provisions of the Public Finance Management Act and "alarming", given that a contract of almost R52m was paid from public funds. She recommended criminal investigations into the awarding of the contract and described the misrepresentation of On-Point’s credentials as "fraud". During her probe, Ms Madonsela stopped the contract, which was due to end on October 18.

9 October 2012 The New Age Warren Mabona Zille ‘shreds’ ANC in London Mystery surrounds the main reasons behind the visit of Western Cape premier and DA leader Helen Zille to London last week. While Zille’s spokesperson last week said the aim of the trip was to promote the Western Cape as an investment destination, The New Age can today reveal that Zille reportedly also attacked the ANC in the British capital. Highly placed sources in London told The New Age that Zille said the ANC was definitely on the decline – and disintegrating. The sources said Zille, who was addressing an audience at a South African Chamber of Commerce event in London on October 1, singled out the Marikana mine tragedy as an example of the governing party’s decline. “Zille said the ANC will increasingly split over the next seven years. She said the split would have a huge impact on the whole of South Africa,” said the source. “She also told investors to invest in the Western Cape as there was no corruption there. Why not encourage them to invest in South Africa as a whole?” asked the source. Zille’s address was also posted on the chamber’s website the following day, headlined: “ANC will disintegrate over next 7 years”. Contacted for comment yesterday Zille’s spokesperson Zak Mbhele jumped to her defence. Mbhele said Zille was speaking in the context of political risks and challenges that affected the country’s climate for investment. Asked if the mere mentioning of the ANC’s imminent split abroad while on an investment mission was not a risk in itself, Mbhele said: “Zille was invited to speak to various audiences in the UK and to give an honest analysis of the pressing political issues of the day in her capacity as premier. She gave an analysis on various platforms.” ANC spokesperson Keith Khoza said: “If Zille really said that then she is confused. She must know that attracting investment to South Africa from abroad should not only be for the benefit of the Western Cape, but the whole country.” 9 October 2012 Business Day Page 3 Sam Mkokeli Zuma battles with due process in appointments

THE Presidency announced last week that Naledi Pandor had been appointed as acting home affairs minister. Another announcement came a day later that her appointment had been made permanent. What? Did President Jacob Zuma decide in 24 hours that it made sense to appoint her in that department permanently? Probably not. Maybe the move had been a long time coming. But the absence of a seamless process in what should be a straightforward appointment comes from a Presidency that battles with the more significant processes in other areas of governance. While the "who" part is still the president’s prerogative, the "how" part has to withstand scrutiny. But often, it does not. Like a sportsman who has a dodgy technique, Mr Zuma’s appointments are usually not pretty on the eye. Friday’s Constitutional Court judgment, which confirmed the invalidity of the appointment of Menzi Simelane as national director of public prosecutions, is one of many such. The judgment exposed what is becoming a chronic problem of Mr Zuma’s presidency — not meticulously following procedure. Processes tend to frustrate his office, judging by how decisions have to be revisited, sometimes at the insistence of those who have a better understanding of the law. Last week’s judgment is bold in stating that Mr Simelane’s appointment was irrational and therefore unconstitutional. Mr Zuma finds himself in familiar territory, as his attempted extension of then chief justice Sandile Ngcobo’s tenure was abandoned last year when it appeared the courts would block it. The result? Mogoeng Mogoeng — hardly a respected intellectual or jurist — had the job fall into his lap. In the police, Mr Zuma’s hand was forced into firing commissioner Bheki Cele after two probes questioned his role in two botched office leases. But the probe into Mr Cele’s suitability for high office was not without what is now the typical scrutiny of Mr Zuma’s choice. Originally, Mr Zuma wanted Yvonne Mokgoro to chair the board that investigated Mr Cele’s fitness for office. But that was challenged on the basis that the law prohibited the choice of a retired judge. Experts had warned that it was wrong to appoint a retired judge to head the panel. The Presidency somersaulted and appointed Judge Jake Moloi. For Mr Cele’s replacement, Mr Zuma went for someone unknown in Riah Phiyega, who ended up with blood in her hands with the Marikana massacre. Mr Zuma better cross fingers that the commission he appointed to investigate the incident does not blame the command structures of the police — all the way up to Gen Phiyega. On the other hand, the Special Investigating Unit (SIU) is still without a permanent head in the wake of another dodgy appointment. It had one for a while, but the typical, and now predictable, happened. Mr Zuma had appointed Willem Heath, and this was immediately controversial. His appointee tripped over his own statements when he launched a vitriolic attack on former president Thabo Mbeki — seemingly in defence of Mr Zuma. As a result of the public uproar, Mr Zuma had no choice but to let his appointee go. Mr Heath’s uncalculating mouth may have merely sped up the process of getting rid of him. There were already complaints that, at 66, he was above the SIU’s retirement

age of 65. Mr Heath was appointed, supposedly to ease the pressure on Willie Hofmeyr, the deputy national director of public prosecutions who had headed the SIU and the Asset Forfeiture Unit. But the acting head of the SIU, Nomvula Mokhatla, also occupies a post in the National Prosecuting Authority. Whenever Mr Zuma decides to make a permanent appointment, his actions and choice will be scrutinised. The deployment of the army after the Marikana incident was also questioned. It appears the issue was not whether or not Mr Zuma was within his rights to assign the army, but the problem was his post-dated announcement. Questions about the quality of advice Mr Zuma receives often come up. Constitutional law expert Pierre de Vos says there are obvious questions about the quality of the advice Mr Zuma gets. There were also questions about the motives for his appointments: whether he chose people who would shield him from prosecution. There are signs that questions about Mr Zuma’s ability to govern do get to him. In an apparent moment of frustration, he lost his cool earlier in the year, denying that he was unfit to govern. "People say I know nothing. I should not be president of the country. I know what I’m doing … I was in the struggle," he said.

9 October 2012 Business Day Page 2 Mariam Isa Gordhan rues graft in municipalities FINANCE Minister Pravin Gordhan has taken municipal finance officials to task for what he describes as "unacceptable" management of public funds, saying there was R15.5bn in irregular spending last year. Municipal officials had to take the blame for fraud, corruption and interference with tender processes, he said in an address at a conference organised by the Institute of Municipal Finance Officers. "It is disconcerting that government is consistently underperforming in this regard ... it is unacceptable when officials take this responsibility lightly," Mr Gordhan said. Auditor-General Terence Nombembe said in July that there was R11bn in unauthorised, irregular, fruitless and wasteful expenditure in the 2010-11 financial year. Further, only 5% of all municipalities got clean audits for that period. Mr Gordhan told the conference it was vital to get rid of this "cancer of corruption, this cancer of greed", whether it was among officials or business people. "If you can’t demonstrate creating a system of financial management that has integrity and honesty then you are failing in your core responsibilities," he said.

Meganomics economist Colen Garrow said South Africa’s poor track record of municipal spending was undermining the government’s track record for fiscal discipline and efficient tax collection. "The funds which are being made available are open to misappropriation and corruption — that is the perception that South Africa is getting as an investment destination. It’s very worrying," he said. Mr Gordhan said municipalities had to bear some of the responsibility for the strikes and service delivery protests which had hit mining areas as they were "falling short" in ensuring that workers in the mines lived in decent conditions. The number of service delivery protests in South Africa had climbed to 113 in the first seven months of this year compared with 81 in the same period last year. "The increase in service delivery protests is indicating that communities are dissatisfied," Mr Gordhan said. Municipalities had to stop hiring people who did not have the skills or experience to do their jobs. "We know that hiring people without the right experience and skills is going to debilitate us but we go on hiring these people," Mr Gordhan said. Mr Gordhan said municipalities were owed R77bn, with about 65% of that debt owed by households. "One of the challenges we have is that we haven’t done enough to ensure a better culture of payment then we have at the moment." The Treasury recommended that each municipality set aside 40% of its capital spending for maintenance of existing assets, as the backlogs were "absolutely crucial" to resolve.

9 October 2012 Business Day Page 1 Nicky Smith SAA crisis deepens as Mzimela joins exodus WITH a R1.25bn loss for the past year, less than enthusiastic support from the Treasury and an atmosphere of mistrust at the airline, South African Airways (SAA) CEO Siza Mzimela and two other senior managers have resigned. Ms Mzimela ended weeks of speculation about her future on Monday when she emailed staff to say she was leaving SAA after almost three years. "It is with a mix of sadness, relief and a measure of pride that I announce my resignation from the airline today," she wrote. The Department of Public Enterprises accepted Ms Mzimela’s resignation, its spokesman Mayihlome Tshwete said.

"This is not a crisis," he said, adding that the resignation was "very unfortunate". Theunis Potgieter, SAA’s GM for corporate affairs and Sandra Coetzee, GM for legal, risk and compliance also resigned. In an e-mailed response to questions Mr Potgieter said: "I can confirm that I have also resigned from SAA. I am not going into any details except to say I am in full support of the reasons as explained by Siza." Ms Mzimela’s resignation comes barely two weeks after the resignation of most of the airline’s board, including its chairwoman Cheryl Carolus, who cited concern about a lack of support from the airline’s shareholder, the Department of Public Enterprises. In her resignation letter Ms Mzimela refers to the strained relations between the airline and the department: "I owe a debt of gratitude to the outgoing board, of which I was a member, for their wise counsel and unwavering support. To that end, I understood and identified with the sentiments that some of them expressed towards the end of their mission." Public Enterprises Minister Malusi Gigaba on Monday announced that newly appointed SAA chairman Vuyisile Kona was now executive chairman. Mr Kona was previously the head of SAA’s subsidiaries and left in 2006 after reaching a legal settlement with the airline. "He will be the executive chairman until we can find a permanent CEO," Mr Tshwete said. Ms Mzimela would meet with Mr Kona over the next two weeks to allow "for a seamless handover process and continuity", SAA spokesman Tlali Tlali said. The new board had to be appointed before SAA’s annual general meeting next week. The board’s immediate focus would be to complete the airline’s new business plan to ensure it complied with the conditions attached to the Treasury’s recent R5bn guarantee for SAA, Mr Tlali said. Two unnamed acting executives were appointed on Monday.

9 October 2012 The Times Page 4 Abongile Mgaqelwa

Parallel structures divide the ANC The ANC Eastern Cape executive committee is on a collision course with the OR Tambo regional leadership after provincial secretary Oscar Mabuyane wrote to the region claiming that the parallel structures some branches had set up were legitimate.

Mabuyane's letter contradicts provincial spokesman Mlibo Qoboshiyane's public statement that all parallel structures would be "disestablished". "Parallel structures that were formed deliberately to undermine any of the registered branch executives will be disestablished and membership integrated to a ward-based branch," Qoboshiyane had said in a text message. About 25 branches were recently found by the national auditing team to have parallel structures. The majority of the affected branches are in King Sabata Dalindyebo area, which recently pledged its support for President Jacob Zuma's second-term bid. OR Tambo regional chairman Thandekile Sabisa said he was shocked by Mabuyane's letter. "I have not seen the letter but the regional secretary informed me about it. As far as I know, there is an NEC [national executive committee] decision to assemble a team that will visit OR Tambo to investigate parallel structures and decide on the way forward. "We were under the impression that, together with the PEC, we would go back to those people, call them under one roof and elect a new structure. What is odd now is that the provincial secretary shows he does not recognise the problem of parallel structures," he said. In his letter, which he copied to ANC secretary-general Gwede Mantashe, Mabuyane wrote: "In attempting to find a way forward in this matter, the office of the provincial secretary verified the status of these branches in terms of the branches deemed to be in good standing before the recent OR Tambo regional conference." Four out of five sub-regions were affected by the problem. Port St John's had three affected branches, Nyandeni three, Ingquza Hill two and King Sabata Dalindyebo 14. All these branches took part in the OR Tambo regional conference, where they were deemed to be in good standing.

9 October 2012 The Times Page 1 Dominic Mahlangu and Thando Mgaga ANC leadership 'deal' on the cards Senior ANC leaders are desperately trying to hammer together a back-room ''deal'' to stave off a bruising battle before the party's elective conference in December. The deal is said to have the backing of party veterans. Yesterday, Gauteng ANC executive leaders met with their counterparts in KwaZuluNatal after both provinces had endorsed different leadership lists.

The meeting at Isibaya Casino, north of Durban, is the first of many expected to be held between provinces as the nomination process continues at branch levels across the country. The Gauteng delegation was led by its chairman Paul Mashatile and secretary David Makhura, while the KwaZulu-Natal delegation was led by its chairman Zweli Mkhize, deputy chairman Willies Mchunu and secretary Sihle Zikalala. Sources close to yesterday's talks said the point of departure was the position of ANC president. They said both parties presented their arguments for each name on the lists. KwaZulu-Natal wants Zuma to retain the presidency, but Gauteng wants Kgalema Motlanthe. "If a deal is not found, we are likely to end up with a dead organisation on our hands. These talks are important as it is through trade-offs that a balance will be found. "The discussion with our counterparts in KZN is one of the many scheduled meetings across the country. The purpose is to avoid the danger that slates have done to the organisation. We have lost good comrades in the process. "For the ANC to survive we need to debate and influence each other's leadership preferences," said a senior Gauteng ANC member. But, according to insiders, the candidates for party president remained a sticking point for the two provinces. KwaZulu-Natal is believed to have insisted that Zuma be elected for a second term, but Gauteng pushed to have his deputy, Kgalema Motlanthe, lead the ruling party and the country after Mangaung. KwaZulu-Natal is said to have maintained that while it would be taking the highest number of delegates - 974 - to Mangaung, compared to Gauteng's 500, it remained open to suggestions from other s. Sources familiar with the KwaZulu-Natal strategy said the province wanted to persuade others that Motlanthe stand back until 2017 when he would then be elected president. One of the arguments was that, at 63, Motlanthe still had age on his side compared to Zuma, who is 70. Part of this deal meant Zuma would delegate some of his powers to Motlanthe. This would be similar to the strategy that former president Nelson Mandela had adopted during his term in office while Thabo Mbeki was his deputy. By the time Mbeki became president in 1999, he had significant control of government already. According to a statement issued after the Isibaya Casino meeting, both Makhura and Zikalala said the discussions had been "frank, robust and constructive, with the sole aim of building a common approach to the upcoming national conference". While yesterday's meeting in KwaZulu-Natal continued late into the afternoon, the ANC Limpopo executive committee and its counterparts in Mpumalanga released their leadership slates.

Limpopo has nominated Motlanthe as its preferred presidential candidate, while Mpumalanga supported Zuma for a second term. The Mpumalanga executive committee said it wanted to continue with what it called leadership that is "in touch with the people, accessible and flexible". Just like KwaZulu-Natal, Mpumalanga put forward the names of businessman Cyril Ramaphosa for deputy president and Jessie Duarte as the party's deputy secretary. It wants KwaZulu-Natal Premier Zweli Mkhize as the next ANC treasurer-general, while incumbent secretary-general Gwede Mantashe and party chair Baleka Mbete would retain their posts. Limpopo has opted to nominate Housing Minister Tokyo Sexwale as deputy president.

7 October 2012 The Sunday Independent Page 1 Staff Sheriff attaches Malema’s assets Julius Malema’s assets were attached following his failure to settle the R16 million tax bill after Sars obtained a court judgment against him. The Sunday Independent was reliably informed by three sources that the sheriffs of the court attached assets at his Flora Park, Polokwane and Sandown, Joburg homes. The sources, who are independent of each other, could not be named due to the legal sensitivities of the case. Malema yesterday referred queries to his attorney Nicqui Galaktiou. She could not be reached for comment. It could not be independently verified whether the movable assets – such as cars and household contents, including furniture – were removed from his homes or not. However, the attachment process doesn’t necessarily mean removal of attached assets but it includes assessment of the asset value and enables the sheriff to verify the ownership rights, especially in instances where the bond is registered against the assets. This means the debtor, in this case Malema, is prevented from selling the assets during the attachment period. The Sandton sheriff Daniel Bezuidenhout refused to comment and the Polokwane Sheriff’s office could not be reached for comment.

Sars spokesman Adrian Lackey said the taxman did “not wish to comment” The Sunday Independent reported last month that the taxman obtained the judgment against Malema at the Pretoria High Court last month. The judgment entitles Sars to seize Malema’s property, including his plush houses in Sandton and Polokwane and a farm outside the Limpopo capital. Malema’s ally and controversial Limpopo businessman Lesiba Gwangwa, according to The Star newspaper, has surrendered his assets to Sars as a guarantee for his unpaid taxes worth millions of rand. The newspaper quoted sources as saying Gwangwa offered his luxury properties and assets after the taxman reportedly obtained a tax evasion judgment against him. Gwangwa and other businessmen, indirectly linked to Malema, appeared before a judicial tax inquiry earlier this year. Malema, Gwangwa and other Limpopo business people were arrested by the Hawks and appeared in the Polokwane regional court last month on various criminal charges related to alleged questionable business activities involving state contracts. Malema insisted that his case was a political plot because of his campaign against President Jacob Zuma’s bid to get a second term as ANC president.

8 October 2012 Business Day Page 5 Franny Rabkin Simelane could still become national prosecutions chief A CLOSE reading of Friday’s Constitutional Court judgment, confirming the invalidity of Menzi Simelane’s appointment, reveals that he could — in law, at least — still be appointed national director of public prosecutions. While the judgment is emphatic that President Jacob Zuma’s appointment of Mr Simelane was irrational and therefore unconstitutional, Justice Zak Yacoob’s judgment explicitly says: "This is not to say that Mr Simelane cannot validly be appointed national director." This is because the finding of irrationality is directed at how the president went about the appointment and not at whether Mr Simelane is fit and proper for the job — something the court said it was unnecessary to decide. Justice Yacoob said Mr Zuma — on the advice of Justice Minister Jeff Radebe — ignored the severe criticism of Mr Simelane by former speaker of Parliament Frene Ginwala, in her report on the fitness for office of Mr Simelane’s predecessor, Vusi Pikoli.

In her report, Ms Ginwala questioned Mr Simelane’s honesty as a witness and said his conduct at her inquiry "left much to be desired". Justice Yacoob said when determining whether a decision is rational, courts must look at the process of arriving at a decision as well as the decision itself. Courts must evaluate the rationality of every step taken in reaching the decision. However, an irrational step would only make the ultimate decision irrational if it "colours the rationality of the entire process". The Constitutional Court’s judgment dedicates 26 pages to a close scrutiny and evaluation of Mr Simelane’s statements at Dr Ginwala’s inquiry, before it concludes that his evidence was contradictory and, on its face, indicative of dishonesty. Justice Yacoob said dishonesty was inconsistent with the conscientiousness and integrity required for the job of national director. In handing down the judgment, he said: "Indeed, I would say that dishonesty is the enemy of integrity and conscientiousness." When the president chose to ignore the "flashing red lights" about Mr Simelane’s honesty, it was irrational. It was a step that tainted the entire process and ultimately the decision to appoint, said Justice Yacoob. But the judgment throughout carefully referred to the dishonesty as "prima facie". And it added that Mr Simelane "may have an explanation and may well be able to persuade the president that his is a fit and proper person and should be appointed". However, the possibility appears pretty remote. Mr Simelane has already had an opportunity to explain what happened at Dr Ginwala’s inquiry. After the Public Service Commission (PSC) recommended that he face disciplinary proceedings due to his conduct at the inquiry, Mr Simelane’s lawyers made submissions to Mr Radebe on the PSC report. These submissions were considered in Justice Yacoob’s judgment and deemed "technical and legalistic in nature". "Nowhere in these submissions to the minister is it said … that Mr Simelane’s integrity and honesty had been left untouched and that he had come out of the process morally unscathed," said Justice Yacoob. So Mr Simelane would have to offer up something better, or at least something different, to what he said before. It is also questionable whether Mr Zuma would have the stomach to pursue this route, with the inevitable outcry that would follow and, most likely, another court challenge.

8 October 2012 Business Day Page 3 Natasha Marrian ‘Political affiliation’ is NUM’s stumbling block

THE Congress of South African Trade Unions (Cosatu) and one of its affiliates, the National Union of Mineworkers (NUM), are scrambling to end the labour unrest in the mining sector, but the mining union is beset by difficulties surrounding its legitimacy. The NUM held talks with the South African Chamber of Mines last week to begin processes intended to end the wildcat strikes and to protect the collective bargaining system. The industrial relations regime emerged as a key point in discussions. This regime is considered advanced, particularly in the mining sector, so the question of what caused the impasse arises. On one hand, the NUM has been criticised by workers for failing to represent them adequately. On the other, the union charges that it — and, by extension, Cosatu — is under attack. But from whom? Their biggest headache comes from the very constituency they ought to represent: the workers. Cosatu president Sdumo Dlamini admits there are weaknesses. A report to Cosatu’s national congress last month showed that 60% of members of affiliate unions were not satisfied with the latest pay increase secured for them by their union. "But we also understand the whole thing to be a real response to the squeeze, the economic squeeze that they are experiencing on a daily basis," he says. Cosatu took a decision to "go back to basics", focusing on the bread and butter issues of workers at its congress. Afterwards it had to deal with the widening crisis in mining, with Cosatu general secretary Zwelinzima Vavi saying the federation and the NUM were "obliged" to take worker demands to employers, even though their strike action was illegal. The NUM’s general secretary, Frans Baleni, says the situation is one in which "anarchy is being rewarded". Wage settlements at Impala Platinum and at Lonmin were negotiated largely in the absence of unions and outside normal bargaining processes. "If our members were to give us a mandate and say we are demanding R50,000 a month and go on a legal strike, I wouldn’t have a problem," Mr Baleni says. "So that’s the fear; that’s where the union is seeing its legitimacy being compromised because the first call we should make is to say, ‘No. This is unprotected.’" Talks between the chamber and unions yielded little results — parties in the gold sector agreed merely to "respect and honour" the existing wage agreement signed in August last year. NUM shop stewards have been murdered at various mines, making it difficult for union leaders to seek mandates and provide feedback to their members on talks with employers. Mr Dlamini says Cosatu will work with the NUM to "fend off attacks" and it is not true that mines are no-go areas for the NUM leadership. Mr Baleni says the NUM is a victim of its own successes: "The more we do, the more people have more expectations". Labour Minister Mildred Oliphant says union leaders should not exclude nonunionised workers from report-back discussions during negotiations.

"Immediately when you find that the majority of them are not unionised, that’s where you will find the commotion that’s happening at the present," she says. She believes setting up a collective bargaining forum in the platinum sector would provide a long-term solution to the current impasse. The situation in platinum is the most worrying, with workers vowing to intensify their unprotected strikes. Anglo Platinum fired 12,000 striking workers for failing to attend disciplinary hearings on Friday. The NUM’s rival in the sector, the Association of Mineworkers and Construction Union (Amcu), expressed some reservation about the process. "It’s highly political, these engagements. We cannot run away from that," says its president, Joseph Mathunjwa. Amcu’s lack of political affiliation and sole focus on worker issues is driving its momentum in the platinum sector and is the reason many workers are opting to leave more established unions, such as the NUM, he says.

8 October 2012 Business Day Page 3 Stephen Grootes Only public anger can stop Nkandla splurge AS PUBLIC anger appears to be growing about the upgrades to President Jacob Zuma’s estate in Nkandla, his critics are likely to start looking for ways either to expose the full amount of spending, or to stop the project from continuing. Up until now, despite being forced to have a press conference on this issue on Friday, Public Works Minister Thulas Nxesi has refused to say how much is being spent on the project. Over the weekend, more claims were reported about the estate, including the fact that not one but two AstroTurf football fields have been built for Mr Zuma’s security guards. But it appears it will be difficult for anyone to stop the project, partly because of legislation around "national security", and partly because of the African National Congress’s (ANC’s) deployment policies. The main claim against Mr Zuma — that the Nkandla upgrade would cost between R203m and R230m — is based on documents leaked to the City Press newspaper from within the public works ministry. Mr Nxesi is investigating who was responsible for the leak. As a result, it would appear that someone driven either by public interest or political motives within the department is already working against Mr Zuma. However, there are few options available to force Mr Nxesi to disclose exactly how much money is being spent. Mr Nxesi says the upgrade is being determined by security assessments carried out by the security services. But it appears that these services are firmly under the political control of Mr Zuma, through his ally, State Security Minister Siyabonga Cwele. Mr Cwele’s former wife, Sheryl Cwele, started a lengthy prison term for drug trafficking last week, and yet Mr Zuma has not removed Mr Cwele from his Cabinet despite the sensitivity of his position. This indicates it could be in Mr Cwele’s interest

to ensure the upgrade of Mr Zuma’s estate conforms with his perception of Mr Zuma’s wishes. The ANC’s deployment policy, which has seen the party ensure its cadres are deployed to important state offices, could also ensure that Mr Zuma’s desires are met, through that parallel hierarchy. The officials, who are paid by the state, may find themselves in the position of having two bosses — the government and the ANC leaders to whom they owe their jobs. Thus they are likely to ensure that any security assessment includes the need for two AstroTurf football fields, should Luthuli House deem them necessary. At the same time, the National Keypoints Act makes it difficult to use legal means to uncover the extent of government spending on the project. The act not only makes it difficult to enter the premises, but other legislation means there are few legal grounds on which to mount a challenge to that spending. This means the only way around the legislation is to challenge its constitutionality in court. That would be a costly exercise and could bring a political claim that those challenging the law want to make South Africa’s leaders vulnerable to physical attack. In the meantime, the Democratic Alliance has asked Public Protector Thuli Madonsela to investigate. However, Ms Madonsela has already said that because of budgetary constraints, all she has done so far is to contact the Presidency and ask it for information. It would not appear to be in the interest of that office to comply speedily with her request. This means the best option opponents of Mr Zuma might have is to stoke public anger as much as possible and hope the pressure will force other information into the open. That there is already one person leaking documents from the Department of Public Works would indicate it is a strategy with some hope of success.

8 October 2012 Business Day Page 2 Wyndham Hartley Strikes, ANC battles to hog headlines THE desperate efforts to resolve the swathe of wildcat strikes across the country and the continuing nominations process for the African National Congress’s elective conference in December are likely to dominate the news this week. There will also be a renewed focus on Parliament as MPs return from a two-week recess to begin interrogating the annual reports of state entities and government departments many of which have received qualified audits from auditor-general Terence Nombembe. The attempts to resolve the strikes come in the wake of President Jacob Zuma’s "reminder" to business and unions late last week that they should attend to shop-

floor issues so South Africa can renew its focus on economic growth and job creation. Wildcat strikes in the mining sector remain intractable with workers facing dismissal but still refusing to return to work. With two of its structures having already announced their nominations for the top leadership of the ruling party, other ANC regions are expected to make their choices public this week. The ANC Youth League and the party in Limpopo and Gauteng have come out in support of Deputy President Kgalema Motlanthe taking over the leadership reins from Mr Zuma. Limpopo was the first of the provincial structures to make its preference known. Also this week, a session of the Pan African Parliament, sitting at Gallagher Estate opens. The session will last until October 19. On Monday evening, Mr Zuma will host a presidential banquet to bid farewell to the departing Minister of Home Affairs Nkosazana Dlamini-Zuma, who leaves soon to take up her post as the head of the African Union Commission. On Tuesday, Mr Zuma will visit the site of the Square Kilometre Array (SKA) near Carnarvon in the Northern Cape. Carnarvon is close to one of the central Karoo areas identified for exploration for shale gas and the use of hydraulic fracturing to extract it. There have been warnings that "fracking" could harm the purity of the SKA site. On Wednesday, ANC secretary-general Gwede Mantashe speaks at a seminar on "Unity in Diversity: What it means for the ANC". Also on Wednesday, former Democratic Alliance leader Tony Leon will celebrate his return to South Africa, after three years as ambassador to Argentina, with an appearance at the Cape Town Press Club, while on Thursday Mr Zuma will address the Black Business Summit. The first government department to face a grilling by MPs on Tuesday will be Agriculture, Forestry and Fisheries. Agriculture Minister Tina Joemat-Pettersson has hit the headlines in recent weeks with allegations of corruption in marine and coastal management reaching R2bn. The parliamentary police committee will also begin its work on interrogating the annual report of Police Minister Nathi Mthethwa, the report of the Independent Police Investigative Directorate and the Private Security Industry Regulatory Agency on Tuesday. The office of the auditor-general will also be busy on Tuesday with a wide variety of parliamentary committees receiving briefings on the departments of health, transport, communications and defence. On Wednesday the auditor-general will report to Parliament on the audit outcomes for energy and mineral resources in their respective parliamentary committees while the police and transport departments will brief their committees on their annual reports.

8 October 2012 Business Day Page 1 Setumo Stone Motlanthe book claim rattles ANC race SUGGESTIONS that President Jacob Zuma owes his political survival partly to Kgalema Motlanthe, his putative rival for the leadership of the African National Congress (ANC), are likely to unsettle those campaigning for the president’s reelection to a second term. These revelations are contained in a book, Kgalema Motlanthe: A Political Biography, to be launched this week. The ANC in Gauteng on Sunday nominated Mr Motlanthe to become president of the organisation when it holds its electoral conference in December. Mr Zuma could be in a difficult position if Mr Motlanthe accepts the nomination. Mr Motlanthe hints in the book that Mr Zuma could have been out in the cold if he did not take a stand for him when he, Mr Zuma, was threatened with expulsion from the ANC in 2005. Mr Motlanthe said in his biography that there were efforts to block a discussion on Mr Zuma’s offer to resign during the ANC’s 2005 national general council. But as party secretary-general at the time he put the matter in his organisational report, thereby allowing delegates to discuss it. "Let me tell you that if I did not take that stand — and he (Mr Zuma) knows it — those targeting him will have perhaps finished him off politically," Mr Motlanthe told biographer Ebrahim Harvey. Mr Motlanthe is yet to declare publicly whether he will accept nomination to retain his position as deputy president of the ANC, or whether he has his sights on the top post. Political analyst Steven Friedman said the fact that Mr Motlanthe might have been Mr Zuma’s ally in the past was not important for the electoral conference at Mangaung. But it might work in Mr Motlanthe’s favour that he supported Mr Zuma during a difficult time. "Some people could say he deserves to remain as deputy president," said Mr Friedman. But there are indications in the book as to why Mr Motlanthe might want to challenge Mr Zuma, including his concerns over factionalism in the ANC. He appears to feel that his push for the party to launch a formal political school was being frustrated.

8 October 2012 Business Day Page 1 Nicky Smith SAA money woes worse than feared, report shows SOUTH African Airways (SAA) is in a far more serious financial position than previously thought and it is clear the airline will need much more than the R5bn lifeline it recently and controversially secured from the government. A "transition plan" the former board of directors of SAA drew up, and which Business Day has seen, shows that the airline will report a loss of R1.25bn for the past financial year. It reveals the crippling weakness of the airline’s balance sheet — its liabilities exceed its assets by 359%. The tabling of the carrier’s annual financial statements was postponed last month when Public Enterprises Minister Malusi Gigaba was forced to play for time to secure the lifeline from the Treasury and avoid SAA’s auditors from flagging its status as a going concern. The guarantee allows the airline to continue borrowing should it need to in an environment of high fuel prices. The Department of Public Enterprises has conceded that more money will be needed from the Treasury to support the carrier. Therefore, Mr Gigaba had sought to strengthen the board through a skills mix that would take the airline forward. The new board members have skills in aviation, mergers and acquisitions, and financial management, according to the department. Conditional to the R5bn guarantee is that the board oversee the drawing up of a long-term business plan in co-operation with technocrats from the department, the Treasury and SAA. "The shift by the minister has been to entrench a more technocratic board at the helm of SAA as it going through this very tough time," department spokesman Mayihlome Tshwete said last week. "Whatever strategies are presented must be guided by technical pragmatism because that will strengthen the minister’s hand in engaging with Treasury (for more money) and with the public, when communicating the strategy and plans for the airline." The department was not expecting a speedy turnaround. "It won’t be overnight, there are variables which are out of SAA’s control, such as fuel prices and the economic downturn," Mr Tshwete said. "It is difficult to say (when SAA will be profitable), it is going to be a process, but we have a shareholder that is committed to this process." The transition plan talks about the failure of the 2009 programme of cost cuts, and restructuring to allow the airline to rebuild its balance sheet from retained earnings.

"SAA’s balance sheet was weak in 2009 and the carrier’s financial position has continued to atrophy despite a range of operational improvements," it said. "SAA remains inadequately capitalised with a current debt-to-equity ratio of -359%. As a result, the group cannot adequately support the growth strategy at the centre of the 2012-15 corporate plan, or navigate cyclical adverse trading conditions." This weakness undermines the airline’s ability to fund the acquisition of new, more fuel-efficient aircraft or to cater for the government’s ambition that it expand its route network. By comparison, Singapore Airlines’ debt-to-equity is 8%, Ethiopian Airlines is at 54%, Lufthansa 75%, Kenya Airways 122%, and Air New Zealand at 226%. Since 2006, SAA has been surrendering market share to its aggressive and better capitalised competitors, including Emirates Airlines, Ethiopian Airlines, Kenya Airways and Egypt Air. The board has proposed that R2bn be invested on the fleet, which would allow SAA to improve its service offering. The fleet renewal "will support a 10-year international network plan which aims to expand the east-west corridor, connect major global flows to Africa via Johannesburg, and fly nonstop on all international routes." Over the next five years, SAA is expecting to take delivery of 20 Airbus A320s for domestic flights. To achieve its goals, SAA would need to lease six new A350 aircraft as soon as possible, and be able to take delivery of the aircraft between 2016 and 2018. It is also envisioned that there would be some sort integration of SAA, SA Express and SA Airlink. This could take the form of a straightforward merger or placing them into a single holding company, allowing for cost savings on shared services. SAA, according to the plan, "must be run on commercial lines borrowing on the strength of its balance sheet", the board said. "This requires an adequate capital base and from time to time capital injections that enable the carrier to realise its broader developmental objectives as defined by the shareholder, allowing the company to borrow for fleet expansion." The rapid expansion of SAA’s international service since 1994 had not been matched "by a commensurate increase in the level of capitalisation", the board said. Rising fuel costs have had an enormous impact on SAA’s bottom line. Fuel costs have increased from 24% of SAA’s total expenses in 2009-10 to 34% in 2011-12 and rose by R2.2bn last year to R8.3bn. SAA declined to comment on the loss the company made in the past financial year. "The actual position in relation to the company’s financials will only be known once the AGM (annual general meeting) has taken place (on October 15)," SAA spokesman Tlali Tlali said. "To provide any details regarding the financials before … would undermine the reason(s) why we have it in the first place."

8 October 2012 The Times Page 4 Dominic Mahlangu GP rejects Mbalula The ANC Gauteng executive committee has nominated party heavyweight Joel Netshitenzhe for election for the position of secretary-general at the organisation's elective congress in December. Netshitenzhe, once the brains in former President Thabo Mbeki's administration, is highly regarded by party members. His inclusion on Gauteng's leadership slate is expected to cause debate across the country. But the biggest surprise is the omission of Fikile Mbalula from the executive list. Mbalula, has been nominated by the ANC Youth League to take over from the incumbent secretary-general, Gwede Mantashe. In his address to the committee yesterday, ANC Gauteng chairman Paul Mashatile said the party should avoid taking "voting fodder" to its elective conference in December. Businessman and current Housing Minister Tokyo Sexwale and African Union-bound chairwoman Nkosazana Dlamini-Zuma have both been nominated for deputy president. The inclusion of Dlamini-Zuma is a surprise as the ANC veteran is unlikely to accept the post following her successful campaign to lead the African Union. President Jacob Zuma, together with current treasurer general, Mathews Phosa and Baleka Mbete have not made the list. Gauteng's proposed list: president Kgalema Motlanthe, deputy president Tokyo Sexwale and Nkosazana Dlamini-Zuma, secretary-general Joel Netshitenzhe and Gwede Mantashe, deputy secretary-general Febe Potgieter, Thandi Modise and Naledi Pandor for national chairman and Paul Mashathile for treasurer general. Mashatile said unity in the ANC was key to taking the ruling party forward. He said the members should use the organisation's document "through the eye of the needle" to evaluate and elect leaders. "To become an ANC leader is not an entitlement. It should not be an easy process to which merely status is attached. "It should be informed first and foremost by the desire and commitment to serve the people, and a track record appreciated by ANC members and communities alike," Mashatile said.

Gauteng will send 500 delegates to Mangaung and Zuma's home province, KwaZuluNatal, 974. Mashatile, however, said their choice was about quality. "Our focus on membership recruitment has always been based on recruiting quality membership as opposed to just getting people to join the ANC." Gauteng branch nomination process started today and the lobbying is expected to be intense.

8 October 2012 The Times Page 1 Nashira Davids and Katharine Child An end to the chaos At the start of every school year there is the inevitable mad dash by parents to enroll their children at the last minute. Provincial education departments are now trying to put a stop to the chaos. The effort is being made against the backdrop of the lesson learned from the experience of the Rivonia Primary School, in Johannesburg, last year when it refused to admit a six-year-old. This led to a standoff between education officials and the school's governing body. School principal Carol Drysdale found herself before a disciplinary hearing, accused of gross insubordination, last month. The school governing body's legal adviser, Paul Lategan, said the governing body and the parents had paid for extra classes and teachers for Rivonia Primary so that classes would have fewer pupils than the government's specified maximum of 40. He said the government could not interfere because parents had used their own money to create smaller classes. Lategan said there were three pupils at the top of the waiting list who were not admitted and whose rights were "violated" when the pupil was forcibly placed at the school. The pupil came from a private school and had not been sitting at home out of school, he said. In Western Cape, the provincial education department has launched a campaign to encourage early enrolments by using packets of rice - among other things. This has helped to ensure that an estimated 99% of pupils are registered for school in the province next year. The campaign was launched in June to encourage parents to enroll their children for next year by September 7. In addition to billboards and posters at malls, and in bus shelters, taxis and trains advertisements ran on five radio stations.

The department also turned to spaza shops for the first time to spread the message. Shop owners were dishing out small bags of rice as an incentive to customers who bought prepaid electricity from them. The department "acquired space on 100000" of the bags of rice on which to print the message: "Enroll your child for school today. Let's make education better together!" "Leaving enrolment to the last minute places massive pressure on our officials and distracts from the task at hand - which is teaching and learning," said education MEC Donald Grant. The hard work has paid off. Paddy Attwell, spokesman for the department, said it expects the pupil population to grow by 11000 - bringing the number of children at schools in the province to close to 1million next year. "We estimate that more than 99% of pupils are registered for school in Western Cape next year. Our enrolment campaign might have contributed to this success. However, the main success factor has been the determination of parents and the work of schools and officials to ensure that pupils are registered," said Attwell. The department started campaigning for early enrolment more than 10 years ago when "thousands" of children queued for places at schools. At 2.8million children, KwaZulu-Natal has the highest pupil population in the country. KwaZulu-Natal education officials have taken a different approach to late enrolments. Though there is currently a campaign to have children registered by the end the month, education MEC Senzo Mchunu said the last-minute "clamour" at the start of every year is caused by desperate parents who want their children at betterperforming institutions such as former Model C schools. "It also happens in rural areas where a particular community would prefer that their children walk past the gate of the closest school to a school slightly further that has better results," said Mchunu. "This is what we are trying to reverse by dealing with the failure of local schools ... We have decided the only way is to make all schools better." In Gauteng, parents had until July 27 to enrol pupils - two months earlier than usual. Gauteng education spokesman Charles Phahlane said this was to enable the department to get its "house in order" and find space for pupils who had not been accommodated by a school. There were "pressure points", Phahlane admitted, at which the number of pupils exceeded the schools available. "There is a high demand for space in schools in the south of Johannesburg, Ivory Park, some parts of Ekurhuleni, Tshwane north and in many townships."

Parents would have already been told if their application had been successful. Now the department is trying to accommodate children who were not accepted. Phahlane said the province educated 2million pupils a year.