Global South Africans Weekly News Wrap - 2 March 2012 Contents Fight for ANCYLs soul SA commits to human rights at UN conference .. Gordhan criticises Moodys Sanral downgrade SA steps in as deadline for Zimplats grab nears Affordable housing drive set to change face of Gautengs cities .. Zumas delicate balancing act . Ideological fixation holds SA back, despite clearer policies Minister sees role for business in roads, dams . Executive has sole discretion on state policies ANC promises to defend autonomy of judiciary . A limited sigh of relief after assurances BEE billions shocker Mantashe slaps down Numsa on takeover No holy cows as ANC reviews policy mix Reform funding just not Chancellor House Navy could bridge African divides ANC hits back at union over leadership ruckus . Editor flees to SA in fear of life Questions over R300bn nuclear reactor budget DA scenarios: Ramphele takes over from Zille .. State scrambles to rescue case Doidge convened asecretmeeting . Mandelanot in any danger Presidency Cosatu: 'Keep Zuma but change NEC Thuli gets tough with all-out probe Malema punts league talks with ANC ANC executive meets today to discuss policy documents . Newspapers continue to battle in bleak environment . State steel maker mooted in ANC discussion paper . Vavi springs to top courts defence .. Cosatu to discuss strike, Walmart . Experts question raising of withholding tax Zuma, Vavi differ on state of alliance .. SA wants to deport even when hangman waits SA seeks Chinas vote on bid for telescope No greater role seen for business in infrastructure plans . Motsoaledi starts health overhaul . SAs Fraser ranking rise a feather in Shabangus cap ..

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2 March 2012 The New Age Ricky Naidoo, Mpho Dube and Mia McDonald Fight for ANCYLs soul Barely a day after the expulsion of ANC Youth League president Julius Malema, the battle for the heart and soul of the organisation has erupted into the open. Following the announcement of Malemas expulsion late on Wednesday, sporadic battles broke out between supporters of the youth leader and his opponents. In a swipe aimed at President Jacob Zuma, supporters sang showera wa re sokodisa (the shower man is giving us hard time) and demanded that Deputy President Kgalema Motlanthe succeed ANC president Zuma. They also called for ANC secretary-general Gwede Mantashe to be replaced by Sports Minister Fikile Mbalula, a former leader of the youth league. Addressing his supporters after the announcement of his expulsion, Malema said: My blood remains green, black and gold. We must remain unshaken. They can expel us but our blood is black, green and gold. The struggle continues. Malema also complained that the partys national disciplinary committee (NDC) had informed the media of his expulsion before communicating its decision to him. They communicate internal issues of the organisation through the media. We are expelled through the media, said an angry Malema. After addressing the crowd Malema sang songs with his supporters, including Senzenina (what have we done?) and Nomakubi siyaya (even when it is tough, we are going there). The inference was that his supporters would triumph at the Mangaung ANC national elective conference. Malemas detractors sang Lebogo and Malema ba re sokodisa (Lebogo and Malema are troubling us). Jacob Lebogo is the leagues provincial secretary for Limpopo. Facing a leadership vacuum, the ANCYL national executive committee has convened a meeting this weekend to deliberate on the expulsion of the leagues leader. In statement yesterday league spokesperson Floyd Shivambu, who has been suspended by the ANC for three years, said the meeting was convened to chart a way forward. Shivambu said: The ANC Youth League extends its gratitude to all members of the ANC, the ANCYL, fraternal organisations and progressive forces and structures from across South Africa, Africa and the world who have sent messages of support and solidarity in response to the NDC outcomes.

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We also thank members of the ANC and ANCYL who went to defend the house of ANCYL president Julius Malema from rascals in Seshego on Wednesday. The leadership tussle within the organisation has been simmering for a while, with proand anti-Malema factions clashing for supremacy in its provincial structures. In the race to succeed Malema, ANCYL treasurer-general Pule Mabe, Gauteng ANCYL chairperson Lebogang Maile and ANCYL deputy president Ronald Lamola have emerged as the frontrunners. Commenting on the succession battle, Lebogang Maile said: The provincial executive committee will meet and deliberate on the Malema expulsion. We do not want to react emotionally. We want to look at the details of the matter before we comment. Asked if he thought he was in the running for the presidency of the league, Maile said: I do not parade myself. I have never done that and I never will. Im a disciplined member of the ANC and ANCYL. Political analyst Steven Friedman said: The real issue the ANC must work out is within its factions. Ronald Lamola comes from the same group as Malema. The factions will determine what kind of leadership comes to the fore. There is the possibility that one of the other factions could take over. Commenting on the future of the league, political analyst Prof Susan Booysen said: Malemas demise did not herald a new area filled with uncertainties within the youth league. The ANC will tighten its control on the league and make it stronger. We are watching the space for the next month to see what strategies the ANC will put into the league. Meanwhile, Sapa reports that ANC secretary-general Gwede Mantashe had no thoughts or comments on Malemas expulsion from the party and that a free for all approach when it came to speaking on Malemas disciplinary matter would spoil it. Theres a committee responsible for that, he said.

2 March 2012 The New Age Mel Frykberg SA commits to human rights at UN conference South Africa confirmed its commitment to support human rights when Deputy Minister of International Relations and Cooperation Marius Fransman delivered a speech at the 19th Session of the UN Human Rights Council (UNHRC) in Geneva, Switzerland on Wednesday. We are acutely aware and awake to the persistent challenges of poverty, unemployment and inequality in our own country, continent and the globe.

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In our steadfast efforts of building a better South Africa, a better Africa in a better world, we seek to do more to ensure the promotion, protection and fulfilment of human rights and fundamental freedoms for all, said Fransman. He outlined a number of important issues which included decisive action on the rights and plights of women in relation to human trafficking. Acknowledgement that some of the human rights abuses in many countries of the world were perpetrated by those countries own governments was another issue raised. He pointed out that until the rule of law stemming from constitutions underpinned by defendable bills of rights, became the norm, rather than the exception in many countries, civil society would continue to be silenced. Finally Fransman said that the partiality in which some international bodies were perceived to respond to situations of human rights abuse in different parts of the world was also problematic. Some countries continue to enjoy protection by certain Western forces, even while gross human rights violence against their own neighbours is continuing. It is the responsibility of this council to ensure that this type of selective application of the definition of human rights is stopped, and that all peoples everywhere in the world are protected from abuse. On Africa he said that the African Renaissance and International Cooperation Fund, in line with its mandate to advance the economic and social development agenda for Africa, had decided to disburse funds in support of the mandate of the Special Rapporteur on Extreme Poverty and Human Rights.

2 March 2012 Business Day Page 2 Alistair Anderson Gordhan criticises Moodys Sanral downgrade Rating agencies needed to understand SAs policies and take a hard look at their own shortcomings before criticising the country, Finance Minister Pravin Gordhan said yesterday. Speaking at the launch of the new Black Business Council, Mr Gordhan said Moodys was wrong to downgrade the South African National Roads Agency (Sanral) this week over its decision to institute an e-tolling service in SA. Moodys lowered Sanrals long-term rating to a Baa1 rating on its global scale, local and foreign currency system, from an A3 rating. The agency was concerned that the income

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receivable from the tolling service would be less than expected. The downgrade was enacted at the conclusion of a "review for downgrade" that began on January 19. Mr Gordhan allocated R5,75bn to Sanral in his budget last week to reduce the R20bn debt accumulated in upgrading Gautengs roads. The day before the latest Moodys rating, the agency downgraded the debt and deposit ratings of five local banks Standard Bank , Absa , FirstRand , Nedbank and Investec . Moodys and Fitch Ratings had previously revised the countrys credit rating downwards. Mr Gordhan said the rating agencies were shown up for their inadequacies when they did not foresee the European financial crisis of 2008. "They are now using the European problems as the brush to paint everyone else they now wish to paint us with the same brush." Mr Gordhan said this was despite SAs prudent management of its fiscus and debt. "We take that initiative they clearly havent read our budget documentation," he said. The Black Business Council is a grouping of various black business interest groups. It has the support of African Rainbow Minerals chairman and billionaire Patrice Motsepe, and Reserve Bank communications head Hlengani Mathebula. Mr Motsepe told delegates the black business community needed to reach more people. He said they needed to form networks similar to those operated by Afrikaans businessmen during the apartheid era. "The Afrikaners learned that much of business was in the hands of Englishmen but they changed this through working together." Mr Gordhan implored business leaders to lead the dialogue around making more of the countrys youth economically active. He said capitalism had lost room for a human soul and did not care for the wellbeing of society. "How do we help to redefine it so that this capitalism has a human soul?" Mr Gordhan asked. "We need to put a soul into what has become a heartless, ruthless capitalist system that has little regard for its impact on workers. "As the Black Business Council, we need to lead a debate on what kind of soul do we want for the next 20 to 30 years." The council could take the lead in making South Africans more competitive, he said, reiterating his call for the private sector to create partnerships with the government.

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Mr Gordhan has said business needs to get involved in developing SAs infrastructure. "The time has also come for the private sector to come forward and engage in meaningful dialogue with government to say these are the projects," he said yesterday.

2 March 2012 Business Day Page 1 Linda Ensor, Mark Allix and Allan Seccombe SA steps in as deadline for Zimplats grab nears The South African government signalled for the first time in public yesterday it was taking an active interest in efforts by Zimbabwe to seize 51% of the local operations of Implats , the worlds second-largest platinum miner. Implats, a South African company, was given notice last week that it had 14 days to transfer 51% of its Zimplats subsidiary to a government-nominated fund. The stake is worth R2,5bn. Zimbabwes Indigenisation and Economic Empowerment Act requires foreign-owned companies to transfer 51% of their equity to local entities. SAs Department of International Relations and Co-operation was in negotiations with the Zimbabwean government to ensure South African investments were protected from indigenisation in terms of the bilateral investment and trade agreement with Zimbabwe, Department of Trade and Industry director-general Lionel October said yesterday. Different corporate structures could be used by South African companies to accommodate the indigenisation law, without having to lose assets or investments. "The bilateral agreement is law. That is sacrosanct and we have been given the undertaking that it will be upheld," he said. The agreement, ratified after tremendous pressure by SA last year, gives South African companies recourse if their assets are seized without compensation. South African companies wanting to invest in Zimbabwe recently expressed concern to President Jacob Zuma and the ministers of trade and industry and international relations about the indigenisation laws. They were promised the two ministries would engage Zimbabwes authorities to reach a legally binding arrangement guaranteeing the protection of South African investments. Clayson Monyela, spokesman for the Department of International Relations and Cooperation, yesterday referred all inquiries to the Department of Trade and Industry, which he said was in charge of the process.

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Zimplats is domiciled in Australia, but having Implats, domiciled in SA, as an 87% shareholder means its assets are protected under the bilateral agreement. David Brown, Implats CEO, said earlier this week a negotiated settlement with the Zimbabwean authorities was the preferred option but the bilateral trade agreement was an other. Asked whether Implats would have the support of the government, he said: "I should hope so, yes." Peter Leon, mining law expert at Webber Wentzel, said while a tribunal might rule in a companys favour against Zimbabwe, the biggest problem was prising any financial award from the Zimbabwean government. "Implats would have remedy under this agreement because, on the face of it, the developments look like expropriation," he said. "The problem is that there has been an award against Zimbabwe which has not been paid." Zimbabwes Prime Minister Morgan Tsvangirai told an investment conference in Sandton yesterday "vast opportunities" existed in Zimbabwe, but " our investment environment has been worsened by the mixed messages coming from the government, especially on indigenisation". "I know the business community here in SA has been following the Implats case, where despite a (bilateral ) agreement, the minister for indigenisation has given a two-week deadline to investors ," he said. "This has caused a lot of consternation, but this is the price that we are paying as a coalition government which has no shared vision and shared values."

29 February 2012 Business Day Page 4 Nicky Smith Affordable housing drive set to change face of Gautengs cities The Gauteng local government and housing department is working on a R32,7bn housing portfolio that it says will change the landscape within and around the provinces largest cities. One of the projects that local government and housing MEC Humphrey Mmemezi briefed the media on yesterday is known as Savannah. The project has been planned since 2006 and will consist of about 18000 mixed housing units and is likely to cost at least R3bn, Mr Mmemezi said.

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The developers are the same developers that built Cosmo City, northwest of Johannesburg, Mr Mmemezi said. Listed construction group Basil Read was the lead contractor of the Codevco consortium that built Cosmo City. The developers have been frustrated by difficulty in obtaining approval from the municipality of Midvaal under which the new mixed housing project will fall. Midvaal is run by the Democratic Alliance. "I am speaking to them nicely now," Mr Mmemezi said. The project will offer housing for low-income earners and affordable middle-class homes. The cost of the Savannah development was a good proxy for the size of investment required to meet the housing needs of the province, Mr Mmemezi said. The province was wary of creating dormitory developments. Mixed housing projects would feature a cross section of shopping malls, schools, crches, police stations and medical facilities. Roads and transport MEC Ismail Vadi told a briefing yesterday the province had already committed to building new roads needed to support the development as well as to meet demand from industry for road infrastructure. "We will be constructing a number of road linkages there," he said. Listed retailer Pick n Pay was planning a 5000m distribution centre in the area to serve the province as well as its business across SAs borders. "Its a major distribution centre," Mr Vadi said. "We are also in discussions on other developments on a number of other roads that will complete the Meyerton area and the face of its cities," he said. Within the city of Johannesburg nine new smaller "cities "with mixed-housing plans were being developed. These developments targeted a cross section of income groups with a mixed racial profile, Mr Mmemezi said. Six of the planned housing developments "are already at the planning stages and three are already being implemented". On completion 64586 new houses would be added to Johannesburg through the various new minicities that are being developed. In Tshwane, eight new mixed-housing developments were being considered, which would add 43844 new houses to the city.

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Six of these developments were in planning phases while work on two of them had begun. Ekurhuleni would get at least three new cities and would add 25862 new mixed houses to the metropolitan area. In the economically depressed West Rand "six big projects" were under consideration, four of them were in the planning stages and two are being implemented. On completion the projects would add 56207 housing units, he said. 29 February 2012 Business Day Page 12 Editorial Zumas delicate balancing act The secretary-general of the African National Congress (ANC), Gwede Mantashe, is technically correct when he complains that the National Union of Metalworkers of SA (Numsa) is out of order for calling on its members to ensure the partys top leadership changes in Mangaung in December. As an affiliate of the Congress of South African Trade Unions (Cosatu), Numsa is part of the governing alliance but will enjoy no more than observer status at the ANCs electoral conference. The party and union movement remain independent for good reason the ANC is the elected body, and it represents a far wider constituency than just labour. As the government, it is obliged to balance the interests of a range of constituencies including some that may have voted for opposition parties and determine policy based on what it believes is best for the country as a whole. Contrary to Numsas apparent belief, what is good for its members is not necessarily what is good for SA. That said, Numsas overestimation of its influence over the ANC is entirely understandable given the precedent that was set at the partys previous elective conference at Polokwane in 2007, when the "leftist tendency" within the party played an important part in dethroning former president Thabo Mbeki and electing Jacob Zuma in his place. Less than a week ago, Mr Zuma spoke at the launch of Numsas political school and criticised labour leaders for being too far removed from the ruling party, saying they needed to be represented on the ANCs national executive committee. The party surely cant expect to have it both ways. Then, of course, there is the matter of Mr Zumas fallout with the ANC Youth League, another important source of support at Polokwane. This has left him in the uncomfortable position of being more dependent than ever on labours support if he is to secure a second term as ANC president. Numsas muscle-flexing is therefore not

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entirely without justification and it should not come as a surprise when the unions remind Mr Zuma of this periodically. However, their political influence is limited by the pressure the ANC is now under to deliver on its promises. Hence the partys resistance to Cosatus demand that labour brokers be banned, for instance. The nationwide strike over the issue scheduled for next week is likely to go ahead, but it is unlikely to succeed. That is because Mr Zuma is acutely aware that banning labour brokers will almost certainly increase unemployment and make nonsense of his governments ambitious job-creation plans. Cosatu is an important ally but he ignores the swelling ranks of the biggest political constituency in the country the jobless masses at his peril. Last week, Finance Minister Pravin Gordhan presented a budget that forecast a declining deficit based partly on growth in the public-sector wage bill being kept to an average of 1% in real terms over the coming three years. Yet with the annual "strike season" looming, public-sector unions are already talking about demanding double-digit wage increases, which puts the government in the position of having to either undermine its own economic growth plans or alienate its union allies before Mangaung. Mr Zumas credibility as president hangs on the government sticking to its targets; his political future by and large on deliberately missing them. The great unanswered question is whether he can avoid having to commit himself to either for long enough to get himself re-elected for a second term. The unions will be doing everything in their power to bring the issue to a head in the coming months, because they know that once Mr Zumas position in the ANC is secure, his focus will have to shift to matters economic. And that means implementing policies and making long-term changes that favour the jobless masses over the unionised employed elite. 29 February 2012 Business Day Page 13 Allister Sparks Ideological fixation holds SA back, despite clearer policies The combination of President Jacob Zuma s state of the nation address and Finance Minister Pravin Gordhans budget speech has given us a tangible policy programme for the first time in this discordant administration. Somehow Gordhan has been able to pull together various strands from the mountain of white papers, green papers and position papers produced in recent years to weave together a coherent outline of where the government wants to go. Essentially it is an Asian "state capitalist" policy, with the state taking the lead role in implementing a R3,2-trillion spending boost on infrastructure development, which in turn is intended to create jobs and boost economic growth. Gordhan has performed a skilful task but the mountain has still produced only a mouse, projecting a piffling 2,7% growth

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this year, 3,6% next year and 4,2% in 2014. We need 8% a year if we are to make any inroads into our unemployment rate. Gordhan held out the prospect of the private sector possibly playing a role in implementing the 43 projects that make up the programme, but Public Enterprises Minister Malusi Gigaba and Transnet CEO Brian Molefe have been quick to scotch that. Economic Development Minister Ebrahim Patel will doubtless join them. Meanwhile, during the previous weeks budget debate, the Democratic Alliances (DAs) shadow finance minister, Tim Harris, presented his partys alternative budget for 201213, setting out details of its economic policy essentially a liberal democracy programme also aimed at boosting economic growth but mainly by encouraging development through the private sector. In the DA model, the role of the state is primarily to provide efficient public administration, services and utilities, focus ing particularly on better education and training and citizen protection; while, on the economic front, it is seen mainly as an adjudicator, to step in when markets fail and to prevent market power from leading to monopolies. Perhaps optimistically, Harris contends his budget would produce the required 8% annual growth rate. So, for the first time, we have two clear policy alternatives before us, which is what democracy requires. Ideally, our public discourse should focus on the relative merits and demerits of those alternatives but, unfortunately, race and cultural identity will continue to play a dominant role, though hopefully to a diminishing degree over time. What is important is that both these policy outlines recognise the need to spend to achieve growth, particularly in this phase of global recession. Here is where I find myself puzzled by the strategies being adopted in Europe, where austerity is the universal watchword as it is, too, among Republicans in the US. Even rich countries such as Germany and the UK, which could afford to spend more to boost job creation and growth, are slashing public spending instead. Germany and its rich euro-zone neighbours are forcing debtor countries such as Greece, Italy and Portugal to accept ever tougher terms of austerity to reduce their deficits, which they hope will raise the confidence of investors and bring them back. It has been going on for several years now, but instead of raising anyones confidence, the cut in production is causing all these European economies to shrink still further. Meanwhile, the US, where President Barack Obama used taxpayers money and the trick of "quantitative easing" in effect, printing money to launch a number of lending programmes, rescue some Wall Street banks and the Detroit motor vehicle industry, is beginning to gain traction. The US could soon start climbing steeply out of the recession. Perhaps I dont know enough about economics, or perhaps because I was born in the Great Depression I have been too deeply scarred, but havent we been down the

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austerity road before? Isnt that what Republican p resident Herbert Hoover did between 1929 and 1933, deepening the worst financial crisis in living memory? And wasnt it the Democratic president, Franklin Roosevelt, whose "New Deal" employed millions on public works projects that pulled the US out of that dark pit of despair? Some economic historians say no, that it was the 1939-45 war effort that ended the Great Depression. I say, no matter. Either way it was the act of putting people to work that revived the economy. Which means I dont expect to see Europe, our biggest trading partner, recovering soon. So if we are to get the growth we need to stem poverty and unemployment, we are going to have to do it on our own. Dont rely on China; its potentially infectious authoritarianism aside, it is trying to contain inflation without letting its currency rise, which is slowing domestic demand. The lesson should be clear: the government ought to be encouraging the private sector to join it in boosting growth. Not only does the public sector lack the skills to tackle the commitment Gordhan has laid before it, but the need to boost growth surely requires the full mobilisation of all our economic resources. To brush aside the role business could play, with its accumulated corporate savings in the region of R479b n, makes no sense. Gordhan himself has made it clear he wants businesss participation. "From governments side we are committed to an environment that will encourage investment," he said in his budget speech. But others in the Cabinet and the African National Congresss national executive committee disagree. Their objections are plainly ideological, not rational, and Zuma is too indecisive to override them. Some in the government accuse business of being negative and blame it for not investing more, preferring to put its savings into deposits, despite low interest rates. There is some truth in this, but it is also true that the government has not in fact created the encouraging environment Gordhan says it has. On the contrary. From labour policy, skills shortages, excessive red tape, transport bottlenecks, uncertain electricity supplies and crippling delays of government payments to private contractors, to nationalisation scares, doubts about the Zuma administrations attitude to the judiciary and the constitution and persistent anti business rhetoric all combine to make the cost of doing business in SA too high and the atmosphere too discouraging. All that needs to be reversed, but it is unlikely to happen for as long as Zuma is at the controls. So while the policies before us are clearer, life this year is unlikely to change much. We shall tootle along to Gordhans projected 2,7% growth, with unemployment increasing and the near certainty of another major spat with the public service unions along the

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way, for Gordhan says he is determined to peg public-service pay increases at 5% for the next three years, with just 1% real growth. There is going to be a sharp rise in inflation, especially food inflation. The petrol price increases, which may rocket if the crazy brinkmanship between Israel and Iran disrupts shipping through the Strait of Hormuz, combined with the e-tolling costs for delivery vehicles and higher electricity tariffs, will send inflation skywards. Do you expect our congenitally aggressive public-sector unions to settle for that? Stand by for another winter of discontent and disruption. 29 February 2012 Business Day Page 1 Carol Paton Minister sees role for business in roads, dams Transport Minister Sbu Ndebele on Tuesday invited the private sector to finance and build roads and dams, clearing the way for limited business involvement in the states infrastructure drive. In his state of the nation speech, President Jacob Zuma said he intended to convene an infrastructure summit "to discuss the implementation of the plan with potential investors and social partners". The Department of Transport is also planning a summit in April to discuss the financing of roads. Mr Ndebele, head of the infrastructure cluster in the Cabinet, said at a briefing in Parliament on the governments infrastructure programme that the summit would address "this issue of how public infrastructure is funded, particularly roads and dams". Public Enterprises Minister Malusi Gigaba said last week that rail and energy projects would be funded by state-owned enterprises, but the "bigger problem" was financing roads and dams. Mr Ndebele said apart from funding from the fiscus for roads and the recovery of costs through user fees, "hopefully we will have the private sector coming in". "For instance, there are roads that are dedicated to coal haulage. It cant be expected that government should pay for that. As South Africans we do need to have this dialogue about how to fund public infrastructure," he said. The maintenance and refurbishment backlog on South Africas roads is R169bn, Mr Ndebele said. Transport director-general George Mahlalela said on Tuesday there were five funding options for road building:

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funding by the fiscus; cost recovery on the user-pays principle; a dedicated fund such as the fuel levy; private concessions; and building and/or maintenance by principal users such as the mines or industry. The greatest potential for leverag ing private sector money lay in asking principal users to build or maintain roads, Mr Mahlalela said. "We need to upscale this option. Usually, the state would build the road but the principal user would be asked to take it over and maintain it. Maintaining the road is to that users advantage." With the expansion of coal-fired power stations and increasing demand for coal, an opportunity existed to develop this model at the Mpumalanga coalfields, where discussions with miners and Eskom had already begun, Mr Mahlalela said. But because capital outlays on road building are very large between R12m and R50m a kilometre it was likely that the state would still be required to build most roads, but the private sector could be called on to take on the maintenance costs, he said. Incentives to support private sector road building and maintenance were being considered and would be discussed at the funding summit in April. Some of the financing models used by the Trans Caledon Tunnel Authority a specialpurpose vehicle set up by the Department of Water Affairs would be developed for new dam projects. Water affairs chief operations officer Trevor Balzer said on Tuesday the Trans Caledon Tunnel Authority had been successfully used to raise off-budget debt funding for water infrastructure, which was recovered through water tariffs. Financing arrangements could also include capital contributions by big users as an alternative to tariffs. Mr Balzer said that these were the "broad brush strokes" and the details of specific projects would emerge during Mr Ndebeles budget speech to Parliament later this year and at the anticipated infrastructure summit. 29 February 2012 Business Day Page 1 Wyndham Hartley Executive has sole discretion on state policies

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Justice Minister Jeff Radebe yesterday moved to calm the growing fear that a review of Constitutional Court judgments was an attack on the sindependence of the judiciary, but he again stressed the governments view that the courts should not get involved in policy formulation. Recent statements by President Jacob Zuma that the powers of the top court should be reviewed, and the statement from the Cabinet last November that the effect of the top courts judgments on social transformation would be reviewed, have alarmed many in the legal sector. This is particularly so, coming as these announcements have, after the president and the government suffered some significant reverses in the courts. Despite promises that Mr Radebe would provide more clarity on the assessment and review of the Constitutional Court, he neither announced specific terms of reference nor which institution would conduct the research, which is expected to last 18 months. Moving to calm the fears that have been expressed, Mr Radebe said "the constitution is an embodiment of the values that the ANC (African National Congress) stood and fought for. The ANC-led government will defend these values at all costs, including the independence of the judiciary and the rule of law, which are the bedrock of our constitutional democracy. "This reassurance comes against the backdrop of irresponsible commentary that has been published recently, which is intended to instil fear that the ANC is hellbent on revoking the fundamental rights and freedoms that many had fought for, and some died for, in order for all of us to reap the benefits of a free society. We want to allay those fears and reaffirm our commitment to the constitution and its values in our quest to building a nonracial, non-sexist and prosperous democratic SA," Mr Radebe said. He also, however, repeated the position articulated by Mr Zuma that the courts should not involve themselves in policy formulation as this was the sole preserve of those in the executive and the legislature who had been elected by popular vote. "President Zuma, when addressing the 2011 Access to Justice Conference, reiterated the importance of a clear delineation of responsibilities of the arms of government and articulated the position as follows: While acknowledging the strides we have made, it is our well-considered view that there is a need to distinguish the areas of responsibility between the judiciary and the elected branches of government, especially with regard to government policy formulation. The executive, as elected officials, has the sole discretion to decide policies for the government." Mr Radebe rejected the notion that the government was disrespectful of the decisions made by the courts and pointed out that a bill was already being prepared to rectify the problems of independence which the Constitutional Court had identified with the Hawks special unit in the Glenister judgment. Mr Radebe insisted it was permissible and desirable for court decisions to come under scrutiny.

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29 February 2012 Business Day Page 3 Sam Mkokeli ANC promises to defend autonomy of judiciary The announcement yesterday of the details of the governments review of the courts was met with scepticism, while the African National Congress (ANC) stuck to its guns and also promised to defend the independence of the judiciary. The review has the potential to pit the ANC against opposition parties and civil society organisations as the ruling party appears keen on consolidating its grip on power. Democratic Alliance (DA) justice spokeswoman Dene Smuts said there was a danger that the government would use this exercise to co-opt the courts into a kind of "chapter 3 co-operative governance". Co-operative governance under the constitution applied to the three tiers of government national, provincial and local and not to the three branches of state executive, legislative and judiciary. Ms Smuts was referring to Justice Minister Jeff Radebe s announcement yesterday, which alluded to a need for debate and engagement between the judiciary, the legislature and the executive. "Judges cannot sit and interface with national ministers and MECs in a glorified version of the minister and MEC meetings without losing their independence," Ms Smuts said. Such co-option would compromise the judiciary into co-responsibility for policy outcomes. "That is not their job. They must interpret the constitution free from political pressure." Ms Smuts said it was problematic that the Cabinet was undertaking this exercise, as the courts were not accountable to the government. "The courts are accountable to no one for their judgments. That principle may not be tampered with ." ANC spokesman Keith Khoza said the effect of the judiciary on society needed to be reviewed from time to time. "The judiciary, like any other institution, is subject to transformation. It has to be monitored." The objectives of the review were within the context of looking at legislation and policy, and how they affect society so that SA did not slip into a comfort zone and lose focus. ANC chief whip Mathole Motshekga said yesterdays announcement created a necessary debate about the judiciary and the effect of legislation on society. He said Parliament had passed more than 2000 transformative pieces of legislation since 1994 to align SAs laws with the constitution.

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29 February 2012 Business Day Page 3 Franny Rabkin A limited sigh of relief after assurances Those who feared the government was hellbent on rolling back on constitutional supremacy and the separation of powers through its planned "assessment" of the Constitutional Court should be breathing a partial sigh of relief. Justice Minister Jeff Radebe , briefing the media on the proposed review yesterday, was categorical on a number of things: that the independence of the judiciary was not at stake, and that the separation of powers was entrenched in the constitution and would not change. On changing the powers of the Constitutional Court, Mr Radebe said that, if anything like that were to happen, it would be to broaden the top courts powers rather than limit them. But the minister also launched a discussion document on the "transformation of the judicial system and the role of the judiciary in the developmental South African state" a document that is confusing in places and sometimes appears self-contradictory, yet provides no answers on how those contradictions can be balanced. Hence the partial sigh of relief. So the review appears to be a component of a much bigger project. The discussion document speaks to a huge variety of issues from enhancing the institutional capacity of the Constitutional Court to strengthening the South African Law Reform Commission. The aim appears to be a sort of stock-taking and to start a public debate on what needs to be done. The document says the separation of powers is a central pillar of a constitutional democracy, but that the South African doctrine of the separation of powers is "not absolute", and there needs to be a continuing dialogue between the three arms of state. Mr Radebes speech referred to establishing mechanisms for "regular debates" between the executive, the legislature and the judiciary "to manage their interface". When asked by the University of Cape Towns Prof Pierre de Vos how these debates could be "squared" with the separation of powers, Mr Radebe said the separation of powers was "entrenched in our constitution". "That will not change. But I think a dialogue is very important." The judiciarys role in the pursuit of "transformation outcomes" is to resolve disputes, and to safeguard the constitution and its "most important" function of judicial review, according to the document.

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While many judges had shown "a profound understanding of constitutional imperatives", there had been "some instances where certain court decisions are perceived not to fully advance the transformative purpose of the constitution", it says. "There is therefore a need for open and constructive debate on the decisions of the court." The transformation of the judiciary should not only be limited to race and gender representivity. "Transformation also seeks to ensure that the judiciary is appropriately positioned to respond to the diverse needs of society and plays a role in the realisation of a better life for all." What "appropriately positioned" means is not entirely clear. Nonetheless, it is positive that the government is wrestling with the meaning of judicial transformation a concept that is often mentioned, with little clarity as to what it encompasses beyond representivity.

28 February 2012 The New Age Sibonelo Radebe BEE billions shocker A significant number of empowerment deals stand to be blown out of the water when the reviewed broad based black economic empowerment (BBBEE) codes of good practice are introduced. This could mean that billions of rands poured into BEE deals over the past few years will be rendered valueless, unless enterprises moved to rescue them. Blue chip companies including Sasol, Absa, Standard Bank, Old Mutual, Nedbank and Mondi, which concluded financially leaky BEE deals, might be forced to restructure their initial deals. BEE commentators described the developments as a necessary evil given that many transactions had dismally failed to deliver respectable value. The codes are being amended by the Department of Trade and Industry, which has worked closely with the presidential BEE advisory council. A document containing the proposed amendments was recently presented to the cabinet. Among the proposals is that rules relating to ownership be tightened. Analysts say this tightening may kill many bad deals.

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There are many of them (bad BEE deals) out there, said Ajay Lalu a director of BEE consulting firm Black Lite. The new rules could trigger a new wave of BBBEE deals as corporations rushed to comply. The document, seen by The New Age, will be released for public comment soon. Part of the proposed changes to ownership element of the BBBEE scorecard is an emphasis on creating greater incentives for genuine broad-based ownership. It is recommended that the points for ownership be broadened to encourage greater inclusion of designated groups including employees and community groups. The document also features proposals that will punish BEE transactions which are not delivering financial value. The document suggests a minimum target of 40% with regard to net value points. This could mean that BEE deals that fail to reach this minimum target could score zero in a particular year of measurement. There is a risk that many BEE transactions will not meet the minimum requirements as set out in the proposed changes, Lalu said. Many companies would have to restructure their BEE transactions. Commenting on the general tightening of the codes, BEE analyst Duma Gqubule said the prevailing codes were more like an exam which was easy to pass. Companies had found a way around the codes, earning points without putting any meaningful effort. The financial health of BEE deals has been a major cause for concern .Few deals have delivered real financial value to designated BEE beneficiaries. It is mainly banks that have made obscene amounts of money out of BEE deals through interest charges from money borrowed on behalf of designated beneficiaries of BEE transactions. Meanwhile, companies that sponsored these deals have derived value through claiming BBBEE ownership. The proposed changes to the codes and mainly the ownership element were designed to close this loophole, analysts said. Government funding institutions including the Industrial Development Corporation would need to review their funding models. The DTI declined to comment, saying the changes to the codes are yet to be released for public comment.

28 February 2012 Business Day Page 1 Natasha Marrian

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Mantashe slaps down Numsa on takeover The spat between the National Union of Metalworkers of SA (Numsa) and the African National Congress (ANC) took an ugly turn yesterday, with ANC secretary-general Gwede Mantashe describing the unions meddling in ANC matters as "dangerous". At the weekend, Numsa called for change in the ANCs top leadership at the partys conference in December, accusing it of not implementing resolutions taken at its last conference in Polokwane. Relations between the ANC and the Congress of South African Trade Unions (Cosatu) are tense as the federation prepares for a national strike on Wednesday of next week against Gautengs highway tolls, and labour brokers. Numsa called on union leaders to swell the ranks of the ANC, so they could influence its policy. Cosatu has close on 2-million members, while the ANC this year managed to bring its membership to 1-million for the first time. The spat between the ANC and its labour ally comes ahead of elective conferences this year of the ruling party, Numsa, the National Union of Mineworkers (NUM) and Cosatu itself. Cosatu played a key role in President Jacob Zuma s ousting of former president Thabo Mbeki as ANC leader in 2007. At the time, the union federation said its support for Mr Zuma was conditional on his administration delivering on the pro-poor resolutions adopted at the Polokwane conference. Mr Mantashe hit back at Numsa yesterday during a briefing on the ANCs national executive committee meeting under way outside Pretoria, saying that waiting in the wings to take over the ANC was a "tendency" which was "politically dangerous". "I dont want us to elevate a myth of takeover of the ANC into reality its a myth. This dream that there will be now a flood to enter the ANC and change its character, its a myth." Mr Mantashe cast doubts on whether Numsa had sufficient members in ANC branches to influence the partys conference. "Theres no delegation in the conference of the ANC called Numsa delegation. They will be invited as part of a delegation of Cosatu, which is a delegation of observers," he said. "As people begin to be bold about what should be changed its an exaggeration of the role, of the interaction, of allies."

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Mr Mantashe spelled out the ANCs position on discussing leadership. He said ANC branches could discuss "anything and everything including leadership", but nominations for positions only opened in October. Numsas deputy general secretary, Karl Cloete, yesterday declined to comment on Mr Mantashes warning, saying the union was attending Cosatus central executive committee meeting where "such matters are the subject of discussion". At a Numsa gathering last week, President Jacob Zuma called on union members to participate in the ANCs decision-making processes and to join the partys top leadership structures. The NUM took a softer approach to the ANC leadership at its national executive committee meeting last week. Its general secretary Frans Baleni said the unions top brass focused on policy. But he added that a correct approach on policy matters was key to leaders making it into the upper echelons of the ANC. Mr Baleni urged the ANC to accept their criticism and pro-poor policy in a positive manner. He warned union members against assuming that they could become ANC leaders on a union platform, and urged them to get to work in structures of the party. 28 February 2012 Business Day Page 3 Sam Mkokeli No holy cows as ANC reviews policy mix Policy discussions in the African National Congress (ANC) have taken off, with the party expected to walk a fine line between introducing new policies and implementing those agreed on at earlier conferences. As the partys top structures put the final touches on the policy documents, attention will focus on whether the ANC will push for radical policies or choose to call for more speedy implementation of the current batch. Policy head Jeff Radebe says the national executive committee subcommittees handling policy documents were given an instruction to review all the partys policies. There were "no holy cows" as all the policies were under scrutiny. The ANC is under pressure to preserve its political credibility among its millions of supporters, some of whom live in poverty despite achieving political freedom in 1994. As a result, policies about redistributing wealth dominate economic policy discussions. Policy documents would be released to the public and lower structures of the ANC on Monday, Mr Radebe said yesterday.

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Some of the policy papers deal with improving the quality of education and providing free access to education, including undergraduate tertiary level. The ANC would like to make education free up to a first degree, but it wants to research whether this is affordable. Currently, education in public schools is partly free, as there are designated no-fee schools, and schools cannot turn away pupils who cannot pay. Also, up to the final year of an undergraduate university degree or a diploma, students who receive government-backed loans are refunded when they pass meaning the loan is converted into a scholarship retrospectively. The establishment of a media appeals tribunal is also back on the agenda. A party official said yesterday that the ANC wanted to see the implementation of its 2007 resolution about the establishment of the tribunal. The 2010 national general council a mid-term review meeting decided that Parliament should pursue the establishment of the tribunal. Parliament would hold public hearings, and decide on the finer details of the tribunal and its reporting lines. But there has been intense resistance to the idea of the tribunal with some civil society and media institutions warning that it would be unconstitutional. On the structure of government, the ANC has been assessing the performance of provincial governments and municipalities. A summit held last year suggested that the structures were not functioning properly. One of the options considered at the summit was scrapping provinces to allow municipalities to be strengthened. But provincial power brokers, who would lose the ability to dispense patronage if the provincial layer were abolished, are opposed to the idea. One of the options in previous discussion papers was the scrapping of district municipalities as they were ineffective and duplicated local municipal functions. Mr Radebe said yesterdays special national executive committee meeting gave its blessing to all of the policy papers, ahead of their release next week. Some of the documents needed some minor editing and improvement, which would be done during the week. The partys policy paper on health is expected to give more details about the implementation of National Health Insurance (NHI). The 2007 Polokwane conference passed a resolution for the implementation of the ambitious system, which would change the healthcare landscape in SA. However, by the time the 2010 national general council was held, the party had adopted a much more pragmatic approach, saying the scheme would be phased in over the years. Yesterday, Mr Radebe said there would be no "big bang" announcement and multibillion-rand budget allocations all at once, as the ANC wanted the NHI implemented systematically. But people should not think it had been shelved.

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The policy discussions take place at a time when the debate about the ANCs presidential elections seems to be dying, which would allow for calmer discourse. The debate on nationalisation has been tied to the election of the president, with the ANC Youth League warning that it would not support any candidate who did not back its call for nationalising the countrys mines. On many levels, this call has been weakened. Its most vocal campaigner, league leader Julius Malema, is fighting for his career and faces suspension from the ANC. Research is also against outright nationalisation. In his capacity as justice minister, Mr Radebe will today announce the details of the constitutional review proposed by the Cabinet last year. The governments feelings about the judiciary are likely to dovetail with the policy proposals being worked on by the partys policy creators. 28 February 2012 Business Day Page 4 Carol Paton Reform funding just not Chancellor House The African National Congress (ANC) needs legislation to regulate the funding of political parties to combat the corrupting influence of money in politics "more than any other party", says ANC secretary-general Gwede Mantashe. But while the ANC is committed to introducing regulation, it will not give up its investment vehicle the 100% ANC-owned company Chancellor House despite the conflict of interest, as the company benefits from government contracts and licences. Mr Mantashe was speaking at a panel discussion on party funding hosted by prodemocracy lobby group Idasa in Cape Town last week. The ANC has filibustered for years over introducing regulation of and transparency in private donations. However, a resolution at its last national conference in Polokwane in 2007 committed it to "putting in place an effective regulatory architecture for private funding of political parties to enhance accountability and transparency to the citizenry". The resolution also said the national executive committee "must urgently develop guidelines and policy on public and private funding, including how to regulate investment vehicles". Mr Mantashe says the chief whips of parties in Parliament recently initiated discussion over increasing public funding for political parties and on the issue of regulation, which would lead to a legislative process. "The debate should start. In fact, it is overdue. We in the ANC need that debate more than anyone else." But if it focuses on Chancellor House, rather than regulation in general, "it would kill the appetite for discussion".

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Controversy over Chancellor House has raged since it became known in 2006 that the empowerment company is an ANC investment vehicle. The conflict of interest became plain when it emerged that its joint venture with Japanese firm Hitachi had secured a contract to supply boilers to Eskom power stations that are under construction. Chancellor House is also the holder of numerous mining and prospecting rights awarded by the ANC government. After his election at Polokwane in 2007, ANC treasurer-general Mathews Phosa said the party intended to close down Chancellor House. This has not happened and Mr Mantashes comments last week indicate it is not being contemplated. "Chancellor House is not up for sale," he says. "The reason we established Chancellor House and Thebe Investments was because as a liberation movement we did not have the financial base that white political parties had. We also realised that donor funding from social democratic parties would dry up. We intended to close the funding gap. We are not going to be apologetic." To expect the company not to tender for state contracts just because it is owned by the ANC or to insist any company doing business with the state should not make party donations, is unrealistic, he says. Rather a way should be found of managing the conflict of interest. "Conflicts of interest should not be banned, but declared. The debate we should be having is how to declare interests." Businessman and chairman of the Council for the Advancement of the South African Constitution Sipho Pityana, also on the panel, says the political environment requires rules of disclosure in the same way that conflict of interest is managed in the business environment. "It is critical that the private sector recognise the importance of providing support to political parties, but it should be open to scrutiny, including by workers." The bigger problem with secret party funding may lie with party benefactors who are not unmasked but have criminal intentions, says Mr Pityana. "The lack of transparency benefits corrupt private players more than political parties. Regulatory measures should be focused on dealing with the crooks." 28 February 2012 Business Day Page 10 Editorial Navy could bridge African divides This is not a great time to be placing increased demands on the fiscus, given the governments attempt to simultaneously invest heavily in infrastructure and cut the

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budget deficit, but Defence Minister Lindiwe Sisulu s call for a substantial increase in SAs defence spending nevertheless has merit. The sharp rise in incidents of piracy in the Indian Ocean off the east coast of Africa is a real threat to SAs security and commercial interests and needs to be tackled decisively. The South African Navy is the obvious candidate to take on this important regional assignment but for it to do so will require both a change in mind-set about the role of the military in the 21st century and a lot more money. This will go down like a lead balloon in some circles, which is understandable in the wake of the arms deal scandal and associated wastage of resources on expensive military hardware bought more on the basis of the vendors inclination to pay bribes than the appropriateness of the equipment. SA still does not get enough bang for its military buck generally, due largely to indiscipline in the ranks and a dire shortage of appropriate skills. But that is a separate issue that needs to be addressed through the appropriate channels and political processes. The international benchmark for defence spending as a percentage of gross domestic product when a nation is not at war is 2%; SAs currently comes in at about 1,2%. Starving the military of funding on the basis of corruption in the arms procurement process more than a decade ago is counterproductive. The South African National Defence Force, and the navy in particular, has a vital function to fulfil now. Ms Sisulus call for additional funds follows a summit of Southern Africa Development Community navy chiefs in Durban last week, at which it was resolved that the former naval base on Salisbury Island, in the Durban harbour, be reopened as part of a scaledup regional effort to combat Indian Ocean piracy. This makes sense on a number of levels, in addition to the threat of piracy. The fish stocks in SAs territorial waters are under threat, partly due to industrial-scale poaching by foreign fishing fleets. A more active naval presence would be an extremely useful addition to the fisheries departments efforts to monitor and catch the culprits, and it would certainly not harm customs and excises endeavours to reduce the smuggling of drugs and other contraband by sea. While most piracy still takes place north of the equator and Somalia remains at the core of the problem due to its lack of an effective government, the problem has been spreading southwards at an alarming rate. It is already a significant issue affecting economic growth in the region, with the head of Tanzanias navy, Maj -Gen Saidi Shabani Omar, reporting a 30% drop in the number of ships entering the port at Dar es Salaam due to security fears. Insurance premiums for commercial vessels operating in the Gulf of Aden and Indian Ocean off East Africa have increased by as much as 10 times in recent years as a result of piracy concerns and, with incidents having taken place recently near the Seychelles and in the Mozambique Channel, it is a matter of time before SAs ports start to feel the financial effects more acutely.

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There is a bigger picture to be considered, too. SA has struggled for years to find its rightful place in the community of African nations, the recent wrangling over the chairmanship of the African Union Commission being a case in point. Advocating African solidarity at all costs has served only to provide succour to dictators and erect barriers with potential allies in the West. However, using SAs technological and resource advantages to play a constructive leadership role in Africa when it comes to practical issues such as the menace of piracy could help bridge the language and other divides that have held the continent back for so long. 28 February 2012 The Times Page 4 Amukelani Chauke ANC hits back at union over leadership ruckus ANC secretary-general Gwede Mantashe has slammed the National Union of Metalworkers of SA, saying it was "politically dangerous" for it to seek changes in the ruling party's top leadership. Last week, Numsa deputy general secretary, Karl Cloete, said the current ANC leadership should be replaced in Mangaung in December because it had failed to implement all the resolutions adopted at the ruling party's elective conference in Polokwane in 2007. Addressing journalists before the ANC's special national executive committee meeting at St George's Hotel in Centurion, Pretoria, yesterday, Mantashe said the union's statement that it would try to effect a leadership change at branch level was not only a "myth" but tantamount to dangerous politics. Mantashe said union leaders [must] familiarise themselves with ANC processes before making public statements. Last week, President Jacob Zuma told the union that if it wanted to effect policy changes within the ANC, it should elect its members to the party's national executive committee. Mantashe reminded Numsa of its status in the ANC alliance. He said Numsa leaders would be "observers" at the ANC's policy conference in June and its elective conference in December. "I think when people decide to be bold about what should be changed, what should be said in the ANC is an exaggeration of the role of interaction of allies. "I think it is a dangerous and an adventurous position taken by Numsa because, once you make statements like that to say because you [ANC] don't do this, there will be changes here, they make an assumption that there is no ANC, there is everybody else except the ANC," he said. "It is a tendency to wait in the wings and think that at the right moment you will take over an organisation. It's not done, it's politically dangerous.

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"So I don't want us to elevate the myth of the takeover of the ANC into reality. It is a myth. It can't happen in an organisation that has one million members already. Mantashe also said discussion documents for the party's policy conference would be made public next week. 28 February 2012 The Times Page 4 Sapa Editor flees to SA in fear of life Mbabane The sacked chief editor of the Swazi Observer newspaper said Monday that he has fled to South Africa in fear of his life after receiving a tip-off that police wanted to arrest him on terror charges. Musa Ndlangamandla, once a royal advisor to King Mswati III, who owns the paper, was fired in January after he published interviews with leaders of banned pro-democracy groups in his daily column. "I am now on the police wanted list on trumped up charges under the Suppression of Terrorism Act," Ndlangamandla told AFP on Monday. "Yes, I am scared, looking at the history of people who die in police custody," he said. "However if it means I should die for trying to help fellow Swazis realise a better future and self-determination, so be it," he added. Police officials could not be reached for comment. The Suppression of Terrorism Act makes it a crime to promote the views of "terrorist organisations". The People's United Democratic Movement -- the country's main opposition group -- is listed as such and its leaders were interviewed in the Swazi Observer. "All my articles were balanced as I belong to no group and I interviewed all sides to a story," he said. Ndlangamandla said uniformed policemen have visited the newspaper offices to confiscate his computer and documents. The paper is one of Swaziland's two dailies, along with the private Times of Swaziland. Mswati has faced growing criticism and unprecedented public protests over the last year due to a financial crisis that has pushed the kingdom to the brink of bankruptcy.

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"Everyone can see that there are serious problems in the country and as citizens, we need to participate in speaking out against people and things that are detrimental to the welfare of the people," Ndlangamandla said. 27 February 2012 Cape Times Page 5 Melanie Gosling Questions over R300bn nuclear reactor budget Nuclear reactors may cost SA R300bn The government has put a R300-billion price tag on its proposed nuclear reactors after years of keeping mum on what the new reactors would cost. But although this is around a third of SAs annual budget, it is lower than the going price for a modern nuclear design. The price, which appeared in last weeks Budget review for 2012, is lower than the current cost of nuclear reactors built in the US, which may be an indication that the government is expecting to draw cheaper bids from from Korea and China. Questions have been raised as to whether the Korean and Chinese nuclear designs would meet European regulatory standards. Steve Thomas, professor of energy policy and director of research at the University of Greenwich, said the R300bn translated into about $4 000 (R30 700) a kilowatt. This is called the overnight cost and does not include finance costs. The two bids they (Eskom) got last time were both over $6 000/kW, so I can only assume they are expecting Korea and China to come in way cheaper. $6 000/kw overnight is about par for the advanced estimates for reactors in the US and bids elsewhere, so if you were going for a modern design, that would be the price, Thomas said. The governments last call for tenders was restricted to the French nuclear company Areva and the American power company Westinghouse. Eskom suspended the proposed nuclear project in 2008 because of the cost. The utility was reportedly shocked by the high cost of the French and American bids. Eskom proposes to generate 9 600MW of nuclear power by 2029. The design the government selects will determine how many nuclear power stations will be built. This could range from six to 10. If it was a French reactor (EPR 1 600MW), that would be six reactors. If it was an AP1000 (1 200MW), that would be eight reactors. If it was Korean APR1400 (1 400MW),

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that would be seven reactors. If it was a Chinese CPR1000, that would be 10 reactors. The two bids last time (in 2008) were for AP1000 and EPR designs, so it is hard to see how it could be them. The R300bn price looks like the bid made by Korea for the UAE. That was their first ever export bid and most people assume it was underpriced, Thomas said. Speculation China has never bid to export nuclear reactors, so it was pure speculation to say Chinese reactors would be cheap, he said. China had sold two 300MW reactors to Pakistan, but the design and the price were not made public. The DAs Lance Greyling will table a motion to debate the proposed nuclear programme in Parliament as soon as possible.

The public had had no chance to scrutinise the programme. They had a right to see the evidence on which the budgetary allocation was decided, he said. Given that the shadow of the arms deal corruption continues to darken our democracy, the government should be extra careful about the nuclear build programme, Greyling said. The three sites Eskom has earmarked for the power stations are Koeberg, north of Cape Town, Bantamsklip on the southern Cape coast near Pearly Beach and Thyspunt near Cape St Francis in the Eastern Cape. 26 February 2012 City Press Carien du Plessis DA scenarios: Ramphele takes over from Zille It will be a huge boost for the DA to have someone with the stature of Mamphela Ramphele on board. Her stature and political credibility will be a huge boost to the DA and help the party to attract more votes in the 2014 elections, possibly helping it to take over in 2019. But the move could be difficult to sell to the partys caucus and activists on the ground, some of whom might feel its unfair that leaders get parachuted into top positions. Some DA representatives have expressed reservations about Rampheles ability to lead a political party like the DA. Ramphele says no to the DA Indications are that Ramphele is not convinced that serving in the DA is the way to go.

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She could decide to pull back from formal involvement in the party, but remain a friend and informal adviser to its leaders. This would force the DA to consider its other options, including keeping Zille on as leader until 2019 or finding an alternative. Parliamentary leader Mazibuko is considered a strong candidate, but many say the 31year-old is too young and inexperienced to step up to the post before 2019. Strategists in the party would prefer a black leader to take over from Zille to boost its political credibility and attract more black votes. 26 February 2012 The Sunday Independent Page 1 Gcina Ntsaluba and Dianne Hawker State scrambles to rescue case Doidge convened asecretmeeting He department of Public Works offered R50 million to property mogul Roux Shabangu to walk away from the controversial Pretoria police headquarters lease. This allegation is contained in an explosive 60-page affidavit in which Shabangu aims to absolve himself of any wrongdoing in the lease deal which led to the axing of a minister, and suspension of Police Commissioner General Bheki Cele. The affidavit is accompanied by over 900 pages of documents which Shabangu believes will exonerate him. Shabangu says former Public Works minister Geoff Doidge tried to get him to abandon the deal soon after Public Protector Thuli Madonsela began investigating. I was approached by Doidge to attend a meeting in Durban Doidge said that DPW (Department of Public Works) would pay (Roux Property Fund) R50 million to walk away from the lease, said Shabangu. I, in no uncertain terms, told them that I would not do so. In the affidavit, Shabangu does not mention who else was present or the exact date of the meeting. He later claims that another meeting took place in September 2010 at OR Tambo International Airport attended by a delegation from Public Works headed by the former Director-general Siviwe Dongwana. At the meeting, Shabangu said he was again told not pursue the lease. Asked to comment on the allegation, Doidge, who is now ambassador to Sri Lanka, referred The Sunday Independents questions to the Public Works Ministers legal advisor, Phillip Masilo.

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Masilo said Public Works would only respond to Shabangus Tallegations in court. The R500 million lease agreement has been mired in controversy since Public Protector Thuli Madonsela and the Special Investigations Unit (SIU) were asked to investigate alleged corruption. The deal was cancelled following Madonselas findings that Treasury regulations were breached by concluding the contract through a negotiated process instead of public tender. A second property deal worth R1.1 billion involving Durban police headquarters was also nullified by Madonsela. It is clear from the court papers that Shabangu intends using the departments own mistakes, documents and correspondence to clear his name. He questions why the department continuously changed its position on the deal first cancelling it, then re-instating it before cancelling it once again. At one point Dongwana and representatives from the State Attorney went so far as to assure his financers, Nedbank, in a two-and-ahalf-hour long meeting that the lease would go ahead, despite the investigations by the SIU and Madonsela. The next day Dongwana assured the bank that the investigations would not be a problem. The department further confirms that the outcome of the investigation of the Public Protector and the Special Investigation Unit will have no effect on the validity and enforceability of the lease, he said in a letter to Nedbank dated November 25, 2010. Meanwhile the State Attorney Advocate Moipone Mosidi, who is handling the case on behalf of Public Works, is trying to rescue the case after it was dealt a blow from former acting Director-general Sam Vukela. After being placed on special leave, Vukela submitted a supplementary affidavit in the case which brought into question the entire basis of the Public Works application. In the second affidavit, Vukela tells the court that the department had negotiated 2 415 of 2 950 leases from 2008 to September 2011 and that it was common practice. Mosidi is now asking for the second Vukela affidavit to be struck out as inadmissible. It was filed by subterfuge and in bad faith, whether his own or that of the (Roux Property Fund) The affidavit is replete with irrelevant vexatious material: discursive reference to other instances in which it is contended (Public Works) acted with an equal lack of

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compliance with constitutional and statutory requirements regarding procurement, Mosidi told the court. 26 February 2012 The Sunday Independent Page 1 Sapa Mandelanot in any danger Presidency AS Well-wishes from various political parties rolled in for Nelson Mandela, the Presidency said he was in a satisfactory condition in hospital and comfortable. He was in good health before admission in hospital but doctors felt the complaint needed a thorough investigation. He underwent a diagnostic procedure as part of his ongoing medical management. We are happy that he is not in any danger, the Presidency said. ANC spokesman Jackson Mthembu called for calm, saying the hospital visit was planned. We are satisfied that his condition is not life threatening and that the admission was long arranged and therefore its not an emergency admission, Mthembu said. Mandelas granddaughter Ndileka Mandela said she was not concerned about his hospitalisation. I dont see it as a big thing. He is in perfect health. When I saw him on Wednesday, he was in good spirits, in perfect health and the epitome of health really for a man of his age, she told AFP. Im not worried. Granddad rebounded from his illness last year. I dont see any reason why this should be any different. Ndileka Mandela did not want to divulge where her grandfather was being treated and said any details about his health would come from the surgeon-general or the Presidency. A source, who spoke on condition of anonymity, claimed Mandelas health appeared to be taking slight knocks over the past few days. The source, who is not a relative, claimed to have spoken to the Mandela family in recent days. All I know is that he has been getting sick and sick since late last week, but I do not know what his condition is. They moved him back to Johannesburg largely because of his health condition. That is why he did not attend the funeral of his relative recently, the source said. The information could not be independently verified.

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Mandela, who turns 94 this year, recovered from a health scare which saw him admitted to Milpark Hospital in Johannesburg a year ago. The Nelson Mandela Foundation came under fire for their handling of the situation last year, after they said he was admitted for routine tests. It later transpired what he had suffered a respiratory infection. The Presidency then said it would take over all communication relating to Mandelas health, and that his health would be cared for by military doctors. As a result it is believe Mandela is being treated at 1 Military Hospital in Pretoria. However officials and security at the hospital would not confirm whether he is being treated there. 26 February 2012 The Sunday Independent Page 2 George Matlala Cosatu: 'Keep Zuma but change NEC President Jacob Zuma appears to be tightening his grip on power in labour federation Cosatu as the ANC prepares for its elective conference in Mangaung in December. Several Cosatu leaders told The Sunday Independent that union leaders from the federations big affiliates preferred to surround Zuma with decision-making structures dominated by unionists, instead of ousting him. This emerged as Cosatu was preparing for its all-important central executive committee meeting its highest decision making body between conferences starting tomorrow. The federations unity will be under the spotlight when it thrashes out ways to assess Zumas performance and his collective ANC leadership in the run up to Mangaung a discussion that split the federation down the middle the last time it was tabled. The meetings agenda document states that Cosatu had to: Reflect on the framework for the assessment of leadership as we prepare for discussions towards the 53rd National Conference of the ANC. Already, metalworkers union Numsa has taken a decision that the current ANC national executive committee (NEC) should not be retained in Mangaung. There were strong indications that union leaders would not suggest that Zuma be replaced. Two senior Cosatu leaders told The Sunday Independent there seemed to be consensus that the problem with the ANC was not necessarily Zuma, but the ANCs NEC, which had to be swelled with union leaders for Cosatu to win debates on policy and the deployment of government servants.

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The decision by Numsa to invite Zuma to its political commission on Thursday was interpreted by its opponents in the federation as a move to rid itself of the perception that it was anti-Zuma. Zuma told Numsa members that union leaders had to be present in the ANCs decisionmaking body to sway policy in favour of workers. A senior leader of the mineworkers union (NUM) said: They (Numsa) are realising that their initial posture (on Zuma) put them in a corner. They now dont want to be seen to be anti-Zuma. Why invite Zuma to a political commission when we usually invite him to congresses? asked the leader. But Numsa leader Irvin Jim poured cold water on suggestions that the union was trying to get into Zumas good books, saying they invited him to state the challenges facing workers. He told The Sunday Independent Numsa had not started a campaign to remove any ANC leader since former president Thabo Mbekis days. Numsa has not embarked on any campaign against any leader of the ANC and therefore there is no reason for people to have the view we dont want Jacob Zuma, he said. This (push for reforms in the country) has nothing to do with who is who in the site of power, he said. Numsa has also resolved that it would not elect the current ANC NEC as it had failed the workers. Speaking at Numsas media briefing in Johannesburg yesterday, Jims deputy Karl Cloete said: We will ensure this NEC doesnt return. This comes as Vavi, a strong Zuma critic, told a meeting of Numsas political commission this week that the current political environment made it difficult for tripartite alliance leaders to have honest and open discussion without being labelled as belonging to a particular faction in the ANC. Vavi, with Numsas Jim, are believed to be pushing for Zuma to be replaced for not delivering on promises he made to workers. But Vavi has always insisted that his criticism of Zuma was meant to encourage the ANC to succeed. ANC spokesman Jackson Mthembu said the ANC was concerned by Numsa's decision calling for the ANC NEC to be removed.

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The ANC respects the independence of its alliance partners and therefore does not interfere in the internal democratic processes that elect their leadership. The resolution by Numsa is not in line with respect of independence enjoyed by individual member organisations of the Tripartite Alliance, he said in a statement. 26 February 2012 The Sunday Independent Page 4 Dianne Hawker and Gcina Ntsaluba Thuli gets tough with all-out probe Public Protector Thuli Madonsela says she will, following a complaint by property tycoon Roux Shabangu, conduct a full-scale investigation into allegations of billions of rands worth of leasing irregularities at the Department of Public Works. However, Madonselas office said it would not suspend about 194 Pretoria leases which were concluded without going to tender. In November, Shabangu com-plained to Madonsela, saying his company had been treated unfairly. His lease agreement with the department and the police had been declared invalid, partly because it was not put out to tender. He submitted a complaint referring to at least R4 billion worth of unadvertised lease contracts, and alleged that the national figure could be as much as R300bn. Shabangu demanded that all those contracts be investigated and suspended, in the interest of fairness. However, in a letter dated January 24, Madonsela told Shabangu that she could only suspend leases in circumstances where the contract has just been or is about to be entered into. Her spokeswoman, Kgalalelo Masibi said while Madonsela had initially decided to conduct a preliminary investigation, pending the outcome of discussion with the Special Investigating Unit (SIU), she had now chosen to go ahead with the probe. That meeting (with the SIU) has not taken place due to the change of leadership at the SIU. She has now decided to go ahead with a full-scale investigation, Masibi said. Masibi also said the Public Protectors office had received a cash injection from the Treasury to pay the salaries of new investigators. She said the jobs were still being advertised. The investigation will focus on maladministration because the SIU investigation is focusing on the criminal aspect. If the Public Protector picks up criminality, it will be referred to the SIU, she said.

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Meanwhile, Shabangu has complained that Madonsela treated him unfairly in her SAPS Pretoria lease probe. He said he was only interviewed two days before she brought out her first draft report. I attended a meeting with the Public Protector, my impression was that my attendance was not taken seriously and I experienced (Madonsela) to be antagonistic towards me it was not a long meeting, he said in an affidavit. Shabangu said his impression was that Madonsela had already made up her mind and that she was only going through the motions. He added that he and his company suffered ongoing and relentless negative publicity as a result of Madonselas findings. 27 February 2012 Business Day Page 3 Setumo Stone Malema punts league talks with ANC Only a political solution would resolve the tensions between the African National Congress (ANC) and its youth league, suspended ANC Youth League president Julius Malema said yesterday. Mr Malema yesterday took his battle for survival to Kliptown, Soweto, where he called on his supporters not to lose hope and cautioned that the youth league should exercise restraint instead of being "frustrated" that the ANC leadership was not willing to listen. The ANCs national disciplinary committee is this week expected to present the outcome of the mitigation hearing of Mr Malema, league spokesman Floyd Shivambu and secretary-general Sindiso Magaqa. "The problems between the youth league and the ANC can be resolved by one thing: a meeting between the youth league and the ANC," Mr Malema said during the ANC centenary celebration organised by the youth league. He said there was certain conduct which could not be acceptable, referring to hecklers at President Jacob Zuma s memorial lecture in Cape Town in honour of the second ANC president, Sefako Makgatho. "We will continue to write letters to ask for a meeting with the leadership of the ANC," he said. However, it was unlikely that the ANC leadership would approve such a meeting until the national disciplinary committee had concluded the mitigation hearing. ANC spokesman Keith Khoza said yesterday that he was not aware of any request for a meeting. "Such a request would have to be submitted through the office of the secretarygeneral (Gwede Mantashe)."

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Mr Malemas close allies expected there would be an opportunity after todays ANC national executive meeting for Mr Mantashe and Mr Malema to meet. Mr Mantashe would not confirm whether the meeting would take place. Only a handful of the youth leagues national executive committee members was present at yesterdays rally, suggesting Mr Malema could be gradually losing support and momentum. The committee consists of the five office bearers, 30 additional members, and provincial chairmen and secretaries. The turnout was in sharp contrast with the united front displayed by the league lekgotla in Pretoria a fortnight ago, where its executive committee including the provincial and regional structures declared that only youth league members had the authority to remove its leaders. Mr Malema said the youth league, despite playing a pivotal role in "defending" the ANC in Polokwane and during the 2009 elections, had fewer friends today. "In the past all of them were fighting to address rallies of the youth league, but today they are not here." The leagues Gauteng provincial chairman, Lebohang Maile, said young people must commit to never "betray the revolution". Mr Maile said it was significant that the rally was held in Kliptown. "We are here to reconnect with the spirit of our ancestors and those who gathered here in 1955 and drafted the Freedom Charter." Mr Malema also took a swipe at Finance Minister Pravin Gordhan, saying it was "disingenuous" that the budget of the National Youth Development Agency had been cut to R376m from last years R386m. 27 February 2012 Business Day Page 3 Sam Mkokeli ANC executive meets today to discuss policy documents The national executive committee of the African National Congress (ANC) will hold a special meeting today to consider policy discussion papers, ahead of their release to the lower structures of the party and the public for discussion. Economic policy is expected to dominate, with the committees subcommittee on economic transformation presenting papers. The research report on nationalisation of mines is handled by this committee. ANC spokesman Keith Khoza said yesterday that all the committees would present policy papers.

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The committees were given the task of reviewing current policies, and identifying "policy gaps" which would require the formulation of new policies. This is a key stage in the ANC policy discussion. After todays meeting, the discussion papers will be released to the public and ANC branches to discuss. A policy conference will be held in June. Final policy decisions will be taken at the partys Mangaung elective conference in December. Two task teams under the economic transformation committee have been preparing policy papers. One concerns state intervention in the mining industry, while another is investigating ways of coordinating infrastructure development. Infrastructure coordination is a key element of the ANCs economic policy approach. The party and its government are relying on a new infrastructure drive to rejuvenate the mining industry, and other related sectors, as they seek to increase economic growth and create jobs. The ANC is under pressure to deliver, hence economic transformation has dominated discussions. Some of the policy considerations relate to the creation of a mineral beneficiation industry in SA, to add value to minerals instead of their being exported in raw form. A study commissioned by the ANC has opposed the idea of nationalisation through attaching mines without compensation as that would be unconstitutional. The research report has also shot down the idea of the state buying mines as that would be unaffordable. Instead of nationalising, the ANC should look at ways of more state intervention in mining. One of the ways suggested was to prop up the state mining company, so that it could become a major player in mining. The governance committee has been working on ways to improve the efficiency of provincial and local governments. One of the options being considered is abolishing provincial governments, but that option seems unpopular in the ANC. The committee will likely focus on ways to support struggling municipalities. Campaigning during last years local elections exposed party leaders to the harsh reality of poverty under rural and peri-urban municipalities, some in such a bad state that they were labelled "dysfunctional". At the time party leaders called for the model of funding municipalities to be reviewed because councils in rural towns were not in a position to raise enough revenue through rates and taxes, but had to carry out a full array of municipal functions.

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27 February 2012 Business Day Page 5 Trevor Neethling Newspapers continue to battle in bleak environment Daily newspapers have lost about 90000 buyers over the past year, according to the latest quarterly data from the Audit Bureau of Circulation. The data for October to December last year show that daily newspapers sold 97000 fewer (-6,7%) copies compared to the same quarter in 2010. The drop outlines the bleak environment in which print media operates and follows last weeks dire outlook from Caxton Media which forecast that the sector would make further losses to digital products in both circulation and advertising. Among the biggest losers in the daily newspaper market were The Star, down 17% in daily sales and 10% in total circulation, and the