Deputy Minister of Transport, Ms Sindisiwe Chikunga;
ACSA Board Members, led by the Chairperson Mr Skhumbuzo Macozoma;
DDG: Civil Aviation, Zakhele Thwala;
Acting DDG for Operations
ACSA Chief Executive Officer, Bongani Maseko;
Management Team from ACSA;
Officials of the Department of Transport;

Greetings,

I am grateful to be joining the distinguished shareholders to the Airports Company South Africa SOC Limited (ACSA) 22nd Annual General Meeting (AGM) to take stock of the performance of ACSA during the 2014/15 financial year.

For a government entity, an AGM is not an end in itself, but a platform in which government and the Board of Directors should review how its Company is managed in keeping with the:

Public Finance Management Act,

the Airport Company South Africa Act 44 of 1993,

the Civil Aviation Act 13 of 2009,

the Civil Aviation Regulations,

Companies Act, and the

National Key Point Act.

Legislation seeks to directly and indirectly change the lives of the people by dealing with the triple scourge of poverty, inequality and unemployment.

Board members what we are here to do, has an influence in the manner in which South Africa’s image, government and its economy is viewed both locally and internationally. We are here to account on how we manage a public company.

This AGM takes places as we celebrate women month. This is a month in which as South Africa we pay tribute to the more than 20 000 women who marched to the Union Buildings on 9 August 1956 in protest against the extension of Pass Laws to African women. We also use this month to evaluate how we as a country perform with regard to the empowerment of women and gender transformation.

We will be having the Women in Transport Summit and this meeting goes a long way in addressing transformation in the transformation sector.

Women’s Day (9 August) was hosted in Sasolburg, Free State, with the  “Women United in Moving South Africa Forward”.

Every week of August 2015 is focus on a specific sub-theme, and the sub-theme for this week is: The fight against human trafficking and labour exploitation of women. Indeed ACSA can play a leading role in ensuring that this ill is confronted and defeated as ACSA is a port-of-entry and exit to and from our country to the world.

Malibongwe igama lamaKhosikazi!!!!

Turning to the business of the day. In 1993, we inherited a group of basic airports with dated terminal buildings offering little in the way of passenger comforts and services. Twenty-two years later, our airports have been transformed to ten world leading, structurally and functionally advanced airports of which South Africa can be justifiably proud.

ACSA continues to occupy a central role in the development of a non-racial, non-sexist, democratic and prosperous South Africa.

ACSA is a 74.6% owned by the South African Government and operates commercially like any other business, while simultaneously contributing to the Government agenda through compliance with the dual mandate applicable to state-owned companies.

Amongst ACSA’s key achievements:

ACSA is a top employer within the public sector for the third consecutive year.

In 2012 ACSA entered into a twenty-year concession to work with the Brazilian company Invepar for airport operation and management services at Guarulhos International Airport in São Paulo.

ACSA won the Airports Council International award in its Airport Service Quality programme.

The Cape Town International Airport won Best Airport in Africa for the fourth consecutive year, with King Shaka International winning the second place and O.R. Tambo International, fifth place. The Upington International Airport won the ‘Best Small Airport in Africa’ for the third consecutive year and East London the Best Improvement in Africa award.

ACSA won all three of the 2014 Skytrax awards available for the Africa region. O.R. Tambo International was named Best Airport in Africa, and King Shaka International won the award for the Best Regional Airport in Africa for the second successive year. Skytrax also afforded Cape Town International Best Airport Staff in Africa award.

ACSA achieved a level 2 Broad-Based Black Economic Empowerment (BBBEE) rating.

ACSA reported 22 063 job opportunities against the target of 25 624 (20 977: March 2014). This translates to 86% of the target.

ACSA developed the national security plan to amongst others deal with issues of stowaways.

I am informed that:

ACSA introduced a thermal scanning machine in order to detect travellers with high fevers, and

ACSA has been recognised by the prestigious Airport Council International and Skytrax Awards, for its customer-focused strategy.

As part of its transformation agenda, ACSA has identified various socio-economic development initiatives that make the most profound impact on South Africa development agenda.  They include;

The donation of computers at the Makgatho Lewanika Mandela Primary School in Mvezo;
The adoption of the Naledi Hospice in Vryburg;
Women’s Volunteer Programme that provide education for learners with disabilities in various communities; and
The participation in the Annual Oliver and Adelaide Tambo Liberation Walk/Run

Having noted these achievements, ACSA needs to improve on its public image by fostering relations with the stakeholders as well as the media, so that all South Africans could celebrate together with ACSA these glorious achievements.

Turning to the Annual Reports Achievements, I am pleased to announce that out of the 18 annual targets committed for the 2014/15 financial year, 16 were achieved and only 2 were not.

This translates into 89% (94%: March 2014) of targets achieved for the year under review.

The following areas are some of the targets that were achieved:

ACSA reported cumulative revenue of R289m against the annual target of R250m in property development.

The annual target was exceeded by R39m. The 2014/15 revenue of R289m was exceeded in comparison to the previous financial year (R164m: March 2014). This represents 56.74% increase in revenue earned from the previous financial year. This is a significant achievement of revenue earned and therefore presents the potential in property investments for the company.

ACSA reported cumulative revenue of R23m against the annual target of R15m on the provision of technical assistance on Airport Management Solutions (AMS). It is further noted that the revenue earned is comprised of R19, 5m for Guarulhos airport, Brazil and R3, 5m for Umtata airport, Eastern Cape, respectively.

Aligned to this target is the approval that I have recently granted ACSA to establish a new entity to undertake contractual activities for the provision of AMS.

Ladies and Gentlemen,

ACSA exceeded its on-time departure annual target of 85%by 3.7% achieved at 88.7% (88%: March 2014). This means that 88.7% of aircraft that departed the airports were on time during the year under review. The target remained slightly the same for the 2014/15 financial year as compared to the 2013/14. Whilst this is noted as a shared responsibility in the operational value chain, ACSA is urged to continue improving on this area.

ACSA reported 0.386 (0.524: March 2014) safety incidents and accidents per 1000 movements against the annual target of <=0.700 per 1000 movements. The target was achieved.

ACSA committed that the IT systems availability at the airports would be 98% in order to avoid inefficiencies. As reported, the IT services were available 99.4% for the year under review, therefore the target was achieved.

With regards to Broad-Based Black Economic Empowerment (B-BBEE), ACSA is currently sitting at level 2. Although we applaud the Board for this continued achievement, there is however, a need to aim higher in this area given the transformation challenges in the aviation industry. 

The Board should ensure that issues of gender equality, diversity and sector-specific skills are highly considered. On the appointment at executive level, there are five (5) women at executive level, compared to three in the 2013/14 financial year.

ACSA upheld its commitment to enhance corporate governance processes in line with best practices taking into account the fundamental principles of governance which enhance the company’s values.

It is also pleasing that ACSA’s Board is composed of a group of experienced, skilled professional individuals who have the best interest of the company at heart.

Led by Mr Skhumbuzo Macozoma, I wish the Board well in the execution of their responsibilities to transform ACSA and the aviation industry in general. I also like to thank all the outgone Board members who worked tirelessly to ensure that ACSA achieves its objectives. I wish ACSA former Board Chairperson, Me qBusi Mabuza in her new responsibilities.

Let me remind all of us that ACSA as a public entity, its financial statements are presented in terms of the Companies Act No.71 of 2008, Public Finance Management Act, No 1 of 1999 as amended and the Treasury Regulations.

For the year under review, Revenue for the Group was R7,761 billion (2014:R7,127 billion) indicating an increase of 8,9%, including aeronautical revenue of R4,926 billion (2014:R4,559 billion) an increase of 8,05%.

ACSA posted a profit of R1,567 billion (2014:R1,712 billion) indicating a decrease of 8,5%. This was after making provision for taxation of R716 million.

The following targets were not achieved:

In the main, these are some areas which were identified as targets not achieved in the 2014/15 financial year.  These include, amongst others:

The under-expenditure of capex has been ongoing and is continuously noted with great concern. The Board is therefore urged to pay serious attention in addressing the challenges pertaining to capex projects and job creation.

Having noted the AG’s audit report, the Board is required to develop a plan on how it will address the findings as highlighted. This should be reported quarterly to the Department. 

The Department of Transport endeavours to monitor ACSA’s quarterly performance on both financial and non-financial areas. This is despite the capacity challenges in the non-financial area. I therefore appreciate ACSA’s continued acknowledgments and consideration of the Department and my interventions on quarterly performance.

In conclusion

The discovery of the unknown cannot happen, new knowledge cannot emerge unless the human mind questions the veracity of existing knowledge.

Ladies and Gentlemen, ACSA’s achievements will go a long way to ensure that South Africans benefits from this state entity. This could be done by making sure that those who are given the responsibility to drive this ship are adequately capacitated, committed and selfless in performing their duty. The direct spin-off of such dedication is a better life for all in order to move South Africa forward.

I wish this meeting all the wisdom it deserves to come with renewed energy and commitment to take the South African aviation industry forward.

I welcome you all to the 22nd Annual General meeting of the Airports Company South Africa.

I thank you