need to accelerate electricity distribution industry restructuring
3 August 2007
The Minister of Minerals and Energy, Buyelwa Sonjica and the Premier's
Co-ordinating Forum of the Western Cape have agreed on the urgent need to
accelerate the restructuring of the electricity distribution industry. The
parties agreed that this should be done to ensure that Government's social and
economic imperatives relating to reliable supply of energy, universal access to
basic services and eradication of poverty are met sooner.
"The electricity distribution industry has a critical role to play in
enhancing the economic and social development of our people. However, in its
current state, whereby it is characterised by segmentation, unequal treatment
of customers, where the poor subsidise the rich, as well as poor investment in
infrastructure, it cannot be able to meet the social and economic objectives
set by Government effectively. Thus, there is an urgent need for it to be
restructured," said the Minister.
The Minister said this on Thursday, 2 August 2007, at the Premier's
Co-ordinating Forum meeting held in Mossel Bay. This forum was attended by,
amongst others, the Premier of the Western Cape Ebrahim Rasool, who is also the
Chairperson, MECs, Executive Mayors and Mayors, the Director-General of the
Western Cape Provincial Government, heads of departments as well as municipal
managers.
On her part, the Minister was accompanied by the Chairperson of the Board of
EDI Holdings, Dolly Mokgatle and the Chief Executive Officer, Phindile
Nzimande.
The meeting noted the importance of the Western Cape Premier's Co-ordinating
Forum providing the necessary support to ensure that the municipalities get
ready to join the Reds (Regional Electricity Distribution) as well as monitor
closely the process of the re-establishment of Red1 in line with the Cabinet
Decision of 25 October 2006. In terms of this Cabinet Decision, six
wall-to-wall Regional Electricity Distributors (Reds) must be established as
public entities regulated by the National Energy Regulator of South Africa
(Nersa).
Currently, EDI Holdings, together with the South African Local Government
Association (Salga) are involved in an undertaking to re-establish Red1 in line
with the said Cabinet Decision and to that effect, a Regional Engagement Forum
(Ref) composed of Eskom and municipalities from the Western and Northern Cape
Provinces was launched on 20 July 2007.
"The EDI restructuring process is very complex indeed and that is why we are
committed to consulting with all stakeholders with a view to making sure that
all their concerns are considered during the restructuring process. We have
noted concerns such as making sure that municipalities and Eskom do not lose
their revenue, that governance arrangements take into cognisance constitutional
issues and that, when the Reds are eventually established, they do indeed meet
the service delivery objectives set out by Government," Minister Sonjica
added.
The Minister has already held similar meetings with the Premier's
Co-ordinating Forums of the Eastern Cape, Northern Cape and Gauteng provinces
and all of them have pledged their full support to the Cabinet decision of 25
October 2006 and have also committed to work very closely with the Department
of Minerals and Energy and EDI Holdings in ensuring the success of the
restructuring process.
Enquiries:
Sputnik Ratau
Tel: 012 317 8291
Cell: 082 521 9614
Mbulelo Musi
Tel: 012 316 7816
Cell: 082 338 3890
Issued by: Department of Minerals and Energy
3 August 2007
