Replies by Deputy President David Mabuza to questions for oral reply in National Assembly, Parliament
Question 13: Visit to the Russian Federation
Ms N W A Mazzone (DA) to ask the Deputy President:
Whether he attended any meetings with any person, entity and/or organisation while he was on his most recent visit to the Russian Federation; if not, what is the position in this regard; if so, (a) with whom did he meet and (b) what was on the agenda of each meeting?
Reply by Deputy President David Mabuza
Honourable Speaker.
The trip undertaken to the Russian Federation during my leave of absence, was for the purpose of a scheduled medical consultation. As such, the consultations with my long-standing medical team were held as per the objective of the visit.
Thank you very much.
Question 13: State-owned enterprise in particular Eskom
Mr N F Shivambu (EFF) to ask the Deputy President:
In light of the announcement by the Minister of Finance in his Medium- Term Budget Policy Statement that the State will no longer be bailing out state-owned enterprises, what (a) assessment has been done to determine the impact of this new position of the Government on Eskom in particular and (b) short- to medium-term plans does the management of Eskom have to ensure that the entity stays afloat financially?
Reply by Deputy President David Mabuza
Honourable Speaker,
The underlying message in the Minister of Finance’s Medium Term Budget Policy Statement is that it is fiscally unsustainable to continue bailing out state-owned enterprises in the context of diminishing fiscal resources and competing developmental priorities.
Instead, any form of support provided must focus on transforming these SOEs, and ensuring that they are put on a path of financial and operational sustainability in a manner that does not require constant bailouts from fiscal resources.
Our efforts as the Eskom Political Task Team are focussing on supporting Eskom in the implementation of the Eskom Turnaround Plan aimed at repositioning Eskom, improving operational efficiencies, plant maintenance, and ensuring that debt and liquidity challenges are addressed.
While Government will continue to provide necessary support required, the Eskom leadership, including the Board, has a primary responsibility to drive organisational change, effect governance improvements and ensure that the organisation is placed on sound financial footing.
The fiscal framework has made provision for targeted support to Eskom to minimise negative impacts and ensure that Eskom is sustained as a going concern.
In terms of the recent announcement by the Minister of Finance, there will be no negative implications for Eskom as this will not negatively impact what has already been provided in the current fiscal framework in terms of the 230 billion Rands support package announced in the October 2019 Medium Term Budget Policy Statement. To date, 136.7 billion Rands of this support has been disbursed to Eskom, with the remaining disbursements to be provided over the next 4 fiscal years.
The Minister of Finance has approved a special dispensation to allow Eskom to access additional guaranteed debt of 42 billion Rands in 2021/22 and 25 billion Rands in 2022/23, which falls within its existing guarantee facility.
This approval will enable Eskom to execute its borrowing plan and honour its obligations as they become due. In addition, Eskom has been allocated 21.9 billion Rands in 2022/23 and 21 billion Rands in 2023/24 to assist with the redemption of debt and interest.
Eskom continues to implement various levers to improve internal efficiencies and ensure that it reduces its cost structure while enhancing its capabilities to deliver on plant maintenance, and new build programmes to keep the lights on. While challenges remain, there is discernable progress in some of the key areas of organisational transformation, including financial savings and the recruitment of management and technical skills required by the organisation.
We are advised that Eskom achieved a saving of 14 billion Rands in the 2020/21 financial year and the target of 21 billion Rands has been set for the 2021/22 financial year. Various initiatives are being pursued to ensure that the target is achieved.
Government is working with key stakeholders to adopt a unified approach to Eskom’s financial sustainability. This approach includes cost savings within Eskom, the recovery of arrear municipal debt, achievement of a cost reflective tariff and further reduction of Eskom debt.
This work will be further guided by the Presidential State-Owned Enterprises Council as it identifies specific interventions aimed at stabilising and strengthening the State Owned Enterprises’ financial and operational performance, reduce reliance on the fiscus, and ensures they are repurposed to align with national priorities.
In respect of Municipal debt, Eskom is implementing the Active Partnering Model to assist municipalities with maintenance of infrastructure and revenue collection to enable the payment of the bulk electricity account. Alongside all these support interventions, various models and options are currently under consideration to resolve the current debt challenge facing Eskom. Once finalised, Government will make announcements accordingly.
Thank you very much.
Question 15: support to municipalities and amendment of the Electricity Regulation Act
Ms D R Direko (ANC) to ask the Deputy President:
What plans does he have in place, to assist the coordination of support for municipalities, taking into cognisance their constraints of infrastructure and the challenges of linking up to the grid, to ensure that they have the capacity to generate electricity in light of the undertaking by the President of the Republic, Mr M C Ramaphosa, in his 2020 State of the Nation Address, to ensure the amendment of the Electricity Regulation Act, Act 4 of 2006 that will allow municipalities to generate their own electricity as load shedding has seriously dampened economic recovery and compromised service delivery?
Reply by Deputy President David Mabuza
Honourable Speaker,
Government’s Integrated National Electrification Programme makes provision for planning, financing and implementation of electrification projects in prioritised municipal spaces to ensure that communities have access to electricity.
This is a programme that supports municipalities with electrification infrastructure plans and capital subsidies to address electrification backlogs in permanently occupied residential dwellings.
Government will continue to coordinate and provide targeted support to municipalities to ensure that there is reliable electricity transmission and distribution infrastructure.
With that said, it is important to note that as part of reforms in the energy generation sector, government has empowered municipalities to generate their own electricity to improve the country’s overall generation capacity.
To this end, the Department of Mineral Resources and Energy has developed new regulations that are aligned with the Electricity Regulation Act, for municipalities to procure or develop their own power generation. In October 2020, amendments to the new Regulations in terms of Section 35 (4) of the Electricity Regulation Act, were gazetted.
Through this amendment, municipalities can now procure their own energy in three different options, namely:
Through developing their own energy generation, meaning, the municipality funds the electricity generation.
Through a public private partnership, where a private partner is funding the energy generation in collaboration with the municipality.
Through procuring from an independent power producer that owns all the aspects of generation, and the municipality is a customer.
Should municipalities want to procure energy, they must conduct a thorough feasibility study to determine the best option to pursue.
When it comes to long-term sustainability, municipalities must demonstrate diversity in their customer base; and that electricity revenue collection meets their electricity operations and energy buying costs. This is critical to ensure that consumers are not burdened with high electricity tariffs as compensation for non-paying users.
A further amendment has also been introduced, allowing for facility of up to 100 Megawatts without the need for a generation licence. This was intended to urgently address the current problem of power shortages.
These amendments are aligned to the Integrated Resource Plan of 2019, which envisages the procurement of more than 31 300 Megawatts of new generation and storage capacity between 2020 and 2030.
While Eskom as a national power utility with required baseload, will continue to play an important role in energy generation, a diversified, open and competitive energy generation environment, will go a long way towards addressing electricity supply constraints that impact negatively on economic growth and the quality of life for citizens.
It is expected that with additional energy into the grid, the negative impacts of load-shedding will be avoided and thereby ease the burden on the people and the economy.
The Municipal Infrastructure Support Agent (MISA), continues to provide the necessary support to municipalities in addressing infrastructure challenges. This includes maintenance and refurbishment of existing infrastructure and development of technical capacity through skills development.
Where necessary, municipalities will be able to leverage funding streams to invest in generation and distribution infrastructure, including partnerships with the private sector and government’s Infrastructure Fund.
Honourable Speaker,
We remain optimistic that the newly elected local government leadership and their representative organisation, SALGA, will assist Municipalities to generate or procure their own energy thus promote sustainable local economic development, job opportunities and effective delivery of services at local levels.
Thank you very much.
Question 16: Land Reform and Land Restitution
Mr M G E Hendricks (Al Jamah-ah) to ask the Deputy President:
In view of the delays in the fast-tracking of land reform and the slow pace of land restitution as in the case with the restitution process that has been delayed in District Six, what (a) has he found to have been the causes of the delays and (b) plans does he have in place to fast-track the restitution process of land reform?
Reply by Deputy President David Mabuza
Honourable Speaker,
Equitable land restitution continues to be a matter of concern for us as Government. We have, in our previous responses to Parliament, indicated our commitment to accelerating the resolution of old order claims.
However, there is still much work to be done, and this has been compounded by the devastating impact of the Covid-19 pandemic in the past financial year. The District Six Development is one of the post settlement restitution cases that has been affected by the Covid-19 pandemic.
A framework agreement was reached to develop dwellings for claimants who opted for restoration. This agreement was reached between the City of Cape Town, the District Six Redevelopment Beneficiary Trust, and the Department of Agriculture, Land Reform and Rural Development for the development of the land in a phased approach. The District Six Reference Group was then established to oversee the phased development.
Honourable Speaker,
As Government, we acknowledge the fact that there has been delays in the District Six Development project and there is a need to address such delays with a renewed sense of urgency.
In the main, these delays can be attributed to the appointed construction companies not adhering to their original contractual agreements; the process relating to the transfer of land; the revisions and amendment of the Site Development and Subdivision Plans; and the repairs of technical snags which impacted on the issuing of certificates of occupancy.
A scheduled handover of dwellings for the 108 claimants was earmarked to proceed from 24 June to 16 July 2021, which could not happen at the time due to Covid-19 regulations and adjusted level 4 restrictions. As the handover process was to resume in August 2021, some claimants lodged their dissatisfaction with the typology of the completed 108 units.
As a result, these 108 dwellings have not been allocated to eligible beneficiaries as the occupational certificates for the units remain outstanding. We have been advised that the City of Cape Town has already approved all building plans for Row Houses, and issued one-year temporary Occupancy Certificates for 31 Units of the 48 Units.
The Department of Agriculture, Land Reform and Rural Development will continue the discussions with City of Cape Town on design items raised for the permanent Occupancy Certificate to be issued.
It is anticipated that the City of Cape Town will issue the balance of temporary Occupancy Certificates before the end of this financial year, with full Occupancy Certificates expected by 01 May 2022.
Since there are more than 1 000 claimants who opted for dwellings, further redevelopment phases are still to be implemented. The construction of the remaining units that where all claimants will be accommodated, is anticipated to be carried out and completed in December 2024.
Honourable Members,
As the Inter-Ministerial Committee on Land Reform and Agriculture, we are committed to ensuring that there are no further delays in the finalization of the District Six project. We will ensure that various departments and affected spheres of government, play their respective roles and seamlessly coordinate their work to avoid unnecessary delays in project implementation.
Within a short while, we will convene all the key role players within government to agree on fast-tracking plans with shortened delivery time-frames. These key role players include the Department of Agriculture, Rural Development and Land Reform, the Land Claims Commission, the Western Cape Department of Human Settlements, and the City of Cape Town. With dedicated focus and close project monitoring, we believe it is possible to deliver on this project within a shorter space of time.
Honorable Speaker,
In broad terms, government continues to be seized with the bigger responsibility to accelerate land reform to achieve restorative justice and social inclusion.
While our land reform has encountered challenges and not performed to our satisfaction, there is no doubt that significant progress has been made in the restitution and redistribution of land to its rightful owners in a way that restores dignity and justice to those who were dispossessed of their land.
As at 30 September 2021, the Restitution Programme has, since its inception, settled 82 295 land claims, resulting in the award of 3.8 million hectares of land to beneficiaries at a cost of 24 billion Rands. The programme has furthermore approved 18 billion Rands in the settlement of claims involving financial compensation.
Since the inception of Land Redistribution and Tenure Programme, government has acquired over 5 million hectares of land from over 5 500 projects, and in the process, benefitting 309 535 beneficiaries. The process of allocating 700 000 hectares of state owned land for development is currently underway to benefit those who need access to land for productive use.
Government has further given a mandate to the Commission on Restitution of Land Rights to fast track the settlement of the old order land claims. To support this process, government will prioritise the resolution of administrative hurdles and challenges that are contributing to the slow pace of our land reform process. Among others, these include:
- The need to strengthen capacity and streamline research and verification processes;
- Making provision for additional human resource capacity to deal with backlogs;
- Instituting effective processes for the resolution of disputes, including conflicts among beneficiary communities; and
- Dealing decisively with incidents of fraud and corruption whenever detected.
Notwithstanding progress made in fast-tracking the resolution of outstanding claims, the reality is that the current fiscal constraints are imposing serious limitations on our ability to move with the necessary speed.
The Inter-Ministerial Committee on Land Reform and Agriculture will continue to seek solutions and monitor progress on the finalisation of outstanding claims in line with the standing directives by the Constitutional Court on new land claims.
Thank you very much.
Question 17: Intergrated Farmer Support
Ms M M Tlhape (ANC) to ask the Deputy President:
In light of the fact that the National Development Plan envisages the potential of the agricultural sector to create a million jobs by 2030, (a) how much progress has the Inter-Ministerial Committee on Land Reform and Agriculture made in terms of providing targeted support packages to farms allocated to beneficiaries and (b) what are the Government’s plans to particularly assist small producers in the agricultural sector to mitigate the negative impact of Eskom’s unreliable electricity supply on this jobs target envisaged for the agricultural sector?
Reply by Deputy President David Mabuza
Honourable Deputy Speaker,
The National Development Plan sets out a broad vision of eliminating poverty and reducing inequality by 2030. It also identifies agriculture as a critical sector in economic development, which can contribute significantly to reducing unemployment, and improving household food security.
The Department of Agriculture, Land Reform and Rural Development, continues to provide support to beneficiaries who were allocated state farms as determined through the Beneficiary Selection Policy.
As part of our integrated farmer support programme, Government has prioritised the provision of a package of post-settlement support that includes training, as well as financial and technical support to ensure that all allocated land is productively utilised.
During the period 2019/20 to 2021/22 financial year, the Department of Agriculture, Land Reform and Rural Development has provided support to 191 Proactive Land Acquisition farms across the nine Provinces. The major focus of support is on farm agricultural infrastructure, production inputs, mechanization, as well as training and mentorship to ensure that the allocated farms are productively utilised. Business and entrepreneurship training is also provided on an ongoing basis.
The skills audit was conducted in 275 farms located In the North-West, Mpumalanga, Limpopo, KZN, Free State, and Gauteng provinces to determine skills gaps and design appropriate training interventions. 106 beneficiaries from 66 farms have since received requisite training.
Alongside these interventions, the Covid-19 Agricultural Disaster Fund to the tune of 1.2 billion Rands was established by the Minister of Agriculture, Land Reform and Rural Development in 2020, to ensure sustainable food production post the pandemic.
Honourable Deputy Speaker,
Whilst, the current response packages to support farmers do not specifically include the provision of renewable energy, the agricultural sector is not excluded in the recent intervention which allows for the generation of electricity by private sector or municipalities of up to 100 Megawatts without a requirement of a generation licence.
However, the reliability of electricity supply to small and emerging farmers should be explored when farm assessments are conducted,. so that alternative and workable technologies for farm support are identified and tested.
As Government we will continue to explore a wide variety of green energy solutions for the agricultural sector, and further engage Eskom to work with emerging farmers to diversify their power generation opportunities to include solar and wind energy.
We accept that smallholder agricultural growth, will not be achieved without access to support services, including addressing the challenges caused by instability in electricity supply.
Increasing agricultural productivity, requires us to address all accompanying challenges in a collaborative manner, thereby creating long term food security, job opportunities, and sustainable income.
Thank you very much
Question 18: The role SADC members states to fight the insurgency in Nothern Mozambique
Mr A M Seabi (ANC) to ask the Deputy President:
(1) What has been the role of the Government in the Southern African Development Community (SADC) region in ensuring there is peace and stability, in light of conflicts and attacks on some states like Mozambique by non-governmental groupings, while geopolitics dictates that states need to work together and support each other to ensure their survival;
(2) what lessons has the Government drawn from the different incidences of conflict in the SADC region to intensify the Republic’s security?
Reply by Deputy President David Mabuza
Honourable Deputy Speaker,
During the sitting of Southern African Development Community Extra-Ordinary Organ Troika Summit of Heads of State and Governments, which was held in Harare, Zimbabwe, on 19 May 2020, the Government of Mozambique requested assistance and support from the SADC member states to fight the insurgency in northern Mozambique.
Of course, the insurgency in neighbouring Mozambique continues to pose a threat to stability and security in our region, and measures to contain and prevent any potential social, economic and humanitarian crisis is paramount.
It is against this backdrop, that our government took a decision to support Mozambique to contain and subdue the insurgents, and further provide capacity in terms of training, military intelligence, reconnaissance and equipment. As a member of SADC, our government continues to play a key role towards the realisation of peace and stability in the region.
In this regard, South Africa was amongst the SADC member states who pledged support on military personnel and equipment for the SADC Mission that was deployed to Mozambique on 15 July 2021.
The mandate of this SADC Mission in Mozambique, is to assist our neigbour to combat acts of violent extremism by neutralising the threat such extremism poses. The end result, being to restore peace and security, and create a conducive environment for investment that will drive economic growth of Mozambique.
Honourable Deputy Speaker
South Africa assumed the Chairship of the SADC Organ on Politics, Defence and Security Cooperation in August 2021, and have prioritised the promotion and coordination of peace and security in the region for the duration of our term.
Given the nature and intensity of this insurgency, we cannot ignore the possibility of it spilling to neighbouring states especially those bordering Mozambique. Therefore, active engagements and provision of support to Mozambique is necessary to prevent destabilisation, displacement of people and a humanitarian crisis.
Honourable Deputy Speaker,
Our view is that security risks and possible economic challenges for SADC countries due to forced migration, far outweigh the fear of reprisals from the insurgents. Therefore, our involvement in the stabilisation efforts in Cabo Delgado is in the country’s national interest.
As SADC member states, we need adequate early warning system that is enhanced through strengthening of regional cooperation and sharing of information and intelligence to prevent future insurgencies.
We remain committed to a conflict-free Mozambique that will ensure peace, security and stability in the region.
Thank you very much.
