Question 19 – President Ramaphosa on electricity bills
Honourable Members,
Debt owed to Eskom by municipalities and government departments stands at more than R50 billion.
We have made it clear that non-payment for services is unacceptable and have taken steps to ensure that payment is recovered.
For this reason, we have established a multidisciplinary revenue committee, of which Eskom forms part, to address payment of debt to the utility by municipalities and organs of state.
To assist municipalities across the country to pay what they owe Eskom, the Department of Public Works and Infrastructure pays the services charges and property rates for its properties on behalf of client departments.
For the month of September 2022, as an example, the Department paid R575 million for property rates and municipal services and processed invoices to the value of R51 million to Eskom.
Where there are disputes, the Department pays what is not disputed and engages the relevant municipalities for amounts and accounts disputed.
The Department has made significant progress on the reconciliation, verification and settling of debt owed to municipalities.
Because of its concurrent function, for the last two years the Department has been coordinating reports from the provincial public works departments on a quarterly basis to verify if the public works sector pays its municipal debt.
Where there are challenges, the Department engages through established provincial forums with municipalities to resolve disputed accounts.
In conclusion, regular engagements are taking place with relevant departments and treasuries to resolve all outstanding debt.
The Department of Cooperative Governance and the South African Local Government Association are part of these consultations for amounts that may be incorrectly reported.
I thank you.
Question 20 – President Ramaphosa on causes of Load Sheding
Honourable Members,
The causes of the recent load shedding are both structural and operational.
Among the structural challenges are the fact that there was insufficient investment in new generation capacity at an Eskom when it was needed two decades ago, resulting in a national capacity shortage of between 4,000 and 6,000 MW.
This situation was made worse by the delay in building Medupi and Kusile, the faulty design of key components, state capture and corruption, and the loss of experienced staff. I recently heard that real serious maintenance had been halted.
At an operational level, as a result of these challenges, power stations were run very hard with poor reliability maintenance and neglect of mid-life refurbishments.
With respect to the position of the Group CEO of Eskom, the current Group CEO was appointed on a 5-year contract in January 2020.
The Group CEO reports to the Eskom board, which conducts performance reviews against agreed targets.
The new Eskom board was appointed on 1 October 2022 and will be given the space to assess what needs to be done to improve the efficiency of the existing plant and the effectiveness of the management and operators at all levels.
The new board has the skills, expertise and experience to undertake a thorough assessment of the current executive leadership at Eskom and take whatever steps they consider necessary to address areas of weakness.
As announced in the State of the Nation Address in February and in an address to the nation on 25 July this year, a range of initiatives are being pursued as a matter of urgency to address load shedding.
This work, which is being managed by the National Energy Crisis Committee, includes:
- bringing the remaining two units at Kusile into commercial operation and expediting the return of Medupi unit 4;
- implementing reliability maintenance through a focus on quality of maintenance, recruitment of experienced staff, and the use of the original equipment manufacturers;
- focusing on six priority stations where the maximum benefit can be achieved by improved performance. These stations are Kendal, Majuba, Duvha, Matla, Kusile and Tutuka;
- coordinating efforts with law enforcement agencies to address sabotage, theft and fraud that continues to disrupt the operation of power stations;
- addressing Eskom’s debt to enable the required investments in maintenance and infrastructure, as announced by the Minister of Finance in the MTBPS;
- implementing the just energy transition in line with the Nationally Determined Contribution declared at COP 26; and,
- using climate funding to repurpose and repower stations due for decommissioning.
This work is taking place alongside efforts to accelerate initiatives to add more generation capacity to the grid through investments in gas, solar, wind and hydro power.
I thank you.
Question 21 – President Ramaphosa on social infrastructure
Honourable Members,
The Infrastructure Fund is an important part of our economic stimulus and recovery plan.
This is because of the substantial contribution that infrastructure investment can make to economic growth and development.
The Infrastructure Fund provides government support for the co-financing of projects that blend public and private capital resources.
This is intended to encourage greater involvement of concessional lenders in our public infrastructure effort and build a credible pipeline of social transformation projects over the short- to medium-term.
Government has committed R100 billion to the Infrastructure Fund.
The Fund will use government’s investment to leverage R1 trillion worth of infrastructure investment over the next ten years through blended finance initiatives.
The Infrastructure Fund aims to support projects in the energy, water, transport, digital and social infrastructure sectors.
The Infrastructure Fund has packaged a number of catalytic infrastructure projects to the value of R21 billion.
Of these, projects worth R2.6 billion have been approved by National Treasury’s Budget Facility for Infrastructure, with the remainder to be sourced from project owners’ equity and a significant component from debt capital markets.
Social infrastructure projects approved for funding include parts of the Student Housing Infrastructure Programme and the Social Housing Programme.
Phase 1 of the Olifantspoort and Ebenezer Water Supply Project was also approved.
The Infrastructure Fund has submitted eight projects for the next bid window of the Budget Facility for Infrastructure.
These projects are in the areas of water and sanitation, transport, mixed-use developments and student accommodation.
The Infrastructure Fund has played a supporting role in packaging social infrastructure projects, such as the Gauteng Schools Programme, which aims to design and construct schools in the province.
The Infrastructure Fund is collaborating with government departments and institutions such as Infrastructure South Africa and the Development Bank of Southern Africa to expand the blended finance project pipeline.
Projects that could form part of this pipeline would stimulate socio-economic development through investment that enables effective wastewater treatment, efficient cross-border trade and movement of people.
The Infrastructure Fund has taken some time to get going, but it is now proving to be an important driver of new investment in social infrastructure.
I thank you.
Question 22 – President Ramaphosa on the Presidential Climate Commission
Honourable Members,
The Presidential Climate Commission is an essential part of our country’s response to what we have described as the existential threat of climate change.
The commissioners, supported by the secretariat, make recommendations to government on the implementation of a just transition in South Africa.
The Commission recognises the high levels of poverty, inequality and unemployment in South Africa, the intensity of our greenhouse gas emissions intensity and our economic vulnerability to a global transition to a low carbon economy.
The Presidential Climate Commission’s recommendations to date have therefore focused on enhancing South Africa’s commitment to lower emissions through a more ambitious Nationally Determined Contribution and establishing a framework to guide the just transition.
The Commission will now focus on developing an implementation plan for the Just Transition Framework together with all relevant institutions.
This will include research work on net-zero pathways for each sector of the economy, local government planning, climate resilient development and funding the transition journey.
An immediate priority is making recommendations on the energy mix and energy governance to achieve the mid-century net zero emission target.
These recommendations are due in the first half of 2023.
The Presidential Climate Commission has a further function to monitor and evaluate government performance against implementation of our climate commitments.
The ambitious actions that the Commission has proposed, developed through extensive stakeholder engagement and consensus building, will play a significant role in enhancing the effectiveness of South Africa’s response to climate change and implementation of a just transition.
I thank you.
Question 23 – President Ramaphosa on Black Economic Empowerment
Honourable Members,
Broad-based black economic empowerment, affirmative action and other transformation policies were introduced to address the imbalances created by years of apartheid mis- rule in our country.
While progress has been made in empowering black people and women in the economy, the benefits of this progress have not been felt by all South Africans.
These policies are not only about justice and historical redress.
They are also necessary for economic growth and job creation by opening up the economy to black professionals and entrepreneurs, who over the apartheid years were prevented to build the capital base owned by black industrialists, workers and communities.
Unless we open up the economy to all, we will never realise our economic potential.
For this reason, implementation of transformation and empowerment policies will continue to unfold to create an inclusive economy.
While the policy framework on broad-based black economic empowerment has evolved, its strategic intent has been guided by the Broad-Based Black Economic Empowerment Act of 2003.
The legislation aims to ensure that black people, women, workers, youth, people with disabilities and people living in rural areas are empowered through a series of integrated socio-economic measures.
These measures include skills development, preferential procurement, investment in black-owned and -managed firms, and increasing the number of black people who manage, own and control enterprises and productive assets in the economy.
Such measures have been deployed in the context of an economy with a high degree of market concentration which limits the opportunities for new entrants.
There are three broad areas of focus:
First, we are strengthening inclusivity by broadening ownership and promoting more inclusive corporate governance.
This includes promoting a greater spread of ownership in the economy, especially among black, women and young industrialists, and supporting worker share ownership.
Second, we are addressing structural challenges to growth through active competition policies, particularly where concentration levels in the market limit new entrants and small and medium businesses.
Third, we are promoting spatial transformation, enabling more balanced growth between rural and urban areas and between provinces.
This includes district-based industrial initiatives like the Special Economic Zones and supporting the growth of township and rural economies.
Many of these programmes have broader economic benefits.
Funding for black industrialists by the Department of Trade, Industry and Competition and its entities is creating platforms for a new entrepreneurial industrial class that can fully harness the resources of our country.
The regulatory frameworks set out in the Broad-Based Black Economic Empowerment Act are sufficiently flexible to accommodate a number of different approaches to transformation.
We are therefore pursuing empowerment through master plans in several industries, agreements with business and labour to reduce imports, worker ownership schemes and promoting greater competition through the Competition Act.
Through each of these efforts, we are changing our market structure, paving the way for new entrepreneurs and industrialists.
There have been many lessons learnt over the years, which we are using to make the funding and other packages of support offered by government more targeted and efficient.
The transformation of our economy is at the centre of the policies of this government.
Broad-based black economic empowerment is necessary if we are to create an inclusive economy that is able to grow, innovate and realise its full potential.
I thank you.
Question 24 – President Ramaphosa on air traffic market
Honourable Members,
The impact of travel restrictions and lockdown measures in nearly every region of the world has led to a significant drop in airline activities and revenues.
As the industry recovers, the African Continental Free Trade Area presents opportunities for access to new markets in Africa for goods and services that originate from South Africa.
Much of this increased commerce between African countries will depend on air travel.
To strategically position South Africa to reap the potential benefits of the African Continental Free Trade Area, the Department of Transport has commissioned the development of the Air Freight Strategy for South Africa.
During the COVID-19 pandemic, the air freight market surpassed the passenger market.
By so doing, it offered much needed revenue that effectively cushioned the domestic aviation sector from collapse.
At the heart of this proposed strategy is the quest to find ways of harnessing the growth of air freight to enable aviation entities such as the Airports Company South Africa, Air Traffic Navigation Services and the South African Civil Aviation Authority to expand their footprint.
South Africa is a signatory to the Single African Air Transport Market, which is a flagship project of the African Union Agenda 2063.
South Africa is among the 35 AU Member States that have subscribed to the Solemn Commitment to unconditionally implement the Yamoussoukro Declaration on the liberalisation of air services and the Single African Air Transport Market.
Full implementation of the Single African Air Transport Market across the continent will provide an opportunity for South African airlines, including South African Airways, to expand regional linkages and contribute to our goal of an integrated and prosperous continent.
I thank you.
