Archive | Public utilities

Green Paper on rail transport published

sent to clients 12 October…..

National rail policy mapped out…..

metrorailA Green Paper on South Africa’s National Rail Policy has been published for comment naming the country’s challenges in rail transportation, recommending policy direction and containing broad proposals for the way forward to develop the current rail network.

Gazetted recently, the Green Paper represents work commenced in 2010 and says the document “Seeks to revitalise the local railway industry by means of strategic policy interventions”.   Not only is freight rail included in the proposals but long-distance rail passenger and localised commuter services.

Road dominates at a cost

Minister Peters said in a media statement at the time that railways in South Africa had operated for almost more than a century without a proper overarching policy framework to guide development.   “The railway line and its railway stations have played a pivotal role in the day-to-day lives of communities, especially those in the rural areas, but as far as freight is concerned, 89% of freight is still transported by road and the future of commuter rail conducted on an ad hoc basis”.

roadsThe emphasis of road transport is costing the country millions of rands annually in road maintenance, money that could have been well spent on developing freight rail, she said.

The process

Cabinet last month approved the release of the Green Paper for public consultation. When all is finished, a final White Paper on National Rail Policy will be released to guide and direct development of infrastructure and develop more modern commuter systems. A National Rail Act will be the final result of the White Paper.

These interventions, according to Minister Peters, will reposition both passenger and freight rail for inherent competitiveness by “exploiting rail’s genetic technologies to increase axle load, speed, and train length.“

Lining things up

railway lineWider-gauge technologies are on the cards.   The government has said it is converting 20 000km of track to standard gauge from the narrower Cape gauge. This would bring the network in line with an African Union resolution on the subject and at the same time would boost capacity of goods carried, with longer trains and a reduction in transportation costs.

With both passenger and freight rail falling within its scope, part of the envisaged national transport policy includes involvement by the department of transport (DOT) in the local government sphere to create capabilities to move more passengers by rail with infrastructure, more rail line and technical assistance.

Creating local commuter rail

Secondly, once the localised capacity is in place, DOT says it will be able to appropriate subsidies for urban commuter rail, the management of the mini-systems then being devolved to municipalities themselves.

The Green Paper talks of investment and funding, private sector participation, inter-connection with the sub-Continent, skills planning, investment strategies and the start of a regulatory system.     Part of the master plan at operations level would include a branch line strategy with the private sector involved to improve connection between cities with towns and industrial areas.

Other articles in this category or as background

Transnet improves on road to rail switch – ParlyReportSA

South Africa remains without rail plan – ParlyReportSA

Minister comments on taxi and rail plans – ParlyReportSA

PRASA gets its rail commuter plan started – ParlyReport

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Expropriation Bill phrases could be re-drafted

Most countries have forms of expropriation…..

As a result of three full days of public hearings on the new Expropriation Bill,  Deputy Minister of croninPublic Works, Jeremy Cronin, confirmed that in a number of aspects, notably on issues of arbitration and definitions of “the public interest”, the Bill as tabled needed re-drafting considering certain constitutional aspects.

He was adamant that a Bill of this nature was needed, a fact not disputed by many in submissions, but the wording of the Bill at present certainly seems to have raised the spectre of a constitutional challenge if the hearings were anything to go by unless considerable alterations take place.

Expropriation definition will trump all

Whether the Expropriation Bill is land reform in disguise or a genuine attempt by the Ministry of Public Works to unlock mechanisms that are preventing infrastructure development became the kernel of discussion and debate. This was after some twenty five submissions by various parties across the entire business, political analyst and land ownership spectrum.

Clearly opinion is still divided but the motives for dissension and the subject of the submissions put to the Portfolio Committee on Public Works were as varied as the arguments put forward by the department itself in the need for such a Bill.

Eskom used as reason

The worry behind any disagreements with the wording of the new Bill appeared in question time. Would the Department of Public Works (DAPW) seriously put forward an ANC Alliance proposal for “land grabbing” under the simple guise of a platform of argument such as that Eskom needed to resolve land issues to extend electricity grid installations or that the N2 was held up in the Eastern Cape?

Anything else in the “public interest” including “property”, as yet undefined, would be unconstitutional, said many of the submissions, whether agreeing to the basic need to alter the anchor Act by amendment or not because the ‘willing buyer, willing seller” principle was clearly “out of the window”.

How close is Constitution on “expropriation”

Minister Cronin The Bill tabled clearly states that it “seeks to align the Expropriation Act, 1975, with the Constitution and to provide a common framework to guide the processes and procedures for expropriation of property by organs of state.”    This, the Bill says, would be in the “public interest” but again and again the query arose as to what the “public interest” might be.

Throughout the entire round of submissions, the Deputy Minister of Public Works, Jeremy Cronin, was at pains to express the benign in nature of the proposed Bill insofar as plans to expropriate land. The intention of the Bill was merely to speed up processes that hindered development in the “public interest”, he argued.

He admitted that in some cases this might include “land development” but denied that the Bill was in fact a pre-cursor to the proposed Land Reform Bill and the recently tabled Promotion and Protection of Investment Bill, where the issue of land in the one case and “property” in the other case arose.

CCCI attacks whole raft of Bills

ccci logoSuspicions in respect of this were strongly expressed by Ms Janine Myburgh of the Cape Chamber of Commerce (CCCI) who claimed to represent also the views of SA Chamber of Commerce, in completely rejecting the Bill as a flagrant attempt to undermine the Constitution.   She thus brought CCCI to a great degree into contradiction with Business Unity SA (BUSA) and even Agric-SA, both of whom agreed that such a Bill was in order but that the wording need much attention on the issues under debate.

In some respects the CCCI presentation, as lodged with Parliament and subsequently circulated, differed in basic content from the speech actually made, which was particularly vehement in its rejection of the Bill and which, Ms Myburgh said, flew in the face of the Constitution. She linked the Expropriation Bill with the Promotion and Protection of Investment and other land reform legislation from the Minister of Rural and Land Development together.

Coming round the corners is more…

CCCI was convinced that the Expropriation Bill was the first of more legislation to come that could damage any investment in the South African economy; was an attempt to provide precedent for expropriation at “any price”; and should be the subject of a constitutional challenge. The need for the Bill in totality was rejected.

The chairperson, Ben Martins, complained that the CCCI submission brought “nothing to the party” with no alternative suggestions, “nor an attempt to understand the processes involved”. They should only discuss the Bill before them. The UDM stated that they doubted whether Ms Myburgh, an attorney, “had even read the Bill” and Minister Cronin, said that the input by CCCI was an embarrassment and a waste of the committee’s time. There would be a Bill tabled eventually, that was a fact that seemed to be accepted, but to contribute nothing was a pointless exercise, he said.

He expressed his view that Ms Myburgh should not even be allowed to respond to these different criticisms since her organisation either had not read or did not understand the Bill. He asked how the Bill could be “unconstitutional” when it directly enforced the “public interest”. What was being discussed, he said, was to define this with wordings necessary to resolve issues, achieve this, and move forward.

Minister Cronin said that CCCI had adopted an alarmist attitude, which he was continually at pains to oppose, and added that a wide majority of stakeholders who had intervened in the public hearing thus far, including Business Unity South Africa (BUSA), Agriculture South Africa (Agri-SA) and the Banking Association South Africa (BASA) amongst others, had raised useful contributions which had to be considered.

Minister Cronin said that he hoped that the media present would have the intelligence to understand the processes envisaged by the amended Bill and the suggestions that had so far come forward were part of a process that all countries had.  He condemned the attitude of CCCI towards an Act that had been in place but needed revision because of circumstances.

Institute of Race Relations

anthea jeffriesRight from the start of hearings, the first being from the South African Institute of Race Relations (SAIRR) represented by Dr Anthea Jeffrey, the point was that in the case of poorer folk the whole question of court litigation costs was not only a dubious issue but the time frame for lodging an appeal had to be extended from 60 to 120 days.

When asked why SAIRR should become involved in land issues, Dr Jeffrey replied that it was just a question of the unconstitutionality of the issues and for many years SAIRR had been involved in discrimination against black land ownership.

She said that under the present Act the validity of any expropriation could be challenged, whereas under the new proposals it could not; SAIRR was deeply concerned that all types of property could be expropriated; property that was expropriated “in the public interest” should be better defined and she asked that the new Bill should trump all other Bills.

She complained that Bill in no way assumed responsibility for loss of livelihood; loss of property and the unintended consequences of taking land. She reminded MPs that over 8.6m black people owned their own homes in South Africa.

Dr Jeffrey was asked what she meant by making the remark that “a number of interested organisations would be taking the current wording to the Constitutional Court if the wording should stand”. Would SAIRR really appoint silk and go to the Court, they asked.  She replied succinctly, “It totally depends what you put in the Bill”.

Earlier, Ms Vuyokazi Ngcobozi, Parliamentary Legal Advisor, reminded the Portfolio Committee that it needed to be mindful of Section 25(2b) of the Constitution which states that if parties did not agree on compensation, they should approach a court.

People could not afford to take the route of going to court, she said, and arbitration was expensive. However, this was a right which is provided for in the Constitution. Alternative approaches had to be considered, she said. There was, throughout the hearings, much debate on which courts should be used.

Eskom goes up front as reason

eskom logoEskom in its presentation said that it was currently experiencing significant delays in acquiring servitudes for the construction and installation of its infrastructure and this was largely due to an “ineffective expropriation process”. They quoted one essential transmission line to the Western Cape which had been held up for six years and one even more critical line to the Vaal Triangle industrial area held up for four years.

When asked why the land had to be bought, Eskom said in many cases this was the only route to acquire rights. At this point, the Deputy Minister responded that there was absolutely nothing against the acquisition of servitudes in the public interest but the issue remained the market value for such rights, whether ownership or servitudes, and the Bill itself therefore remained a Bill about expropriation of such rights.

SA Institute of Valuers

This point was made by Saul du Toit of the SA Institute of Valuers (SAIV) in urging both the committee and the department not to leave the notion of value as openly definable and to align it with market value for purposes of fairness and constitutionality and the rights of a property owner.

He found himself answering provocative questions from EFF members who stated the land was not the property of the current owners in the first case so the question of rights did not apply.

Mr du Toit urged members of the EFF to obtain a copy of “Grundrisse” by Karl Marx, in which Marx explained how “labour” actually allocates a certain value to land.  He again confirmed that it was highly doubtful whether some magistrate’s courts, which had to take a fair share of the load of expropriation cases away from costly High Court actions, had the experience but not necessarily the competence, to deal with expropriation matters.

One submission, from a valuator, Mr Peter Meakin, suggested that that all land, as in Hong Kong, should become state land and leased back to owners, thus completely changing the structure of taxes and rates into rent and leasing costs, making expropriation a much easier matter, providing just compensation for property only as the main issue. The impracticality of this suggestion led to very little debate.

Agric-SA- “process must totally protect”

agri-saMs Annelise Crosby, parliamentary representative for Agri-SA, said they “supported orderly land as a prerequisite for rural stability and inclusive rural development.” She stated that “expropriation should only be used as a last resort where negotiations had failed”.

Agri-SA had been totally opposed to the original 2008 Bill on the basis that it restricted access to the courts and was not in line with Section 25, 33 and 165 of the Constitution and she said that government “should be applauded for the extensive and inclusive consultation process which it undertook on the 2015 Bill before the showed significant improvements”.

However, expropriation without compensation, she said was traumatic, causing financial loss, emotional stress and suffering.  Agri-SA proposed that the full 100% of compensation offered be paid to the owner on the date which the state took responsibility of the property. Under no circumstances should an expropriation lead to insolvency on the part of the land owner because the compensation was not sufficient to settle the loan secured by the mortgage bond and settlement paid in time.

Claimants, she said, should as far as possible be placed in the same position as was the case before the expropriation. The definitions of “expropriating authority” and “public interest” were broad and left a lot of room for uncertainty.

Also Ms Crosby said, “due regard must be given to the owner’s right to privacy and these should therefore be resolved in the wording, submitted by Agric-SA, before the Bill was finalised if it was to be acceptable.”

Banking Assoc: Expropriation should only be for land

basaThe Banking Association of SA (BASA) went a stage further, stating the whole preamble to the Bill and the Constitution should be altered to state that the Bill be restricted to land, water and related reform as opposed to “other types of property”.

BASA noted since the instigation of the original Act the word “property” had become a debatable issue at law. This was agreed later by Minister Cronin and not even the Constitutional Court had been able to rule on this.  BASA pointed out that the Bill had to be aligned to the Constitution which called for “just and equitable” access to land which was missing in the proposed Bill, thus there being no adequate safeguard against abuse of the power to expropriate.

BASA stated that the new Bill left out the previous expression of “consequential loss” contained in the original Act and any replacement or amendment should be aligned to relevant international norms and standards. In terms of global regulatory requirements, they said, lenders are required to make use of market values against which mortgage loans are made and they could see “no valid reason” for leaving out the relevant clauses as contained in the original Act.

“Expropriation is a drastic measure which places an inordinately heavy burden on the shoulders of particular individuals. The full extent of their consequential loss must be taken into account, not disregarded”, BASA emphasised. They disagreed with the concept that any property that had been “taken without the consent of the expropriated entity or person” should not be taken into account.

BASA set out a full alternative set of wordings and concluded by urging government use caution and act in strict compliance with the Constitution, especially in cases when a heavy burden on the expropriated person became apparent. They concluded with the comment that South Africa could ill afford to have an Expropriation Bill that works against investment growth and the creation of jobs. This was not conducive to a satisfactory international business environment, they said.

Taking bits out of land destroys values

The South African Institute of Valuers (SAIV) further said that land assets should be considered as holistic units and should not be divided up by any expropriation process since the units thus divided, they argued, become non-viable and lost their use or value. The expropriation process, they argued, had to be related to market value for purposes of fairness and constitutionality.

Discussion again centered on what courts should be used, SAIV sharing its experience with the Gautrain expropriation where some 1,400 cases of expropriation were satisfactorily concluded by arbitration before the necessity of going to the courts arose.

SAIV called for privacy on compensation agreements, for if the amounts paid, the Institute said, were to become public, landowners could rely on data from previous cases and play these off against each other as well as against the state.

Minister Cronin’s consistent assurances throughout the hearings that the amended Bill was benign on the issue of expropriation and mainly for state utilities to complete infrastructure projects was challenged after a submission on the third day by Prof. Ruth Hall for Institute for Poverty, Land and Agrarian Studies (PLAAS)

She said the amending Expropriation Bill highlighted “the necessity to bring expropriation laws and theirRuth hall compensation components into line with the Constitution in order to remove the ‘veto power’ of landowners in relation to land reform and to ensure consistency in expropriations undertaken by the different arms of government.”

Prof. Hall said that the proposals, for the first time, properly phrased historical factors into a Bill, particularly regarding the shaping of compensation in order to address the apartheid legacy and the necessity for redress. She said a state “advisory panel on expropriation” could provide all citizens with a cost free framework for negotiations and arbitration in order to address the costly and “intimidating” court system.

Minister Cronin hastened to assure Prof. Hall that this legislation, like much of South Africa’s current legislation, had the main purpose of addressing improprieties of the past and was designed to continue the process of redress.

sapoaThe South African Property Owners Association (SAPOA), represented by Adv. Gerrit Grobler, felt that in broad terms the Bill conformed to international standards and the department was to be commended. “It is workable, practical and constitutionally sound but there were a few outstanding matters needed to be attended to and that the Bill could not go forward as it was.”

Originally only the High Court where the property was situated could determine compensation for all instances of expropriation, Adv. Grobler said, but in 1975 the Expropriation Act provisions allowed for compensation to be decided by a magistrate but subsequently were deleted from the Act because compensation mostly fell outside the experience of magistrates.  This had to be cleared up and decided upon, he said.

He advised that the 60 day notice of expropriation was too short and felt it would not meet constitutional muster.   It could not be expected that property could be valued and a claim for compensation prepared in such short time. He suggested 6 months in the light of court rolls being overloaded.

Mr M Ndlozi (EFF) said that SAPOA represented land and property of capitalists, some of whom were the main beneficiaries of the policies of a criminal government. SAPOA needed to have a conversation around the criminal acquisition of land, he said.

Adv. Grobler, when replying, said if a property owner who had paid full value for the property, whether in 1960 or 1975 and the property is taken away, then the owner would lose the market value which he or she had paid for the property. That was a fact. If the land was acquired for nothing, then this would be taken into consideration.

gerrit groblerAdv Grobler said he was not a politician but a lawyer and therefore could not discuss any member’s personal ideologies. He followed only the Constitution which outlined the principle that compensation for expropriation be paid.

However, SAPOA continued with the proposition that High Courts, or preferably arbitration beforehand, had to take place first in terms of the Constitution but the argument remained, as had been stated from the start of the hearings, that these costs were too high and the period in which a defence could be prepared before expropriation took place was too short. This had to be reconciled, he said.

Adv Grobler again repeated that the Bill was a good piece of legislation which needed a few technical adjustments. Magistrate courts were specifically good in matters relating to criminal law but not to expropriation. However, he stressed that the proposals would “not serve the bottom end of the market”.

Deputy Minister Cronin thanked the presenters for providing clarity on the jurisdictional areas of the High Court and the Minister notably remarked that it made sense to begin assessing things from a market value point of view.

On the Eskom matter, he said the problem with Eskom was that the entity was pursuing the “willing buyer, willing seller” approach and a couple of landowners held out to drive up prices. Therefore such a Bill as tabled was important to tackle land acquisition although it had to be in line with the Constitution.   Adv. Grobler was thanked by the chairperson, Ben Martins, for his thoughtful observations.

cosatu2The Congress of South African Trade Unions (COSATU) submission descended into an argument between their need for an answer why land restitution had “failed so far” and the fact that the land was “stolen” in the first place. A response was made by FF+ member, F Groenewald, that most of the land referred to had been stolen from the Khoi-San by such historical parties as King Shaka in the first place.

Chairperson, Ben Martins, called for order and asked both parties to continue their debate “at another timeBenedict Martins in a different place” since the issues were irrelevant to the meeting.

However, Mathew Parks, parliamentary coordinator at COSATU, submitted the view that government should never compensate theft and emphasised that arbitration should be able to take place prior to referring to a court at low cost. The present process was, moreover, described as long, costly and intimidating. This could be sorted out without changing the Bill.

He suggested as a solution the development of an advisory panel on expropriation which would provide actors in a dispute with a comprehensive framework, enabling the development of fruitful negotiations.

He described the recent criticisms directed against the Bill in the media as attacks lacking any foundation. He urged members of the committee to vote in favour of the Expropriation Bill as it stood.

In conclusion, Deputy Minister Cronin said that Department of Works and his Ministry Department had much benefited from the general support and advice contained in the majority of the submissions. It was a Bill which was now perceived as a nearly completed and was now a working document which any government needed to bring matters in line with international practice.

He added that the Freedom Charter “did not contain any reference to the possibility of nationalising any land” and this was a “red herring”.

Other articles in this category or as background
Expropriation Bill has now to be faced – ParlyReportSA
Zuma goes for traditional support with expropriation – ParlyReportSA
Expropriation of land stays constitutional – ParlyReportSA
Amended Expropriation Bill returns – ParlyReportSA

Posted in Facebook and Twitter, Finance, economic, Land,Agriculture, Mining, beneficiation, Public utilities, public works, Special Recent Posts, Trade & Industry0 Comments

South Africa on international cybersecurity

Cybersecurity for SA to fight cybercrime….

A Green Paper for discussion on fighting cybercrime in South Africa is expected before the end of the year, Minister of State Security, David Mahlobo, said in his budget vote speech and a Bill setting up a Cybersecurity Agency by the end of next year will be enacted, developing upon the current ad hoc response to cybercrime events.

cybercrimeExperts in the industry are hoping that the Green Paper will recommend private/state partnerships.

Some time ago the African Union called on each of its member nations to develop a policy on cybersecurity but experts complain that South Africa has no a culture of cybersecurity and is falling behind on partnerships that would enable the country to defeat what the United States has named as one of the greatest threats to its own national security.

Fraud flooding SA

With hundred of incidents a day in South Africa affecting households, banking institutions and financial houses, let alone those which affect international security and crime and policing matters, Minister of State Security, David Mahlobo, has undertaken to finalise a South African National Cybersecurity Policy during the current financial year.

A National Cybersecurity Policy Framework was promised as far back as 2012 in response to a committee set up, tasked with monitoring the implementation of such a policy.  South Africa already has an Electronic Communications Security Computer Security Incident Response Team but this is acknowledge as a “pro tem” arrangement.

Small team of experts

Minister Mahlobo announced that a Cybersecurity Bill would be drafted setting up a
“Cybersecurity Centre sphere” which would “enhance the work of this small team” and the body in terms of the new Bill would become a government agency reporting to his department.

He also announced that a Green Paper expanding on intelligence needs in this area would be tabled in computerSchoolCabinet for approval during the third quarter of 2015/16. With broadband penetration becoming so pervasive in Africa, the 20% of Africa’s citizens now connected to the web are particularly vulnerable, it was noted.

The AU paper on cybersecurity generally describes four cyber-related components specified by the AU convention which should be invested in, namely a national, publicly available cybersecurity policy; cyber public-private partnerships in the national interests communicating with other countries; cybersecurity capacity building and training and a plan for developing a culture of cybersecurity countrywide.

Policy paper then Bill

As stated, the first component is that South Africa should undertake to develop, in collaboration with stakeholders, a national cybersecurity policy… and outline how the objectives of such a policy are to be achieved.   At last this is being dealt with.

Local IT experts have called for the department to adopt measures and a plan to develop capacity building with a view to offering training on all areas of cybersecurity and a clear policy which sets standards for the private sector and developers.
Other articles in this category or as background
Lack of skills hampering broadband rollout – ParlyReportSA
More state powers for ICASA proposed – ParlyReportSA
SAPS still trying to computerise – ParlyReportSA

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Transnet improves on road to rail switch

Transnet tries new formats…..

Troad railerransnet is piloting an innovative rail wagon termed a “road railer” which can use both rail track and the road system, all in further efforts to recover its loss of haulage to the private road sector, enter new markets and to improve turnaround times.   Addressing the Portfolio Committee on Public Enterprises on Transnet’s third quarter performance, Ravi Nair, Marketing and Operations Manager, said that this was one of the innovative pilot programmes in Transnet’s engineering facilities, which included also a flat rail wagon onto which private investors could invest with their own wagon specifications to meet tailored products hauled by Transnet rail. The meeting was specifically held to study Transnet’s road to rail strategy and progress.  Matters regarding Passenger Rail Agency (PRASA) were not involved.

Automotive industry important

Transnet, Ravi Nair said, were also introducing specialised wagons to meet the greater traffic needs of the automotive industry because of the introduction of SUVs and other wider bodied road vehicles, Ravi Nair said. The improvement of siding facilities for customers with necessary off loading equipment was also being undertaken as part of the general view taken of a strategy to improve the road to rail switch. It was noted that rail traffic with the automotive industry had greatly increased at the expense of road haulage. Nair said that on the whole there had been a 28% improvement in turnaround on the Durban/Gauteng line with an improvement in Duran harbour with new crane installations and container handling facilities.  An average turnaround time of 23hrs had been reduced to 18hrs for the trip.

Gauteng terminal reducing blockage

high-density-container-terminal-picture-credit-getty-imagesRaisile Letibe of Transnet said that the City Deep terminal in Johannesburg was due for further investment in sidings, warehousing and equipment. Throughout Transnet, a principle had been adopted that where maintaining line and signalling that had gone way beyond its age and maintenance was a waste of money, all line, signalling and switching gear was being replaced if maintenance was deemed necessary. Approximately 450 new locomotives were starting to pass through Transnet’s new plant at Kodooesberg, Pretoria, this being GE and South China Railway (CSR) locomotives of which some 100 CSR type had already emerged. Only 10 were built by CSR in China during the training period.

Hauling more

In mining terms, these locos will be able to improve a haul of 75 wagons up to 150 for magnetite, up to 200 wagons for manganese and probably double whatever was required with chrome, all possible according to the different class of locomotive used in the new range. The balance of Bombardier and China North locomotives will be built in Transnet’s Durban engineeringbombardier train works, taking the total number for Transnet freight haulage locos to well over 1,000. Transnet took advantage of a R50bn loan from China to conclude these contracts with the main operators and their BEE constituents, Transnet said. However, as things stood at present there was a general increase of 19% turnabout in mining haulage with increases for steel and cement, agriculture and bulk liquids and a major improvement in automotive products haulage and general manufacturing all recorded.

Freight and commuters

A daily meeting was now held with the Passenger Railway Agency (PRASA) on frequency of needs for commuters and the need for haulage of goods on the same track and the system was working well. There was a common understanding on signalling use and track needs at certain hours in cities and to industrial areas. PRASA were also engaged on their  massive development of commuter locomotives and carriages, or “trains” and the integration of both the needs of Transnet and PRASA were being satisfactorily co-ordinated, Transnet commented. rail sidings Raisile Letibe said that R300m had been invested in branch lines to attempt to keep them in shape for concessionaires when the plan to privatise branch lines was finalised. He said that the matter of branch lines brought Transnet with into contact with many other bodies involved in developmental matters including agricultural development, SEZ planning and rural development generally.

Private investment: branch lines

It was hoped to get the issue of the development of branch lines underway as soon as possible. Opposition members complained that this proposal was five or six years old. Under questioning, Transnet admitted that major “challenges” at the moment were breakdown of locomotives, all of which were now aged and parts had to be especially engineered a bought. Wagon availability was also a problem but both these “challenges” should be addressed by new rail stock. Industrial action and economic conditions contributed to the problems facing Transnet but to a lesser degree.

Rural outreach

Parliamentarians continued to be intrigued with the idea of a “road railer” which served the double purpose to become an off-rail road transport trailer. Nair, in answer to questions on this, said probably the private sector would be called in on road haulage issues to rural destinations and the system was used in many other parts of the world. A prototype was being constructed at the Transnet engineering workshops. Nair said that a number of bi-lateral meetings were being held with SADC countries, DRC, Mozambique and Namibia all with the purpose of improving volumes of haulage, particularly in Zambia where copper could be moved despite that country’s plans to open a rail link to the West Coast. However, the general purpose also was to strengthen economic growth through rail in the Southern Region. MPs all agreed that it was good news that at least one state utility in their portfolio was improving. Other articles in this category or as background Transnet says freight rail operations coming right Operation Phakisa to develop merchant shipping – ParlyReportSA Transnet doing better but resists carving up its assets South Africa remains without rail plan – ParlyReportSA Minister comments on taxi and rail plans – ParlyReportSA

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Nuclear partner details awaited

DoE gives update on SA nuclear plan….

russian nuclearThe Department of Energy (DoE) says it is the sole procurer in any nuclear programme and that “vendor parades” had been conducted with eights countries, the results to be announced before the end of 2015. To give cost details, they said, would “undermine the bidding process”.

The situation regarding South Africa’s current intended nuclear energy programme was explained during a parliamentary meeting of the Portfolio Committee on Energy, DoE confirming that a stage had been reached where nuclear vendors had been approached and DoE staff were being trained in Russia and China.

Eskom not involved

Neither DoE, nor the Minister of Energy, Tina Joemat-Pettersson, who was also present would givetina-joematt cost estimates nor speak to the subject of financing other than the fact the minister admitted that the idea of Eskom being involved in the building programme in the style of Medupi and Kusile was a non-starter.

At the same time Minister Joemat-Pettersson announced that a new Bill, the Energy Regulator Amendment Bill, was to be tabled that would give Eskom the right to appeal against tariffs set by the National Energy Regulator (NERSA). This followed upon the news that Eskom would be given powers to procure, which must lead to the assumption, said opposition MPs later, that Eskom will recoup costs of financing through electricity tariffs.

The Minister said the renewable IPP programme involving the private sector had included multinationals and had been “hailed as a success” and the deal that would be struck with nuclear vendors would be on best price in terms of the end price for the consumer. Any bidding would be conducted in the “style of the IPP process”, which included support of the process of black procurement and skills training.

Contribution to grid still “theoretical”

modern nuclear 2Deputy Director, Nuclear, DoE, Zizamele Mbambo, explained to opposition members that whilst government had in principle decided to include nuclear energy in the energy mix for the future, DoE itself was still only at the stage of establishing all costs involved to the point of actual connection of a theorised figure of nearly 10GW to the national grid. To disclose costs at this stage would undermine the bidding process, he said.

The main purpose of the costing exercise still remained the final cost the consumer, he said, in terms of the NDP Plan 2030, a phased decision-making approach over a period of assessment having been endorsed by the Cabinet in 2012. The whole exercise of deciding what the costs would be was therefore relevant to how much coal sourced power would contribute to the baseload of the energy mix by 2030.

Deal or no deal

Zizamele Mbambo confirmed that in 2013, DoE had been designated as the sole procurer of the nuclearsmall nuclear reactor build programme and “vendor parades” had been conducted with Russia, China, France, China, USA, South Korea, Japan and Canada. The strategic partner to conduct the next stage, the New Build Programme itself, would be announced before the end of 2015, Mbambo said, by which time costs would have been established and treasury consulted.

At this stage no deal had been struck, he confirmed.

As distinct from the actual vendors per se, and any deals, Mbambo said that international agreements had been struck with interested counties on the exchange of nuclear knowledge, training and procurement generally.

DoE trainees already in China

chinese sa flags“Fifty trainees already employed in South Africa’s nuclear industry had already gone to China for ‘phase one’ training with openings for a further 250 to follow”, he said, noting that the Russian Federation had offered five masters degrees in nuclear technology.

The New Build nuclear programme was at present based on providing eventually 10GW of power to the grid but DoE confirmed that the indirect effect on the economy from “low cost, reliable baseload electricity is logically positive but difficult to assess”.

Zizamele Mbambo showed a graph of the possible integration of energy from coal, nuclear, hydro (imported), gas and renewables over a period, stating that nuclear was clean, reliable and would ensure security of supply with “dispatchable power.”

Opposition Members complained that the process seemed likely to make the price of electricity unaffordable to the poor and have a major impact on the cost of doing business in South Africa.

Nuclear vs. coal

Mbambo was at pains to explain that in the long term, the cost of nuclear energy was considerably lessgrids than coal and this was the reason that, for future generations, South Africa had to embark on a course that not only lead to cleaner but cheaper energy.

As a final issue, DDG Mbambo touched upon the question of approval by the International Atomic Energy Agency (IAEA) and explained that any relationship with this UN body was on the basis of a peer review.

This covered nineteen issues from nuclear safety management to radioactive waste disposal and was not an audit, he explained, South Africa already having been an experienced nation in nuclear matters from medical isotopes to nuclear weapons. It was pointed out to members that that IAEA merely carried out reviews and made input.

Up to speed or not

IAEAIt was during the response to the budget vote speech on the subject of the IAEA, that Opposition Shadow Energy Minister, Gordon Mackay said that the agency had found South Africa deficient in more than 40% of its assessment criteria.   In response, DDG Mbambo did not refer to the current state of the country’s nuclear readiness at any point but confirmed there was a great need for training and this was now the emphasis.

He said the relationship with the IAEA was in three phases covering purchasing, construction and operations and although it was thirty years since South Africa had a nuclear building programme at Koeberg, the current contribution to nuclear technology was recognised.    The programme now was to create a younger generation of nuclear experts, the main issue being to build technology capacity and train trainers in the state nuclear sector.

Reactor numbers

Mbambo concluded his presentation by stating that DoE was in discussion with treasury specifically on this issue of funding training, Minister Joemat-Pettersson adding that some six to eight reactors were planned  but a this was very early, the weight that “price” would carry in determining a strategic partner was not decided.

Other articles in this category or as background
Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA
National nuclear control centre now in place – ParlyReportSA
Energy plan assumptions on nuclear build out in New Year – ParlyReport

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MPs attack DPE on energy communications

DPE has a tough time on energy issues…

business-communicationsPoor communications with the public on the energy crisis and the limited ability of the ministries involved to communicate with state owned companies (SOCs) were issues raised during a report on SOCs falling under control of the department of public enterprises (DPE) during a meeting of the relevant portfolio committee.

The meeting was called to respond to the AG’s report on the performance targets of the DPE.

One opposition member complained that all bonuses paid to Eskom executives should be keyed to whether the lights stayed on or not. Despite there being six state utilities being reported on, it was questions on Eskom that occupied most of question time.

AG report about targets only

AGSA logoWaleed Omar, audit manager, auditor general’s office (AGSA), indicated to Parliament that no significant findings representing failings on issue targets were identified in their review of the DPE annual performance plan for the 2015/16 financial year.

It was explained by Sybrand Struwig, manager of AGSA, that any annual audit of actual performance period was prepared against pre-determined objectives, coupled with indicators and targets as contained in the annual performance report of a department.  Such confirmed compliance with laws and regulations.

The usefulness of this performance information against targets and the reliability of performance reporting enabled AGSA to compile an audit of a department or SOC to reflect an opinion or conclusion on performance against predetermined objectives and how risk had been managed.

DPE met standards set

Ms Matsietsi Mokholo, DPE acting DG, expanded on this by saying what in fact AGSA was saying to parliamentarians was that the exercise had been to assess DPE’s compliance according to AGSA’s matrix; how it aligned with the National Development Plan (NDP); and how issues were dealt with in terms of the medium strategic frameworks report (MTFs) made regularly to Parliament over the given period 2014 -2019.

She said the auditor general had confirmed that DPE was on track with regards to this alignment.  Indeed, she said, DPE had identified its key challenges and the risks which “could materialize” if measures within state owned entities under their control were not taken.

Eskom the only real SOE problem

In answer to MPs questions on Eskom, Ms Mokholo said that DPE has identified that the tense situation of load shedding needed to be carefully managed and monitored in order to avoid a blackout.   Currently the country has moved towards stage three of load shedding in order to avoid a blackout.

The issue was the only matter in the DPE portfolio of state owned companies (SOCs) that had major problems; otherwise DPE had a good record. However, she said, there were questions still being asked about how Eskom would prevent stage four which would apply in the case of a total blackout. This issue was now being addressed in its strategy plan and, consequently, the AG was satisfied that issues had been addressed not ignored. That was what the report was all about.

Medupi on or off

Other issues addressed were the unrest at the partly constructed Medupi power plant, which was difficult because the workers involved were not public servants, but the matter had been addressed and a resolution hoped for.   Another issue covered was a strategy to how further avert any downgrading of Eskom from a shareholder perspective, again most difficult because much was outside of DPE’s control.

DPE’s control over SOEs limited

Other matters being discussed were the whole issue of the reliance of SOCs on government guarantees and the reliance SOCs on road transportation.   It emerged during the discussion how little DPE could intervene in SOC management and parliamentarians said that thought should be given to this as the success of an SOC was imbedded in a minister’s performance agreement.

Ms Mokholo concluded that DPE currently was responsible for six SOCs. She said, “The challenges currently faced by Eskom should not be seen as a reflection on the performance of the entire portfolio. Eskom was the only SOC which was facing serious challenges”.

She repeated the fact that the others were doing well. AGSA confirmed that the corporate plan of any SOC was audited consistently throughout the portfolio of DPE’s SOCs and, as was reported in October 2014, the current portfolio at that time, with the exclusion of SA Express, did not have any material findings that worried AGSA.

Financials to come at end of year

Waleed Omar, audit manager, explained that AGSA did not wait until the end of a financial year to audit a department or entity’s financial plans. Financial audits were a completely separate issue. AGSA would provide input before the end of the financial year.

In this case, internal auditors of each SOC looked at the reliability of the information reported and whether the quarterly results were supported by the matching documents. AGSA would then rely on the work of internal audits. He said there have not been any instances at this stage within DPE at this stage showed any material differences between the findings of internal audits and those of AGSA.

Mr Omar explained that AGSA has considered the work of internal audits for the first two quarters of the financial year for 2014/15. AGSA followed a process according to international standards but this particular meeting showed that DPE’s operational plans were compliant.

DPE admits private sectors skills needed

When the committee started to discuss the gradual development of DPE into commercial sectors, Mr Ratha Ramatlhape, DPE director, added that many of the new strategies being triggered in the core entities of energy, manufacturing and transport would require bringing in technical experts from the outside to deal with the challenges being faced within the DPE portfolio.

Ms N Mazonne (DA) raised the fact that Eskom had paid bonuses to executives, none of which had achieved 100% of their key performance indicators (KPIs) which were therefore far too easy to reach.  DPE needed to tell Eskom, she demanded, that executive KPIs had to be aligned to whether the lights were kept on or not.

This indicated, the DA said, what the minister of public enterprises had been telling Parliament for some time to the effect that the level to which the DPE could intervene with SOCs was far too limited.   DPE could only play an advisory role it seemed, Mazonne said, and there needed to be legislation in place urgently to resolve this.

Legislation expected on minister’s powers

Ms Mokholo responded that DPE has already started working on giving ministers the power to intervene based on the Companies Act.  For example, she said, the DPE had a meeting with the Eskom board to deal with interventions which were not necessarily based on legal prescripts, an example being the co-generation contracts. She confirmed legislation was being looked at.

Opposition members were of one voice that although it was unfair to blame DPE for the electricity crisis, nevertheless, with the country at stage three of load shedding, there was no way DPE could deny that the economy and people’s lives were being badly affected. Current communication with Eskom was very poor, they said, and a national broadcast was needed to allay the air of panic that existed in some quarters of the economy.

The DPE responded that it had advised the Minister and the war room to release such a statement or the President to make a statement in his budget vote speech.

Other articles in this category or as background

Public enterprises reports on controversial year – ParlyReport

South Africa remains without rail plan – ParlyReport

SA Energy gets war room status – ParlyReportSA

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Lack of skills hampering broadband rollout

Broadband for SA needs local tech….

computerSchoolThe lack of IT skills in broadband development in government, especially those responsible for implementation of the new broadband policy in SA as well as technicians in the field, has become a major issue of debate in Parliament recently.

The department of telecommunications and postal services (DTPS) has increased it spend in consultancy services by nearly 400% in the last year according to its presentation documents to the relevant parliamentary portfolio committee.

Also, once again the rationale behind the splitting of the department of telecommunications and postal services (DTPS) away from the department of communications (DOC) was queried in Parliament as “not being in line with world trends” causing delays in implementation plans.

DTPS in long terms will benefit

Both these issues were responded to by the responsible minister, Dr Siyabonga Cwele, who was in attendance when DTPS presented their strategic and annual performance plans to the relevant portfolio committee.

Dr Cwele said that he was far happier to leave DOC concentrating on matters surrounding the SABC and migration to digital TV, leaving his department (DTPS) to pursue the objective of uplifting South Africa into the world of broadband.

Broadband will help all

This objective also fitted into the plan to re-model and reassess what was expected from the South African Post Office (SAPO) and for government to decide, like many other countries had done, where postal services fitted in and how to consolidate on the valuable rural outreach of SAPO in respect of other services required by poorer sections of the community.

What was clearly missing during the meeting was, according to parliamentarians, exact timelines for broadband introduction to schools, health services, government departments and state owned utilities, Dr Cwele being quite clear that DTPS had been mandated to ensure that affordable broadband was available.

Staff needed to do the job

Dr Cwele acknowledged, however, that DTPS was greatly under qualified to achieve this due to lack of technical skills and the department did not have enough capacity to deliver on its mandate, as this was a very technical sector of public services. It was too early to commit to timelines but at this stage they had to build the staff complement to do the job, he noted.

He said that DTPS had to bring highly skilled young people into the organisation considering the internet revolution and the growing need for national broadband services. “We need skills not expensive managers”, he added.

Technicians not paper creators

It was explained, in general, broadband refers to telecommunication in which a wide band of frequencies is available to transmit information at greatly increased speed, the installation of which should bring costs down, South Africa having some of the highest communication cost factors in the world.

Ms Rosey Sekese, DG, DTPS, in presenting her strategic plan, said her immediate  priorities were:

• broadband connectivity focused on radio frequency spectrum
• cyber security
• the cost to communicate
• an Information Communication Technology (ICT) policy review
• a national e-strategy
• a turnaround plan for SAPO

The total budget allocation for the Department was R1.4 billion, a reduction from R2 billion in the previous financial year.

Opposition members wanted to know the criteria that DTPS had used to choose Telkom as the leading agency in the rollout of broadband and whether this was fair competition.

Also, they asked why DTPS had emphasised the roll-out of e-governance in the public service to meet NDP targets as first objective. Rather, they said, the focus should have been on business and industry, the ICT sector in the commerce and industry sectors needing this and who played a far greater role in economic development and job creation.

Telkom has to lead in this..

TelkomMinister Cwele responded that the selection of Telkom as the leading agency in the rollout of broadband was as a result of Telkom having the largest terrestrial fibre network and was also based on cost, as this was a state owned entity.

On business and industry needs, he also said DTPS needed to find a way to work with the private sector that could improve economic growth and he, the deputy minister and the DG had been in constant engagement with the private sector as it was realised that this was essential.

The department would also work together with the department of trade and industry and the department of small business development to create incentives for investment in SMMEs, as they realised that many small companies had been marginalised by slow internet services and limited access to the many international IT developments taking place and additional sea cable services.

Creating certainty

He added that he was perfectly aware of the challenges in the finalisation of a spectrum policy to internetcreate a smooth path for the regulators and he was also aware of the need to create certainty in the telecommunications industry. He acknowledged that DTPS was following closely the experiences of the Western Cape and Gauteng broadband rollout plans.

The minister promised that all critical posts within DTPS would be filled within the next three months. However, opposition members continued to draw attention to the question of the general IT skills shortage and said it was yet another “crisis about to happen”.

DA’s Gordon Mackenzie noted “a dramatic increase in outsourced services from R52.5m in 2014 to R230m in 2015” and said this route only added to the high cost of communications in South Africa.

Other articles in this category or as background
Overhaul of broadband policy underway – ParlyReportSA
Parliament gets final dates for digital TV – ParlyReportSA
More state powers for ICASA proposed – ParlyReportSA

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Fuel price controlled by seasonal US supply

US refinery shut downs affect fuel price…..

US refineryThe current spike in the price of petrol is due of a number of international issues  compounding together but the primary cause is that at this time of year in the United States, a number of major US refineries close down for maintenance in order to prepare for the US summer surge in fuel sales.

This was said by Dr Wolsey Barnard, acting DG of the department of energy (DoE), when he introduced a briefing to the portfolio committee on energy on its strategy for the coming year.

In actual fact, the meeting had been called to debate the promised “5-point energy plan” from the cabinet’s “war room” which did not eventualise, the minister of energy also being absent for the presentation as scheduled. It appeared that the DoE presentation had been hastily put together.

“Price swingers” make perfect storm

Dr Wolsey BarnardDr Barnard said that it could be expected that the price of fuel would be extremely volatile in the coming months due in main “geo-political events” affecting the price of oil, local pricing issues of fuel products and possibly even sea lane interruptions. Price would always be based on import parity and current events in Mexico, Venezuela and the Middle East would always be “price swingers”, he said.

On electricity matters, his speciality, he avoided any reference to past lack of investment in infrastructure, but said that he called for caution in the media, by government officials and the committee on the use of the two expressions “blackouts” and “load shedding”.

Same old story

“Over the next two years”, he said, “until sufficient infrastructure was in place, there would have to be planned maintenance in South Africa” and referred to the situation in the US as far as maintenance of refinery plant was concerned. He said that also “unexpected isolated problems” could also arise with ageing generation installations, during which planned “load shedding” would have to take place.

He said he could not imagine there being a “blackout”.

Opposition members complained that the whole electricity crisis could be solved if some companies would cease importing raw minerals, using South African electricity at discounted prices well below the general consuming manufacturing industry paid, and re-exporting smelted aluminium back to the same customer. They accused DoE of trying to “normalise what was a totally abnormal position for a country to be in.”

Billiton back in contention

One MP said, “Industry was in some cases just using cheap South African electricity to make a profit”. Suchaluminium smelter practices went against South Africa’s own beneficiation programme, he said, in the light of the raw material being imported and the finished product re-exported. “It would be cheaper to shut down company and pay the fines”, the DA opposition member added, naming BH Billiton as the offender in his view.

Dr Barnard said DoE could not discuss Eskom’s special pricing agreements which were outside DoE’s control  and “which were a thing of the past and a matter which we seem to be stuck with for the moment.”

High solar installation costs

Dr Barnard also said that DoE had established that the department had to be “cautious on the implementation of solar energy plan” as a substitute energy resource in poorer, rural areas and even some of the lower income municipal areas.  DoE, he said, “had to find a different funding model”, since the cost of installation and maintenance were beyond the purse of most low income groups.

In general, he promised more financial oversight on DoE state owned enterprises and better communications.   There were plenty of good news stories, he said, but South Africa was hypnotising itself into a position of “bad news” on so many issues, including energy matters. He refused to discuss any matters regarding PetroSA, saying this was not the correct forum nor was it on the agenda.

Still out there checking

On petroleum and products regulation, the DG of that department, Tseliso Maquebela, said that non-compliance in the sale of products still remained a major issue. “We have detected a few cases of fraudulent fuel mixes”, he said, “but we plan to double up on inspectors in the coming months, especially in the rural areas, putting pressure on those who exploit the consumer.” The objective, he said was reach a target of a 90% crackdown on such cases with enforcement notices.

Maquebela added that on BEE factors, 40% of licence applications with that had 50% BEE compliance was now the target.

Competition would be good

On local fuel pricing regulations, Maquebela said “he would dearly like to move towards a more open and competitive pricing policy introducing more competition and less regulations.”

fuel tanker engenOn complaints that the new fuel pipeline between Gauteng and Durban was still not in full production after much waiting, Maquebela said the pipeline was operating well but it was taking longer than expected to bring about the complicated issue of pumping through so many different types of fuel down through the same pipeline. “But we are experts at it and it will happen”, he said.

Fracking hits the paper work

On gas, particularly fracking, DoE said that the regulations “were going to take some time in view of all the stakeholder issues”.

On clean energy and “renewables” from IPP sources, DoE stated that the “REIPP” was still “on track” but an announcement was awaited from the minister who presumably was consulting with other cabinet portfolios regarding implementation of the fourth round of applications from independent producers.

Opposition totally unimpressed

In conclusion, DA member and shadow minister of energy, Gordon McKay, said that the DoEgordon mackay DA presentation was the most “underwhelming” he had ever listened to on energy.   Even the ANC chair, Fikile Majola, sided with the opposition and said that DoE  “can do better than this.”

He asked how Parliament could possibly exercise oversight with this paucity of information.   DoE representatives looked uncomfortable during most of the presentations and under questioning it was quite clear that communications between cabinet and the DoE were poor.

When asked by members who the new director general of the department of energy would be and why was the minister taking so long to make any announcement on this, Dr Wolsey Barnard, as acting DG, evaded the question by answering that “all would be answered in good time”.

Other articles in this category or as background
Energy gets war room status – ParlyReportSA
Medupi is key to short term energy crisis – ParlyReportSA
Integrated energy plan (IEP) around the corner – ParlyReportSAenergy legislation is lined up for two years – ParlyReportSA

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Public utilities, Special Recent Posts, Trade & Industry, Transport0 Comments

Government communications accused of promoting ANC

Department of communications accused of cloning ANC slogans…..

country wants youThe opposition has complained that the department of communications (DoC) and government communications information services (GCIS) are using ANC party slogans for a DoC communications and PR campaigns, such campaigns costing millions of rands.

The complaint was lodged by Gavin Davis, DA member of the parliamentary portfolio committee on communications and a DA whip, during a presentation by DoC on progress of setting up the newly reconstituted DOC with new responsibilities and reporting at the same time ion liaison with the similarly, newly re-constituted department of telecommunications & postal services (DTPS).

Brand South Africa had moved from department of public service to DoC, it was reported.   SABC remained with DOC; the Media Development and Diversity Agency (MDDA), previously reporting direct to a minister was now with DOC as well, and the Films and Publications Board (FPB) moved from department of home affairs. Also, important was the transfer of the (GCIS) to DoC.

At the same time, parliamentarians were told of the new mandates on matters related to the Independent Communications Authority of SA (ICASA), some of which were in the area of broadband and telecommunications and therefore had to remain with DPST. 

Hot under the collar

It was in the discussion and questions on the campaigns of Brand SA, using the combined power of this re-organisation together with the communications strategies of GCIS, that most of the questions arose. At various points the meeting became quite heated. on the issue of slogans and party posters.  Present was the deputy minister of communications, Stella Ndabeni-Abrahams, who could be seen at times to be visibly angry under questioning.

tv flat screenPresented by the DDG of communications, Gift Buthelezi, was a progress report of the national communication strategy, which included details of the processes to be used, media deployed and messages to be conveyed in the communications campaign of Brand SA aimed at the South African public.  The objective was “to increase pride in being a South African”.

Upfront minister

stella abrahamsDeputy minister Ndabeni-Abrahams took it upon herself to answer 95% of the questions asked during question time on the various presentations made, not the director general.   

On a number of occasions the debate reached the level of a public spat, particularly on the questions surrounding statements made in the presentations at the meeting which conflicted with statements made by senior executives of the SABC at different times and on different occasions.

First, shadow minister of communications, Gavin Davis, complained that the line adopted by the DoC campaign for all government departments and media placings, “Together We Move South Africa Forward”, was in fact an ANC slogan and used at the recent ANC conference. He said the DoC was clearly bringing party politics into government spending.

Good news

ANC athen added that the ANC had fielded a successful electoral manifesto to the whole country at the election based on this line and therefore took this as a mandate for government to also adopt this “because obviously this was what the majority wanted. She said DoC had plenty of “good news” to impart.

They (the public) had said so when they voted”, she said, and emphasised that there was nothing “sinister in this”. “Togetherness and pride in South Africa”, she added, were the key neutral expressions being used to shape the campaign, she said.

ANC members argued that pride in South Africa could be encouraged by sports events, regular communications on subjects that affected the ordinary citizen focused on the “good news”, such as cleaning up corruption and government successes.

Gavin Davis (DA) then asked the minister how DoC, as a government department, could possibly involve itself in building up such issues as “pride”. He said that pride in one’s country was a personal issue and it was not the job of a government to manipulate this feeling with what might be described as propaganda.

He also said it was impossible to neither measure such things as “pride” nor manipulate the emotion and called for detail on how this could be achieved with PR campaigns when such issues were governed or frustrated against a background of political and economic facts, which at this time were far from good.

Gupta’s “New Age”

Davis said he was also unsatisfied by the answer given to his question as to why R10m should be spent on the publication New Age for advertising when they only had some 10,000 readers and queried the media spend in general. The answer given was stated by Davis as being “totally undecipherable”.

He also asked for clarification on the statement made by DoC that a 70% quota of what was published and broadcast had to be “localised”, DoC having emphasised local news would be disseminated in future as a priority as distinct from international news. 

sabc news logoMinister Ndabeni-Abrahams said she did not necessarily agree with SABC editorial policy on this issue, the  SABC management being quoted by Davis as having said that SABC will in future broadcast the good news which would be local news”.   The minister said her earlier  statement, and that of DoC, was that  a figure of 70% for local news was the correct one.   Davies then asked if she were prepared to tell the SABC this fact.

At this stage minister refused to answer any more questions on the subject and accused the opposition of being provocative.

Other articles in this category or as background
Overhaul of broadband policy underway – ParlyReportSA
Communications bill awaited setting up consumer body – ParlyReport
More state powers for ICASA proposed – ParlyReportSA

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Parliament circulates Russian technology agreement

 

Partnership in techno between SA and Russia…

russian flagThe agreement between the Republic of South Africa and the Russian Federation on scientific and technological cooperation has now been tabled in Parliament, according to a notice published recently. It includes an annex between the same parties, the point being made strongly that both Russia and South Africa are part of BRICS which includes Brazil, India and China and indicating similar agreements. After much to-ing and fro-ing in 2014 between Moscow and Pretoria by minister of energy Tina Joemat-Pettersson and a separate visit by President Zuma for personal reasons it seems but who met President Vladimir Putin, a Russian Federation delegation was reported as having visited Tuynhuis in the Parliamentary precinct in early December last year, meeting Speaker of the House, Baleka Mbete.

The “R” in BRICs

The actual agreement was signed by the chairperson of the National Council of Provinces, Thandi Modise, who appears to have hosted the event. It was also signed by the deputy chairperson of the council of the Federation of the Federal Assembly of the Russian Federation, Ilyas Magomed-Salamovich Umakhanov. In a statement issued at the time in Cape Town, it was announced that “the two Parliaments had agreed to strengthen ties and cooperation through exchange programmes and to encourage freer movement of people between the two countries.”

Not just science

Education, agriculture, economic cooperation and coordination in the global arena were also identified as key areas for closer cooperation. “This memorandum of understanding is testimony to the historical, present and future ties between our countries,” Ms Modise said.   With regard to the use of the word “historical”, President Zuma mentioned in his recent SONA address that the bodies of “two veterans of the apartheid struggle” were to be repatriated and re-buried in South Africa. The statement issued at the time by Ms Modise stated, “Members of Parliament should not be left behind in developments taking place at executive level between their countries.” Other articles in this category or as background Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA Nuclear and gas workshop meeting – ParlyReportSA National nuclear control centre now in place – ParlyReportSA

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Debate on Nkandla to intensify

Facts on Nkandla with MPs…..

effIn an internal parliamentary question paper, M Khawula, an MP of the IFP-KZN, asked for a reply in writing from the minister of police to his question, “Which structures, buildings and/or areas have been declared national key points and, secondly, what qualifies such to be declared national key points.”

He was not to know that minister of police, Nkosinathi Nhleko, would be forced out of blustering and show that president Zuma’s country homestead in the hills of KwaZulu-Natal, Nkandla, was indeed a national key point whereas, as illustrated by a newspaper in the parliamentary recess, nuclear experimental station, Pelindaba, north of Johannesburg, was not.

The reply in writing from the minister in the parliamentary replies of 19 September, in response to Nhleko’s question, was as follows, “To publish or to make known a list of all national key points would to a large extent defeat the purpose of the National Key Points Act 102 of 1980, namely the protection of such NKP’s. It is therefore not policy to provide such a list for public knowledge.”

When is a key point not one?

The minister added to the written note, “In terms of the National Key Points Act, section 2 deals with the declaration by the Minister of Police and I quote; “Declaration of any place or area as a National Key Point.

(1)  If it appears to the Minister at any time that any place or area is so important that its loss, damage, disruption or immobilization may prejudice the Republic, or whenever he considers it necessary or expedient for the safety of the Republic or in the public interest, he may declare that place or area a national key point.

(2)The owner of any place or area so declared a national key point shall forthwith be notified by written notice of such declaration.

That was the full extent of the reply from the minister.      Meanwhile in the recess, the opposition has written to the Speaker of the House, requesting that President Zuma be forced to respect the Constitution and answer questions from MPs in the National Assembly orally on a regular basis.

Weight of the law

settlement_law_justice_In the meanwhile during the recess, Judge Roland Sutherland in the Johannesburg high court  ordered the minister to hand over the list of national key points and national key point complexes in “the next thirty days” to the parties complaining, who were the Right2Know Campaign and the South African History Archive. Such was finally acceded to.

It is now understood from a statement made at the proceedings by the Mail and Guardian, who joined the action as a friend of the court and who were represented by advocate Matseleng Lekoane, that according to the Act, security guards are allowed to search and seize peoples’ belongings if the people were in a national key point. “They were also allowed to use guns to do this”, she said.

Adv. Lekoane argued that if this was the type of reaction that people, including journalists, might face, then they had the right to be prepared for it. “You need to know the status of a place so you can inform your conduct,” she argued.

Just so we know

The advocate representing Right2Know campaigners, Steven Budlender, had earlier complained that his client was only asking for the names of the places not the addresses.

In any case, he added, it would not make a difference to the country’s security if places like OR Tambo International Airport were publicly known as national key points.  This is because, Budlender said, the “dark forces” that the minister’s counsel feared would inflict harm on the country do not need to be told that a place is important. They would already know.

He was responding to argument made by counsel for the minister of police who said that revealing which buildings and places were NKPs would place national security at risk. “This does not stand up to logical scrutiny”, said Budlender.

Judge Sutherland said minister Nhleko’s refusal to release the list was unlawful and unconstitutional, and ordered the ministry to pay the legal costs.   The matter will no doubt be tabled for discussion in the next parliamentary session by which time it will be even clearer what the realtionship  between President Zuma and Parliament will be after his State of Nation Address.

Maybe appeal

However, debate at parliamentary committee working level will now be at a different level in the new session . The facts are there and what was fog in a bucket is now in the open for proper debate.

Other articles in this category or as background
http://parlyreportsa.co.za/cabinetpresidential/nkandla-debate-rekindled-da/
http://parlyreportsa.co.za/cabinetpresidential/nkandla-ndp-argument-rages-go/

Posted in cabinet, Cabinet,Presidential, earlier editorials, Facebook and Twitter, Justice, constitutional, LinkedIn, Public utilities, Security,police,defence0 Comments

South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

dipou Peters2In a written reply to Parliament on the whereabouts of the promised Green Paper on rail policy, transport minister Dipuo Peters told her questioners that such a document which has the intention of outlining South Africa’s rail policy was to be presented to cabinet in November. GCIS statements for cabinet meetings for November and the final cabinet statement in December 2014 made no reference to any such submission having been made – alternatively, the minister might have failed to have it put on the agenda. The country therefore went into Christmas recess once again without an established government policy on both freight and passenger rail transport matters, worrying both industrialists, investors and, not the least, built environment planners.

Just talking together

A draft Green Paper was first submitted to cabinet a year ago but cabinet instructed that more consultation on the proposals was necessary, particularly interchange between the transport and public enterprises departments. The portfolio committee on transport stated that policy on freight rail upgrading and infrastructure development was unclear, plans for commuter and long-distance passenger services confused and no clear picture had emerged on Transnet’s promised policy of structural re-organisation. Subsequent to this, the department set up a national rail policy steering committee to oversee the consultation process and introduce the required changes to policy. It has also divested itself of a number of non-core assets but no clear picture has emerged in statements on the promised policy of giving direction on the privatisation of branch lines.

Since time began…

According to the minister at the time, cabinet’s concerns had also involved the adoption of a standard gauge, private sector participation and economic regulation.  Subsequently, DoT indicated that standard gauge has been selected as the most suitable gauge for the South African rail network and as a result a final revised Green Paper was tabled before the steering committee in October 2014. Nothing has emerged. In the absence of any agreed policy, particularly to meet the proposed idea of rail freight re-assuming its dominant role over road transport in the light of the deteriorating national road picture, a number of developments have indeed taken place with regard to the purchase of diesel and electric train stock, signal systems upgrades and station re-building and passenger coach rolling stock manufacture. Nevertheless, no clear picture has emerged on the road ahead with regard to the freight/road picture, branch line privatisation, commencement dates for full long distance passenger services nor satisfactory plans and targets expressed on domestic commuter rail services.

All said before

Jeremy Cronin, when deputy transport minister, told Parliament in April 2011 that by establishing a local manufacturing base for the new rolling stock, benefits would ensue by creating a substantial number of local jobs. He added that as a result of the redevelopment of rail engineering capacity, skills that have been lost over decades of underinvestment in the local rail engineering industry would be recovered. The then deputy minister also said, “We are currently (2011) in the Green Paper phase with the primary objective of preparing the way for effective stake holder engagement. We are poised to reverse the decline in our critical rail sector that began in the mid-1970s and gathered pace in the late 1980’s.” In April 2015 therefore the country will be the fourth year of waiting for South Africa to outline its rail policy, “a system critically in decline” according to minister Cronin.

Recent update from Maties

A few months ago, a most important paper on rail transport, now in the in the hands of DoT, was published and out into the public domain by Dr Jan Havenga, director: centre for supply chain management, department of logistics, Stellenbosch University, who led a team of transport logistics experts to complete this erudite and informed report. The report is entitled “South Africa’s freight rail reform: a demand-driven perspective” and opens with a definition of government’s responsibilities in rail transport matters. “The role of the government is, primarily, to facilitate the development of a long-term logistics strategy that optimally equilibrates demand and supply through ‘anticipation’ of the market character.” “The definition of a national network of road and rail infrastructure and their intermodal connections will flow from this, presupposing neutrality across modes by taking full account of all relevant social, environmental, economic and land-use factors.” “This ensures that the mix of transport modes reflects their intrinsic efficiency, rather than government policies and regulations that favour one mode over another. The strategy is subsequently enabled by a clearly defined freight policy, a single funding regime for the national network and, lastly, the establishment of appropriate regulatory framework.”

Volume of freight critical

The report notes that “the American Trucking Association (2013) forecasts that intermodal rail will continue to be the fastest-growing freight mode in the next decade. Only the very busiest railway networks, which can exploit the density potential of volume growth, are likely to generate sufficiently high financial returns to attract substantial risk capital in long-term railway infrastructure.” “The Association of American Railroads as well in 2013 also highlights the impact of density on efficiency, revenue and, ultimately, the ability to reinvest.”

Lacking in market intelligence

Dr Havenga says, “The failure of South Africa’s freight railway to capture this market is attributable to a lack of policy direction regarding the role of the two modes (road and rail) in the surface freight transport industry and according to the Development Bank of Southern Africa, caused by the absence of sufficient market intelligence to inform policy.” He goes on to confirm that “one of the key requirements for an efficient national freight transport system is better national coordination based on market-driven approaches.”

Pressing need

“To avoid the ad hoc policy responses of the previous century, which led to sub-optimisation, increasing complexity and decreasing end-user quality, the pressing reform issue for South Africa, therefore, is agreement on the design of an optimal freight logistics network based on a market-driven long-term strategy that holistically addresses the country’s surface freight transport requirements.” Dr. Havenga’s final comment in the report, only a few weeks old, states that South Africa’s freight task is expected to treble over the next 30 years, with further concentration on the long-distance corridors. He points out that the country desperately needs a profit-driven market related core rail network to serve industry and manufacturing, as well as a developmental-driven branch line network to serve rural development. Other articles in this category or as background http://parlyreportsa.co.za/transport/minister-comments-taxis-e-tolls-road-rail/ http://parlyreportsa.co.za/finance-economic/prasa-gets-its-rail-commuter-plan-started/ http://parlyreportsa.co.za/uncategorized/transnet-says-freight-rail-operations-coming-right/ http://parlyreportsa.co.za/uncategorized/rail-is-departments-main-focus-in-year-ahead/

Posted in cabinet, Facebook and Twitter, Finance, economic, LinkedIn, Mining, beneficiation, Public utilities, Trade & Industry, Transport0 Comments

Medicines Bill : focus on foodstuffs

DOH responds on new Medicines Bill……

patientDr Anban Pillay, DDG of the department of health (DoH), has made it quite clear in answering public comments on the proposed amendments to  the Medicines and Related Substances Act  that their concerns regarding foodstuffs are not just confined to the labelling of food and providing a list of the contents of any food products but also the actual food content itself contained in the product and any harmful effect it might have on the consumer.

In this regard, Dr Pillay has said there was to be much closer contact between DoH and the department of Agriculture, Forestry and Fisheries (DAFF), the lack of co-ordination becoming apparent during the recent scandal when horse meat and donkey meat had been discovered in the contents of named foodstuffs brands without any public awareness to this effect.

This and many other comments were made on submissions recently put before the parliamentary portfolio committee on health during the debate on the Medicines and Related Substances Amendment Bill.

No separation from cosmetics

Dr Pillay also made it quite clear that comments in submissions suggesting that food stuffs and cosmetics be isolated into separate legislation parallel with medicines and related substances was a non-starter.  DoH, he said, had already recruited 25 new permanent staff members that would be working for the South African Heath Products Authority (SAHPRA) who were in the process of considering a food agency, food being very much within the ambit of the one Act.

A good number of the changes in the Bill before Parliament arose in the area of vitro diagnostics (IVD), or tests with equipment which assisted medical diagnosis by sampling body tissue and fluids.    In this regard, the wording of international medical regulatory bodies had been used whereby such equipment had to meet certain performance requirements. This was in contrast to medicines and related substances issues which dealt primarily with matters of efficacy.

Big retailers excluded

On the question of the issue of licences to trade issued by the new Medical Control Council (MCC), it had been conceded that retailers dealing exclusively with bulk products classified as unscheduled medicines did not have to comply with all SA Pharmacy Association requirements or obtain a licence from the MCC.

Comments in submissions had been made and by the opposition that the regulating body would find it difficult to exercise its authority with regard to product advertising in all forms of electronic media, particularly if it extended to social media.  Dr Pillay said that this was acknowledged but he asked for his detractors to note that advertising and marketing world was an ever-evolving subject and attempts had to be made to deal with false claims and failure to meet requirements in all forms of advertising media whatever the problems of doing so.

Debate on medical devices

Regarding criticism on the descriptions and definitions in the amending Bill with regard in the approval of medical devices and the ambits of inclusion and exclusion, Dr Pillay said DoH had fallen back on an updated version agreed upon by the International Medical Device Regulatory Forum, which was more appropriate, he said.

Considerable debate took place upon the issue of controls on pricing, raised in a number of written submissions. DoH had agreed that the amendments would clearly state that the agreed pricing committee would be the final body to make recommendations on such matters to the minister of health. Meanwhile, the MCC would confine its activities to quality, safety and efficacy, not pricing.

Furthermore, Dr Pillay confirmed it was the pricing committee alone who were to “pronounce on marketing, bonusing and pricing matters”, bonusing usually being related the incentives to doctors to recommend certain medicines in relation to price.

Traditional medicines

As expected, the EFF and the ANC raised the question of traditional medicines and asked why there was no reference to such in the “description of medicines and products”.  On this, Ms Malebona Matsoso, DG of DoH, replied that department was fully aware of the need to incorporate traditional medicines.

She said that DoH was now distributing a booklet on the process they intended to use to regulate for traditional medicines and how DoH planned to carry out any regulations. The booklet was not available at the time but would be sent to parliamentarians, she said.

The DG, DoH, said that eventually SAHPRA would regulate all products that were processed in laboratories as well as the plants that were used during the process of making medicines. She explained that one of the main drivers for the establishment of SAHPRA was that MCC appointed members were contributors from different industries and not only public servants.

The establishment of SAHPRA therefore would be on a permanent DoH staff member basis and would deal with this as well as foodstuffs and cosmetics in terms of “products” under the Bill. Ms Matsoso confirmed again that traditional medicines and products had not been excluded under the Bill since the Bill included all products. How the regulations were to be extended to include traditional medicines was now being established, she said, and university research particularly from the University of the Western Cape and UN World findings would be used.

Animal world

Despite some objections in written submissions, DoH was insistent that veterinarians had to ensure that they were issued with licences wherever medicines were either compounded or dispensed. Also, Dr Pillay pointed out that the new Bill would not regulate for electronic-medical and radiation devices, the worry of one submission, and hence the question of the Hazardous Substances Act did not arise, he said.

In an earlier meeting with the DoH, also led by Dr Anban Pillay, the portfolio committee debated the section of the Medicines and Related Substances Amendment Bill that covered the formation and running of SAHPRA. What SAHPRA would do and the manner it would operate in the industry, he said, would be dealt with by the regulatory process to be devised.

Other articles in this category or as background
http://parlyreportsa.co.za/health/medical-food-intellectual-property-tackled/
http://parlyreportsa.co.za/health/sa-allow-avoidance-medical-patents/
http://parlyreportsa.co.za/health/medicines-and-related-substances-bill-now-tabled/

Posted in Earlier Stories, Facebook and Twitter, Health, LinkedIn, Public utilities, Trade & Industry0 Comments

Air traffic control Bill changes “permissions”

OR tamboBill  penalises false air traffic data…..

The department of transport (DoT) has published the Air Traffic and Navigation Services Company Amendment Draft Bill, calling at the same time for public comment.

Air Traffic and Navigation Services (ATNS) is the company responsible to the minister of transport as a profit-making government venture which has the mandate to control the management of South Africa’s airspace, air traffic control and organise the management systems necessary to operate such national facilities.

The Bill in question seeks to amend the Air Traffic and M-Navigation Services Company Act so as to “insert new definitions; substitute certain expressions; provide for appeals against the decision of the Committee; and provide for offences.”

Airport facility definitions changed

It is understood that income to run ATNS primarily comes from “permissions” or pre-agreed rates for aircraft to descend and land; use runways; airport facilities aside from charges levied by ACSA; park aircraft; take off; what height to fly and to accept flight plans for data dissemination.

The main subject re-defined by the Bill is the wording of the expression “permissions” i.e. at what rate these are charged, which mainly depend on frequency of use, size of fleet, routes chosen and the amount of input from air traffic control staff needed.

The Bill also deals with penalties that may be imposed, it being an offence to supply false information on intended flight routes, lodge false flight plans and supply any false information which may affect the flow of data needed to control airspace and aircraft movements.

Permission to land

How appeals against rulings on the cost and application of “permissions” is also dealt with. The Bill also seeks to give legal status to an application for a “permission” called an “approach document”, in which ATNS provides guidelines on the information needed from operators when a “permission” is sought.

SA world class

DoT reported to Parliament in its annual budget statement that the budget appropriation for ATNS and its operating profit, though not excessive, had resulted in the use of “state-of-the-art equipment and world-class technology being used and a principle of mid-life updating of the air traffic management system to meet the highest of international standards being applied.”

DoT also reported that VHF radio systems with the latest voice and data capabilities and the installation of the high quality VHF directional finders had been acquired.

The department claimed that ATNS was well known for efficiently managing South Africa’s airspace and had successfully, throughout the years, maintained a record of a zero commercial aircraft accident rate.
Other articles in this category or as background
http://parlyreportsa.co.za/public-utilities/saa-turnaround-plan-involves-flight-changes/
http://parlyreportsa.co.za/uncategorized/search-and-rescue-bill-to-set-up-search-centres/

Posted in Communications, Facebook and Twitter, LinkedIn, Public utilities, Transport0 Comments

Energy gets war room status

Cabinet creates energy crisis committee…..

Editorial…….

eskom logoIn retrospect, for the cabinet having had to resort to establishing an energy war room is probably a good thing inasmuch that a meeting of minds appears to have taken place at all levels of the ANC Alliance on energy matters. The situation is indeed serious.

The message from business and industry that the “energy crunch” is not only immensely threatening to the economy appears to have got through, accompanied probably by the realisation that so many regular failures, power or otherwise, are threatening to the ability of the ANC to stay in power.

Foggy outlook

Perceived at first as an issue mainly affecting the rural poor, the failure of Eskom to deliver on most of its promises; the bumbling of the department of energy on independent power producer parameters and the to-ing and fro-ing of cabinet on the adoption of nuclear energy into the energy mix, has been somewhat of a pantomime.

For months we have been reporting from Parliament on the ambivalence of Eskom and the reluctance of the department of energy and public enterprises to chart a course on energy.

The whole truth…

NA with carsHowever, what is a matter of concern is the fact that in all those lengthy power point presentations and detailed reports to parliamentary committees that we have witnessed or read, the ball has been completely dropped on the energy issue and badly so.   At the very least Parliament were not given the full facts, particularly in the case of Eskom, thus threatening the parliamentary oversight process.

Deputy President Ramaphosa has now been designated to oversee the turnaround of SAA, SAPO and Eskom. The cabinet statement says regarding this, “Working with the relevant ministries, SAA will be transferred from the department of public enterprises to national treasury. The presidency will closely monitor the implementation of the turnaround plans of these three critical SOCs that are drivers of the economy.”

Maybe next year

It is comforting therefore to some extent to know that such a “war office” has been established and that cabinet has adopted a five-point plan to address the electricity challenges facing the country but it just seems incorrect that a relatively empty, tired statement such as “more cross cutting meetings to meet the challenges facing  the country will be adopted” was all that could be added in the form of action before ministers disappeared for the Christmas recess, including, we understand, the contractor’s staff at Medupi.

elec gridIt seems that nobody is in charge over the same period nor interested enough to be there and nobody is really looking much beyond January 15, when South Africa starts switching on again.

 

Perhaps in 2015, some reality will return to South African politics and amongst the governing party. They may learn that there is a direct relationship between being in power and keeping the power on and we foresee many more direct confrontations on this issue and others in Parliament during the coming year.

 

 

Posted in cabinet, Electricity, Energy, Finance, economic, Fuel,oil,renewables, LinkedIn, Public utilities, Security,police,defence, Trade & Industry0 Comments

Minister Nene maps survival route

Not so merry Christmas….

Editorial……

candlesWithout wishing to put a dampener on festive arrangements, the last few weeks of the closing parliamentary session, which included the medium term budget from minister Nene, have seen a difficult period, not in the least caused by fiascos in the National Assembly with the EFF. Baiting President Zuma, whatever the reason, has nothing to do with running a country.

Such hooligan behaviour completely demeans the status of Parliament but worse, it also denigrates all the real work that is going on the engine room of Parliament, the working committees.  Some observers are quietly happy that the ANC Alliance is being called to account on certain matters but the overall effect has been to take South Africa perceptually into dangerous waters.

Nkandla unpleasant diversion

The Nkandla issue has clearly damaged the political standing of Parliament as well as giving the media a field day, or a field month as the case turned out to be.  But in the parliamentary portfolio, ad hoc, finance standing and NCOP select committees, the work has gone on and it has been a busy and difficult period as a result of the necessity to approve finance minister Nene’s medium term budget.

Difficult because some fifty utilities, government departments and section nine companies had to declare their objectives, say how things were going and reflect upon the auditor general’s findings on each of them.   Difficult because cabinet statements are really giving no true direction on questions being asked every day in Parliament.   Difficult because it is still the first year of a new Parliament and everything is running late with new MPs.

Whilst the auditor general (AG) may have declared that government departments only received 15% unqualified reports, the balance of 85% are qualified to some degree by the AG.  A learning process. This means the working committees have seen it, everyone knows about it and the system works. This is the difference between weekend newspaper reporting and monitoring. It is not just a question of putting a positive spin on things but recognising that there is, indeed, a force working for morality and financial correctness.

Focus is on medium term budget

Nevertheless, minister Nene’s budget speech was still the key issue of the last month, not Nkandla as the perception might be.  Nene’s remarks that “business is a key area in fostering the ideal that the NDP becomes a reality” had the all too familiar ring of what Alec Erwin had to say twenty years ago when the ANC promised private and public partnerships on energy matters. Nothing happened of course, the ANC embarking upon ten years of infrastructure inactivity.

In fact major private sector participation in the country’s development was totally halted at that point and has since never really got going.

When is when?

Now the question is being asked once again as to whether the government will actually ever embark upon real hard core private/public investments, other than dishing out a few solar and wind power projects. This is the question being asked by opposition MPs in Parliament at working committee level, ignoring for the moment the embarrassing fracas upstairs in the National Assembly.

It is difficult to imagine in parliamentary terms that minister Rob Davies, minister Tina Joemat-Pettersson, minister Jeff Radebe, minister Lindiwe Sisulu and minister Lynne Brown will ever truly understand the tenets, motivations and passion that drive businesses, even perhaps the President himself.  South Africa suffers from bad politicians, not necessarily bad government.

Circus with no ringmaster

What the presidential national planning commission is actually saying to the cabinet is an issue that cannot be guessed at by anybody at this stage, such private messages certainly not being conveyed in Parliamentary papers. In fact nobody seems to be talking, the DA having as little knowledge as half the SA cabinet, it appears.

Consequently minister Nene’s hopes appear somewhat lame at this stage. To be positive however, it may be that as next year’s parliamentary oversight programme on service delivery targets gains momentum, as it has already, accompanied with all the political pain that will occur if voters remain dissatisfied, political reality may force the governing party to at last start walking the talk that minister Nene espouses.

Posted in cabinet, Cabinet,Presidential, Energy, Facebook and Twitter, Finance, economic, Land,Agriculture, LinkedIn, Public utilities, Trade & Industry0 Comments

Eskom crosses its fingers

Medupi:  Eskom on final run ….

eskomCollin Matjila, interim CEO of Eskom, told a joint parliamentary portfolio committee on energy and public enterprises that Eskom had learned a number of lessons in the building of coal-based power stations, probably the most important being the need for a suitably qualified and capacitated contractor oversight team to handle the complexity and extent of any project such as the construction of Medupi.

Although power from the new plant was to be introduced to the grid this Christmas Eve from Medupi, and incrementally more onwards, full power would only be happening at stable levels by winter 2015.

With both the boiler contractor and control and instrumentation contractor problems causing delays and a strike affecting between 40% -70% of the workforce, the 6-month delay had been recognised by both treasury and cabinet in financial re-calculations.

Minister notes….

Also addressing the committee, public enterprises minister, Lynne Brown, stressed that in her view “the corner had been turned at Medupi”.  She said that cabinet had approved a package to “support a strong and sustainable Eskom to ensure energy security”.   The inter-ministerial committee, which was comprised of finance, public enterprises and cooperative governance and traditional affairs, had now reviewed all options before them both on electricity and energy generally.

Eskom then stated that the second unit, Kusile would be added to the grid in a start-up process in the first half of 2015 and Ingula, the third and smaller hydro unit, in the second half of 2015.

No rest with summer

Matjila cautioned MPs that additional capacity would be needed during summer this year, despite any reduced seasonal demand.   This was because of the need to accommodate “planned” outages, which were set to take up 10% of full capacity being supplied.

By referring to full capacity, this was a theoretical maximum availability, Matjila said, subject to the reality of unplanned outages.  Eskom warned of a possible inability to meet demand throughout the remainder of the financial year, as distinct from seasonal timing, if it should be financially restrained in its use of it expensive-to-run standby open-cycle gas-turbines.

More price increases

Recovery of unbudgeted costs in this area for the year under review were part of the problem facing Eskom, Matjila said, and the recent announcement by the national electricity regulator, Nersa, of a rise of just short of 13% in electricity prices in April 2015 was no doubt motivated by this factor amongst others.

However, he said, Eskom may also have to deal with a higher maintenance in December, including half station shutdowns for three stations. He qualified this in a later Engineering News report which stated that 32 of Eskom’s 87 coal-fired generating units required “major surgery”, whilst four were in a “critical condition”.   November was also critical, he said, if all did not go as planned.

Despite continued questioning by parliamentarians on the state of progress at the second “New Build” power station, Kusile, no specific answers were provided by either Eskom or the minister other than the fact that Kusile had experienced “protected” and “unprotected” strikes in contractor workforces during the year.

Strikes

Matjila stressed that the workforce was back on site at both locations. “Additional resources had been mobilised to mitigate delays, he said, and additional shifts have been introduced 24 hours a day, 7 days a week, to accelerate progress on site.  Eskom was liaising with contractors to deal with any issues which had the potential of causing further delays, he said.

In his overall concluding remarks, Matjila said a five-point recovery plan had been introduced to improve the performance of the Eskom coal-fired fleet, with the utility having reaffirmed its objective of “returning to an 80-10-10 operating model, which implied 80% plant availability, 10% planned outages and 10% unplanned events across a period of a year.”

Outside inputs

On the situation with regard to the independent power producers (IPP) programme, Matjila said he was aware that the department of energy (DoE) had processed  over one thousand applications during the three IPP 3-stage bidding process and this had stretched DoE resources considerably.

He said it had been a complicated process to secure sustainable competitive prices in respect of the particular technologies involved. What had to be also factored in was the burden of hidden costs of storage and back-up which had to be borne by Eskom, not the IPPs.

Also the proximity and availability of energy supplies on the supply in providing the “appropriate infrastructure” was being dealt with and overcome.

It was important, Matjila said in conclusion, for Eskom to ensure that potential and online suppliers met grid code requirements and he was aware that some IPPs were struggling with this process.
Other articles in this category or as background
http://parlyreportsa.co.za/energy/medupi-key-short-term-energy-crisis/
http://parlyreportsa.co.za/cabinetpresidential/eskom-says-medupi-and-kusile-will-have-great-local-benefits/
http://parlyreportsa.co.za/energy/eskom-warns-on-costs-of-new-air-quality-rules/
http://parlyreportsa.co.za/energy/dpe-reports-on-eskom-and-it-utilities-to-parliament/

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, Land,Agriculture, LinkedIn, Public utilities, Trade & Industry0 Comments

Parliament brings government to account

Editorial, October end…

Six month review of targets…

FSY001803or three weeks now, the parliamentary working committees have been exercising oversight on the forty seven government departments responsible for service delivery throughout the three tiers of government service.  In terms of the Constitution, oversight is necessary to qualify and quantify the appropriations made to each department for the next six months of the budget year.

Under each department have also come the reports of the many state owned entities (SOEs) described under section twenty nine of the Constitution and scheduled into categories under the Public Finance Management Act. There are the many national government business enterprises similar to Eskom and Telkom; then the funding entities controlled by boards such as the Road Accident Fund; and finally the less self sufficient and less commercial entities such as CSIR and SABS.

Owned by the public

Generally speaking, SOEs are funded from the public purse, meaning that the public has a legitimate interest in the workings of the SOEs.   In the case of the large national enterprises, it could be said that the public is an indirect shareholder through the shareholding minister. The new and so far quite successful system of evaluation by Parliament involves reference to performance rating by the newly established presidential evaluation department.  

Also contributing are the auditor general reports produced on time, and thankfully every time, by the backbone of South Africa’s essential and probably most un-applauded department, the office of the auditor general. We have watched these mainly young men and women in action. Thank heavens for their contribution.

Monolithic structures

Following minister of finance Nhlanhla Nene’s address on the medium term budget statement, there will follow a pause and even perhaps a vacuum of expectation.  It is an enormous machine that he addressed in the public sector; a government structure which has 34 ministers, 33 deputy minister, 159 directors general, 642 deputy directors general, 2,501 chief directors and 7,782 directors.

In a sour note, the Freedom Front pointed out for what it is worth that 40 years ago the country had 18 ministers, six deputy ministers and 18 directors general and in the most recent quarter of 2014 it has been reported, they said, that more than 44 000 public servants have been appointed bringing the number of public servants to just over 3m, or 22.6% of the total labour force of South Africa.

Catch 22

The dilemma now is that all the regulatory processes put in place to monitor spending of tax payer’s money could so easily establish more red tape and further hinder the delivery process.    But to be positive, the oversight system seems to be working and has established a far better ethos in spending procedures and also seems to have established an improved sense of morality.

Politicians such as chairperson of the standing finance committee, Joan Fubbs, may seem fuddy-duddy at times but such are erudite and responsible people and bad performance on delivery receives little change when in debate. Performance of SOEs is now is now clearly the key issue in South Africa and whether what is happening in Parliament can be translated down to provincial, municipal and local level, where local governance controls are often shaky, is now the constitutional issue facing minister Pravin Gordhan.

Bigger by the day

The overall trend is also clear – employment in the private sector has declined while public sector employment has grown. Public service and administration minister, Lindiwe Sisulu, in charge of what has been rapidly expanding public service, faces a major problem ahead in dealing with the intimidating annual wage negotiation period, which is not a good time to rein things in.

In the coming weeks, until the year end possibly, the uneasy feelings expressed in many portfolio committees that nothing is happening will probably persist until some sort of positive results emerge from the massive infrastructure spend. Like a tanker making a turn at sea, any large public service in any country is slow to respond and it will no doubt take time before this change in economic direction, now being better monitored in the parliamentary sphere, can be distinguished as a turn for the better.

Posted in cabinet, Finance, economic, Public utilities0 Comments

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