Department of Energy Third Quarter 2011/2012 Performance

Energy

12 March 2012
Chairperson: Mr S Njikelana (ANC)
Share this page:

Meeting Summary

The Department of Energy (DoE) briefed Members on its 3rd quarter 2011/12 performance and financial statements.  Overall highlights of the quarter were listed as the hosting of COP 17; completion of the Independent Power Producers (IPP) bidding process and announcement of successful bids for 1415MW; launching of the South African Renewable Energy Initiative (SARI) and the commissioning of the new Multipurpose Pipeline. DoE was to locate to the old Land Bank building in Pretoria. Awareness and information sharing sessions had been held. DoE held its annual planning session in November 2011.

The specific programmes and achievements within the different programmes and branches were outlined. DoE had signed agreements and declarations of intent with various countries, dealing with a range of issues around capacity building,
funding, technology, exchange of information and development of energy infrastructure, and an increase in generation capacity. DoE currently had 566 staff, with a 7,77% vacancy rate, mostly in the newly established IPP unit. 347 employees had received training. Six events were held under the public participation programme. There were special programmes in women’s outreach, including women attending projects in India, and installation of 16 solar panels for families of abused and disabled women. A Regulatory Accounting System was formulated, and there were measures to improve biofuels uptake. Pro-poor pricing initiatives on paraffin had been implemented. Integrated Energy Centres were established in QwaQwa and the construction company for the IEC in Ulundu had been identified. Mechanisms were put in place to secure strategic stocks, and the strategy would be presented in March 2012. The Storage and Distribution/Infrastructure Gap Analysis Report was prepared monthly. Increased domestic refining capacity was reported. DoE had started to analyse data on the 20-year plan. Regulations on LPG pricing and licensing were developed. One request for arbitration was received and was being processed. 411 site inspections had been conducted. Reports on pricing were released, and policy analysis for IEP was developed. DoE had made 43 235 Eskom and 13 463 Municipalities grid connections, and connected 5 764 non grid connections. Two substations had been completed and eight were under construction. A detailed report was developed on electricity distribution infrastructure. The National Nuclear Radioactive Waste Disposal Institute (NRWDI) was being established and was likely to come into operation in the next financial year. The National Nuclear Energy Executive Coordinating Committee had been established with DoE as the leader of the interdepartmental team.

Members asked questions around the relocation of the Provincial Offices, delays in the relocation to the old Land Bank Building in Pretoria and the cost implications. They also asked for more information on the signed agreements, nature of queries made through the Presidential Line and the progress made with regard to the SARI Initiative. They sought clarification on the Petroleum Product Amendment Bill and information on the targets of the Petroleum Product Amendment Act (PPAA) and licensing process. They requested that the Department circulate copies of the Transport Booklet. They also asked questions on what the Department was doing in order to secure security of supply of LPG, the Interdepartmental task team, and the Men’s forum. Members were concerned whether the mixing of blends and the introduction of the block tariff system could negatively impact the customers. They commented that the Department was not leading by example with regard to Energy Conservation. They asked about the number of sites inspected, methods used to dispose of nuclear waste, the implications of the establishment of the Waste Disposal Institute, location of the installed 16 solar heaters, the maintenance plans for solar and water on heaters, and for progress on IEC, staff training, the Refinery Audit, and the Energy Petroleum Control Act

The DoE presented its quarterly financial performance report, focusing on overall and quarter-specific performance, across each of the programmes. The DoE had, by end of December,  utilised 70.6% of its total allocated budget, and was predicting an underspend by year end of about R53 million, or 1% of total budget. There was some overspending in administration, as a result of increased staff, but there was underspending in  
Energy Policy and Planning (33.2%), Energy Regulation (30.2%), National Electrification Programme (3.0%) and Nuclear Energy and Regulation (0.5%).Much of the underspend arose from transfers to municipalities. Members asked for clarification of the projected under spending. They also asked about the financial and legal implications for the delays in the transfer of payments to the municipalities, what DoE did to try to assist them, and asked if the delays in relocating to the new premises had had a negative effect.

The Department’s final brief presentation outlined the legislation that had been, or would be tabled in Parliament, and the purpose of the
Electricity Regulation Second Amendment Bill, Energy Regulator Amendment Bill, New Petroleum Products Bill and the Gas Amendment Bill was outlined.

Meeting report

Department of Energy: 2011/2012 Third Quarter Performance Report
Apologies were tendered for the absence of the Director General, Department of Energy.

Ms Thandeka Zungu, Chief Operations Officer, Department of Energy, noted the major highlights for the whole Department in the 3rd quarter of the 2011/12 financial year. These included the hosting of Conference of Parties (COP 17), completion of the Independent Power Producers (IPP) bidding process and the announcement of successful bids for 1415 MW. She also cited the launching of the South African Renewable Energy Initiative (SARI) and the commissioning of the new Multipurpose Pipeline (MPP). Other notable achievements included the pending relocation of the Department of Energy (DoE or the Department) to the old Land Bank building in Pretoria and the facilitation of awareness and information sharing sessions.  DoE also held its annual planning session in November 2011.

Turning to achievements specific to the Office of the Chief Operations Officer, Ms Zungu listed the finalisation of the annual strategic planning and mid-term review and the submission of Annual Performance Plans. Q
uarterly performance reports were presented to the Minister. DoE also submitted the 2012/13 MTEF strategic plan, 2012/13 Annual Performance Plans and changes in its governance structures for discussion.

DoE also signed agreements and declarations of intent with South Korea, Ghana, Denmark, Lesotho, DRC, International Energy Agency (IEA) and SARI [Germany, Norway, UK, Denmark and the European Investment Bank].The agreements dealt with issues around access to capacity building, funding, technology, exchange of information and development of energy infrastructure, and an increase in generation capacity.

The
total staff complement as at end December 2011 was 566. The 7.77% vacancy rate was mainly due to the newly established IPP Unit. The Human Resources (HR) Plan was approved in September 2011 and was being implemented according to plan. 347 employees received training to enhance performance and productivity.

The communication strategy of DoE was directed to hosting six events, under the Public Participation Programme, in Northern Cape, Limpopo, Eastern Cape, and KwaZulu Natal (KZN). DoE also addressed 96% of the Presidential hotline queries. The majority of the concerns were centered around issues on Integrated National Energy Plans (INEP) and petroleum licensing. The Department also resolved 100% of its media queries.

DoE ran special programmes and Outreach Projects for Women Empowerment. Rural women representatives had been sent to India to participate in the study on the “Barefoot India Women Solar Engineer Project”. DoE also participated in the 16 days of activism for no violence against women and children, through the establishment of the DoE Men’s Forum. In partnership with the Department of Human Settlements a total of sixteen solar panels were installed for families of abused and disabled women in Ermelo.

Mr Muzi Mkhize, Chief Director: Hydro Carbons, Department of Energy, presented the highlights under this programme. Payments were currently in order for the new MPP. The Regulatory Accounting System (RAS) margin models and the Regulatory Manual and Guidelines had been approved in November 2011. The RAS margins were incorporated into the December 2011 fuel prices. In respect of the programmes geared to improving the bio fuels uptake, final reports on the blending value and break-even costs had been submitted, through a Ministerial Submission, on 21 December 2011. The biofuels Mandatory Blending Regulations were also published on 16 September 2011 for public comment, as part of the determination of the break-even price.

DoE had initiated various pro-poor pricing initiatives on paraffin, which were signed off on 21 December 2011, and DoE was now awaiting approval to publish the final report for public comments.

DoE also established new Integrated Energy Centres (IECs). The construction company for Ulundi IEC had already moved on site during December 2011 to prepare the area. The construction for QwaQwa IEC could commence in the first quarter of 2012. An extension of the completion deadline to the new financial year had been requested.

Mr Mkhize noted that DoE had drafted a strategy document for securing of strategic stock,
and it had been forwarded to Cabinet for approval.  That strategic document could be presented to Parliament during March 2012. DoE also generated the Storage and Distribution/Infrastructure Gap Analysis Report on a monthly basis. The Department also reported an increased domestic refining capacity. The 20 YLFIRM was established, and 80% of the data had since been collected, and an analysis had begun with the working groups. The Minister had approved an extension of the deadline to accommodate the expedited Refinery Audit. DoE also developed regulations on Liquefied Petroleum Gas (LPG) pricing and LPG licensing framework, and had drafted an LPG Strategy document for internal review.

The revised Fuel specifications and standards (Clean Fuels) regulations were sent to the legal unit for perusal and stakeholder workshops were held. Other significant achievements on the legislative programme included the drafting of the Gas Amendment Bill, on which an internal review had been done and it was forwarded to Cabinet, and the Petroleum Products Amendment Bill was still being drafted.

The Office of the Petroleum Controller had received one request for arbitration, the Q3, but this was
not processed within the 14 day turn around time period, largely due to the complexity of arbitration legal documents and voluminous supporting documents to be considered.

DoE had conducted 411 site inspections. Various awareness campaigns had been conducted in Mpumalanga, Limpopo, Durban, Northern Cape, Eastern Cape and Western Cape.

A review of the methodology for the Integrated Energy Planning (IEP) was being done by an expert on s
cenario planning, and an inter-governmental steering committee on the development of the IEP had met on 17 November 2011, as part of the stakeholder consultation process. The comments arising from the final consultation with the State Law Advisor were incorporated in the Regulations for the Provision of Energy Data. A submission requesting approval of the final regulations by the Minister was circulated before the proclamation by the President. The Director General had approved the release of the Energy Balance data for 2009.  The 2010 Price Report (with data for 2009 and 2010 reports) had been published. A Policy Analysis Framework for the IEP had been developed.

Mr Ompi Aphane, Acting Deputy Director General: Electricity, Nuclear and Clean Energy, Department of Energy, noted a total of 43 235 Eskom and 13 463 Municipalities grid connections. DoE also connected 5 764 non grid connections. Two substations had been completed, and eight (out of the target of ten) were under construction.

In regard to the Electricity Distribution Infrastructure, DoE had developed a detailed report and implementation plan for each of the six Metros, on the status of the distribution infrastructure. The process had been completed, and a Cabinet memo had been submitted for internal approval.

DoE was in the process of establishing
the National Nuclear Radioactive Waste Disposal Institute (NRWDI). However due to lack of funds the Institute could only start its operations in the next financial year. DoE was also involved in the improvement of legislation governing the nuclear sector. The National Nuclear Energy Executive Coordinating Committee (NNEECC) had been established, with DoE as the leader of the interdepartmental team.

Mr Aphane reported on clean energy programmes. The DoE had closed the first window of the Renewable Energy Independent Power Producers (REIPP) programme on 4 November 2012. 54 proposals had been received and evaluated. 28 preferred bidders were selected for the REIPP programme. In the Solar Park Initiative, tender documents had been issued for the feasibility study, but there were still some challenges around land availability.

Mr Aphane noted that DoE had launched the Energy Efficiency Campaign Strategy in December 2011, as well as launching the Energy Efficiency Accord. DoE had also published the Energy Efficiency Regulations and tax incentive regulations on 15 November 2011.

Finally, he noted the publication of the Clean Development Mechanism transport sector booklet.

Discussion
The Chairperson asked for more information on the relocation of Provincial Offices.

Ms Zungu replied that the regional offices were still housed under the Department of Trade and Industry (DTI).

Ms Yvonne Chetty, Chief Financial Officer, Department of Energy, added that while the rental for the relocation had been budgeted, IT and capital expenditure costs were not budgeted, and the DoE was trying to re-use whatever it could from the old offices to reduce the costs.

The Chairperson inquired about the agreements and the progress made so far.

Ms Zungu replied that DoE was in the process of tabling the various Memoranda of Understanding, and said that the final documents could be forwarded to the Members.

The Chairperson asked for information on the kinds of queries that had been made through the Presidential Line.

Ms Zungu replied that she could liaise with the communications units, to have the information made available to the Committee, via monthly and quarterly reports.

The Chairperson asked who DoE was targeting in relation to the Petroleum Products Amendment Act (PPAA) and licensing process.

Mr Mkhize replied that the target audiences were wholesalers, retailers and new players interested in participating in the area of bio fuels.

The Chairperson requested that DoE circulate copies of the Transport Booklet to Members.

Mr Aphane replied that this would be done.

The Chairperson commented that in the next presentation, DoE should have a comparative analysis section to reflect targets achieved against the set target.

Ms Zungu replied that this could be taken into account in the next presentation.

Mr C Schmidt (DA) asked for progress made on the SARI Initiative.

Ms Zungu replied that SARI had originally been within the Department of Trade and Industry (dti), but  that department had officially handed over the function to DoE. Nonetheless, dti was still giving funding support to set up the Secretariat steering Committee. DoE had recently held meetings with Swiss representatives to discuss how DoE would generate long term funding for the initiative.

Mr Aphane reiterated that DoE had interacted with three of the four countries in the agreement. In addition, DoE had entered into a concept agreement with the Swiss.

Mr Schmidt inquired what DoE was doing in order to ensure security of supply of LPG.

Mr Mkhize replied that the emphasis was on importation and creation on import facilities.

Mr Schmidt asked about the progress made in the National Nuclear Energy Executive Coordinating Committee.

Mr Aphane replied that the Committee had not met yet.

Mr J Selau (ANC) asked about the composition and criteria around the Men’s Forum.

Ms Zungu replied that the Men’s Forum was a voluntary platform, in which men in the DoE discussed issues and challenges affecting them within the workplace, private life and society as a whole.

Mr Selau and Mr J Smalle (DA) enquired if the process of mixing of blends could not cause an increase in fuel prices.

Mr Mkhize replied that the impact of mixing blends was in line with the promotion of cleaner fuels. For example crude oil emitted far more emissions than the plant material of bio diesel or ethanol. The key objective was to ensure that manufacturers remained neutral in their pricing. DoE could have to subsidise in some instances, and this could mean it incurred high costs. However, in other instances, when the petrol prices was high, the blends could be bought for less.

Mr Selau asked what the cooperatives consisted of, and which model would be regarded the best within the South African context.

Mr Mkhize replied that DoE was working closely with dti and the office of the Registrar of Corporate Governance to deliberate the different ownership models. The aim was to create a model which could allow continuity and sustainability of entities such as IECs. Currently the IECs faced numerous problems, such as financial problems, and DoE had to step in and give assistance.

Mr Selau noted that the Committee was not aware of the various contents of the documents generated by the DoE for public comment on the infrastructure issue.

Ms Zungu replied that she would refer the concerns to the Chief Director: Communications, and ensure that the Committee received access to these documents.

Mr Selau noted that the presentation should include the overall progress in other quarters.

Mr Selau commented that DoE initiatives seemed to be focusing on urban projects, and did not include the rural areas.

Mr Selau commented that DoE was not “walking the talk” in energy conservation, as various public buildings were not energy efficient.

Mr Aphane conceded that DoE was not doing enough in terms of implementing Energy Conservation.

Mr J Smalle (DA) asked about the operational costs involved in the relocation to the Old Land Bank Building in Pretoria.

Mr Smalle about for clarification on DoE’s new approved staff complement.

Ms Zungu replied that the staff complement related directly to the introduction of the IPP Unit. The R3 million payroll had to be ring fenced for the IPP personnel.

Mr Smalle asked for the total number of sites that DoE was required to inspect.

Mr Mkhize replied that a total of 375 inspections had been carried by the Regional Offices, which was higher than the set target. Nonetheless, DoE still sought to improve the quality of the site inspections.

Mr Smalle asked how the introduction of the block tariff system could affect consumers.

Mr Aphane replied that the intention of the incremental block tariff system was to protect the poor against high tariffs. However, at the same time, the idea was not to overcharge the high-consumers of electricity beyond competitive or sustainable levels. DoE was currently undertaking a feasibility study to assess the best way to move forward.

Mr Smalle asked about the current methods used to dispose of nuclear waste.

Mr Aphane replied that the Waste Disposal Institute could take over operations which had, in the past, been undertaken by the different operators. For example, National Energy Regulator of South Africa (NERSA) was currently operating on the rich uranium site in the Northern Cape, while Eskom was disposing of spent fuels of uranium. The argument was that the operator should not also be responsible for the disposal of the waste. This did not compromise the risk.

Mr S Radebe (ANC) inquired about the locations of the 16 solar water heaters that had been installed during the 16 days of activism.

Ms Zungu replied that she did not have this information to hand, but could forward it to Members at a later date.

Mr Radebe asked for the progress made on the IECs.

Mr Mkhize replied that the IECs were in all Provinces expect Mpumalanga, although there was a process to set up a centre in that Province.

Mr Radebe asked if DoE had a maintenance plan for the installed solar geysers.

Mr Aphane replied that corrective measures had been developed, through a new delivery model, and the contract would also encompass a maintenance plan. Contracts were issued for the maintenance of the already-existing solar and water geysers. 

Ms N Mathibela (ANC) asked for more information on the staff training within DoE. She also enquired how DoE was handling and curbing the movement of its trained staff members to the private sector.

Mr Aphane replied that this movement was to do with the nature of the industry, as it was characterised by a shortage of skills, and trained personnel from DoE would be poached by the private sector. However, with the introduction of new programmes, DoE had developed partnerships and collaborations with developed countries, in order to ensure that its staff received world class training in institutions abroad.

Mr Mathibela pointed out that initiatives such as the Barefoot Indian Women’s initiative on clean energy would be ineffective if the women were not given funding to implement what they had learned on their return to their communities.

Mr Moloto inquired how the energy petroleum controller could impact upon the Department.

Mr Mkhize replied that there would be no legislative impact on DoE from the electricity amendments, but there could be an impact on DoE arising from the amendment of the NERSA Act, which could relegate all legislation to this entity.

Quarterly Financial Performance Presentation
Ms Yvonne Chetty, Chief Financial Officer, Department of Energy, gave the second presentation, which was an overview of the third quarter 2011/12 financial performance. This presentation also listed the performance in each programme, outlined the budget composition per programme for the MTEF period, and highlighted the forecast for the year ending 31 March 2012.

Ms Chetty noted that the DoE had utilised 70.6% of its allocated budget in the third quarter. However, by the end of the
third quarter, DoE had disbursed a total of R4.37 billion (or 70.59%) of the total budget allocation for the 2011/12 financial year. This R561.9 million under-spending was mainly due to the performance within the transfer payments classification.

She then outlined the performance in the programmes. Under transfer payments, DoE had a total of R4.7 billion available to transfer to entities or implementing agents, and had actually transferred R4.1 billion, resulting in a variance of R552 million. The under-spending of R552 million was mainly due to the fact that, under Programme 2, the payment for the Transnet pipeline had not been transferred in December. In Programme 3, the Working for Energy Project was operating at R17.5 million below budget. In the Energy Efficiency and Demand Side Management (EEDSM) Municipalities, a total of R61.8 million had not been transferred. In Programme 4, R88.7 million had not been transferred to the INEP Municipalities.

Ms Chetty noted that the results for the Goods and Services economic classification showed a R9.1 million under spending. This is mainly due to an under spending within Professional Services, as a result of the delay in the implementation of the Energy Modelling System. This saving would, however, be re-directed to other areas of spending, to balance the projected over-spending under programmes 1 and 4. The year to date spending within goods and services of programme two was R7.55 million below budget due to an under spending, but these unspent funds would be redirected to other areas within DoE. The major drivers in goods and services included travel and subsistence, consulates, business advisory services, lease payments, operating payments and venues and facilities.

Although spending in Capital assets increased from R2.3 million in the last quarter to R3.1 million in the current quarter, an under spend of R3.5 million was recorded. The reason was that DoE had anticipated moving to its new office accommodation by 1 April 2012. The costs associated with this move, for example the ICT costs, were catered for within this category. However, the move had been delayed due to the internal processes at the Department of Public Works. EDI Holdings assets were also transferred to the DoE, meaning that it had to spend less on buying new assets than originally planned.

Administration reported an overspending of 3.2%. Under-spending was recorded in Energy Policy and Planning (33.2%), Energy Regulation (30.2%), National Electrification Programme (3.0%) and Nuclear Energy and Regulation (0.5%).

In Programme 1, there had been R150.7 million spending against the budgeted R146.1 million. The overall shortfall of R4.7 million was mainly due to the overspending within the Compensation of Employee’s classification. The over-spending was mainly due to positions being filled additionally to the approved establishment.


In terms of transfers, the under spending was mainly due to reduced payments to departing employees. Underspending on Capex was due to the delay in the relocation of the DoE to the Landbank Building which was R3.5 million.

In Programme 2,
Compensation of employees was negatively affected by vacancies. R375 million under spent for transfers related to the late disbursement of the 3rd quarter payment to Transnet. For goods and services, there was R7.5 million underspending, in Travel & subsistence, Professional Services and Inventory and Stationery.  Professional services had been mainly affected by the delay in the implementation of the Energy Modelling System.

In Energy Regulation a total
30% under spend was recorded at 31 December 2011, mostly due to transfer payments, as R95 million had not been transferred. The Working for Energy initiative was operating at R17.5 million below budget. However a reclassification request had been declined by National Treasury. With regard to EEDSM Municipalities a total of R61.8 million had not been transferred because municipalities did not adhere to contractual obligations. EDI Holdings had core funding of R11.76 million that was not transferred. A submission for reclassification has been made to National Treasury for approval.

Under spending in the National Electrification Programme was
mainly in transfers, particularly the  conditional grants payable to municipalities, which fell R88.7 million below the Division of Revenue projections. Approval for the revision of the drawings schedule was received after the December pay-run.  Payments would be distributed in terms of the revised schedule.

In Nuclear Energy and Regulation
the total spend was R617.8 million, reflecting a 0.5% under spending in the compensation of employees, due to vacancies and savings, mostly in the outsourced services expenditure category.

The transfer payment schedule and budget composition per programme for 2011/12 to 2014/15 were then outlined. It was predicted that by year-end there was likely to be R53 million under-spent, split between EDI Holdings at R11.7 million, 2010 Local Organising Committee at R1 million, EEDSM Municipalities at R27 million, INEP Municipalities at R13.5 million and Households at R0.3 million.

Discussion
Mr Selau commented that the unspent R53 million did not highlight the contribution made by the vacancy rate.

Mr Smalle asked about the implications of the lack of payment to the Municipalities.

Ms Chetty replied that the R53 million was about 1% of the total transfer and DoE had come a long way during the financial year. The figure was just a projection based on the situation at present. However, this situation could still be changed.

Mr Aphane noted that the bulk of the R53 million shortfall resulted from the delayed transfer to Nelson Mandela Metropolitan Municipality. DoE had operated within the division of revenue framework, and notified National Treasury of the situation. In addition, all processes had been done within the framework of Division of Revenue Act. Once the municipality had organised itself, then the fees could be released. With regard to the R 13 million involving a private contractor, the Public Finance Management Act (PFMA) specifically noted that transfers of funds had to be done once the service had been provided. In both cases, DoE was working within the set legal framework.

Mr Smalle asked how the process of rolling over funds worked.

Ms Chetty replied that the rollover of unspent money could be requested from National Treasury, along with a motivation. The response from National Treasury would be given in mid year, stating whether the roll-over had been approved or not.

Mr Smalle asked if DoE’s delay in relocation could not result in the cancellation of the lease.

Ms Chetty replied that DoE had not signed leases with the Department of Public Works (DPW), which had worked to its advantage. Department of Mineral Resources (DMR) had already been informed of DoE’s intention to move. Furthermore, DoE had been granted a three month grace period till 1 June 2012, as the deadline for relocation. The finalised Bill of Quantity could be available from DPW by the following Wednesday.  

Mr Radebe asked what plans were in place to assist municipalities in order to ensure that they complied.

Ms Chetty replied that DoE had assisted the municipalities substantially, to ensure that they were able to comply with the requirements of the Division of Revenue Act. The Department had offered more assistance than was actually required.

Mr Radebe asked what would happen to service providers who failed to deliver.

Mr Aphane replied that there was not failure by the service providers in the sense that they cold not deliver on the work, but only in the sense that they had a backlog.

Ms Mathibela commented that delays in payment impacted on municipalities’ ability to deliver quality services.

Department of Energy 2012 Legislative Programme
Mr Mkhize noted that Departments were expected to submit their legislative programmes to Parliament at the beginning of each Parliamentary cycle, and DoE had submitted its 2012 Legislative Programme to Parliament at the beginning of the year.


He noted that the list (see attached presentation) of legislation to be amended, and new Bills, were intended to address
the critical regulatory or legislative framework within the energy sector.

The Independent System and Market Operator Bill was submitted in March 2012, and was intended to
encourage IPP participation in electricity generation through establishment of an independent buyer.

The Electricity Regulation Second Bill was intended to provide a regulatory framework that promoted IPP participation. This Bill was approved by Cabinet in October 2011, and was published for public comments, and it was scheduled for submission to Parliament in June 2012.

The Energy Regulator Amendment Bill was developed in order to promote efficient regulation of the energy sector. The Bill was approved by Cabinet in October 2011 and was published for public comments, and should be presented to Parliament in June 2012.

The New Petroleum Products Bill was intended to promote an efficient, competitive and responsive petroleum infrastructure, inclusive economic growth, including opportunities for new entrants and meaningful participation of historically disadvantaged South Africans in the oil industry, and improve compliance monitoring and enforcement. The Bill would be submitted to Cabinet in March 2012 and Parliament in June 2012.

The Gas Amendment Bill was intended to promote an efficient, competitive and responsive economic infrastructure, inclusive economic growth and to leverage available gas resources. The Bill should be submitted to Cabinet in February 2012 and to Parliament in May 2012. The consultation on this Bill was under way.
Inputs received from implementing agencies had also been incorporated.

Discussion

The Chairperson noted that the Members were aware of the ISMO Bill and Mr Aphane had taken the Committee through the provisions of the Bill. Members had been briefed on the Electricity Regulation Amendment Bill and Energy Regulation Second Amendment Bill. However, more clarity was needed on the Gas Amendment Bill and the New Petroleum Products Bill.

Mr Mkhize replied that the objective of the Gas Amendment Bill was to incorporate changes in the business landscape, particularly different forms of gas for energy and transportation, such as Compressed Natural Gas (CNG) and Liquid Petroleum Gas (LPG). The Bill was also intended to tighten up the enforcement of regulations and site set up and site inspections.

The New Petroleum Products Act had already been amended in 2003, and 2005, and this latest amendments was intended to bring it up to date with the developments in industry, and would strengthen compliance and enforcement.

The meeting was adjourned

Share this page: