2013/4 Energy Budgetary Review and Recommendations Report

Energy

28 October 2014
Chairperson: Mr F Majola (ANC)
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Meeting Summary

The Committee met to consider the Budgetary Review and Recommendation Report (BRRR) on the Department of Energy and its entities, and the Content Advisor took the Members through the findings and recommendations. The key findings included comments on the deficiencies around planning, specifically the integrated energy plan, integrated resource plan, and gas utilisation master plan, as well as certain legislation that was outstanding. Lack of skills, especially for the national electrification programme, was noted, at both national and municipal level. Several observations were made on electricity challenges, and the problems of implementation of the free basic electricity and basic alternative energy policies at municipalities, and the backlog of infrastructure for distribution. The Committee noted that although the Department of Energy spent considerable money on energy efficiency initiatives,more effort was needed, particularly to meet the targets for installation of Solar Water Heaters. Difficulties in linking up the independent power producers to the grid, empowerment of local communities and skills transfer were also commented upon. The nuclear power programme would involve the largest infrastructure, but readiness had to be assured. Members noted the need to fast-track the liquid fuels sector and biofuels strategies and deal with constraints in gas supply. Overall, the oversight capacity in the Department would need to be bolstered, and challenges on project delivery in the State Owned Companies would need to be resolved, and it was recommended that the Department must reassess their funding, whilst specific comments were made on the entities individually. It was noted that the operational context and economy had not been conducive, and the low financial baseline, fragmented legislation and erratic fluctuation of oil prices compromised the Department's work. The recommendations included that the Minister should expedite finalisation of the energy planning policies, and all outstanding legislation, ensuring that fragmented legislation was consolidated and,in particular, that the National Energy Regulator's mandate was comprehensive and robust to allow it to execute its duties.  The Committee also recommended that the Minister must develop strategies to address problems at municipal level, must expedite transformation of the liquid fuels sector, closely monitor developments on shale gas and other oil and gas exploration, ensure that ownerless legacy sites were identified and managed to protect citizens from accidental exposure. Robust mechanisms were needed at the Energy Development Institute, and staffing addressed to convert contracts to permanent placements.

Members raised concerns and agreed to the replacement of some wording, and agreed that sources of information should be indicated. The meeting became more contentious in relation to bullet point 1 on page 20, which referred to the Integrated Resource Plan (IRP). A DA Member asserted that the point was incorrectly reflected; firstly, it was not the IRP, but the updated IRP that was being referred to, and it had not, as the report suggested, "reconfirmed" nuclear but had, on the contrary, recommended, particularly in view of shifting levels of demand, rather recommended a delay in the nuclear programme, with issues around cost of two reactors also being debated. An ANC Member did not agree, and referred the meeting to the President's last State of the Nation address where clear policy directives were given on nuclear energy, and said that this "reconfirmed" further consideration of nuclear in light of the policy. This led to a long debate on whether the SONA was relevant, the content of the revised document, the mandate given at the public hearings. The Chairperson, as a compromise, suggested that "revision" should be substituted for "reconfirmation", but that suggestion did not find favour either. The IFP Member did not feel that any change was needed to the wording. The meeting diverged into debating whether the nuclear plans would be implemented, the public consultation process and reached a divisive point when the ANC accused the DA of merely attempting to delay the issue and suggested that a vote should be taken, which sparked further debate on whether it was correct to attempt to push something through that was not correct, or the democratic right of the parties. The Chairperson, reluctant to put the matter to the vote as he feared it did not augur well for the future work of the Committee, suggested that this point be returned to later, but the majority insisted upon a vote, and voted to make no changes to the wording. The DA members asserted that they could not continue with the process and did not want to adopt a BRRR that was factually incorrect and left the meeting in protest. The remainder of Members adopted the BRRR, with the changes suggested.
 

Meeting report

Committee's Budgetary Review and Recommendation Report 2013-14
The Chairperson noted that Members had received the Budgetary Review and Recommendations Report (BRRR or the report) on the previous day, suggested that the Committee firstly consider page 31, with the findings and recommendations, and then adopt the whole report, page by page.

Mr Pradish Rampergadh, Content Adviser to the Committee, firstly took the Members, as suggested, to page 31 of the document, where the key findings and observations were set out. He summarised that these included comments on:

  • Energy planning: The  Committee found that there were deficiencies specifically regarding key outstanding policies, the integrated energy plan (IEP), integrated resource plans (IRP) , the Gas Utilisation master plan
  • Key legislation was outstanding
  • Lack of skills was apparent, specifically with the National Electrification Programme, and this was experienced at the Department and the Municipalities
  • In regard to electricity, several observations were made. There were challenges regarding electricity supplies, resulting in load shedding, and other challenges with the ‘new build projects’, transmission and distribution of electricity. There was a problem of implementation of the Free Basic Electricity (FBE) and Free Basic Alternative Energy (FBAE) policies at the municipal level, giving rise to problems with the supply to indigent communities. There were challenges regarding the management of the Integrated National Electrification Programme (INEP), especially at the municipal level. The Department of Energy (DoE or the Department) had a backlog with the distribution of electricity infrastructure, to the tune of R68 million, and this was a serious concern for the future.
  • Energy Efficiency: It was noted that DoE spent a substantial amount of money on energy efficiency initiatives but there was still a need for more effort to increase the energy efficiency levels in the country. One of the initiatives used was the Solar Water Heater (SWH) programme, which aimed to ensure that one million systems were installed by 2014. However, only 400 000 units had been installed to date, so it was clear that greater effort was required in that area.
  • Renewable Energy Independent Power Procurement (IPP) Programme: There was a problem of linking up the programme to the transmission grid, empowerment of local communities, and skills transfer
  • Nuclear Power Programme: Mr Rampergadh emphasised that the Nuclear Power programme would be the biggest infrastructure programme for the state. However the observation, with regard to the operation of the programme, was that there had to be State readiness for its operation. The DoE had also looked into aspects of localisation and skills development.
  • Liquid Fuels sector:  the observation was that the transformation of this sector was moving at a very low pace. The Department had mentioned some initiatives to resolve this problem but Members were concerned that the programmes needed to be fast tracked
  • Biofuels: Mr Rampergadh said that the delivery of objectives on the biofuel strategy had been spoken about in the Department of Energy more than once but still needed to be re-emphasised
  • Emphasis was placed on the fact that a gas Utilisation Master Plan was critical for the development of the energy sector and the Portfolio Committee observed that the constraints in terms of gas supply were placing substantial strain on the economy.
  • Overall, the oversight capacity of the of the Department of Energy had to be bolstered, specifically with regard to the Department’s projects and the State Owned Entities to resolve, amongst others, the challenges with project delivery, financial management and supply chain management.
  • It was recommended that the DoE must reassess the funding of State Owned Entities, especially National Nuclear Regulator (NNR) and Nuclear Energy Corporation (NECSA) and the Committee had identified various specific challenges at the State Owned Companies (SOCs) that equally needed to be addressed. The Central Energy Fund (CEF) and its entities had restructuring issues, and these needed to be fast tracked. The Department of Energy was also faced with financial challenges and specific challenges with regard to the supply of feedstock at PetroSA. The Petroleum Agency (PASA) had been transferred to the Department of Mineral Resources but  issues of financial sustainability and retention of key and critical skills still had to be addressed.

He amplied that in regard to NECSA, the key point was its financial stability, as this was necessary to ensure that it could become financially independent of the State. There were specific concerns with regard to contingent liabilities related to decommissioning and decontamination.

The Committee's observations on the National Nuclear Regulator included that it had to have the required skills and resources to perform its oversight function. However, the main area of concern in this area was the ‘ownerless legacy sites’ and the issue of the fragmented regulatory framework with specific reference to category 3 and category 4 radioactive sources normally managed by the Department of Health.

The report noted that the legislative mandate of NERSA had to be reassessed and revised to ensure that it was comprehensive and robust in order to empower NERSA to execute its duties.

The Committee observed that South African National Energy Development Institute (SANEDI) had a problem with certain projects and meeting of deadlines. Another concern was that fact that majority of its staff were on contract.

Mr Rampergadh then moved on to detail the recommendations set out in the report, which included recommendations to the Minister to:

  • expedite the finalisation of the Energy Planning Policies, with specific reference to the Integrated Energy Plan (IEP) and the Integrated Resources Plan (IRP)
  • expedite all outstanding legislation which included the Gas Amendment Bill, the National Nuclear Regulator Amendment Bill, the Electricity Regulation Second Amendment Bill, the Radioactive Management Fund bill, the Nuclear Energy Amendment Bill
  • develop strategies to address the problems experienced at the municipal level in terms of the INEP programme relating to: slow delivery, skills availability, budgeting, and project management, amongst others
  • develop mechanisms and strategies to expedite the transformation of the Liquid Fuels Sector
  • closely monitor, where necessary, direct developments related to shale gas and other oil and gas exploration ventures in and around South Africa
  • ensure that the “ownerless legacy sites” were identified and managed, to protect South Africans from accidental exposure
  • ensure that the fragmented regulatory framework was addressed, in particular to enable the NNR to become empowered to manage category 3 and category 4 radioactive sources which were currently managed by the Department of Health
  • assess the legislative mandate of NERSA and ensure that it was comprehensive and robust, to fully empower NERSA to execute its duties. This would include ensuring that NERSA would be empowered to audit and investigate regulatory related issues at Eskom and the municipalities
  • ensure that SANEDI had a robust plan to ensure that its projects met all the specified deadlines and that mechanisms were in place to convert the Research and Development projects into commercial ventures
  • address the staffing challenges at SANEDI, as the majority of its staff were on contract, with very few permanent staff.

In conclusion, Mr Rampergadh said that the operational context in which the Department of Energy was assessed for the period under review had been unfortunate and less conducive to progress. Compromising factors, such as the low financial baseline upon which the Department was established, fragmented regulatory environment, the absence of properly refined legislation and erratic fluctuation of oil prices globally tended to compromise the work of the Department, and in turn compromised the Department's ability to meet the demand of electricity and energy in the country.

Discussion

The Chairperson asked Members now to consider the report as a whole, and raise questions where necessary, and the Committee would later revert to the sections on the observations and recommendations to consider whether changes were necessary there.

Ms L Makhubele-Mashele (ANC) said that she had a problem with the use of the word "chunk" on page 6 of the document presentation, as it was not formal enough.

The Committee Secretary responded that the particular word could be changed.

The Chairperson suggested that if Ms Makhubele-Mashele was opposed to the use of the language, then it should be replaced, because it was inappropriate for the Committee to use wording that did not reflect what was presented.

Mr M Mackay (DA) wondered whether the phrasing relating to the Department's share ownership and amount spent on the shares on page 13 was correct. The document said that the Department was a 100% shareholder in NECSA, and owned 2 205 shares at R1 value, but the investment into the shares was R2  205 million.

The Chairperson responded that the phraseology on page 13 was correct; this part of the report had just been directly duplicated from the Auditor General’s presentation.  

Ms Makhubele-Mashele recommended that for the sake of consistency  especially on page 16, the report should indicate the source of the information.

The Chairperson agreed that this was a good point, and suggested that this should be done consistently from page 1, to indicate sources for all data, which should eliminate any confusion.

Mr L Greyling (DA) said that the content of page 20, with regard to the Integrated Resource Plan (IRP) drafted for public consultation, specifically the portion dealing with the reconfirmation of nuclear and renewables as supply side solutions to meet environmental and macroeconomic objectives, was incorrect. He said that it was not the revised IRP, but the updated integrated plan and it certainly did not reconfirm any nuclear levels; on the contrary, it had questioned the nuclear programme. He said that the IRP had not been revised, but this issue was to be taken up a later stage. He recommended that the statement be changed to state that the updated integrated resource plan was drafted for public consultation, with major highlights being the reconfirmation of nuclear. He added that this called for a threshold for the price of nuclear, and it was suggested that this should not be done. He said that the plan had specifically called for a delay in the nuclear programme. He emphasised that he could not support the current wording of the report on the reconfirmation of nuclear use, because the integrated plan did not say that.

Ms Makhubele-Mashele said that she did not agree with Mr Greyling, when he stated that it was incorrect to state that the revised integrated plan reconfirmed the nuclear use. In the State of the Nation Address (SONA) of 2014, the President had given a clear policy directive on nuclear energy. She believed that the Integrated Resource Plan was just reconfirming the further consideration of nuclear because that was what the President had directed in the SONA, which did amount to a policy directive. So if Mr Greyling was insisting that reconfirmation of nuclear energy was not what the Integrated Resource Plan, there was a clear policy direction to the reconfirmation of nuclear. She said that the fact that people were opposed to the plan did not mean that the plan would not go ahead. She repeated that the Integrated Resource Plan was just reconfirming the further investigation into nuclear energy. She understood that the DA may state that people were opposed to nuclear use, but the IRP did speak to reconfirming it.

The Chairperson asked the Content Advisor why he had opted for the term "reconfirm" and recommended that another word be found. From the various interactions, he understood the situation with the updated resource plan, and also understood why some Members thought that it was being used as the way to proceed, as Ms Makhubele-Mashele had set out. He emphasised that the purpose of this Budgetary Review and Recommendation Report (BRRR) was to reflect facts that were contained in the reports to the Committee from the Department and entities, and the BRRR must reflect correctly the content that was in the different Departmental reports. He would address the issue regarding the first bullet point at a later stage, because it was a matter of fact. In regard to the updated IRP, this was a subject for debate, because it did not state the same thing as the original resource plan on nuclear. He assured Members that the updated resource plan "would not see the light of day" and requested them to reflect factually on the BRRR which was the subject matter of the meeting.

Mr Greyling said that he did not want the meeting to turn into "political division", but he wanted to speak to the facts. He knew what the President had said in the SONA, but those statements did not change what was in the updated IRP. The meeting needed to look into the contents of the Integrated Resource Plan. That updated plan looked again into the energy demand levels, and in particular revised those energy demand figures down, which meant that it questioned the original IRP, because the demand projection was now lower that what was initially anticipated. This point needed to be added in the BRRR. The updated IRP did not rule out, but certainly did not reconfirm use of nuclear. Instead, it said that there were a couple of issues that needed to be looked into before the nuclear programme was embarked on. The updated IRP recommended that the nuclear programme be delayed, and that a financial feasibility study be conducted. It suggested that if the programme was above a certain price, only two reactors needed to be bought, and if the price was even higher than was earlier anticipated for those two reactors initially anticipated, then the programme needed to be delayed. He thought that it would be a good idea for these  points to be captured in the BRRR, rather than the statement that the updated IRP reconfirmed nuclear use. He had also thought that the updated IRP questioned the original sanctions around nuclear and certain aspects of the original IRP, and this needed to be mentioned. As to whether the updated IRP would see the light of day, he hoped that it would, because it was not based on political decisions and thus not a political document. It was a monitoring exercise which indicated the results of the public consultation on the original IRP, and this needed to be taken into account. He added that there was no purpose of energy monitoring if the consultation was going to be disregarded.

The Chairperson wondered if the Mmbers were speaking to the same issue, and reminded them that the subject matter of this meeting was to focus on the BRRR. He said that the report reflected the contents of the updated IRP, but the Committee needed to find the correct wording for bullet point 1 on page 20 of the BRRR. He was not sure whether the updated resource plan applied to both nuclear and renewable energy; it certainly did apply to nuclear but was not sure about the application to renewables. He recommended that the word "reconfirmation" be substituted by "revision", but, even with the substitution of that word, he was not sure whether it would be correct to add "and renewables". He suggested that this might resolve the issue, and the Committee now needed to find the correct phrase for the budgetary review and recommendation report to reflect the fact that there were changes in the updated IRP.

Mr Mackay thought that for the sake of clarity, the Committee should refer to the full document of the updated integrated plan of 2013. He also recommended that, to assert the facts, there was also a need to indicate that the plan had been released for public consultation and was sent to Parliament in February, before the SONA, and subsequently sent to Cabinet for consideration, as this could clarify the apparent discrepancy on the IRP. Speaking to the Chairperson's point, he felt that the BRRR should not include the phrase "and renewables” because the updated IRP had increased the demand level for renewables. The Department of Energy was more aggressive on renewable energy, and was actually pushing for it and recommending that the country should postpone nuclear. He said that there was widespread confusion in the country on nuclear production, so there was a need to indicate this in the BRRR, to recognise that point.

The Chairperson told Members that their responses were not helping with the problem of the wording for bullet point 1 on page 20.

Ms Makhubele-Mashele requested all Members to abandon political discussions around the issue, also reminding them that the Committee was now tasked with the BRRR, and needed to make input on the wording without clouding this with political positions and other issues. She strongly supported the view to omit "reconfirmation" of nuclear and to use the phrase "highlights the revision of nuclear". If Members read the entire sentence, they would realise that it spoke to what the resource plan was talking about, and she emphasised that the IRP did not only speak to putting nuclear considerations aside but it looked also into how best nuclear could be implemented, if it was going to be feasible, in terms of financing, amongst others. She asked that Members agree on new wording and move on.

Mr J Esterhuizen (IFP) said that he was not an English teacher, but he believed that “reconfirmation” was the correct word to be used in the statement. He believed the statement should be left as it was.

Ms Z Faku (COPE) said that she supported Ms Makhubele-Mashele’s views as long as the statement reflected the production of nuclear energy, and she she did not mind the use of the word “highlights” or “reconfirmation”.

The Chairperson said that he was not quite following the substance of their discussions.

Mr Greyling requested that he give some clarity on the contents of the updated IRP, before Members gave consideration to wording to replace the word "reconfirmation". He said that the updated IRP essentially stated that South Africa needed to delay the nuclear programme while the DoE investigated the other options - solar generation, imported hydro and renewable energy - to determine whether any of these three could prove to be better options than the nuclear programme. The updated IRP also indicated that the demand projections for energy were far lower than originally anticipated. For these reasons, it was argued that there was a need to delay the nuclear programme. The IRP provided guidelines on how to make decisions on the nuclear programme, and set out some guidelines as to how the pricing was going to affect the decision on the nuclear programme, because it had set financial ranges in which it could operate. It was noted that South Africa could only acquire one or two reactors for the project, and if the price of the reactors was higher than originally estimated, the DoE could not be allowed to go ahead with the project. That was the factual content of the updated IRP. If the BRRR attempted to capture anything contrary to this, then he could not support it. He emphasised that the updated IRP did not, as a matter of fact, speak to the "reconfirmation" of nuclear energy. It was putting forward other options that could be considered in place of nuclear, and also gave guidance on what should happen, if in fact the country did go through with the nuclear option, as well as the negotiating price range for the nuclear programme. He emphasised that what he had just stated was not a political view, but the facts, and these facts had to be incorporated in suitable wording in the BRRR.

The Chairperson asked members on what would happen to renewables if the above discussions were to be considered.

Mr Greyling responded that the issue of renewables should be considered as a separate point from that on the reconfirmation of nuclear.

The Chairperson then asked Mr Greyling why he had also objected to the recommended use of the phrase “revision”, since he had strongly insisted that use of the term “reconfirms” was not factual. He wondered why the use of the word “revision” would be difficult. He thought the use of the term “revision” covered the viewpoints of all Members, but if there were still objections, then they must find another suitable word in place of "reconfirms". Whether or not the  nuclear programme was going to happen  was "a battle for another day" but should not be debated in the current meeting; it was merely how the BRRR should capture the fact of the updated IRP, without distorting the factual meaning of that plan.

Mr Esterhuizen said that although he agreed with Mr Greyling's views, the updated resource plan had set out a need to strive for cleaner energy. The sentence in bullet point 1 at page 20 set out the same objective. He thought there was no problem with the sentence if it was read and interpreted as a whole.

The Chairperson said that he understood what Mr Esterhuizen was saying but urged him to find an appropriate word to replace the use of the term "reconfirmation". He did not understand why there was difficulty with "revision". He asked Members if they still had a problem, and received confirmation that they did.

Mr Mackay proposed that the easiest way to resolve the issue was simply to pull out the actual wording of the updated IRP of 2013, and insert that into the BRRR. That would save the Committee the trouble of trying to think of appropriate words. He felt that the word "revise" was too benign, pointing out that the subject was far from benign and uncontested. In all good conscience, he could not in good conscience agree to the use of the word "revision", pointing out that this could mean upwards or downwards changes in regard to nuclear, and that the word "revision" did not give any indication of the substantive content of the updated IRP, which had actually recommended the delay of nuclear plans. "Revision" was an amorphous word that did not set out clearly the meaning of what was being captured. The updated IRP had clearly stated that the nuclear plans should be "postponed" and this needed to be reflected in the BRRR, and whilst he wanted to support the BRRR, he could not do so if there was not absolute clarity - that was how strongly he and the other DA Member felt about the issue. This had to do with accurately reflecting the core substantive meaning of the contents of the updated IRP, a Departmental report. He added he was not sure why the meeting was having so much trouble agreeing to reflect the substantive findings of the updated IRP.

The Chairperson said that he felt threatened by Mr Mackay’s statements.

Ms Makhubele-Mashele said that she believed that the members of the DA wanted to delay the meeting by these interactions, because they wanted to put out a particular position which they had on nuclear energy; she was not arguing with their position. However, she pointed out that the updated IRP contained many provisions that spoke to nuclear, and for the DA to be selective and say that it proposed for the delay of nuclear, without making specific mention also of the other points about nuclear was very problematic. The Chairperson had correctly pointed out that the debate on nuclear was for another day. To try to move forward, she now formally proposed the use of the word "revision", and if other Members did not agree, then she suggested that the matter be put to the vote. She said that Members had a right not to agree with the BRRR, but there were six ANC Members present, who could push for the adoption of the content of the BRRR. These back-and-forth discussions were, to her mind, delaying tactics. At the end of the day, the ANC had a mandate from the electorate, and if they decided not to change the BRRR, it would vote to accept the BRRR - namely, to substitute "revision" for "reconfirmation". She did not agree with the DA suggestions to incorporate the other issues in the BRRR.

Ms Faku said that the meeting had tried to be flexible, and to accommodate the Members from the DA, within the spirit of democracy and the Constitution, but the ANC was not going to allow the DA to dictate the point, if it persisted in taking a hard line and being difficult. The ANC Members did not want to be pushed into voting. However, they were also not going to allow themselves to be dictated to, and wanted to move on, not be delayed any further, and would not agree to deleting the references to the policy position of government, which was to support nuclear, as addressed in the SONA and government documents.  

Mr M Matlala (ANC) suggested a vote for the two positions of contention—the DA’s position and the position of the IFP. He said that he would support the position of the IFP Member, to leave the sentence as it was currently. He agreed that at this stage, a vote was needed because Members failed to agree. It was not profitable for the Members to spend two hours discussing wording, when there were other urgent matters that needed to be addressed.

The Chairperson quipped that these interactions were similar to two bulls confronting each other. The intention behind the discussion was to try correctly to capture the spirit of the updated IRP in the BRRR, but if no consensus was reached, then Members would fall back to their original positions. He suggested that for the moment, Members pass on this point, and continue with the rest of the document, reverting later after resolving other issues.

Mr Mackay said that he wanted to clarify his views to the Committee, because it seemed like there was confusion with the DA position. He said that the position put across was not "a DA position". The DA did not run the Department of Energy, and did not take the Integrated Resource Plan for public consultation, where people went through the process of participation and made inputs and comments on the contents of the document. When the ANC Members spoke of their mandate from the people, they must remember also the people who went to the public hearings as they had discussed the document with the Department of Energy and Government and made inputs on it,which was not what the DA had done. He stressed that the updated IRP was a document from the DOE, when Mr Zuma was President, essentially therefore an ANC-led government document.

Ms Faku raised a point of order, saying that the ANC would not allow the President to be disrespected as he should be referred to as "the President", not "Jacob Zuma".

Mr Mackay retracted his statement and said he wished to refer to him as "Honorable Jacob Zuma".

The Chairperson reminded Mr Mackay and the other members of the Committee that the formal rules for Committee meetings still applied to the current meeting.

Mr Mackay responded that he had been confused by previous interactions where the members of the ANC were referring to the Chairperson as "Comrade Chair", which had put him in doubt whether the formalities for normal proceedings were still applicable to the current meeting.

Mr Mackay repeated that what he and his DA colleague were trying to emphasise was not a DA position, the updated IRP was not a DA document and the DA had nothing to do with writing it nor updating it; it was a factual document from the Department of Energy. The document had been produced and set out many different positions, and even if the ANC voted to say that the document said something different, that would not change what was actually already in the document. He reiterated that the document had nothing to do with the DA. It was a position paper from the previous ANC government, created by the DoE after public consultation; it was those people who gave the mandate, via the previous Portfolio Committee. The inaccuracy of the BRRR had to be corrected. He wanted the true meaning of the updated IRP to be reflected,in a single-line sentence, in the BRRR. Whether or not the ANC Members wanted this was their choice. He asked Members to remember that there could be "tyranny by the majority" and added that at the end of the day, whatever was in the BRRR, the content of the IRP would not be altered, and could not be changed if the ANC did not like what it said, certainly not by voting, no matter what mandate the ANC claimed to hold. He asked the Chairperson, as a reasonable and logical man, to prevail upon his colleagues to allow the substantive meaning of the updated IRP to be reflected in the BRRR.

Mr R Mavunda (ANC) said that these discussions suggested to him that Members were running out of ideas on how to deal with the matters, and the manner of interrogation did not help. from all the above discussions, he thought that the members were running out of ideas on how to deal with the matters at hand and this would not assist the manner in which this issue was being interrogated. In the course of a debate, it was for one party to persuade the other to an understanding of the point being made, and not for one party to impose his or her views on another. The DA had failed to make the ANC understand their position, and he supported the Chairperson’s suggestions on suspending the discussion for a later stage, because a lot of time had been wasted and the DA seemingly was enjoying the debate and not wanting to move on. In such a case, voting was part of the democratic process, and the ANC was willing to do that, it had come to power through votes and when debates were getting nowhere and people were trying to impose their positions, the ANC would revert to the vote. He did not think the changes proposed by the DA would do any justice and that although the DA was pushing for a rewriting of the BRRR, he did not believe the Committee had the capacity to rewrite.

Ms Makhubele-Mashele reminded the Committee again that no amount of rhetoric would change the fact that the Committee was dealing with the BRRR, and the recommendations needed to speak to the adjustments needed to the budget. Some Members were advancing challenges that essentially had to do with the legislation and the updated IRP of the DoE. There was a 2010 IRP, and the 2013 updated IRP. The problem was that the DA Members had highlighted some parts of the updated IRP as if it was the whole intention, and wanted these portions to be reflected in the BRRR. The updated IRP did not only speak to delaying nuclear but also spoke to "a shopping list" of alternative to address the energy demand levels, which equally needed to be represented in the BRRR, but there was unwillingness to do this. She agreed with Mr Esterhuizen, that the objective of the report was to produce clean energy, but this objective equally spoke to renewable energy, which she believed the IRP also looked into. The Committee was arguing over adoption of the word "reconfirmation" to set out the objective of the update IRP. Whether or not Members wanted to acknowledge nuclear as an option, it was not going to "run away"; it was one of the many forms of energy sources that the Committee and the Department of Energy was going to look into. She was surprised that nobody had objected to the nuclear production in Koeberg. She asked that Members now move away from this point and go to address other areas of the document. She did not agree with the Chairperson's proposal to revert to this after considering other issues, and did not believe that there was time to address the finer points of English, but would be comfortable with retaining the word "reconfirmation". She also wanted to make the point that MPs were elected by their constituencies, and where there was an unresolved matter on the table, it was not incorrect to resort to a vote, which, at the end of the day, would impose the decision of the majority. She proposed that the Committee take a vote, to help conclude the matter.

Mr Mackay raised a point of order, that Ms Makhubele-Mashele had referred to the Chairperson as "Comrade Chair". He requested that the Committee comply with the formal language of the Committee meetings. Ms Makhubele-Mashele had ignored this point of order and again insisted on referring to the Chairperson as "Comrade Chair". Mr Mackay explicitly asked the Chairperson to rule on the matter.

Ms Makhubele-Mashele conceded that she would refer to "Chairperson", according to the formal language for Committee meetings.

Ms Faku said that she agreed with Ms Makhubele-Mashele, and did not see how postponing the matter would resolve it; Members would still not agree. Another way of resolving it was to note that the DA did not agree, and move on.

The Chairperson requested Members to be clear on what they wanted to decide. It seemed that the ANC members were going to support Mr Esterhuizen’s proposal to retain the current wording, not to move to the word that the Chairperson suggested, but the DA needed to clearly spell out what it wanted, so that a decision could be made on the proposals.

Mr Esterhuizen said that the IRP, which was drafted after the February public participation process, had actually mentioned that the position on nuclear "could" change - not "should" or "must" change. The President, in the SONA, had said that nuclear "would" be implemented as a cleaner energy alternative. He stood by the statement that "reconfirmation" should be used in the BRRR.

Mr Greyling said that whatever the President had said in the SONA was irrelevant to the BRRR, because the issue in contention was not the SONA, but the updated IRP, and everything quoted after that was drafted was irrelevant. The DA had made its counter-proposal on the statement that he believed would be an accurate reflection of the contents of the updated IRP.

The Chairperson said that he needed the record to reflect absolutely accurately on his next decisions. He formally asked the Members for their positions on bullet 1, page 20, of the BRRR, and would ask for a vote on this issue so that Members could move on to the rest of the document.

Mr Greyling said he had now drafted another statement which thought would be acceptable to all Members. The BRRR needed to read that "the updated IRP was drafted for public consultation, with major highlights being the revision downwards of the country’s energy demand projections and delay of the nuclear programme".  He requested that Members agree to the insertion of that sentence.

Ms Makhubele-Mashele strongly opposed Mr Greyling's proposal, and said that she still supported the existing sentence. She urged other opposition parties not to support Mr Greyling's proposal.

The Chairperson cautioned the Members, saying that their actions could have serious implications on how the Committee did its work in the future. He had been trying to avoid a voting process but was left with no choice. He reminded the Members of the two positions:

- the current statement  on "the reconfirmation of nuclear and renewables as supply side solutions to meet environmental and macroeconomic development objectives"
- The sentence proposed by Mr Greyling.

The Chairperson requested Members to vote by show of hands, and noted that the four ANC members present and Mr Esterhuizen voted in favor of the first position. This was therefore adopted.

Mr Greyling said that the DA had stated its position, which was a factual statement, not a political one. He believed that the decision by this vote was political, because the updated IRP did not in fact "reconfirm" nuclear, but proposed the delay of the nuclear program. It was the prerogative of the majority party to use its majority to state that the plan said something which in fact it did not. However, they must then recognise that this was a political, not a factual situation, as opposed to his statement, which had been factual. The ruling party had used their majority to veto the factual statement.

Ms Makhubele-Mashele wanted to note a correction; she said that the ANC had used their minds, not their majority, to make the decision.

Mr Greyling responded that Ms Makhubele-Mashele’s views were not factually correct.

The Chairperson said that he understood perfectly what Mr Greyling was suggesting, but could not rule against the outcome of the vote. He summarised that, by majority decision, bullet point 1 on page 20 would remain as originally drafted.

Mr Mackay said that he and his colleague from the DA did not agree with trying to re-write documents that the ANC did not agree with. At this point, therefore, the DA intended to withdraw from the meeting and did not agree to vote in favour of,  or against,  the BRRR.

The withdrawal process caused a little commotion in the meeting. The Chairperson called for order and asked the meeting to continue.

The Chairperson requested clarity on the issue regarding the "hiving-off" of the entities of CEF" and reminded Members that they should comment on the findings and observations set out in the Report.

Mr Rampergadh responded that this referred to the moving of PASA to the Department of Mineral Resources, and African Exploration Mining and Finance Corporation (AEMFC) was also still in the process of moving out.

Ms Makhubele-Mashele asked about recommendation 22, and requested whether it was proper for the Committee to say that, with regard to the AEMFC, the Minister should address the issue of coal contracts at the entity, to ensure the sustainability of the business unit. This suggested that the Minister was responsible for the bidding process and ensured that contracts were given to the entity, which was not correct. The Minister, as the executive authority, was not involved in the intricacies of bidding and contracts. She suggested that the sentence be rephrased to state that the Minister should look into the issue of AEMFC operating optimally in its supply and demand. If the sentence was revised to talk about the supply and the demand sides, this meant that the issues would be taken care of, rather than suggesting that the Minister must take responsibility for tenders and contracts.

Ms Makhubele-Mashele also questioned bullet number 4 of the Conclusion, which currently stated that economic growth had been severely compromised. She enquired whether, in the context of the recommendations by this Committee, it was proper to say that economic growth had been severely compromised, because this meant that the Department was not able to meet the demand of what the country needed, for the economy to grow to its full potential. A statement that the economy had been "severely compromised" was not factual; it did not speak to the whole picture. She added that in the spirit of putting forward matters that were assisting the advancement of the economic growth of the country, it was not necessary to mention any compromise. The economy had received a shock from external circumstances, and there was now projected positive growth. She suggested that this sentence be removed.

Mr Mavunda said that before doing that, perhaps Members should be informed about what had brought the economic situation to its current level, and factors contributing, in order to decide whether the statement was accurate.

Ms Faku said that she agreed with the proposal of Ms Makhubele-Mashele, and that economic issues were larger than the Committee's scope.

Mr Esterhuizen proposed that the sentence to re-worded to delete any reference to “severely compromised”.

Ms Makhubele-Mashele proposed the adoption of the report, saying that she agreed with the content, but the corrections agreed upon would need to be incorporated.

Mr Esterhuizen seconded the proposal and the remaining Members agreed with the adoption.

The Chairperson noted that the events during this meeting had been unusual, and he was not sure of the implications for the future.

The meeting was adjourned.

 

 

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