Committee Report on Energy Budget

Energy

03 May 2016
Chairperson: Mr F Majola (ANC)
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Meeting Summary

The Committee considered the Draft Report of the Portfolio Committee on Energy on the Budget Vote No 26 of the Department of Energy

The Committee effected grammatical and spelling changes to the Draft Report where members deemed it necessary. Members engaged in a lengthy discussion on whether the wording for Committee Recommendation 2 was correct and on how it should be worded. Committee Recommendation 2 as contained in the Draft Report was as follows: “The Minister of Energy, within the current financial year without prejudicing the interests of the country, present the key nuclear procurement documentation such as the Integrated Nuclear Infrastructure Review, Finance Options, Models and Solutions for the nuclear build programme and Economic Impact of Localisation of the Nuclear Programme to the PCE and update the Committee on a regular basis regarding the nuclear procurement process”. No agreement could be reached on what was considered the correct wording for the recommendation. In the end Committee Recommendation 2 was amended and read as, “The Minister of Energy, within the current financial year without prejudicing the interests of the country, present the key nuclear procurement documentation including the Integrated Nuclear Infrastructure Review, Finance Options, Models and Solutions for the nuclear build programme and Economic Impact of Localisation of the Nuclear Programme and other relevant documentation to the PCE and update the Committee on a regular basis regarding the nuclear procurement process”.  The DA did not accept the amendment.

The Draft Report was nevertheless adopted as amended with the DA not supporting its adoption. 

Meeting report

Draft Report of the Portfolio Committee on Energy on the Budget Vote No 26 of the Department of Energy
The Chairperson tabled the Draft Report for consideration. He said the Committee had in its previous meeting deliberated upon the Draft Report and had made necessary changes and additions where it was deemed appropriate. The changes and additions made by Members had been incorporated into the Draft Report that was before the Committee for consideration. He encouraged members to comment on the Draft Report that was before the Committee.

Mr J Esterhuizen (IFP) was concerned about the R7.5bn outstanding debt of Eskom and the fact that Eskom reported to another department and not the Department of Energy. The Committee’s mandate was in relation to the Department of Energy. Another concern raised was the delays attached to the Medupi Power Station. The Medupi Power Station was supposed to have been completed years ago. How did the Department of Energy intend to take Eskom to task to overcome its energy issues?

Ms Z Faku (ANC) referred to page 13 of the Draft Report and under the section on the Biofuels Strategy suggested that the third bullet be deleted.

Mr M Mackay (DA) asked Ms Faku what her reasoning was for suggesting the deletion on page 13. He was concerned about the fact that a Biofuels strategy necessitated an abundance of water, which SA at present did not have.

Ms T Mahambehlala (ANC) referred to Committee Recommendation 9 on page 17 and suggested that the phrase “known as Project Apollo” be deleted. It was correct that SA had a shortage of water and that further research was needed on the Biofuels Strategy.

The Chairperson agreed that further research on the Biofuels Strategy was needed.

The Committee agreed that suggestion “known as Project Apollo” be deleted.

Ms Mahambehlala, also on page 13, suggested an amendment to Committee Recommendation 22. She asked that the word, “Intensify” be deleted and be replaced by the word, “Expedite”.

The Committee also agreed to the suggestion that “Intensify” be replaced by “Expedite” on page 13.

Mr Mackay, on page 16, referred to Committee Recommendation 2 and said the wording needed to be tightened up. He pointed out that the same recommendation had been made in the Committee’s Budgetary Review Recommendations Report (BRRR) of 2015. The Committee also needed to request procurement documentation from other government departments like the Department of Trade and Industry and National Treasury on nuclear. Perhaps timelines could also be attached to the request. The Committee had already requested such documentation in its BRRR in 2015.

Committee Recommendation 2 as contained in the Draft Report read as follows: “The Minister of Energy, within the current financial year without prejudicing the interests of the country, present the key nuclear procurement documentation such as the Integrated Nuclear Infrastructure Review, Finance Options, Models and Solutions for the nuclear build programme and Economic Impact of Localisation of the Nuclear Programme to the PCE and update the Committee on a regular basis regarding the nuclear procurement process”. 

Ms Mahambehlala did not agree with Mr Mackay’s suggestion and said that Committee Recommendation 2 was correct as it was and that there was no need to edit it. There were many elements to procurement processes. She noted that the recommendation could not state that all procurement documents should be furnished to the Committee. National interests had to be taken into consideration. The documents highlighted in Committee Recommendation 2 were those that should be provided to the Committee.

Ms Faku agreed with Ms Mahambehlala that Committee Recommendation 2 should remain as it was.

Mr Mackay felt that the Committee had to push for greater transparency on the nuclear procurement process. The Executive maintained that it was fully transparent yet the Committee in its two years of existence was yet to see a single procurement document. Public hearings should also be held forthwith and that the recommendation should say something about it. Committee Recommendation 2 could be reworded in such a way that it would not be detrimental to SA and would be acceptable to the majority party.

The Chairperson urged members to find a solution to Committee Recommendation 2 that was acceptable to all. Even though public hearings would take place it could not be included in the Recommendation. The Department of Energy needed to decide when public hearings should take place.

Mr Mahambehlala said that energy should form part of state security and should also spearhead economic growth in SA.

Mr Mackay was sure that the Committee could find a solution to Committee Recommendation 2. In September 2015 already the Committee was aware of the list of documents mentioned in the Recommendation. He felt that there were additional documents that were not listed in the Recommendation. The list was not an exhaustive list. He would like to know what procurement documents there were. He furthermore felt that there was no reason why procurement documents could not be captured in the Committee’s Draft Report, as they would become public documents in any case. The Department of Energy should table the procurement documents in Parliament for the Committee’s benefit. The Committee needed to know what the documents were procuring and to be provided with the documents listed in the Recommendation as well as additional procurement documents that had emerged since October 2015. He was confident that Members would come to a solution on Committee Recommendation 2. There was a holistic process on procurement. There were thus various documents that the Department of Energy needed to table in Parliament.

The Chairperson asked why members were quibbling about the wording of Committee Recommendation 2.

Mr Esterhuizen responded that the issue of nuclear power and the transparency of its procurement was something that affected the whole of SA. The Committee needed to be kept informed about issues that affected the whole of SA.

The Chairperson stated that the Committee was not against the idea of Members having access to documents. What was the procurement document that Mr Mackay was referring to?

Mr Mackay reacted that if the Chairperson and the Committee was not aware of what documents were out there then how would the broader public know. The Committee needed to be provided with an exhaustive list of documentation.

Mr Esterhuizen agreed with what Mr Mackay was saying.

The Chairperson responded that no one was objecting to the transparency of the process. He asked whether there was a procurement document. Referring to Committee Recommendation 2 he suggested that in line 2, the words, “such as” be deleted and be replaced by the word “including”. In line 3 after the word, “Programme” he suggested adding the words, “and other relevant documentation”.

Ms Faku found the suggestion by the Chairperson acceptable and suggested that the Committee adopt the Draft Report as amended.

Mr Mackay agreed with the Chairperson’s suggested wording but said that the Committee needed to see the amendment in writing. Members could not move for adoption of the Draft Report if the amendment was not captured in the Draft Report.

Committee Support Staff captured all the amendments made by members including the one made by the Chairperson into the Draft Report.

The Chairperson read Committee Recommendation 2 inclusive of changes out aloud to the Committee.
 
Committee Recommendation 2 now read as follows: “The Minister of Energy, within the current financial year without prejudicing the interests of the country, present the key nuclear procurement documentation including the Integrated Nuclear Infrastructure Review, Finance Options, Models and Solutions for the nuclear build programme and Economic Impact of Localisation of the Nuclear Programme and other relevant documentation to the PCE and update the Committee on a regular basis regarding the nuclear procurement process”. 

Mr Mackay in reference to the changes asked who determined relevance. The Minister of Energy needed to make documents available to the Committee whereupon the Committee would determine the relevance of the documents provided.

The Chairperson said the Committee would decide what documents were relevant and would call for them. The Committee would ensure that no relevant documents were left out.

Ms Mahambehlala pointed out that the Committee could not discuss things that it did not know about. The Committee was not aware of what the DTI was dealing with. Members had already deliberated the issue under discussion at a previous meeting. She suggested that the Committee Secretary, Mr Arico Kotze provide members with the relevant set of minutes.

Mr Mackay stated that if Committee Recommendation 2 were fixed, as it should be, then there would be agreement on the Draft Report by members. He said that if there were no agreement on Committee Recommendation 2 then minority parties in the Committee would stand up and not agree to the Draft Report.

The Chairperson, addressing Mr Mackay, said the substance of what he had proposed was incorporated into Committee Recommendation 2.

Mr M Matlala (ANC) seconded Ms Faku’s suggestion to adopt the Draft Report.

Mr Mackay said if the Committee adopted the Draft Report the way it currently stood then the Democratic Alliance did not support its adoption.

Mr Esterhuizen stressed that if there were no transparency then the Committee had failed.

The Committee adopted the Draft Report as amended.

The Chairperson noted that the Committee had made the changes to the Draft Report as had been requested by members. The Budget Vote debate would take place on 11 May 2016.

The meeting was adjourned.


 

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