Hansard: NA: Unrevised Hansard
House: National Assembly
Date of Meeting: 20 Mar 2024
Summary
No summary available.
Minutes
UNREVISED HANSARD
NATIONAL ASSEMBLY
WEDNESDAY, 20 MARCH 2024
PROCEEDINGS OF HYBRID NATIONAL ASSEMBLY
Watch video here: Plenary
The House met at 15:00.
The House Chairperson, Ms M G Boroto, took the Chair and requested members to observe a moment of silence for prayers or meditation.
The HOUSE CHAIRPERSON (Ms M G Boroto): The only item on today’s Order Paper is questions addressed to Ministers in Cluster 4 - Economics. There are four supplementary questions on each question. Parties have given an indication of which question their members wish to pose a supplementary question. Adequate notice was given to parties for this purpose. This was done to facilitate participation of members who are connecting to the sitting through the virtual platform.
Members who will pose supplementary questions will be recognised by the presiding officer. In allocating opportunities for supplementary questions, the principle of fairness, among others, has been applied. If a member who is supposed to ask a supplementary question through the virtual platform is unable to do so due to technological difficulties, the party Whip on duty will be allowed to ask the question on behalf of their member. When all supplementary questions have been answered by the executive, we will proceed to the next question on the Question Paper. Before I proceed, all the Ministers are in the House except for the Minister of Agriculture, Land Reform and Rural Development who has asked permission to present from the virtual platform.
The first question today is the question asked by ... [Interjections.] ... the hon Mileham. I am not sure if I pronounced it correctly. Natasha wants to kill me. Hon Natasha wants to kill me. Mileham, okay. Thank you for protecting that. The first question is asked by the hon Mileham to the Minister of Mineral Resources and Energy. Previously, when we did this, because of these microphones and some of the files that the Ministers are using in responding in writing, I had asked Ministers to take the podium during your four questions and then the next one will come. And then there is a seat here. As we proceed, you are able to sit and listen to the question. Because sometimes you are not audible as you hold your file on your seat. So will we invite Minister Mantashe to take the podium as he responds to Question 193 asked by the hon Mileham. Thank you.
Questions – Cluster 4: Economics.
Question 193:
The MINISTER OF MINERAL RESOURCES AND ENERGY: Thank you, hon Chairperson, hon members in the House. The question of cost of energy per hour in terms of International Energy Agency, cost is protected at in terms of the 2020 edition. The levelised cost of electricity of nuclear projects ranges from US$27,41 MW per hour to US$61,16 MW per hour, that means the ranges is from R0,49 to R1,10 in South African terms, at 83% discount rate. These are 2020 figures, assuming the rand to dollar exchange is R18 per US$ as at that time. So, if that exchange rate fluctuates, the price will fluctuate in terms of the estimate. The actual cost of South Africa’s nuclear new build programme will be an outcome of competitive bidding process in line with the value for money principles. The reason we issue request for proposal for any project of this nature is because we don’t want to assume and set prices, we want to test the market and the market should respond to that question. Thank
you very much.
The HOUSE CHAIRPERSON (Ms M G Boroto): Thank you very much, hon Minister. Hon Mileham?
Mr K J MILEHAM: Thank you, House Chairperson. You can pronounce it like Malema but without the “a” that’s in it. And I’m much friendlier. Minister, we’ve had 17 years of load shedding ....
Ms O M C MAOTWE: Wena [You] Mileham, you must wait, man.
The HOUSE CHAIRPERSON (Ms M G Boroto): No. Hon Maotwe, we don’t do that, please. Don’t repeat that, you’ll be removed from the platform. Thank you. Proceed, hon Mileham.
Mr K J MILEHAM: Thank you, House Chair. House Chair, we've had
...
Dr M Q NDLOZI: Okay, Hon Chair, can we call a point of order then.
The HOUSE CHAIRPERSON (Ms M G Boroto): Hon Ndlozi, you have a
gadget with you and your hand is not up. What you’re doing is the same thing that I’m talking to you about. Please don’t do that. [Interjections.] You can raise your hand and I am not going ...
Dr M Q NDLOZI: Okay, I’ve raised it. I’ve raised it.
The HOUSE CHAIRPERSON (Ms M G Boroto): Okay, what is your point of order?
Dr M Q NDLOZI: The implication of the speaker, and I thought, as the Chairperson you would protect hon members so that we don’t have to call unnecessary point of orders. The implication of the speaker is that the hon Malema is not a friendly person and that is completely out of order. If we can call him “Mayhem”, I’m sure he will not be appreciating that. So, you must call him to order. Everybody in the House is honourable - end of story. Thank you.
The HOUSE CHAIRPERSON (Ms M G Boroto): Okay. Thank you. Okay, I hear you. Don’t do that again, hon Mileham. Proceed.
Mr K J MILEHAM: I won’t do that, Chair. I am friendly. I am friendly. What can I say?
The HOUSE CHAIRPERSON (Ms M G Boroto): Okay, proceed.
Mr K J MILEHAM: Minister, we’ve had 17 years of load shedding which have severely constrained South Africa’s economy.
Various reports and analysis have indicated that we need new generation capacity now, not in 10-years’ time. We need new transmission infrastructure and that the latest cost estimates for that is more than R390 billion - more than double what it was in December 2022. We all know that the Medupi and Kusile projects ran years overschedule and multiple billions of rands over budget because of corruption and mismanagement by the ANC. Do we honestly expect an ANC government to do better with the nuclear new build? Minister, my question is this: “Would you agree that a nuclear new build is a long-term project that will not solve load shedding in under 10 years and that the costs associated with nuclear, including the incremental transmission infrastructure that will be required for the offtake of nuclear power, do not make the best option for alleviating South Africa’s immediate electricity crisis, especially under an ANC government?
The MINISTER OF MINERAL RESOURCES AND ENERGY: I don’t know the
“under the ANC government” part. My assumption is that any problem is a problem of the country, and we must resolve it. As a shadow minister of the DA, you are not a spectator, you are a participant. That’s my assumption, unless you see yourself as an opponent. I see you as a participant. Now, in
17 years of load shedding, one of the things that you force us to do every time we talk about this, is to accept that the construction of Medupi, Kusile and Ingula were delayed. Because when it was declared that the oversupply of electricity was going to be exhausted by 2007, everybody who depended on the private sector to invest on electricity generation delayed the project and started these projects much later, in a rush and a lot of mistakes happened, including design problems. And if you deny that you will be actually fishing for problems. Following that with Medupi and Kusile
... [Interjection.] ... and I’m sure Minister Ramokgopa will answer this question and complete it. I am just putting an introduction to it. The reality of the matter is that we have authorised a number of renewables over the period - a number of them. And according to me, I can tell you that confidently today, renewables on their own are not going to resolve load shedding because of the intermittent nature of them. They need
a partner with base load. Therefore, coal, nuclear and gas are appropriate partners, if we are going to resolve load shedding and energy security in the country.
The HOUSE CHAIRPERSON (Ms M G Boroto): Thank you. The next follow-up question will be asked by the hon Mahlaule.
Mr M G MAHLAULE: Thank you very much, Chairperson. Minister, in what ways does the nuclear new build programme minimise the financial stability risks to ensure that independent power producers, IPPs, in nuclear make reasonable returns on their investment? What are some of the factors that make it difficult to procure nuclear energy from IPPs at a price that does not exceed Eskom the standard tariffs.
The MINISTER OF MINERAL RESOURCES AND ENERGY: If I answer that question in the definite, Ntate Mahlaule, I will be thumbsucking. That is why I referred you to something called request for proposal. Once we issue the request for proposal, then we’ll have tested the market. Once we have tested the market we will know the appetite of the market for nuclear build programme, only then can we answer your question completely. Because the reality of the matter is that at this
point in time, our experience is that nuclear is the most efficient generator and cost-effective generator of energy, today, if you look at Koeberg. It is the most cost-effective and the most efficient. It is a little bit stiff at commissioning and at decommissioning, but when it is operational, the costs are low. It gives us the lowest cost of electricity. For example, I can tell you that it gives us just over R0,40 per unit, when actually our renewables, bid window 1 gives us about R6 per unit, bid window two, about R3 per unit, bid window 3, gives us R2 per unit and the more reasonable one, which is R110 of bid window 4, bid window 5 went down, many of those bidders didn’t finish and get to financial close because in an effort to accelerate demand for renewables, they put the price very low. They couldn’t risk the financial close. So, my suggestion is that, as we did with energy problems, we must be reasonable. We must do what should be done and not try to exaggerate any aspects of it. Thank you very much.
Ms O M C MAOTWE: Thank you very much, Chair. Minister, given the energy per kilowatt power and some estimation of cost per kilowatt, which you tried to explain earlier on - which you say you have the figure as at 2020 - now in 2024, just so you
can wake up. We can all agree that nuclear programme will be amongst the cheapest sources of energy in comparison to other sources. However, Minister, can you also agree that such an addition will be meaningless if we continue to pay the kinds of cost per kilowatts we currently pay for this renewable energy through independent power producers? And I am asking this because in 2019, Minister, you and the Minister of Public Enterprise, who is proceeding with privatisation of Eskom for greed, said you are going to renegotiate those rates and you never came back to us with the report. To this day, you still don’t have the figure yourself standing there, as you presented earlier on. So, what is the cost and what is the implication of this cost on ordinary people of South Africa?
The MINISTER OF MINERAL RESOURCES AND ENERGY: Hon Maotwe is stating truth that does not exist. We never came to this House and promised privatisation of Eskom. We never did that. We never did that and we will never do that. I can confirm that. I will never do that. Even the Electricity Amendment Bill, which talks about the establishment of the transmission company it’s emphasising that it is a state-owned company. It is following the Dutch model, which actually is a wheeler and the trader of electricity and therefore create a market of the multiple sources of electric generation. So, if the hon Maotwe interprets that as privatisation, that is her interpretation. She must not state that as an issue that I said in the House because that truth does not exist. Enkosi [Thank you.]
The HOUSE CHAIRPERSON (Ms M G Boroto): Thank you, hon. Hon Zondo?
Mr N SINGH: Hon Chairperson, hon Zondo is not available because of technical difficulties. Hon Minister, considering that your department is the designated procuring agency for the nuclear new build programme, what safeguards have you put in place to ensure that either the request for proposals which you referred to or the tendering procedure will be fair, equitable, transparent, competitive and cost-effective? Thank you.
The MINISTER OF MINERAL RESOURCES AND ENERGY: Thank you very much, hon Chairperson and hon members. Request for proposal in itself ensures transparency, ensures fairness and it ensures competitiveness because it is an open request for proposal and various bidders come to the fore and put their proposals and they are assessed by a panel that will assess them. I can assure you that section 34 which was issued by the Minister of Electricity in terms of the proclamation of the President – I am giving this to those who take us to court – that gave the Minister of Electricity the right to issue the section 34 for nuclear. Because the National Energy Regulator of South Africa, Nersa, has concurred with that section 34, we will issue the request for proposal and that will assess all those criteria. The reason will issue it is to assess those criteria in a transparent way rather than take a decision in a corner and give it to some preferred bidder of our liking. Thank you.
The HOUSE CHAIRPERSON (Ms M G Boroto): Thank you. As we allow you to go back to your seat and proceed with the Minister of Finance ... I am not forcing you, hon Minister, but I think it’s much better to be here on this podium for audibility.
Yes. The question that you are going deal with now is Question 201 asked by the hon Manyi to the Minister of Finance. The hon the Minister?
Question 201:
The MINISTER OF FINANCE: House Chair, the Prudential Authority, PA, is afforded certain powers in terms of section
81 to 84 of the Banks Act of 1990 to control the activities of unregistered persons. These activities are, however, confined to illegal deposit taking only. Following the expiry of Ithala as an exemption, the Prudential Authority has appointed the Repayments Administrator to ensure that the deposit of funds is safeguarded. In terms of the provision of section 1 subsections 1© of the Banks Act, the Minister is required to concur to the issuance of exemption notice by the Prudential Authority. Mark that, I don’t issue exemption, I concur. As such, the Minister does not have the authority to see the issued exemption notices.
The issuance of exemption notice is a regulatory function that is performed by the Prudential Authority as an independent regulatory authority. In this respect, the Minister is not empowered by law to interfere in the operational decisions of independent regulatory bodies. Notwithstanding the above, the National Treasury has been co-ordinating closely with the Prudential Authority and other relevant regulators to ensure that depositors are safeguarded. Ithala functions through the promulgation of the KwaZulu-Natal Development Finance Corporation Act of 2030 under the oversight of the board, and it reports to the Provincial Department of Economic Development, Tourism and Environmental Affairs. The strategy
and sustainability of Ithala is therefore, underline that, directed by the board under the oversight of the KwaZulu-Natal Provincial Government. The National Treasury has, however, developed a tier banking system that allow banks like Ithala to be fully licensed through other frameworks. I thank you.
Ms K N F HLONYANE: House Chair, I will take it.
The HOUSE CHAIRPERSON (Ms M G Boroto): Hon Manyi, you may proceed. Hon Hlonyane wanted to take the question on your behalf, but if you allow it, you can proceed.
Mr M MANYI: Minister, noting that section 12 of the Banks Act requires a company to be either a publicly-owned company or state-owned company on condition that it is a national state- owned company for it to be eligible for banking license, noting that you’ve already said you haven’t got this and that power, but at least you got a power to amend the Act, would you agree to sponsor an amendment of section 10 of the Financial Matters Amendment Act, so that the word national or that condition of national is removed from state-owned company definition? This would immediately remove the impediment for
Ithala Bank to have a banking licence, especially, given that this is one of our pioneers in banking.
It has played a role in financial inclusion and being a financially sound and liquid state-owned company, one of the few with good governance and also with no maleficence or corruption. So, the only way standing between Ithala Bank and its eligibility is the word national, that is proceeding state-owned company. If that fact was to be amended to remove the word national, then. the provisions of the Financial Matters Act will then allow Ithala Bank to be considered a bank that can have its own license. So, the question is, once again, would you agree to sponsor an amendment of this section
10 so that this is being realised. Thank you, Chairperson.
The MINISTER OF FINANCE: There are discussions about the amendment of the Banks Act to change that question. Therefore, I cannot make commitment on behalf of everybody else. However, I’m saying, there are discussions that are intended to amend the Banks Act in this regard.
Mr G P MASUALLE: Thank you very much, House Chairperson. Minister, given that Ithala Bank was established for the
purposes of mobilising and securing resources, and to provide financial supportive services for the people of KwaZulu-Natal as well as those in the outlying areas within the statutory frameworks. In your earlier response, Minister, you have referred to a role the National Treasury could play to support efforts to ensure that finally this bank ensures or secures sustainability as well as functioning lawfully within the.
Banks Act. Would you really share what those other frameworks you referred to could be?
The MINISTER OF FINANCE: The current legislation framework does not allow any province to own a bank. Ithala has been operating through an exemption for over 20 years. The last exemption was issued in July 2022, which expires on 15 December 2023, an 18 month exemption. During this period, Ithala was required to do a number of other options. One of those options was to tier with an existing bank and operate on this platform using Ithala. Another option which was proposed was to start as a mutual bank, which does not require all the difficult regulatory requirements which are there now. The mutual bank only requires seven members. The proposition to them was, if you don’t have seven members, you have to have depositors which can be utilised as members of the mutual
bank. In that sense, we would not be discussing what we are discussing today. Thank you
Mr A N SARUPEN: House Chair, we know that this particular bank has a long instore history in KwaZulu-Natal of making sure that the banking and financial services are available to financially excluded persons. However, most recently, its troubles have been that it has fallen out of regulators for failing to safeguard clients insurance premiums and has come under fire from the Financial Sector Conduct Authority, FSCA, for failing to submit financial reports for two years. This has all happened since the ANC has gained a majority in KwaZulu-Natal and as the policy of cadre deployments became the policy of the KwaZulu-Natal government.
So, my question Minister is what were the early warning signs about trouble with the bank and why did the bank and its management structure not act, and what did they report to the government as the shareholder at all, and why did they fail to act?
The HOUSE CHAIRPERSON (Ms M G Boroto): Hon Minister, before you proceed, you are protected by Rule 142(7) where you can
only respond to one question because the supplementary questions are limited to one question. Proceed.
The MINISTER OF FINANCE: I’m not aware of any problems in the Ithala Bank as I am standing before you, House Chair and this House. What I’m aware of has been battles between them and the Prudential Authority over meeting a criterion to get a commercial bank license, that has been the issue and not any mismanagement, I’m not aware of that. The repayment authority, which has been appointed, has appointed Sizwe Ntsaluba Gobodo to look into, not to audit, but to look into the total assets of the bank and total liabilities. As things stands, the banks have the deposit of about R2,5 billion and the loans of about R2,1 billion. That’s all we know. We want to understand the nature of the bank as far as we are concerned, whether these R2,1 billion loans are nonperforming and performing, which is standard. Any bank has got performing and nonperforming loans. Thank you.
Mr E M BUTHELEZI: House Chair, I understand that the Minister has made it very clear that the challenges that are faced by the Ithala Bank are outside his jurisdiction. Now, I want to understand from him whether the Minister is satisfied that the
reason is not that the extend the exemption of Ithala does not amount to any deliberate act of trying to undermine the bank as we have seen that trend in all state-owned entities. Thank you very much.
The MINISTER OF FINANCE: I want to assure the hon member that as we are standing here, we have done everything possible to negotiate with both the provincial government and Ithala SOC Limited. Let me give you an example, they have spent more time in court with the Prudential Authority than in the actual discussion, which is quite a difficult problem that we are faced with. Let me give another example, I had a meeting with the premier with some person from Ithala which happens to be a legal person. We have agreed that our discussion is off the record. By Monday, he had taken our discussion with the premier and submitted supplementary papers in court using our arguments.
So, what I’m trying to say is that one of the proposals that I’ve put on the table was that, instead of these difficulties, can we convert Ithala into a mutual bank? Once all the regulatory things have been sorted out and stabilised, thereafter, we can continue to a second phase of a commercial
bank. If we had done that over the years, we wouldn’t be talking about the commercial licencing by now. I thank you.
Question 172:
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Hon
Chair, the SABC is guided by its editorial policy, as well as the Independent Communications Authority of South Africa, Icasa, regulations, which were gazetted, 26 February 2024 this year. Regulation status is as follows:
Each broadcasting service licensee will be expected to treat political parties and independent candidates fairly, and equitable treatment is unlikely to be achieved in a single programme but can be achieved in a series of programmes.
We also want to make the point that each broadcasting service licensee should be consistent in its treatment of contesting political parties and independent candidates of conflicting views. The SABC has therefore committed itself to abide by its editorial policy, Icasa regulations and other independent regulations or code of ethics.
However, Icasa emphasised that: “It does not intervene in news and programming operations of the broadcasters”.
Its regulations further states that:
Broadcasting service licensees’ role during election, does not differ from their normal journalistic role during nonelection periods. Normal ethical considerations will continue to apply. A distinguishing feature of the election period is the obligation to achieve equitable coverage of political parties or independent countries without abdicating news value judgments.
Mr M R MDAKANE: Presiding officer, hon Minister, I know that you are dealing with a very difficult question, because for the first time in our country, we are going to have independent candidates or individuals. Then this issue is going to be raising lots and lots of questions, but we hope, hon Minister, in your work, as you do your oversight over this department, you will be able to ensure two things - that individual rights and the interests of the individual and the parties are catered for. May I then make this follow-up questions? It is a short one, hon Minister. How are the rights
and interests of individual candidates also going to be taken into consideration, in line with the party election broadcast?
I know, as you were answering the main question, you touched on this matter, but I think it is important to expand further, in order for the society to know exactly how you are going to deal with these sensitive issues.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Hon
Mdakane, the Icasa regulations afford the same protection for individual candidates as for political parties, in respect of party election broadcasts and political advertisements. The individual candidates will be allocated slots for party election broadcasts, as it was done in the last local government elections. The political advertisements are a matter of choice, as they are paid for by parties or individuals. The same principles apply for both parties and individual candidates. Thank you.
Ms N W A MAZZONE: House Chair, Minister, thank you very much for that answer. And you said something, in particular, that is very important. You said that Icasa is going to adhere to the regulations the way they did in 2021. So, Minister, given
that the constitutional mandates of Icasa and the SABC are to ensure equitable and free treatment of all political parties and now the individuals that are going to be joining in the political race. Can you today give us the assurance that all party election broadcasts and the slots that are allocated will be granted to anyone who is capable of creating an advert on all provincial and national stations?
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Hon
Mazonne, I think the point states that all contestants, whether parties or individuals, during elections, regarding slots, will be entitled to equity, without changing the normal programmes of different institutions. And that principle stands. As I have already said, you may be unhappy with a particular slot, regarding equity, but over a particular period, there is a way in which they cancel off whatever it is that found its way. That is how far I respond to your question. Thanks.
Adv B J MKHWEBANE: House Chair, firstly, in case there is no equitable distribution, what are the consequences for SABC. In light of the continued strike by the Communications Workers’
Union, what contingencies are in place to ensure that the elections coverage is not adversely affected? Thank you.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Hon
Mkhwebane, naturally, consequence interventions, which are, in my view, administered by the Electoral Court and the IEC, kick in. There are adjudication institutions, regarding unfairness in as far as elections are concerned, which are well known.
Secondly, when it comes to strikes, we hope that matter will be resolved. We are following it very closely, but we have taken an attitude that it must be resolved between themselves and their direct employer. We believe it will be resolved.
However, we cannot say it will be resolved tomorrow, but our biggest appeal is the sooner it is resolved, the better. We don’t want to see it interfering with the elections.
Ms Z MAJOZI: Hon House Chairperson, can I keep my video closed, so that I can keep the connection, because I am ...
The HOUSE CHAIRPERSON (Ms M G Boroto): Proceed.
Ms Z MAJOZI: Hon Minister, we have seen how fake political news can derail election campaigns and cause unnecessary panic in various countries. Therefore, I would like to know what
measures the SABC has in place to clamp down on the spread of political misinformation, as many South Africans will predominantly be looking to them for their daily political updates, as has been the case in the past? Thank you.
The HOUSE CHAIRPERSON (Ms M G Boroto): Hon Majozi, you still have minutes? Is it possible to just repeat the main question. The Minister did not get it right. You still have minutes, I mean seconds.
Ms Z MAJOZI: Chair. Hon Minister, we have seen how fake political news can affect election campaigns and cause unnecessary panic in various countries. Therefore, I would like to know what measures the SABC has in place to clamp down on the spread of political misinformation, as many South Africans will predominantly be looking to them for their daily political updates, as has been the case in the past.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: I
hope I have understood you, hon Majozi. I once worked underground for a long time. A number of institutions, which become a vehicle for misinformation, be it TikTok or any such
similar institution has a particular agreement and code with the IEC.
Similarly, those are governed in terms of that. Of course, as government, we will also be watching whenever such occurs. We will always make sure that Icasa, as a regulatory board, and other related regulatory institutions will stay close to that. However, at the end of the day, whatever breach that occurs in that regard, be it misinformation by whoever from whatever direction, once it is actually produced as evidential information, I repeat, there are judication institutions for elections that will handle that. Thank you.
Question 170:
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Thank
you, Al Jama-ah. Under the SA Connect phase one, we have connected 170 public facilities in the region of Qwaqwa you have spoken about, Thabo Mofutsanyana, 23 healthcare facilities, 48 facilities upgraded by State Information Technology Agency, Sita. All with free data. Qwaqwa is planned as part of the Thabo Mofutsanyana District Municipality rollout under SA Connect in the 2025-26 financial year. We envisage data to cost as little as R5 per day once you’ve got
access to that connectivity, which is as a result of intervention by developmental state, which we have already demonstrated in a number of areas that we have spoken about. Thank you.
The HOUSE CHAIRPERSON (Ms M G Boroto): Hon members, hon Hendricks is not on the platform, and we know he is the only member in the party. So, according to Rule 137(10), any party that is not on this follow-up questions can take charge of the question. But you will only be allocated one minute, unlike if you were the person asking the question. Do we have any party that wants to take that slot, or we proceed to the next? None. Hon Gumbu, this is your time.
Mr T T GUMBU: Minister, please share some of the key findings and recommendations which have emanated from the study on the cost to communicate. Are there further reductions that South Africans can look forward to as far as data is concerned?
Thank you.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Thank
you, hon Gumbu. Amongst others, the study recommended the finalization of the amendment of Electronic Communications
Act. This will afford the regulator, for instance, the Independent Communications Authority of South Africa, Icasa, the power to deal with issues relating to, amongst others, the pricing of mobile data as well as market features that impede, restrict or distort competition in the telecommunications sector. The data prices vary significantly across different regions within Africa, including South Africa.
The data service market inquiry recommended that mobile operators should reduce the data price by 30% to 50%. The study further indicated that the price of data can still be reduced by 55%. Currently, South Africa’s average price of 1GB of data is approximately R78, 50. However, there are new intervention that were put in place, such as SA Connect phase two. We have seen the price of data costing as little as R5 from R78 in the areas where SA Connect has intervened. Thanks.
Ms T BODLANI: Minister, your recent reply to our day parliamentary question indicates that you missed your own targets of connecting 10 000 wi-fi hotspots, achieving only
231. We believe that this is because of the overlap between Broadband Infranco SOC Limited, BBI and Universal Services & Access Agency of South Africa, Usaasa. What are you doing
Minister to bring synergy between these two entities to ensure that communities in Northwest, Northern Cape and Qwaqwa do not fall through the cracks? Thank you.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Thank
you very much, hon Bodlani. The issue of BBI and Sentech is an issue we have not allowed to impede the speed of connectivity because we’ve realized that it requires legislative amendments. Now we had to look at the contestation of quotes. Which one is urgent. Is it the connectivity or that? So, I think in the meantime as we analyse policy and legislation that will actually be the founding principle for that - merging of the two. We have just unlocked the processes of connectivity. I want to say to you that by March last year we had connected 970 sites, and we analysed and dealt with processes. After we have unlocked processes, you will realize that in February, I reported to this House or the hall down there, that we had connected no less than 361 000 houses. Just few or a week ago we have connected no less than 567 000 households.
About wi-fi, the numbers have gone close to about nine or
10 000 already. But the point I want to make - why I’m
emphasizing the household - is that where we have done this connection, it is those houses in the rural and townships that have got access to that R6 to R7 a gig. ... [Inaudible.] ... is one of those, Kokstad is one of those, Modimolle is one of those and a number of other districts that we have already connected. So Qwaqwa, in answering on Al Jama-ah, we have said it is in 2025-26, which falls in that district. Thank you, hon Bodlani.
Ms N P SONTI: Minister, access to network coverage is critical to ensure that the electorate participates maximally in the provincial and national elections of 2024. Is there a plan to ensure areas that suffer severe network issues are provided with access to electoral information? Thank you.
The MINISTER OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES: Thank
you, hon Sonti on behalf of Pambo. Oh! thank you very much. I have indicated to you that we have actually improved the connectivity speed. In particular to the poor communities, townships and rural communities. We will be doing a series of announcements, long before this election, with regard to a number of poor communities which have access to online and to television and so on, through the connectivity that would
afford them. So in other words, what am I trying to say? The issue you are worried about is our priority. We wish we could actually do triple. But I’m not disappointed, taking to the fact that where the speed was and where the speed is. We believe that a significant number of people are going to have that access. Thank you very much.
Question 173:
The MINISTER OF AGRICULTURE, LAND REFORM AND RURAL
DEVELOPMENT: Thank you very much, House Chair, thanks to the hon members on the platform and to hon Dlamini. When we started in 2019, we found that there were various challenges on the board, and we had to do several things in order to bring stability. One of those was engagement with the board in order to outline areas of improvement that the board needed to deal with. That included the stabilisation of the human resources and ensuring that the board has enough capacity.
It was during that period, that the board in 2021 appointed the chief executive officer, and secondly, as a department we seconded a staff member from national to address the issue of financial management, who was then an acting CFO for the board. We also had to engage with the board to clarify
important issues that relate to the disbursement of the funds of the various communities, as well as ensuring that we limit the nature of litigations that were there against the board.
Subsequently, in 2023, we then had adverts – maybe, to say from 2022 - where we advertise for the appointment of the board, because the tenure of the previous board had come to an end. We did that in a transparent way so that many people can be afforded an opportunity to apply for serving into this important structure, which was done. In May, we actually appointed the full board.
I must say that in terms of the legislation, the board is appointed in the following manner:
Four members of the board are appointed by the Minister in consultation with the king, together with the Premier of the province of KwaZulu-Natal and the chairperson of the House of Traditional Leaders in KwaZulu-Natal; the other four members of the board are appointed in consultation between the Premier of the province, the king and the chair of the House of Traditional Leaders of
the province; and then the nominee, who will chair the board, is appointed by the King, Isilo samabandla.
And, that happened. So, in ensuring that communities and their traditional leaders understand the workings of the board and work out the governance system, as well as disbursement, there has been various consultations between this current board and the House, as well as amakhosi who are affected and are members/beneficiaries who are part of the Ingonyama Trust, to make sure that they, themselves, are part of the accountability structure that the board has to work with, because the land that the board is governing is actually the land of those communities under their traditional leaders.
The other question that has been asked is: How have we ensured that we have improved the administration capacity? I must say to this House that now we do have the full-time CFO of the board, as well as the company secretary of the board, and we have filled a number of posts that were vacant within Ingonyama Trust, which will enable the trust and the board to do the work as they are supposed to. Thank you very much.
Mr S M DLAMINI: Thank you very much. Chairperson and thanks to the Minister for clarifying what has happened. I want to just check: What measures have been put in place to improve the accountability of Ingonyama Trust, especially in relation to matters which relate to the disbursement of funds, land administration and general governance and financial control.
How will good governance and accountability improve given the measures which are being put up in place in relation to Ingonyama Trust, given the recent changes? I am sure the Minister understands when I say the recent changes in leadership. In other words, what mediation measures are going to be taken over and above regulatory measures to improve governance and financial control of the entity?
Thank you,
The MINISTER OF AGRICULTURE, LAND REFORM AND RURAL
DEVELOPMENT: Thank you very much, hon Dlamini. I think the first part of the question has been answered to, but how will these measures improve the good governance, as well as accountability? I think first and foremost: Like any other board has to exercise its responsibility in a collective manner to ensure that it works within the prescripts that
govern that institution, that is what we believe the board is going to adhere to.
If you look at Ingonyama Trust Act, the primary responsibility is to ensure that the board manages this land, working with the trustee, who is the king, to ensure that the interest of those communities whose land is being governed are actually taken into account. That will talk to how the disbursement of resources, where such land has been exploited, either through mining or any other kind of development, building of malls in some communal areas, or even, I would say, supermarkets and other commercial activities, that through those leases, the benefits of those resources will actually accrue to the respective communities.
This is what we have been seeking to improve because one of the weaknesses is that, for a number of years, such a transparency to communities, about how much is available in their resources that have come as a result of such commercial activities, have never actually been done. In accordance with the prescript. So, these, the systems put in place, will seek to improve that.
In the latest, on what the hon Dlamini has raised, are the changes. Actually, those changes has only been the change of the nominee, where the king, rightfully so in terms of the law, he can be the chair of the board if he decides not to appoint a nominee. That is the chose he has made.
However, what we have done on our part from the Ministry was to have an engagement with the king, in his capacity as the new chair of the board, to brief him about what responsibilities are for him in the management of the structure, working together with the collective. We have also introduced the king to the entirety of the board, and we trust that he will execute that responsibility, as is expected of a chairperson of any board. Thank you very much.
Ms T M MBABAMA: Thank you, House Chair. Minister, I acknowledge the interventions you say you have put in place to improve accountability from the Ingonyama Trust. Considering your department’s dismal failure in land reform and governance: What makes you think that your interventions will now be successful, while you and your department failed the country on land administration and the disbursement of funds?
I am particularly worried about the people on the ground. What will they gain from your interventions. Thank you.
The MINISTER OF AGRICULTURE, LAND REFORM AND RURAL
DEVELOPMENT: Thank you very much, hon Mbabama. Firstly, I must actually put a disclaimer on what you have said about the dismal failure of the department in undertaking land reform in this country, because that is not true. Yes, maybe the pace – as everybody like yourselves might like - may not be to that fast extent, and we all know the reasons for that. Part of those relate to resources, and the competing needs, that everybody has on the fiscus. So, that is understandable.
Secondly, it might relate to the management and the governance of the land that has been taken over by communities after transfer. There, we have worked to ensure that we train, and we assist. Obviously, issues of challenges and disputes among communities will always be issues that are ongoing, where we all need to assist.
So, I think it is important for me to make that disclaimer on what we have said. Yes, we are confident that the work that this board is undertaking in engaging with the traditional
leaders and their communities, whose land is governed under Ingonyama Trust, will be able, once they have the full information about what is happening in the trust and their role in actually engaging with the trust about the development needs for their community, to improve that governance.
Collectively, the board working with Isilo, I am sure they will also improve other matters that might require the board to do so. Thank you very much.
Mr V GERICKE: Hon Chair, I will take the question. Thank you. Hon Minister, it is clear that matters of accountability of the Ingonyama Trust regarding financial management and land administration have been left to the device for political reasons by the ANC. When will you, hon Minister, concede failures to manage the affairs of the Ingonyama Trust and the people living in KwaZulu-Natala, because it is all about accountability to the community? Thank you, Chair.
The MINISTER OF AGRICULTURE, LAND REFORM AND RURAL
DEVELOPMENT: Thank you very much, hon member. One does appreciate that we are in an election period, so at times we will say things that are not supposed or rather not consistent with the matters at hand. The Ingonyama Trust is governed by
the board, with the chair being the nominee of the king. So, there is no party-political appointment to the Ingonyama Trust. People are appointed as I have outlined earlier: How the act dictates the appointment of the board must be done.
This Parliament, through the portfolio committee, has been engaging with Ingonyama Trust - not only during this time of office - from its inception, in 1994 and, subsequently, after the amendment in 1997. So, it is not like this is the new board or a new institution that we are talking about. It has actually been operational.
Obviously, the portfolio community, has been concerned, and so as the Minister, about the disbursement policy that he had not been undertaken by the board to the satisfaction of the community. So, that has nothing to do with any party-political issue. I would like to submit to submit, Chairperson. Thank you very much.
Question 174:
The MINISTER OF EMPLOYMENT AND LABOUR: House Chairperson, thank to hon Wolmarans for this question. Yes, the department introduced the labour activation programs, which we call them
‘the LAP’, following the recession in 2008-2009. So, in the financial year of 2017-18, LAP was massified and the target was set at 450 000. But there’s a big ‘NO’ on the labor activation program, there is no 15 billion that has been spent. We’ve allocated 15 billion for the job creation, so that money has not been spent. We’re still following the necessary processes to deal with that.
The department established the labour education program to intervene in the unemployment crisis and section 5(D) of the Employment Insurance Act provides that:
The funds of the Uninsurance Insurance, UIF can be used for financing of the retention of the contributors in employment and re-entry of the contributors into the labour market and any other scheme aimed at the vulnerable workers.
And section 48(1A) (iv) of the Employment Insurance, UI Act requires that:
The UIF Board advise the Minister on the creation of the schemes to alleviate the effects of unemployment.
So, the UIF established the labour activation programs to give effect to these intentions, in the legislation. And the LAP currently pursues this mandate through three objectives which are:
To enhance employability of the unemployed through the training of the unemployed beneficiaries. To enable entrepreneurship through enterprise development. To preserve jobs, Temporary Employer Employee Relief Scheme in partnership with the Commission for Conciliation, Mediation and Arbitration, CCMA, which administers the applications or the applications process for distressed companies and business turn around and recovery programs.
Now, in this financial year starting on the 1st of April 2024, we are targeting the creation of 360 000 jobs through LAP. In 2025 financial year, we have a target of 820 000 jobs, and we further target 50% of some of these. And I’ve mentioned they come from the vulnerable groups, mainly women, young people and people with disabilities.
So, in a few weeks’ time I will be issuing certificates to the project owners, so the program is intended to equip
individuals with skills and experience needed to secure lasting employment. Thank you, House Chairperson.
Mr M J WOLMARANS: Thank you very much, hon Minister, it seems that the project at hand is very encouraging. It is undertaken under the labour activation program. It promises to contribute immensely to the fight against unemployment. But what I would want to find out, Minister, does the department have any capacity to carry through this project, such that it also reaches the far-flung rural areas and not only focusing on the urban centres? Thank you.
The MINISTER OF EMPLOYMENT AND LABOUR: Thank you very much hon Wolmarans. The department has put in place the provincial structure for the labour activation programs. Providing in each and every province or for the nine provinces deputy director positions, seven of which have already been filled.
The structure further provides for 27 assistant director’s positions, which is three per province, 26 of which are filled. In addition to the approved structure, the UIF head office has appointed six interns for the labour activation program. So, the department has the public employment services
branch with a footprint across the labour centres, all the labour centres in the country that recruit the labour activation projects.
Further, the department has embarked on the process to evaluate the structural capacity of the UIF to execute its mandate. This includes the labour activation program, chief directorate and indeed the current capacity of LAP chief directorate needs to be beefed up.
In the short term, the department is in the process of augmenting that capacity of LAP. And the department is also exploring collaboration with the provincial governments to roll out LAP and initial engagement has started with the Gauteng Provincial Government, with others to follow. Thank you.
Mrs H DENNER: Hon Minister, the labour activation program doesn’t have a very positive image with South Africans at large due to the Jack Capital Fund scandal, as we all know. And this is also something that we will follow closely in the time to come. But except for that, millions have been allocated for this program to fund employability proposals
from companies involved to train unemployed people. Which you must also admit sounds very dodgy, anyway.
So, what clear mechanisms, if any, are being built into agreements with the companies involved to absolutely ensure that trainees are indeed provided with concrete skills resulting in employability as a return on investment, for the billions to be spent on something that is so difficult to measure? Thank you, House Chair.
The MINISTER OF EMPLOYMENT AND LABOUR: House Chairperson, I wouldn’t like to comment on the Thuja matter. And you know very well that the matter in the legal jargon, it’s sub judicare. So, we are awaiting, we are awaiting the judge.
However, I must be able to indicate that we’ve put a lot of mechanisms before we can be able to give those companies any agreement and money. There’s due diligence which we’re doing.
And we have also employed an audit firm which is going to be looking at all the processes and monitoring what is being implemented on a quarterly basis and demanding reports. As they apply for this funding, we also want assurances from companies to be able to confirm that they are going to absorb
those young people, as they are being trained, for at least a minimum of a year to two years. We think that after that they would have gained a lot of experience, but some of the programs, it’s possible that they can be permanent jobs. Some of them it will be self-employment. They would be able to go beyond what you call the short term; it might be medium to long term. Thank you.
Mr W M THRING: Minister, the UIF Spokesperson, Makhosonke Buthelezi, at one stage admitted in a radio interview that the UIF system was overwhelmed because it was built to process a certain number of claims, with the increase in unemployment and other demands placed on the system, the system has become overwhelmed because it is taking on more than what it was built for.
Now, Minister, what steps have been taken to upgrade the system in order to ensure that claims timeously settled for maternity, death, and the loss of income, and indeed the creation of the much-needed jobs that you spoke of earlier? And if no steps have been taken, why not? Thank you, House Chair.
The MINISTER OF EMPLOYMENT AND LABOUR: Thank you hon Thring, indeed we were the first to concede that our system during COVID-19 when we had to pay more than 5 million workers. Which was about 62 billion Rand, that our systems collapsed because they were not meant to deal with such huge numbers. But also, a project which we had started two years ago, we had appointed PricewaterhouseCoopers, PwC, the audit firm. To do a very deep diagnostic of the particular funds, which is also the compensation fund, not just the UIF.
And in terms of that, we’ve received the results we’re dealing with that report. We’ve started now to do the implementation of that, looking at the structures, looking at the systems, looking at the skills and remember, the UIF and the compensation fund you are talking about, the medical insurance you are talking about the pension ... you’re talking about a very, very sophisticated system which you need, which is like the system you get in the insurance companies or in the banks.
And we are in the process now of fundamentally restructuring those two funds, in order to have the right skills and the right capacity to be able to deal with the task at hand. And indeed, a number of workers have complained about how they are
frustrated in terms of their claims and so on, and we are up to task now in trying to fundamentally turn those two institutions around. But it’s going to be a process. It’s not an event. Thank you.
Mr M BAGRAIM: Minister, thank you for the details of the labour activation program, LAP. However, it costs government according to your department, R250 000 to create a job, and it’s not a job, it’s a job opportunity. Universally, it’s understood that the private sector creates jobs and not governments. It’s not about time that the government gets to understand the nature of job creation and economic empowerment. When will they ever learn? Minister, as a labour lawyer, I could help you try and access the LAP when you leave Parliament. Thank you, House Chairperson.
The MINISTER OF EMPLOYMENT AND LABOUR: House Chairperson, no, we have we have enough labour lawyers and better labour lawyers who can help us. We know very well that your advice would not be what we want.
But let me tell you, your calculation is incorrect. It depends on the industry you are dealing with. There are certain
industries which are very expensive to create just one job, but there are industries which you spend far less than what you’re talking about. Some of the industries you’re talking about 10 000 to create a job, but others can even go to more than the figure which we have quoted. It depends on which industry you are talking about; industries differ. That’s what I can be able to tell. You. Thank you.
Question 197:
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much to hon Graham for the question. Just to say the following that the improvement of the energy availability factor and the unplanned outages are as a result of concerted efforts focusing on what we have identified as a priority power stations namely; Kusile, Kendal, Majuba, Matla, Tutuka and Duvha. Each power station has its detailed recovery plan. A total of 3 510 megawatts was recovered by January 2024 through this intervention and also working with the private sector.
The highest level of plant maintenance was performed between the periods of December 2023 and January 2024, reaching an average of 80% of the generation capacity. Just to put it into context, the last time we reached this proportions of plant
maintenance was in 2022. Thanks to the work of the board increasing to good use the fiscal support received from the National Treasury. The downside of increased maintenance was a negative impact on energy availability factor, EAF.
However, the deliberate spike in plant maintenance aims to improve the reliability of the generation fleet, deliver long term benefits and ensure the security of energy supply.
Although heightened maintenance negatively impacted the EAF, it remains a necessary trade off as delivery spiked in plant maintenance is intended to improve the generation fleet reliability to deliver long term benefits and ensure security of energy supply is restored. Not only are the plants started to yield desirable results as far as the EAF is concerned but the unplanned capacity loss factor has also taken a positive turn from 34% of the generation capacity in January 2023 to 30% in January 2024.
The gradual improvement brought about by the generation operational recovery plan has started to be visible as far as the frequency and intensity of load shedding is concerned. We have to look over a period of the past five and half months, the period running from September 2023 to mid-February 2024.
Based on our linear modeling had plant maintenance been reduced by anything between 25 and 50% between the period of September 2023 and February 2024, load shedding could have been wholly averted for this period, consequently, a much improved EAF could have been reported, adding annualised EAF performance closer to the planned 65% target to March 2022-23.
However, this could have left the system vulnerable and weaker going into winter. Just to indicate that the increase in plant maintenance between the period of September 2023 and February 2024, there has created buffers in the available capacity going into the winter of 2024. From the end of March 2024, we will begin to reduce plant maintenance from the high of 8 000 megawatts to around 4 000 megawatts by May 2024. Effectively, this means that we have added an additional 4 000 megawatts of generation capacity to the grid.
In addition to unit 4 of Medupi which will return in August 2024, followed by Koeberg unit 2 in September, we will increase the available capacity. Therefore, all indications are that although on an annualised basis we would not have reached the 65% but during the latter part of the financial
year we will be close to the 65% EAF and we remain on course to achieve the target of 75% by March 2025. Thank you.
Ms S J GRAHAM: Minister, you are the champion of the energy action plan launched in 2022 with the purpose of addressing the energy crisis. Now, the DA supports the plan as one of the mechanisms to be used to solve the rolling blackouts. However, since the inception of the energy plan there has been a major focus on the energy availability factor. According to the vision generation benefit, VGBe, Report, the international standard for power systems of similar age to that of South Africa’s energy infrastructure are running at an average of 78% EAF while ours has remained below 60% attaining an all- time low of 50% in February. That means that 50% of the Eskom fleet is not working.
However, the report also criticised the focus on EAF as a determination of operational success of Eskom stating that the fixation on the EAF is a dead end and leads to poorer plant performance. Now, the DA has planned to rescue South Africa.
Speaks to the unbundling of Eskom and the breaking of the monopoly of government around energy provisioning by expanding the basket of energies supplier, the focus will move from a
centralised energy availability factor under the control of government to a composite EAF that brings in all energy role players. This will also eliminate the approach of Eskom to prioritise the EAF over long term solutions to the issues plaguing the power utility.
Minister, do you agree with the vision generation benefit, VGBe, Report that your focus on the EAF has not only failed to achieve any of the targets you have set but has also led to poor decision-making and prioritising performance over maintenance which has created a consequentially high risk of failure of our entire energy system as evidenced by ongoing load shedding? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: So, what it is
unfortunate with the report, hon Graham, is that she makes for selective reading of the VGBe report. I thought it would be instructive that you read it in its totality. It does make that assertion and at the end it proposes a set of recommendations to ensure that there is a broad spread of interventions. I want to indicate that all of those three transversal areas that the VGBe points to being a some of the solutions to address load shedding, are receiving attention.
In fact, when I produce what I refer to as a diagnostic report, having done an extensive visit to all the power stations, I have made a reference to all of those things that the VGBe refers to.
In fact, we have already initiated those actions. What are those actions? From a people’s management point of view, it is just the stabilisation of the management at all levels including the apex of Eskom; the appointment to the chief executive officer, CEO; the inspired appointment of the board or appointing the head of generation Mr Nxumalo; we have since appointed permanent general managers at all the power stations and also introduced incentives that are performance related.
On the engineering part, they are proposing that there is a need for us to ensure that there is concerted effort on maintenance and ensuring that there is some degree of collaboration with the original equipment manufacturers. That is what we have done. The major three original equipment manufacturers are now in space, essentially, we have eliminated the middleman. It also refers to the presence of corruption, malfeasance and leakage. As you will know that working with workstream number six, a number of investigations
are happening, arrests have been made and convictions have been achieved. I thought that the total reading of the VGBe Report will reveal that the actions that they propose are already underway as well. Thank you.
Mr N E DLAMINI: Hon Minister, considering the marginal improvement in the energy availability factor, which is below Eskom’s target for the 2024 financial year, how did the six priorities stations support the marginal improvement in the average energy availability factor overall? Which focus areas of the EAF recovery plan proved difficult to address and achieve the targeted EAF? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, hon Dlamini. You are absolutely correct. We have identified the six power stations mainly; Kusile, Kendal, Majuba, Matla, Tutuka and Duvha. The choice of those power stations where scientific, there is a principle as they put it in science, they refer to it as the Pareto principle, 20% effort and 80% return. So, in the configuration of the matrix trying to understand where we can get the maximum returns, returns in this instance refers to the megawatts to be made available to the grid. We have identified that these are the
power stations that give us the shortest path to the resolution of load shedding.
I want to say as I stand before you now, that as a result of those interventions collectively we have been able to recover over a period of a calendar 12 months period an additional
3 510 megawatts of capacity derived from those six power stations and other interventions. I must say that we continue to focus on the power station like Tutuka, we only had one unit operating. We were able to place one of our most seasoned engineer, Mr Bruce Moyo, that is why I am saying the VGBe Report’s recommendations are eight months late because we have already made those interventions. We are beginning to see that they have been able to add an additional two generating units and we want to maintain that on a consistent basis.
Just on the second half of your question, the primary focus, for example, in a power station like Kendal where there are partial load losses, that is the inefficiency of the power station. It is as a result of the power station exceeding its license emissions parameters. So, we are working with the private sector to ensure that we are able to be within the parameters of emissions license whilst being able to ramp up
performance. So, the partial load loss ... [Time expired.] ... [Inaudible.] ... accounted for 6 800 megawatts ... [Inaudible.] ... down consistently. Thank you.
Mr N SINGH: Hon Minister, when you were appointed you were known as the Minister of Electricity not as the Minister of load shedding. However, we know that your particular responsibility was to try and avoid the frequency of load shedding. I am extremely concerned, hon Minister, about the frequency and the lack of maintenance of existing lines not power stations. In the area where I come from; uMgababa, Mkomazi and Craigieburn for the last five days or so there has been no electricity or intermittent electricity. This impact greatly on the citizens of that area. Minister, would you intervene in this area and see what can be done by the maintenance officials of Eskom in those areas? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, hon Singh. I think if you look at the ecosystem of energy supply in the country I think you are referring to the downstream challenges, essentially you are distribution. So, we have moved from the generation and the transmission last mile connectivity. There are a number of challenges that you
said in that area of the ecosystem; the first one, is the issue of illegal connections, essentially tracing a significant amount of load beyond, if you like, the capacity of the asset or the substation or the transformer which result in the asset failing.
So, one of the things that we have been working on together with Salga, engaging all the municipalities is to ensure that we agree on a set of conditions for us to be able to move into that space and replace these assets. The first one, is to ensure that we clamp down on illegal connections, so that is the first part; the second one, is that there has to be a commitment from everyone that draws from that asset that we must agree, if you like, on a penalty associated with the failure of that asset, and we have been able to compute it to on average about 6 000. We know that there are communities or householders that cannot afford it and in that instance it is about R500. Once 60% of the households have paid, then we are able to roll out going forward.
The third condition is to ensure that all those that can pay should pay. That is why we are part of this intervention being to ensure that, associated with the return or the fixing or
the replenishment of the asset, is installation of the smart meters. For those households that cannot afford, they will be taken care of but those that can afford should make sure that they commit to those set of principles. We have already started rolling out the programme. I am happy to make the intervention in those areas. Thank you.
Mr S N SWART: Arising from your response, hon Minister, the ACDP appreciates the focus on maintenance of power stations as opposed to merely keeping the lights on at all costs at the expense of maintenance as in the past. We have taken note of the recommendations of the VGBe Report and expounding on the Report. The report also recommended the immediate establishment of an entrant team of independent experts. While we appreciate that this is largely an Eskom management decision, will the Minister share with the House whether such experts have been seconded; and if so, will this continue going forward as part of the process to meet the EAF target and reduce load shedding? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, hon Swart. I was making the point to some colleagues that the VGBe Report does speak to what I call a standard
template to offer recommendations. At the end they say, we therefore recommend that there should be additional work to be done in the following area. Just to give hon Swart and members the comfort, remember that we have the National Energy Crisis Committee referred to as NECCOM. So, this is a meeting place of government and private sector to ensure that there is some degree of convergence on how we will resolve this pre-eminent question that is facing the postapartheid South Africa.
It is a challenge of existential proportions because you know, if you like, the kind of impact that it has on the South African economy. So, hon Swart, in that context we are already receiving technical support from the private sector in areas where there is deficit with regards to expertise or there is no sufficient supply inside of Eskom in relation to the kind of expertise that are required. I am happy to say to the country that we are already on that path. We are receiving extraordinary support from the private sector and a number of these individuals will be embedded in those six priority power stations.
That is why earlier on I made reference to the point that a myriad of these recommendations that derives out of the VGBe
Report are already receiving attention. A very useful instrument to help us to make the intervention. However, I want to give the country the comfort that on almost all of those recommendations we are already acting. I am sure that the benefits will be realised sooner. Thank you.
Question 202:
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, House Chair and hon Manyi for the question. I think it’s important at the onset to state that it is incorrect to suggest that there has been a recent, as hon Manyi puts it, “high frequency of load shedding”. It is important to know that the stage 6 load shedding which occurred on the 9th of February midnight until the 11th of February midnight was an outlier and as a result of a cluster of units that had failed during that period. However, what we have experienced is that there’s been a gradual improvement brought about by the generation operational recovery plan and has started to yield visible results as far as the frequency and the intensity of load shedding is concerned, especially in the past five and a half months, the period of September 2023 to February of 2024.
As I stated earlier, if you are to do an objective comparison of load shedding between December of 2022, and February of 2023, on the one side and compared with December of 2023 to February of 2024, so essentially a comparable period you will realise that the load shedding hours were reduced from 1 008 hours to about 1 217 hours, a reduction of no less than 600 hours. Therefore, it is important to know that the renewable energy does not and will not address base load requirement.
You need base load as Minister Mantashe referred to earlier on. You still need a combination of coal. You still need nuclear. You still need gas to anchor if you like the energy mix. Remember that renewable energy thrives on the redundancy of base load. Therefore, I think it’s important that there is that the appreciation.
In addition to this work, what we’re doing in the short term is to ensure that we’re repurposing or converting our peaking plants, that is Ankerlig and Gourikwa, and we want to use a gas as a fuel source. If we do that, we will attain a number of things. First is that being an exponential reduction in the kilowatt-hour of production. The second one is that we will achieve if you like base load benefits because we will be able to run gas as a fuel source on the basis of base load. The
improvement of the energy availability factor, EAF, and unplanned outages results from, as I mentioned earlier on, the concerted efforts that we’re making at the priority six power stations, as I’ve mentioned before, and as a result of that intervention, we’ve been able to recover 3 500 megawatts.
I want to conclude on this question by stating that the notion that Eskom is experiencing a further decline in performance is not supported by facts or evidence as mentioned here. It is important to emphasise that the setbacks of the last stage 6 load shedding were as a result of that cluster of units failing. Therefore, we are on course to reduce the intensity and frequency of load shedding. As I always make the point in public that this is the one Ministry that is very easy to assess. You don’t have to be a scientist, all that you simply do is to compute the number of hours that your lights are on or off compared to the same period last year, and you will see that there is that improvement.
However, the point is not just to reduce the intensity and frequency, the point is to ensure that we liquidate load shedding, and the economy is able to stand on her feet and
create the kind of jobs that are required for us to achieve our developmental mandates. Thank you.
Adv B J MKHWEBANE: Thank you, hon Minister.
The HOUSE CHAIRPERSON (Mr C T Frolick): Are you taking the question, hon member, please proceed.
Adv B J MKHWEBANE: I’m taking the question, House Chairperson. Yes. Thank you, hon Minister. So, Minister, considering that we are told that the megawatts count, especially those which have been contracted for the renewable energy, is about around
7 000 megawatts. How many megawatts or renewable, in fact, are generated from the independent power producers, IPPs, during peak hours, between 05:30 in the morning to 09:00 in the morning, and from 17:00 to 21:00, if you can just help here?
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, hon Mkhwebane. You’re absolutely correct to say that there has to be an appreciation of the mix. However, just to your point, as you will know that there are two fuel sources forms of production from renewable energy sources. Therefore, the first one is the photovoltaic, PV, and the fuel source
there is a sun, and you know that we get that benefit off peak. Essentially, we’re getting that after 09:00 in the morning up until about 16 hours during the day. Then the other one is on the wind. We are really getting it during the early hours of the morning.
Therefore, to your question, what is the number of megawatts that we are getting from renewables during the peak, and I guess that your question really is just an appreciation that the biggest demand is during the peak in particular the power measurement point, PMP. No, we are receiving absolutely what is negligible or close to nothing, and that’s why it’s important that when we look at the configuration of the mix, battery storage will be important that during the periods of the day or morning where we have, if you like, an optimal benefit from renewables during the day, the sun and then in the early hours the wind we’re able to store that capacity and we’re able to engage it during the peak. That’s why the conversation is important, it should not be a binary discussion of whether you need base load or you need renewables. You need all of those, including battery storage.
The tragedy of the situation in the country is that we are pitting one fuel source against the other. It’s a very unhelpful conversation. I think the issue around whether the renewables are helping you during the peak is a pointed conversation just to illustrate that you need everything and once we are able to enable everything, you’ll see that the mix will be able to meet our energy requirements. Thank you.
Sepedi:
Moh C M PHIRI: Ke a leboga, Modulasetulo. Ka nnete, Tona, re ikgantiha ka wena. O na le tsebo le maitemogelo. Ka nnetenete o tseba ditaba tia gago, Motlokwa wa geio.
English:
... apart from the unprecedented levels of unplanned unavailability, what has been the impact of lower than expected IPPs capacity being available on load shedding stage and delays in adding the risk mitigation IPPs procurement programme to the Eskom grid, to ensure sufficient capacity to respond to significant unplanned breakdowns or disruptions of supply in order to protect the power system?
Sepedi:
TONA KA KANTORONG YA MOPRESIDENTE YA MOHLAGASE: Ke a leboga
mohl Phiri ka potiiio ya lena. Re rata go gatelela gore diphetogo tiona re a di bona. Le ge e le gore maikemisetio a rena a go kgonthiiiia gore re fediie kgaotio ya mohlagase ga ieio re a fihlelela, efela re kgona go bona gore tema yona e gona.
English:
Therefore, just as an indication, if you look at the May of 2023, and I’m using that as a baseline so that there’s an appreciation of what the trend line is over a period of time so that there’s no instantaneous analysis of what the performance is, because we don’t have an appreciation of a bigger picture. The amount of unplanned capacity loss factor, that is the amount of generation capacity, that has been out as a result of the inefficiencies of this units or their unreliability was averaging about 17 369 megawatts.
However, we have seen an extraordinary improvement, for an example, we’ve noticed that during the period of December 2023, we are averaging about 13 473. Essentially, a difference of 4 000 megawatts, that has given us an opportunity to ramp up planned maintenance, what we call opportunity maintenance.
Therefore, just on the IPPs just to indicate that the IPPs solar assist in part in managing demand during peak supply periods, during the periods of 09:00 to 14:00. That’s why I spoke earlier on, on the need to have a battery storage so that we’re able to have this access capacity being stored so that we can exploit it during the periods of the peak when we need it the most. We’re doing everything possible to ensure that we are able to look at the totality of the energy sources and when we look at that aggregation, and if you like a measure of how best to exploit which generation capacity at which time, you’ll see that we’re getting closer to the resolution of this problem. Thank you.
Ms S J GRAHAM: House Chairperson, through you to Minister, it’s been a year since you took on the role of Minister of Electricity with a ... [Inaudible.] ... you are remaining in that position until the load shedding crisis was resolved.
You’ve said that you’ll be out of the job by the end of this year. In the year past, the energy availability factors plummeted, generation has declined, load shedding has become a permanent fixture, and the cost of the transmission grid is escalated from R190 billion to almost R400 billion. All while your offices cost the taxpayers millions of rands to run. Your
ongoing and persistent claim that we have turned a corner, and that the crisis is all but resolved is disputed by most experts. Minister, will you admit the truth that load shedding will remain with us for the foreseeable future? I thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: No, thank you
very much, hon Graham. I always make a distinction between an expert and a commentator. Those who speak most of the time and have got the power of the microphone, mic, they are not experts. They have never visited the power station, and they’re not engineers. They just read an article on energy, and they regurgitate it. Therefore, those are not experts.
Just to indicate as a civil engineer with a splendid credentials just to say the following that it’s important to have the following appreciation, that in October of 2022, we lost the three units at Kusile 2 400 megawatts. In December of 2022, we took out unit 1 of Koeberg, another 980 megawatts.
Essentially, we took out 2 500 megawatts and we only retain them in November of the following year.
Therefore, it goes without saying that there would have been an intensification of load shedding, because you lost 2 500 megawatts of generating capacity. That’s why I say that they
are not experts because they don’t understand how this works, but we’ll forgive them because I think it’s just the excitement of the mic. However, what are the issues that we are working on? I did make the point that it is important that we have an appreciation that there has been a significant improvement both in the intensity and frequency of load shedding.
I make the point that you don’t have to believe me, just ask the simple question to an average person, was your December of 2023 better than the December of 2022? Everyone in the House here knows that your lights were on. Was your January of 2024, better than your January of 2023? The answer is in the affirmative. Therefore, don’t believe me, it’s a number of hours that your lights are on or off, you’ll arrive at that determination, and we have already shared with the general public what is the new generation capacity that we are bringing on stream. Thank you.
Question 175:
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: I think, the
thrust of the question is the efforts that we're making on expanding and modernising transmission. Hon members have made
the correct observation that our ability to evacuate the electrons that is generated by new capacity coming from renewables, especially your Cape areas, the Northern Cape, the Eastern Cape, and Western Cape is undermined by the absence of the grid. The fact that it’s a legacy issue. The concentration or the density of the grid is in the northern and eastern part of the country. That’s where your fuel source is, which is coal. The power stations are constructed at the mouth of the source and therefore the density of transmission line is in the northern and eastern part of the area. However, if you were to do an irradiation ATLAS, trying to understand and why does the geographic location of the optimal quality of sun concentrate in the Northern Cape? If you were to do a wind Atlas, you’ll find that is in the coastal areas of the Eastern Cape and the Western Cape and those are areas where we either don’t have grid capacity or the capacity has been exhausted.
On account of Eskom having done an analysis of the transmission requirements on the back of the transmission development plan, they arrived at the determination that they will need to modernise and expand the transmission by about
14 000 kilometres in the next 10 years. To put that into context, in the past ten years, we only expanded it by 4 000
kilometres. So, we must increase it by 325%-fold, and then we’ll require something in the order of magnitude of
R390 billion.
So, what we’re trying to do, working with the National Transmission Company of South Africa is to resolve that conundrum. So, we want to address two things. First, there is access to private sector liquidity because we do accept that there is going to be an off-balance sheet financing. So, we don’t need corporate finance because the balance sheet of Eskom has deteriorated. The fiscal matrix has also deteriorated, and you are going to do that without the relinquishing ownership of the grid. Then those interventions should not result in elevated tariff levels, especially for the poor because it will result in another form of energy hunger.
I want to say that we are working with the National Transmission Company of South Africa, NTCSA. We have workshopped what these options are, and once the Board has applied its mind to what these options are. We will jointly be able to come back to the country to say this is how we’re going to expand the transmission line. We already have in
terms of that the Transmission Development Plan, prioritise what you call the priority corridor or identified what we refer to as priority corridors. These are the three main corridors located in the Northern Cape and the Western Cape and if we were to prioritise those, we can derive an additional 2 300 megawatts. So, we’re putting together a bespoke solution that allows for agility, speed, and transparency, ensuring that we don’t relinquish ownership of the grid, but still tapping on the liquidity of the private sector. There’s a number of options before us, but once we have concluded with the National Transmission Company of South Africa, NTCSA, because principally that is their mandate. So, I really want not to pre-empt what they will say, but I think there's some degree of convergence on the principles. I’m more than confident that will come out in the public and indicate what these interventions are.
Ms J C N MKHWANAZI: Thank you very much, House Chairperson. Minister...
IsiZulu:
...siyabonga kakhulu ezimpendulweni zakho. Uyafundisa, kuyabonisa ukuthi i-ANC ingumholi womphakathi. Uqhubeke nje.
English:
Noting that the government has committed itself to the regulator and financial de-risking to create the condition for private investment in infrastructural projects in the transmission network. How is your plan on ensuring that the fiscal cost of protecting private investors from the risk in transition network, firstly, recorded as contingent liabilities for the government and do not count as public debt and lastly, not to pass to the end user via periodical adjustment of tariffs? Thank you, hon House Chairperson.
IsiZulu:
UNGQONGQOSHE WOMBANI EHHOVISI LIKAMONGALI: Ngiyabonga lungu
elihloniphekile uMkhwanazi ngombuzo wakho. Siyazama ukuthi siyixazulule le nkinga yokucima kogesi.
English:
I have tried there. Maybe just to indicate I think the first principle to state it’s something I said earlier on, the fact that the financing of the modernisation and expansion of the grid is not going to be corporate finance. It is going to be off balance sheet for the reasons that I have mentioned above.
The fact that the balance sheet of Eskom is constrained, and the fiscal metrics have deteriorated. Having said that, I must state that in terms of Eskom’s financing, the first three years Eskom has got some degree of financing. They can do approximately 1400 kilometres. However, working with the NTCSA, we think that 1400 kilometres will not be sufficient to enable us to ensure that we are able to ramp up, if you like the rollout of a transmission. Like I said, the part of the principles as we’re looking at this private sector financing, in addition to state ownership of the transmission is that whatever solution that we are seeking, will want to go to the Minister of Finance, Minister Godongwane and seek sovereign guarantees. There are existing instruments and there are countries in the world that have illustrated that this is possible. Just to mention a few Colombia, Brazil, Peru, and Chile have pursued these options. We are really learning and unlearning from their experiences. We’ll do everything possible to ensure that this does not result in an additional burden to the end consumer, resulting in elevated levels of transmission. We still want to make energy accessible and affordable to everyone. Thank you, House Chairperson.
Ms S J GRAHAM: Thank you, Chairperson, Minister, as someone with an LLB cum laude, let me state that the powers assigned to you by the President emanate from section 34 of the Electricity Regulation Act, which speaks to new generation capacity. Listen for meaning. This section does not cover powers and functions in respect of transmission. This would indicate us for the President’s advisory that other powers and functions contained in the Electricity Regulation Act will remain under the Minister of Mineral Resources and Energy.
Putting aside the obvious conclusion that you are not legislatively mandated to work with the transmission sector and that the existing legislation does not yet provide for the establishment of an independent transmission operator or actions associated therewith. A further concern is that government has no credible plan in terms of the extension of the grid. The IRP provides for 14 000 kilometres of grid over the next eight years, while the Transmission Development Plan only provides for 1 675 kilometres by 2027, leaving the bulk for those last eight years. Minister, how do you propose to sell a plan for hundreds of billions of rands to the private sector when you have no mandate and no idea of what you need to buy when? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Oh! I think,
it’s a legal reading of the problem statement. I do sympathise with you because you did declare that you hold an LLB. You know nothing about financing and engineering. Now, you don’t have to be upset. I think, the starting point of knowing that you don’t know, is to accept that you don’t know. So, let me just say the following: We have made the point that in terms of the Transmission Development Plan, Eskom makes the point that you’ll need to expand the transmission by about 14 000 kilometres over the next 10 years. What is finance from Eskom? It’s about the three years and that is amounts to 1 400 kilometres. In our view, I say that is inadequate to allow us an opportunity to aggressively onboard the renewables and that’s why we’re seeking these bespoke solutions on how best you can access the liquidity that is sitting with the private sector. I want to say the following that we have engaged with the private sector players that conversation was facilitated by the JSE. We were recently at the Davos engaging with the major players globally on how best to finance this. Minister Barbra Creecy is leading the Just Energy Transition Implementation Plan, JETIP, and the partners they have set aside upwards of 12 billion US dollars to be invested in transmission. So, hon Graham, I mean, on a serious note, the
issue really is not about the financing is around the putting a bespoke solution that guarantees transparency, a credible governance framework, a plan and that plan already exists in the form of the Eskom Transmission Development Plan. So, you’ll see when we go out in the market engaging with the private sector. I’m sure they’ll share with us some of their concerns and we’ll do everything to ensure that we correct them and move aggressively to roll out the new transmission. Thanks, hon Chairperson.
Ms K N F HLONYANA: Thank you, I will take it on his behalf. Minister, as a follow-up question to the practical steps that your office needs to take to implement the stated model of private sector, develop, build, finance and operate. Can you enlighten us and South Africa what exactly is this kind of model amongst the popular models of built on transfer or build on operate and transfer models? Minister, this is not giving the national Transmission Company of South Africa to the private players during the term of the loan, even though denying doing it, if it is not either BOT or BTT model, what model exactly is it? Who will have powers to give access to the grid during the term of the loan? Minister, the words private sector to develop, build, finance and operate are far
too ambiguous and nothing short of giving the private sector powers to the grid access during the term of the loan privatisation of the grid. Why are we not privatising the grid or NTCSA are indulging and hiding behind sophisticated wording of the same thing. Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much. Maybe just to say the point, you make the point on those options, build, operate, transfer, build operate on transfer. You always forget the T, you just say transfer. So, you are accepting that ownership is going to reside somewhere, which is the NTCSA. So, you can’t talk of privatisation. I’m just saying it’s an elementary error of comprehension. So, I think, it’s going to come back to ownership.
But also, just to state the following, I’ve made the point that we are engaging with the NTCSA. What I’ve just shared with you is the flow of what the options are available, but ultimately it is the NTCSA that will make that decision. What we agreed on both of us and the majority of the House, is that will not relinquish ownership of the grid. The second one is that even if you go for the option of operating, the private sector will be responsible for the wires. However, the
management of the entire grid sits with the system operator. So, at all material times the NTCSA will be responsible for the management of the grid outside the wires. Thanks.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Thank you very much, hon Minister. Hon members, may I kindly remind you that as you pose supplementary questions, please try to confine yourself to one question. We are still going to hon Hlengwa.
Mr N SINGH: Thank you, hon Chairperson, can I take the question. Hon Minister, your job is not over there. There’s one more question, but so much you can take it from there.
Mr M MANYI: Point of order, Chair.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Just take a sit, hon Singh. Hon Manyi.
Mr M MANYI: Thank you, Chairperson, just only a remark that you’ve just made. I just want to just check our understanding if it’s the same, because sometimes the original question has got two parts. Now when you do a follow-up question, on a question that has got two parts, it sounds like asking a
second question, when, in fact, I said addressing the one question which had two parts. So, I wanted to sensitise the Chair to be sensitive to questions that have got A and B or 1 and 2 so that when we do a follow-up question, it must be expected that it will also be a follow-up question on the total package. Thank you, Chairperson.
Mr N SINGH: Hon Chairperson, may I take the question on behalf of hon Hlengwa. Thank you very much. Hon Minister, I’m sure that the engagement with the new Board of the National Transmission Company of South Africa, known as NTCSA, will be to ensure alignment with government objectives for accelerating grid investment. So, the question is: How will the NTCSA establishment as an independent entity contribute to creating a level playing field between IPPs and Eskom? Thank you.
The MINISTER IN THE PRESIDENCY FOR ELECTRICITY: Thank you very
much, hon Singh, I think, it’s a fair question and I did make the point that we have had an extensive engagement with the NTCSA. Those are some of the prominent questions that they require responding to. So, in that engagement, we have agreed on broad principles and the NTCSA Board is retreating. They’re
going to have that conversation and come back to the Minister. The point I’m making is important, that there must be a degree of alignment from the policymaker and the SOE. So, where we’re standing now, I will not be able to give you that absolute answer. But like I said, we will be coming back to the public and use this platform to account to the House on what are these options so that we are able to introduce certainty in the scheme. So, I’m leaving that to the NTCSA because I really don’t want to overstep my mark, but we have agreed on the broad principles and, of course, they’re the ones who will be making that determination going forward.
Question 186:
IsiXhosa:
UMPHATHISWA WEZEZIMALI: Sisabuyela kwi-Ithala Development Finance Corporation Limited.
English:
The National Treasury is aware of Ithala Limited’s challenges and has been working with the prudential authority of South Africa. Ithala’s shareholders and the KwaZulu-Natal Provincial Government for many years with a view of returning it to profitability. Ithala's last exemption which had been issued
by the prudential authority with the concurrence of the Minister of Finance expired in December 2023.
In terms of the country's banking regulatory framework, the National Treasury and the Minister of Finance do not have direct regulatory powers over any specific financial institution, including Ithala. The regulatory responsibilities over financial institutions are shared across the regulatory institutions for the financial sector. The main regulators of which are the prudential authority, the Financial Sector Conduct Authority, the National Credit Regulator and the Financial Intelligence Centre. The Minister of Finance encourages Ithala and its shareholders to continue working closely with the regulatory authorities so that it is able to overcome its challenges.
The National Treasury is committed to developing a framework which fosters a competitive banking landscape that provides critical banking services to key sectors, including small businesses. The tiered bank regulatory framework which enables banks of different sizes to access the market, including co- operative, mutual and commercial banks, allows small
institutions and start-ups to apply for licensing under frameworks that are appropriate for them.
The National Treasury has also been working with the SA Reserve Bank to enable non-banks access to the national payment system. There is a paper which has been published, which I invite colleagues to read, published in 2018, proposals in the policy paper seek to enable facilitating greater access to the payment system without the need to obtain a banking licence.
Greater access to the payment system allows for cheaper payments to be made to and from small businesses, and it is critical to reducing transaction costs for small businesses. It should be noted that the proposed changes are meant to benefit the financial system as a whole are in the interests of the regulations of the entire financial system and are not specific to Ithala. I thank you.
IsiZulu:
Mnu N SINGH: Ngiyabona ukuthi usukhathele manje, Sihlalo, sekuntambama. Ilanga lishonile.
English:
Thank you very much, hon Chairperson, Minister, I heard your response earlier on Ithala Bank, and you've added to that response, and you may wonder why we are so passionate about the continued existence of Ithala Bank as a bank in 2024 and beyond. It's because of the history of the bank. It's because of the support that it provided to thousands of business owners, particularly black, who could not gain access to the big four banks, and even now, we struggle to gain access to the big four banks to get loans and things like that, and not only that, it is reported that the KwaZulu Development Finance Corporation was created in 1978 by the Chief Minister at that time, Mangosuthu Buthelezi, where the function of the finance corporation was to promote African entrepreneurial stratum to service the commercial sector of the KwaZulu economy, and having said that, not only the legacy but the role it has played, can you give the House an assurance that you will do everything in your power, not just to concur with the repayment administrator because concurring doesn't mean saying yes, it means applying your mind, but do everything in your power to assist the administrators of the Ithala Bank to ensure that it becomes a relevant financial institution, as we
want state banks now in the South African scenario post-2024? Thank you.
The MINISTER OF FINANCE: I want to turn the question around and say, can the hon members who have been asking me this question do me a favour? Prevail on Itala to play ball. The current regulatory framework does not allow a provincial bank. That's the regulatory framework. What we have offered to Itala are two options in the meantime. The first one was, can you partner with an existing bank, which you can utilise still, use that as a platform? Alternatively, you convert Ithala into a mutual bank. Therefore, its depositors become shareholders or members of that mutual bank. Over time, once you finish that first step, you graduate into a commercial bank. Ithala is spending more time in court than in having discussions with us in the room. Can you do us a favour? Instead of saying, will I do everything in my power, can you help me and help Ithala? Thank you.
Ms P N ABRAHAM: House Chair, hon Minister, thank you so much for your response, especially the last part of the advice that you are giving us because, at this point, the issue of Ithala has been taken over by the committee. Hence, we have, through
the chairperson, written to the Minister and we have also visited Ithala Bank. The question I have is that Ithala Bank has not been granted a banking license since 2001 under the Banks Act and has relied on exemptions, as you correctly stated.
Considering that the granting of an exemption by the prudential authority is meant to serve as a temporary measure to assist qualifying institutions to regularise themselves as financial institutions, what means will the National Treasury employ in conjunction with the prudential authority to enable the bank to obtain a banking license? Thanks, Chair.
IsiXhosa:
UMPHATHISWA WEZEZIMALI: Inye le mpendulo.
English:
We want to give Ithala a license, but there are stages to doing that. Over the years, as you can say, it's more than 20 years, they've been operating on an exemption, and that exemption, the last exemption was given in July 2022 for 18 months say, can you regularise yourselves? These are the options for regularizing yourselves. They have not been
applying those options at all. So, the ball is not on the National Treasury or the Minister. The ball is on Ithala.
Even when they went to court now, when they went to court, the prudential authority phoned me and said, can you appeal to the province to appeal to Ithala to stop the court action because if they lose, it's going to be detrimental to them? And they lost.
Now, I'm saying, the hon members here have got to appeal to the Ithala leadership to come to the table and co-operate with the administrator. There's no intention, for instance, as we did with the VBS to pay the depositor their money back, to keep the money so that when the Ithala is ready, you bring it back to Ithala, but let Ithala take the steps, the options we've given to them. As soon as they take those options given to them, the matter is closed.
Mr A N SARUPEN: House Chair, on 13 November 2023, last year, hon Minister, it was revealed that there were management issues at Ithala dealing with how they were complying with relevant legislation, particularly around the handling of clients' short-term and long-term insurance funds and separate ring-fence accounts, as well as failure to submit a report of
its financial affairs for two years. Now, in light of these struggles, as well as the struggles at the Postbank and the ANC's commitment to establishing a state-owned bank, what assurances can the Minister provide the country that any future state-owned bank will not be destroyed or mismanaged completely? Thank you.
The MINISTER OF FINANCE: Let me answer the question. The question before me is Ithala. Now, there's a distinction between the regulator and the governing body of Ithala. My relationship with Ithala is a regulatory relationship. We don't manage the affairs of Ithala. Ithala has a board which manages the affairs of Ithala, and, therefore, the National Treasury and the prudential authority do not have that relationship. We are a regulator. Our role ends there. So, we will not be talking about the finances of Ithala because that function belongs to the governing body of Ithala.
Thank you, Chairperson.
Ms K N F HLONYANA: Thank you very much. I'll take it, House Chair. Minister, is it the intention of the National Treasury to incorporate Ithala into the umbrella of the state bank
holding company? Why would you allow Ithala to be put under repayment administrator while knowing very well that it is a state entity and any shortfall in the repayment of the depositors will be footed ultimately by the state, whether provincial or national? Thank you.
The MINISTER OF FINANCE: I said earlier in answering the first question that was posed that Ithala operates outside the licensed environment of the Banking Act. Therefore, we can't put it under business rescue or anything of that sort. We've got to apply the conditions referred to under sections 81 to section 84 of the Act. That's why we've appointed an administrator, and that administrator is not intending to do anything. It's to make sure that the depositors are safeguarded.
Secondly, we have no reason, I've made the point, that it is the business of the board of Ithala to make the decision as to where it is incorporated, whether it's going to be incorporated into another state bank or not. That decision belongs to the board of Ithala. I must emphasise this thing.
Our role and our relationship to Ithala is a regulatory one.
We are not involved in the decision-making about its future or anything of that sort. Thank you.
Question 176
The MINISTER OF FINANCE: Hon House Chair, sectors that are likely to drive growth in 2024 include agriculture, forestry and fishing, finance, real estate and business services, as well as trade and hospitality. The construction industry is also expected to grow in the year, supported by developments in transport, energy, industrial and housing projects. While the frequency and intensity of power cuts are expected to decline in 2024, growth in the manufacturing and mining sectors is further expected to remain constrained, at least in the short term in line with continued power cuts and logistical constraints.
Over the medium term, the mining and manufacturing sector should see improved growth as various network industries reforms and other support measures are implemented. Given that, energy and logistics constraint have been the largest challenges for growth. Network industry reforms remain a key challenge through which economic growth is unlocked and I instrumental to boosting private investment. Supported by
these reforms, gradual improvements in the level and quality of public investment spending will increase co-ordination and partnerships with the private sector. As under spending declines, public sector capital improve programmes will approach full efficiency.
The additional capital expense supports the scaling up of projects, leading to increased availability and reliability of infrastructure. These changes encourage private investment and boost exports. To accelerate the GDP growth, South Africa needs large scale budgeting. To achieve these structural reforms are being implemented in the energy and logistics sector, along with measures to improve state capacity.
Furthermore, these reforms and improvements in state capacity are supported by stable macroeconomic framework that maintains low and stable inflation. Why inflation targeting and fiscal strategy that stabilize the public finances to reduce long- term borrowing cost? The combination of structural reforms, improved state capacity and stable macroeconomic framework will catalyse increased investments supporting faster economic growth and job creation. I thank you.
Mr G P MASUALLE: Thank you very much, hon Minister, for a very comprehensive response. Certainly, Minister, these growth areas are not just thought out in government, they are shared and the assumption is that they are widely supported, including by partners at National Economic Development and Labour Council, Nedlac. Minister, at this point, what would be your sense of participation as well as commitment in investing in these identified sectors among the swift interventions would, for instance, consideration of prescribed assets as an example to ensure investment in these sectors, be one of the considerations that could be made in future. Thank you.
The MINISTER OF FINANCE: Of course, for growth to succeed, you require a co-ordinated effort between all stakeholders in society, including labour and business, and I think Nedlac was created as an important instrument to achieve that objective. In addition, as Dr Ramokgopa has mentioned in the energy sector that there is also National Economic Crises Committee, Nicom, in the logistics sector. There is some work with the private sector as well, to co-ordinate that work.
Prescribed assets are always an option provided we can identify what those assets are and the private sector is not
willing to invest on those assets. You will recall that in the budget we made mention of the bucket of issues or strategies to deal with infrastructure investment. Among other things, we said we will be publishing new guidelines which should be concluded by the end of March in dealing with the Broad-Based Black Economic Empowerment. Part of that, is to make sure that we can get the private sector to invest in the infrastructure in government. Dr Ramokgopa has mentioned some of the areas in transmission. He is working with Treasury team to do some pilots on the transmission sector. So, there is a lot of effort being done to bring in the private sector to participate in the public sector infrastructure.
So, part of that is to bring in this private sector investment. We may have too, provided we can identify the asset classes in which the private sector is not prepared to invest. For now, the private sector is prepared to invest. We simply do not have the instruments and I must add the pipeline. Thank you.
Mr A N SARUPEN: Hon Minister, when President Ramaphosa took office, he promised a series of structural reforms in his New Deal programme. You will recall that, and I am going to give
you just four of them. One was reforms to promote reindustrialization, two, was reforms to enable and accelerate small business, three, were reforms for skills development, to deal with structural unemployment and the fourth promise was reforms to promote policy certainty. Can you, as Minister, explain how just one, a single one of these structural reforms that was promised by the President was actually implemented by this government and resulted in accelerated growth?
The MINISTER OF FINANCE: Throughout our discussions including the state of the nation address, including the Budget, we have referred to structural reforms as key elements of changing the economy. Among other things, was that the President set up an institution between the President and Treasury called Vulindlela. This fundamental task has been to look at a number of structural reforms in order to ensure growth. They publish a report quarterly, which unfortunately, I do not know how hon Sarupen missed that report. That report details a number of achievements over the period, and it details what are the outstanding projects for reform, from skills, from logistics to visas to everything that has been done, all of those things are detailed in the in that report. Thank you, hon Chair.
Mrs M R MOHLALA: Hon Chair, Minister, noting that in your budget speech you said absolutely nothing believable about what exactly you do to stimulate the economy. You said nothing about industrialization. You said nothing about saving ArcelorMittal which is the backbone of our steel production.
Could you provide specific and practical examples of the structural reforms the Treasury plans to implement in these productive sectors to stimulate growth and alleviate constraints? Thank you.
The MINISTER OF FINANCE: Hon Chair, I do not know which budget of speech the hon member was listening to. For instance, she says, we have said nothing about industrialization. One of the important things we said in that speech about industry, we mentioned the specific industry and we went in detail after that about assets. We said, for instance, for providing an incentive for electric vehicles. That is part of the industrial strategy. The hon member was not listening to that strategy. So, that is why I am saying she was probably listening to a different budget speech. We made in detail presentation about structural reforms and what is happening.
He also clearly demonstrated, which means the hon member does not read the budget properly.
We have also made a detailed submission on infrastructure in that speech, and the hon member was not reading that speech. She was probably reading a different speech. These are the three areas I can just cite, which I made reference to which are contained in the Budget Speech and in the budget review.
Mr N SINGH: Chair, may I take the question? Hon Minister, thank you for response. It is widely acknowledged that revitalizing South Africa’s economy necessitates concerted efforts from both government and business entities. Alongside the imperative to simplify regulatory procedures and decreased operational expenses for businesses, question therefore, is given the importance of fostering synergies between different sectors of the economy including interactions between large and small companies, foreign and domestically owned companies, and public and private entities, can the Minister elaborate on the government’s approach to incentivizing such collaborations? And how does Treasury plan to overcome existing silos and promote greater integration and co- operation within the business landscape to achieve these goals?
The MINISTER OF FINANCE: That co-ordination of business is not a Treasury function alone. It is a function of the whole of government. For instance, the mining sector, Minister Mantashe meets regularly with the mineral council. The President has established a joint co-ordinating function between business and government, and that co-ordination is taking place.
Recently, when the President was in KwaZulu-Natal, he also set up a similar structure in KwaZulu-Natal for co-ordination between the provincial government, eThekwini Metropolitan Municipality and the private sector. So, those are the initiatives which are taking place, not only from the President, but the whole of government is co-ordinating that function.
Question 188:
The MINISTER OF FINANCE: Let me start with a disclaimer. The document titled Learn About the National Health Insurance was originally issued by Government Communication and Information System. During the 2024 Budget, the Minister stated the following about the National Health Insurance, NHI and I quote:
Health is allocated a total of R848 billion over the MTEF. These allocations include R11,6 billion to address the 2023 wage agreement, R27,3 billion for infrastructure, and R1,4 billion for the NHI grant over the same period. The allocation for the NHI is a demonstration of the government’s commitment to this policy. There remain a range of system-strengthening activities, that are key enablers of an improved public health care system, that must be undertaken.
Such activities include, building a national health information system and digital patient records. Upgrading health facilities and improving quality of care to ensure that they meet the minimum criteria to be certified and accredited for contracting under NHI. Strengthening facility and district management in preparation for contracting. Granting semiautonomous status for central and potentially other hospitals. And developing reference prices and provider payment methods for hospitals. Many of these activities are already underway but require further development before the NHI can be rolled out at scale.
A scenario of the potential cost of a fully implemented NHI is included in the White Paper on National Health Insurance. Any announcement regarding tax changes to fund the NHI will be made through the normal budget process by the Minister of Finance. According to section 77 of the Constitution, only the Minister of Finance can table a Money Bill which can impose national taxes. No announcement regarding new taxes to fund the NHI were made during the Budget of 2024. I thank you.
Dr D T GEORGE: The ANC government has been promising the National Health Insurance for several years now and the bid is apparently still lying on the President’s desk for signature. It’s time for the ANC to come clean on its empty promise on the National Health Insurance. One point six billion rand is available in the budget for the NHI. Twenty-eight people are already employed in upper salary range and an average of more than R1 million per annum. We don’t know what they’re doing.
The conservative cost estimates of the NHI ranges between R850 billion and R1 trillion. The Minister says that lots needs to be done and herein lies the problem. South African households are battling a cost-of-living crisis, yet tax was increased in February because the tax brackets were not
adjusted for inflation. Government could very easily have cut the tax on fuel, expanded the zero-VAT-rated food basket and increase the child grant to the poverty line. Yet it does not respond because it doesn’t care.
Minister, when will the government stop lying to the public about the hopelessly unviable nonstarter NHI, that it knows will break the backs of hardworking South African taxpayers? Just another empty election promise that doesn’t feed the
5 million starving children or put food on the tables of 81% of households who miss at least one meal a day. Thank you, Chairperson.
The MINISTER OF FINANCE: I couldn’t figure out what the question was from the state of the nation address. I couldn’t figure out what the question was. But if it’s based on the original question, which is on the funding of the NHI, the first thing I want to say is that the President made it absolutely clear that he is going to sign the Act. The President has made that absolutely clear. Once the President signs the Act, we will work together with the Department of Health on the progressive realisation of the objectives set out in the Act.
The other issue that the hon member does not want to say when he talks about the unaffordability of the NHI is that, on the other hand, the middle class and the rich are subsidised by government to the tune of R34 billion. Shouldn’t be talking about that R34 billion become the starting point, and the current Health budget?
We will ensure at the appropriate time that the appropriate steps are done to roll out to an NHI. Among other things, as I have referred here, is to upgrade the infrastructure to meet those standards that are required. So, that will be at the appropriate time. What the hon remember wants me to do, which we don’t do, is to say we will tax X and we will do X. At the appropriate time, we will look at the various instruments of raising revenue to fund the NHI. But it’s definitely going to be funded once the President signs it. Thank you.
Ms M D MABILETSA: Hon Minister, the right to quality health care is a constitutionally enshrined right that all South Africans should benefit from. Notwithstanding the socioeconomic status, every citizen deserves better value from our health care spending. What are the economic benefits that South Africa will derive from the implementation of the NHI?
Secondly, how will the NHI bridge the gap between the difference in the amount spent by one person who has medical aid and another who relies on public health facilities? Thank you.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Hon Minister, just a second. Whenever a member raises two questions when he/she should I have confined himself/herself to one, the option is on you to decide whether you respond to it or not.
The MINISTER OF FINANCE: The first set of issues is that a healthy nation is good for the economy. Therefore, its’ in the interest of this economy to make sure that we improve the quality of health for all South Africans. The second set of issues is that the Constitution requires a progressive realisation of the rights enshrined in it. Providing quality health care is a response to that constitutional injunction.
Thirdly, that constitutional injunction requires an equitable access to health care services and the NHI provide is an instrument to achieve that objective. Thank you.
Mr V GERICKE: Minister, it seems that the President is waiting very long for that golden pen to sign the Bill as he has
stated. Regarding the National Treasury’s indication of introduction, introducing a small text to support the National Health Insurance, could the Minister provide insight into whether the proposed NHI has been thoroughly costed. If so, could you share the total estimated cost along with relevant details? Because what we saw on the Medium-Term Expenditure Framework seems a gross underestimate.
Secondly, in consideration of funding the proposed NHI, if the Minister does not intend to increase taxes, could you elaborate on alternative funding mechanisms. If an increase in taxes is indeed planned, could you provide some specifics on which taxes are being considered and the corresponding details of this plan? That you Chair.
The MINISTER OF FINANCE: Firstly, when the budget was presented, the NHI Bill was not assented to and signed by the President. Secondly, the budget on Health mentioned in the Budget Speech has got three components. The first one is for compensation of employees which is R11,6 billion. The second one is for infrastructure, which is going to upgrade the infrastructure of our health facilities. The third element to it is one that deals with the pilot projects which the
national Department of Health has been utilising through that grant of R1,4 million.
Now, people refer to a tax for NHI. I have not mentioned that. At no stage have I mentioned that. I mention taxes once a year, on budget day. I don’t go around everywhere mentioning taxes. If, if I am going to tax anything, you will hear that next year on 19 February. So, you are not going to get any clarity on taxation now.
The last point is, I have said in the White Paper there are different scenarios that have been proposed for financing health care. Once the Act has been assented to by the Head of State, the President we will then work with the Department of Health on those scenarios and give effect and roll the NHI out. Thank you.
Mr N SINGH: Hon Minister, in your Budget you announced that you are going to dip into the contingency reserve. Now, given that billions of rand are already allocated to the health care sector for our public hospitals, and given the fact that there are numerous complaints about poor services being offered at our clinics and hospitals, do you think this is the right time
for government to invest more money into something that we are not looking after currently or to partner with the private sector to make NHI work and to make universal health care work for all South Africans? Thank you.
The MINISTER OF FINANCE: I think your last part of the question is a better option. Your first proposition that we should not invest because in some funny clinic in some area people are not performing well, I don’t think is a proper starting point. Not all public health care facilities are incompetent and inefficient. There are health services where our people are satisfied with the quality of service that they are getting.
We must therefore invest in improving our health care facilities. Where necessary, and I must put this point, where necessary partner with the private sector. Again, in KwaZulu- Natal where you come from, Chief Albert Luthuli Hospital is a case in point which is a public/private partnership injustice. Where necessary, there is an experiment here in Western Cape which is going to come through in Tygerberg. So, those are proposals are going to be entertained moving forward, I thank you.
Question 177:
The MINISTER OF MINERAL RESOURCES AND ENERGY: Hon Chairperson,
hon members, in terms of dealing with debt collection through our regional offices which appoint contact, the department continuously engaged license holders to hold them accountable in licensing obligations. Debt reminder letters signed by regional managers sent to licensees through registered mail to their domicilium citandi et executandi. That means house for being summoned and executed upon. Because it is written in latin, I am explaining it in English for all of us to understand.
And the department continues to make contact and visit last known business addresses to attempt to pursue licensees to settle outstanding amounts and where the attempts do not yet yield result the regional management hand over the debtors to legal services at head office for the matter to be dealt with in the Office of the State Attorney.
Let me emphasise this, you will notice that we talk about debt collection. We don’t take in the first instance a legal route. What we are trying to do is to develop relation with high debtors because our relationship is not short term, is long
term. Their licensees, they must pay the license all the time. So, we must have a relationship with them. That is what we do in that first stage. Now then the State Attorney process is no longer effective. So, we can’t refer them to State Attorneys, and therefore, the department in the process of appointing tracing agent to help trace and recover monies due when the internal process of debt collection has been exhausted. That means that is the next phase, persuade then sent, debt collected. And following handover of the tracing agent, the department will schedule regular meetings with tracing agent to monitor the performance against allocated work and ensure that work is allocated on incremental basis to perform an agent. Again, ever since which agent do their work successfully and give us results. That’s where we develop long term relations.
As part of management reporting, quarterly revenue reports are generated indicating balances per data and aggregated balances per region. These reports are circulated to management for appraisal and for use to monitor both performing and nonperforming debtors.
Going forward, the department will ensure that where licensees with outstanding and due amounts apply for new rights for renewal in other provinces such are not ensued or granted until outstanding amounts are settled in full. So, our assumption is that you get a license, you don’t settle your debt, you will be attracted to get another license. In that case, if you are a bad debtor, we deprive you access to license.
Mr M G MAHLAULE: Hon Minister, while the proposed control measures to improve debt collection within a reasonable acceptable time frame are welcome has there been any consequence management on employees that impede the department to collect debt on time as recommended by the Auditor-General? If not, why not? And if so, what are the relevant details?
The MINISTER OF MINERAL RESOURCES AND ENERGY: Our starting
point is not the employees, is the debtors because the employees don’t owe the department nothing. It is debtors who owed. That’s why we give you this last answer that if you are a bad debtor in another province, you get a licence in another province, we don’t grant you that license. That means we are monitoring you as a debtor.
Employees will be penalised from time to time in terms of transgression of their conditions of employment. But it is not the primary task to look for mistakes amongst the employees.
It is to encourage the employees to do their work, sent those letters, visit those debtors and collect the money. If they are transgressing the conditions of employment, then consequences will follow.
Mr K J MILEHAM: Minister, we have noticed the poor performance of the department in managing its credit control and debt collection under the ANC government, with the audit action plans and consequence management not being implemented, monitored or enforced by you. In fact, the Auditor-General highlighted this today in her latest report for the safe group, inadequate consequence management, poor quality financial statements and internal control deficiencies.
Considering this lack of basic financial management and physical leadership, how do you expect entities such as the African Exploration, Mining and Finance Corporation and Petro SA to improve their audit outcomes and even deliver their annual report on time when they are led by incompetent cadres in the national executive and at the SOEs reporting to you?
The MINISTER OF MINERAL RESOURCES AND ENERGY: Yes, I knew that
this thing of cadre and incompetence will come to the fore. Last time I described it as being racist. Let me tell you how. This is racist if you see poor performance and you attached that to race. No, wait. Don’t clap hands, I am explaining. Let me explain this. In the last question of cadre deployment, I explained this to you that, last time I had a Director-General worker who had a matric but was the right man. And that was competence. I am having a Director-General today who is an engineer ... [Inaudible.] ... [Interjections.] That is cadre deployment. I think it must disappear the use of this obsession still with issues. The question is, if we have given you steps regarding debtors, they have nothing to do with After Effects, AE. They have nothing to do with self. There are debtors in the department, and they apply licenses through the department. You are dragging all the entities into the space for some of their reasons in your mind. I don’t understand it.
Now we can as well stand up and sing then and dance. There are less tense there. Take out the entities. Let’s deal with the issue of debt collection, which is beginning to improve
because we have assigned the regional managers and teams to deal with it.
Ms N MHLONGO: Chair?
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Okay, you can proceed.
Ms N MHLONGO: Okay, can I proceed. The hon member was talking as if I am struggling with my gadgets. Minister, revenue of Eskom debt collection moved from R258,8 billion which is 9,5% increase from R144, 8 billion in September 2002, which was due to the impact of tariff increase for the year 2024 financial year. Now the tariff increase was 18,65 resulted in an increase in revenue in September 2022 compared to 2023 despite 5,9 declining in said volume.
It is our view that the income does not come from the efficient debt collection but rather from high tariff that the National Energy Regulator of South Africa, Nersa, imposing on the consumers. Can the Minister deny or agree on this assertion of the view that you hold and allow elaborate on its answer. Thank you.
The MINISTER OF MINERAL RESOURCES AND ENERGY: Hon Nqobile has
missed the point. She talked about Eskom debt. Here we are talking about debt for licensing and permits. That’s what we are dealing with.
So, you are talking about ... [Inaudible.] ... So, we can’t deal with that issue. You should have asked that question to Minister Ramokgopa. I am dealing with debt for licensing and permits in the department, not Eskom. Eskom is not my portfolio, hon Mileham. Okay. Just for your information, its not my portfolio. Eskom is not my portfolio.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): The hon Zondo?
Mr N SINGH: Hon Chairperson, I will have to take this question again. He is getting married tomorrow. So, I am taking the
.... Chair, can I take one and a half minutes to ask the question. So, we move towards 6 o’clock. It was very cold here in here and we don’t want any more questions.
Let me ask the question. It’s very difficult, hon Chair and hon Minister, for me who does not serve in that portfolio committee to ask you a question because one does not know the quantum of debt. I don’t know if you are aware of how much the
debt is within this five-year period. And you mentioned that it is debt for people who don’t pay for licenses and permits. Is there a system within the department that if they do not pay by a particular period that those licenses and whatever would get cancelled completely? Thank you.
The MINISTER OF MINERAL RESOURCES AND ENERGY: The debt is for
renewal of licenses annually. Are annual fees. If you don’t pay ultimately, we withdraw that license. But that is not the starting point. We start by pursuing in people to pay for their licenses because they have an interest in mining, they have an interest in exploration. And we want to encourage them to do that because the future of the industry is not on cancelling licenses. Is on encouraging them to use those licenses and develop business models. That will help us, help others to deal with mining issues. Thank you.
Question 178:
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT:
Sorry.
Mr N SINGH: Hon House Chairperson, on a point of order.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Hon Minister, could you please take your seat. Hon Singh, what is the point of order?
Order, hon members!
Mr N SINGH: Hon House Chairperson, I rise on a point of order and information.
I do not know but my cronomy just says one minute past six. I do not know what yours says. I do not know if mine is wrong.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Hon Singh, mine also says six, zero, one. We will close this House at six, zero, five.
We still have four minutes, hon Singh.
Hon Minister, you are welcomed.
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: My
apologies hon members. We seem to be in injury time.
Our department is implementing various tools to ensure the transformation of the wildlife sector. In this financial year, we are currently consulting on the National Biodiversity Economy Strategy which is been revised and developed to optimise biodiversity-based business potential across the teresity of freshwater ... [Inaudible.] ... run and marine landscapes and to contribute to economic growth and local beneficiation, job creation, poverty alleviation and food security, while maintaining ecological integrity of the biodiversity resource base for thriving people and nature.
Through it revision, the strategy is been broadened to respond to the White Paper on conservation and its sustainable use of South Africa’s biodiversity, while incorporating the outcomes of the National Biodiversity Economy Phakisa and addressing opportunities associated with all eco systems.
This strategy has been completely reconceptualised as a broad strategy to guide the entire biodiversity economy and it is now framed to provide strategic direction to the sector over the next 10 years. It includes two cross-cutting imperatives that address enhanced biodiversity conservation and a goal on transformation. Consistent with the policy context of the
White Paper, the strategy is founded on the key pillars of the conservation, sustainable, use and beneficiation of the biodiversity business value-chain and transformation.
This requires growth and ensuring sustainability and the conservation of biodiversity components that can be leveraged for biodiversity-based businesses as well as driving transformation of the sector.
Mr M E DLAMINI: Hon House Chairperson and hon Minister, just a quick one: Is there a necessity to provide a historical marginalised people with skills and training so they can fully benefit from the sector potentially on wildlife and biodiversity? Thank you.
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: Hon
House Chairperson yes, the department has previously embarked on a process to identify opportunities available within and around protected areas that communities can tap into. We then conducted a skills audit in communities living in adjacent to protected areas. We found that these communities did lack the necessary skills to capture economic opportunities that might arise.
The results of the survey also indicated the trainings relevant to business entrepreneurial development and technical skills are required within various value-chains. We have already started to offer both accredited and nonaccredited training on annual basis. So far about 2 000 people have been trained.
This commitment also aligns with the strategy that I was speaking about earlier when a commitment was made to provide training 4 000 Small, Medium and Micro Enterprises, SMMEs, by the year 2030. I thank you.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Thank you very much, hon Minister. The hon Paulsen.
Ms K N F HLONYANA: Thank you, hon House Chairperson, I will take it on behalf of him.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Alright.
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: Hon
Minister, the department had a target of 30% expenditure ...
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Hon member, I am sorry. I skipped the hon Bryant.
I was nearly guillotined. I am sorry about that. The hon Bryant.
Mr D W BRYANT: Thank you. Hon Minister, it’s been a trend that in the absence of economic opportunities ...
Interjections.]
Sorry, what is that?
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Hon Bryant, just go ahead please.
Mr D W BRYANT: In the absence of economic opportunities and development projects, many of the unemployed people living close to our national provincial parks across South Africa have resorted to poaching. This has led to a 75% decrease in the rhino population of the Kruger National Park over the past
10 years. With our rhino numbers now dwindling in Kruger National Park are poachers targeting parks and private
reserves in KwaZulu-Natal, leading to 499 rhinos being poached last year across South Africa which is an increase of 51 rhinos poached as you would be aware.
This is an addition of the poaching of many other animals for food and traditional medicine.
What steps is the Minister taking to protect any new endowment projects from the rampant poaching that is taking place across the country and in particular KwaZulu-Natal?
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: Hon
Bryant, yes indeed rhino poaching is a serious scourge. I do not think that it is primarily linked to poverty in protected areas around our national parks. It is really related to organised crime. I think you are well aware that we have an integrated wildlife trafficking strategy that addresses this through intelligence-driven operations that have been highly successful in catching and prosecuting offenders.
I think what we are concerned about in terms of the existence of poverty on the outskirts of our national parks is an increase of what we call bush meat poaching. We are
particularly concerned about the sneering of many species of animals, many of which would not necessarily be that the targets of the ... [Inaudible.] ... businesses that are set.
One of the things that we are currently doing particularly on the Western boundary of Kruger National Park where there is a huge problem is that we have increased our foot patrols so that we can search for these animals. We are also responding to tipoffs from our tourists. This is a matter that is currently under discussion by the Kruger National Park management and by also SA National Parks, Sanparks in general because we recognise that while a lot of our resources have been going into dealing with the rhino poaching scourge, this is a new phenomenon that we need to be combating much more effectively. Thank you.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Thank you very much hon Minister. Hon member, you are now allowed.
Ms K N F HLONYANA: Thank you, so very much hon House Chairperson.
Hon Minister, the Department had a target of 30% of expenditure to companies that are at least 51% owned by women. This target has since been removed. Why was the target not reinstated and how would the department measure its progress in supporting women-owned businesses without the target and will the department ensure that women-owned businesses are not disadvantaged without the targets? Thank you.
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: Hon
House Chairperson, yes this is an important issue. You would be aware that because of the core challenge to the Preferential Procurement Bill, we must change the way in which we handle our targets. We now have a departmental strategy that encompasses these targets. In fact, the target in certain categories is not 30%, but is now 50%. It includes women and it includes those who are living with disability conditions, and it also includes the youth. Thank you very much.
Mr N SINGH: Hon House Chairperson, last question again today and yesterday.
Hon Minister, we are concerned, and people are concerned about the environmental impact of this plan. Many environmental NGOs
have expressed the concerns. My office has also received numerous correspondence regarding this issue.
The proposed health clinics offering rhino horn and ivory curving for personal use we believe will only harm wildlife and stimulate illegal markets. We know as this has happened before. We are responsible and you are responsible for South Africa’s fauna and flora, hon Minister.
How do you plan to fulfil this obligation, whilst still promoting the monetisation of our rich wildlife, biodiversity heritage and biodiversity?
The MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT: Hon
House Chairperson, I think what is important is first of all to read the strategy. I think what you will see has been introduced into this strategy is a relationship between our conservation objectives, our ecosystem protection objectives and our transformation objectives.
If you look at previous economic strategies, there was not that linkage between economic objectives and environmental objectives. If there are certain specifics in the strategy
which you feel are inappropriate, you still have an opportunity to comment on the strategy. I have extended the comment period by another two weeks because NGOs have indicated they did not feel there was enough time. We do have the Indaba next week which is intended to be a conversation on this strategy. We welcome inputs that will improve it. Thank you very much.
The HOUSE CHAIRPERSON (Mr M L D Ntombela): Thank you very much, hon Minister.
Hon members, the time allocated for questions has expired. Outstanding replies received will be printed in Hansard.
Order. I request hon members to stand and wait for the Chair and the Mace to leave the Chamber. That concludes the business for the day. The House is adjourned.
The House adjourned at 18:13.
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