ATC140313: Report of the Portfolio Committee on Energy on its oversight visit to KwaZulu-Natal, Free State and Gauteng on 27 – 31 January 2014, dated 12 March 2014


Report of the Portfolio Committee on Energy on its oversight visit to KwaZulu-Natal, Free State and Gauteng on 27 – 31 January 2014, dated 12 March 2014

1. Introduction

1.1. Purpose of the report

The purpose of this report is to report back to the National Assembly on the findings of the Portfolio Committee on Energy’s oversight visit to KwaZulu-Natal, Free State and Gauteng.

1.2. Background

Poor rural households have least access to electricity and provisioning it to them is a great challenge. Extending the grid to every household in the country is not feasible now for technical and financial reasons. The solar home system (SHS) programme was designed to give more rural people access to limited electricity until such a time that they get grid connections.

The solar water heater programme is one of the benchmark renewable energy projects that are managed by the Department of Energy in its pursuit to ensure SA has an energy mix that includes clean energy. In 2009 the Minister of Energy stated that “The Department will ensure that one million solar water heaters are installed in households and commercial buildings over a period of five years”. In the 2012/13 Annual report of the DoE, it was reported that to date 350 000 solar water geysers have been installed to date. In terms of the Integrated National Electrification Programme, it was reported that close to a million new connections were achieved over the past four years increasing access to electricity to over 84%. Various challenges and successes were noted here and the PCE planned to engage with both the beneficiary communities and concessionaires/service providers to gain an overview of both successes and challenges.

In terms of our renewable energy programme, “Amongst the G20 countries, South Africa is now recognised as the 9 th most attractive investment destination for the green economy and our programme was voted by the Global Leadership Infrastructure Programme in New York as the best green energy infrastructure programme in the world in 2012.” In this regard out of the 93 bids received, 17 renewable energy programmes were granted preferred bidder status in round three of the REIPPP. This follows up on the successful financial closure of round one, where 1 416MW of projects from 28 bidders are currently under construction and round two where a total of just over 1000 MW was approved. In terms of cogeneration, the Minister has made a determination in December 2012 that 800 MW of cogeneration power will be implemented in South Africa and the DoE has as its target in this area, to develop a strategy and plan for the introduction of economic infrastructure as per the IEP/IRP.

1.3. Purpose of the oversight visit

The Portfolio Committee on Energy will conduct oversight on various energy related projects in a number of provinces. The Committee plans to firstly visit solar home systems that have been implemented in KZN. Further, the committee will visit an area in the Free State where the Renewable Energy Independent Power Producer Procurement Programme ( REIPPP ) is being implemented, In Gauteng; the PCE will be holding public hearings on “Transforming the gas industry through partnerships” and will further have a roundtable discussion focusing on “Cogeneration and tri-generation power initiatives and partnerships”. The week will end with a visit to Integrated National Electrification Programmes (INEP) (and solar water heater programmes) in Gauteng

1.4. SA Parliament Delegation

Hon Sisa Njikelana - Chairperson and Leader of the delegation

Hon GS Radebe

Hon N Mathibela

Hon B Tinto (joined delegation on 30 January 2014)

Hon B Ferguson (joined delegation on 30 January 2014)

Hon L Greyling (joined delegation on 30 January 2014)

Mr A Kotze (Committee Secretary)

Mr S Maboda (Researcher)

Mr P Rampersadh (Content Advisor)

Mr L Dodo (Committee Assistant)

Mr T Gubula (Media - Parliament)

Ms K Barlow (Media - Parliament)

2. 27 th and the 28 th of January 2014 - KwaZulu-Natal visits

On the 27 th and the 28 th of January 2014, the Committee visited non-grid electrification projects in Ndwedwe Municipality and Msinga Local Municipality. The aim was to visit four Municipalities including Nquthu and Maphumulo; however, this became impossible due to time constraints. A summary of the visits is provided below.

It should be noted that Mr. Diana – an engineer from UKZN – was part of the delegation at the invitation of the Chairperson.

2.1 27 th January 2014 Msinga Local Municipality – meeting with stakeholders and beneficiaries

The Mayor of Msinga was present and was requested by the Chairperson to welcome all present. After the welcoming, the Department of Energy and Ukukhanya Energy Services (KES) briefed the Committee as well as the various stakeholders present on the non-grid electrification programme prior to the oversight visits.

2.1.1 Briefing by the Department of Energy

The Department of Energy (DoE) gave an overview of the Non-grid Electrification Programme indicating that the project started in 2001 and the DoE is responsible for the project. The Department highlighted the following regarding the project:

In 2001, DoE appointed KES to install solar home systems. There are more service providers, other than KES, in various other regions within KZN. However, KES has been appointed to provide solar home systems (SHS) specifically to the Msinga area. SHSs is installed in areas where there are challenges with grid electrification in the medium to long term.

When providing SHSs, the DoE looks at the plans of Eskom and the Municipality. If a municipality is at the far end of the grid electrification plans of the Eskom and Municipality – such a municipality qualifies for non–grid electrification (in this case, a SHS).

The Department emphasised that a SHS is a temporary measure – while waiting for grid electricity.

The DoE has a 20 year contract with KES. The reason for the 20 year period is to ensure the sustainability of the project. Another reason for the 20 year period is that the installation fee that is given to KES by the DoE is 80 percent of the total budget. The remaining 20 percent is from KES investments. The Department also confirmed that they work very closely with Msinga Local Municipality.

It was further explained that when the project started in 2001 – the system had the capacity to provide for four lights, charging of cells phones as well as the use of a black and white television – and this is the system used at Msinga. However, the DoE has since increased the capacity of the system – the only change is that one can plug in a colour television and can connect 8 lights instead of 4.

With regards to the financing of the project one has to apply for the solar home system and pay an application fee of R110.00. On a monthly basis one pays a service fee of R89.00. The reason for paying the R89.00 service fee is for KES to do maintenance – if there are faults on the battery or any part of the systems. KES also utilizes part of the service fee to pay their running expenses. As a way of subsidising the indigent communities, municipalities contribute a portion of the R89.00 service fee, from the Free Basic Electricity (FBE) fund. Once a municipality has contributed its portion from FBE, the beneficiary pays the difference. In the case of Msinga beneficiaries were paying R55 instead of R89.00. However, the FBE allocation differs, across the differing municipalities – i.e. the difference paid by the beneficiaries in Msinga Local Municipality will not be the same in another municipality.

2.1.2. Briefing by Ukukhanya Energy Services (KES)

KES indicated that DoE has already covered most of what the project is about. However, the presenter, Mr Ngcobo, added that the installation in Msinga started in 2002. Currently, Msinga is the biggest Municipality in terms of people who have SHSs. More than 7 000 people in Msinga received SHSs, about 70 percent are still paying for the system, while others have stopped paying – therefore their systems have been disconnected.

KES has two offices in Msinga. In the two offices, KES has employed about 40 people on a permanent basis – mostly to do maintenance. People employed are from Msinga, including 8 women, who were identified by the municipality.

Mr Ngcobo explained that, the system is designed in such a way that if one is not paying it switches off automatically. KES confirmed that Msinga Municipality contributes (from the FBE) R34 and the beneficiaries pay the difference. KES noted that they are also exploring other alternative energy sources that can be rolled out in the future – not just SHSs.

2.1.3. Input by Mayor Sikakhane of Msinga Local Municipality

After KES’s presentation, the Mayor of Msinga added that Msinga Municipality has a huge backlog in terms of service delivery, generally. The Mayor welcomed the SHS programme indicating that “ it is better to get half a loaf of bread than nothing ”. However, the Mayor pleaded that the grid electrification programme be accelerated.

The Mayor acknowledged that there are areas that are pipelines for grid electricity – emphasising that he did not mean that the department is not doing anything. The Mayor also highlighted that water is the main challenge and the main need in the Municipality – much more important than electricity.

2.1.4. Discussions

After presentations, members of the community as well as Members of Parliament were invited to contribute or respond to presentations. The following key issues were raised, particularly by the Community Members:

  • A concern regarding payment of grid electricity in Emahlabathini area was raised. A community member indicated that when he bought electricity for R100 it was utilized quickly. The resident contacted Eskom and was given a number to key into the system, resulting in the resident recovering half the amount of electricity he has purchased. This was a general problem in Emahlabathini. The Emahlabathini community was then advised by Eskom to report the matter to the Councillor, who would take up the matter with the Municipality. The feedback was never received from the Councillor – the current situation is that grid electricity is available but not working.
  • Adding to what Mayor Sikakhane said: As much as the community appreciates the SHSs, they would like to get grid electricity from Eskom.
  • There were complaints that the payment method used by KES is problematic. The beneficiaries of the solar home system are required to pay the monthly fee at the Post Office. The issue highlighted is that “ old people spend more than an hour in the queue in the post office when wanting to pay for the KES solar. There is one queue for everything .” A dedicated line for those paying for KES services was recommended.
  • An issue was raised about a community/village member that resides near an existing grid connection but was told supply to his village will come from the side that has non-grid electrification. Residents were concerned about this process.
  • A concern was also raised about the fact that the KES systems are designed in such a way that supply gets disconnected when one has not paid for the KES services. The main issue though, was that even though one is disconnected, the monthly service fee still has to be paid. The community needed clarity on how one pays for a service that is not being used.
  • The limited capacity of the solar home systems was highlighted as a concern. The fact that one cannot cook or connect a fridge was regarding as very limiting in light of the fact that residents are far from the towns – preferable they would like to buy bulk food and store it in the fridge.
  • Clarity was sought as to what happens “if the solar panel was stolen, would KES replace the system?

2.1.5. Responses

· KES appreciated the feedback regarding queues at the post office and indicated that they would try to work with the Post Office in ensuring a dedicated line for KES Customers. The method of paying at the Post Office was done because of robbery at KES offices. KES customers were requested to pay at the Post Office and bring slips to KES. KES pleaded with the communities to report to KES on issues relating to payments problems at the Post Office. Old people can still be assisted at KES offices; however, younger people are encouraged to pay at the Post Office.

· On the point of paying for the service while disconnected – KES indicated that when the SHS was installed – it was installed in a manner that one rents the system – hence paying for it even though it is disconnected (in other words one pays for “having the system”).

· When a system is stolen, the owner has to report the stolen system to the police. With such evidence KES would be able to replace the system; however, there will be a fee involved.

2.1.1 Site visit

The delegation visited a household in a deep rural village and was able to appreciate the significance of the SHS in a poor rural environment.

2.2 28 th January 2014 - Ndwedwe Local Municipality

2.2.1 Briefing at the Ndwedwe Council Chamber

The first part of the meeting was held in Ndwedwe Local Municipal offices in the morning, on the 28 th of February 2014. The meeting in Ndwedwe was attended by the Members of the KwaZulu-Natal Provincial Legislature (members of the Provincial Committee on Social Development, including the Deputy Chair of Chairs), PCE Members, City Councillors, the Acting Municipal Manager, the Mayor of Ndwedwe and the officials of Ndwedwe Local Municipality. The second part of the meeting, the same day, was with the Ndwedwe community in Hosiyana village.

In the first meeting the acting Municipal Manager chaired the meeting as requested by the Mayor (Mr Hadebe). The Mayor welcomed all present and thereafter, a round of introductions was done.

The Chairperson of the PCE, Hon Sisa Njikelana, outlined the purpose of the visit indicating that one of the roles of Parliament is to conduct oversight over any department. He explained that the PCE was aware that the DoE was rolling out SHSs. So, as part of the PCE oversight work, the Committee requested DoE to identify areas that the Committee could visit, and KZN was identified as the main province where there was substantial rollout. Furthermore, it was explained that the KZN municipalities were selected as a sample as it was impossible to visit all areas that are rolling out SHSs. The Chairperson thanked the Members of the KZN Provincial Legislator for attending – indicating that energy issues are cross cutting.

2.2.2. Briefing by the Department of Energy

Presentations were similar to those done at Msinga Local Municipality – details of which are summarised below.

Similarly to above, the DoE gave an overview of the Non-grid Electrification Programme indicating that the project started in 2001 and the DoE is responsible for the project. The Department highlighted the following regarding the project in Ndwedwe:

· The non-grid electrification programme started in 2001. The intention was to provide some form of electricity to the areas which could not be electrified through grid electricity. Areas identified were those that were not earmarked for electrification in the medium and long term.

· The system has the capacity to connect 2 – 6 lights, black and white television as well as the charging of cells phones. The system does not provide for heating and cooking. DoE appointed a service provider (KES) on a 20 year maintenance contract. Reason for the 20 year contract was to ensure sustainability of the project until grid installation.

  • The Ndwedwe Local Municipality works hand in hand with KES. The Municipality is responsible, amongst other things, for identifying the indigents and introducing KES to the Councillors and the community. If the Municipality is not involved, implementation becomes a challenge. With regards to the financing of the project one has to apply for the SHS and pay an application fee of R110.00. On a monthly basis, one pays a service fee of R89.00 and as explained above, part is subsidised by the Municipality from the FBE funds.

· The cost of the solar home system opted for (by the DoE) is equivalent to the cost of grid connection. Due to the drop in SHS prices, the specifications of the systems have since been revised to provide for more, like a colour TV. At the moment, this is work in progress.

2.2.3. Briefing by the Ukukhanya Energy Services (KES)

KES also delivered a presentation adding to the points raised by the DoE. The following was highlighted:

The project in Ndwedwe started in 2005, however installations started in 2006. However the project stopped after 300 installations as there was a conflict on the appointment of KES as the service provider. Lack of cooperation from the community led to a low number of installations.

The DoE, in 2009, gave KES another budget, where KES came back to Ndwedwe for project implementation. This also did not solve the problems as the office in Ndwedwe had to be closed because only about 40 to 50 customers were paying for the system and this was not sustainable for the KES offices. It was possible that certain households were illegally using the system.

There is only one person at KES offices in Ndwedwe – responsible for complaints. Others have lost their jobs.

2.2.4. Discussions

· The MPL’s appreciated the invitation by the PCE and also noted the educative nature of the engagement.

· A concern was raised that, the power supplied by the system is limited – it was argued that, the system should also support a refrigerator.

· The system does not address energy poverty as women still have to continue collecting wood for heating and cooking. Therefore, it was urged that the DoE upgrade the system.

· Regarding the issue of conflict on the appointment of KES and the closure of the project: It was indicated that the community was not happy with the system, they preferred grid electricity. It was suggested that the budget must be increased from DoE to accelerate electrification.

· With regards to the issues on payment of the system, it was indicated that poor people cannot afford to pay for the system – it should be free. The provincial legislators undertook to discuss this issue independent of the PCE.

· The main issue in Ndwedwe seemed to be around the acceptance of the non-grid technology – perhaps education and awareness raising on alternative energy sources needs to be intensified.

  • The Mayor’s contention was that Ndwedwe Municipality is 80 percent electrified.

· The Department of Energy has to review the policy on non-grid electricity system including budget allocation as well as the technology to accommodate increase of power.

· The “Island Syndrome” was raised quite sharply i.e. the SHS was not installed in certain households within area where installations were made.

2.2.5. Site visit

A site visit to a household where a SHS had been installed was made. However, this did not happen as the system had been stolen in the said house.

2.2.6. Public meeting at Hosiyana Village in Ndwedwe

A second meeting was held with the community at Hosiyana village in Ndwedwe... The meeting was facilitated by the Mayor of Ndwedwe.

Hon Njikelana explained the purpose of the meeting and requested that community members share experiences, challenges and opportunities regarding the non-grid electrification programme. The Community raised the following issues:

· The community experienced challenges with crime. SHSs are problematic because they are easily stolen.

· Members of the community would prefer grid electricity, as the SHS does not fulfil all their requirements. Heating and cooking also needs to be considered when installing the system.

· The area is in the process of being electrified – some members of the community emphasized that they would rather wait for grid electricity.

· Some appreciated the fact that could at least light their houses with solar. However, a concern was raised that solar is not reliable – when it is raining the system does not work.

· There was a concern raised that if homes have a SHS, this would prevent households from being grid-electrified

· A whole host of other service delivery issues were raised viz.:

Ø Lack of potable water – Note: This was strongly emphasised!

Ø Lack of roads

Ø Need for houses

2.2.6 Responses

· In terms of the capacity of the system, KES clarified that the system is determined by the DoE not KES. KES is the implementing agent. Issues relating to the limited capacity of the system should be directed to the DoE.

· In response to this, the DoE indicated that the system is currently being upgraded (work in progress) – the new system could be installed in two houses instead of one. However, the new system still does not address the issue of energy poverty as it does not provide for cooking and heating.

2.3. Issues for consideration

· Increasing the capacity of the solar home system is essential – as a way to address poverty issues, particularly to provide for cooking and heating as well.

· The absence of electricity and the impact thereof on schools was noted by the PCE.

· The absence of water, although not a mandate of the Energy Department was noted but was indicated that it would be referred to the relevant Department (Water and Environmental Affairs).

· The good relationship that KES had with the Doe together with the Msinga Municipality and the Post Office was commended and it was emphasised that such relations should continue.

· It was indicated that the whole drive for the SHS was to eventually upgrade to grid electricity. It is an interim measure. Education and awareness raising on alternative energy sources is essential.

· Different municipalities appear to have differing policies on the deployment of the FBE policy and hence recipients of non-grid electrification are receiving differing amounts (to pay the service fee) depending on where they live.

· A socio-economic impact study of the programme needs to be conducted

· The DoE and Eskom, to in future, come to the municipality and/or communities to explain the electrification process.

3. Visit to Letsatsi Power (Free State) - 29 th of January 2014

On the 29 th of January 2014, the Committee visited a Solar Photovoltaic Park (SPV) – a project that is part of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). The Committee has been getting updates and reports from DoE on how the REIPPP is doing. The Committee thought it would be useful to get a sense of what is happening on the ground in terms of implementation. The description of the project is provided below.

Solar Reserve SA, Intikon Energy (Pty) Ltd, Kensani Capital Investments (Pty) Ltd, Old Mutual Insurance Company of South Africa and GCL-Poly Energy Holdings Limited, jointly developed and submitted the SPV project, which was awarded to the preferred bidder on 07 December 2011.

The project entails the development, design, construction, financing and operations of Solar Photovoltaic Park 50km North-West of Bloemfontein in the Free State, with an installed name plate capacity of 75 MWDC and which will deliver circa 64 MWAC into a 132 kV distribution line. The project is being designed, constructed, operated and maintained by the consortium comprising of ACS Cobra, GranSolar and Kensani EPC.

The total project cost is estimated at circa R2.4 billion. The Project is financed on a non-recourse project finance basis, with approximately 75 percent of the project funded through senior and junior debt arranged and underwritten by Rand Merchant Bank. The shareholders are funding all the equity in the Project by ordinary shares and shareholder loans. Intikon Energy, SolarReserve and Kensani (the developers), have been developing the Project since the fourth quarter of 2009.

Prior to the Committee visiting the site, a presentation providing an overview of the project (including the background above) was delivered by the project partners. Key issues emanating from presentations are as follows:

· The project is ranked amongst the top 10 ten in the world in terms of its scale.

· Letsasi Power started construction work on the 6/7 th of January 2013. Project covers about 150 hectares and 227 000 PV modules have been installed. 1200 km of cables have also been installed.

  • Construction is now completed and Letsasi Power officially notified DoE on 28 January 2014 for the completion. They officially requested from NERSA permission for early power generation. Letsatsi Power planned to connect to the grid on 9 th and 15 th of February officially, instead of the contract date in May 2014.

· About 400 locally people have been employed on the project

· In terms of economic develop (which is a high priority), targets have been exceeded. For example, in terms of job creation, women participation, enterprise development etc.

· Letsatsi Power adopted a high school at Tokologo Municipality and created a vegetable garden. The garden is feeding about 20 to 30 families per week. The aim is to expand the garden. The next phase is to train the community on how to harvest and sell the vegetables for profit.

· The company employed local people who had no skills and these people were trained

· Letsatsi also appointed a Transformation Manager, ensuring compliance with the DoE requirements. For example compliance with the local content of the materials, use of SA companies, employing black people within the 50km radius, and helping to understand what has to do with compliance requirements.

· Letsatsi Power worked with the Municipality in terms of identifying workers in the area.

· Some sub-contractor was not found in the area, but they trained the local workers.

· Furthermore, a needs analysis study of employees was done. Workers were trained in the following areas: safety and 1 st aid, construction and water, electrical. Realised that local people were willing to do the training. Money was sourced – and training was conducted for 60 to 70 people. They were issued with SETA accredited certificates. Of the 250 assessed, 50 fell off as they were not interested, but 190 were interested. Letsatsi looked at their current level of education and identified 4 types of programmes; Healthy and Safety, Electrical Works Installation, First Aid and Construction.

· The training programme started in October 2013 with about 67 people and they fully completed and at the time of the site were due for the exams. 80 start next week. Letsatsi now has 120/130 SETA accredited workers. This was not part of the contract and can be look at as pro-activeness from the developers.

· Durban University of Technology was also adopted by Letsatsi Power. It was difficult for the University to identify project for the students’ in-service training project as there are few opportunities in the solar industry. There are 70 students in total and the ultimate goal to run a solar manufacturing plant in Somerset West. Letsatsi wanted them to learn what it means on the practical point of view.

· It was also noted that women owned companies were difficult to find e.g. doing electrical installation work. This was a huge problem across the project.

· The PCE expressed its utmost appreciation of the achievements and commended Letsatsi Power for going beyond the contract obligations

· Strong cooperation between the company and Dealesvile Local Municipality was also appreciated – specific reference was also on the utilisation of the personnel that was trained by Letsatsi Power and was to be transferred the municipality on a similar project.

· Cooperation and coordination which included the provincial offices of DoE, local Energy Information Centre and local FET College and some universities was noted

· An academic from the University of Free State – who was invited as an expert – was encouraged to explore and set a joint initiative with Letsatsi Power for students in future

NOTE: Dr. Ntwaoabarwa – an academic from University of Free State – was part of the delegation at the invitation of the Chairperson.

4. Oversight visit to Ivory Park, Johannesburg - 31 st January 2014 -

The PCE visited Ivory Park SWH project on the 31 st January 2014. Due to heavy rains no site visit was conducted. However a briefing meeting, at the local community hall, was held with the local Councillors, members of Ward Committees, academics from UJ (at the invitation of the Chairperson), Eskom and DoE to discuss the successes and challenges identified.

The Chairperson welcomed everyone and thanked them for their attendance.

Clr. JP (Big Joe) Mhlanga (Ward 78) welcomed everyone on behalf of the City of Johannesburg and thanked the PCE for taking the time to visit the area. With him were Clr. Petros Zitha (Ward 79) and Clr T.M. Mabotja (Ward 77). The three wards make up part of Ivory Park in the City of Johannesburg.

4.1. Briefing by ESKOM

Mr. M. Dlamini presented the project where it was explained that the scope of work was the supply, delivery, installation and maintenance of 16000 solar water heaters to the Ivory Park area. It started on the 11 th October 2010 and was completed in 30 April 2012. A total budget of R101.76 million was allocated to the project. Three main contractors were used for the installation Genergy, Thunzi Consulting (Pty) Ltd and Machite Engineering cc. In terms of employment 292 local people were employed on the project as Data Capturers, Community Liaison Officers, Installers and Installer assistants. Roshcon was employed to conduct random audits to selected areas and the SANAS 10106 specification was used to develop a checklist for technical audits. Eskom indicated that there was a 5 year after sales service and maintenance programme and all SWH’s have a 5 year guarantee and within this period all the installed geysers will be replaced and/or maintained depending on the defects.

Eskom listed the following issues/challenges identified from their side;

· The community was not properly informed on the employment processes followed resulting in work stoppages

· Some of the SWH developed leaks as the unit are designed for a maximum of six bar pressure and the water pressure in the area fluctuated above and below this.

· A lack of capacity from suppliers resulted in stoppages

· Eskom needs to ensure that proper planning is done and that the municipality and Councillors are involved.

· There were some technical problems with units

· The high content of calcium carbide in the water also resulted in damage to units

· There needs to be feasibility studies done to assess the challenges that lay ahead

· There also needs to be an assessment of the roof structures as some cannot hold the weight of the units

· Eskom needs to re-engage with the DoE for cost of maintenance of geysers

Finally Eskom noted that these projects must involve the communities and communication is critical

4.2. Comments from the Department of Energy

Mr X. Mabusela presented a more overhead view of the project and indicated that of the planned target of one million SWH installed, Eskom and Municipalities have installed 390 000 so far. The implementation of the projects should be under the management of the Municipalities.

Further, in terms of the actual units, currently there is a 70% local content threshold but originally most of the units were imported. Currently some tubes are imported and the units should have a 5 year warranty.

4.3. Comments from the City Councillors

Clr Mabotja responded on behalf of the Councillors and indicated that the community was well informed, there was clear communication and public meetings. There were also clear employment arrangements made with meetings held every Monday and Thursday.

In terms challenges identified;

· Some units were delivered but not installed hence it cannot be claimed that the project was completed

· The quality of the geysers was low

· The community were to be trained for maintenance but so far this is not happening

· There was a lot of poor workmanship and this has resulted in a lot of leaks

· Eskom is not responding to the concern of the Councillors

Clr Zitha further indicated that the project employed a lot of people and they were happy. The project was transparent and there was regular communication. There are benefits as people have hot water and save on paraffin used to heat water.

In his Ward there is only one trained person to maintain the geysers and the work load is too high for him as they break regularly. Further he has a problem obtaining parts for defective geysers. Additionally he indicated that some people have removed their geysers to other provinces without permission.

Clr Mhlanga indicated that there was never a handover from the Contractors to the Councillors. Further he indicated that there needs to be a roll out of geysers in those areas without it. Clr Mhlanga ascribed the work stoppages to problems between the contractors and sub-contractors. He also indicated there were problems with installations in his area.

4.4. Response from Members

· The Members requested that the DoE follow-up with these issues and check why there was no sign over to the community.

· The five year maintenance must be looked at and honoured.

· The DoE was requested to look at the quality of work and of the products as well. There should be a “happy letter” signed by the residents when a unit is installed.

· There must be further investigation into installing SWH in houses where the roof structures are not secure as people could get injured with the help of UJ.

· The removal of SWH must be investigated and managed as this could be a criminal issue.

· It was further recommended that the parties involved in this issue work together to solve the problems with the DoE coordinating such efforts

· The Members acknowledged that there is positive in everything e.g. the community is saving on paraffin costs.

4.5. Conclusion

In conclusion The Chairperson strongly suggested that a Project Steering Committee be established to deal with the outstanding issues. The Chairperson further indicated that standards for quality should not be compromised as the SABS is there to assist in inspecting the equipment.

Finally, ESKOM, City of Johannesburg and the DoE were requested to meet and address all concerns and challenges raised in the meeting and report to the Chairperson within two weeks, indicating what action steps have been taken to deal with the issues.

5. Recommendations

· Policy reviewal on non-grid electricity system including budget allocation as well as the technology to accommodate increase of power be initiated as matter of urgency.

  • The Department of Energy to upgrade non/off-grid systems and also make them scalable to accommodate those who may express additional need and appropriately address energy poverty
  • The Department of Energy to explore “ permanency” or long term approach on the non/off-grid electricity system in the rural areas
  • Strong coordination between various stakeholders especially Department of Energy, ESKOM, and the municipalities be addressed as a matter of urgency
  • Intensive public education and mass communication with the help of SABC, GCIS, local community media especially community radio stations and municipal communications units on non/off-grid electricity system including Solar Home Systems
  • Grid electrification programme be accelerated in both Msinga and Ndwedwe Municipalities
  • Address the huge backlog in terms of general service delivery in Msinga Municipality

· Improve customer care especially for the sickly and elderly particularly at pay points

· Explore micro-insurance arrangements for damaged or stolen equipment

  • Department of Energy to explore jointly with the Department of Basic Education introduction of appropriate electrification of schools
  • Integration of FBE and municipalities to be consistent in their allocation of subsidy – such be done through the support of SALGA
  • A socio-economic impact study of the programme to be conducted
  • Issues below be referred to relevant departments and/or spheres of government for their consideration:
    • Lack of potable water NOTE: Water is the main challenge and need in Msinga Municipality
    • Lack of roads
    • Need for houses
  • The Department of Energy, ESKOM, the municipalities visited – together with their district municipalities to arrange follow-up meetings to address issues raised with the aim of working solutions
  • Such follow-up meetings include municipalities of Nquthu and Maphumulo as a compensation for not visiting them
  • The involvement of experts during oversight visits be promoted even in future as it had proven to of benefit to members
  • ESKOM, City of Johannesburg and the DoE were requested to meet and address all concerns and challenges raised in the meeting and report to the Chairperson within two weeks, indicating what action steps have been taken to deal with the issues.
  • The Minister of Energy be requested to investigate the allegation of the “Island Syndrome” in the Ndwedwe area and take the appropriate action where necessary.

Report to be considered.


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