ATC191022: Budgetary Review and Recommendation Report of the Portfolio Committee on Mineral Resources and Energy (Vote 26) dated 22 October 2019

Mineral Resources and Energy

BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON MINERAL RESOURCES AND ENERGY (Vote 26) DATED 22 OCTOBER 2019

 

The Portfolio Committee on Mineral Resources and Energy, having considered the performance and submission to National Treasury for the Medium Term period of the Department of Energy (Vote 26), reports as follows:

 

1. Introduction

 

The Money Bills Procedures and Related Matters Amendment Act (Act 9 of 2009) sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department.

 

In October of each year, Portfolio Committees must compile Budgetary Review and Recommendation Reports (BRRR) that assess service delivery performance given available resources; evaluate the effective and efficient use and forward allocation of resources; and may make recommendations on forward use of resources. The BRRR are also source documents for the Standing/Select Committees on Appropriations/Finance when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The comprehensive review and analysis of the previous financial year’s performance, as well as performance to date, form part of this process.

 

1.1. Mandate of the Portfolio Committee on Energy 

 

In terms of the Constitution of the Republic of South Africa, 1996 (the Constitution), Portfolio Committees have a mandate to legislate, conduct oversight over the Executive and facilitate public participation. The Portfolio Committee on Mineral Resources mandate is governed by Parliament’s mission and vision statements, the rules of Parliament and its Constitutional obligations.

 

The mission of the Portfolio Committee is to contribute to the realisation of a developmental state and ensure effective service delivery through discharging its responsibility as a Portfolio Committee of Parliament. Its vision includes enhancing and developing the capacity of Committee Members in the exercise of effective oversight over the Executive Authority. One of the Committee’s core objectives is to oversee, scrutinise and influence the action of the Executive and its agencies. This implies holding the Executive and related entities accountable through oversight of objectives of its programmes, scrutinising its budget and expenditure (annually), and recommending through Parliament actions it should take in order to attain its strategic goals and contribute to service delivery.

 

1.2. The Mandate of the Department of Energy and its entities

 

This section provides a synopsis of the mandate of the Department and its six entities.

 

The aim of the Department of Energy (DoE) is to ensure secure and sustainable provision of energy for socio-economic development. The mandate and core business of the Department are underpinned by the Constitution and all relevant legislation and policies applicable to the South African Government. The vision of the Department is to foster a transformed and sustainable energy sector with universal access to modern energy carriers for all by 2025. The Department aims to improve the country’s energy mix by having 30 percent clean energy by 2025[1]. The Department execute its mandate through the following entities:

 

1.2.1. National Nuclear Regulator (NNR)

 

The purpose of the NNR, as outlined in section 5 of the National Nuclear Regulator Act 1999 is to essentially provide for the protection of persons, property and the environment against nuclear damage through the establishment of safety standards and regulatory practices.

 

1.2.2. National Radioactive Waste Disposal Institute (NRWDI)

 

The key strategic thrust of NRWDI is to execute its legislative mandate with regard to the long-term management and disposal of radioactive waste in a technically sound, socially acceptable, environmentally responsible and economically feasible manner, which is an apex priority for Government and the Department to ensure that no undue burden is placed on current and future generations due to the country’s past, present and future involvement in nuclear science and technology applications.

 

1.2.3. South African National Energy Development Institute (SANEDI)

 

SANEDI’s functions, as outlined in section 7(2) of the National Energy Act, are to: - direct, monitor and conduct applied energy research and development, demonstration and deployment as well as undertake specific measures to promote Energy Efficiency (EE) throughout the economy; and - establish a nationally focused energy research, development and innovation sector and undertake EE measures with a strong relevance for South Africa.

           

1.2.4. South African Nuclear Energy Corporation (NECSA)

 

NECSA’s functions, as outlined in section 13 of the National Energy Act, are to: - undertake and promote research on nuclear energy, radiation sciences and technology; - process source, special nuclear and restricted material including uranium enrichment; and - collaborate with other entities.

 

1.2.5. The Central Energy Fund (CEF) Group of Companies (SOC) Ltd

 

CEF (SOC) Ltd is involved in the search for appropriate energy solutions to meet the future energy needs of South Africa, the Southern African Development Community and the sub-Saharan African region, including oil, gas, electrical power, solar energy, low smoke fuels, biomass, wind and renewable energy sources. CEF also manages the operation and development of the oil and gas assets of the South African Government.

 

1.2.6. National Energy Regulator of South Africa (NERSA)

 

The purpose of NERSA, as effectively outlined in section 4 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004), is to regulate the electricity, piped-gas and petroleum pipeline industries within the Republic of South Africa in terms of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), the Gas Act, 2001 (Act No. 48 of 2001) and the Petroleum Pipelines Act, 2003 (Act No. 60 of 2003).

1.3.       Purpose of the BRR Report

 

Section 77(3) of the Constitution stipulates that an Act of Parliament must provide for a procedure to amend money bills before Parliament. This constitutional provision resulted in the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009 (the Act), which sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department.

 

Section 5 of the Act, states that the National Assembly (NA), through its Committees, must annually assess the performance of each national department with reference to the following:

 

  • The medium term estimates of expenditure of each national department, its strategic priorities and measurable objectives, as tabled in the NA with the national budget;
  • Prevailing strategic plans;
  • The expenditure report relating to such department published by the National Treasury in terms of section 32 reports of the Public Finance Management Act, No 1 of 1999 (PFMA), as amended in 2009;
  • The financial statements and annual report of such department;
  • The report of the Committee on Public Accounts relating to the department; and
  • Any other information requested by or presented to a House or Parliament.

 

Committees must submit the BRRR annually to the NA. The BRRR assesses the effectiveness and efficiency of a department’s use and forward allocation of available resources and may include recommendation on the use of resources in the medium term.

 

Committees must submit the BRRR after the adoption of the budget and before the adoption of the reports on the Medium Term Budget Policy Statement (MTBPS) by the respective Houses in November of each year.

 

The Act therefore makes it obligatory for Parliament to assess the Department’s budgetary needs and shortfalls vis-à-vis the Department’s operational efficiency and performance. This is done taking into consideration the fact that the Department has oversight responsibilities over five entities.

 

1.4.       Method followed by the Committee in writing the BRR Report

 

On  29 May 2019, the President of South Africa, President Cyril Ramaphosa announced a reconfigured executive, which merged the former Department of Mineral Resources with that of the Department of Energy, resulted in a new Department known as the Department of Mineral Resources and Energy (DMRE), hence even though the two respective Departments are still reporting as separate entities, going forward both Departments will be reporting as a single entity to the Portfolio Committee of Minerals and Energy (PCMRE), the merger is expected to be finalised by the end of March 2020. DoE (Vote 26) will be used to refer to the former Energy component of the new Department.

 

The Committee has scrutinised and interrogated all available documents as outlined in Section 5 of the Act. The Committee has assessed the performance of the Department in the 2017/18 financial year, as well as performance in the 2018/19 financial year.

 

The PCMRE held their meetings on the 2018/2019 Annual Report of the DMRE and its entities on the 8th, 9th and 10th of October 2019, which was addressed by the Senior Leadership of the DMRE.

 

The office of the Auditor General gave input during the budget review and recommendation report process. Moreover, the Committee undertook visits to the Department’s entities in Gauteng Province, to look at issues pertaining to the role played by various entities reporting to the Department.

 

The Committee, in undertaking this process, used a number of source documents, including the 2014-2019 Strategic Plan of the DMRE, Annual Performance Plans, Annual Reports, Financial Statements, 2018/19 and the 2018 Estimates of the National Expenditure (ENE). It also reviewed briefings by the Department and its entities during the course of the year, as well as the State of the Nation Address (SONA). The Committee also used the Constitution as a reference point.

 

 

 

2.  OVERVIEW OF THE PERFORMANCE OF THE DEPARTMENT OF ENERGY 2018/19

 

This section provides an overview of the service delivery performance of the Department during the 2018/19 financial year. The first part provides a summary of the key priorities of the Department for the 2018/19 financial year. The second part provides an overview of the financial performance, whereas the third part deals with non-financial performance. It is important to note that the Department has six programme areas through which it measures its performance as well, namely Administration, Energy Policy and Planning, Petroleum Products and Petroleum Products Regulation, Electrification and Energy Programme and Project Management, Nuclear Energy and Clean Energy. 

 

2.1. Key Priorities of the Department for the 2018/19 Financial Year

 

In terms of non-financial performance, the Department, according to its Annual Performance Plan (APP) for 2018/19, had planned to focus on the following key strategic areas, amongst others:

 

2.1.1. Legislative Programme

 

During the year under review, the Department had planned to submit the following pieces of legislation to Cabinet:

  • National Energy Regulator Amendment Bill, the aim of which is to establish a National Energy Regulator, for the regulation of the electricity, piped gas and petroleum pipelines industries. The target of submitting the Bill to Cabinet by the end of the 2018/19 financial year was not met. The latest update on the Bill from the Department is that it will be submitted to Cabinet in the Fourth Quarter of 2019/20 Financial Year[2].
  • Gas Amendment Bill, which aims to facilitate gas infrastructure development and investment; to promote Broad-Based Black Economic Empowerment (B-BBEE); and to provide for socio-economic and environmentally sustainable development. As with the above, the deadline for submission of the Bill to Cabinet was deferred to the end of the 2019/20 Financial Year.[3]

 

The Department is doing badly in executing its mandate or the purpose it was created for, which is to “…formulate energy policies, regulatory framework and legislation”, amongst others. The deadlines that the Department had set itself for the submission of legislation to Parliament in the Fifth Parliament have passed. Consequently, the Fifth Parliament did not process any of the long outstanding legislation.

 

2.1.2. Implementation of the National Solar Water Heater Programme (NSWHP)

 

 For the past five years, the former Portfolio Committee on Energy has been raising concerns about the slow pace in the implementation of the NSWHP. Initially, the programme had a target of installing 1 million solar water heaters (SWHs) by 2014. However, the programme has installed just over 400 000 units so far – meaning the target was not realised. Despite the failure to meet the 1 million target, the previous administration set a cumulative target of 1,75 million SWH installations by 2019 and further established a long-term target through the National Development Plan (NDP) (a cumulative target of 5 million solar water heaters by 2030). This programme is failing. Initially, it was managed by Eskom, then the Department, now the Central Energy Fund and the Independent Power Producer (IPP) Office are responsible for some aspects of the programme. Though the implementing agent was changed, progress on implementation is still slow.

 

2.1.3. Integrated National Electrification Programme (INEP)

 

Compared to other countries in sub-Saharan Africa, South Africa has made tremendous progress in terms of electrification. This could be attributed to INEP that the South African Government embarked on after 1994. Through this programme, the level of household electrification increased from 36 percent in 1994 to 86 percent in 2019, with over 7.2 million households having been electrified under the programme, a significant milestone for South Africa and unprecedented internationally. Through the programme, the government further aims to electrify 97 percent of households by 2025 through grid and non-grid solutions.

 

 

 

 

 

 

Table 1: Electrification Statistics for March 2018

Province

Projected Households (April to March 2018)

Total Households Connected (April to March 2018)

Houses Without Electricity

Houses Electrified

Access Per Province

Eastern Cape

1 863 009

66 243

323 411

1 539 598

82.64%

Free State

909 007

4 586

123 589

785 418

86.40%

Gauteng

4 315 876

11 876

776 997

3 538 879

82.00%

KwaZulu-Natal

2 803 735

70 765

485 472

2 318 263

82.68%

Mpumalanga

1 187 426

33 496

88 320

1 099 106

92.56%

Northern Cape

332 775

3 400

44 196

288 579

86.72%

Limpopo

1 565 699

58 666

22 723

1 542 976

98.55%

North West

1 172 550

16 271

158 795

1 013 755

86.46%

Western Cape

1 804 068

10 527

185 394

1 618 674

89.72%

Total

15 954 146

275 830

2 208 898

13 745 248

86.15%

Source: Department of Energy (2018)

 

As evident in the table above, provinces with highest electricity backlog are mainly those with high rural population, namely, Gauteng 18 percent, KwaZulu-Natal 17.32 percent and the Eastern Cape 17.36 percent. For deep rural areas and informal settlements, non-grid electrification becomes a solution in the short- to medium-term.

 

The non-grid electrification programme is designed to temporarily provide deep rural communities access to limited electricity until such time that grid connections are possible. Solar Home Systems (SHS) are given to households as part of the non-grid electrification programme.

 

Non-grid electrification is carried out by private sector service providers (concessionaires) who have successfully tendered for concessions in designated areas. The non-grid electrification programme that was expected to install 300 000 SHS in 1998 has not managed to attain its objective. To date, just over 83 000 SHSs have been installed and programmes are running in only a couple of provinces. The SHSs are mainly installed in Eastern Cape, KwaZulu-Natal, Limpopo and Northern Cape.  The DoE has indicated that, in future, the non-grid electrification programme will not only be implemented in the aforementioned provinces, but also in other areas of the country. 

 

Lack of political will and government support has thwarted the process. Some concessionaires have been providing maintenance for the systems, charging on a fee-for-service basis, while others have not provided this service. Non-payment of bills has also been a cause for concern in most concessionaires and lack of expected government capital subsidies has delayed much of the work. Decision-making concerning the definition of a non-grid area has also caused delays and costs to the concessionaires. These difficulties have weakened the financial stability of the concessionaires and delayed the installation process.

 

For the 2018/19 Financial Year, the Department aimed to deliver 200 000 connections through grid and 20 000 through non-grid technologies. The Department has overachieved the grid connection target as 242 905 connections were delivered through grid technologies by the end of March 2019.[4]

 

In the previous financial year, 2017/18, the Department had aimed to deliver 235 000 connections through grid and 15 000 through non-grid technologies, this translates into 250 000 connections. The Department overachieved this target as it had delivered 292 705 connections through grid and non-grid technologies by the end of the financial year.[5]

 

Whilst the budget for this programme has been reduced due to tight fiscal financial constraints by almost 13 percent, in real terms, the Department has committed to ensuring that the target of electrifying 1.25 million households by the end of 2019 is realised.

 

2.2. Financial Performance of the Department

 

As in the past, when considering the financial performance of the Department, one appreciates the consistent good financial performance. For the 2018/19 Financial Year, the Department had an available budget of R7.16 billion.[6] This is a decrease from R8.1 billion in the previous Financial Year (2017/18). 

 

Of the total allocated budget for 2018/19 Financial Year, the Department has spent R7.09 billion, or 98.9 per cent, the majority of which has been used on transfers and subsidies; compensation of employees; and goods and services. Thus, the Department underspent by R73.293 million or 1.02 percent. At the same period, in the previous financial year (2017/18), the Department had spent almost 98 percent of its available budget, thus underspent by just over R200 million.[7]

 

Transfers and Subsidies account for R6.38 billion or 89.04 percent of the allocated budget, and of the remaining amount, the Department has so far transferred R6.365.9 billion, or 99.8 per cent, mainly to Eskom and Municipalities for the implementation of the Integrated National Electrification Programme (INEP).

 

There is a significant underspending of 21 percent on goods and services. According to the Department, this is due to the following, amongst other things:

 

  • Delays in the implementation of the National Solar Water Heater Programme.
  • Delays in discharging outstanding obligations from the Department’s implementation of New Nuclear Build Programme (NNBP).

 

On compensation of employees, there is an underspending of 3.7 percent. The Department was allocated R360.075 million, however, it spent R346.7 million. The reason cited for the underspending is the fact that there are four vacant Deputy Directors-General (DDG) positions and other positions.  In total, by the end of the 2018/19 Financial Year, the Department had 39 permanent funded posts that were vacant.[8]  

 

Table 2: Vote 26 – Year-End Expenditure Performance 2018/19

R million

Final Appropriation

Actual Expenditure

Variance as % Final Budget

Programme

 

 

 

1. Administration

305,329

304,017

0.43%

2. Energy Policy & Planning 

46,073

40,066

13.04%

3. Petroleum & Petroleum Products Regulation

79,242

77,044

2.77%

4. Electrification & Energy Programme & Project Management 

5,380,591

5,364,511

0.30%

5. Nuclear Energy

875,486

875,285

0.02%

6. Clean Energy

496,811

429.317

9.96%

 

 

 

 

Total

7,163,532

7,090,239

1,02%

 

     

Economic Classification

 

 

 

Compensation: Employees

360, 075

346,731

3.71%

Goods and Services

419,116

331,433

20,92

Interest And Rent On Land

1

1

0.00%

Total transfers and subsidies

6,378,197

6,359,491

0.29%

Payments for capital assets

6,140

52,580

-756,36%

Payments for Fin. Assets

3

3

0.00%

Total

7,163,532

7,090,239

1,02%

Source: Department of Energy Annual Report (2018/19)

 

Programme 4: Electrification and Energy Programme and Project Management, is the largest of the six programmes, because it includes the transfers to Eskom and Municipalities.

 

As seen in Table 1, the DoE has transferred 99.8 percent of the available budget to Eskom and Municipalities for the grid electrification programme, and various institutions for the implementation of the non-grid electrification programme. The underspending of 0.29 percent on transfers is attributed mainly to the delays in implementation of the non-grid electrification programme. 

 

Programme 2: Energy Policy and Planning and Programme 6: Clean Energy; have underspent the allocated budget by 13 percent and 9.9 percent, respectively. Similarly, during the same period in the previous financial year, the two programmes were the main under spenders, underspending 10.6 percent and 17.9 percent, respectively.[9] The reasons cited for the underspending in both programmes for the 2018/19 Financial Year are as follows:

 

  • Programme 2: The underspending of R6 million is because of unfilled vacant posts, delayed Footprint and Saving Potential Project owing to expired contracts.[10] Furthermore, it is reported that under this programme, the Department undertook fewer domestic and international trips, thus resulting in some savings.
  • Programme 6: This programme underspent its allocated budget by R47.49 million, firstly due to delays in conducting training for the installers who have to install 87 206 solar water heater units that have been procured.[11]Secondly, subscription fees to the International Partnership for Energy Efficiency Cooperation had not been paid owing to the outstanding invoice.[12]

 

Table 3 below provides a comparative review of the financial performance of the Department.

 

Table 3: Review of Expenditure Performance during the period 2014/2015 – 2018/19

Department

 Expenditure Performance During the Period 2013/2014 – 2017/18

 

2014/15

2015/16

2016/17

2017/18

2018/19

 

Under Expenditure

Under Expenditure

Under Expenditure

Under Expenditure

Under Expenditure

Amount

%

Amount

%

Amount

%

Amount

%

Amount

%

Energy

R1.2 Billion

83.6%

R125.5 Million

98.2%

125 Million

99.5%

R200.7 Million

97.5%

73.2 Million

98.9%

 

 

 

100% = Good

 

Below 90% = Bad

 

90 -99% = Average

 

As it can be seen in table two above, the Department has consistently performed well on financial expenditure, with the exception of the 2014/15 financial year. The reason for the poor performance in 2014/15 financial year was the fact that the National Solar Water Heater Project, which was implemented by Eskom, had been put on hold, and the project funds had to be surrendered to the National Treasury[13]

 

2.3. Non-Financial Performance of the Department

 

As indicated in the preceding section, the Department has six programme areas. Each programme has sub-programmes within it. The financial performance of the programmes has been discussed in the previous section, thus, this section contrasts what the Department had planned to achieve (non-financial outcomes) against what it has achieved.

 

It is important to note that in the previous Financial Year (2017/18), the Department had 67 annual targets, of these, only 28 (42 percent) of the targets were achieved[14]. In contrast, during the year under review, the Department had 67 key performance targets, and of these, 28 or 42 percent were achieved. During the year under review, 2018/19, the Department regressed, it achieved 32 percent of the set targets. According to National Treasury guidelines, an acceptable performance requires 80 percent of set targets to be achieved each year.

 

Table 4: Summary of financial and performance information 2014/15 – 2018/19

Year

No. of targets

set

No. of targets achieved

%

Targets  achieved

%

Budget Spent

2014/15

39

17

44%

83.6 %

2015/16

76

39

51%

98%

2016/17

77

32

42%

99.5%

2017/18

67

28

42%

97.54 %

2018/19

41

13

32%

98.9%

Source: Department of Energy Annual Reports

 

As evident in the table above, the Department has performed well consistently on financial expenditure. On the contrary, service delivery performance has consistently been below required standard.  In the past four financial years, the Department has never achieved more than 60 percent on its performance, let alone the required 80 percent. As indicated in the above table, in 2016/17 and 2017/18 financial years, the Department achieved 42 percent of its performance targets. In 2018/19, the Department regressed, as it achieved only 32 percent of the set targets.

 

It is also important to note that, whilst the performance of the Department is worsening, there is some progress in certain areas, as 44 percent of the targets during the year under review were partially achieved.  

 

Table 5: Comparison - Programme Performance 2017/18 and 2018/19 

Programme

2017/18

2018/19

No of Annual Targets in the APP

Achieved Annual Targets

No of Annual Targets in the APP

Achieved Annual Targets

Programme 1: Administration

13

8

9

4

Programme 2: Energy Policy & Planning

23

3

12

0

Programme 3: Petroleum & Petroleum Products Regulation

5

4

5

3

Programme 4: Electrification & Energy Programme & Project Management

8

7

5

5

Programme 5: Nuclear Energy

5

0

4

1

Programme 6: Clean Energy

13

6

6

0

Totals

67

28

41

13

 

Percentages

42%

 

32%

 

Source: Department of Energy Annual Reports, (2017/18 & 2018/19)

 

The Administration Programme did not achieve four of the nine set targets. The Department had planned to achieve an unqualified audit opinion from the AGSA; however, in two consecutive years, the Department received a qualified opinion. The Department of Public Service and Administration (DPSA) directs that vacancy rate in government departments be maintained at below 10 percent. On the contrary, during the year under review, the Department had a vacancy rate of 16 percent, a deviation of 6 percent. Furthermore, the Department had aimed to achieve a score of 3.0 on the Management Performance Assessment Tool (MPAT), but instead it scored 2.28. A score below 3 means that the Department only partially complied with legal/regulatory requirements. 

 

With regard to the human resource capacity, in line with the approved establishment, the Department is supposed to have filled 673 posts, but instead it has filled 565 posts – this translates into a vacancy rate of 16 percent as indicated earlier. The highest vacancy rates are in Clean Energy programme (27.3 percent), Administration programme (16 percent), and the Energy Policy and Planning programme (25 percent). As of 31 March 2019, twenty-nine (29) percent of the vacant posts were in senior management positions.

 

Table 6: Personnel by Programme: Vote 26 – Year-End Performance 2018/19

Programme

Number of Posts

Number of Posts Filled

Vacancy Rate ( includes frozen posts)

1.  Administration

328

277

15.5

2.  Energy Policy & Planning 

61

46

24.6

3. Petroleum & Petroleum Products Regulation

126

108

14.3

4. Electrification & Energy Programme & Project Management 

89

80

10.1

5. Nuclear Energy

36

30

16.7

6. Clean Energy

33

24

27.3

Total

673

565

16.00

Source: Department of Energy Annual Reports, (2017/18 & 2018/19)

 

As can be seen in table 4 above, for two consecutive years, the Energy Policy and Planning Programme performed unsatisfactorily. In the previous financial year, it achieved three of its planned targets. In the year under review, it achieved zero of the twelve set targets.  This is an indictment on the part of the leadership and management of the Department as this programme is key to executing the Department’s mandate – energy specific policies, legislation and regulations fall within this programme. Some of the key areas the programme underperformed on include the following:

 

  • Gas Infrastructure Master Plan Report. According to the Department, the Draft Plan has not been developed because the process of appointing a consultant to assist with the drafting of the Plan is incomplete. 
  • Approval of the final proposals regarding the end-state of the electricity sector: The Department states that the delay is due to prolonged stakeholder consultations on cost recovery mechanism.  These proposals will also be affected by the pronouncement made by President Ramaphosa on the restructuring or the unbundling of Eskom.
  • The National Energy Regulator Amendment Bill: The target of introducing this Bill for support and consideration and approval by the Cabinet was not achieved. The Department states that the entire Bill needs to be revised and aligned with the proposed Eskom structure.
  • The long-awaited decision on the new refinery has been taken. The Department had a target of developing the implementation plan. However, this responsibility has been delegated to the Central Energy Fund (CEF) as the coordinator of the new refinery project.
  • Final Memorandum of Understanding (MoU) on Transmission Infrastructure solution on the Grand Inga Hydro Power Project was not achieved. The target was to conclude the Inter-Governmental MoU with transition line transit countries.
  • The Grand Inga treaty was signed by South Africa and the Democratic Republic of Congo (DRC) in October 2014 and provides the framework for the facilitation of power generation from the Grand Inga project and its delivery to the border between the DRC and Zambia.  The multi-phase hydro power station has the potential to generate approximately 40 000 megawatts (MW) of electricity. The ratification of the treaty will pave the way for the development of Inga 3, which will provide 2 500 MW of electricity to South Africa and contribute to regional integration, energy security and economic growth in an environmentally sustainable manner.  Two existing dams, Inga 1 and 2, have been in operation since 1972 and 1982 respectively, together generating nearly 1 800 MW. The next phase of the Grand Inga project, Inga 3, is expected to cost in the region of US$12-billion and produce around 4 800 MW of electricity.[15] Subsequent phases, adding up to an eventual total capacity of 40 000 MW, will allow countries in southern Africa, north-east Africa and parts of west Africa to benefit from production at the site. However, since 2014, progress on this project has been very slow.  

  

Programme 3 performed fairly well, having missed two planned targets. These relate to the Publication of the Audit Report on B-BBEE in the Petroleum Retail Sector and the Publication of the Petroleum and Liquid Fuel Sector Code. The reason cited for the deviation from the Publication of the Petroleum and Liquid Fuel Sector Code is that the Department is awaiting the gazetting of section 9(5) of the B-BBEE Act (No. 53 of 2003), as amended for public comment.

 

Programme 4, the largest programme of the Department, performed very well having achieved 100 percent of its planned targets. Important to note is the fact that the programme exceeded its grid electrification target by 42,905 connections. However, the non-grid electrification programme fell short on its target by 6,910 connections.  Whilst the Department did not reach its non-grid electrification target of 20, 000 connections; in the Annual Report, the target is reported as achieved – the rationale for this is not provided.  The AGSA also raised this as concern stating that “the evidence for achieving the planned indicator was not clearly defined and the planned target for this indicator was not specific in clearly identifying the nature and required level of performance. The target is not specific as the nature and the required level of performance cannot be clearly identified as intended in relation to number of reports and target of 20,000 in the national electrification plan”.[16] 

 

On the other hand, Nuclear Energy Programme performed dismally having achieved one of its four planned targets. The planned targets not achieved are as follows:

 

  • Decommissioning and Decontamination Policy was produced but not finalised as envisaged. The Department states that there was a need for additional study to be undertaken. 
  • The National Nuclear Regulator Amendment Bill was not submitted to Cabinet for approval as planned. It was recommended that further consultation with the stakeholders be conducted.
  • The Draft Radioactive Waste Management Fund Bill was not sent to the Chief State Law Advisor as planned. The Department states that the delay is because of the comments received from the legal services, which needed to be resolved prior to submitting to the Chief State Law Advisor.

    

The Clean Energy Programme achieved none of the six planned targets. Targets not achieved related to the following:

 

  • Completion of the Draft Renewable Energy Technology Roadmaps (RETRM). In the Annual Report, it is stated that this project has been put on hold – no further details provided.
  • Completion of the Annual Solar Water Heater (SWH) Installation.
  •  Development and production of the Annual Compliance Report on the 3rd Environmental Management Plan Edition.  The reason cited for the non-achievement is that there were delays in data consolidation from other State Owned Companies and Entities.

 

Development and implementation of the Carbon offsets registry for listing offsets credits linked to carbon offsets administration system. According to the Department Procurement of service provider under Partnership for Market Readiness did not materialise.

 

3. Key Achievements of the Department

 

The preceding section reveals a struggling Department in meeting its planned targets or executing its mandate. However, it would be unfair not to highlight some of the achievements of the Department. The achievements may not be contained in the APP but have occurred during the period under review.

 

During the 2018/19 financial year, the Department achieved the following, as reported in the Annual Report[17]:

 

  • A decision to build a new refinery was taken. The Kingdom of Saudi Arabia pledged its commitment to investing $10 billion in building a new crude oil refinery jointly with Government owned entity, CEF. According to the Department, CEF and Aramco have started a process of conducting a pre-feasibility study for this refinery.
  • The Department developed a Liquid Fuels Emergency Response Plan (LERP) that addresses all aspects associated with any fuel potential supply shortages and disruptions. Consequently, there were no liquid fuel shortages during the year under review. 
  • In August 2018, the Petroleum and Liquid Fuels Sector Charter Council was appointed as an independent body to oversee implementation of the Petroleum and Liquid Fuels Sector Codes of Good Practice.
  • The Department commissioned an independent Petroleum Retail Audit to determine the extent of transformation in the retail segment of the Petroleum industry and also to establish a baseline for the system of future allocation of petroleum licenses. It is anticipated that the outcomes of the Audit would be published by the end of the Third Term of the 2019/20 Financial Year.
  • NRWDI and NERSA also obtained Clean Audits.
  • The Grid Electrification target of 200 000 connections was exceeded by 42, 905.
  • The Department developed and implemented the Department’s Disability Mainstream Strategy.
  • The Department drafted the Energy Sector Women Empowerment and Gender Strategy and Implementation Plan.
  • Hosted Women in Energy Conference and Gender Transformation in the Energy Sector – a parallel session during the Africa Energy Indaba in February 2019.
  • Established partnerships with the South African Institute of International Affairs Gender Mainstreaming through renewable energy research.
  • Significant amount of crude oil was sourced from African countries, although, the Middle East countries were still an important source of crude oil for South Africa.  An estimated 51 percent of crude oil requirements were met by African countries, mainly, Nigeria (33 percent), Angola (12 percent), Ghana (5 percent) and Togo (1 percent).
  • The South Africa’s Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) has attracted R209.4 billion in committed private sector investment, resulting in much needed alleviation of fiscal pressure.

 

4. REPORT OF THE AUDITOR-GENERAL OF SOUTH AFRICA ON THE DEPARTMENT OF ENERGY AND ITS ENTITIES

 

The Auditor General of South African appeared before the Committee on 08 October 2019. Below is a summary of the Audit Outcomes for the Department and the entities reporting to it.

 

4.1. Department

 

In three consecutive years, the AGSA expressed a Qualified[18] Audit opinion on the performance of the Department (see table below).

 

Table 7: Review of Audit Outcomes

Department

 

Snapshot Review of Audit Opinion during  2013/14 – 2018/19

 

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

Energy

Unqualified with findings

Unqualified with findings

Clean

Qualified with findings

Qualified with findings

Qualified with findings

           

 

Clean Audit

 

Disclaimer

 

 

Unqualified with findings

 

Qualified with findings

 

According to the AGSA, the basis for a qualified audit opinion in 2018/19 is because of the following:

 

4.1.1. Irregular Expenditure

 

The AGSA found that the Department did not include the required information on irregular expenditure in the notes to the financial statements, as required by section 40(3) (b) (i) of the Public Finance Management Act (No.1 of 1999) (PFMA). The Department did not disclose payments of R64, 068,000 (2017-18: R98, 382,000) made in contravention of the supply chain management requirements, resulting in irregular expenditure being understated by R162, 450,000 (2017-18: R98, 382,000).

 

 

4.1.2. Material Underspending of the Vote

 

According to the AGSA, the Department has materially underspent the budget on by R63, 574,000 on Clean Energy, as well as Electrification and Energy Programme and Project Management programmes.

 

4.1.3. Presentation of the Performance Information

 

The AGSA is concerned about the usefulness and reliability of the performance information of the following programmes:

  • Programme 2 – Energy policy and planning:

 

The Programme has performance indicator that reads as “Gas demand/supply analysis report”. According to the AGSA, “the planned target for this indicator was not specific in clearly identifying the nature and required level of performance”.[19]

 

  • Programme 4 – Electrification and Energy Programme and Project Management:

 

Similarly, this programme had a target of producing four quarterly reports and a target to 20 000 non-grid electrification connections. The Department produced the four reports but failed to reach the 20 000 target, however, it reported the target as achieved. According to the AGSA, “The evidence for achieving the planned indicator was not clearly defined and the planned target for this indicator was not specific in clearly identifying the nature and required level of performance. The target is not specific as the nature and the required level of performance cannot be clearly identified as intended in relation to number of reports and target of 20,000 in the national electrification plan”.[20]

 

4.1.4. Annual Financial Statements

 

The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 40(1) (b) of the PFMA. Material misstatements identified by the auditors in the submitted financial statements were not adequately corrected, which resulted in the financial statements receiving a qualified opinion.

 

 

4.1.5. Expenditure Management

 

Steps taken were not effective to prevent fruitless and wasteful expenditure amounting to R110,151,000, as disclosed in note 27 to the annual financial statements, as required by section 38(1)(c)(ii) of the PFMA and treasury regulations 9.1.1. The majority of the fruitless and wasteful expenditure was caused by additional storage cost for solar water heater geysers that were manufactured but not installed.

 

4.1.6. Consequence Management

 

The AGSA was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against official who had incurred irregular, fruitless and wasteful expenditure, as required by section 38(1)(h)(iii) of the PMFA. This was due to proper and complete records that had not been maintained as evidence to support the investigations into irregular, fruitless and wasteful expenditure.

 

4.2. Entities

 

Table 8: Summary of Results for Public Entities Related to DoE

Entity

Audit Outcome

 

2018/19

SANEDI

Unqualified 

NERSA

Clean

NNR

Unqualified

CEF

Unqualified

NRWDI

Clean 

NECSA

 N/A – did not submit Annual Report

Source: Auditor General of South Africa Presentation to PCMRE 08 October 2019

 

4.2.1. SANEDI

 

SANEDI regressed from a Clean Audit in the two previous financial years to an Unqualified Audit outcome in 2018/19 financial year. SANEDI regressed due to quality of financial statements submitted for audit and other non-compliance with legislation. Furthermore, SANEDI regressed on Supply Chain Management (SCM) compliance. The non-compliance relates to the uncompetitive and unfair procurement processes.

 

Some of the contracts and quotations were awarded to bidders that did not score the highest points in the evaluation process, as required by section 2(1)(f) of Preferential Procurement Policy Framework Act, 2000 (PPPFA, 2000) and Preferential Procurement Regulations, 2017. Furthermore, some of the contracts were modified or extended without the approval of a properly delegated official as required by section 44 of the PFMA and treasury regulations 8.1 and 8.2.

 

As disclosed in note 14 to the financial statements, material losses of R3 188 000 was incurred because of a write-off of irrecoverable trade debtors and vat receivable.

 

4.2.2. NERSA

 

For six consecutive years, NERSA obtained a Clean Audit opinion from the AGSA on its financial statements. In terms of meeting planned performance targets, the entity achieved 94 percent of the targets. However, NERSA indicated that it achieved 100 percent of the targets at by the end of financial year. The Entity only missed the deadline it had set for itself, hence reporting the achievement at 94 percent.

 

4.2.3. NNR

 

The NNR obtained an Unqualified Audit Opinion from the AGSA. In the previous financial year, the Entity had also obtained an Unqualified Opinion with two findings. The reason for an Unqualified Audit outcome is the non-compliance with legislation on the preparation of financial statements.

 

In terms of service delivery performance, the Entity achieved 96.5 percent of its planned targets, almost the same performance as in the previous financial year, wherein the Entity achieved 97 percent.

 

 

 

 

4.2.4. Central Energy Fund (CEF)

  • For six consecutive years, the CEF Group obtained an Unqualified Audit Opinion on its financial statements.  The Entity did not comply with legislation regarding the preparation of its financial statements, management of procurement and contracts, consequence management, strategic planning and performance management. The AGSA found the following:
  • As disclosed in note 3 to the consolidated financial statements, the group had an impairment loss of R692 096 000 (2018: R239 762 000) on property, plant and equipment.
  • With reference to note 7 to the consolidated financial statements, the investment in African Royal Minerals (Pty) Ltd (ARM) to the value of R161 167 000 (2018: R0) was not equity ac-counted due to a lack of financial information. There is a disagreement regarding the memorandum of incorporation (MoI) and the shareholders are still engaging on the matter.
  • With reference to note 38 to the consolidated financial statements, the group has lodged an application to the court to set aside the disposal of the strategic crude oil stock on the grounds that these disposals were unlawful, invalid and unconstitutional. The ultimate out-come of the matter cannot be determined and no provision for any liability that may result was made in the consolidated financial statements.
  • With reference to paragraph 13 of the directors’ report, PetroSA has an obligation to rehabilitate and abandon its offshore and onshore operations valued at R9.8 billion, with cash set aside of R2.4 billion and therefore the provision is currently under-funded by approximately R7.4 billion. In terms of the financial provision regulations which were promulgated under the National Environmental Management Act, 1998 (Act No. 107 of 1998) NEMA, PetroSA is required to have the rehabilitation liability fully funded by 19 February 2024.
  • An annual shareholder’s compact was not concluded in consultation with the executive authority as required by treasury regulation 29.2.1.
  • Effective and appropriate steps were not taken to prevent irregular expenditure amounting to R8 426 000 as disclosed in note 37 to the annual financial statements, as required by section 51(1)(b)(ii) of the PFMA. The majority of the irregular expenditure was caused by non- compliance with the supply chain management policy and regulations.

 

4.2.5. National Radioactive Waste Disposal Institute (NRWDI)

 

For two consecutive years, NRWDI obtained a Clean Audit Opinion on its financial statements. In terms of achieving planned performance targets, the Entity achieved 80 percent of the ten set targets. The two targets not achieved relate to the environmentally sound management and disposal of radioactive waste and the efficient scientific and technical support for development and maintenance of safety cases.  These targets were not met mainly due to external factors that are beyond NRWDI’s control.

 

5. Budget Vote Recommendations (2019/20)

 

The Committee made the following recommendations for the 2019/20 financial year, after considering the Annual Performance Plan and the Budget of the DMRE (Vote 26):

 

The Minister of Mineral Resources and Energy:

 

  1. Present to the Committee the approach towards the finalisation of the Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP), including the restructuring of the energy mix
  2. Prioritise and address governance challenges which exists at Central Energy Fund and its subsidiaries.
  3. Ensure a decision on the location of the proposed new oil refinery is reached.
  4. Address the issue of various energy technology costs, cost implications currently and in the future.
  5. Ensure that measures are in place to address issues of corruption within the Department’s petroleum licensing units. 
  6. Prioritise the review of the fuel price formulation.
  7. Present the legislative programme of the Department for the 2019/20 financial year. 
  8. Ensure the finalisation of the ‘end state’ of   the South African electricity sector proposals.

 

 

 

 

 

 

6. FINDINGS AND OBSERVATIONS

 

The Portfolio Committee of Mineral Resources and Energy (Vote 26) having assessed the performance of the Department of Minerals Resources and its six entities made the following findings and observations:

 

6.1. Department of Energy (Vote 26)

 

  • The performance of the Department has regressed, from achieving 42 percent of planned performance targets in 2017/18 to 32 percent in 2018/19. On the contrary, the Department spent 98 percent of its budget. 
  • The Committee observe the adverse finding of the AGSA on the Department receiving a qualified audit opinion.
  • The Committee also observed that the department chose to challenge the audit outcomes of the AGSA.
  • The Department sought an external independent audit institution on the audit outcomes of the Department.
  • The Committee takes comfort from the assurance by the Minister that in the case of a dispute between the AGSA and the Department, the AGSA is the final arbiter and that will be the end of it, and that the Department will work with the AGSA and not antagonise them. 
  • The Draft Integrated Resource Plan (IRP) for Electricity that was due for finalisation by the end of September 2019 is yet to be finalised. It was indicated that the IRP would include all energy technologies, such as coal, renewables, gas, nuclear and hydro. Regarding nuclear, it was emphasised that it would be procured in a scale (modular form) and at a pace the country would afford.
  • The Committee note with concern that the Department has failed to adopt and review the IRP on regular basis.
  • The underspending of 0.29 percent on transfers is attributed mainly to the delays in the implementation of the non-grid electrification programme.[21] The programme did not meet its 2018/19 target of 20 000 connections, instead, 13,090 connections were achieved.
  • The National Solar Water Programme is experiencing a number of challenges. Firstly, its implementing agent was Eskom; it was later changed to the Department. The Department partnered with CEF. Secondly, the programme had aimed to install 1 million solar water heaters by 2014/15.This target was not achieved as over 400 000 solar water heaters have been installed to date.  It is apparent that, even after the change of the implementation model, the programme still experiences challenges. Moreover, over 40 000 solar water heaters were imported and the design was not compatible with South Africa’s climate conditions.
  •  The majority of the Department’s fruitless and wasteful expenditure was caused by additional storage cost for 87 000 solar water heater geysers that were manufactured, but not installed.
  • There is an overlap in mandates between the entities reporting to the DMRE – there needs to be a rationalisation of these entities.
  • There is a concern about a significant number of acting positions in Entities Reporting to the Department, mainly at the Executive and Board levels.
  • The Committee is concerned about the risk associated with the Department’s reliance on a single country, Saudi Arabia, for a high percentage of its crude oil.

 

6.1.1. NECSA

 

  • The Committee has observed with displeasure the failure of NECSA to submit its Annual Report to Parliament on time, for two consecutive years. This seems to be a normal practice for them to avoid accountability.  

 

6.1.2. NERSA

 

  • The Committee is impressed that NERSA continues to set a good trend, as it has received a sixth consecutive Clean Audit.
  • The Committee has observed with concern the issue of Eskom approaching   the North Gauteng High Court to challenge the energy regulator’s decision to grant it a lower tariff increase, which it says left the company with a shortfall of R102 billion. NERSA contends that it has applied the electricity pricing methodology to the best of its ability.  
  • There is a contention between Eskom and Municipalities regarding Electricity Distribution. There was an attempt to resolve the electricity distribution industry challenge in the form of Regional Electricity Distributors (REDS) – this failed due to constitutional issues. Thus, the electricity distribution industry remains a challenge.

 

 6.1.3. NNR

 

  • NNR’s funding model is not sustainable. The NNR is mainly funded from Authorisation Fees and State Grants (conditional and unconditional) in the form of transfers. NNR financial sustainability is imperative given the general economic downturn and operators (Eskom, NECSA and Mining and Minerals Processing facilities) having financial constraints in paying Authorisation fees to the NNR.
  • The effective Management of Safety Culture at NECSA subsidiary, NTP Radioisotopes, remains a concern.

 

6.1.4. SANEDI

 

  • One Member of the Board resigned, which was the Chairperson. Another Board Member did not attend meetings, and this was raised with the Department. The Board Member was requested to indicate why he should remain on the Board, but he did not respond and was subsequently removed from the Board. These 2 members were independent members of the board. The aforementioned impacted on the operations of the Board Committees.  According to SANEDI the Board could quorate, but sub-committees could meet.
  • The Minister appoints the Chairperson and deputy Chairperson of the board, including 2 independent members.
  • The acting CEO has been in her position for the past 26 months. According to SANEDI, the shortlisting for the position was done by the department, and they are hoping to finalise the process within the next 2 months.
  • SANEDI is currently undergoing an organisational review, which has increased its operational costs.
  • SANEDI indicated that a number of departments are requested to participate, but the department of Transport was never active.

 

 

 

6.1.5. NRWDI

 

  • For two consecutive years, NRWDI obtained Clean Audits from the AGSA.
  • Funding for the disposal and related management of all classes of radioactive waste remains a challenge and countries have established dedicated Radioactive Waste Management Funds.
  • The Department is currently finalising the Radioactive Waste Management Fund (RWMF) Bill – The finalisation and enactment of RWMF will enhance the viability and financial sustainability of NRWDI.

 

6.1.6. CEF and its subsidiaries

 

  • Of the five subsidiaries under CEF, not all of them are performing at the same level; SFF and AEMFC are doing well, as they are making profit. The biggest problem within the Group is PetroSA.
  • Members pointed out that there seems to be abuse of public resources at the CEF.
  • Members are concerned about the high levels of unaccountability as demonstrated by the CEF.
  • Members were further concerned about the the absence of an oversight authority in the form of the Board resulting in the Entities instability.  
  • Members pointed out and raised concern regarding the R96 million paid out as consolidated bonuses in the CEF Group.
  • On the implementation of the National Solar Water Heater programme, CEF contends that it has a long history in the solar water heater industry, having installed solar water heaters in Nelson Mandela Bay Municipality in the past.

 

6.1.6.1. PetroSA

 

  • According to the PetroSA, the Rosgeo partnership is currently at a Framework agreement level, which is non-binding, i.e. not a contract.
  • PetroSA confirmed that Block 9 is prominent, however PetroSA do have other Blocks as well, where they would want to enter into partnerships. PetroSA further confirmed that they do have other partnerships, Equinor, Anadarko etc.
  • The Minister stated that the biggest mistake was to remove the Soekor part (exploration) of PetroSA and only maintain the Mossgas part.
  • PetroSA confirmed that they are working on their turnaround strategy.
  • PetroSA has an obligation to rehabilitate and abandon its offshore and onshore operations valued at R9.8 billion, with cash set aside of R2.4 billion and therefore the provision is currently under-funded by approximately R7.4 billion. In terms of the financial provision regulations which were promulgated under the National Environmental   Management Act (No. 107 of 1998) NEMA, PetroSA is required to have the rehabilitation liability fully funded by 19 February 2024.
  • As at 31 March 2019, PetroSA (South Africa) was technically insolvent, however at the Group level they are solvent.
  • PetroSA spent and lost R14 billon on drilling on something it could not find.
  • The Committee observed with concern that the PetroSA Mossel Bay gas-to-liquid Refinery will run out of feedstock by 2020.

 

6.1.6.2. iGas

 

  • Rompco operates in both the South African and Mozambican jurisdiction. Seventy five (75) percent of the products from Rompco is shipped through Sasol.
  • iGas pointed out that by 2023 the current production supply to the pipeline will decline.
  • In order to grow its asset base, the iGas stated that additional drilling is taking place and they are also looking to partner with the envisaged North-South pipeline in Mozambique and this project will take about 7 years to complete.
  • According to iGas the Coega Liquefied Natural Gas (LNG) importation terminal is a flagship investment for the region and will be game changer for gas supply to South Africa.

 

6.1.6.3. Strategic Fuel Fund (SFF)

 

  • Members commended the SFF for making a profit (close to R1billion) for the period under review.
  • SFF sold 10 million barrels of strategic fuel stock without following proper governance processes.
  • Following the sale of the strategic fuel stock, there is uncertainty on how much the country has available of its strategic fuel stock. Furthermore, the Committee is concerned about the fact that country does not have a Strategic Fuel Stock Policy.
  • With regard to investing in other countries, especially relating to the South-Sudan project, the project is at a pre-feasibility stage.
  • The SFF is contributing R932 million to the group financial statements of the CEF.

 

7. RECOMMENDATIONS

 

Informed by its deliberations, the Committee recommends that the House request that the Minister of Mineral Resources and Energy should:

 

  • Ensure that Department and its entities consistently submit their Annual Reports as per the deadline prescribed by the PFMA.
  • Ensure that there is not a repeat of a dispute between the Department and AGSA.
  • Ensure that decisive action will be taken by the Executive Authority against any official who challenge the authority of the AGSA.
  • Conduct an investigation whether the issue of an alternative audit to that of the AGSA, is not an act of misconduct on its own.
  • Consider conducting forensic investigations on the expenditure of public funding with specific reference to the Central Energy Fund (CEF) and its subsidiaries, and any other entity reporting to the Department. 
  • Conduct an investigation into NECSA’s failure in tabling its Annual Financial Statements timeously.
  • Ensure that governance issues at the entities are addressed.
  • Expedite the filling of vacancies of Boards and Senior Executives in State- Owned Entities.
  • Should include in the performance agreements of the Board Members a provision that commits them to upholding their fiduciary responsibilities at all times.
  • Ensure the start of the installation of the 87 000 solar water heater units by the Third Quarter of 2019/20 and provide a comprehensive update on the programme during the Fourth Quarter of the 2019/20 financial year.
  • Revisit the areas where the 400 000 imported solar water heater units installed in an effort to establish if they are still functioning.
  • Ensure that there is consequence management and encourage entities to undertake investigations if there is a suspicion of wrongdoing.
  • Finalise the Bio-fuels Framework within the current financial year.
  • Provide robust oversight on entities reporting to the Department, especially NECSA and CEF.
  • Ensure the finalisation of the Turnaround Strategies of the Central Energy Fund, PetroSA and NECSA, respectively. 
  • In consultation with the SFF review the Strategic Fuel Stock policy.
  • Explore projects and initiatives to address the decline (from 2023) of production supply from the Rompco pipeline.
  • Carefully consider the issue of overlapping mandates between entities during the merger process and provide the Committee with the outcome of the above analysis, as well as any applicable legislative proposals.
  • Expedite the finalisation of the Integrated Resource Plan for Electricity and also provide timeframes for review thereof.
  • Address the Electricity Distribution Challenges, the impasse between Eskom and Municipalities.
  • Support NERSA in the execution of its duties as an institution which protects public interests.
  • Ensure that the five pieces of legislation that the Department intends to finalise during the Sixth Parliament are indeed finalised. Key amongst these is the National Radioactive Waste Management Fund Bill and National Energy Regulator Amendment Bill. 

 

8.  APPRECIATION

 

The Committee would like to thank the Minister of Mineral Resources and Energy, Mr S.G Mantashe, and the staff of the Department as well as the Board Members and Management of all the Entities, for their cooperation and transparency during this process.

 

The Chairperson wishes to thank all Members of the Committee for their active participation during the process of engagement and deliberations and their constructive recommendations reflected in this report.

 

The Committee also wishes to thank its support staff, in particular the Committee Secretaries, Ms A Boss, Mr A Kotze, the Content Advisor, Mr N Kweyama, the Researcher, Mr S Maboda, the Committee Assistant, Ms V Makubalo and the Executive Secretary to the Chairperson, Ms N Baleni, for their professional support and conscientious commitment and dedication to their work. 

 

Report to be considered.

 

 

 

 

 

 

 


[1] Department of Energy Annual report (2018/19)

[2] Department of Mineral Resources and Energy, (2019)

[3] Ibid

[4] Department of Energy Annual Report, (2018/19)

[5] Department of Energy Annual Report, (2017/18)

[6] Department of Energy Annual Report (2018/19)

[7] Department of Energy Annual Report (2017/18)

[8] Department of Energy Annual Report (2018/19)

[9] Department of Energy Annual Report (2018/19)

[10] Ibid

[11] Ibid

[12] ibid

[13] Maboda, (2015)

[14] Department of Energy Annual Report Presentation, (2016/17)

[15] Portfolio Committee on Energy (2014)

[16] Department of Energy Annual Report (2018/19)

[17] Section extracted from the DoE Annual Report, (2018/19)

[18] An opinion is qualified when an accounting officer/department could not produce credible and reliable financial statements , had material misstatements on specific areas in their financial statements, which could not be corrected before the financial statements were published and did not comply with key legislation in certain instances.

[19] Ibid

[20] Ibid

[21] Department of Energy Annual Report, (2018/19)

Documents

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