The reforms under way in the electricity sector will spur a boom in private investment and will supercharge the country’s efforts to modernise and transform the electricity sector.
This is according to minister in the presidency Mondli Gungubele who, with finance minister Enoch Godongwana, announced progress achieved by Operation Vulindlela on Friday.
Gungubele said Operation Vulindlela has prioritised electricity reforms in the second quarter that will remain a key focus “given that load-shedding remained the largest impediment to growth and investment in the SA economy”.
The reforms will create the conditions for a “boom in private fixed investment in the coming years” that will lift economic growth, Gungubele said.
Operation Vulindlela was set up to give effect to structural reforms needed to achieve economic growth. The operation, which is overseeing 26 such reforms across various sectors, aims to unlock administrative and other operational bottlenecks in areas such as energy, telecommunications, transport, water and tourism.
The reforms include stabilising the supply of electricity and water, reducing the cost of digital communication, improving the efficiency and competitiveness of the country’s ports, and developing a visa regime that will attract critical skills and unlock growth.
National Treasury’s chief director of microeconomics, Nomuyo Guma, said the review of the policy framework and procedures for issuing work visas, particularly for scarce skills, has been completed.
Missed deadline
She said other achievements include the clearing of the backlog on water use licences, of which almost 1,000 were outstanding at the start of the quarter.
“This [the progress] was partially offset by a missed deadline with respect to completing the migration from analogue to digital signal. A new date will be communicated shortly once the relevant department has finalised its consultations with stakeholders,” Guma said.
Gungubele told the media that efforts to address the electricity crisis received the “greatest focus” during the quarter. He said the focus will now be on implementing the energy action plan outlined by President Cyril Ramaphosa in July, and on efforts to encourage private sector participation in the freight industry.
Gondongwana said one of the most pressing issues is the ports and rail infrastructure, which have faced significant challenges due to security issues, inadequate investment in equipment, procurement processes that were tainted by state capture, and poor operational performance.
He said the requests for proposals regarding private sector participation in rail are due this month for 16 slots made available by Transnet on the Durban-City Deep and Pretoria-East London lines.
It is “only the first step” in enabling third-party access to the freight rail network.
“We anticipate the passage of the Economic Regulation of Transport Bill in the coming months that will establish an independent Transport Economic Regulator and enable properly regulated, non-discriminatory access to the network beyond these initial slots,” he said.
Container terminals
“This is a major step forward to enable experienced international terminal operators to invest in the expansion of infrastructure and improve the management of port operations,” Godongwana said.
Head of the project management office in the presidency Rudi Dicks said the requests for proposals for private sector participation in the container terminals at the ports of Durban and Ngqura are set to be published on August 8.
“This will enable partnerships to be set up by January next year and will help improve port performance,” Dicks said.
It was highlighted in the report that three reform actions — including the implementation of emergency procurement of 2,000MW of generation capacity, improving the performance of Eskom’s coal-fired generation fleet, and completing digital migration priorities — face critical implementation challenges.
The switch-off of analogue transmission, which was due to be completed by end-March, was postponed by a high court order to June 30. It was unable to proceed as planned due to a subsequent Constitutional Court order invalidating the date gazetted by the minister of communications & digital technologies for the end of dual illumination.
Decisive action
In terms of Operation Vulindlela Eskom’s declining energy availability factor, which measures generation output as a share of total installed capacity, should rise to more than 70%. SA’s 46,000MW of installed electricity-generation capacity, which is meant to supply the country’s peak demand of 32,000MW, is running at an average of about 60%-65% of available capacity due to maintenance outages, unplanned outages and an ageing fleet.
Godongwana said as demonstrated with the formation of the National Energy Crisis Committee, “we are taking decisive action to get these reforms on track as quickly as possible”.
Dicks said the main focus for the next few weeks and months is to ensure the swift and full implementation for the energy action plan that was announced last month by Ramaphosa, including the removal of the 100MW licensing threshold for private generation and doubling capacity under the sixth bid window of the Renewable Energy Independent Power Producer Programme to 5,200MW.
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