Full answers as South Africa’s Deputy President David Mabuza faces parliament on long-term sustainability of Eskom

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Below are South Africa’s Deputy President David Mabuza’s replies to the National Assembly on the long-term sustainability of Eskom

Question 1 On Government’s plan to ensure the long-term sustainability of Eskom so that it contributes to the recovery of the economy of our country.

Reply by Deputy President Mabuza:

Honourable Members, Government has taken a view that Eskom must be supported to implement a comprehensive turnaround programme, which will ensure that the utility develops and enhances its requisite institutional capabilities to meet the country’s energy needs.

Rapid economic growth and recovery will depend mainly on our ability to ensure the security of energy supply to support industrialisation and development whilst equally ensuring that the livelihood of our people is not undermined through electricity interruptions. Eskom is central to the country’s plans of re-igniting the economy in the context of the prevailing negative impact of COVID -19.  

In the main, our support focuses on:
• ensuring that Eskom strengthens its leadership, governance and accountability systems;
• addressing debt and liquidity challenges, including the payment of debts owed to Eskom by government entities and municipalities; 
• the implementation of an effective plant maintenance programme to minimise energy supply disruptions;
• accelerating the completion of the new build programme that will deliver additional energy capacity; and
• Fast-tracking the emergency procurement of additional energy generation through the Independent Power Producers Programme.

While the road ahead is still long, and challenges we face as a nation may be daunting, we are confident that Eskom is heading in the right direction.

With the appointment of the new Chief Executive Officer and the executive team, the strategic direction of the organisation is clear. We can say without any fear of contradiction that there is visible progress in addressing key challenges to ensure that the organisation is transformed and put on a new governance and agile operating model.

Under the leadership of the new CEO, the re-organisation of Eskom along the lines of a new distinct yet complimentary business and operating model has begun, with clear completion timelines.

In part, the thrust of organisational transformation seeks to achieve significant cost reductions and savings while improving overall efficiencies across key cost drivers such as expenditures on coal contracts and compensation of employees. Eskom is reviewing its head count levels in a way that will balance and match business delivery outcomes, core skills and improved organisational performance.

To avoid resource leakages, wastages and corruption, the leadership of Eskom has focused sharply on strengthening governance systems and internal controls. A number of investigations have been undertaken to ensure that all those involved in fraud and corruption are brought to book.

The Political Task Team consists of the members of the Justice, Crime Prevention and Security Cluster to follow through on issues where Eskom requires support.

Currently, there are investigations in progress to detect breaches and fraudulent activities across key value chains that are core to Eskom operations. Where it has been discovered that companies and individuals have been inappropriately and wrongfully paid, Eskom has embarked on a process of recovering those monies owed. 

Alongside these initiatives, Eskom is improving its revenue and debt collection measures to fund its operations and ensure that electricity is supplied on a sustainable basis. Rising municipal debts continue to pose serious risks to Eskom’s long-term financial sustainability, and contribute significantly to liquidity challenges facing Eskom.

The current municipal arrear debt remains very high, and has reached R28bn as at 31 March 2020, which is an increase of R8,2bn over the past 12 months.

As a Political Task Team, we have committed to ensuring that we expedite the payment of outstanding debts owed to Eskom while also directing all national and provincial organs of state to settle all outstanding debts to municipalities.

More importantly, we have a responsibility to improve a culture of payment for services such as electricity and water by our communities to avoid unnecessary disruptions in the provision of these services. We call on all our communities to pay for electricity to enable Eskom and municipalities to provide services continuously and sustainably.  In this regard, government is planning to implement a comprehensive campaign to raise awareness and encourage communities to pay for electricity and other services that they consume.

We hope that Honourable Members of this august House, in their capacities as public representatives, will also join and aid government’s campaign to root out the pervasive culture of non-payment for services.

We are also implementing key measures to ensure that Eskom outstanding debts are paid. Among others, these measures include:

• the establishment of the Multi-Disciplinary Revenue Committee to resolve the issues of outstanding debts, and implementing mechanisms to prevent the accumulation of new electricity debts by municipalities and organs of state;
• instituting a Dispute Resolution Mechanism to process and resolve disputes arising from disagreements between parties on amounts of monies owed;   
• ensuring that National Treasury communicates with all municipalities and organs of state owing Eskom directing them to settle their electricity debts; and
• Supporting Eskom in addressing the problem of illegal connections that contribute to electricity supply disruptions.

As part of achieving operating efficiencies and cost reductions, Eskom has embarked on the re-negotiation of some of the coal contracts to bring them in line with value for money principles, achieve optimal pricing, and ensuring  win-win outcomes with affected coal suppliers in the best interest of our country.

Honourable Members,

To consistently achieve acceptable levels of energy availability, a focused maintenance programme is critical to avoid electricity supply disruptions, particularly when you are managing a fleet of old and unreliable power plants.

We are pleased that the Eskom leadership has put a clear maintenance plan in place to ensure that the Energy Availability Factor is kept at levels that will avoid unexpected electricity supply disruptions. While the system remains under pressure, we are confident that Eskom has put in place necessary measures to keep the lights on.

The contribution of the new build programme to energy availability is critical in the mix of initiatives to ensure energy security.   Eskom has had to deal with cost overruns and defects affecting Kusile and Medupi power stations. We are advised by the management of Eskom that a great deal of progress has been made in effecting corrective technical modifications required in Kusile and Medupi. Eskom has committed to completing Medupi and Kusile Power Stations by the revised dates of 2020 and 2023 respectively, although the impact of COVID-19 on potential completion delays has not yet been assessed.  Once completed, the new build will contribute additional generation capacity.

Madam Speaker,

The Political Task Team has been seized with ensuring that we accelerate processes to provide additional energy capacity through the implementation of the Emergency Energy Procurement Programme. Concurrence has been received from the National Energy Regulator of South Africa to the Section 34 determination by the Department of Minerals Resources and Energy to procure an additional 2000MW as pronounced by President Ramaphosa.

The Department is also in discussions with existing Independent Power Producers that are already connected to the grid to supply additional available power to Eskom.

In the medium to long-term, the implementation of the Integrated Resource Plan 2019 will provide additional, diverse energy generation options to support accelerated economic recovery and growth.

As a nation, let us stand firmly together and extend our support to the leadership of Eskom as it traverses the challenges of the moment, with a view to building a sustainable power utility that meets the demands of our country and continent. 

Thank you very much.

Question 2 On the Leader of Government Business’s contribution in ensuring  that members of the Cabinet attend to their Parliamentary responsibilities during the Covid-19 pandemic.

Reply by Deputy President Mabuza:

Madam Speaker

When President Cyril Ramaphosa declared the State of National Disaster on 15 March 2020, he announced the establishment of the National Coronavirus Command Council tasked in the main with the coordination of government’s response to the Covid-19 pandemic.

The contributions of the Deputy President like any other member of the Executive, are made within the context of discussions and debates on agenda matters being considered by both the National Coronavirus Command Council and Cabinet.

The decisions arrived at, are collective decisions of the Executive and not personal viewpoints.

The establishment of the National Coronavirus Command Council has not in any shape or form, usurped powers, responsibilities and functions of any of the three Arms of  State – including Parliament in its responsibility of exercising oversight over the Executive as well as facilitating public participation in legislative processes.

Madam Speaker,

As for ensuring that members of the Executive attend to their parliamentary responsibilities, we have amongst other things during this COVID-19 pandemic, been in constant engagements with the Executive to ensure that they attend to their parliamentary responsibilities, and that they continue to be transparent and fully accountable to parliament.

As a matter of fact, Parliament had on the 27th May 2020, held its first second-term question session. Cabinet colleagues under Social Services and Governance clusters, were requested to avail themselves to respond to questions during this session. They all attended, except one Minister who was represented by his Deputy due to other pressing commitments.

In addition to this, we have written to the Executive, requesting that they urgently prioritise responding to unanswered written questions within stipulated timeframes, or alternatively give us reasons in writing for their non-compliance, and how they intend to address this. The reports we are receiving are now showing great improvement in turnaround time, and responses to outstanding questions that are being submitted.

As for possible fast-tracking of any legislation, Honourable Members would know that we had already begun a process of compiling the 2020 Legislative Programme with new Executive Bills when the State of National Disaster was announced. This process was then halted by the lockdown; however, we have since requested the Executive to re-prioritise the proposed legislative programme to be in line with government’s programmes to address the reality of COVID-19.

To this end, Ministers have since reprioritised their proposed legislation, and the 2020 Legislative Programme with new Executive Bills that will be submitted for Cabinet approval before the end of June 2020.

Thank you very much.

Question 3 On the contents of the internal report of Eskom into the investigation of allegations against the Chief Operating Officer.

Reply by Deputy President Mabuza:

Madam Speaker,

We can confirm that we have through the Minister of Public Enterprises as a shareholder representative, have had sight of the contents of the internal report of Eskom into the investigation of allegations against the Chief Operating Officer.

As a point of departure, we must state the importance of good corporate governance in our State Owned Enterprises, especially those as strategic to our country as Eskom. In an environment of prevailing financial challenges faced by Eskom, the public should at all times have confidence in how the power utility is managed.

That is why we have appointed the board and put in place a shareholder compact to guide our relationship including setting parameters on the responsibilities, duties and rights of shareholders, directors, and executives. At all times, we look to the board to ensure that the affairs of the power utility are well managed, including dealing with allegations of corruption, abuse of power, dishonesty and conflicts of interest whenever such arise.

Notwithstanding the fact that we have no basis to doubt the fairness, and the integrity of the investigation process as conducted against the COO, we call on the board to ensure that the recommendations are implemented in full. We find comfort in the commitment expressed by the CEO that they will act should new evidence arise.

Thank you very much.

Question 4 On the impact has the “She Conquers” Campaign in light of the escalation of reported cases of gender-based violence during the national lockdown to curb the spread of Covid-19.

Reply by Deputy President Mabuza:

Madam Speaker,
The ‘She Conquers Campaign for Adolescent Girls and Young Women’, was born out of the vulnerabilities of adolescent girls and young women in experiencing violence and contracting HIV/AIDS. The Campaign Core Package of Interventions addresses the biomedical, socio-behavioural, and structural factors that contribute to gender-based violence.

In the main, the Campaign was established to decrease new HIV infections in girls and young women; decrease teenage pregnancies; increase the retention of adolescent girls in school until matric; decrease sexual and gender-based violence amongst adolescent girls and young women; and increase economic empowerment opportunities for young people, particularly young women.

The target of the campaign was to reduce sexual and gender-based violence experienced by Adolescent Girls and Young Women, by 10% over three years. Although the term “campaign” suggests a limited and time bound effort, the project goals require and deserve a longer term footing and even wider application to appreciate its impact.

The Campaign has since its launch in June 2016 had more than 90 000 adolescent girls and young women that have received post-violence care, and nearly 19 000 young boys and girls have participated in violence prevention programmes in the 22 priority sub-districts.

Under the umbrella of the Campaign, the SANAC Social and Structural Technical Task Team provided substantial written inputs into the National Strategic Plan for Gender-Based Violence, with a specific focus on the intersections of HIV and Gender-Based Violence.

The National Youth HIV Prevention Technical working group developed a standardised HIV prevention risk assessment tool, which included gender-based violence screening questions, help-lines and referral tools.

The gender-based violence prevention services that educate and empower adolescent girls and young women on safety and health, include interventions that are community-based multi-session, delivered through contact sessions in schools and community engagements. These sessions address bullying and links to gender-based violence, gender dynamics, power and violence, social norms change, gender equality, dealing with violent situations, avoiding risk, abuse and sexual violence.

In the final analysis, the She Conquers Campaign is focused on investing in institutional capacity, strengthening of our implementing partners and striving to ensure that Campaign Agents, Youth Ambassadors, Youth Connectors and Ground Breakers including civil society, and volunteers, implement programmes at the grassroots level.

In this instance, multi-media campaigns were implemented to intensify efforts in raising awareness of the child protection risks of lockdown including sexual and gender-based violence as well as providing targeted support through remote case management and physical visits to vulnerable households.

With the outbreak of Covid-19, the Campaign continues to work with communities, traditional and religious leaders to avoid transmission of coronavirus infections and to provide training to those well placed to care for vulnerable adolescent girls and young women.

During Lockdown Alert Level 5 and 4, community gender-based violence prevention services that educate and empower adolescent girls and young women, were not available due to lockdown regulations and restrictions.

However, during the same period, biomedical and psycho-social services were available and continue to be available during Lockdown Alert Level 3.

Staff that is providing trauma containment and immediate health support, continued to work as essential staff and so did linkage officers who provided virtual follow-up and psycho-social support services to clients.

Madam Speaker,

It is now evident that Covid-19 and the lockdown has brought along an increase in cases of gender-based violence. Empirical research and data trends have shown that adolescent girls and young women face enormous hurdles that impacts on the quality of their lives in various ways, including adverse effects on their education, personal safety, rights over their bodies, health, peer support, social connections and economic prospects.

The need for the She Conquers Campaign is more important during this time and gives us an opportunity to go back to the drawing board, and to adopt a different approach in uprooting this social cancer from our society.

If anything else, the Campaign for the empowerment of adolescent girls and young women, raises sharply the need to concentrate on the family as an important unit for the regeneration of the new society we envisioned in our country’s Constitution.
Honourable Members

The recent incidents of gender-based violence perpetrated by men, continue to undermine our national commitment towards the protection of the rights of women. These incidents negate the noble objectives of our social compact that was forged through the 2018 Declaration of Gender-Based Violence and Femicide Summit led by the President.

Among other key focus areas, the Declaration calls for leadership across all segments of South African society, including political, government, business, and community leadership to take collective responsibility and accountability for responding to the scourge of GBV and to actively play a role in supporting the cause of eradicating gender-based violence and femicide. It is a call for collective action and partnerships across all sectors of society.

On our part as government, we are committed to providing the necessary leadership required to galvinise society towards a unified vision, purpose, and broad-based implementation programmes aimed at eradicating the scourge of gender-based violence and femicide. This includes the process of setting up appropriate institutional mechanisms, capacities and resources to ensure that, as a nation, we respond decisively to the challenges of gender-based violence and femicide.

Earlier in the year, Cabinet approved the Gender-Based Violence and Femicide National Strategic Plan and the establishment of the National Council on Gender-Based Violence and Femicide. The National Council will be an inclusive multi-stakeholder body tasked with leading and coordinating the implementation of the National Strategic Plan.

Cabinet also approved the setting up of the Inter-Ministerial Committee on gender based violence and femicide, which will play a key facilitation and political liaison role in the National Council processes, and ensure the effective implementation of priority programmes.

The Department of Women, Youth and Persons with Disabilities, is in a process of consultations with civil society formations to engage and forge a roadmap for the establishment of the National Council. Notwithstanding the need for broad and intensive consultations, we are confident that these processes will be expedited within the framework of deadlines agreed by all parties. For us, the time for talk on issues of gender based violence is over. Time is of the essence. We need to act now, and act decisively, in tackling all challenges faced by the women of our country.

In pursuit of our social compact commitments to end gender-based violence and femicide, government is progressing on the implementation of some of the key measures. These include:

• Ensuring legislative amendments such as minimum sentencing in cases of gender-based violence, bail conditions for suspects, and greater protection for women who are victims of intimate partner violence.
• The Draft Amended National Policy Framework on the Management of Sexual Offences Matters, which has been developed and aligned with the Presidential Summit Declaration against GBVF, 2019.
• Cabinet approval of the GBV Policy Framework in Post-School Education and Training System in order to respond to the increased number of GBV-related cases at institutions of higher learning; an important step during Youth Month.

There is no doubt that more work lies ahead. Collectively, we can make a difference to the lives of all South African women so that, they too, can enjoy freedoms and liberties, with no fear of being raped and murdered by men.

Unless as a society we fight this scourge with the same vigour that we fought the oppressive system of apartheid, the freedoms we envisaged at the dawn of our democracy will remain elusive.

Thank you very much.

Question 5 On leading the Social Compact to ensure that matters of electricity in respect of affordability, debts, mobilisation of resources, fresh capital injection into Eskom are addressed.

Reply by Deputy President Mabuza:

Madam Speaker,

Under the leadership of President Ramaphosa, social partners from government, business, labour and community constituencies are working towards finding solutions to economic, labour and development issues that are facing our country. 

This is in line with the dictates of the National Development Plan, which advocates for strong leadership throughout society to work together in crafting solutions for challenges that South Africa faces.

The Parties in the National Economic Development and Labour Council (NEDLAC) as one of the vehicles that exercise this principle of active citizenry, have initiated efforts towards resolving the ongoing electricity supply challenges.

We are encouraged by the acknowledgement of all parties at NEDLAC that the culture of non-payment for services rendered, is not helping the situation. To this end, Social Partners have developed a Framework Agreement for a Social Compact on Supporting Eskom for Inclusive Economic Growth, supported by an implementation plan which provides practical expression to the Social Compact. This draft Social Compact will be presented to the Presidential Working Committee of the Jobs Summit on 06 July 2020, for final approval and sign off.

Through the compact, progressive steps have been suggested such as; each constituency identifying commitments and sacrifices that will be made towards contributing to resolving the energy challenge, addressing human capital issues and promoting labour stability while enabling an efficient and productive Eskom that plays its developmental role.

This includes enabling increased access and affordable prices to communities and allows industries to support job creation and inclusive economic growth. Over and above the partners at NEDLAC, it is incumbent on all South Africans to champion development efforts in their spaces.

Through the Eskom Task Team, various strategic role players are put together with the aim of developing a comprehensive approach, and coordination of efforts to ensure that the power utility is supported in the implementation of its turnaround plan.

We are pleased to announce that there is noticeable and improved coordination at government level with Eskom and SALGA in developing creative strategies to increase optimal performance of the utility whilst ensuring security of energy supply.

To this end, SALGA has mandated municipalities to embark on a rigorous debt collection and restructuring process in an effort to recover debt owed to them, and to curb escalating Eskom and Water Boards debt, owed by municipalities. According to Eskom, the total municipal arrear debt has continued to escalate to unacceptably high levels to R28 billion at the end of March 2020. This represents an increase of R8.2bn over the past 12 months.

Hence the Department of Cooperative Governance and Traditional Affairs is in discussion with relevant government departments to embark on a campaign to enhance the culture of payment for municipal services. The objective of this campaign is to educate consumers about the benefit of paying for municipal services and to instil a culture of payment for services rendered.

All these efforts are aimed at enabling municipalities to collect the required revenue in order to meet their obligations. As far as possible, we should all ensure that we resolve challenges linked to social development and economic growth through taking initiative, towards making our democracy work.

With democracy comes taking responsibility. It is in this spirit that we continue to call upon consumers to embrace the user-pay principle to ensure that access to basic services such as electricity is on a sustained basis.

Similarly, we also call upon all departments across government to ensure that they pay municipalities on time, to ensure that they in turn can meet their debt obligations.

We reiterate our call for Accounting Officers to settle all contractual obligations, and pay all monies owed, including intergovernmental claims, within 30 days of the submission of an invoice, or on a specific period agreed with creditors or suppliers.

Thank you very much.

Question 6 On government programmes to accelerate agricultural support

Reply by Deputy President Mabuza:

Madam Speaker,
The Honourable Member would be aware that President Ramaphosa established an Inter-Ministerial Committee on Land Reform and Agriculture at the beginning of the current Administration. The work of the Inter-Ministerial Committee is to resolve blockages in the acceleration of land reform, as well as ensuring the effective coordination of integrated farmer support interventions to this sector, as the lifeblood of our economy.

Since its establishment, this Inter-Ministerial Committee has been seized with issues of land reform and coordination of agricultural support to farmers. For example, when we started experiencing this cycle of drought, as government we implemented in 2019 a package of support to affected areas.

These include:
• Drilling of boreholes in the Free State Province, which has resulted in, for example, 50 subsistence and smallholder farmers benefiting in the Mangaung Metro.
• Making available livestock feed to targeted commercial, smallholder and subsistence farmers in KwaZulu-Natal.
• Ongoing drilling of boreholes and supply of livestock feed in Limpopo. We are informed that thus far, 3,563 farmers have benefitted from livestock feed whilst 14 farmers have benefitted from the livestock water projects – and all these are smallholder farmers.
• Similarly, in the North West district of Dr Ruth Mompati, interventions have included livestock feed to communal and subsistence farmers.
• In Mpumalanga, livestock feed and interventions supporting the development of fodder-bank has benefitted 1,094 smallholders, subsistence and commercial farmers.
• In the Western Cape, fodder supply has benefitted 753 commercial and 719 smallholder producers.
• In the Northern Cape, during our visit with the Honourable Groenewald and Minister Didiza, an immediate relief fund of R30m was announced, a fodder bank was established. The Province embarked on the planting of maize and lucerne for fodder supply and moreover, the extension of irrigation and input costs for fodder production benefited 8,123 beneficiaries.

As we have stated before, this support does not amount to agricultural subsidies, but is part of our efforts to alleviate the negative impact posed by drought on farmers and the sustainability of the sector. Government will continue to act as swiftly as possible in responding to challenges faced by farmers, especially in relation to drought and its accompanying effects of climate change. Among other interventions, would be to continuously provide early warning information and drought coping strategies.

That is why considering the impact of persisting drought conditions in many parts of the country, on 4th March this year, the Minister of Cooperative Governance and Traditional Affairs declared South Africa a national disaster area.

In implementing this decision, multiple affected Provinces were advised on the allocations and in response they needed to present their business plans on how these resources would be expended. The national lockdown disrupted this process as movement, which would have facilitated engagement with affected farmers was limited.

After the lifting of Alert Level 4, the Minister of Agriculture, Land Reform and Rural Development and the Minister of COGTA, once again requested Provinces to act on this matter in order to ensure that affected farmers are duly supported.

We expect that the business plans will take into account the diminishing fiscal resources and the negative impact of COVID-19. This calls on government to reprioritise the available resources to respond to the impact of the pandemic. This means that resources may not always match the needs on the ground including on this issue of drought. However, as government and all stakeholders in the agricultural sector we should work together with a common purpose, in ensuring that we optimise limited resources to sustain this important sector and save jobs.  

In the final analysis, the cumulative negative effects of climate change, resulting in severe drought and flooding, affects all of us, and as such, we have to find common ground and a unifying purpose to unlock the full potential of the agricultural sector presented by among others equitable land reform.

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