Eskom Crisis – new CEO Andre de Ruyter to jump in early

Government revives war room to tackle power crisis

By Paul Vecchiatto
(Bloomberg) – The government revived a so-called Energy War Room to tackle South Africa’s electricity crisis, as it brought forward the date when the incoming chief executive officer of the state power utility will start work.
The team, to be headed by Deputy President David Mabuza, will seek to avoid a repeat of a nine-day blackout earlier this month that risks tipping the economy into recession. Debt-ridden Eskom is struggling to meet demand for electricity because of its failure to properly maintain aging plants and invest in new ones.In addition to Mabuza, the war room will consist of Finance Minister Tito Mboweni, Energy Minister Gwede Mantashe and Public Enterprises Minister Pravin Gordhan, Minister in the Presidency Jackson Mthembu told reporters at a cabinet briefing on Tuesday in Pretoria.

“The team will deal with any challenges to our energy supply in the country,” he said.

The government previously established a war room in December 2014 to deal with electricity shortages that contributed to an economic contraction in the second quarter of the following year. That team was tasked with improving power maintenance and debt-collection processes.

The cabinet also mandated Gordhan to negotiate with incoming CEO Andre de Ruyter, who is scheduled to start on January 15, to take up the position earlier, Mthembu said.

“De Ruyter, together with his management team, will immediately deal with the concerning issues of governance, lack of financial management as well as stabilise the operations of Eskom,” Mthembu said. “This includes dealing with the huge backlog of maintenance of the aging fleet of their power stations and the structural defects” at other plants, he said

Full statement on the Cabinet Ordinary Meeting held at Union Buildings, Pretoria on Friday, 13 December 2019

1. ISSUES IN THE ENVIRONMENT

  1.           Eskom

1.1.      Cabinet fully supports all efforts meant to ensure electricity supply certainty in our country. In this regard, Cabinet has mandated Public Enterprises Minister Pravin Gordhan to negotiate with the Chief Executive Officer Mr Andre de Ruyter to commence his duties earlier than the set date.

1.2.      Mr de Ruyter together with his management team will immediately deal with the concerning issues of governance, lack of financial management as well as stabilize the operations of Eskom. This includes dealing with the huge backlog of maintenance of the aging fleet of their power stations and the structural defects in Medupi and Kusile power stations.

1.3.      Deputy President David Mabuza will convene a resuscitated Energy War Room comprising Finance Minister Tito Mboweni; Minerals and Energy Minister Gwede Mantashe and Minister Gordhan. The team will deal with any challenges to our energy supply in the country.

1.4.      Renewables will play a key role in our energy supply to complement the efforts of Eskom.

  1.           South African Airways (SAA) Business Rescue

2.1.      The SAA was this past week placed under Business Rescue. Cabinet is confident that this intervention will assist in repositioning the national airline into a stronger, competitive entity that with time will gain confidence of all South Africans and attract equity partners.

2.2.      Cabinet has welcomed the appointment of the Business Rescue Practitioner Mr Les Matuson from the Matuson Associates.  He will work with the Black Partners that will be announced in due course.

2.3.      The SAA will receive an additional R2 billion in financial assistance from government to contribute towards the radical restructuring of the airline. Also, the existing SAA lenders will provide an additional R2 billion.

2.4.      Cabinet is confident that this intervention will restore the reputation of the airline and prevent the collapse which would have had a negative impact on passengers, suppliers and other partners in the aviation sector and importantly, the workforce.

2.5.      Minister Gordhan will report progress regarding this Business Rescue intervention to Cabinet on a regular basis.

  1.           Flooding

3.1.      Cabinet sends condolences to those who lost their loved ones as a result of the recent floods experienced in various parts of the country.

3.2.      Government is coordinating a multidisciplinary intervention through the National Disaster Management Centre to respond to the devastation caused by these floods.

3.3.      Cabinet welcomes the support of various organisations in providing rapid relief efforts. The evacuation of people from buildings and relocation of people who were displaced in community halls and churches displayed a true spirit of Ubuntu (Humanity). Cabinet calls on the public to listen to alerts and tips on severe weather conditions.

3.4.      Fast-moving flood water is life threatening and drivers and pedestrians are urged to be extremely careful and to completely avoid using routes which have been flooded.

3.5.      Residents who live below the flood line of rivers and dams are warned to be cautious and move to safer areas at the earliest sign of flooding. Do not put your life at risk by swimming in dams and rivers during heavy rains.

  1.           Festive Season

4.1.      Cabinet wishes all South Africans a safe and prosperous Festive Season. As South Africans we must continue showing Ubuntu to fellow South Africans and our visitors during this period of merriment.

4.2.      Cabinet calls on all South Africans to observe the rules of the road as they make their way to their holiday destination and throughout the festive season. The responsibility to reduce the carnage on the roads lies with every one of us. Responsible behaviour on the road includes no drinking and driving, driving within the speed limits, being considerate for other road users, including pedestrians. Let us work together to save lives #LiveBeyondDezemba # Arrive Alive.

4.3.      Government’s “Safer Festive Season Operations” has already started with the South African Police Service (SAPS) out in force during this period. Citizens are encouraged to use the MySAPS mobile App, which is the first of its kind on the African continent.

4.4.      The new App allows citizens to interact with law-enforcement officials more effectively by providing tip-offs anonymously, finding nearest police stations and facilities, and allowing a victim of crime to send messages instantly during an emergency.

4.5.      Cabinet also appeals to parents and guardians to ensure that children are not left unattended during this time.

4.6.      Cabinet encourages South Africans to take a Sho’t Left by visiting local attractions and support domestic events. The use of registered tour operators or tourist guides will ensure safety and enhance travel experiences. Details of registered tourist guides can be found on the various Provincial Tourism Office websites.

  1.           2019 National Senior Certificate (NSC) Examination results

5.1.      Cabinet thanks teachers, learners and parents for working with government to ensure the successful conclusion of the 2019 NSC Examinations. Results will be announced on the evening of 7 January 2020 and matriculants are encouraged to visit the website of the Department of Basic Education (www.education.gov.za) or register via SMS by sending their ID number and Exam number to 35658 to get their results.

2. CABINET DECISIONS

6. Biofuels Regulatory Framework

6.1.      Cabinet approved the Biofuels Regulatory Framework, which will give effect to the implementation of the Biofuel Industrial Strategy. Biofuels are internationally recognised as immediate less carbon-intensive substitute. They blend fuel for conventional mineral fuels so as to reduce air pollutant from the use of transport fuel.

6.2.      The framework provides five areas to be regulated namely (1) the feedstock Protocol. The protocol mitigates the risk of the biofuels programme towards food security. (2) The mandatory blending regulations so as to create certainty of biofuels demand.  (3) The cost recovery mechanism for blending of biofuels. (4) The Biofuels subsidy mechanism for biofuels farmer support and biofuel manufacturer’s support. (5) the selection criteria for biofuel projects requiring a subsidy. The framework document can be accessed through the Department of Energy website: www.energy.gov.za.

  1.           National Security Council

7.1.      Cabinet approved the re-establishment of the National Security Council to streamline the coordination of all the security related work of the country. The council will be responsible for the approval of the National Security Strategy, the National Intelligence priorities of the country and National Intelligence Estimates.

7.2.      The council will be chaired by the President in his capacity as the Commander-in-Chief of the Armed and Security Forces. The other members of the council will be Deputy President Mabuza; State Security Minister Ms Ayanda Dlodlo; Defence and Military Veterans Minister  Mrs Nosiviwe Mapisa-Nqakula; Home Affairs Minister Mr Aaron Motsoaledi; Police Minister Mr Bheki Cele; Finance Minister Mr Tito Mboweni and Cooperative Governance and Traditional Affairs Minister Ms Nkosazana Dlamini Zuma.

  1.           White Paper on Home Affairs

8.1.      Cabinet approved the White Paper on Home Affairs, as well as the high-level strategy and road map for repositioning the Department of Home Affairs as a critical enabler for economic development and national security.

8.2.      The White Paper is based on a policy foundation for a modernised and digitised government that takes us closer to realizing the objectives of e-Government and e-Commerce.

  1.           Cabinet approved the submission of the Madrid Agreement on the International Registration of Marks (1989) to Parliament for ratification.

9.1.      The Madrid Protocol covers the protection of trade marks. Trademarks build brand recognition and competitive advantage in marketing goods and services both locally and internationally.

9.2.      Accession to the Madrid Protocol will enable the   advancement of the country’s Intellectual Property (IP) Policy. It will offer South African businesses particularly the small businesses an avenue to use the IP system to market their goods and services internationally.

  1.       Passenger Rail Agency of South Africa (PRASA)

10.1.  Cabinet approved the dissolution of the Interim Board of PRASA and placing of the entity under administration.

10.2.  South Africa needs a reliable, economical and smooth flowing rail corridors that acts as the backbone of public transport in linking the various modes of transport. The Auditor-General’s recent outcomes for 2018/19 reported serious governance failures at PRASA, lack of effective financial management process resulting in PRASA obtaining a Disclaimer Audit Outcome.

10.3.  To this effect, Cabinet approved the appointment of an Administrator, Mr Bongisizwe Mpondo, to administer the affairs of the entity for 12 months. This intervention will contribute in restoring the effective performance of PRASA.

  1.       Broadcasting Digital Migration

11.1.  Cabinet was briefed on the status of the Broadcasting Digital Migration programme regarding decoder storage, distribution and installation management.

11.2.  It noted the framework for installation of the decoder stock kept at South African Post Office warehouses. Cabinet approved that for the remaining decoder installations, installers will be appointed at local municipality level. This revised delivery model is meant to fast-track the process towards the migration from analogue to digital and the  release of the High Demand Spectrum.

11.3.  Cabinet also approved the appointment of Mr Newyear Niniva Ntuli as the Administrator and Accounting Authority of the Universal Service and Access Agency of South Africa for 24 months.

  1.       Report on 25-Year Review of Women’s Empowerment and Gender Equality in South Africa: 1994-2019

12.1.  Cabinet approved the report, which will serve as the Country’s Report Back to the Beijing Declaration and Platform for Action (Beijing+25) of the United Nations (UN). The UN Commission on the Status of Women is scheduled to make the 25th anniversary of the Beijing Declaration and Platform for Action in March 2020. South Africa is the signatory to the Beijing Declaration.

12.2.  The report highlights progress in a number of areas in respect of women empowerment and attempts to narrow the gap of gender inequality. Whilst it affirms that South Africa has comprehensive gender-responsive legislative and policy interventions to redress sexism, challenges of transforming historical gender imbalances and addressing the persisted patriarchal practices and stereotyping remain.

  1.       Gender-Based Violence (GBV) and Femicide National Strategic Plan (NSP) (2020-2030)

13.1.  Cabinet was briefed on the NSP 2020-2030, which provides a multi-sectoral, coherent strategic policy and programming framework to ensure a coordinated GBV national response by government and the country as a whole. Cabinet approved that all funded programmes of the plan must be implemented by the various affected departments.

13.2.  Cabinet, however, directed further work be done in refining the proposed institutional and coordination arrangement of this work. The following Ministers were directed to do further work in this regard: Social Development Minister Ms Lindiwe Zulu; Justice and Correctional Services Minister Mr Ronald Lamola; Police Minister Mr Bheki Cele; Women, Youth and Persons with Disabilities Minister Mrs Maite Nkoana-Mashabane. Minister Mrs Nkoana-Mashabane will convene this team.

  1.       Recommendations of the Presidential Advisory Panel on Land Reform and Agriculture

14.1.  On 24 July 2019, Cabinet received the Report of the Presidential Advisory Panel on Land Reform and Agriculture chaired by Dr Vuyokazi Mahlati, which made 73 recommendations.  Through the Inter-Ministerial Committee on Land Reform led by Deputy President Mabuza, all the affected departments were asked to study the recommendations relating to their respective portfolios and respond accordingly.

14.2.  Cabinet has since endorsed and supported 60 of the recommendations. Only nine were not approved and three were noted. The various departments will provide a fuller briefing on the areas that were noted and not approved.

  1.       Gauteng Freeway Improvement Project (GFIP)

15.1.  Cabinet noted the report on the GFIP (e-tolls) of the Task Team led by Transport Minister Mr Fikile Mbalula. A final decision on the recommendations of the Task Team as contained in the report will be made in the New Year.

 

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