Deputy President David Mabuza: ‘Our plans to fix Eskom are working’

From The Presidency: 

Restructuring at Eskom

7.    Mr T B Matibe (Limpopo: ANC) to ask the Deputy President:

(1)    How far is the process of restructuring at Eskom?
(2)    Whether Eskom’s turnaround strategy is delivering what it was intended to; if not, why not; if so, what are the relevant details? CO459E

Reply:

Honourable Chairperson,

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

Our country’s rapid economic growth and recovery, is largely dependent on our ability to ensure the security of energy supply in order to support industrialization and equally ensure that there is no disruption to people’s livelihood through electricity interruptions. It is this consideration that Eskom remains a central pillar to South Africa’s plans of re-igniting the economy, further impacted negatively by Covid-19 pandemic.

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.

Honourable members would appreciate that restructuring the company of Eskom’s magnitude will not be an easy task, and it would take even longer to consider the potential effects thereof. That is why President Ramaphosa on 18 February 2020, appointed a Political Task Team on Eskom under the leadership of the Deputy President as an institutional coordinating platform that brings together key players within government, to provide leadership and technical assistance towards the resolution of challenges facing the energy utility. Since then, the Political Task Team has been hard at work in ensuring that the restructuring plan is expeditiously implemented.

This builds on the Special Paper on Eskom published by the Department of Public Enterprises in October 2019, which details the electricity reform process of ensuring that South Africa has an appropriate electricity supply system capable of responding to the demands of a rapidly evolving world, to which South Africa needs to be responsive.

To this end, this restructuring of Eskom is being implemented in a phased manner to effect stabilisation, optimisation and growth of the entity.

The stabilisation phase deals with strengthening the balance sheet, attending to the dwindling cash flow, overturning governance failures, rooting out corruption and improving plant performance both in the generation fleet and distribution networks. This is an important step as it sets the organisation on a sustainable path.

The optimisation phase starts to augment Eskom’s business model by implementing the restructuring as outlined in the Department of Public Enterprises Roadmap paper. This step will help address the “fit for purpose” question that Eskom and the industry has been engaging on. It will provide delegation, responsibility and accountability to each of the new subsidiaries and its executives.

Lastly, the growth phase will set Eskom on a growth path recognising that the domestic and international energy landscape is fast changing requiring an agile Eskom that adapts and responds to changing environment that is competitive and shaped by new cleaner technologies.

We are pleased by the progress we are making towards a better, transformed and performing Eskom under the leadership of Mr Andre de Ruyter as the Chief Executive Officer. Therefore, the re-organisation of Eskom along the lines of a new distinct yet complimentary business and operating model has begun.

To date, the high level achievements involve the following:

•    Adoption of the Functional Leader Operating Model as the basis for how Eskom will manage its business. This allows the various businesses to function independently.
•    Implementation of business models for the divisions and corporate functions for the first phase of Divisionalisation are at an advanced stage of completion.
•    Establishment of Divisional Boards for all three Eskom divisions, appointment of Divisional Managing Directors as well as Board members.
•    Conceptualisation of a market operator which will operate as a central purchasing agency of electricity by contracting from Generation to Distribution.

More importantly, the Turnaround Management Office has been set up and capacitated to drive the implementation of the turnaround including restructuring milestones.

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 also reviewing its head count levels in a way that will balance and match business delivery outcomes, core skills and improved organisational performance.

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.

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 to detect breaches and fraudulent activities across key value chains that are core to Eskom operations have been undertaken.

This will ensure that all those involved in fraud and corruption are brought to book and also guarantee the recovery of monies owed to the utility by companies and individuals who were inappropriately and wrongfully paid. We rely on the board to ensure that action on acts of corruption are dealt with decisively, without fear, favour or prejudice.

Alongside these noble initiatives, Eskom is also improving its revenue and debt collection measures to fund its operations and ensure that electricity is supplied on a sustainable basis. As a Political Task Team, we have also committed to ensuring that we expedite the payment of outstanding debts owed to Eskom and have directed all national and provincial organs of state to settle outstanding debts to municipalities and water boards, so that in turn they meet their own debt obligations.

Honourable Chairperson,

We are cognisant of the negative impact of the current load shedding on the economy and the quality of life of citizens. This is regrettable. Eskom is seized with managing the performance of ageing power stations while ensuring that, vandalism, theft, and illegal connections are minimised.

While the system is currently under severe pressure, we are confident that Eskom has put in place necessary measures to keep the lights on. There are substantial legacy issues of governance, operational and financial challenges that still need to be overcome by the current management to fully stabilise Eskom. A stable and sustainable Eskom is important in ensuring that reliable electricity supply is guaranteed, thereby securing our path to a growing economy. This is an objective that we will pursue relentlessly.

Thank you very much.

Effectiveness of land reform programmes

8. Ms C Labuschagne (Western Cape: DA) to ask the Deputy President:

Whether, as leading the Government’s efforts to fast-track land reform and the coordination of Government programmes to accelerate land reform and agricultural support, he has found the response to the National Assembly Question 1378 by the Minister of Agriculture, Land Reform and Rural Development (details furnished) and her department’s work to be satisfactory; if not, what is the position in this regard; if so, what are the relevant details? CO542E

Reply:

Honourable Chairperson,

Through the government’s Land Reform Programme, we are taking a responsible and measured path of restoration, redress and dignity for all our people, who are the real beneficiaries of their ancestral land.

Although, there is still much work to be done, which has been compounded by the devastating impact of the Covid-19 pandemic, we have found the work of the Minister of Agriculture, Land Reform and Rural Development to be satisfactory. We are encouraged by the leadership focus and direction provided by the Department to ensure that key policy and programme interventions are developed and implemented to fast track land reform.

We have no doubt that, with the repositioning of the Department, the overall institutional capacity has improved to ensure that government accelerates land reform.

The Minister’s response to the National Assembly referred to by the Honourable Member provides a historical view of what government has accomplished through the implementation of various policy interventions to advance meaningful land reform. This includes investments that government has made in providing comprehensive farm development support, to ensure that acquired and restituted farms remain productive.

Historically, various assessments and evaluations at national and provincial levels have highlighted challenges that have impacted on the productivity of farms. Among others, these include Communal Property Associations governance challenges, alleged corruption in land reform transactions, and inadequate post-settlement support due to fiscal constraints.

For the Inter-Ministerial Committee on Land Reform and Agriculture, the functionality and productivity of land reform farms remain high on the agenda to ensure that the agricultural sector promotes economic inclusion, increases aggregate production output and contributes significantly to economic growth.

Read also: Deputy President David Mabuza condemns farm murders

As part of this work, the Department of Agriculture, Land Reform and Rural Development has prioritised a comprehensive assessment of all land reform farms with a view of ensuring that appropriate policy interventions and post-settlement support measures are effectively implemented to enhance the productivity of all land reform farms.

Based on the assessment of each farm, appropriate support packages will be designed and implemented to improve functionality and productivity. In this regard, the Department has appointed technical teams to undertake this comprehensive work. It is expected that the teams will commence next month. Given the scope of what needs to be covered, this process may take up to two years. It is expected that interventions will be implemented on farms where assessments have been completed.

Alongside this, the Department has finalised a Comprehensive Producer Support Policy for approval by Cabinet. In terms of this policy, a more targeted and differentiated approach to supporting various categories of farmers is proposed. Based on the needs assessment of each farm, it is expected that land reform beneficiaries will be supported in a more focused and effective way.

As part of this, coordinated farmer support centres will have to be implemented at District level to ensure that government support services are integrated and made accessible to all farmers. Farmers should always find it easy to access an integrated suite of government services. This requires better coordination between national, provincial and local governments.

While core funding for land reform is expected to come from government, it has become clear that the fiscal space is constrained and limited, and therefore, private sector capital and partnerships, are critical pillars for our funding and financing model for agriculture, including blended financing options for farmers who are beneficiaries of land reform farms.

With specific regard to the Eastern Cape Province as alluded to in the Honourable Member’s question, we have been advised by the Department of Agriculture, Land Reform and Rural Development that while challenges remain, a great deal of progress has been made towards supporting land reform farms. There is ongoing post-settlement support provided by the Department in terms of technical support, infrastructure and mechanisation to ensure that farms remain productive and functional.

During 2020/2021 financial year, land development support will be extended to the identified 147 projects within the Pro-Active Land Acquisition Strategy in all nine provinces. This programme speaks to the category of farms totalling 2.2 million hectares which were acquired by the State and leased out to qualifying farmers with a view of expanding participation in the agricultural sector. These farms are on the books of government, and post settlement support is provided on an ongoing basis.

Going forward, all reform farms in the country will form part of the comprehensive assessment process that the Department will undertake. All non-productive farms will be prioritised for specific support packages to ensure better functionality and productivity.

Honourable Members,

Within the context of the District Development model, government intends to coordinate and streamline government’s fiscal resources to focus on spatially defined development priorities to promote increased agricultural production.

To this end, the Department of Agriculture, Land Reform and Rural Development has developed a Comprehensive Land and Agrarian Strategy, as well as the Agriculture and Agro-Processing Master Plan which is currently being consulted with all relevant key stakeholders. These policy instruments will provide a macro-framework that outlines specific production priorities for land reform farms in all Districts. Resources from government and the private sector will be crowded into District priority areas for agricultural production, including non-productive land reform farms.

More essentially, we are cognisant of the fact that all the initiatives that we have just outlined, must be anchored on good governance, transparency and effective accountability systems to impact on the functionality and productivity of farms. We have prioritised policy and legislative interventions to address governance gaps, Community Property Associations conflicts, as well as alleged incidents of fraud and corruption. Where the integrity of proper systems is undermined, and public resources misused, all those involved must face the consequences of the law.

Lastly, we would like to underscore the fact that the productivity, functionality and viability of farms, including land reform farms depend on the creation of a secure and safe environment for farmers and farmworkers.

Therefore as government, we condemn these heinous murder against farmers and farmworkers. Farmers are an important resource to our nation. We will continue to ensure that our criminal justice system responds decisively to such criminal acts that undermine the sector and the economy as a whole.

Thank you very much.

Redirecting resources towards Covid-19

9. Ms Z V Ncitha (Eastern Cape: ANC) to ask the Deputy President:

Whether the redirecting of resources to fight Covid-19 pandemic is impacting on the fight against HIV/Aids (details furnished); if not, what is the position in this regard; if so, what are the relevant details? CO461E

Reply:

Honourable Chairperson,

Since the confirmation of the first Covid-19 case in South Africa on the 5th of March 2020, this pandemic has spread to all nine provinces with community transmission also taking root.

When the World Health Organization declared Covid-19 as a Public Health Emergency of International Concern, as Government, we immediately took measures to ensure detection, referral and management of cases.

This called for a better coordinated and strengthened response to the pandemic. Therefore, some resources had to be reprioritised to ensure availability of diagnostics, personal protective equipment for frontline workers and other emergency response supplies, as well as addressing critical gaps in health and community systems. This included strengthening laboratory networks, supply chains and community engagements.

However, this reprioritisation of resources to respond to Covid-19 did not mean diverting resources away from HIV and TB. For instance, the provincial departments of health have started experimenting with combining TB and Covid-19 screening at some of their locations in the districts, in order to ensure continuity of services. By offering HIV self-screening at Covid-19 screening sites, the Department of Health is able to reach people who would otherwise be missed by their standard HIV programmes.

Community health workers across the country, are screening for the coronavirus whilst conducting their normal door-to-door HIV and TB monitoring work, such as ensuring that patients are taking their antiretroviral medicines.

Our Government and its partner donors, including the United States President’s Emergency Plan for AIDS Response and the United Nations Global Fund for AIDS, Tuberculosis and Malaria, are leveraging on existing resources in order to assist in the Covid-19 response. This is done while ensuring that HIV and TB services remain accessible to those who need them. The HIV and TB programmes have integrated HIV testing and TB screening into the Covid-19 response.

The Department of Health sets targets for HIV testing and treatment for those diagnosed and eligible for treatment initiation. The funds for required commodities and medicine are based on annual targets.

These funds are ring-fenced through the Schedule 5 Conditional Grant and cannot be shifted without prior approval of the Accounting Officer of the National Department of Health. Therefore, funds for HIV test kits and ARVs have not been reduced or shifted in the current 2020/2021 financial year.

As Honourable Members would know, through the South African National AIDS Council, other departments are also implementing programmes that respond to HIV and TB. In this regard, measures announced by the Minister of Finance in the Budget Readjustment which was tabled before Parliament in June 2020 clearly outline Government’s commitment to ensuring that health and frontline services remain at the core of our responsibility to protect the most vulnerable in society.

Some of these programmes and interventions include capacity building of social service practitioners, social and behaviour change programmes, including those focusing on men and boys in response to addressing various societal ills.

During our Covid-19 oversight visit to the Free State Province, we witnessed the scaling up of this capacity as we handed out certificates to 92 social workers that the province was appointing to address the social challenges that we have referred to.

We must assure South Africans that despite the impact of the colliding pandemics globally, it remains of paramount importance for us as a country to sustain and invest in our response to the dual epidemics of HIV and TB, including addressing the impact of the Covid-19 pandemic to this fight.

As we face the devastating effects of Covid-19 in our country, it is important that we use our limited resources efficiently by focusing on targeted interventions and integrating our programmes for even greater impact.

We call upon all leaders across various sectors of society and political divide, to ensure that public funds allocated for the Covid-19 response are not misused and misappropriated. Any acts of corruption will be dealt with as they deny us speedy response towards defeating this pandemic.

Thank you very much.

Investigation of senior executives

10. Ms M O Mokause (Northern Cape: EFF) to ask the Deputy President:

(1) Whether, with reference to his reply to an oral question in the National Assembly on 25 June 2020, it is an acceptable practice to investigate senior executives who are not suspended (details furnished), if not, what is the position in this regard; if so, what are the relevant details;
(2) Whether he has found the findings of the report to be satisfactory; if not, what is the position in this regard; if so, what are the relevant details;
(3) Whether senior white executives with allegations and findings of misconduct are protected from suspension (details furnished); if not, what is the position in this regard; if so, what are the relevant details? CO451E

Reply:

Honourable Chairperson,

We reaffirm the response we gave during our oral question session in the National Assembly on 25 June 2020, on a similar question regarding the investigation of allegations against the Chief Operating Officer of Eskom. As stated, we have no basis to doubt the fairness, and the integrity of the investigation process as conducted against the COO. The report makes no reference to any hindrance experienced by the Senior Counsel in carrying out his investigation and in compiling his report.

Section 9 (3) of the Constitution, states “the state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.”

That is why the governing party, aptly outlined this in its 2019 Election Manifesto that among its key priorities, is to advance nation-building and social cohesion by stepping up the fight against racism, sexism, homophobia and other intolerances.

It would therefore be incorrect to suggest that senior executives at Eskom are protected from disciplinary processes on the basis of the colour of their skin. Let us give space to the Board and Management of Eskom to do their work, and at an appropriate time, the Honourable Members will engage with the report. Let us work together and desist from divisive statements which are not contributing to social cohesion and nation building.

We further reiterate that as Government, we remain committed to clean governance and that is why we appointed a competent, experienced and capable Board, which is expected to effect clear mechanisms to hold executives accountable. It is our expectation that the Board is empowered to run the affairs of Eskom in a diligent manner and adopt zero tolerance for corruption including any conduct that undermine our efforts of building a financially sustainable energy utility that is oriented to meet its developmental imperative.

As we focus on restructuring Eskom into an efficient and financially sustainable Eskom, we are clear that the Board and Executive Management must put in place necessary mechanisms and systems to tackle any acts of corruption including legacy issues that have contributed to the current state of Eskom. This includes taking necessary action, through due process, against anyone found to be involved in corruption. We find comfort on the commitment expressed by Mr De Ruyter that they will act should new evidence arise.

Thank you very much.

Meetings convened

11. Ms H S Boshoff (Mpumalanga: DA) to ask the Deputy President:

What are the details of all the meetings he convened since 1 January 2020 to (a) coordinate government programmes to accelerate land reform, (b) assist the President in (i) stimulating and supporting rural and township economies and (ii) the implementation of rapid response interventions on service delivery in service delivery hotspots, (c) coordinate anti-poverty initiatives and (d) lead the SA National Aids Council? CO453E

Reply:

Honourable Chairperson and Members,

Firstly, let me take this opportunity to thank all of you for your understanding and empathy in allowing changes to your programme as a result of my inability to appear before you on some scheduled dates due to ill-health. Our commitment to the culture of accountability remains strong, and we will continue to accord this august House the respect it deserves.

The details of programmes which have been requested are part of the responsibilities that have been delegated by President Cyril Ramaphosa to the Deputy President for strategic leadership and coordination. These programmes are directed towards ensuring that South Africa’s poverty alleviation programme realises the democracy dividend as summarised in the preamble of our Constitution – that of improving the quality of life of all citizens, and freeing the potential of each person.

In the same list of delegated responsibilities, there is also support to the President in building a better Africa as a Special Envoy to the Republic of South Sudan, to facilitate the their peace process. This is the work that intensified in the latter part of last year and early part of this year, where we engaged in peace process facilitation on 13 January 2020, 04 to 06 February 2020 and 22 February 2020, which was the culmination of coming into effect of the Revitalised Transitional Government of National Unity.

On 18 February this year, the President further delegated the responsibility of being Chairperson of the Political Task Team on Eskom, which is an institutional coordinating platform of key players within Government to provide leadership and technical assistance towards the resolution of challenges facing Eskom. This adds to other responsibilities that are not covered in the original delegation of responsibilities from the President.

However, what the Honourable Member is effectively asking of us is to provide a diary of meetings since the beginning of this year in relation to some of the delegated responsibilities. We do not think that would be helpful than sharing what we have done in advancing these areas of work in the period under review.

Honourable Chairperson,

On coordinating government programmes to accelerate land reform and support agriculture, the Inter-Ministerial Committee on Land Reform and Agriculture, held a meeting on 21 February 2020. The meeting seized itself with the plan of action for the allocation of land parcels that are ready for release including release and utilisation of government owned land for agricultural production and human settlements; integrated funding model for agriculture; and analysis of all land related legislation.

Furthermore, the meeting considered government’s response to drought, its impact on the agricultural sector, and water shortages in the drought stricken provinces.

This followed the visit we had undertaken to the Northern Cape Province in October 2019, to assess the impact of drought in the area. We took note of measures planned to address drought in an intensified and integrated manner within the context of the District Development Model, and also agreed to revisit the timeframes in responding to and declaration of a national state of disaster. This led to the Minister of Cooperative Governance and Traditional Affairs declaring South Africa a national disaster area, owing to the impact of persisting drought conditions in many parts of the country.

Following our response to the challenge of drought, the outbreak of the Covid-19 pandemic was declared as a National State of Disaster on 15 March 2020. This has since meant a reprioritisation by government and all sectors of society, towards focusing on the implementation of the country’s Covid-19 eight stage response plan.

In efforts of maintaining a delicate balance between saving lives and livelihoods, the National Coronavirus Command Council has held weekly meetings to date, presented to Cabinet regulations related to the Risk Adjusted Approach of the nationwide lockdown, and championed economic, social and health plans towards countering the Covid-19 pandemic and its undesirable effects.

We are encouraged by the partnerships that have been formed with various national and provincial stakeholders which demonstrate active citizenry in this fight. The work continues in advancing behavioural change and encouraging adherence to the set health protocols across society, and addressing the threat of hunger and poverty.

In the same spirit of reversing the ills of the past through the revitalisation of our rural areas and townships, the Office of the Deputy President has continued its engagements and to work with the National Planning Commission, provinces, and other stakeholders over two colloquiums held on 12 May and 23 to 24 June 2020. The focus of this work has now been expanded to taking into consideration implications of the Covid-19 pandemic on our country’s transformation agenda.

A spotlight has been shone on informal and small businesses in rural areas and townships, to ensure that their specific realities are taken into account as the country’s economic recovery is being conceptualised, towards ensuring that these economies are supported to play their rightful role in society. Government also ring-fenced Covid-19 economic response interventions for small businesses and the informal sector.

As resolved during our Covid-19 oversight visits to the Free State and North West Provinces on 05 and 12 June 2020 respectively, provinces have been encouraged to establish structures that will focus on coordinating efforts to resuscitating economic activity at District Level, and also continuing to measure the province’s growth on an ongoing basis.

In this same spirit of ensuring sustainable strategic nodal investments, the Office of the Deputy President continues to work closely with the Department of Cooperative Governance and Traditional Affairs in the institutionalisation of the District Development Model, and in proactively identifying priority districts and service delivery hotspots.

The district-focused approach has been endorsed by Cabinet as the base for implementing the country’s Covid-19 Response Plan. All Ministers and Deputy Ministers have been deployed as Champions to the country’s 48 District Municipalities, towards ensuring coordination across all spheres of government efforts of flattening the Covid-19 infections curve, continuing the fight against HIV and TB epidemics, and also championing the fight against Gender Based Violence and Femicide.

Honourable Chairperson,

Work is continuing also through other structures such as the Eskom Political Task Team that is chaired by the Deputy President to ensure that Eskom is able to meet its obligation of providing electricity, and that it develops and implements a credible and transparent national maintenance programme to ensure that power generation plants operate at optimal levels to reduce negative impacts of electricity supply disruptions.

In the main, this area of work is focused on the Eskom restructuring and implementation of the Road Map and the Management and Recovery of Municipal Debts to Eskom and State Organs Debt to Municipalities. These issues also have indirect linkage to outbreaks of community protests that lead to destruction of public and private properties.

To this end, the Political Task met on 20 February 2020, 01 May 2020, 15 May 2020, 29 May 2020, 26 June 2020 and 03 July 2020, which have contributed in ensuring that the commitment made by the President of energy security through the procurement of additional capacity is fast-tracked to meet existing gaps.

These issues are further dealt with in the Governance, State Capacity, and Institutional Development Cabinet Committee which is chaired by the Deputy President, and met on 04 February 2020, 03 March 2020, and 19 May 2020. Other critical issues to support this work were dealt with in the Justice, Crime Prevention, and Security Cabinet Committee which met on 02 June 2020 and 01 September 2020, and is also chaired by the Deputy President.

To further deepen social compacts and ensure that we proactively address challenges that may lead to service delivery related challenges, we have supported the President in engagements with constituencies in NEDLAC on 17 April 2020 and 15 May 2020. These constituencies are focusing their efforts on leveraging on partnerships, turning challenges that arise from the Covid-19 pandemic into opportunities for development, and ensuring that communities continue to access services that they deserve.

As the Deputy President, we co-chair the Presidential Coordinating Council with the President. In this regard, the Council held meetings on 28 February 2020, 04 April 2020, 18 April 2020, 16 May 2020, 17 June 2020, and 09 July 2020. The focus of these meetings with Premiers, the South African Local Government Association, and Traditional Leaders sought to deepen coordination in efforts of flattening the Covid-19 infections curve and addressing social economic challenges.

In the spirit of saving lives, the South African National AIDS Council Inter-Ministerial Committee met on 16 July 2020 and the Plenary was held on the 25th of the same month. The various sectors represented in SANAC remain resolute in the fight against the three colliding epidemics of Covid-19, HIV and TB in the country. Some of these efforts have been referred to earlier in the response to Honourable Ncitha.

Thank you very much.

Infrastructure Investment Plan

11. Mr K M Mmoiemang (Northern Cape: ANC) asked the Deputy President:

(1) (a) What does the country’s Infrastructure Investment Plan entail and (b) what are its implications to the provinces;
(2) Whether the plan will be affected by underspending that is affecting all spheres of government; if not, what is the position in this regard; if so, what are the relevant details? CO460E

Reply:

Honourable Chairperson,

The Infrastructure Investment Plan which Cabinet approved on 27 May 2020, is in response to the recognition that public infrastructure spending has been declining in recent years.

This Plan responds to the call made by President Ramaphosa in February this year to leaders of development finance institutions, that the overall infrastructure spend into South Africa’s investment needs, must grow to 30 percent by 2030 to achieve the National Development Plan growth targets.

In the face of the current economic and social challenges that have been brought about by the Covid-19 pandemic, the Infrastructure Investment Plan is the main driver to reignite South Africa’s infrastructure-led economic recovery.

On 23 June this year during the Sustainable Infrastructure Development Symposium, President Ramaphosa officially launched the Infrastructure Investment Plan following a process of consultations with Premiers, Members of Provincial Executive Committees responsible for Public Works and Infrastructure, and the South African Local Government Association.

The Plan provides a comprehensive focus on infrastructure investment in the immediate, medium and long-term and deals with all aspects of the infrastructure life-cycle. The projects outlined in this plan will be implemented through the Sustainable Infrastructure Development Symposium Methodology for project planning, assessment and evaluation, towards building a comprehensive infrastructure project pipeline that aligns infrastructure investment to the development goals of the country.

These infrastructure projects address the following: energy, water and sanitation, roads and bridges, human settlements, health and education, digital infrastructure and transport. As these projects will be implemented in the community spaces of ordinary South Africans, the approach to their immediate implementation will be based on the following principles:

  • Ensuring spatial justice and advancing social cohesion
  • Promoting job creation, with specific focus on women, youth and persons with disabilities
  • Ensuring skills transfer, localisation, and the empowerment of small, medium and micro enterprises.

To achieve sustainability over the medium to long term, the current National Infrastructure Plan will be expanded to a National Infrastructure Plan 2045, in accordance with the principles contained in the Infrastructure Development Act, No 23 of 2014.

As per the mechanisms of this Act, projects that are of economic significance and social importance will be prioritised. This will build on the progress we have made in developing new economic centres through Special Economic Zones, revitalisation of industrial sites as well as business and digital hubs that are located and spread across various provinces of our country. These are also based on comparative advantages of each province and location.

The long-term infrastructure plan will ensure both stability and consistency in the planning, investment, implementation and maintenance of infrastructure in the short, medium and long term. This will also see provinces re-establishing technical and financial engineering capacity, which we have seen being reduced within the State over time.

Coupled with this are the technical, financial, legislative and developmental reforms that Cabinet approved, and that are relied on for infrastructure implementation to be prioritised.

These reforms are in the process of being actioned, in order to ensure that the trend of underspending on infrastructure across all spheres of government and State Owned Enterprises is corrected.

For its part, Cabinet has approved the evolution of the Investment and Infrastructure Office in the Presidency, to become Infrastructure South Africa.

This is part of the reconfigured Department of Public Works and Infrastructure, to ensure a single entry point for all infrastructure assessment, co-ordination and prioritisation of investment, which will, in turn, report to the Presidential Infrastructure Coordinating Commission.

This development ensures that the strategic focus for investment and infrastructure in the country, is located at the highest level to streamline planning and execution.

Infrastructure South Africa will assess and evaluate all infrastructure projects, ensuring that they are aligned to the key priorities of the country as well as being technically, legally and financially viable.

The establishment of the National Infrastructure Fund is an important institutional mechanism to ensure that government invests in infrastructure, and the private sector contributes to making capital available for funding priority infrastructure projects in partnership with government.

The signing of the Memorandum of Agreement on 17 August 2020 between Infrastructure South Africa, National Treasury and the Development Bank of Southern Africa marked significant progress towards realising the establishment and implementation of the Fund objectives.

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