Hon Speaker, I was going to say that this is my maiden reply to questions.
You do look like a maiden today, sir. [Laughter]
Hon Speaker, to respond to the hon Zondi's question, the reply to the question is as follows. Yes, the financial guarantee was used to raise a loan to the value of R1 billion to pay outstanding debts to local and foreign creditors. The money from the loan was used to prevent a major crisis at the SABC, and to assist in getting its outstanding debts paid. The loan unfortunately did not resolve the SABC's financial challenges as a turnaround plan is still to be implemented, which is currently being developed by the corporation. Should the SABC continue to incur high expenses on certain costs items, it will certainly find itself in a limited cash flow position again.
The number of issues will need to be addressed as per the corporate plan that was submitted with the guarantee application. I'm informed that in dealing with this turnaround plan that the corporation is currently seized with, the corporation is investigating measures to bring down the operating costs of the corporation. It is certainly looking at restructuring the organisation so that it could become a fitter organisation. It is looking at ways in which it could improve its efficiency.
Unfortunately, the details are not available to us yet. I'm informed by the corporation that these are being looked at quite thoroughly, and are being discussed by the corporation, as well as the formulation of its turnaround strategy. They are to present their thinking on the turnaround strategy to the department this coming week, whereupon this strategy will be presented to Parliament. Thank you.
Mr Speaker, hon Minister, firstly, allow me to congratulate you on your appointment. I want to assure you that I'm looking forward to working with you. As you know, the SABC should have appeared before Parliament's Communications portfolio committee today. However, the committee was sent a letter by the SABC informing us that they would first confer with you, and appear before us then only.
At the last meeting with the SABC, the committee sent them away in a less than friendly fashion as they had not produced the required turnaround strategy. Could you please tell us if the SABC has in fact presented to you, for your information, a turnaround strategy, or did they in fact just miss the 10 November deadline?
Hon member, the SABC is having a meeting with me on Thursday. One of the items on that agenda is the presentation of their turnaround strategy. I have been informed that they have done a considerable amount of work on the turnaround strategy. But, we advised them that we would like to see it before it comes to Parliament. Thank you.
The system is not working. If there are any members who might wish to ask supplementary questions, please raise your hands and I will recognise you.
Hon Speaker, hon Minister, in your response you indicated that a number of issues need to be addressed regarding the corporate plan which was submitted with the guaranteed application. My follow-up question is: What are these issues? Are there any measures or systems in place to address them? Thank you.
The MINISTER OF COMMUNICATIONS Hon member, I've mentioned that some of the issues relate to the reduction of costs, the restructuring of the organisation and the improvement of efficiency in a number of areas in the corporation.
Minister, also from our side congratulations to you. But, we have very serious concerns about the governance issues at the SABC, specifically within the board, which recently led to a spate of resignations, and this is very unfortunate for high quality board members.
Largely due to the publicly expressed frustration with the role of the chairperson, are you aware of the tensions within the board? How do you intend to assist the board to come to grips, because board members contend that the chairperson actually transgressed the statutes which govern the SABC? They are very unhappy that they were called in to endorse an illegal appointment. How do you intend to take the process forward? Thank you.
Hon member, I think it is common knowledge now that four board members of the corporation have resigned. You have heard that those resignations have been accepted by the President, and Parliament is seized with the responsibility to consider the replacement of those members.
It is clear from what has happened that there are issues pertaining to the leadership within the corporation, at the level of the members who constitute the board that Parliament has appointed, as well as at the level of the kind of contradictions within pertaining to the executive management. So, the problem that we are seized with is giving support to the remaining members of the board and finding a mechanism that works in a way in which they can address the issues that are causing this instability.
We are currently in discussions with members of the board. I'm about to see them on Thursday to discuss this and to ascertain what kind of support they would require to resolve the issues that they are plagued with currently.
So, I would appeal that you give us the time to engage on this matter. We've been on the job for a few days only. We've come to understand precisely what the nature of the problem is. It will not help this House or the corporation if we went into those details just yet. Thank you.
Mr Minister, Phil Molofe's appointment prior to the board rectifying such appointment created a situation of irregular expenditure according to sections of the Public Finance Management Act, PFMA. In your financial deliberations with the SABC, will this be discussed and what action will be taken?
Hon member, my information tells me that the board has now formally ratified the appointment of the executive member that you are concerned about, but the details that you raised will be provided in the meeting on Thursday, and you will get a response regarding that from the board.
Question 3, which has been asked by the hon P J Groenewald to the Minister of Rural Development and Land Reform, falls away in terms of Rule 1172, as a reply was submitted yesterday.
Question 239 has been asked by the hon B Tinto to the Minister of Energy.
Speaker, seeing that the Minister responded yesterday to my question, is it not possible that I can respond today to his question? [Laughter.]
Well, there seems to be a fact change. The Minister is not available. We'll come back to that question. Let's move on. Question 237 has been asked by the hon S N Swart to the Minister of Trade and Industry.
Position regarding steps to (i) amend regulations regarding company registration and zoning; and (ii) subject new laws to regulatory impact assessments
237. Mr S N Swart (ACDP) asked the Minister of Trade and Industry:
Whether he intends introducing steps to (a) amend regulations regarding company registration and zoning of small businesses and (b) subject all new laws to regulatory impact assessments to review their effect on small businesses; if not, why not; if so, what are the further relevant details? NO3830E
Speaker, of the issues that were mentioned in the question, the issue of company registration falls under the Department of Trade and Industry. Company registration will be considerably simplified and the regulatory burden accordingly greatly reduced when the new Companies Act comes into force. The target date that we have set for this is April next year.
The process of drafting regulations which will give effect to the new Companies Act of 2008 has been finalised and they will be published during the course of this month. A rectified Bill to deal with a few errors and omissions in the original Act is also being presented to Parliament.
The new Act, as I said, will considerably simplify company registration processes, reduce the cost of registering companies, and this will benefit small businesses, among others. Furthermore, there is a process to create an integrated business register to reduce the regulatory burden and facilitate efficient registration of businesses. The question of zoning business activity is a matter that falls under the responsibility of municipalities. Thank you.
Thank you, Speaker. Minister, the issue of the cost of regulatory compliance has been raised in the past. It was again raised in the Medium-Term Budget Policy Statement where it was stated that, "a successful job creation strategy needs to address constraints that make it more difficult to open and expand small businesses".
I thank you, Minister, for your indication that the new Companies Act and regulations will address this issue. Clearly, small businesses face onerous regulatory burdens with the cost of regulatory compliance at about 8% of total turnover compared with less than 1% for large businesses.
Minister, the Medium-Term Budget Policy Statement also recommends that all new laws should be subject to regulatory impact assessment to review their effect on small businesses. The ACDP agrees with this view and wishes to know whether the economic cluster will consider this proposal, given the very important role that small business plays in job creation in the country. Thank you.
Speaker, I thank the hon Swart for recognising that the Companies Act is trying to do exactly what the Medium- Term Budget Policy Statement says, which is to reduce the regulatory burden on small businesses. We hope that we will end the situation where small businesses have to fill out forms, memoranda and articles of association, get a name, and things like that - which won't be a requirement any longer to get limited liability - while too often companies are prepared to buy shelf companies from people who register thousands and thousands of companies because they think that's a cheaper and easier way to go. So, we think that that's going to be a major reduction.
Obviously, if the Medium-Term Budget Policy Statement says what it says, and you are correct in saying what it says, this is a matter that will seize the cluster. We are constantly looking to reduce the regulatory burden and red tape with regard to small business. Thank you very much.
Thank you, Speaker. Minister Davies, the efforts by the Department of Trade and Industry to reduce the burden and red tape for small businesses is quite admirable. Of course, in the context of such efforts, the government has also been earnestly and meaningfully trying to reduce the cost of doing business. Now, the question is: To what extent and in what way will the Companies Act impact on the efforts of reducing the costs of doing business? Thank you.
Speaker, in addition to the company registration process that I already mentioned - which will be much easier, much cheaper, much simpler, with less forms and online facilities, and all of that - when the new Companies Act comes in, there will be a reduction in terms of the requirement of small businesses to produce audited financial statements. At the moment that is something which close corporations don't have to do, but other small businesses do. They will be able to produce financial statements, but not through auditors and expensive processes of that sort.
There will be an important provision of business rescue in the Companies Act. This means that when otherwise viable companies find themselves in trouble, instead of going into judicial management, which is just a step away from liquidation at the moment, they will be able to go through a meaningful process in which the possibility of that company surviving can be entertained and exercised in a way which we think is very significant. So I think that the Companies Act is a major, major piece of reform. It will bring our company law well into the 21st century and the realm of best practice. I think that it will undoubtedly have major benefits for small businesses. Thank you very much.
Deputy Speaker, we welcome the Minister's commitment to lessen the regulatory burden, but I have here a leaked copy of the regulatory impact assessment commissioned by the DTI into the Intellectual Property Laws Amendment Bill last year. I want to ask the Minister why this document hasn't been released to the committee or released publicly, considering that it has very important things to say about this very important Bill that our committee is considering? And I want to ask the Minister when will this report be released to the committee?
Deputy Speaker, I am not aware of the report that the hon Harris is referring to. If he got hold of a leaked document it may well be a document that has no currency with any of us. I will have to see what document you are referring to. [Interjections.]
Deputy Speaker, thank you for the responses that you have already given to this House, Minister. However, there are aspects around the regulatory impact assessments, etc, which don't necessarily relate to the new company registration but to a number of pieces of legislation. When do you expect to complete such a review? I heard you saying it is being considered.
The regulatory impact work was actually not done by the DTI, it was done by the Presidency, and I'm not quite sure what the timeframe is for that. But, as I said earlier, the issue of regulatory impact and the reduction of pure red tape - I think we must distinguish between red tape and other kinds of requirements and regulations which do make some sense - is a policy objective which we have repeated on a number of occasions.
Madam Deputy Speaker, on a point of order: Were all the supplementary questions asked last time? You didn't give parties the opportunity for a second follow-up. Were they all asked?
Yes.
Alright, thank you very much.
Position regarding application of energy mix policy by Government
239. Mrs B Tinto (ANC) asked the Minister of Energy:
To what extent has the Government applied the energy mix policy since the adoption of the 1998 White Paper on the Energy Policy, especially with regard to energy diversification through the utilisation of clean energy means? NO3833E
Madam Deputy Speaker, in relation to question 239, as asked by the hon member B Tinto, the reply is that government has diversified the energy mix in respect of both supply and demand sides.
In regard to the demand-side option various energy efficiency interventions have been introduced, including the introduction of solar water heating in the residential and industrial sector, cogeneration from industrial processes in order to substitute the demand that would otherwise have been supplied by Eskom and introduction of energy efficiency lighting, which is the compact fluorescent lamps, CFLs.
The demand side is complemented by clean energy options on the supply-side programmes, including the introduction of renewable energy feed-in tariff programmes pursuant to the 10 000 gigawatt of wind, solar, biomass, small hydro and land field gas generation options; the development of the liquefied petroleum gas pilot programme for space heating and cooking in the residential sector; and the introduction of the integrated resource plan with a long-term objective of introducing nuclear energy, imported hydro and imported gas for power generation.
It is anticipated that the South African energy mix will be diversified from 97% coal domination to what the Integrated Resource Plan, IRP 2010, will specify. Thank you.
Deputy Speaker, hon Minister, it is quite admirable that government is making these attempts with regard to diversification, particularly in view of the attempts by the government to reverse the devastating effects of climate change. That is one of the areas where an energy mix helps to move away from fossil-based energy supply.
However, another interesting area is the extent to which such diversification will benefit the poor and the disadvantaged. I assume, amongst other things, any effort that is done by government to ensure that there is adequate energy supply should take into account the plight of the poor and the disadvantaged. I thank you.
Deputy Speaker, thank you, hon Sisa Njikelana. Hon member, you would remember that late last year we introduced the Regulations of Liquefied Petroleum Gas, which make it possible for us to reduce the price of gas, which is actually one of those energy carriers that is used predominantly by the rural people and the poorest of the poor as a clean energy source.
I want to indicate that already the calculations indicate that that reduction has brought back almost R500 million into the pockets of consumers. It is important to note that the reduction of gas was intended to create an uptake.
What we have done also is to make sure that with the metros we could engage on a programme of waste to energy. We look forward to making sure that within the year we would be able to introduce that particular programme where we are going to use waste to be able to generate energy. That is one of the interventions that we are going to use for poverty relief and, working together with environmental affairs and social development, we believe that it is also one of the programmes that can ensure that we get money into the hands of the poorest of the poor.
There is quite a number of interesting programmes within the Working for Energy Programme that we will be bringing to the portfolio committee in particular. Thank you very much.
Deputy Speaker, over the past few years, government has floundered in terms of the energy policy mix. It's never been right. We've had the failed pebble bed reactors, the missing coal stockpiles, now the declining coal deposits, and the results for consumers has been blackouts, brownouts and white elephants. Can the Minister state whether, in allowing for this proposed energy policy mix, a level playing field has been created for all investors to have an equal opportunity to invest?
Secondly, can she give us any assurance that individuals and businesses connected to the ruling party will not be the only ones that benefit from this policy?
Deputy Speaker, thank you, hon Dexter, for your question. The one important thing that we have realised in the process of developing the Integrated Resource Plan, IRP 1 and IRP 2, is that power generation as well as power supply doesn't seem to see colour. The brownouts, blackouts and white elephants you are talking about I don't know about.
What we are doing with the IRP 2010 is to make sure that we will be able to allow for maximum input from the various stakeholders. As we speak, we have been requested by business as well as labour and the other stakeholders within the National Economic Development and Labour Council, Nedlac, to extend the period for public comments so as to allow for maximum participation on this particular plan. For once we want to make sure that South Africans have a comprehensive consolidated energy plan that can help those who want to invest - irrespective of the party they belong to - in the 30% power generation going forward, and that would be able to project their inputs. But, the most important thing is for us to be able to afford South Africans an opportunity to benefit from the new growth path in terms of making sure that the number of jobs that we said we were going to create, in terms of the stipulations of the new growth path, can be realised.
One of the key pillars of the IRP would be to ensure that all the energy carriers or technologies that would be utilised in the next 20 years emphasise localisation. That is why, with the support of the Deputy President, we could agree to the extension of the period for public comments so that even business as well as labour could help us to do the proper calculations in terms of which energy carrier would afford us decent and sustainable jobs, which energy carrier would make it possible for us to emphasise and realise localisation. I just want to assure you that this is one plan that, including our National Stakeholder Advisory Council on Electricity, role-players indicated that we wanted to make sure that we can all agree as South Africa that this is a plan that would help us to generate jobs.
This is a first attempt, and we want to make sure, like I said, that there is diversification, and we have also insisted that in the plan we need to create space for all the energy carriers. South Africans are also very much alive to the fact that we are being called on to reduce the percentage of coal in our IRP. We are saying that we are conscious of the fact that we need to protect the environment for the next generations. We are not going to be careless and avoid utilising the only reliable source of energy, coal, or alternatively another big base load being uranium. We are going to make it possible that we invest in the different scientific interventions to make sure that the particular energy carrier becomes clean.
That is why we say that we are not going to stop using coal, we are not going to say no to nuclear energy and we say, as government, that we need a plan that is going to be technology neutral. We are looking at making sure that early in January when we table the IRP 20 we sure that the different role-players have already made their maximum inputs.
I'm happy that even today the Minister of Science and Technology can indicate that there is a big conference of the scientific academic role- players where some of them are speaking about the importance of changing the picture of the world at night, when it is still only the continent of Africa that is dark.
We are looking at the different atlases. In terms of wind we've got the solar radiation indicators. We also have what is called the Carbon Capture and Storage, CCS, atlas so that whatever project we are looking at should be designed in such a way that it can capture, transport and store carbon going forward. As government we are saying that we want to make sure that we have a consolidated and comprehensive energy plan for South Africa. Thank you.
Deputy Speaker, hon Minister, we set ourselves a country target of 10 000 gigawatt hours of renewable energy generation by 2013, but it is clear that at this stage we have not even reached 10% of that target. We are also aware that the department has commissioned a review of the White Paper on Renewable Energy and that certain findings have been generated as a result of this review. We would like to know why these findings have not yet been released to the public. This is particularly important given that we are currently finalising the Integrated Resource Plan. These findings should surely be used to inform consultation around this 20-year energy plan. Therefore, we would like to know from the Minister when these findings would be released. Would it be before the integrated resource plan is finalised? If they won't be, then how does the Minister intend integrating the review of the renewable energy White Paper into the country's 20-year energy plan?
Deputy Speaker, I want to assure the hon member that she is correct that by 2010 we have reached about 4%. I just want to indicate that the 29 September call for Request for Information, RFI, by the Department of Energy and National Energy Regulator of South Africa, Nersa, was actually a way of making sure that we accelerate the participation of Independent Power Producers, IPPs, in this particular programme so as to be able to make sure that we reach the target.
By 2013 we should have reached the 10 000 gigawatt hours. You will realise that it is central to the IRP 1, which is the document that we promulgated in December, so as to be able to say how far we should be by 2013. It is still located within 2013.
The ruling party emphasises an energy mix. I want to say that the Integrated Resource Plan brings everything together that makes it possible for us to generate power. We say, from waste to nuclear. That is why we are talking about everything that is usable. To generate power we will be able to utilise that. That is why I specifically raised earlier on the indicators that include using waste to generate power.
Together with Environmental Affairs we are looking at making sure that we can separate waste from source. In that way, whatever is not reusable or recyclable can go into power generation because it would be useless material that can be burnt and combusted in order to generate power.
I want to reassure you that the anchor of our IRP is going to be the importation of clean energy sources, especially hydro from our neighbours through the Southern African power pull, but also gas. We believe that we are going to be able to do that. There are already projects in the region of the Southern African Development Community, SADC, that would make it possible for us to achieve the targets that we set for ourselves in the IRP 2010.
I also want to say that Cabinet took a decision to pursue the Wesco initiatives, which have the potential to generate more than 100 000 megawatt from the hydro schemes in the Great Lakes. Working together with Lesotho, Botswana, Namibia and South Africa, we were looking at hydro schemes within or on the Orange River so as to be able to utilise the power of water to generate power.
We are doing everything in our power to assure South Africans that the lights will be on and that industries and machineries will continue running. That is why we say that the IRP is a response to IPP2 and a response to the new growth path. Thank you very much.
Deputy Speaker, I listened very carefully to the recent announcement by the Minister at the launch of the solar park that we were going to get 5 000 megawatt of energy from solar power over the next 10 years. Certainly, I welcomed that initiative and also welcomed that announcement. Unfortunately, there have been many announcements by the government over the last five years with regard to renewable energy and we haven't reached those targets: 1 million solar water heaters, and the 10 000 gigawatt hours by 2013. As you said, we've only reached 4%.
What we've also seen is that, in fact, we are not issuing Power Purchase Agreements, PPAs, to independent power producers with regard to the Renewable Energy Feed - in Tariff, Refit. Refit isn't even bringing out stream renewable energy. What are you going to do to address those particular problems, including the 5 000 megawatt that you announced from solar energy? I don't see it in the present IRP2. It's not in there. In fact, what we allocated to solar heat is only 600 megawatt. Where does the 5 000 megawatt fit in, in terms of this current Integrated Resource Plan? Thank you.
Hon member, I think the point that you have just made is also a very important point that you could make in the public comment processes for the IRP.
I indicated that business, labour and other stakeholders have requested for an extension. The extension allows until 15 December for inputs. I would call on you to do that.
I also want to indicate to you that what we did in Upington the other day with the Concentrated Solar Power, CSP, and Photovoltaics, PV, investor conference is market sounding to hear from the investors who have been saying to us we can produce this amount of megawatt from solar. If they have the interest to honour the requirements, policies and directives of South Africa in terms of localisation and job creation, we want to grow local manufacturing with those initiatives.
We are also saying that the IRP is a dynamic document. We all know that the different utilities as well as the IPPs submit applications to Nersa every three years in terms of the Multi-Year Price Determination, MYPD, process for applications. We want to allow South Africa the space. When technologies improve, the price goes down. If we lock ourselves into a 5 000 megawatt plant it means we will have to be able to acquire whatever is required for that solar power station at today's prices. This technology is changing almost like you change your cellphones. I want to say to you that it is important for us that we also become responsible and allow you to know that developed countries have started scaling down in terms of the wind power as well as the solar power. They are all flocking to the developing countries. We don't want to be guinea pigs or the dumping grounds for obsolete or redundant technology. We also want to create space for the entry point of new technologies.
If we start, as I've indicated in the speech I delivered yesterday, we are committed to the first 1 100 megawatt of solar in the first year, so we believe that we are going to achieve it with those companies that want to invest with South Africa or in line with the South African terms.
I just want to say to you with regard to the Power Purchase Agreements, PPAs, that it's a purely commercial transaction. We can't determine for the utility or the systems and market operator what the price should be. Every investor, every IPP must negotiate and be able to get a commercial transaction that would be in line with what the tariff is. If we determine it at this level, who is going to be the ultimate payer of that tariff? It would mean that the consumers will have to pay even if we say that the solar power or wind power or whatever power must be sold at R10 or however many thousands of rands per kilowatt hour.
We need to allow operators, which would be Eskom and the systems operator, to determine tariffs because it would be a commercial arrangement and commercial transaction that they engage in.
I want to say that we are also very wary as South Africa to lock ourselves into that long-term contract for Concentrated Solar Power, CSP, whilst we are busy investing in Research and Development on initiatives with regard to clean coal and clean technology. What if tomorrow there is a way of using coal in a better way and we've got so much coal reserves here?
I think it is also important that we create those loops for South Africa to be able to use whatever new technology is presented. In September we launched the CCS atlas. We will soon be doing a demonstration and we also believe that very soon, with the support of Australia and Norway, we would be able to start the injection of carbon into the disused gas fields. I think it is important that we remember that we are doing it in the best interests of South Africans. Thank you.
Position regarding effect of settlement of outstanding rural land restitution claims on meeting of target for black ownership
261. Ms L D Mazibuko (DA) asked the Minister of Rural Development and Land Reform:
Whether the settlement of the 3 852 outstanding rural land restitution claims will contribute to meeting the 30% target set by his department for black ownership of productive agricultural land; if not, why not; if so, what are the relevant details?