Thank you, hon Chair. Hon Minister, hon Deputy Minister and guests, energy is central to our economy, and without any clear and well-co- ordinated strategic objectives, we are drifting into the abyss of low growth and crisis management.
The complexity facing the global and local energy markets is increasing rapidly. Fossil fuels continue to form the basis of our energy supply, but this is unsustainable, creating an imperative to strive for an effective and sustainable energy mix. Profound challenges remain with emissions reduction. Increasingly, the role of biofuels is becoming more prominent in any ideal energy mix.
South Africa, in the light of our proportionately small contribution to global gross domestic product, is an energy and carbon-intensive country. We rank 16th in the world in terms of our total amount of primary energy consumption. The transition to a low-carbon economy, as noted in the draft National Development Plan, will require sacrifice. Minister, your challenge is to ensure that the transition is smooth and that energy demands are met to sustain dynamic growth without killing the environment.
The Central Energy Fund, CEF, whose mandate is to engage in the acquisition, generation, marketing and distribution of any energy form and in research relating to the energy sector, incurred a loss of R1 billion last year. If the CEF had not been a state-owned enterprise, it would have been liquidated! Instead, the people of South Africa are expected to fork out the cash needed to keep it afloat, money that could have been better spent in areas that directly benefit and uplift the poor.
Proposals put forward in April 2011 to restructure the CEF from 35 to 15 subsidiaries were a step in the right direction. But the DA is concerned that the call to further reduce that to 9 subsidiaries, which will include the joining of PetroSA, the South African Gas Development Company, iGas, and the Strategic Fuel Fund, SFF, will clearly create conflicts of interest and enhance state control in the energy sector.
The Mthombo project, for instance, a refinery initiative by PetroSA to build an $11 billion, 400 000 bl/d crude refinery in the Coega Industrial Development Zone, aims to capture 25% of the market share, while the SFF will be expecting to manage, enhance, plan and control storage capacity. It is evident that the strategy here is to create yet another state monopoly. Soviet-style mega-projects do not make sense simply by slapping the title of "infrastructure" on them.
The call by Cosatu for Sasol to become a state entity, purely on the basis that some of its shareholders are situated outside the borders of South Africa, is rather ridiculous. Cosatu is effectively calling for the nationalisation of this sector. How many times must we reiterate that government's function is to create an environment conducive to increased investment, which in turn will create jobs? This is the only way to eradicate poverty.
The role of government is to regulate the market, not to consolidate its participation and monopoly in any given sector. We must clearly differentiate between the state and the role of the private sector, in partnerships, to create a vibrant and diverse economy.
Ri a ?o?a na u vhona muvhuso u tshi langula phesenthe dza mahumi mavhili na n?hanu kha zwivhaswa zwa makete nga kha madzangano a langwaho ngawo, dziSOE? Ri tea u dzulela u vha rengulula u tou fana na SAA naa? Kana ri khou ?o?a u vula makete, ra ita uri u vhe na ndeme, u sike mishumo minzhi, nahone u dovhe hafhu u fhungudze mutengo une ra u badela bommboni? [Interjections.] (Translation of Tshivenda paragraph follows.)
[We want to see the government controlling twenty-five percent of the fuels on the market which are controlled by it and the SOEs. Must we always bail them out like SAA? Or do we need to open a market, make it important, create more jobs and also reduce the price we pay at the pumps?]