Hon Chair, hon Minister, on Friday, 12 March 2010, my colleague here the hon David Ross and I went to the National Energy Regulator of SA offices in Pretoria, among other things, to appeal, plead and beg that the regulator review, reverse or reduce the impending Eskom tariff increase of about 25% a year for the next three years.
We were galvanised into action by our deep concern for the heavy burden that such steep increases in electricity tariffs, coming as they would so soon after the huge tariff hikes previously, would have on the poor and the unemployed people of this country. We believed then, and do so now, that the effects of these increases will not be good for this country. We wanted Nersa to intervene to mitigate the blow.
On 18 March 2010 Nersa responded to us, and we want to thank Mr Thembani Bukula and his colleagues at Nersa for giving us a hearing. We however regret, deeply, that Nersa did not accede to our pleas.
Consequently, 1 April 2010 became a very bleak day for the electricity consumer in South Africa as these big tariff increases came into being. The impact of these increases has yet to be calculated, but there is no doubt in our minds that the poor people of this country and the overburdened middle class will bear the brunt of these hikes and that this will have serious negative consequences for our economic recovery efforts. [Applause.] When we went to Nersa, they said ...
... batho bao ba sa ?omi?ego mabone a mant?i, ke gore mohlagase o mont?i, ba seke ba tshwenyega ka gore go nale mokgwa wa go bea diporeisi t?eo. Tona o bolet?e ka taba yeo. Ke nnete fao fela nna ke a gana, ke re le ge e kaba sente yeo e swanet?ego gore e oket?we mo t?heleteng yeo ya mohlagase, batho ba ba humanegileng le bao ba senang me?omo ba ka se e kgone. Re a tseba gore le gona bjale go na le batho ba bant?i bao ba sa kgonego go lefela dikelo t?a bona t?a mohlagase. Bjale re re a re lemogeng taba yeo. (Translation of Sepedi paragraph follows.)
[... people who are saving electricity should not worry about the increase in electricity tariffs, because there is a way in which electricity usage is measured. The Minister of Energy did mention this also. I know this is true, but I am concerned that the poor and the unemployed people of this country would still bear the brunt of these hikes even if electricity tariffs are increased by one cent. We should also consider the fact that there are people who cannot afford to pay their electricity bills right now.]
A major unintended consequence of the Nersa decision is that Eskom will be further emboldened to continue to use the threat of blackouts to get its way. And so the government and the beleaguered consumer will be forced to cough up even more to the avaricious monopolistic power producer. There seems to be no end in sight to this vicious spiral.
The DA urges strongly that capital be found from the markets to secure Eskom's Build programme. The energy environment must also be made able to attract the participation of independent power producers.
Meanwhile, municipalities who will soon be hiking their tariffs should brace themselves for more defaulters, people who cannot pay for the electricity they need. Electricity theft is likely to increase and some people will risk electrocution during these illegal activities.
Furthermore, people could lose their jobs as businesses struggle to survive. This is not a good picture, but it is the reality of our situation. It becomes even bleaker when one adds the recent increases in the price of fuels like petrol and diesel and the likelihood that there could be more increases next month.
To add insult to injury, however, the ANC must be rubbing its hands in glee as it seems poised to benefit from the hardship of the people it claims to care about. [Interjections.] Chancellor House, the ANC's investment vehicle through its shareholding in Hitachi Power Africa, stands to reap millions of rand in windfall profits from the deal with Eskom. What is even more depressing is that some leaders in the ANC don't seem to appreciate the negative implications of this blatant conflict of interest. The deal may be legal, but it sure is immoral and odious. [Applause.] The deal is wrong for South Africa.
The ANC treasurer, Matthews Phosa, is right that exiting the deal is a shareholder issue and that it is about what is ethically correct. As Mr Phosa explains - and I quote him, I quote Mr Phosa here:
The ANC is the ruling party. It must set standards and be subject to governance like anybody else. It can't be above the rules of good governance. It can't make rules and say the rules apply to others; they do not apply to us.
I again urge the ANC to get out of its stake in Hitachi and to desist from doing business with any government entity as a matter of course. This sort of shady dealing only reinforces the growing perception that this country is fast becoming a banana republic.
Due to the seriousness and the urgency of this matter, the DA will submit a Private Member's Bill to Parliament to make it illegal for political parties to tender and contract with government at any level.
Access to energy is central to the creation of opportunities for all South Africans. In this regard, the Ministry of Energy has the very important role of protecting the interests of the country on all energy-related matters, such as the ones referred to above. It is for this reason that the DA welcomes the establishment of a stand-alone Department of Energy under the hon Minister Dipuo Peters. The department has its work cut out for it. The challenges are huge but not insurmountable. The Minister has a once-in- a-lifetime opportunity to create a government department from the ground up and to get things right the first time.
Recent experience has taught us that cadre deployment ANC-style leads to failure through lack of delivery and corruption at great cost to the country. Staff should be employed on their fitness for purpose, their skills and competences and their willingness to serve. These are some of the hallmarks of an open-opportunity society for all. The Minister and senior staff have committed to this approach. We will hold them to it. The Department of Energy cannot afford any failures, particularly during this year of the Soccer World Cup when we must keep the lights on for the rest of the world to see us in our best light.
This leads me to the department's budget. The Minister has also referred to it. In simple terms, the department's maiden budget is more than a stretch. It is a tight baseline to set as the numbers indicate that the department needs much more to be fully funded. This is a serious cause for concern.
It is, however, commendable that the senior staff in the department have committed to doing more with less to make the budget work. This is the right attitude, but the work must be seen to be done and they will have to work hard to inspire their subordinates.
Lack of proper planning and poor decision-making have been fingered as the major causes for the country's recent electricity supply problems. The DA therefore welcomes the R20 million budgeted for a National Integrated Energy Modelling System. We need to plan appropriately for energy security, sustainability and efficiency by taking guesswork out of the equation.
In this regard, we look forward to interaction with the electricity Integrated Resource Plan 2 that has been referred to. It is encouraging to know that the process to unveil the plan is being speeded up.
There is also R36 million that has been set aside for renewable energy. We've been hearing a bit about it, and it is clearly inadequate. The government has set a target of 10 000 gigawatt hours of electricity from renewable sources by 2013. As matters stand, it seems very unlikely that this goal will be achieved. We need to move quickly if we are to meet even half of the target. While the department's goal to commission 400 megawatts of wind power in the next three years through the involvement of independent power producers is welcomed, it needs to do much more in this regard, and the participation of IPPs must be incentivised and fast- tracked.
The DA welcomes the announcement that an independent buying office will be established and that, while it will initially be located at Eskom, it will, as soon as possible, move out. This is necessary to remove the Eskom stranglehold on the sector and to facilitate IPP participation. The relevant Bill for the independent system and marketing operator is being considered by Cabinet. We urge that the decision-making process be speeded up, Minister.
There is R328 million set aside for demand-side management. This will go a long way towards electricity savings, but we are concerned that the target to install one million solar water heaters in households by 2014 seems unreachable. Thank you. [Time expired.] [Applause.]