Chairperson,

Minister Brown,

Members of the Portfolio Committee for Public Enterprises,

Ladies and gentlemen.

It’s a sad, sad day when you have to hold your breath hoping that the lights in the National Assembly Chamber will stay on long enough for your budget debate to happen in the light.  However, this is the reality that we as South Africans face on a daily basis.

In our debate of National Importance, Minister Brown thought it appropriate to call me a sour mouth because I complained about the state of affairs of our country’s electricity supply. Well Chairperson, Minister Brown better have her mints at hand because this sour mouth is about to tell some home truths!

The current state of the South African electricity situation can only be described as one of chaos.  The electricity crisis can be attributed, in large part, to Eskom’s insufficient generating capacity; the never-ending delays in completing its new build programme; the lack of proper and regular maintenance of its existing plants; a lack of competence within the management of the utility; as well as insufficient political will to address the issue and the prioritisation of political imperatives over the technical imperatives of the utility.

The current situation is further exacerbated by the precarious financial reality the company finds itself in.  Is it not then completely bizarre that the ANC, who are responsible for the cadre deployment to ESKOM, is today marching on its very own creation. Talk about the worm that turned.

The DA supports a short-term action plan based on rapidly, and vastly, increasing the number and size of energy projects undertaken by Independent Power Producers (IPPs) as a means to increase South Africa’s power generation capacity over the coming three to five years.

There is no “quick fix” solution to these problems, but we can take certain steps immediately to stop the problem escalating, these include:

    Ending the state monopoly of the electricity industry by removing the ability of the Minister of Energy to determine what energy technology is built and who gets to build it, and passing and implementing the long overdue Independent Systems and Market Operator (ISMO) Bill.  The ISMO Bill would essentially remove the operation of the transmission grid from Eskom and place it in a separate state-owned entity.

    Second, the Government must make clear its intention to release the latest Integrated Resource Plan (IRP) 2015. The 2013 Update Report, as opposed to the 2010 iteration, has a distinct focus on those technologies that can be brought on stream in the shortest possible time. This would include renewable energy technologies and gas fired turbines.

    Government must urgently publish the Gas Utilisation Master Plan (GUMP) to give clarity to the market on what investments in the gas sector are being contemplated and similarly give policy certainty over mining property rights. The use of liquefied natural gas (LNG) must be fast-tracked as gas turbines can be brought on stream within a few years.

    The Government must exhibit strong and unwavering political will in terms of fast-tracking the finalisation of the Medupi and Kusile projects.

    Investigations need to be undertaken with regard to procurement processes for diesel and coal. A number of questions have been raised regarding the procurement process that Eskom uses when buying diesel fuel for its turbines. A transparent procurement process is vital to ensure middle men, benefiting from dubious tenders, do not enrich themselves at the cost of consumers.

    The government must urgently implement an appropriate subsidy scheme for embedded generation to promote its uptake at both a commercial and a residential level.

    The Government must ensure that Eskom provides a detailed report on backlogged maintenance at all power plants as well as instituting international best practice measures in a number of areas, including Duvha and Majuba power stations, which have caused the most worrisome maintenance problems on the country’s energy supply.

    A rational explanation needs to be provided on the salaries and bonuses which have been paid to Eskom officials. There is undoubtedly a perverse incentive architecture in the structuring of Eskom salaries and bonuses paid to officials.

    The National Energy Regulator of South Africa (NERSA) must be required to make Eskom accountable for its tariff increases and give full and rational explanations to the South African people as to why these increases are being requested.

    The government must rapidly support and reintroduce measures to increase generation capacity, decrease the demand for electricity and improve efficient energy use.

Government must take immediate steps, including splitting Eskom, to begin the expansion and updating of the grid, which will allow more IPPs to connect and begin contributing to generating capacity.

The fact of the matter is this: a secure energy supply is the lifeline of any economy. We are, without being overly dramatic, on a path to economic destruction if we don’t take action now.  We don’t complain, we have solutions, let us put party politics aside and work together to solve this national crisis.

I thank you!