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Minister Radebe’s sprint to sign R14.5bn Sudan oil deal before elections highly suspicious

The Democratic Alliance (DA)  views with suspicion Minister Jeff Radebe’s covert rush to finalise a questionable R14.5 billion oil deal with war-torn South Sudan before the elections.

According to Sunday reports, Minister Jeff Radebe pleaded with his Sudanese counterpart to speed up the signing of the agreement that allows exploration of oil and gas to begin. This despite experts cautioning that crude oil in South Sudan was not compatible with South Africa’s refineries.

The SA taxpayers deserve to know why R14.5 billion of their money will be spent on a deal that appears to be rushed and ill-considered.

The DA will write to Minister Radebe and National Treasury to demand answers as to why the  Minister insists on this deal to be sealed before the May 8 Elections and why Minister Radebe is rushing to sign an agreement and allocate budgets for the project before a feasibility study had been done by Treasury, the Central Energy Fund and the Strategic Fuel Fund.

Additionally, DA have always maintained that South Africa cannot afford the large scale burning of diesel in a desperate bid by the ANC to keep the lights on ahead of the elections.

The absence of any concrete information only cements the perception that this another Gupta type deal which will enrich the ANC, and not serve the needs and interests of the country.

The DA will continue to keep a close eye on this and ensure that the full details are made public.

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DA welcomes High Court dismissal of Coal Transporter’s Forum attempt to block Eskom signing on IPP’s

The Democratic Alliance (DA) welcomes the decision by the South Gauteng High Court in Pretoria, to dismiss with costs the case brought by the Coal Transporter’s Forum to prevent Eskom from signing power purchase agreements with a number of Independent Power Producers (IPP’s).

This comes at a time when South Africa faces a national energy crisis with stage 4 rolling blackouts – bringing businesses, industries, public transport and homes to its knees.

What South Africa needs now is the urgent release of the latest Integrated Resource Plan (IRP), which will showcase government’s commitment and resolve to bring on new renewable generation urgently.

The Minister of Energy, Jeff Radebe, has stated that the IRP roll-out is imminent, but this has been the same story for a number of months.

Concentrated Solar Power (CSP) offers opportunities to address base load power and when combined with wind and solar photovoltaic, can provide a clean and green energy source. The government needs to ensure that CSP and the other renewables receive significant future allocations in the new energy plan.

With the energy costs falling dramatically and the short turnaround from contract to connection, renewable IPP’s will bring about much needed breathing room to Eskom’s stretched generation capacity.

The DA are, at the same time, waiting with anticipation for the court’s ruling that may allow the City of Cape Town to source directly from IPP’s. We need to unlock the energy sector and allow IPP’s to sell electricity directly to metros that are well-functioning.

The DA will continue to fight for a competitive and diverse energy sector that will bring about stable and affordable electricity to all. The DA will continue to fight to keep South Africa’s lights on.

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“Technical team” on high fuel prices misses deadline by almost 100 days and counting

On 5 July this year President Ramaphosa set up another “technical team” tasked with finding solutions to the persistent petrol price hikes that have hurt the pockets of South Africans since the beginning of the year. Over the past ten months, the price of petrol has increased seven times.

While this “technical team” was given two weeks to present solutions to mitigate these fuel increases, the Minister of Energy, Jeff Radebe, has confirmed to the DA that no significant progress has been made – with an “initial report” still more than a month away.

The Minister said that “The initial report was expected at the end of September 2018, however, more work is still required before the report is finalised. It is anticipated that the work would be completed by the end of November 2018.”

This “technical team” has missed its deadline by almost 100 days and counting. While this failing ANC government dithers, South Africans are financially suffocating. To make matters worse, there was no relief announced in yesterday’s Medium Term Budget Policy Statement (MTBPS) for consumers – with fuel taxes set to increase each year over the medium term.

These fuel price increases are not only the result of international markets and global trends – as the ANC government claims – but are also in large part due to the weakening rand that is directly related to the mismanagement of the economy by the ANC government. Approximately one third – or R5.30 – of the cost of petrol per litre goes directly to government via the General Fuel Levy and the Road Accident Fund Levy.

The DA’s solution to this is straightforward: cut the fuel taxes by at least R1 in the short term with a view to review these levies on an ongoing basis; stop bailing out the bankrupt Road Accident Fund and ensure it runs efficiently; cut the bloated Cabinet; reject the proposed fuel levy increases in yesterday’s MTBPS; and tighten government’s belt to halt wasteful spending. In the long term, with prudent economic policy direction and sound fiscal discipline, a strengthening rand will aid the decrease in fuel costs.

The lax approach to providing any respite to ordinary South Africans appears to be the approach of this ANC government under Cyril Ramaphosa. Finance Minister, Tito Mboweni’s MTBPS yesterday delivered no hope for the poor and jobless. When it comes to the cost of living for ordinary South Africans, Mboweni decided to:

  • Commit more precious public money to bailing out bankrupt SOEs such as SAA and Eskom, instead of selling them off;
  • Cut funds to basic services – including health and education;
  • Reaffirm the continuation of E-tolls for Gauteng residents; and
  • Increase the fuel levy on already sky-high fuel prices;

With corruption and waste by ANC national departments and SOEs totalling over R100 billion, South Africa is being taxed to death to pay for the failing ANC governments repetitive sins. We cannot continue along this path any longer.

It is time for the change that creates One South Africa For All, where public money is spend on creating jobs and delivering basic services to all.

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Two independent coal power stations to cost South Africans extra R23 billion and should be scrapped

In a parliamentary reply to a DA question, the Department of Energy (DOE) has confirmed that the two additional coal Independent Power Producing (IPP) projects that have been committed to, will cost the consumer an additional R23 billion. This will definitely be passed onto the consumer through higher electricity tariffs.

Given the environmental as well as the financial burden of the two coal IPPs and in light of a revised Integrated Resource Plan (IRP) 2018 which is focused on renewable energy, the DOE should immediately resolve to cancel these two coal IPPs and proceed to fill the gap with a combination of solar and wind.

On top of the higher tariffs, a study by UCT’s Energy Research Centre, has indicated that these coal IPPs would add R28 billion to South Africa’s costs in trying to keep our greenhouse gas emissions within international commitments made in the Paris Agreement.

Financial institutions have also begun to take note of the environmental concerns with a new policy position to not fund any future coal projects.

With the DOE and a number of energy institutions unable to table annual reports in time, the Minister of Energy, Jeff Radebe, needs to provide clear leadership and resolve these issues along with the cancellation of the two coal IPPs urgently

South Africans are hard-pressed in this current economic climate, with rising unemployment, increased VAT, personal taxes and yet another petrol increase. The last thing we need is an unnecessary additional electricity tariff hike due to two coal power plants.

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DA welcomes gazetting of Integrated Resource Plan

The DA welcomes the gazetting of the latest Integrated Resource Plan (IRP) by Energy Minister Jeff Radebe after a number of false starts over the last few years.

In particular, we welcome the policy shift away from building new nuclear power plants. This IRP confirms that former President Jacob Zuma’s corrupt nuclear deal has been shut down in favour of cheaper, cleaner sources of energy.

Minister Radebe and President Ramaphosa deserve credit for taking on the Zuma faction and winning. It is now presumably up to Deputy President David Mabuza – as the President’s special envoy to Russia – to explain to President Vladimir Putin that the nuclear deal is off. We wish him the best of luck on his mission.

The fact of the matter is that we never needed new nuclear plants, and we didn’t have the money to build them. On this score, the new draft IRP is a substantial improvement on the old one.

The plan includes the following new additional capacity by 2030:

  • 1000 MW of generation from coal (previously 16386 MW)
  • 2500 MW from hydro (previously 3399 MW)
  • 5670 MW from solar PV (previously 0 MW)
  • 8100 MW from wind (previously 11800 MW)
  • 8100 MW from gas (previously 8666 MW).
  • 0 MW from nuclear (previously 9600 MW)

We will study the IRP further during the 60-day public consultation period, and will begin engaging with various experts. We will also table the draft IRP for discussion with the Minister and Department of Energy officials in the parliamentary Portfolio Committee.

It appears that a difficult chapter in the energy sector is coming to a close. We are moving towards cleaner, renewable energy and away from the corrupt nuclear deal. This is something to be welcomed.

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Fuel price: Radebe confirms government still has no plan

Today at a meeting of the Energy Portfolio Committee in Parliament, Minister Jeff Radebe offered no plan to reduce the high cost of petrol.

This was a slight improvement on last week when the Minister and his officials didn’t even turn up for the meeting.

However, the outcome of both meetings was essentially the same: we are no closer to knowing what government is planning to do about the high fuel price.

It is true that there is no quick fix to curb the high cost of petrol. High oil prices set by OPEC are out of our control. And the rand-dollar exchange rate is determined, to an extent, by exogenous factors.

What is in government’s control is the exorbitant fuel levy that accounts for R5,30 of the R16,03 that consumers pay for every litre of petrol. Of course, any cut to the general fuel levy will incur a cost to the fiscus and careful thought needs to be given to the financial impact of a cut.

However, Energy Department officials said today that the fuel levy is not part of the remit of the fuel price technical team set up by Treasury and the Department of Energy. And so we are left wondering exactly what they are discussing, and whether there is any real commitment to reduce the price of petrol.

Minister Radebe has promised to report back on his plan to reduce the fuel price by the end of September. Every South African affected by escalating living costs is waiting to hear the details.

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Nuclear Deal: Is it off or on?

The DA challenges new Energy Minister Jeff Radebe to give the South African public an unequivocal and unambiguous statement on the nuclear deal.
Yesterday, new Finance Minister Nhlanla Nene said that nuclear plans are still on the table, before adding that this would be subject to affordability.
Today, in Parliament’s Energy Portfolio Committee, the Director-General of the Department of Energy, Thabane Zulu, said that the Department of Energy is preparing a road-map to deal with nuclear.
The Director-General added that he wouldn’t be surprised if nuclear is part of the new Integrated Resource Plan (IRP) since nuclear is part of the Department’s energy policy.
We had hoped that President Ramaphosa’s election, and his appointment of Minister Radebe in place of Minister Mahlobo, signalled the death knell of the R1 trillion nuclear deal.
It now seems the door has been left open to go ahead with the nuclear deal. This would be a slap in the face for every South African who believed President Ramaphosa when he promised a ‘new dawn’ for our country.
It also gives credence to allegations in the public domain that it wasn’t just ‘Zupta’ politicians who benefited from illegal kickbacks in return for a nuclear deal.
In the ‘Betrayal of the Promise’ report authored by a number of respected academics, allegations are made that the ANC received R1 billion for its 2016 local election campaign in return for a nuclear deal. As the report says, on page 17:
“There are allegations that one set of transactions involved Russian funding for the local government elections, which may explain where the ANC managed to find R1 billion for this campaign.”
If the ANC as a whole benefited from illegal kickbacks, then it will be much more difficult for President Ramaphosa to renege on whatever promises have been made.
Indeed, the continued prevarication from ANC Ministers and government officials does nothing to quell the rumours that continue to swirl around nuclear procurement.
The new Energy Minister, Jeff Radebe, has been very quiet since assuming office last week. The time has come for him to break his silence by unequivocally and unambiguously rejecting the nuclear deal.
We call on him to do so without any further delay.

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President Jacob Zuma’s new “spend now, pay later” populism in South Africa

The following speech was delivered by the DA Shadow Minister of Finance, David Maynier MP, during the debate on the Division of Revenue Amendment Bill in the National Assembly today.
Before we debate the merits of the Division of Revenue Amendment Bill [B24-2017], we should pause to consider the chaos in the budget process, which appears to have been manufactured by President Jacob Zuma who now seems determined to “take out” National Treasury.
The Minister of Planning, Monitoring and Evaluation, Jeff Radebe, tried to reassure us that there was “nothing to fear” from the new “budget prioritisation framework” during his briefing following the medium-term budget policy statement, on 26 October 2017 in Parliament.
However, yesterday we heard of the shock resignation of budget office “Tsar”, Michael Sachs, who is one of the most experienced, and one of the most capable, senior officials at the apex of the system at National Treasury.
The fact is that his resignation is a huge blow to National Treasury and confirms our fears that decision-making about budget priorities, and the budget itself, has now been centralised under President Jacob Zuma.
The Constitution itself requires that “budgetary processes” promote transparency, accountability and sound financial management, and yet we now have:
• a “Presidential Fiscal Committee” making decisions about the budget, which undermines the Minister’s Committee on the Budget;
• a “Mandate Paper” setting out budget priorities in terms of a new budget prioritisation framework, compiled by the Department of Planning, Monitoring and Evaluation, which undermines National Treasury; and
• that is not to mention rogue elements, such a Morris Masutha, who is reportedly peddling a R40-billion budget-busting plan for higher education, with the support of President Jacob Zuma.
What this means in practice is that in the middle of a “fiscal crisis” – which Michael Sachs himself described as the most challenging since the global financial crisis – decision-making on the budget has been plunged into chaos.
We have to face the fact that National Treasury are being “defanged” and reduced to “bookkeepers” with declining influence over budget priorities, and the budget itself, under President Jacob Zuma.
Things have got so bad that we are now not even sure whether government has abandoned fiscal consolidation, and its central fiscal objective, which is to stabilise national debt, in favour of a populist “spend now, pay later” fiscal policy under President Jacob Zuma.
Whatever the case, we can be sure that the ratings agencies, which are circling us like sharks, will have taken note and the probability of further ratings downgrades to “junk status” is greater today than it was the day before yesterday in South Africa.

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Resignation of Michael Sachs plunges the budget process into chaos in the middle of a fiscal crisis

The Minister of Planning, Monitoring and Evaluation, Jeff Radebe, tried to reassure us that there was “nothing to fear” from the new “budget prioritisation framework” during his briefing following the medium-term budget policy statement on 26 October 2017 in Parliament.
However, the shock resignation of veteran budget office head, Michael Sachs, which is a huge blow to National Treasury, confirms our fears that decision-making on budget priorities, and the budget itself, have now been centralised under President Jacob Zuma.
We now have:
• a “Presidential Fiscal Committee” making decisions about the budget at the expense of the Minister’s Committee on the Budget;
• a “Mandate Paper” setting out budget priorities, in terms of a new budget prioritisation framework, compiled by the Department of Planning, Monitoring and Evaluation, at the expense of National Treasury; and
• that is not to mention rogue elements, such a Morris Masutha, who are reportedly peddling a R40 billion budget-busting plan for higher education, with the support of President Jacob Zuma.
What this means is that in the middle of a “fiscal crisis”, which Michael Sachs himself described as the most challenging since the global financial crisis, decision-making on the budget has been plunged into chaos.
And it seems that National Treasury are slowly being “defanged” and reduced to “bookkeepers”, with declining influence over budget priorities, and the budget itself, under President Jacob Zuma.
That is why I will write to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting him to schedule an urgent hearing on this matter before the end of recess in Parliament.
We can only hope that there is no snowball effect and that other senior officials at the apex of the system hold steady do not resign from National Treasury.
 
 

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SASSA-SAPO agreement does not mean Minister Dlamini is off the hook

Minister Jeff Radebe’s announcement today that the Inter-Ministerial Committee on Social Security will have an agreement ready for SASSA and the South African Post Office (SAPO) for the distribution of social grants, does not mean that Social Development Minister Bathabile Dlamini is off the hook.
Minister Radebe, at the Joint sitting of SCOPA and the Social Development Committee in Parliament,  announced that an agreement between SASSA and SAPO is expected to be signed by next week Friday.
Although the DA is pleased that there might soon be an end to this SASSA social grants debacle, we must face the facts that Minister Dlamini once again tried to delay the process of SASSA finding a new distributor of social grants in order to keep the dodgy CPS contract.
The Minister failed on numerous occasions to resolve the crisis which ultimately led to joint committee meetings and the intervention of the IMC.
Minister Dlamini was clearly blocking every effort to ensure that SAPO did not qualify as a suitable service provider because she either wants the illegal CPS contract to continue or she has another provider in mind.
Minister Dlamini is unfit to lead the Department of Social Development and she must be held accountable for putting the country on the brink of another social grants crisis.
It is clear that SASSA also had a hand in this prolonged procurement process. The Panel of Experts appointed by the Constitutional Court to oversee this entire process found that SASSA failed to cooperate with experts. In a letter to the Committee, National Treasury stated that SASSA took more than two months to evaluate and adjudicate one proposal, this conclusion implies there was a deliberate delay from SASSA to work with SAPO.
Both Minister Dlamini and  SASSA must account for their disgraceful behaviour of threatening the security of social grants for what is no doubt their own financial benefits.