As a department we are presenting our Budget Vote during the Energy Month which is premised on Promoting Affordable and Sustainable Energy Mix in support of radical soci-economic transformation, said the Minister of Energy, Ms Mmamoloko Kubayi.
Energy is at the forefront of our country’s economic growth imperatives and we are prepared to do our level best to harness its potential, she said. Linked to that is an urgent need to transform what remains an untransformed energy sector, she said. “The Independent Power Producers remain one of the critical tools for us to achieve radical economic transformation by ensuring that we don’t discuss shareholding by black business but ensure ownership patterns change.”
To maximise the potential of this sector to meet its challenges, we are in the process of re-engineering the energy sector’s business model. This is meant to, among other things, harness its capability to contribute to our country’s GDP (gross domestic product). “The Department of Energy has a critical role to play in ensuring that we secure the supply of energy and petroleum in the country.
“The sector currently contributes R300bn towards the GDP of the country and accounts for 90 000 jobs. It is our considered view that this sector has potential to contribute more towards the GDP and can be able to create more jobs.”
The breakdown of this financial year’s allocations is primed to reinforce this imperative, she said. “Our budget allocation as a department for this financial year is R8.1bn, of which R7.5bn is for transfers to our entities and R244m is for the department to embark on its operations and its projects.”
Eskom received R3.8bn and is the major beneficiary followed by allocation to municipalities which stands at R2bn. We would love to have been allocated more but we will do the best with what we have, said the Minister.
On the recent court judgement, the Minister maintains that they won’t lodge an appeal but will ensure that they comply with the recommendations of the court ruling. “Following the court judgement and our decision not to appeal the judgement, we will proceed with the signing of the new Inter-Governmental Agreements with the five countries and submit to Parliament within a reasonable time. We will review all the determinations to ensure compliance with the judgement.”
The Chairperson of the Portfolio Committee on Energy, Mr Fikile Majola, said the need for policy certainty cannot be over-emphasised. “Policy certainty in this sector can guide investment. That needs to be addressed urgently because the sector cannot remain a missed opportunity.”
As it stands now, the department is not operating at its optimal capacity, hence restriction is needed to realise its true potential. This concern is foregrounded by the performance of the state-owned-enterprise in this sector which are a cause for concern. “The problems in our entities must be dealt with urgently. There is a need for an oversight on their boards and the executives who are appointed in them.”
The energy sector is rigged by scandal involving the Central Energy Fund, Eskom and PetroSA. The crisis in this sector reflects broad government failures, he said.
Of all the entities in the sector, PetroSA is the worst, said Mr Gordon Mackay. “PetroSA is a joke that is not funny anymore. What is more hilarious about it is its recent presentation to the Committee of an eight-page turn-around strategy of its R16bn losses that lacked substance. We call on Parliament to institute an inquiry into the board of Petro SA.”
Mr Steven Swart supported the idea of an inquiry into the affairs of PetroSA. It would be wise for the Minister to consider the establishment of an ad hoc committee to investigate PetroSA. “This inquiry will allow us to exercise our oversight mandate and hold its board and executives accountable.”
PetsoSA’s unilateral selling of our country’s oil reserves below the spot price of oil at the time is enough for such an action. “You took a moral high ground when you came to this office, show the nation that you are prepared to live up to that.”
By Abel Mputing
19 May 2017
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