On the reduction of debt owed by municipalities to restore Eskom

REPLY
Honourable Speaker,

Government has on numerous occasions acknowledged the negative effects of load shedding to all citizens and the economy.

This acknowledgement has found expression on the President’s decision to appoint a Minister for Electricity in his office, specifically to respond to this function. The Minister is tasked to work with the board in implementing the national energy plan. In addition to this intervention is the declaration of National State of Disaster to ensure that there are measured interventions. 

Another special focus of the new Ministry is to work with the National Treasury and respective Municipalities to facilitate payment of outstanding monies owed to Eskom. As outlined in the Budget Speech in February this year, the National Treasury is working with Eskom to provide a sustainable solution to this crisis of municipal debt.

Government has previously adopted a plan to unbundle Eskom into three functional units to increase accountability and competencies of the various functions. The Minister of Energy is on record on the decision to create another energy entity to augment current energy supply.

During the 2023 State of the Nation Address, President Cyril Ramaphosa flagged the problems and outlined interventions to unlock our nation’s potential This includes reducing load shedding to facilitate economic growth, job creation, and fighting poverty and inequality.

The means towards ending shedding included the following:

1) Fix Eskom’s coal fired power stations and improve Energy Availability Factor;

2) Enable and accelerate private investment in generation capacity;

3) Declare the State of National Disaster and establish a ministry in the Presidency focussing on accelerating the implementation of the already agreed plan towards reducing and ultimately ending load-shedding in the shortest possible period.

4) Provide budget to boost the roll out of roof top solar by businesses and households, and

5) Allocate budget to reduce Eskom’s debt burden.

As of the end of December 2022, municipalities owed Eskom 56.3 billion Rands, and the debt is rising. It is clear that we need a debt-relief strategy that will acknowledge the inherent risk of unviable municipalities.

In this regard, Eskom will provide incentivised relief to municipalities whose debt is unaffordable. However, the relief will come with conditions that will ensure that there is no repeat of debt build-up over time.

Some of the conditions will include the installation of prepaid meters, to correct the underlying behaviour of non-payment and operational practices in the affected municipalities. Municipalities must use the money they are allocated effectively and efficiently for the intended purposes.

If this is not the case, there should be consequences.

In addition, the National Treasury is preparing a Municipal Finance Management Act (MFMA) Circular dealing with the relief strategy regarding municipal debt owed to Eskom, which is expected to be released later this month, with implementation expected to start on the 01st of April this year.

Under the National Treasury, the Multidisciplinary Revenue Committee (MdRC) is continuing with its main task of ensuring that all municipal debts are coordinated, tracked and resolved on an ongoing basis.

In this regard, Accounting Officers are required to settle all contractual obligations, and pay all monies owed, including intergovernmental claims, within 30 days of the submission of an invoice, or on a specific period agreed with creditors or suppliers.

Honourable Members,

The culture of non-payment, not only by municipalities but by all organs of state and individual household customers is concerning.

We cannot over-emphasise the need to encourage a culture of non-payment for public services.

In addressing the utility’s financial challenges, government has announced further measures on Eskom.

A debt relief of 243 billion Rands will be implemented over the next three years. Government’s intervention on explicitly taking on this debt is aimed at reducing fiscal risk and enhancing long-term fiscal sustainability.

This debt relief consists of two components: first Eskom’s debt service requirements of 184 billion Rands. This represents Eskom’s full debt settlement requirement in three tranches over the medium term. Second is a direct take-over of up to 70 billion Rands of Eskom’s loan portfolio in 2025/26.

This will allow Eskom to focus its operating cash flow on much-needed maintenance and capital expenditure while at the same time reducing Eskom’s debt by 168 billion Rands.

Further to this work, the government is continuing with the medium- to long-term plans of adding additional capacity to the grid. We are committed to clean energy solutions, including investing in renewable energy solutions. 

Amongst others, this includes the implementation of the integrated energy plan and the amendments to electricity legislation to make it easier for private developers to generate additional electricity. This includes speeding up the implementation of the over 100 projects expected to provide over 9 000 MW of new capacity.

It is our hope as a government that all these measures will facilitate and chart the way towards energy security, resulting in inclusive economic growth and job creation.

I thank you!

On priorities of the Leader of Government Business to ensure executive accountability

REPLY:
Honourable Speaker

Section 92 (2) of the Constitution stipulates that Members of Cabinet are accountable collectively and individually to Parliament for the exercise of their powers, and the performance of their functions.

Therefore, Members of the Executive have a constitutional obligation to avail themselves to respond to questions for oral reply, appear before relevant Portfolio Committees, and attend Plenaries as scheduled by the Programming Committees of Parliament.

In August 2021, the Speaker of the National Assembly proposed new mechanisms to monitor outstanding responses to Parliamentary questions by Members of the Executive. In terms of the new mechanisms, the Speaker writes to the Leader of Government Business in Parliament, on a quarterly basis, informing us of outstanding replies by individual Members of the Executive.

To this end, the Leader of Government Business in Parliament has further introduced monitoring mechanisms where-in Members of the Executive with more than 10 outstanding responses to questions for written reply are requested to inform the Leader of Government Business in Parliament in writing about: (1) the reasons for the Unanswered Questions; and (2) remedial actions to be taken to address the delay.

This information is then presented fortnightly in every full meeting of Cabinet.
Since the implementation of these mechanisms, noticeable progress has been achieved. In this regard, we have seen a tremendous decline in the number of unanswered questions that have since lapsed in the last three years of the 6th Administration.

For an example, at the end of 2019 Parliamentary session, there were 405 lapsed questions, and by the end of 2022 session, only 83 unanswered questions lapsed.

However, much more needs to be done by Members of the Executive to ensure they fully attend to their Parliamentary responsibilities as provided by the Constitution.

We equally appeal to our programming whippery to ensure that the scheduling of Plenaries and Parliamentary committees does not coincide with critical Executive engagements like Cabinet, and its committee meetings. There should be collaboration and integrated planning by the various parties involved in this regard.  

Honourable Speaker.

We must admit that the development and finalisation of the Legislative Programme with proposed Executive Bills remains a weakness.

As part of government’s efforts to address this challenge, President Cyril Ramaphosa delegated the Minister in the Presidency responsible for Planning, Monitoring and Evaluation to develop a framework which will investigate strengthening efforts of monitoring effective implementation of the Legislative programme, and the fulfilment of parliamentary responsibilities by members of the Executive.

A draft Framework and its implementation plan has since been developed, and it is due for consideration by the relevant Cabinet committee before Cabinet approval.

Moving forward, our main priority will be, amongst other things, to closely monitor the development, and the introduction of priority Bills to Parliament, with special focus on legislation with Constitutional Court deadlines, and those pronounced by the President during the State of the Nation Address.

I thank you!

On combating crime and corruption

REPLY
The President has expressed his commitment to co-operate fully with all investigations. The government supports this position without reservation. 

Given the fact that investigations are still ongoing, it would be ill-advised to opine on whether or not the Government’s efforts to combat crime and corruption have been undermined. We simply do not have sufficient information to reach informed conclusions at this stage. 

That said, there is one important issue that stands out and merits mentioning even at this stage. The fact that public institutions can, without let or hindrance, investigate the affairs of no less a figure than the President of the Republic speaks volumes about the strength of our democracy. 

The government remains committed to fighting crime and corruption. As honourable members are aware, the Phala Phala matter is being probed by more than one public agency following the break-in and theft at the President’s Phala Phala farm. 

We take this opportunity to reiterate our support for the institutions concerned, and emphasise that they must be allowed to complete their work.  

I thank you!

On the role of Traditional Leaders in promoting investment and economic development

REPLY:
Honourable Speaker,

As Honourable Members know, under the leadership of former Deputy President Mabuza, the Inter-Ministerial Task Team on Matters of Traditional and Khoi-San Leaders, conducted extensive consultations with Traditional and Khoi-San Leaders across all provinces, as part of the full appreciation of the critical role that these leaders play in assisting the state to develop our communities.
This Task Team was established by President Ramaphosa in February 2022, to address all issues of concern to the Institution of Traditional and Khoi-San Leadership.

The issue of promoting investment and economic development in rural areas is indeed critical, as highlighted in the question by the Honourable Member. Hence, in light of this, the Task Team resolved to establish a workstream that focuses on advancing land ownership, tenure rights and fast-tracking socio-economic development in these communities.

The Inter-Ministerial Committee on Agriculture and Land Reform also continues to be instrumental in fast-tracking the land reform agenda, as it relates to economic development of rural communities. 

Honourable Speaker,

Some progress has been registered in this area of work, and much more still needs to be done to ensure that our people in rural areas reap the economic benefits of our democracy. In ensuring support to our farming communities, a number of rural infrastructure projects have been delivered by government in various villages across the nine provinces.

Amongst others, these include mechanisation, infrastructure upgrades, irrigation schemes, as well as community facilities such as pre-schools, community halls and Agri-Parks.

This has also included the construction and rehabilitation of Farmer Production Support Units, such as animal handling facilities, animal clinics, dipping tanks, boreholes, fencing and other related infrastructure.

Subsistence farmers in various parts of the country are supported through the Presidential Economic Stimulus initiative, to obtain production inputs through a voucher system, which allows them to continue to grow their crops, feed their livestock and, in turn, sustain their livelihoods.

To date, over 107 farmers have been registered as subsistence farmers that have benefited from the Presidential Economic Stimulus initiative. 
 
Honourable Speaker,

At the Local Government Summit that was held last year, it was resolved that the proposals made by the Institution of Traditional Leadership in the form of the InvestRural Master Plan, should inform socio-economic development plans at local level.

The InvestRural Master Plan seeks to convert rural development challenges into opportunities for investment, covering critical areas such as infrastructure development, agriculture, service delivery, financial inclusion and rural enterprise development, among others.
In addition, the InvestRural Strategy has now been mainstreamed into the Integrated Rural Development Strategy of the Department of Agriculture, Land Reform and Rural Development.

Furthermore, a number of skills development programmes have been implemented through the National Rural Youth Service Corps, attracting and empowering young people from various traditional communities such as those from Barolong Ba Seleka in the Free State province.

Both the Inter-Ministerial Task Team on Traditional and Khoi-San Leaders and the Inter-Ministerial Committee on Agriculture and Land Reform, will continue to strengthen partnerships with the Institution of Traditional and Khoi-San Leadership, to collectively address issues of investment and socio-economic development.

Following the Communal Land Administration and Tenure Reform Summit that was held in May 2022, the Department of Agriculture, Land Reform and Rural Development has commenced with the process of developing the Communal Land Tenure policy. This policy will address issues of land ownership, thus contributing to socio-economic development in rural communities.

Honourable Members,

This task of addressing issues of development in areas under the jurisdiction of Traditional Leadership, is a collaborative effort between national government, provinces, municipalities and traditional leaders themselves.

As government, we will continue to engage with Traditional and Khoi-San Leaders, to collectively find workable solutions for addressing the issues of socio-economic development in their areas.

We cannot fail in this task, because rural areas are an integral part of our identity as a people, and our country cannot achieve its full economic potential if these areas continue to be on the periphery and are excluded economically.

I thank you!

On promoting good governance in local government

REPLY:
Honourable Speaker,

The District Development Model has, in the main, being designed to  ensure the delivery of services to communities in an integrated manner.

In our view, the District Development Model is a golden opportunity to partner all three spheres of government, and civil society, to address critical challenges confronting the people at local level, including attending to service delivery hotspots across the country.

Through the implementation of the whole-of-government approach, The Presidency, working with the Department of Cooperative Governance and Traditional Affairs and all relevant role-players, will continue to fast-track the resolution of existing service delivery challenges by developing and implementing targeted action plans involving all three spheres of government.

In the coming year, and aligned to responsibilities as assigned by President Ramaphosa to the Deputy President, this work will include championing responses to problems identified in specific municipalities for resolution.

Beyond providing political leadership, together with colleagues in the Departments of Cooperative Governance and Traditional Affairs, National Treasury and Planning Monitoring ana Evaluation we will zoom into the issues of good governance, as they have been consistently flagged by the Auditor General. We will revive and strengthen inter-governmental relations to assist municipalities whose governance protocols are weak, resulting in a lot of financial leakages and in some instances collapse of provision of basic services to communities.

This calls on us to be more proactive, and as such, compels us to create early warning and quick response mechanisms to areas where there are service delivery failures.

Part of the solution rests with building adequate capacity in municipalities, both at district and local level, for them to be able to discharge their service delivery mandate more effectively. Indeed, what fundamentally will assist us to turnaround the situation will be the implementation of an Improved District Development Approach. 

I thank you!

On Service Delivery Hotspots

REPLY:
Honourable Speaker,

We are gravely concerned about the current state of our local government, not only in Kopanong Municipality, but across the whole country.

The situation calls for immediate interventions by all spheres of government, as a practical illustration of the District Development Model to improve the delivery of services at the local government level, as we have referred to earlier.

In line with this year’s Water Week, which began on 20 March and will end this Sunday, with the focus on “Accelerating Change”, the government on its part is embarking on a number of turnaround efforts.

Amongst these is ensuring the necessary speed in initiatives that are aimed at ensuring that all citizens have access to reliable water services, and embarking on necessary water conservation measures.

Furthermore, the 2021 State of Local Government Report identified Kopanong Local Municipality as a service delivery hotspot, and as a dysfunctional municipality.

When the disaster occurred through the collapse of a dam wall in Jaggersfontein in September 2022, government moved with speed to ensure that the situation does not get worse than it already was.

We are pleased to report that water supply in the Kopanong Municipality was restored to full capacity as part of the rapid response intervention by the Department of Water and Sanitation, and the Water Board.

The Department of Water and Sanitation, in partnership with Bloem Water, has put in place the following tangible interventions to ensure availability of water in Kopanong Municipality:

· Two 18 000 litre water tankers were deployed to Jaggersfontein in the morning of 12 September 2022 and were operational in the area for three (3) months;

· Re-operationalisation of the Water Treatment Works in the area has been completed.  A backup generator has been installed for supply of electricity to the plant due to power being affected by the collapse of the sludge dam;

· Power restoration was conducted by Centlec (a local electricity distributor) on 14 September 2022, which enabled Water Treatment Works to operate at full capacity. This intervention assisted to restore bulk water distribution to other areas except Charlesville in the Jagersfontein and Fauresmith towns, respectively, due to a pipeline which was damaged by the flooding;

· On 13 October 2022, a new bulk pipeline was laid by the maintenance team of Bloem Water in the area of Charlesville, to supply the community with bulk water from the treatment works;

· On 21 October 2022, the last portion of the pipeline supplying Charlesville which was damaged in the disaster was repaired and commissioned to supply the whole area with bulk water from the Treatment Works;

· A series of water quality tests were conducted by both Bloem Water and the Department of Water and Sanitation throughout the three months since the disaster happened;

· On 14 September 2022, a 45000 litre water tanker from Coca Cola Beverage Africa (CCBA) was deployed to Charlesville to augment water supply to the community.

Regrettably, Bloem Water have since informed the Kopanong Municipality that it will not be able to continue supplying water at full capacity due to non-payment of the outstanding debt. Until now, the municipality has not honoured payment of the current account, nor provided a realistic payment plan covering the historic debt to Bloem Water.

This has finally led to a decision by the company to once again restrict water supply at 30 percent to all  nine (9) towns in  Kopanong Municipality. 

As government we remain committed to resolving this impasse.

In this regard, the Department of Water and Sanitation is playing a coordinating role in ensuring that all stakeholders such as Corporative Government and Traditional Affairs, Bloem Water, the Office of the Premier, and the Municipality, are planning together to find permanent solutions in restoring water and wastewater infrastructure.

The Ministers of Cooperative Governance and Traditional Affairs, and Water and Sanitation are in consultation with the Free State provincial government to invoke Section 139 of the Constitution, to be read with Section 63 of the Water Services Act, 1997, which will be a targeted intervention on the water and sanitation affairs of the municipality.

Improvement in the delivery of services at local government level, including the provision of water and sanitation, is a critical aspect of our developmental state.

It is for this reason that we are planning to conduct a series of outreach programmes with special focus on service delivery challenges in local government (including Kopanong Municipality), aimed at turning around the situation for the betterment of our people.

I thank you!
Date: 
Thursday, March 23, 2023 - 18:15
Tags: 
Deputy President Paul Mashatile