On Municipalities' debt to Eskom and Water Entities
 
Honourable Chairperson,
 
In our view, the sustainable provision of essential services such as water, electricity and sanitation must be the hallmark of developmental local Government.
 
The task delegated to the Deputy President, working with the Department of Cooperative Governance and Traditional Affairs, National Treasury and other departments, is to ensure that municipalities deliver critical services. In the immediate, we have been helping municipalities to pay debts owed to Eskom and water boards.
 
At the end of December 2022, municipalities owed Eskom fifty-six point three billion Rands, and the debt is rising. 
 
Government has introduced a debt relief package for Eskom intended to improve the utility's balance sheet, whilst proposing that Eskom writes off some of the municipal debt under strict conditions with guidance from the National Treasury.
 
On 01 April 2023, the National Treasury published the Municipal Finance Management Act Circular no. 124, which deals with the relief strategy regarding a municipal debt owed to Eskom.
 
As a government, we recognise that debt relief alone will not return Eskom to its financial sustainability. A key assumption considered in the debt-relief determination is the implementation of the recent tariff increase approved by the regulator (an increase of 18.65 per cent in 2023/24, and 12.74 per cent in 2024/25). Without these increases, the debt-relief arrangement is not sustainable.
 
Municipal Debt Relief will be conditional, and application based. This relief is aimed at correcting underlying behaviour and operational practices in defaulting municipalities. Hence, parallel to this process Eskom is introducing a smart metering solution to change consumer behaviour by reinforcing a culture of payment for services rendered.
 
Honourable Chairperson,
 
The culture of non-payment, not only by municipalities but also by all organs of state and individual household customers, is concerning. As the Government, we cannot over-emphasise the need to enforce the culture of payment for services rendered.
         
The National Treasury has further developed the Eskom Debt Relief Bill, 2023, as a measure to improve Eskom's financial situation. In terms of section 2 of this Bill, Government advances to Eskom, which are over the Medium-Term Revenue and Expenditure Framework period, will amount to a loan.
 
Honourable Chairperson,
 
Municipalities and Water Boards are responsible for sixty-five per cent of the debt to the Water Trading Entity. As of December 2022, water boards were owed sixteen point one billion Rands by municipalities, this includes ten point nine billion Rands that is overdue for more than three months. 
 
The escalating debt in the water sector is attributed to the absence of an economic, regulatory regime for infrastructure investments, costing and pricing, a culture of non-payment of services, water losses and unauthorised connections.
 
The Government has put in place the following measures to strengthen billing and revenue collection to address the escalating debt of municipalities to water entities:
1.    Adoption of credit control and debt recovery measures across all the water boards; and 
2.    The installation of bulk prepaid meters by water boards in municipalities especially with a poor payment record.
 
The success of all these relief measures is dependent on coordination across all spheres of Government.
 
This is why the government will continue working with all sectors of society to increase and build sustainable economic activities in all municipalities, to create viable tax bases to develop revenue for social and economic development.   
 
I thank you.
 

On removal of South Africa from the Financial Action Task Force Grey List
 
Honourable Chairperson,
 
The Financial Action Task Force is a global inter-governmental body that promotes policies and sets international standards relating to combating money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction.
 
During its Plenary held on 24 February 2023, the Financial Action Task Force grey-listed South Africa based on the evaluation conducted in 2019 and the report released in 2021.
 
The report identified South Africa as one of the countries with strategic deficiencies in relation to Anti-Money Laundering and Countering the Financing of Terrorism. 
 
In 2021, South Africa was put under a one-year observation period, allowing the country to address 67 of the recommended actions. 
 
According to the Financial Action Task Force, South Africa has made significant progress by addressing 52 of the 67 recommended actions, and we are now focusing on the remaining 15 actions to meet the January 2025 deadline.
 
Furthermore, Cabinet has mandated the Inter-Departmental Committee on Anti-Money Laundering and Countering Terror Financing to address the identified deficiencies expeditiously. This includes overseeing the implementation of the National Strategy on Anti-Money Laundering and Countering Terror Financing and tracking progress in addressing the identified deficiencies.
 
Honourable Chairperson,
 
Our Law Enforcement Agencies, including the National Prosecuting Authority, are implementing an integrated action plan to ensure a sustained increase in investigations and prosecutions of serious and complex money laundering cases.
 
The action plan focuses on cases involving professional money laundering networks and third-party Money Laundering, as well as identifying, investigating and prosecuting Terror Financing activities in line with South Africa's risk profile.
 
Through the Cabinet Committee on Justice, Crime-Prevention and Security, we will continue to enforce the implementation of the high-level goals, ensuring that all relevant agencies and departments are addressing the deficiencies identified by the Financial Action Task Force. 
 
I thank you.

 
On Functionality of Political Coalitions
 
Honourable Chairperson,
 
Following the 2021 Local Government Elections, political coalitions among various political parties became necessary because of hung Councils, where no single political party gained a majority vote in some municipalities. 
 
Acknowledging that coalition governments have not been institutionalised, the South African Local Government Association, in 2021, developed a framework for coalition governments that can be used as a guide by political parties in practically structuring their coalitions.
 
The issue of coalitions is part of the discussion on improving the quality of our democracy. While working towards the dialogue, the Government will review the negative impact of dysfunctional coalition arrangements and its effect on service delivery.
 
We are particularly concerned that, although some municipalities are weakened because of low economic growth, approvals of development proposals that would boost local economic growth are derailed because of endless disruptions of coalition arrangements. The results of this process will form part of the dialogue on coalitions to determine the appropriate mechanisms to guide how coalitions function collectively.
 
I thank you.
 

On Skills Development and Employment Creation Initiatives
 
Honourable Chairperson,
 
This question is timely in that it comes when we are planning a visit to KwaZulu-Natal, and the engagement with the KZN Human Resource Development Council in May is high on the agenda. 
 
In the main, the visit will be undertaken together with business, labour and academia, focusing on assessing the impact of the Human Resource Development Strategy in the province, by identifying gaps and solutions to fast-track our developmental agenda. 
 
However, we would like to start by expressing our sympathies to the families and the community of the Dakota Informal Settlement in Isipingo, who were displaced because of the recent fire tragedy. As the Government, we continue to support the affected families through rebuilding livelihoods from this and other disasters that have engulfed KZN and other provinces.
 
Our comprehensive response to these disasters has demonstrated that success depends on our ability to forge and strengthen partnerships across all sectors of society, including collaboration with NPOs, NGOs, traditional leaders, organised labour, the private sector, and faith-based organisations.
 
The Government intends to deepen the participation of non-governmental organisations, NPOs and the private sector in local development and service delivery programmes. This work also includes targeted training and skills development programmes to empower local communities.
 
Regarding the Expanded Public Works Programme, the Government recognises the centrality of multi-stakeholder collaboration to improve skills development and job creation. 
 
Through the Expanded Public Works programme, eThekwini Municipality has created over 16 000 work opportunities between April 2022 and March 2023.
 
Furthermore, the municipality has highlighted some critical initiatives on community empowerment and job creation. As of March 2022, these included:
•    The Zibambele Road Maintenance Programme aimed at breaking the cycle of poverty in families by contracting households to routine maintenance of roads. This programme benefitted 5 877 community members;
•    The Sihlanzimvelo programme, where 106 cooperatives participated in cleaning streams and surrounding areas of their localities to protect the environment; and 
•    The Catalytic Projects in Keystone, Ntshongweni Phase 1A, Oceans Umhlanga, and Brickworks aimed at transforming the local spatial footprint have also created employment and business opportunities for the community.

All these initiatives are designed to offer the acquisition of skills that enable beneficiaries to be placed in employment and entrepreneurship opportunities.
 
Furthermore, The Presidential Youth Employment Initiative is another key government programme demonstrating the value of collaboration with the private sector, labour and civil society to respond to the challenge of youth unemployment. This programme creates pathways and opportunities for young people in training, work experience and income generation.
 
At the end of December 2022, the Presidential Youth Employment Initiative benefited 5 787 young people in KwaZulu-Natal through the National Pathway Management Network. 
 
In conclusion, the Human Resource Development Council serves as one of the platforms for institutional coordination of various partnerships aimed at creating a skills pipeline to meet the needs of industry and development.
 
Working with members of this House and all civil society formations, the Government is ready to work with every sector to advance our common national agenda of fast-tracking and addressing the triple challenges of unemployment, poverty and inequality.
 
I thank you.
 
 
On Private Sector Involvement in Manufacturing of Agricultural Vaccines
 
Honourable Chairperson
 
The Department of Agriculture, Land Reform and Rural Development is working with Onderstepoort Biological Products to expand South Africa's vaccine manufacturing capacity through contract manufacturing.
 
To this end, Onderstepoort Biological Products is currently in discussion with Aspen Pharmaceuticals to investigate the entity's capacity and technology improvement.
 
Through these ongoing discussions, it is hoped that an agreement on a partnership will be reached by the third quarter of this year. However, the agreement would depend on granting permissions by vaccine regulators for human and animal health vaccine production.
 
Honourable Chairperson,
 
We have also been advised that Onderstepoort Biological Products is working with cooperatives, veterinary companies and wholesalers to forge deeper partnerships with the Biotechnical Vaccine Manufacturing Industry.
 
Furthermore, Onderstepoort Biological Products is also pursuing linkages with the private sector through collaboration with veterinary companies to allow the sharing of norms of best practice, as well as institutional knowledge. 
 
The Department of Higher Education, Science and Innovation in partnership with the National Biosecurity Hub, and the Department of Agriculture, Land Reform and Rural Development in collaboration with the University of Pretoria, are working together on developing mechanisms to improve ways of addressing biosecurity threats.
 
In this regard, the biosecurity hub will enhance and improve the capacity of the Department to identify, analyse and mitigate against biosecurity threats and risks. The partnership will also assist with augmenting and availing sufficient research capacity and science on which the Department bases its biosecurity work, and its regulatory function and mandate.
 
The hub will significantly enhance collaborative working arrangements between Government and stakeholders affected by biosecurity threats, rather than having these groups act independently or in isolation.
 
We remain confident that through partnerships with the private sector and support from the Department of Agriculture, Rural Development and Land Reform, Onderstepoort Biological Products will be in a better position to conduct tests and trials and develop vaccines that will save livestock and thus contribute to food security in South Africa.
 
I thank you.
 

On Vandalism and Theft of Electricity and Water Infrastructure
 
Honourable Chairperson,
 
The theft and vandalism of public infrastructure have far-reaching consequences for the economy of South Africa.
 
To combat illegal electricity connections, meter bypassing, tampering with operations on the Eskom network, theft and vandalism of infrastructure, and other electricity-related crimes, Eskom has increased existing measures such as audits, maintenance, and education and awareness campaigns.
 
Additionally, the Government has adopted an integrated security approach with law enforcement agencies to protect infrastructure such as electrical cables from theft and vandalism.
 
Together with Eskom, the Government has taken the following steps to safeguard critical infrastructure:
•       Eskom and NATJOINTS have established the Energy Security Priority Committee and, more than fifty infrastructure-related arrests have been made since January 2023;  
•       The enforcement of the Criminal Matters Amendment Act has been bolstered, resulting in the imposition of strict and severe penalties for infrastructure offences;
•       A Tactical Joint Operations Centre has also been established in Mpumalanga, in addition to a Mission Area Joint Operations Centre at the Sunninghill headquarters of Eskom. These facilities are staffed by SAPS and Eskom personnel;
•       The Joint Operations Centre at Eskom MegaWatt Park has received additional support from specialised SAPS units, the Directorate of Priority Crime Investigations, and other specialised units across the country, such as Provincial Essential Infrastructure Task Teams; 
•       The National Prosecuting Authority, the Department of Home Affairs, the Special Investigating Unit, the South African Police Service, and mining companies also collaborate on high-priority projects;
•       Government departments and agencies such as the South African Revenue Service, Asset Forfeiture Unit, Department of Mineral Resources and Energy, HAWKS, the National Prosecuting Authority, State Security Agency, Special Investigating Unit, the Financial Intelligence Centre, and many others are participating in a multidisciplinary approach to investigating infrastructure crimes;

Honourable Chairperson,
 
This model's effectiveness in combating organised crime necessitates the empowerment of these departments to ensure enhanced performance.
 
In addition to the measures we have highlighted above, an integrated operational approach has also been established within Organised Crime Investigations.
 
This approach to organised is a model that targets organised crime syndicates in relation to theft and vandalism of critical infrastructure in all provinces. 
 
Our Government has taken a tough stance on the pervasive problem of illegal water and power connection. We urge Local Government to take stricter measures against water, electricity theft and vandalism of infrastructure.
 
We will continue implementing all actions required to ensure the safety of our infrastructure for the benefit of the community because infrastructure is essential for building resilient, inclusive, and prosperous societies.
 
I thank you.
 
Date: 
Thursday, April 20, 2023 - 16:15
Tags: 
Deputy President Paul Mashatile