Admin
04 Jun, 2015
Request for intervention: renewable energy sector challenges in the Eastern Cape
Dear Minister Patel, Minister of Economic Development RE: REQUEST FOR INTERVENTION: RENEWABLE ENERGY SECTOR CHALLENGES IN THE EASTERN CAPE The abovementioned matter has reference. Thank you for the interest you have shown on this matter. This letter highlights some of the challenges faced by renewable energy investors, whose projects are situated in former Homeland areas of the Eastern Cape. I had intended to bring some of these issues to your attention during the Economic Development Budget Vote Debate, but due to time constraints (3 minutes speaking time) I could not do so. While some of the issues here fall under the mandate of the Department of Energy and, to a less extent, the Department of Rural Development and Land Reform, I have decided to include them in an attempt to give you a comprehensive picture – and primarily because they all have a negative impact on the economic development of the aforementioned areas. Please find hereunder the details of the issues I would like to bring to your attention. 1. REIPP Procurement Programme In 2011, the Department of Energy launched the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) consisting of 5 bidding rounds taking place over a five year period. The first 4 rounds saw 79 renewable energy projects being selected amounting to R170 billions of investment by the private sector nation-wide. The Eastern Cape Province was only awarded 1 solar project and 15 wind energy projects by the Department of Energy (DOE). The total Rand value amount of this investment is approximately R26 billion. However, regrettably none of these projects is located in former Homelands, despite these areas representing 40 per cent of the Province’s land mass and 60 per cent of its population. I therefore appeal to you Mr Minister to influence the DOE to spread the benefit of these projects as wide as possible. 2. Socio-Economic Impact of the REIPP Procurement Programme Apart from its primary objective of procuring energy, the DOE has commendably designed the REIPP Procurement Programme as a tool to foster long term rural development within a 50km radius of each project location. The social benefits of this are massive. Each successful renewable energy project is compelled and has to commit to spend between 1 to 2.1 per cent of its turnover on Socio-Economic Development (SED) contributions and Enterprise Development (ED) contributions over the 20 year life cycle of its project. In addition to the job opportunities created during the construction and operation phase, each renewable energy project has to set up a community trust that owns between 5 and 40 per cent of the project’s equity shares and the dividends should be spent on community upliftment projects. The long term benefits are substantial, and will definitely change the face of rural South Africa in the medium to long term. 2.1 Over-concentration of Projects While these policies have massive socio-economic benefits, several challenges about the overconcentration of projects in certain areas of the Province remain. For instance, the majority of Wind Farms in the Eastern Cape are situated in two areas, Jeffrey’s Bay and Cookhouse, and together they have a combined investment value of R26 billion. In other words, the entire R26 billion that has been invested on renewable energy in the Eastern Cape thus far has gone to the two “previously advantaged” areas. Needless to say, this creates a long term imbalance with regard to development in the Province. It is often argued that the Northern Cape also suffers from the same over-concentration of projects in some areas. This over-concentration results in a situation, where a few communities that happen to fall the same within the 50km radius experience massive development, while leaving those who fall outside largely depending on the limited resources of the municipality for development. If left unchanged, this will become a major source of future intra-community inequality, which would lead to major community tensions and instability in future. To balance development in the Eastern Cape and other Provinces, I would like to propose that 30 per cent of the 1 and 2.1 per cent of the turnover companies have to spend on socio-economic development and enterprise development over the 20 year life cycle of the project be channelled to municipal coffers for service delivery across the municipality. Government should also take active steps to address the over-concentration of projects in a few areas. In particular, there should be deliberate focus on projects that are situated in previously disadvantaged communities. 3. Complex Land Tenure Systems: Former Homelands at a Competitive Disadvantage A private investor has to secure land rights before participating in the REIPP Procurement Programme. To acquire such rights on communal land, an investor must follow a lengthy and complicated administrative procedure with the Department of Rural Development and Land Reform, which takes anything between 3 to 4 years to complete. In contrast it takes a couple of months to achieve the same result when land is acquired from a private landowner. Government has to streamline this process if it has to level the playing field. 4. High Community Ownership and the Role of Development Finance Institutions (IDC) In former Homelands, communities are the landowners, meaning that in rural areas instead of dealing with a few farmers as landlords; a developer has to negotiate with several communities and therefore has to ensure that the project will meaningfully benefit tens of thousands of people, who live on the land earmarked for development. However, when the community is the landlord, most developers will back-end the payment of dividends from the community trust as a way to increase the competitiveness of the project. In other words, developers delay the payment of dividends to the surrounding communities by 10 years. This enables a developer to secure much more favourable financing terms for the community trust, which has a direct impact on the improvement of the project’s finances. But the downside of it is that communities have to wait for ten years to get dividends. Again the playing field is not level, as high community ownership stakes and favourable financing terms are required for projects that have thousands of community members as landlords, but there are currently no incentive schemes or reward mechanisms built into the DOE’s selection criteria to reflect the positive long term socio-economic impacts of rural projects. Moreover, development finance institutions do not provide projects located on communal land in Former Homelands any preferential financing terms for community stakes. For instance, the Industrial Development Corporation (IDC) has been very active in financing community stakes for projects located on privately owned land in the renewable energy hotspots with 50km radius overlap between projects. The terms offered by the IDC to project’s located in former Homelands are less competitive than commercial banks. For instance, one of the Wind Farms in Motherwell had to acquire finance from commercial banks in order to finance the community stake due to the IDC’s unfavourable loan conditions. Clearly, IDC failed to play its developmental role of bridging the inequality gap in our economy in this example. It is estimated that in order to finance a 30 per cent community ownership stake for the 400MW of renewable energy projects that are currently being developed in Former Homelands, about R600 million would be required at competitive rates. The amount of R600 million might seem like a lot of money. But it is not out of reach when one considers that the Department of Economic Development has set aside R23 billion to assist black industrialists out a R100 billion rand package earmarked for industrial development. Currently, lack of funding and other challenges force developers, who are located in former Homelands, to reduce community stakes, back-end the distribution of dividends and reduce the percentage of ED and SED contributions in order to stand a slim chance of winning in the REIPP Procurement Programme. In summary, to level the playing field, I propose that two actions be taken by Government: • The DOE gives more credit in its score card to projects located on communal land in the former Homelands. • Development Finance Institutions provide very competitive financial terms for community stakes in order to beat commercial banks and allow projects to be more competitive. 5. Underutilisation of Electricity Infrastructure. Since 1994, the ANC government has successfully built brand new electricity substations in former Homelands in order to give access to electricity rural communities. This new infrastructure represents cheap and rapid means of connecting renewable energy projects to the grid, while placing no additional financial burden on Eskom. However, the large majority of projects selected to date by the DOE require substantial network investment with the associated timing implications, while the country is in the middle of an energy crisis. The DOE has not taken into account the advantages former Homelands offer in terms of rapid, cheap and decentralized energy generation capacity they bring to the Eskom grid. In other words, it is easier to connect the small wind farm projects to the substations that are in rural areas than it is to connect big renewable farms to the same substations for reasons mentioned above. Again, the playing field is not level, as these advantages which have a financial implication for the country are not taken into account. I look forward to hearing from you. Mr Nqabayomzi Kwankwa, MP Copied to: Honourable Elsie Mmathulare Coleman, Chair PC on Economic Development
Admin
04 Jun, 2015
2015 Budget Vote 17: Social Development – address by Mr LB Gaehler, MP
Honourable Chairperson, Ministers and Members The United Democratic Movement supports this budget vote and in this regard, we would like to make the following comments. • The creation of a caring society is based on the willingness to provide the tools for achieving an inclusive society. This implies that life chances are partly detached, or de-commodified from social and economic origins and circumstances. • The core of the inclusive society is to create equal opportunities and equal access to services and infrastructure for specific groups such as unemployed and disadvantaged, disabled people, children and adolescents, older people and pensioners, ethnic communities and many others. • We need to grapple with the essential building stones for a caring society in order to achieve an inclusive society. In doing this, we must also strive to reach a stage where participation of society, in social, political and economic spheres while respecting diversity but deliberately empowering the disadvantaged and vulnerable. • We must underpin our conception of an inclusive society with education and family capital for us to sustain it. • Given the current demographics, economic and political pressure as well as financial constraints, welfare state reforms are on the political agenda everywhere in the developing world. The recent spate of missing children in particular children from poor families robes the nation of future leaders. It makes it impossible for society to invest in these poor souls for the future development of the nation. We must double the efforts in rooting out this barbaric act from our society. Both, the community and law enforcement agencies must work collectively as agents of change for the creation of a caring and inclusive society. Gender discrimination is a crucial factor in entrenching a caring and inclusive society in particular for women and girls who are vulnerable to all sorts of social and economic ills including human trafficking. A range of laws and policies and programmes have been adopted to promote gender equity. This is not only a political and constitutional priority but also a key developmental matter and central part of building a caring and inclusive society. I concede that there are, and shall always be complex and varied factors impeding realization of this noble goal, a caring and inclusive society, however, a combination of all efforts by all citizens can guarantee us a great success in this regard. Thank you
Admin
02 Jun, 2015
2015 Budget Vote 2: Parliament -address by Mr Nqabayomzi Kwankwa, MP in the NA
Madam Speaker and Honourable Members, A race to the bottom is currently underway in our Parliament. Today in this House, we engage and deal with our Nation’s challenges, less according to national interests and the need to create a better life for all, but more according to cheap political point scoring and vote maximisation at all costs, and mostly according to the primitive doctrine that might is right. This approach causes us to miss countless opportunities to use our People’s Boardroom as an important space in the public sphere for debates and contestation of ideas. As a consequence, we allow debates to degenerate into an orgy of insults and counter-insults; put bluntly, into an orgy of nonsense our nation can ill afford. We have to arrest this problem, if we are to bequeath to our progeny a vibrant Parliament that is a voice of the people, and not one that is thick with the wreckage of failure. Madame Speaker, Recently, I attended a Conference on Illicit Flows, Transfer Pricing and Tax Evasion in Malawi. While at the conference, we got an opportunity to attend the sitting of the Malawian Parliament and discovered the following. Parliaments of Malawi and Kenya always endeavour to give as much speaking time as they can – sometimes even more time – to the opposition than they do to ruling parties. The rationale behind this is that they believe in the principle that: “The opposition must have its say, while the ruling party will (ultimately) have its way”, (through obviously the use of its majority during voting time in times of disagreements). This does not by any means imply that the ruling parties are not given enough time to articulate their policies and programmes, but that opposition parties are also given ample time to articulate their alternative policy proposals and to scrutinize as well as constructively criticise the work of Government. When speakers run out of time, their presiding officers politely request them to wrap up and they give them a minute or two to do so. This greatly enhanced the dignity and decorum of their House. As a result, our counterparts were shocked to hear that Africa’s model democracy (South Africa) gives opposition parties 3 minutes speaking time during Parliamentary debates. They call it a joke! We have to increase the minimum speaking to 5 minutes in debates in order to give us an opportunity to contribute meaningfully to debates, which would enhance the decorum of the House. Madam Speaker, In conclusion, I believe there is scope for our Parliament to partner with Sister Parliaments on the Continent in the campaign against illicit financial flows, transfer pricing and tax evasion, as well as on other African programmes. The UDM supports Budget Vote 2. Thank you.
Admin
01 Jun, 2015
Message from the UDM President at the 41st Anniversary of the Inkatha Freedom Party
Address by UDM President, Mr BH Holomisa- MP Master of ceremonies, President of the IFP, Mr Mangosuthu Buthelezi, the leadership of the party, members and supporters Indeed, none amongst South Africans, people of the continent and the world over, can deny the immerse contribution that this wonderful party has made in the fight for freedom in our life time. You have made a great contribution to bring the kind of South Africa we all celebrate today, notwithstanding the fact that we still have a long way to go, collectively. Off cause the freedom you fought for is not yet felt and enjoyed by all citizens of the country including the members and supporters of IFP. The period between 1990 and 1994 was not well managed. Many role players in the fight against apartheid were not given the full role to play. The relationship between the current ruling party and the IFP was not good and this has robbed South Africans of a contribution that would have been made in crafting the developmental programme for the country. We went into 1994 as divided political parties in our isolated corners and could not learn from those with experience. However, we are happy that your contribution cannot be forgotten. President Mangosuthu, your decision to form and continue to guide the development and growth of this party was and remains one of the most important ones in the political history of this country. For that, we salute you. IFP, under your stewardship, has grown significantly and made numerous important contributions in shaping the political direction of our country. Your policy proposals cannot go unnoticed and in many circumstances has helped the country to sustain its democracy over the last 21 years. Your fatherly and high moral guidance in Parliament is a source of inspiration, continue to do it. The United Democratic Movement wishes you, your party, members and supporters a great evening and many more years to come. Thank you very much for allowing us to be part of history making. Thanks End
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26 May, 2015
2015 Debate on Budget Vote 1: Presidency address by Bantu Holomisa, MP
Hon Speaker and Members The United Democratic Movement supports this budget vote. Mr President, during the State of the Nation Address you declared the year 2015 as the “… year of unity in Action to Advance Economic Freedom”. However, what is not clear, is a common and simple programme that binds the entire society behind this vision. For instance, the Presidential Infrastructure Coordinating Committee’s work is not known by all citizens. We need a clearer road map of infrastructure development with more achievable targets, timelines and clear monitoring tools. To make matters worse, even the most celebrated National Development Plan does not enjoy the support of the ruling party’s main ally Cosatu. This sometimes causes unnecessary tensions between Labour and Business. Mr President, there is a growing culture of lawlessness that is increasingly characterising us as an unruly Nation that lacks discipline. Every day we witness citizens building homes in places not designed for human settlement, thus leading to multiple social and economic crises. Spatial development for both urban and rural areas requires proper coordination with the involvement of citizens to avoid cost of correcting uncoordinated development post effect. The UDM suggest that a Presidential Council on Sustainable Development with direct participation of the broader civil society be created. This approach will place citizens of the country at the centre of their own development as they seek to realise the vision of the country and promote a culture of ownership of its development direction. Central to the task of the council would be to consolidate and deploy the resources of the country towards an agreed to, development path. Many countries that have practiced this model have benefited significantly. It may be helpful to look again at the experiences of those countries like Canada. The current IDP system lacks aggressive people’s participation. Mr President, we have noted your response in this House about the release of the Marikana report. However, the UDM notes the pressure you find yourself in, given that your highest officials, right from the Deputy President and some Ministers were subject of the work of the commission. It is in the interest of all citizens of this country that you release the report without further delay. Its publication will not deter you from considering its findings. I thank you
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26 May, 2015
UDM sympathises with the Marikana Massacre victims and their families
The decision to take President Jacob Zuma to court by the family members, injured workers of the Marikana massacre and AMCU is the best action to force Zuma to release the findings of the investigation. As the United Democratic Movement, we are in full support of this decision and we hope he will realise the importance of the findings being made public as it is not just a report for the family and the injured miners but a closure of what happened to their loved ones on the 16 August 2012 who were victims in the hands of police while they demanded a better life in the work place. It’s been more than 4 weeks since Zuma received the report but up to now he has not made it known. To South Africans, this is a sign that government does not care about the poor. It is unfair to the victims who lost loved ones while others were brutally injured and now the North West police commissioner Zukiswa Mbombo is evacuating her office at the end of the month while the report has not been made public and she is one of the main state officials to answer to what happened on that day when police officers went berserk killing innocent souls for demanding their rights. Mbombo is not retiring but playing hide and seek, running away from what is in the report. This shows clearly that the delay by Zuma is a way of protecting those close to him and this is disgusting. Statement issued by UDM Secretary General, Bongani Msomi
Admin
22 May, 2015
ETolls is just money laundering scheme for greedy individuals
It should be remembered that when Parliament approved guarantees for staging 2010 World Cup, as per Fifa demands. These guarantees were intended among others to improve stadiums, road infrastructure in the host cities. At no stage did parliament or government implied that such an expenditure would be claimed back by the state through schemes such as etolling. What is coming out clearly here is that some comrades became greedy and saw an opportunity to use the already improved infrastructure to generate money for themselves. This is another money laundering scheme similar to Chancellor House/Eskom/ Hitachi deal which led to ANC cashing more than R50 million last year from bogus shares. As United Democratic Movement, we are disappointed everyday by the so called ANC government. South Africans voted for freedom not to buy freedom as we see today. This must be legally challenged as it is not acceptable at all. This is a wake up call not only for the Gauteng citizens but South Africans to keep eyes open when they are in front of a ballot paper next time. Statement by UDM President Mr Bantu Holomisa, MP
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21 May, 2015
2015 Budget Vote 19: Defence and Military Veterans – address by Mr BH Holomisa MP
Honourable Chairperson, Minister and Members The United Democratic Movement support budget vote 19 on Defence and Military Veterans. In appreciation of the work of the Defence Force Service Commission, which has been presented to this parliament previously and being privileged to be its member; I would like to appeal to the Portfolio Committee on Defence and Military Veterans, to convene a brainstorming session involving the Minister, Commission, Secretary for Defence and the Command element of the defence force. Such a session must consider the effectiveness or otherwise of the Defence Force Service Commission in particular with respect to the promise made to soldiers; that its powers will be equivalent to that of the Public Service Commission instead of being an advisory body to the Minister. It should be remembered that one of the burning issues at the time and continues to be, is that soldiers are not part of the Public Service Bargaining Council. The funding of this department has been a cause for concern for a long time. However, delays in processing the South African Defence Review make it difficult to resolve this critical matter. More effort must be towards the finalisation of the Defence Review Implementation Plan so that it can be presented to parliament within a period of three months. Further delays may necessitate the review of the defence operations both locally and abroad. In this regard, we believe that the security of South Africa is a priority in everything that our defence force is doing. I have, at pains experienced unnecessary delays in receiving feedback from the department on the reports we generate and submit in accordance with the mandate of the Defence Force Service Commission. These delays are due to the fact that the Minister and the Accounting Officer are frequently outside of the country. We call upon the Minister and Secretary for Defence, the Accounting Officer, to put moratorium on their frequent travelling outside of the country. I thank you
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