Chairperson, Ministers, hon members, good afternoon. Reliable, affordable energy supply is the lifeblood of a South Africa seriously engaged in the daunting task of reconstructing and developing itself. The centrality of the energy sector in the development of this country should never be underestimated. The starkness of this fact has been sharply brought to the nation's attention by the disruptions and failures that afflicted our fuel and electricity supplies in the recent past - and I'm glad the Minister alluded to this.
Who can forget the general panic and long queues at inland filling stations when this sector faced problems at several refineries? Who can forget the crippling blackouts and brownouts that forced a rolling, systematic load shedding intervention on a bewildered nation? These failures came at a very high cost to the nation. I want to quote the March to May 2009 edition of Mining:
The unprecedented levels of load shedding across the country in January 2008 brought into sharp focus the fragile balance between electricity demand and supply.
It goes further to say:
A supplementary damaging outcome was a more than 25% drop in mining GDP, which effectively halved the country's economic growth rate from 5% in the fourth quarter of 2007 to slightly more than 2% in the first quarter of 2008.
Need we say more? Minister, the DA would thus like to commend you and the department on the separation of energy and mining into discrete portfolios. The DA has long called for such a decoupling, and we believe that this is an important first towards the necessary restructuring of the energy sector. This step will place responsibility and accountability where they belong and sharpen the focus of the Ministry and the department with regard to deliverables in the strategic plan. According to the department, the state organisational structuring is to be finalised by the end of August 2009. We welcome this sense of urgency. We also look forward to the speedy appointment of an acting director-general for the Department of Energy, and other critical appointments to set up the new department. However, we would like to urge that once the appointment of the acting Director-General of Energy has been done, he or she should be replaced as quickly as possible with a permanent appointee, as should be the case with all the other funded vacancies in the department. We further urge that filling these posts should be based on merit, that is competence, professionalism and even potential where necessary. However, political party affiliation should not be a consideration.
The new Department of Energy has a golden opportunity to do things right the first time. Let us not squander this chance for political expediency and opportunism. Let us put the right person in the right job, to establish an effective and professional department. This should be achievable since a huge amount of the energy budget has been allocated to staffing, and the department expresses in these terms, and I'm quoting here from the Budget Vote: Programme 5 - Hydrocarbons and energy planning:
Expenditure is projected to continue to increase over the MTEF, Medium- Term Expenditure Framework, period from R45,9 million in the 2008-09 financial year to R64,1 million in the 2011-12 financial year, at an average rate of 11,8%. And this is the important part:
This increase is driven by rising expenditure on compensation of employees, which grows at an average annual rate of 16,1% over the MTEF period as the energy planning subprogramme builds human resource capacity for implementation of the National Energy Fund, 2008.
We agree that employees should be well compensated for their contribution. Our responsibility is to ensure that the South African taxpayer also gets the appropriate return on that investment.
One cannot speak of energy in this country without reference to Eskom and coal, and I'm glad the Minister has done that too. Eskom is a dominant entity in the energy sector, and some would say "domineering". [Laughter.] In fact, a very big slice of the energy budget is earmarked for Eskom activities. We await with trepidation Nersa's response to Eskom's application for a 34% tariff increase. As we speak, many of our people, particularly in the townships, are deeply in debt as they struggle to keep up with their monthly electricity bills. A 34% increase, on top of the 27,5% levied not so long ago, is certainly bound to make the situation worse.
Ruri ruri bagaetsho, fa Nersa e ka lebala bohuma le mathata a a aparetseng borakgadi, bomalome, bokoko, borangwane le baagi ba bangwe ba Aforika Borwa fa e sekaseka kopo e ya Eskom, gona re tla bona masetlapelo. (Translation of Setswana paragraph follows.)
[Surely, ladies and gentlemen, if Nersa disregarded the plight of our aunts, uncles, grandmothers and other South African citizens when it considered Eskom's application, then the worst is still to come.]
Coal is responsible for the production of more than 80% of South Africa's electricity. Owing to its high greenhouse gas emissions and its potential for significant environmental degradation throughout its value chain, the contribution that coal makes to energy production must be scaled down. And we've heard the Minister refer to that.
Carbon capture storage technology should be part of our energy planning, both for coal-fired power stations and other carbon-intensive industrial processes.