Cyril tackles elephant in room

President Cyril Ramaphosa at SONA2020 in the National assembly.
President Cyril Ramaphosa at SONA2020 in the National assembly.

Financially viable municipalities may now procure their own power from independent power producers, President Cyril Ramaphosa said on Thursday.

Delivering his state of the nation address  — delayed for more than an hour by interjections from EFF MPs  — the president announced a list of seven measures to rapidly increase the capacity of energy generation outside Eskom.

In a speech that pulled no punches on the power crisis, problems at other state entities, slow economic growth and soaring government expenditure, Ramaphosa  said load-shedding was unavoidable but it must be undertaken in a manner that is predictable and minimises disruption  to business and households.

“We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” Ramaphosa said.

Municipalities such as the City of Cape Town, business leaders and, lately, the ANC, backed a plan to allow municipalities to be less reliant on Eskom.

“Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation in our country,” Ramaphosa said.

As part of Ramaphosa’s planned steps for the state to become less reliant on the troubled power utility, he said that the Integrated Resource Plan of 2019 would be implemented to allow for the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.

“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months of approval,” Ramaphosa said.

He said the government  would allow more independent power producers to supply energy to the grid.

Though the government would effect a decrease of reliance on Eskom, Ramaphosa said  it had  worked on a social compact that seeks an “efficient, productive and fit-for-purpose Eskom that generates electricity at affordable prices for communities and industries”.

But to do that, Ramaphosa said, it would require a drastic reduction of costs and an effort to reduce Eskom debt.

This would include the review of irregular contracts as well as inject fresh capital where needed.

The government had also decided to establish a sovereign wealth fund as a means to preserve and grow the country, Ramaphosa said.

He did not provide details on where the money for such a fund — which is likely to be controversial  — would come from.

Ramaphosa also confirmed that the government was proceeding with the establishment of a state bank to extend access to financial services to everyone.

He said finance minister Tito Mboweni would provide details on these two initiatives in his budget speech in two weeks’ time.

Mboweni  would also announce a series of measures to reduce government spending and improve its composition.

The president recognised that the government needed to fix its public finances and that it was  not possible for it to continue along the same path or to remain standing still.

“Low levels of growth mean that we are not generating enough revenue to meet our expenses, our debt is heading towards unsustainable levels and spending is misdirected towards consumption and debt-servicing rather than infrastructure and productive activity,”  he said.

The government was engaged with labour and other stakeholders on measures to contain the public wage bill and reduce wastage, he said.

“Efforts to reduce government spending, prioritise resources more effectively and improve the efficiency of our tax system are important but insufficient contributions towards stabilising our public finances.

“Achieving sustainability will ultimately require us to address structural challenges in the economy that raise the cost of living and doing business.”

The government will work with the auditor-general to reduce irregular expenditure while the Treasury and the Reserve Bank are working together to reduce pressure on business and consumers.

Ramaphosa said the government would be undertaking far-reaching economic reforms, including those contained in the paper produced by the Treasury.

A fundamental overhaul of Durban port — the third-largest in the southern hemisphere — would be undertaken to reduce delays and costs.

Ramaphosa said SA was facing a stark reality as its economy has not grown at any meaningful rate for more than a decade and the rate of unemployment is deepening.

He also said mobile operators like MTN, Vodacom and Cell C would soon have to give free data, discounts and airtime to poor households.

In line with these new regulations being worked on by the competition authorities, mobile operators would  have to allow free access to educational and other public interest websites.

He said the market inquiry into data services was the basis for measures to reduce costs to consumers.

Ramaphosa said the reduction to the cost of data was an important step “to improve lives, bring people into the digital economy and stimulate online businesses”.  

He said digital economy would become a driver of growth and a creator of employment.

But for this to succeed, Ramaphosa said there must be the availability of high demand spectrum to expand broadband access and reliability.

“The regulator, Icasa, has undertaken to conclude the licensing of high demand spectrum for industry via auction before the end of 2020,” Ramaphosa said.

The president also said a new smart city would be developed in Gauteng’s Lanseria area in the next decade where up to 500,000 people were expected to reside.

Ramaphosa also announced a new science and innovation university would be established and located within the Ekurhuleni metro municipality.

Ramaphosa’s  address was delayed by more than an hour as EFF MPs demanded the axing of Pravin Gordhan and the removal of FW de Klerk from parliament.

In a move reminiscent of the Jacob Zuma era  in parliament, EFF leader Julius Malema led his 44 member caucus in disrupting Ramaphosa’s address as they refused to allow him to deliver his speech until he fired his public enterprises minister, whom it blamed for Eskom’s  load-shedding crisis.

Malema and his MPs also wanted parliament’s presiding officers, National Assembly speaker Thandi Modise and National Council of Provinces  chair Amos Masondo to ask De Klerk to leave parliament as he had refused to accept that apartheid was a crime against humanity, as declared  by the UN.

After almost an hour of filibustering punctuated by frivolous points, Modise unexpectedly adjourned proceedings and EFF MPs immediately chanted “De Klerk must go, Pravin must go”.

When proceedings resumed  20 minutes later, Malema and his MPs staged a walkout, declaring that this will define their relationship with Ramaphosa for the next five years until he fired retained Gordhan in his cabinet.

DA leader John Steenhuisen later proposed that all EFF MPs be referred to parliament’s powers and privileges committee for disciplinary proceedings as they had violated the legislature’s rules by preventing it from performing its constitutional functions.

All parties in parliament, except the African Transformation Movement, supported Steenhuisen’s proposal. — BusinessLIVE, TimesLIVE