News in South Africa 30th November:

1. Eskom’s power station shut down plan:

Eskom plans to decommission and repurpose coal-fired power plants at Camden, Hendrina, and Grootvlei at an estimated $2.6 billion (R44 billion) for the three.

Load shedding back at stage 4
Image taken by: Pixabay

This follows the government decommissioning and repurposing of its oldest power station Komati in Mpumalanga, with the help of a $497 million (R9 billion) concessional loan facility from the World Bank.

Responding to a parliamentary Q&A, the minister of Public Enterprises, Pravin Gordhan, said that the repurposing of coal-fired stations is in line with Eskom’s Just Energy Transition Strategy to shift toward green energy.

“Repurposing of the retired capacity will mean replacement with renewable generation capacity while considering the economic, social, and environmental challenges of the transition,” said Gordhan.

In the next 10 years up to the end of 2032, seven stations, including Komati, are expected to be fully shut down, with units at a further two stations ending operation, said Gordhan. Eskom does not yet have clear-cut plans for these stations, however.

He added that funding for further shutdowns is anticipated to come from a combination of development finance institutions, climate funds and the private sector.

Serving since 1961, the Komati Power Station marked the beginning of a shift away from ageing coal-fired fleets when it was officially shut down late last month on 31 October – removing a final 114MW from the grid.

Shift to renewables:

Shifting away from coal has raised the eyebrows of those who bank on still being a reliable and plentiful power supply. Minister of Mineral Resources and Energy Gwede Mantashe said that moving to renewables will require a careful balancing act informed by the country’s circumstances at the time, capabilities and necessity for energy security.

Earlier this month, finance minister Enoch Godongwana said that the country’s energy transition would not be a full-scale abandonment of existing electricity sources – but rather a phasing out over time.

2. Eskom guards steal diesel:

Eskom says that two guards employed by a security company contracted by the utility to protect the Port Rex Power Station in East London were arrested on Monday for stealing diesel.

The suspects were apprehended while on duty at the gas turbine power station, a few days after Eskom laid criminal charges against them.

Eskom said the 5,863 litres of diesel the perpetrators allegedly helped steal was valued at approximately R145,930.

The utility explained its internal investigations supported by security company Bidvest Protea Coin and the police established that the arrested contract security guards permitted a vehicle to collect the stolen diesel from the site during night shifts.

They were then paid for their misdeeds in return.

Eskom said the two suspects would appear in the East London Magistrate Court on Wednesday, 30 November 2022.

Eskom general manager for security Karen Pillay called it “appalling” that people entrusted with safeguarding Eskom’s infrastructure would resort to “such acts of malfeasance.”

“These arrests are another significant step in our fight against crime in Eskom, and we shall continue in our pursuit to ensure that the perpetrators face the full might of the law,” Pillay said.

Eskom said further investigations were underway to identify other suspects.

3. Minor budget allocation for NHI:

Finance Minister Enoch Godongwana says the 2023 Budget to be tabled in February is unlikely to have a substantial focus on the National Health Insurance (NHI) and will focus on overcoming service delivery backlogs in the present system.

The NHI Bill is being processed by the National Assembly, which hopes to complete deliberations before Parliament rises next week. The NHI emerged as an ANC conference resolution more than a decade ago. But while there is a Bill in Parliament, the Treasury has yet to provide details on how the NHI will be financed.

In reply to a parliamentary question from DA MPs Michele Clarke and Lindy Wilson, Godongwana was frank that little work had been done on the financing but stressed that full implementation was still some way off. A more likely scenario was a gradual phasing in of some benefits over time. He said: 

The need for and timing of further updates to the NHI costing model will be determined by practical progress with NHI, spending patterns, and the timing of the legislative process. Further cost modelling will need to be informed by further development of the NHI benefit package, healthcare utilisation trends and projections, and unit costs.

Godongwana also cautioned that “the cost model will not automatically translate into budget allocations as these would have to be made as part of the budget process which will take into account the macro-economic environment and fiscal space.”

Since 2020, Treasury has been shifting funds allocated to the NHI to other uses, citing slow spending. In the February budget, the NHI was hardly mentioned. The NHI Bill states broadly that the system will be funded by taxes such as personal income tax and VAT. Treasury has been wary of raising taxes in the current circumstances, which include a weak economy and high personal tax rates. Increases in VAT are particularly politically unpalatabl

4. Sars new travel system:

The South African Revenue Service (SARS) is piloting a new traveller declaration system at Durban’s King Shaka International Airport. All travellers leaving or entering South Africa will eventually need to complete this declaration, but, for now, it’s voluntary.

SARS says it is on a mission to strengthen its controls to detect and deter illicit financial flows. The revenue service has set its sights on the country’s ports of entry as a frontline in this fight, recently launching the South African Traveller Management System (SATMS), which makes it “easy and simple for travellers to comply with their legal obligation.”

The SATMS’ testing phase officially began on Tuesday at King Shaka International Airport, following a delay brought about by concerns from South Africa’s tourism industry, and a change in the pilot venue from Johannesburg to Durban.

The new system is a web-based application that enables travellers entering and leaving the country to pre-declare goods purchased, received, or otherwise acquired and pay applicable taxes. The declaration is currently available for completion pre-arrival or pre-departure on a voluntary basis. In the meantime, familiar manual declarations – the TC-01 form – are still available at King Shaka International Airport and will likely serve as a backup method going forward in case of technical glitches.

SARS hopes that the SATMS, once tried and tested, will be rolled out at other airports across the country and, eventually, to all ports of entry by 2024.

“Our initial implementation plan will be within the airport environment but, obviously, from a broader perspective [it’s] to ensure that [it’s at] at all our ports of entry, land, sea, and air,” said SARS’ Cassius Sinthumule during a presentation on the SATMS earlier in November.

5. Transnet – no southern rail:

Proposals to Transnet by automotive and other potential customers for the state-owned company to develop the southern rail corridor to the Eastern Cape – to reduce dependence on the Port of Durban in KwaZulu-Natal – appear unlikely to result in this corridor being developed any time soon.

Transnet Freight Rail (TFR) spokesperson Dikatso Mothae said the increase in rail capacity from Gauteng to the Port of Port Elizabeth will depend on the funding being made available.

Mothae said Transnet has spent R9 million on a prefeasibility study for the projected capacity ramp up on this route, and that the funding required for the infrastructure alone is about R1.6 billion.

Hill said the company is transporting almost 100% of the Ford Ranger units it is producing for the export market by road.

He added that the rail link is a very important and integral part of the development of the Tshwane Automotive Special Economic Zone (TASEZ), which was developed in tandem with Ford’s $1.05 billion (R15.8 billion) investment in its local operations and supplier tooling in preparation for the production of the new Ranger.

Mothae said TFR has provided Ford with existing rail capacity to the ports of Port Elizabeth and Durban, but that it requires more capacity to the former in line with the increase in capacity at its Silverton plant.

Mothae said the increased rail capacity requires significant investment into the rail network as well as the acquisition of specialised rolling stock.

She said Transnet has had discussions with Ford, the Industrial Development Corporation (IDC) and government on possible funding and operating models for this capital intensive process.

All information sourced from articles posted by: BusinessTech, MyBroadband, Fin24, Business Insider, and Moneyweb.

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