Archives

Eskom’s unit 2 at the Kusile power station in eMalahleni, Mpumalanga, has today been brought into full commercial operation status, to further stabilise the power system.

“This morning it was officially handed over to the generation business of Eskom from the Group Capital which was responsible for the building,” said the power utility on Thursday.

This means the unit officially moves to be part of Eskom’s generation fleet, contributing up to 800MW to the South African power grid, after undergoing testing and optimisation over the past 16 months.

“The commercial operation of unit 2 is a major milestone that signifies the progress being made by Eskom towards the completion of the Kusile Build Project, on which lie the nation’s best hopes to bring stability and ensure the security of electricity supply to power the South African economy,” said Eskom’s Group Executive for Capital Projects, Bheki Nxumalo.

Unit 2 is the second unit at Kusile to enter commercial operation, with unit 1 having attained the status in 2017.

According to Eskom, the construction, testing and optimisation activities on the remaining four units, some of which are currently providing intermittent power to support the grid, is progressing well.

Eskom said the commercial operation status ensures technical compliance to statutory, safety and legal requirements.

“This significant and major milestone marks the contractual handover of the unit from the principal contractors under the Group Capital Build project unit to the generation division.”

Eskom has also heaped praise on its team for their extreme dedication and working under challenging conditions during periods of load shedding and the COVID-19 restrictions.

The power utility said the team, together with execution partners, worked for long hours to ensure that testing activities are done thoroughly and successfully.

Kusile is the first power station in South Africa and Africa to use wet flue gas desulphurisation (WFGD) technology. WFGD is the current state-of-the-art technology used to remove oxides of sulphur (SOx), such as sulphur dioxide, from exhaust flue gases in power plants that burn coal or oil.

“Eskom is fitting WFGD to the Kusile plant as an atmospheric emission abatement technology, in line with current international practise, to ensure compliance with air quality standards,” the utility added.

Minister of Public Enterprises, Pravin Gordhan, has welcomed government’s commitment to provide R10.5 billion to finalise the Business Rescue Plan (BRP) and restructuring of South African Airways (SAA).

Minister of Finance, Tito Mboweni, made the commitment, when he presented the Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday.

“Failure to allocate the funds would have resulted in the liquidation of the airline at the cost of more than R18.5 billion. Further, the liquidation would have meant that SAA employees would have been worse off and received a maximum of approximately R32 000 per staff member, regardless of years of service, to the extent that there are funds available,” the Ministry of Public Enterprises said on Thursday.

Employees will only receive payment once the final liquidation and distribution account has been approved which can take up to 24 months.

“The Ministry believes that the completion of the business rescue process is the only viable alternative to a viable and sustainable national carrier – one which supports job preservation and the ability to bring the airline back from the brink to a position where employees, suppliers and business partners can continue to contribute to the South African economy and its integration into the global economy.”

The R10.5 billion will pave the way for the finalisation of the business rescue process and restructuring of the airline through the following activities:

• Appointment of an Interim Board;
• Appointment of an Interim Chief Executive Officer and Interim Chief Financial Officer;
• Implementation of a Social Plan – a training layoff scheme which will be facilitated by the Transport Education Training Authority in partnership with the Department of Labour and Employment;
• Selection of a suitable Strategic Equity Partner to strengthen the launch of the new airline;
• Settle the airline’s legacy debt, including voluntary severance packages to employees; and
• Begin preparations for the formation of a new customer-centric airline designed to be lean, technology capable, digitally modernised and agile to service all market segments.

The Department of Public Enterprises is engaging constructively towards the national interest objective of the formation of a new airline in the first half of 2021, which will be run in a professional and sustainable manner to support key economic sectors – including tourism, and solidify South Africa as an African gateway to international markets.

“The Ministry believes that the restructuring contained in the Business Rescue Plan for SAA is fundamental and will create a solid base for the emergence of a competitive, viable and sustainable national airline for the Republic of South Africa.

“The cumulative effect of these actions is that government will be partnering with the private sector in the launch and management of the new airline and relieving the financial burden from the fiscus,” the Ministry said.

The Business Rescue Plan, concluded in line with section 151 of the Companies’ Act, has made the following recommendations:

• A payment of a compromise dividend to the Company’s concurrent creditors of R600 million which would equate to approximately 7.5 (seven and a half) cents in the Rand) and payable over a three-years period;
• A payment of approximately R1.7 billion to aircraft lessors, which is an equivalent of six months aircraft rental payments, again, payable over a three-year period;
• The post-commencement creditors will be paid directly out of the working capital injection for the restart of the airline;
• The lenders, inclusive of PCF lenders, will be paid as contemplated in the budget announced by the Minister of Finance on 26 February 2020; and
• Retrenchments, estimated to cost R2.2 billion, are contemplated which will result in one thousand employees being retained by the Company and such retrenchments will be pursued through either the Leadership Consultation Forum or section 189 process of the Labour Relations Act.

The Plan contemplates the following:

• An initial working capital injection of R2.8 billion of which R800 million is for the payment of post-commencement creditors;
• Retrenchment costs of R2.2 billion;
• A provision for un-flown tickets of R3 billion required in the medium term and
• Payment to Creditors, other than Lenders, in the amount of R2.2 billion.

Given the present temperatures which give rise to a sweltering heatwave, the Department of Water and Sanitation in Gauteng has appealed to water users to be proactive when it comes to water conservation and avoid wastages.

The department warns that excessive usage of water could be detrimental to stabilising the system and acknowledges that water users hold a sway in keeping the system in a healthy state.

“Accordingly, communities must cooperate with municipalities to ensure that they are better placed to detect and report needless water losses.

“The department reiterates that Gauteng is not on the verge of experiencing water shortages but that there is a need to be cognisant that water resources are not infinite,” the Department of Water and Sanitation said in a statement.

The department says the iconic Vaal Dam declined to record lows this week and is in stark contrast to its last year’s levels amidst the few chances of rainfalls and sweltering weather conditions.

Even as the Vaal Dam persists to drop weekly, it is not at a point wherein the populous Gauteng faces prospects of a day zero.

The Vaal Dam is part of 14 dams of the Integrated Vaal River System (IVRS), which continues to sustain it.

Should a need arise for the dam to be replenished, other dams in the system such as the Sterkfontein and the Grootdraai will come in handy for that purpose.

Presently, the Vaal Dam hovers at 29.1%, down from 30.2% last week. By contrast, during the same week last year, it was just below the 50% mark at 48.4%.

Likewise, the levels of the Bloemhof Dam decreased this week as it dropped sharply from last week’s 86.2% to 82.0% this week.

Nonetheless, the dam is extremely resilient on account that is has not been below the 80% mark for some time. During the same time in the preceding year it stood firm at 80.2%.

For the second week in a row, the reserve Sterkfontein Dam in the Free State remained at 94.3%. In the same week last year, the dam was lesser but still strong at 91.5%.

Meanwhile, the Grootdraai Dam recorded a notch up this week after it remained unchanged at 75.9% for the past two consecutive weeks.

This week the levels of the dam went up to 76.0%, while last year at the same period it was in a stable state but comparatively lesser at 54.0%

One of the headaches of the IVRS is the Mohale Dam in Lesotho, which is racing down to unparalleled low levels despite remaining unchanged from last week’s almost non-existent levels of 2.9%. In the comparative week last year, it stood higher at 32.6%

Viewed in the same light as the Mohale Dam, the Katse Dam is in a quagmire as it drops week-on-week. However, this week it remains at 21.7% for the second subsequent week.

The current levels are lower when compared to the 13.5% it recorded at the same time last year.

Instrumental in balancing the system, the Integrated Vaal River System (IVRS) saw a drop from 55.4% last week to 54.7% this week. These levels are not remotely placed to those of last year at the same time when seen in the context of the 59.9% at which the system stood.

The number of detected COVID-19 cases is now 719 714 after 1 863 new infections were identified in the last 24 hours.

In Wednesday’s statement, Health Minister, Dr Zweli Mkhize, said 58 patients succumbed the respiratory illness, which pushes the death toll to 19 111.

Of the latest deaths, 18 are from the Eastern Cape, 12 from KwaZulu-Natal, 10 from the Western Cape, seven from Limpopo, six from the Northern Cape, three from the Free State and two from Gauteng.

“We extend our condolences to the loved ones of the departed and thank the healthcare workers who treated the deceased patients,” Mkhize said, adding that the recovery rate stands at 90%.

The Western Cape has 3 122 active COVID-19 infections, with a total of 115 431 confirmed cases.

Gauteng has a total of 227 833 cases, followed by KwaZulu-Natal with 122 624, while the Eastern Cape has 95 050 infections since the outbreak.

The Minister said the number of tests conducted to date is 4 752 596, with 25 721 new tests performed since the last report.

Globally, there have been 43 766 712 confirmed cases of COVID-19, including 1 163 459 deaths, reported to the World Health Organisation.

The South African Revenue Service (SARS) has welcomed the commitment made by the Minister of Finance Tito Mboweni to reduce the budget deficit and achieve higher economic growth.

The Minister made the commitment when he presented the Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday.

The 2020 MTBPS outlined a fiscal consolidation plan to limit the growth in government operational spending and support economic growth over the medium term as outlined by President Cyril Ramaphosa in the Economic Reconstruction and Recovery Plan.

The MTBPS states that the global economy is returning from the depths of its collapse in the first half of 2020, due to eased COVID-19 lockdowns, unprecedented as well as rapid policy support by central banks and governments globally.

Global growth is now projected by the IMF to contract by 4.4% in 2020, 0.8 percentage point higher than the June 2020 forecast.

South Africa’s real economic growth is expected to plummet in 2020 as seen in the downward revision of the GDP growth forecasts, primarily due to restrictions on economic activity to contain the spread of the COVID-19 virus.

“The economy was underperforming prior to the COVID-19 shock, contracting for three consecutive quarters before the lockdown. The domestic economy contracted by 16.4% in Quarter 2 of 2020, the biggest decline since 1960 – marking the fourth quarter of the recession in 2020. The IMF forecasted a contraction of -8% (2020), thereafter a growth of 3% (2021) for South Africa,” said the SARS in a statement.

In the 2019/20 financial year, SARS collected a net amount of R1 355.8 billion, against the Revised Estimate of R1 358.9 billion, resulting in a shortfall of R3.1 billion (-0.2%) and a growth of R68.2 billion (5.3%) from 2018/19.

The Printed Estimate for 2020/21 was R1 425.4 billion with a required growth of in tax revenue of 5.1%.

“This estimate was revised down in the June 2020 Supplementary Budget to R1 121.3 billion due to the COVID-19 pandemic. The revised Supplementary Budget estimate of R1 121.3 billion represented a contraction of R234.1 billion (-17.3%) against the previous year,” said the revenue collector.

In the June 2020 Supplementary Budget, government made provisions for taxpayers to alleviate tax obligation pressures induced by the COVID-19 pandemic.

A total of 252 398 taxpayers have made use of the relief measures with a total of R52.7 billion deferred as follows: R1.6 billion (PAYE), R33.0 billion (provisional tax), R19.2 billion (customs and excise) of which R18.4 billion is for alcohol beverages and tobacco producers.

As at 30 September 2020, SARS collected R518.8 billion, with a surplus of R9.3 billion (1.8%) against the June 2020 Special Estimate, and a shortfall year-on-year of R117.0 billion (18.4%) in nominal terms. All tax types recorded a shortfall. The major tax types performed as follows against the prior year: PIT Net (-12.0%), CIT Net (-24.9%), Net VAT (-15.0%).

Subject to available funding, SARS says it will continue rebuilding its enforcement capabilities and tools; enhancing its data matching capabilities and make more use of artificial intelligence.

SARS Commissioner Edward Kieswetter in the statement said: “Low real growth in the economy coupled with low inflation rates does reduce the revenue potential from taxable activities.  There is a close correlation between growth in tax revenue and growth in nominal GDP – which is really a measure of economic performance.”

Kieswetter added that improved tax collection and administration continues to be an important element in achieving fiscal consolidation, as SARS continues to rebuild its capacity.

As an organisation, the service’s near-term objectives include:

• Finalising the tax gap study in December 2020 to quantify the difference between how much tax should be collected and how much is collected.

• Remaining focused on international taxes, particularly aggressive tax planning using transfer pricing.

• Increasing enforcement to eliminate syndicated fraud and tax crimes.

• Continuing to use third-party data to find non-compliant taxpayers.

• Collecting PAYE pay-as-you-earn and VAT debt, and ensuring that outstanding taxpayer returns are filed and liabilities paid.”

Finance Minister Tito Mboweni faces a tough juggling act this afternoon, when he presents the 2020 Medium Term Budget Policy Statement (MTBPS) in Parliament.

The MTBPS will be his second budget presentation since the tabling of the Supplementary Budget in June, which was in response to the economy-crippling COVID-19 pandemic. It also comes on the back of the recently announced Economic Recovery Plan.

Early this month, the Finance Minister wrote to National Assembly Speaker, Thandi Modise, requesting the postponement of the mini-budget from October 21 to today.

In a statement, Mboweni made the request having taken into consideration the complex and unusual circumstances faced by the country due to the COVID-19 pandemic, which included the tabling of a Supplementary Budget.

The Ministry of Finance and National Treasury have had to adjust the approach and consultation of the budgetary process.

Econometrix (Pty) Limited director and chief economist, Dr Azar Jammine, speaking to SAnews, said the country might see tough austerities being imposed due to the country’s recent dramatic deterioration in finances.

“That means that the Finance Minister will have to retain the kind of dramatic parameters that were incorporated in the supplementary budget in June,” he said.

The problem, however, was that in June, Mboweni forecasted economic growth of -7.1%. It appears this might be forecast further down to either -8 or -8.5%.

“That in turn means government’s revenue growth will need to be revised downwards sharply, meaning that the shortfall in government revenue is likely to be greater than what was incorporated in the supplementary budget,” said Jammine.

In addition, he said, President Cyril Ramaphosa in his Economic Reconstruction and Recovery Plan stated that the country needed to provide further relief to unemployed people and extended the relief to them.

“There is a view that the relief has to be extended beyond January as well if we are to sustain some sort of recovery because people are taking a lot of strain,” he said.

“…Under those circumstances he will have to increase the budget deficit by probably about R20 billion over and above what was budgeted for in the supplementary budget.

“That doesn’t take into account the possible extra amounts that might have to be devoted to state-owned enterprises. We are unclear on that score because President Ramaphosa spoke about attracting strategic equity partners and we don’t know what that will take into account – will it come off the budget or will we rely upon other funding sources,” the economist questioned.

While some economic analysts have argued that increasing the budget deficit could be a cause for alarm and result in a large-scale sell off of government bonds and the rand, Jammine did not agree for two reasons.

The first is that the global mood around relief packages had softened enormously.

“I think the markets will be a little more forgiving of Minister Mboweni if he does increase the budget deficit from 14.6% GDP to something like 15 or 16%. This would mean a further increase in the public debit GDP ratio,” he said.

“My expectation is that of a slight increase in the budget deficit, but that will not cause excessive and undue alarm and it will not necessarily lead to rating downgrades.”

The government’s hand in this regard had been greatly strengthened by a series of events that speak to the state finally undertaking the structural reforms that are needed to improve the growth of the economy and its ability to raise revenue.

“We’ve a huge number of cases being brought to courts to fight corruption and state capture. We’ve also seen the government announce a big infrastructure investment programme with more details than any of the other ones,” he said.

Also, the state has passed laws that allow independent power producers to produce electricity and compete with Eskom.

“We’ve seen government announcing the launch of broadband spectrum at the end of March [and] we’ve seen the government committing itself to improving the capacity of the state. All these are positive moves in the direction of structural reform,” he said, adding that rating agencies observed such developments.

Minister Mboweni will table the budget at 2pm.

The Portfolio Committee on Basic Education has commended the Department of Basic Education for the work done to ensure that Grade 12 learners are ready for the upcoming National Senior Certificate (NSC) examination next week.

The NSC examination, to be written under COVID-19 regulations, is due to commence on 5 November and conclude on 15 December 2020. The results are expected to be released on 23 February 2021.

Committee chairperson, Bongiwe Mbinqo-Gigaba, said a lot of work was done in the background to ensure Grade 12s are ready to sit for the final examinations.

“We further note that 1 058 699 candidates have registered for the exams. This includes full-time and part-time candidates, as well as those candidates who were supposed to have written examinations in June this year, which were cancelled due to the outbreak of COVID-19. This is a mammoth task,” Mbinqo-Gigaba said on Tuesday.

She said during a portfolio meeting, the committee was assured by the Department of Basic Education and the Council for Quality Assurance in General and Further Education and Training (Umalusi) that the class of 2020 covered the full spectrum of the curriculum.

“This means that this class will be just as equipped to enter the world after school, as any other Grade 12 before them,” Mbinqo-Gigaba said.

Dwindling number of candidates registering for mathematics

The committee has, however, raised concerns regarding the dwindling number of candidates registering for mathematics, opting instead for mathematical literacy.

“It looks like our learners are running away from this. However, it then becomes difficult when they want to register for certain programmes at institutions of higher learning.

“The department said in response that the introduction of technical mathematics and technical physical science has contributed to lower registration rates for pure mathematics,” Mbinqo-Gigaba said.

Additional markers employed

The committee also heard that most provincial education departments (PEDs) have employed additional markers and invigilators, and acquired extra marking centres to cope with the higher number of candidates sitting for the examinations.

Umalusi informed the meeting that it has evaluated the department and PEDs’ states of readiness. Umalusi was also able to engage with the reports and evidence presented by the department and PEDs.

“Extreme effort was made by the department and the PEDs in relation to the restrictions brought on by the COVID-19 outbreak. Acceptable levels of readiness and related measures are in place to ensure the conduct of credible examinations by the department and PEDs. This is appreciated.

“Based on our observation and the reports on the state of readiness, Umalusi is satisfied that the department, through the nine PEDs, is ready to conduct the merged June and November 2020 examinations,” Umalusi assured the committee.

Mbinqo-Gigaba said the committee will closely monitor the examinations.

“We cannot but commend the department, PEDs and the education sector for the hard work they have done during extremely difficult times.”

President Cyril Ramaphosa says government is looking at establishing additional Special Commercial Crimes Courts in several cities, given the rise in commercial crimes and COVID-19 procurement corruption.

The President said this when he responded to oral questions in the National Council of Provinces on Tuesday.

“The rise in serious commercial crimes and incidents of COVID-19 procurement corruption have meant that we are fast-tracking the establishment of additional Special Commercial Crimes Courts, and increasing capacity of existing ones,” he said.

He said this after a SA Revenue Service COVID-19 project team conducted an investigation that has laid bare incidents of tax evasion in relation to COVID-19 procurement.

As at end of September 2020, there were 307 cases, with an estimated tax revenue loss of R300 million.

There are 139 companies referred for potential tax evasion investigation.

“We are looking to establish additional Special Commercial Crimes Courts in Polokwane, Mbombela, Mahikeng, Mthatha and Mangaung.

“A lot of work is happening to ensure that we handle all these COVID-related cases,” the President said.

Government, he said, has responded swiftly and decisively to allegations of corruption in the award of COVID-19 related contracts.

Measures taken includes the establishment of a fusion centre, which brings together nine law enforcement agencies to share information and resources, and ensure a coordinated response.

“On 23 July 2020, I issued a proclamation to the Special Investigating Unit to investigate COVID-19 related maladministration and unlawful conduct in any State institution during the national state of disaster.

“The SIU is currently looking into 932 matters under the issued proclamation, and all these matters are at different stages of investigation.

“The SIU has, to date, provided me with two interim reports, which outline progress in the investigations, including where investigations have been finalised.

“The reports of SIU investigations will be made public once all the necessary process have been completed and there is no risk of jeopardising ongoing investigations,” said President Ramaphosa.

President Cyril Ramaphosa has told Members of Parliament during a question and answer session that rumours of an imminent move to lockdown alert level three this week are not true.

“I don’t want to be alarmist. I don’t want our people to be alarmed with rumours such as that we are going to level three.

“That is simply not true and I want to assure everyone that that is not true. If it ever gets there, I will be the one to advise the nation where we are and where we are going. For now, all we need to do is to adhere to our preventative measures – wear your mask,” he said on Tuesday.

This comes after reports of people attending large gatherings, in some cases violating lockdown regulations by not wearing masks or observing social distancing.

The President said he had received a report from the medical advisory group. The team of advisors has been analysing the rate of infections.

“I received a report today, and I want to look at it very closely,” he said, adding that it is only “in the coming days, possibly next week”, that he might take the opportunity to address the nation about what needs to be done in light of the circumstances.

“With regards to these rumours that are going around [regarding the lockdown level]… I would like to say that we are continuing to actively analyse and manage the situation, with the assistance of the medical advisory group, where they are analysing the incidence of infection as it unfolds throughout the country,” the President said.

He said, however, that government is observing signs that are of concern.

“As South Africans, we are not all adhering to the protective measures such as wearing our masks and washing our hands.

“That is worrying and we must continue to … make sure that we adhere to the measures that have been placed on us by the medical advisory committee…

“COVID-19… is a serious condition and we need to adhere to the safety measures, particularly now.

“As we move towards the fun period of December where people will let their guard down, this is what is of concern and we are watching that.”

President Cyril Ramaphosa says government is working towards ensuring that there is a model, gender-based violence one-stop centre in all areas that have been identified as hotspots.

The President said this when he responded to oral questions from Members of Parliament in the National Council of Provinces on Tuesday afternoon.

“We are focused on efforts to ensure that there is a model GBV one-stop centre in each of the identified 30 hotspot areas. These centres provide multidisciplinary services such psychological and health support.

“They also provide investigation and prosecution but more than that, they also are becoming places of assistance at an economic level for women and help with housing problems as well,” he said.

The Department of Public Works and Infrastructure has allocated several properties around the country for use as shelters of safety for victims of gender-based violence.

There are four in Tshwane, six in the Western Cape and two in Johannesburg.

Additional properties are being assessed in other areas, the President said.

“We are therefore working to expand the Khuseleka one-stop centres in the first phase in Cape Town, Sol Plaatjie Municipality, eThekwini, Mangaung, Ehlanzeni, Tshwane and Johannesburg.

“In the second phase, we will identify buildings in the Eastern Cape, North West and Limpopo to enhance the existing Khuseleka shelters.”

The Khuseleka One-Stop Centres, which will be open 24 hours a day, provide services such as trauma counselling and psychological support, healthcare, police services, legal assistance and shelter for victims of abuse.

The name ”Khuseleka” is derived from the Zulu word which means protection.

The President said as the safe shelters are being expanded, government has developed the Victim Support Services Bill to enhance legislation to focus on victims of crime and violence.

The draft Bill has gone out for public comment and the Department of Social Development is consolidating the inputs received from the public.

“The Bill is victims-centred and touches on the importance of state-owned properties and the accreditation of providers of sheltering services. This in many ways will ensure that service providers are qualified to provide professional services to survivors,” he said.

COVID-19

“As part of our response to the Coronavirus pandemic, each Minister and Deputy Minister has been allocated to a district to champion the implementation of the COVID-19 prevention and management strategies and to support programmes to end gender-based violence.

“As part of this, each municipality is called on to develop and support community capacity to deliver gender-based violence prevention interventions.

“This should be implemented through training community level activists as well as volunteers and GBV services organisations to roll-out prevention programmes.”