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9 June 2008

Programme Director
National Energy Regulator of South Africa (NERSA) Chairperson, Mr Collin Matjila
Minister of Minerals and Energy, Ms Buyelwa Sonjica
Minister of Public Enterprises, Mr Alec Erwin
Gauteng Premier, Mr Mbhazima Shilowa
Chairperson of South African Local Government Association (SALGA)
Mayor Amos Masondo
Distinguished guests, friends
Ladies and gentlemen.

I thank you for inviting me on this winter morning to the 2008 Electricity Distribution Maintenance Summit. I believe this summit is a vital platform to review outcomes and resolutions of the 2003 Electricity Summit and also provides us with a space to formalise new targets that involve the participation and inputs of all stakeholders in business, government, labour and civil society.

Focus of Summit
Our role is clearly to "ensure the Electricity Distribution Industry (EDI) is ready to deliver and perform to meet the expectations of customers, the needs of the economy, and the goal of universal access to electricity". This Second EDI Maintenance Summit is indeed important given the challenging moment our country finds itself in terms of electricity supply and distribution. While our socio-economic progress has been deservedly praiseworthy, on the other hand this record economic growth and accelerated electrification process has placed a strain on our energy capacity to put up with rising demand.

Progress made since 2003 Summit
Nevertheless, I am glad to announce we are making significant progress to marshal our collective strength to organise and implement a national response plan. Furthermore, I learn there are already structures to respond effectively to the electricity emergency, structures such as the JPWG and the National Emergency Response Team (NERT) which comprises a partnership between business, labour and other social constituencies.

In this regard, I want to thank the summit partners that have a material interest in getting us back on track. I thank Department of Minerals and Energy, National Energy Regulator of South Africa, EDI Holdings, Department of Public Enterprises, Department of Provincial and Local Government, South African Local Government Association, Amalgamated Municipal Electricity Undertakings (AMEU) and Eskom.

In the background of resolutions adopted at the 2003 summit, the outcomes of the 2007 Energy Summit and the 2008 National Economic Development and Labour Council (NEDLAC) Summit, I trust and am confident we are now able to focus on the kinds of conservation programmes we probably should have been implementing years ago if electricity had not been kept artificially cheap to attract investment and empower the masses of our people.

We also need to ensure that, in addition to Eskom's massive investment programme, independent power producers and co-generators are able to enter the market and contribute more to our supply than before.

Questions to Resolve
At the same time, our deliberations and implementation plans have to address the question highlighted by the ANC presentation to the National Electricity Summit which cautions that "The emphasis on attracting the private sector to get into the electricity generation sector should be debated within the context of the state having the primary responsibility of providing affordable energy to the nation, i.e., the principle of universal access to energy…accessibility and affordability versus a profitable sector".
I would add that deliberations of this summit with regard to maintenance of EDI infrastructure should therefore be located in a framework of ensuring reliability of supply enhances sustainable social and economic development.

EDI and Accelerated and Shared Growth Initiative for South Africa (AsgiSA)
I am glad to learn that as part of making sure that the challenge of non-optimal maintenance and investment in EDI infrastructure is addressed, we have assigned EDI Holdings within the AsgiSA programme to commission a study that will come up with concrete proposals and would therefore like to call upon all the stakeholders to work closely with EDI Holdings to ensure the project is completed soonest.

Of course, this will be complimentary and should be aligned to the various audit reports and recommendations that National Energy Regulator of South Africa (NERSA) has conducted over the past five years and the resolutions taken at the last EDI Maintenance Summit held in 2003 all of which, require urgent implementation to help resolve the challenge of infrastructure maintenance and investment.

Challenges
The fact that NERSA reports a backlog of infrastructure maintenance of over seven billion rands (R7 billion) accumulated over the past ten years or so and that the figure is increasing every year, should be cause for concern to all of us.

We are called upon to respond effectively and appropriately to this unacceptable situation and it is a situation that demands urgent attention if we are serious about adopting measures leading us "towards a sustainable electricity distribution industry". Now more than ever, our country needs a sustainable and consolidated electricity supply industry particularly the EDI.

As the President stated in this year's State of the Nation Address (SoNA), if we are to implement the Apex of Priorities, in "the further acceleration of our economic growth and development (there has to be a) speeding up (of) the process of building the infrastructure we need to achieve our economic and social goals".

Policy Foundation
Fortunately, there is a solid foundation already laid down for us to come up with lasting and sustainable solutions.
This includes
* the restructuring and consolidation of the EDI into six wall to wall REDS public entities governed by the Public Finance Management Act (PFMA) and led by EDI Holdings and regulated by NERSA
* the Energy White Paper of 1998 and
* the Blueprint of EDI Reform of 2001.

Conclusion
I hope therefore this summit will utilise these policy bases to make sure that indeed the EDI is consolidated and taken to an even healthier energy state. A healthier state characterised by the ability to ensure affordable, accessible and reliable supply of electricity. This will in turn go a long distance to ensure shared economic growth and a qualitatively improved life for all our people.

I wish you well in all your deliberations.
Thank you.

Issued by: The Presidency
9 June 2008
Source: The Presidency (http://www.presidency.gov.za)