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The Department of Works and Infrastructure says the city’s electricity supply needs to be reviewed to ensure local governments can be held accountable. about their failure to pay the bills and guarantee the necessary production capacity for the people.

The ministry last week released the document for Phase 2 of the National Infrastructure Plan 2050, detailing the path the government will take in implementing the country’s major infrastructure projects. himself in the next 30 years.

One of the biggest problems the country’s development faces is the difficulty for cities in collecting money owed to them by customers, the department said.

This prevents municipalities from paying their creditors, which affects their ability to provide electricity and water to households and residents, resulting in service failure , he declared.

At the end of 2021, customers owe the cities Rs 232 billion, equivalent to 12 months of revenue from these services. The Department said that more than three-quarters of the debt is over 90 days old, so it is difficult to collect.

Meanwhile, municipalities owe their creditors Rs 76 billion over the same period, or Rs 30 billion more than customers (counting customer debt less than 90 days only).

“The debt situation is getting worse every year. For example, the city’s debt to Eskom increased by 250% from 2017 to 2021,” he said. At the same time, customer indebtedness increased while assets and services deteriorated.

The ministry attributed most of the decline to poor governance and inadequate technical and managerial capacity. This especially affects the supply of electricity and water – something that has been highlighted in the current electricity and water crisis facing many centrally-run cities.

Electricity is changing

In particular, electricity has had a heavy impact on residents. In addition to the load reductions set up by Eskom, which left millions of South Africans in the dark for hours, residents also suffered from higher electricity prices than inflation. Eskom has asked for a sharp increase in 2023 – to 32% – which will always be reduced to the city tax rate.

Cities won a Supreme Court victory this past week when the courts overturned energy regulator Nersa’s method of calculating increases, but DPWI believes more needs to be done.

The Phase 2 plan includes a major overhaul of how cities self-govern the business of electricity, calling for a new licensing regime.

The department said a city’s ability to operate as a distributor is conditional, and the city must obtain a license to operate with serious consequences attached. “The conditions for the distribution unit to obtain and maintain a license to operate will be clarified, with important consequences such as loss of the license if the conditions are not met,” he said.

“If a city loses the right to operate the electricity distribution network, it must contract with an approved operator.”

The department said licensing conditions will include strong financial transparency and technical performance reporting requirements.

This will lead to consolidation of the electricity distribution business over time through the establishment of dedicated power distribution companies serving multiple centrally-run cities.

“The process will be accelerated through the use of financial incentives that link access to financing for infrastructure upgrades with performance,” the ministry said.

He said that over the next three years, a dedicated professional group will be established in Nersa to drive improvements and efficiency reforms in the city’s electricity sector through the implementation of a trusteeship regime. effective rights.

Business licenses are expected to be implemented in fiscal year 2023/24, with the first cases of revocation and transfer of licenses from centrally-run cities to other entities in the same area. a year.

In the meantime, the Department expects five dedicated power distribution companies to be established by 2025, meeting acceptable standards for financial performance, reliability, financial management. property and investment.

Bloomberg reported last week (October 21) that the 142-meter superyacht Nord anchored on Thursday, October 20 and departed for South Africa from Hong Kong, and is expected to arrive in Cape Town on 9 November

Hill-Lewis said he had written to the Minister of International Relations and Cooperation, Dr Naledi Pandor, asking him to intervene to block the ship’s entrance and asking Mordashov not to allowed to enter this country.

“To our knowledge, Mr. Mordashov is on board and intends to enter South Africa via the port of Cape Town. If that happens, Mr Mordashov – and his luxury yacht – will be treated as a guest of the state of South Africa,” said the mayor of Cape Town.

The Cape Town mayor said that if the yacht is allowed to dock in South Africa, it would pose a moral crisis for the country and damage its reputation and standing as a peace-loving nation.

He added that South Africa has a moral duty to do what it can to protest unjust war, state terrorism, and the gross violation of human rights.

“The international community has recognised Russia’s invasion of Ukraine and its annexation of four areas of Ukrainian territory by force as illegal,” he said.

“Clear evidence exists for war crimes and crimes against humanity having been committed by the Russian state against the Ukrainian people, including deliberate attacks against civilian targets, massacres of civilians, torture, and the rape of women and children. Many thousands of people have died, and many more have had their homes destroyed and their lives torn apart.”

Mordashov is the main shareholder and chairman of Severstal, Russia’s biggest steel company. The steel industry is of important strategic importance to the Russian government and to the Russian war effort.

He is also the chairman of the company Severgroup, is one of the main shareholders of Bank Rossiya, of which he personally owns a significant portion, the mayor said.

“After Russia illegally annexed Crimea, Bank Rossiya actively expanded in the region, opening branches in Crimea and Sevastopol, forcing the economic integration of the Ukrainian territory into Russia. As a result, Mr. Mordashov personally benefited financially from illegal activities,” Hill-Lewis said.

The call for more days off comes after it was realized that Christmas Day would fall on a Sunday this year – meaning South African workers would only be entitled to 11 out of 12 paid public holidays. to which they are entitled under the Holidays Act 1994

Under section 2(1) of the Act, ‘where a public holiday falls on a Sunday, the following Monday shall be a public holiday’.

However, the Monday after December 25, 2022 is already a public holiday (goodwill day), which means that workers do not benefit from 12 public holidays this year as the two will fall on the same day. a day.

According to the law firm Bowmans, the declaration of a holiday was fully within the sights of the President-elect at the time by declaring it in the Gazette under Section 2A.

This raises the question of whether December 27 should be declared a public holiday, and if so, how this will affect employee pay.

Depending on how a company structures its workday, a Fedusa appeal could result in three costly days for employers in December 2022.

Impact on employee compensation

Bowmans notes that this is as important as the Conditions of Employment Act No. 9 of 1997 (BCEA). BCEA discusses how employers should pay employees who work on Sundays and public holidays

Law firm says under BCEA employers must pay employees working on Sundays urgently double pay for every hour worked – unless the employee normally works Sunday – in which case the worker receives one and a half times the wage for each hour worked.

In addition, the BCEA stipulates that an employer can only require an employee to work on a public holiday if the employee has agreed to work. When such an arrangement is made, workers are typically affected in one of two ways:

If the holiday falls on the day on which the worker is expected to work, then the worker is entitled to be paid at least twice the standard daily wage or the standard daily rate plus holiday wages, whichever is higher; or

If the worker is not normally required to work on this holiday but is required to do so, he shall be paid the standard daily wage plus wages for the time worked on the holiday.

By contrast, the law provides that employees who do not work on a holiday that falls on a day they would normally work are entitled to standard pay for that day only, with no bonus that the day is an annual leave, Bowmans said.

However, on occasions like this year, when the holiday falls on a Sunday, it can be difficult to determine an employee’s salary as required by the BCEA, such as in Randfontein Estates Limited v National Union of Miners (2008). ) 29 ILJ 998 (ALC).

According to Bowmans, in this case, Randfontein Estates agreed with its employees that Sundays should be treated as normal working days, but holidays should not be treated as such. Here, Labor Day falls on a Sunday and is observed the following Monday.

Work stops on Sundays and Mondays and the National Miners Union requires its members to be paid for Sunday and Monday holidays.

Therefore, the Labor Appeal Court held that if a public holiday falls on a Sunday and Sunday is a normal working day, the employee who does not work on that Sunday and the following Monday shall be entitled to wages. standard for both days, Bowmans said.

However, the court added that if employees worked on Sunday, Monday or both, they would be entitled to at least double the standard rate for both days, Bowmans added.

This decision of the Labor Appeal Court has set a precedent.

If December 27, 2022 is declared a public holiday, the employer will be required to pay the worker at least two working days without work (Monday and Tuesday) and three days if Sunday is considered a working day.

Compensation costs will be doubled if an employer requires employees to work those three days by December

Eskom Electric Company presented an operational update to the Standing Committee on Public Accounts (Scopa), including progress obtained in investigations of employees doing business with the corporation and acts of vandalism that resulted in incidents and load reductions.

Eskom has joined the Special Investigations Unit (SIU) and Priority Crimes Investigation Branch (Hawks) to investigate a number of high-profile cases and ongoing issues with employees over the past few years. .

Through the investigation, SIU has identified hundreds of electricity employees doing business with the unit, creating a major conflict of interest.

Eskom employees are prohibited from having any personal interest or other interest in an Eskom contract, whether as a supplier, consultant or as a director or owner of the business. business or in any other capacity.

This includes transactions with third parties that are indirectly linked to Eskom.

The SIU identified 334 conflicts of interest within the group in which employees were found to have potentially affiliation with different organizations and suppliers doing business with Eskom. In addition, 5,464 employees were identified for not submitting their benefits disclosure forms.

The investigative unit indicated that in some cases the connection between an employee and a contract is not easily identifiable, with family or friends running the business on behalf of the employee.

In some cases, Eskom officials reached out to complete strangers to set up contractors and bank accounts through which to transfer funds.

Eskom suppliers also often pay bribes indirectly – such as paying for tuition or other bills – which makes it difficult to track cash flow, he claims.

Regarding acts of fraud and vandalism of the power system, the SIU said it has observed cases of non-compliant coal being delivered to the group. This was achieved by applying pre-certification processes at coal mines, SIU said, and has successfully passed other checks and balances through the participation of Eskom employees.

” (Staff) ensures that samples for testing are obtained in the absence of Eskom observers and facilitates sample exchange by transporting samples to the laboratory on a trucks are not equipped with the tracking equipment required by the contract,” he said.

The SIU said employees also colluded with the mines, offering contracts with inflated coal prices to meet “transportation costs”. These contracts are between the mine and the carriers who have relationships with Eskom employees – and because the companies are located outside of Eskom, electricity service does not show prices.

Transport costs are high due to sourcing coal from mines far from the station instead of suitable locations nearby.

Coal theft

The unit said there was also collusion between the transporters to mix the poor quality coal of some mines with the good quality coal of other mines. This ensures that the quantity required under the contract will be routed to the power plants.

“Because coal quality is often not tested when coal is delivered to a power plant, it is not possible to identify a source of lower quality coal.”

Eskom says Eskom can only mitigate this problem by installing automatic, real-time combustion testers that link to a specific truck’s test results, as soon as they arrive. coal to and before unloading.

Eskom CEO Andre de Ruyter says the current system has a certified mine-tested coal stockpile, loaded into a truck, sealed, and the vehicle itself equipped tracking device.

However, he said the team found significant tampering of the seals and jammers used to intercept the tracking signal.

“Coal trucks are then taken ‘out of sight’ to sites where good quality coal is exchanged for scrap coal – instead of 18 kilojoules per kilogram which is seven or eight – and that can very negative impact on our factories, he said. CEO

said real-time checks are difficult because the trucks are constantly unloading. However, he said the team is working on new methods, including container samplers, to do a better job.

Claim fraud

The SIU is also investigating cases of corruption or conflicts of interest related to the Medupi and Kusile constructions, with 29 contracts worth Rs 135 billion under review. . The majority of contracts involve Kusile (24 years old) worth R88 billion, where various lawsuits are being prepared and lawsuits against employees have begun.

It also looks at key issues with contractors submitting inflated claims, which are then resolved by Eskom officials with no or no investigation. These claims are often unsubstantiated and Eskom has allowed them to be dismissed, the SIU said.

This is due to Eskom employees manipulating or intentionally blocking the complaints process or even employees working with contractors against Eskom in the process.

Senior Crime

The Hawks – also gives an update on investigations in Eskom.

The group is investigating a number of alleged crimes including coal theft, diesel theft, cable theft, bomb threats, fraud and corruption, vandalism and more.

One of these cases involved nearly 6,000 kg of aluminum stolen from Eskom. The truck driver was arrested and further investigations into the entity involved revealed that stolen infrastructure worth Rs 20 million was identified.

Diesel oil worth Rs 200,000 was stolen from the Kriel power plants, where the transporters colluded with the Eskom weighbridge workers to steal the fuel.

The receiving agent let the carrier go after weighing the diesel, and the fuel was loaded into another truck at a farm down the road. The carrier then returns to the power station, weighs an empty load – incoming and outgoing volumes are recorded, and the receiver confirms the diesel, but it was never delivered.

“Eskom would then pay the diesel bill for the fuel it never received,” Hawks said. “The driver, after selling the diesel engine, will be paid in cash or electronically.”

Several alleged cases of theft and vandalism are still under investigation – or are expected to have been withdrawn to gather more evidence, the group said.

Group report, submitted to the Commission. The Media Portfolio Board, showed that TV royalties generated revenue of Rs 815.1 million in 2022, up from Rs 788.4 million in 2021, up 3.4% year-on-year.

The broadcaster considers an increase in fees paid for a successful media campaign – however, even with a slight increase, they note that the fee collection compared to a total of Rs 4.4 billion has been set up. bill

Only 18.3% of total license fees were billed as revenue, similar to 17.9% recorded in 2021, SABC said

Recorded by the Broadcasting Commission. Note that the TV license fee evasion rate is therefore still worrisome, as the license fee collection rate shows a evasion rate of 81.7% in 2022, similar to the 82.1% indicated in year 2021.

SABC has a database of 10.5 million licensees – which means there are still about 8.6 million TV licensees.

Above all, SABC realized that there was not much they could do about the situation.

“While there are legal requirements to allow imprisonment for non-compliance, limited resources and cost implications make enforcement economically unfeasible,” SABC said, adding that added that the cost of television royalties was also higher than last year, reaching 8.9%. from 8.1% by 2021.

Proposed changes to address non-compliance

to replace the current TV license system with what would be called a “public media tax” – in an effort to limit the high levels of television license fee fraud .

National broadcaster said the new tariffs would not be suitable for equipment and would apply to all households and businesses.

It will also depend on whether or not South Africans can access the content, not just whether they view it. As a result, South Africans will have to pay royalties even if they don’t watch SABC content – just being able to access it on any device is enough.

ANC also supported this proposal. Speaking at a post-conference briefing in August 2022, Communications Minister Khumbudzo Ntshavheni said the party had decided to continue the proposal, noting that the current television licensing system was not working.

“The public broadcaster must be strengthened. SABC has both commercial mandate and public trust. On the public side, we want SABC to be funded by the national tax authority, but we also propose to tax households,” she said.

“Television license agreement doesn’t work, it really affects SABC’s viability.”

SABC says the adoption of a new TV licensing system in South Africa is one of the key interventions that need to be taken to make the national broadcaster financially viable.

Finance

SABC reported a loss after interest and taxes of Rs 258 million and a negative operating cash flow for the financial reporting period of Rs 353 million.

Unspent balance R86 million from refinancing capital of R3.2 billion from shareholders stabilized the cash position of the company. SABC said its working capital remained stable, with current net assets of Rs 677 million.

Even so, according to SABC, the company is expected to break even in 2022/23