This, and an official end to load shedding, is part of a package of measures aimed at boosting SA’s growth rate. From Moneyweb.
Private sector operators will be given access to the country’s rail network by October, according to a timeline published this week by the transport and logistics committee, a joint initiative of government and business.
A private sector participation unit is being set up within the Department of Transport and National Treasury to help accelerate investment in rail and ports.
This, and a permanent end to load shedding, is part of a raft of measures aimed at boosting SA’s growth rate to 3-5% by 2030 and creating 2.5 million jobs.
The three priority areas are energy, transport and crime, which have been identified as the primary chokeholds on growth.
Last year, more than 130 CEOs from the business sector agreed to partner with government to help get SA back on the growth path, backed up with an investment of R260 million and the deployment of 350 experts in the three focal areas.
“This has contributed to the excellent progress made, with the reduction in load shedding being the most visible and pronounced achievement,” says Adrian Gore, CEO of Discovery and co-convenor of the business delegation.
“Continued momentum could mean we are able to achieve 3-5% GDP growth by 2030. We will be launching Phase 2 of our partnership with this ambition in mind.”
Crime and corruption are reckoned to cost GDP 10% a year. Transport inefficiencies cost the economy 5% in 2023 and energy cost 15% cumulatively between 2020 and 2023.
The good news is that South Africa is approaching 150 days without load shedding and it should soon be officially declared a thing of the past.
That’s according to James Mackay, CEO of the Energy Council South Africa, speaking on Wednesday at a media update on progress made to unclog barriers to growth, an initiative launched a year ago by President Cyril Ramaphosa and business.
Transnet
Freight volumes railed by Transnet have improved to just shy of 170 million tons (Mt) from 149 Mt over the last two years but are still short of the target of 200-220 Mt deemed necessary to arrest and reverse job losses.
Read: It may take R80bn and 10 years to fix Transnet’s core rail network
Rudi Dicks, head of the project management office in The Presidency, said confidence in Transnet’s ability to meet turnaround targets is low. “The Transnet Freight Rail target, while higher than last year, is below contracted volumes and still inadequate for economic growth,” he said, adding that retrenchments in key economic sectors will continue unless performance improves.
Progress was hampered by a lack of consistent forecasting data as well as bottlenecks in Transnet decision-making.
The Department of Transport will appoint a transport regulator by November 2024, while open access to the rail network should be enabled by October.
Finalisation of the Network Statement by Transnet should be completed this month and will clear the way for a competitive rail system, with an independent infrastructure manager charged with refereeing access to the country’s rail network. Transnet CEO Michelle Phillips says the group is setting up a separate company to assist private operators with rolling stock and refurbishments.
Mesela Nhlapo, CEO of the African Rail Industry Association, which represents a number of private rail operators, responded: “The rail business is capital intensive. Any form of support required to transform the sector is welcomed.”
Progress on crime and corruption
Removing SA from the Financial Action Task Force (FATF) grey list by 2025 is one of the targets set by the government and business.
SA was placed on the grey list for weaknesses in monitoring and controlling money laundering and terrorism financing. The Financial Intelligence Centre has reported progress in addressing the FATF’s concerns, particularly when it comes to prosecuting offenders for crime and corruption.
Twenty high profile cases have been identified by the National Prosecuting Authority for prosecution, the first of which should appear before the courts in 2024.
Eight out of 22 recommendations highlighted by the FATF have been addressed, and 1 900 people arrested as well as 300 firearms seized. Business has provided funds for digital forensic services to assist law enforcement in investigating and prosecuting crimes, including tools for decryption of digital devices.
These are some of the fruits of the Joint Initiative on Crime and Corruption set up under the Joint Strategic Oversight Committee, which reports to the president.
The National Prosecuting Authority Amendment Act was signed into law in June, establishing the Investigating Directorate Against Corruption (Idac) as a permanent prosecution-led unit within law enforcement. It replaces the Investigating Directorate (ID) that was established in 2019, which was not a permanent fixture within the National Prosecuting Authority and lacked criminal investigative capacity.
Energy
As SA moves out of load shedding, the focus for the energy sector will be on the drive to “fix, build and reform” the energy sector, says Mackay.
The sector is facing an energy affordability crisis with slowing investment, created largely by the improved load shedding situation. Rooftop solar installations have slowed since 2023, though several large corporate renewable energy projects are due to come online in 2024 and 2025.
The country has experienced 142 days so far without load shedding in 2024, compared to just four for the whole of 2023.
Eskom’s performance has exceeded all expectations, contributing to restored confidence in the country.
A total of 57 private companies are assisting Eskom at power station level, representing more than 9 000 hours of expert engagement. This contributed to Kusile Power Station’s expedited recovery from its chimney stack collapse in 2022.
The National Energy Crisis Committee (Necom) has now focused its attention on five Eskom power stations most in need of intervention, and rapid expansion of the transmission grid.
The Electricity Regulation Amendment Bill was passed into law in May, allowing for a state-owned and state-run transmission network and power generation that allows for private participation.
This was regarded as a crucial milestone in SA’s economic history, for the first time allowing private entrants into the energy space as a way to end the energy crisis and stimulate growth.
More than six gigawatts of new energy generation has been added to the grid, resulting in an energy availability factor above 60%, compared with 54% in 2023.
“We have reaffirmed our commitment to a dynamic partnership between government and business to foster South Africa’s economic growth and social advancement,” said Ramaphosa in a statement.
“Since the start of the partnership just over a year ago, we have made substantial progress towards stabilising the energy sector, improving the performance of our rail and port system, and strengthening the fight against crime and corruption.”
