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The National Treasury has published amendments to Regulation 28 of the Pension Funds Act that encourages infrastructure investments by retirement funds, while still leaving the final investment decision to fund trustees.

The amendments will take effect on January 3, 2023.

The changes follow two rounds of public consultations in 2021, initiated amid some calls for infrastructure to be designated as prescribed assets, whereby pension funds would be forced to invest a portion of their funds in infrastructure assets.

Instead, the amendments introduce a definition of infrastructure, and set an exposure limit of 45% for such investments.

“The aim of the amendment is to explicitly enable and reference longer term infrastructure investment by retirement funds, by increasing maximum limits that funds may invest in.”

The amendments defined infrastructure as any asset that has or is operated with the primary objective of developing, constructing and/or maintaining physical assets and technology structures and systems for the provision of utilities, services, or facilities for the economy, businesses, or the public.

The limit between hedge funds and private equity has also been split, with the allocation to private equity assets having been increased to 15% from 10%.

The regulations, which prohibit investment in crypto assets, continue to limit the extent to which funds are allowed to invest in a particular asset or asset classes to prevent excessive concentration risk.

A limit of 25% has been imposed with regards to a fund’s exposure to any one entity, besides debt instruments issued by, and loans to, government, where the threshold is higher and in certain case as high as 100%.

The asset allocation to housing loans granted to retirement fund members will be reduced from 95% to 65% in respect of new loans only.

“This is meant to curb abuse of the housing loan scheme by fund members.”

As feared, Mineral Resources and Energy Minister Gwede Mantashe has announced big fuel price increases for implementation on July 6.

Despite calls ahead of the announcement for the temporary reduction in the general fuel levy to be sustained at 150 c/l, Mantashe confirmed that the reprieve would be reduced to 75 c/l, as announced previously, and be sustained until August 3.

The fuel levy reprieve of 150c/l had been in place for April, May and June in response to the surge in prices precipitated by Russia's invasion of Ukraine.

The Minister, therefore, confirmed the following adjustments for introduction from midnight on Wednesday:

Petrol (both 93 ULP and LRP) will rise by 237 c/l;

Petrol (both 95 ULP and LRP) will increase by 257 c/l;

Diesel (0.05% sulphur) will increase by 231 c/l; and

Diesel (0.005% sulphur) will rise by 230 c/l;

Illuminating paraffin (wholesale) will also increase by 166 c/l, while the Single Maximum National Retail Price for illuminating paraffin will increase by 221.00 c/l.

The maximum liquid petroleum gas retail price, meanwhile, will decrease by 218.00 c/kg.

The fuel prices schedule for the different zones will be published on Tuesday, July 5.

"Due to the ongoing Russia-Ukraine conflict, which has affected fuel prices globally, the temporary reduction in the general fuel levy of 75 cents per litre announced by the Minister of Finance in consultation with the Minister of Mineral Resources will be implemented in the price structures of petrol and diesel during this period until the 3rd of August 2022," Mantashe said in a statement.

In a joint statement issued in May, Finance Minister Enoch Godongwana and Mantashe announced that Godongwana had submitted a letter to the Speaker of the National Assembly requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy.

“This will take the form of a continuation of the relief of R1.50 per litre for the first month, from 1 June 2022 to 6 July 2022, and then a downward adjustment to the relief for the second month to 75c per litre from 7 July 2022 to 2 August 2022," the May statement read.

It has been estimated that the 150 c/l reprieve was costing R2.8-billion in foregone tax revenue every month.

Even though the rand appreciated against the US dollar, from R15.95 to R15.76, the average international product prices of petrol, diesel and Illuminating paraffin increased during the period under review.

"The movement in product prices has led to higher contributions to the Basic Fuel Price of petrol 95ULP by 201.36 c/l, 93ULP by 180.57 c/l, diesel 500ppm and 50ppm by 176.17 c/l and 175.02 c/l respectively, while the contribution to illuminating paraffin was 186.06 c/l."

Electricity utility Eskom is developing a Web-based portal that will offer real-time visibility of locations in South Africa where new generators can be immediately or easily connected to the grid.

The utility has, for the past three years, been arguing that between 4 000 MW and 6 000 MW of additional capacity is required to address load-shedding and to provide time and space for the maintenance of its neglected coal fleet.

It has also warned of grid constraints in particular regions, especially in the high-potential renewables provinces of the Northern, Eastern and Western Cape.

However, Eskom has also confirmed that 32 GW of grid capacity is immediately available to those independent power producers (IPPs) willing to build projects outside of these prime solar and wind territories.

Mpumalanga, where most of the country’s coal stations are located and where Eskom aims to implement its ‘Just Energy Transition’ strategy, has about 6.5 GW of grid supply area capacity.

There is also capacity available in KwaZulu-Natal (6 GW), Gauteng (4.5 GW), Free State (4.1 GW), the North West province (3.5 GW) and Limpopo (2.5 GW).

Amid the implementation of rotational power cuts of between 4 000 MW and 6 000 MW (Stages 4 to 6), CEO André de Ruyter reported that Eskom was undertaking a survey of available grid connections that would then be superimposed with wind, solar and land-ownership data to identify those areas that could offer immediate grid access.

De Ruyter said during a recent briefing that the intention was to make the information available on a real-time basis through an open access website to “anybody who would like to connect to the grid”.

He also confirmed that more parcels of grid-ready Eskom land had been identified in Mpumalanga for release, through long-term lease agreements, to IPPs.

A bidding process for the land would be initiated in August.

In June, Eskom announced that 18 companies had been selected following its first land-release bidding process.

Projects built on these properties, which cover about 4 000 ha of the 36 000 ha available under the programme, could add a total of 1 800 MW of generation.

Eskom was also canvassing the views of energy experts on ways to end load-shedding, and De Ruyter reported that both supply- and demand-side options were discussed during a roundtable on June 24.

He said that these options were currently under consideration, but that some would require “policy interventions”.

“We have been engaging with our shareholder and we will leave that to the policy side to decide on, but we have certainly provided our input into opportunities for us to bring a rapid conclusion to load-shedding through interventions on both the supply and the demand side.”

Ending the current restrictions to the addition of new generation capacity and addressing Eskom’s deteriorating generation performance are key to arresting intensifying load-shedding, the Energy Intensive Users Group (EUIG) asserts.

CEO Fanele Mondi said in a statement the recent illegal industrial action had escalated the crisis but stressed that the “core underlying issues” remained Eskom’s poor generation performance and the prevailing restrictions on the addition of new generation capacity.

“The EIUG believes strongly that our focus should be on fundamental issues, such as creating time for Eskom to undertake maintenance, streamlining Eskom’s procurement processes, dedicating funds for maintenance, executing effective maintenance practices, enhancing demand-side management, adding additional capacity through public and private generation projects, and further structural reforms,” Mondi said in a statement released as Eskom was implementing Stage 4 to Stage 6 load-shedding.

“To end load-shedding, generation performance needs to be improved while concurrently adding generation capacity to the grid as soon as possible,” Mondi said.

Eskom has indicated that up to 6 000 MW of new generation capacity is required to create the space it requires to maintain its aging and neglected coal fleet.

The utility has initiated roundtable discussions with energy experts to discuss ways to end load-shedding, as well as to create an electricity supply industry that is able to provide stable and affordable electricity, while dramatically reducing emissions.

CEO André de Ruyter reported on July 1 that supply- and demand-side options for ending load-shedding were discussed during the first roundtable, which met on June 24.

He said that these options were currently under consideration, but that some would require “policy interventions”.

“We have been engaging with our shareholder and we will leave that to the policy side to decide on, but we have certainly provided our input into opportunities for us to bring a rapid conclusion to load-shedding through interventions on both the supply and the demand side.”

The utility has also identified a second parcel of grid-ready land in Mpumalanga that it intends to offer, in the form of long-term lease agreements, to those private entities willing to invest in new distributed generation to take advantage of a dispensation allowing plants below 100 MW to proceed without a licence.

“We intend to approach the market by August,” De Ruyter confirmed.

Earlier, Eskom announced that 18 companies has been selected following its first land-release bidding process.

The projects could add a total of 1 800 MW generation capacity once connected and cover about 4 000 ha out of the total 36 000 ha available under the programme.

Embattled power utility Eskom has attributed three stages of the current load-shedding, which is being implemented daily at between Stage 4 and Stage 6, directly to the illegal strike under way at varying levels of intensity across its coal fleet.

Speaking against the backdrop of a resumption of wage talks with unions on Friday, CEO André de Ruyter reported that 2 709 MW of capacity was unavailable as a direct result of the wildcat industrial action, triggered by a recent deadlock in wage talks.

“The key issue really is a return to work in order to allow us to lift load-shedding, [as] there's about three stages of load-shedding attributable to the unlawful industrial action,” he said.

Eskom’s power station workers are deemed to be essential service workers and are, thus, not allowed to strike.

However, absenteeism and protests have continued despite the fact that both the National Union of Mineworkers and the National Union of Metalworkers of South Africa have urged their members to return to work, and despite the utility having secured a court interdict against those workers who embarked on the recent action.

At three stations – Matla, Hendrina and Arnot – as many as 90% of the employees had still not returned to work by July 1; the same day Eskom and unions resumed talks in the central bargaining forum.

While rotational power cuts were already being implemented ahead of the strike, which has involved several incidents of violence and intimidation, the intensity of load-shedding has increased as a direct consequence of the industrial action.

“This is an unacceptable situation where the country is held hostage by wildcat actions taken without any apparent coordination or leadership on a national basis, but intended to drive double-digit wage increases which are clearly not affordable,” De Ruyter said, while refusing to comment on renewed calls for his resignation, or to speculate on whether there might be non-wage-related motives for the illegal strike.

He confirmed that he had participated in two meetings with President Cyril Ramaphosa where possible remedies to load-shedding were discussed.

“We fully briefed the President on the situation; he is seized with the matter.

“We discussed a number of potential options, [but] I'm not at liberty to disclose the nature or the content of those discussions.”

A Government Communication and Information System Tweet said that Ramaphosa was leading the response to the current crisis and that the outcome of discussions currently under way would be communicated to the public.

By Friday morning a total of 13 609 MW was not available as a result of breakdowns, planned maintenance and the industrial action, representing an improvement on the preceding days when up to 20 000 MW were not available.

The improvement saw Eskom reduce the intensity of load-shedding to Stage 4 Friday morning, and it announced later in the day that Stage 4 would continue until 22:00, rather than being escalated to Stage 6 as initially planned. It would then be reduced to Stage 2 at 22:00 until 07:00.

Stage 4 load-shedding would then be implemented at 07:00 to 22:00 on both Saturday and Sunday and be reduced to Stage 2 between 22:00 and 07:00 on both days.

De Ruyter confirmed that Eskom had spent a whopping R1.54-billion on diesel in June alone, more than double its original budget of R700-million.

He also confirmed that R4.14-billion had been spent on diesel for the financial year to date, against a budget of R1.99-billion. This over expenditure was attributed to both more extensive use, as well as a surge in diesel prices following Russia’s invasion of Ukraine.

Eskom had burnt 217-million litres even ahead of the most recent bout of Stage 4 to Stage 6 load-shedding at the end of June and early July, with each open-cycle gas turbine unit consuming 14 litres every second when in operation.

Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about South Africa's worst-ever bout of load-shedding and what has led to Eskom having to resort to implementing Stage 6 load-shedding for several days; how other stakeholders have responded to this situation; and if there is a way to resolve the situation.

The City of Cape Town says it is keen to help revive the Passenger Rail Agency of South Africa (PRASA) rail enforcement unit (REU), which operated as a three-way government partnership between October 2018, and July 2020.

The REU was launched by then Minister of Transport Blade Nzimande at a cost of R48-million.

National government, the Western Cape government and the City of Cape Town each contributed a third of the unit’s funding needs, while the city also provided an additional 100 city law enforcement officers to the existing security personnel in an effort to help address Metrorail’s security needs.

“The unit was an effective deterrent against vandalism – it conducted inspections at hot spot areas and scrapyards; recovered stolen cables and goods; and made arrests for the possession of stolen goods, drugs, assault and malicious damage to property,” says Cape Town mayor Geordin Hill-Lewis.

Over the years, the passenger rail network has experienced a strong decline because of rampant vandalism by organised syndicates.

The sharpest increase in vandalism was seen during the Covid-19 pandemic.

The REU also delivered an immediate improvement in the safety of Metrorail commuters.

“The city believes the revival of the unit will be a meaningful intervention that has previously been shown to work, and that it will have a positive impact on safeguarding the network. We are engaging PRASA at the moment about this,” says Hill-Lewis.

“We are hopeful that PRASA will rejoin what was an effective partnership at curbing vandalism.”

“The proposal is to sign a new memorandum of agreement, which would guide the apportionment of costs between the City of Cape Town, the Western Cape provincial government and PRASA to deliver on the reinstatement of the REU as rapidly as possible,” adds Safety and Security MMC JP Smith.

“The REU would be supported by drones and eye-in-the-sky digital surveillance and evidence management, with enhanced information management and investigative support, as well as improved revenue protection mechanisms to ensure that safe and effective rail commuter transport can be reinstated as quickly as possible and protected against further vandalism.”

The city says it is keen to pursue an agreement with PRASA of between five to ten years, in order to ensure sustainable commuter rail safety.

The Automotive Industry Development Centre Eastern Cape (AIDC EC) says it applauds Transnet National Port Authority’s (TNPA’s) announcement that it will inject R9.1-billion into its three Eastern Cape ports over the next seven years.

AIDC EC CEO Thabo Shenxane says the centre, as well as other provincial stakeholders, have all been lobbying for the investment as part of an effort to grow the region's automotive sector.

The Eastern Cape's automotive sector accounts for about 50% of South Africa's automotive exports.

“Automotive growth and exports, which involves an extended manufacturing value chain, is core to transformation, localisation and job creation in the Eastern Cape, one of the country's most economically impoverished provinces,” says Shenxane.

“While TNPA has earmarked the Port of Gqeberha for the automotive sector, Ngqura is being positioned as a transhipment and energy hub for the southern hemisphere.

“The development of the East London port will finally encourage Mercedes-Benz to cater for the growth of its exports and regional supply cluster.”

According to the TNPA, Ngqura and Gqeberha ports, which are jointly managed as the Nelson Mandela Bay port, will receive R4.8-billion, while the East London port will receive R4.3-billion.

The ports are also set to provide alternate sources of electricity and water supply within its special economic zones, which house a large percentage of automotive component manufacturers.

The TNPA will issue a request for information (RFI) in July for renewable energy capacity at the ports, which will be followed by a request for proposals (RFP) by September on a power-purchase agreement basis.

The ports authority will also issue an RFI in July for all ports to supply desalinated water, with an RFP to follow by October, on a water-purchase agreement basis, as a proactive measure for any future water-related crises.

“These proactive measures directly address the concerns of investors and current operators for a reliable and constant supply of water and electricity,” says Shenxane.

The Department of Public Works and Infrastructure (DPWI) has signed an anti-corruption pledge alongside independent statutory body the Special Investigating Unit (SIU), and seeks to solicit the commitment of infrastructure and construction sector players to also maintain good integrity and ethical standards.

The pledge, which forms part of multi-sectoral body the Infrastructure Built Anti-Corruption Forum (IBACF), will be circulated to all built environment industry bodies.

Public Works and Infrastructure Minister Patricia de Lille said during a signing ceremony held on June 30 that corruption was another pandemic in South Africa and called for every effort to be made to fight corruption.

She added that the prevention and combatting of corruption requires education, behavioural change and a multi-pronged approach from all levels of society.

“Corruption is a societal problem and fighting it is everyone’s business,” De Lille asserted.

The IBACF was launched in May last year to foster collaboration among key role-players, including law enforcement agencies, construction sector regulators, civil society, government departments and the private sector to monitor infrastructure projects more effectively and put systems in place to detect and prevent corruption.

Particularly, the forum was a strategic intervention and investigation oversight body to mitigate the threat of corruption in the implementation of the Infrastructure Investment Plan (IIP) approved by Cabinet in May 2020, through detection and prevention systems.

The DPWI, together with the SIU, had brought various private and public sector representatives onboard the forum, including from the National Prosecuting Authority (NPA), the Directorate for Priority Crime Investigation (Hawks), the Council for the Built Environment and Business Unity South Africa, which have met several times since the launch of the IBACF.

These meetings have culminated in development of an IBACF implementation plan; a case assessment framework; a built environment code of conduct; a pledge against corruption; an online anti-corruption training course as part of the built environment’s academic curriculum; and discussions with stakeholders regarding the use of data analytics and data modelling to generate trend and predictive analysis reports.

These reports serve to inform the IBACF prevention, advisory and awareness initiatives. For example, these data analytics exercises help find loopholes in legislation that render it vulnerable to corrupt practices. It also points out where procurement controls can be improved in regulations.

The implementation plan is focused on preventing corruption through strategies that lower the likelihood of corruption occurring; real-time monitoring of corrupt activities and detecting such activities through whistle-blower initiatives and real-time audits; independent and speedy investigations; and implementing consequence management where there is evidence of wrongdoing.

In turn, the case assessment framework has been developed to regulate how the reported allegations of corruption in the built environment will be handled. It deals with the roles and functions of the IBACF steering committee, receipt and registration of cases and assessment and referral of cases.

De Lille highlighted the other work the SIU had done for the DPWI in fighting corruption, including 6 978 investigations having been conducted under Presidential proclamations. Of these cases, 6 623 have been finalised and 355 are still pending.

Out of 91 disciplinary referrals to the DPWI, 86 cases have been finalised and five remain pending.

The sanctions for finalised cases range from dismissals, found not guilty, resigned before the hearings, death, or retired before finalisation of cases, final warnings and suspension without pay.

About 292 criminal referrals have been made to law enforcement agencies, relating to SIU corruption investigations. Of these, 18 have been finalised and 240 matters are before...

The South African National Roads Agency Limited (Sanral) has appointed the Development Bank of Southern Africa (DBSA) as an independent and lead adjudicating body after Sanral’s board declined the contracts for five strategic projects in May.

As such, the DBSA will act as the infrastructure procurement and delivery management support agency for Sanral as the entity works to finalise awarding of the five contracts, which are worth R17.4-billion.

Sanral declined the five contracts on the basis of “lapses in the due process”, says Transport Minister Fikile Mbalula, adding that Sanral’s board, through its oversight mechanism, identified the flouting of due process and moved with speed to act – withdrawing the five tenders to preserve the integrity thereof.

Sanral chairperson Themba Mhambi says the DBSA was, in no way, involved in the design, cost estimation and tender documentation stages of the cancelled tenders. “This should reassure all interested parties and the public about the integrity and independence of the new procurement processes for the projects.”

“Turning a blind eye to what would have resulted in irregular expenditure and possible litigation that would have held up some of these projects in courts for years, would have amounted to dereliction of duty on the part of the board,” explains Mbalula.

At the same time, he has tasked Sanral’s board with moving as quick as possible to address any anomalies in its procurement and contract awarding process and award the five outstanding tenders in a manner that is transparent and fair.

“I am pleased that the board has moved with the necessary speed to address the due process lapses, with a clear plan on how to finalise the award of these tenders within the shortest possible time,” states Mbalula.

Sanral is planning to finalise a procurement project inception meeting and develop a memorandum of agreement soon.

Following that, the project team will be mobilised and information will be gathered in July and August. There will be a review of bid specifications, the approval of bid specifications and advertisements. This will be followed by advertising the tenders, receiving of bids, their evaluation and adjudication.

Sanral will release the tender advertisements in July.

In September, there will be the submission of bid evaluation and adjudication report to Sanral, whose board will thereafter consider recommendations and will be followed by the awarding of the tenders.

ADDRESSING TIME LOST

However, in acknowledging that cancelling the tenders in May would set back the timeline in which the projects could be rolled out, Mhambi says Sanral is resolved to accelerate the required readvertisement and awarding of the tenders. “We therefore set ourselves a four-month deadline during which, we told the country, the tenders would be readvertised, evaluated, adjudicated and awarded.”

In addition, because of pervasive corruption and maladministration, he says Sanral was urged to err on the side of caution when awarding tenders. “The hard lesson we have learnt from this ordeal is to remain vigilant and stop creeping lawlessness, greed and corruption dead in its tracks.”

Mhambi states that Sanral’s reasons for cancelling the tenders in May revolve around the agency’s obligation to ensure proper corporate governance; the requirement to comply with internal controls; the responsibility to conduct procurement in line with legislative, regulatory and policy prescripts; and the need to enforce subcontracting aimed at small, medium and micro enterprise development, black economic empowerment, and transformation.

Sanral acting CEO Lehlohonolo Memeza says the scope of the services to be rendered by the DBSA includes the evaluation of compliance, technical and financial aspects of relevant tenders, as well as providing independent construction management oversight throughout the construction period of the projects emanating from the tenders.

Going forward, the DBSA will, in the procurement phase of t...