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  • VSL Manufacturing opens new, R750m facility to supply Isuzu assembly plant
    VSL Manufacturing (VSL) has started operations at its new, R750-million manufacturing facility adjacent to the Isuzu Motors South Africa (IMSAf) assembly plant in Struandale, Gqeberha.
    VSL is a majority black-owned South African component manufacturer specialising in advanced metal pressing and stamping products.
    The component maker was established in 2018 and now operates facilities in both Komani and Gqeberha, in the Eastern Cape.
    In Gqeberha, the company manufacturers skin panels for the Isuzu D-Max bakkie line - mainly exterior and structural stamped panels for the sixth-generation bakkie, says VSL director Vuyo Skweyiya.
    "We are also certified to manufacture the same panel categories for the facelift seventh-generation D-Max, and for subsequent models as they are introduced."
    Current output for the sixth-generation programme is around 350 000 panels a year.
    With the seventh-gen D-Max included, Skweyiya expects combined yearly volumes to peak at around 520 000 units by 2027.
    "Daily output varies depending on Isuzu's build schedule."
    Beyond the automotive industry, VSL also supplies components to the rail sector, most notably the Gibela Rail Consortium, which is responsible for building the new blue trains for the Passenger Rail Agency of South Africa.
    "For rail clients, we manufacture pressed and fabricated metal parts used in rail-car assembly and structural applications," explains Skweyiya.
    "We'll continue to diversify into sectors where our stamping, fabrication, welding and tooling-maintenance capabilities add value."
    She notes that it was no small feat to get VSL up and running, but that it has been well worth it.
    "This facility represents the culmination of years of rebuilding, of restoring jobs, and of proving that South African suppliers can compete at the highest level of global automotive manufacturing."
    VSL was established following the liquidation of Stateline Pressed Metal in Komani, which resulted in 123 job losses.
    Rather than accept defeat, retrenched employees Skweyiya and business partner Deon van Zyl secured funding from Absa Bank to acquire the company's equipment and form VSL.
    After rebuilding Stateline's operations and capabilities, a major turning point came in 2021 when IMSAf appointed VSL to its supplier development programme.
    This partnership enabled VSL to scale its operations, increase its revenue five-fold in the 2021/22 financial year, and meet the standards required for global vehicle manufacturing supply.
    With growth came increased pressure, however, especially on the ageing Komani press line.
    To safeguard jobs and ensure long-term competitiveness, VSL, supported by IMSAf, developed an investment plan which was presented to the Industrial Development Corporation, the Automotive Industry Transformation Fund, and the Black Industrialists Scheme.
    This resulted in a R750-million capital mobilisation effort to establish the new facility, now located in Gqeberha.
    To date, the expansion has created 52 new jobs in this part of the Eastern Cape, while the Komani operation continues to sustain 66 skilled employees.
    VSL credits IMSAf for its hands-on supplier development support.
    "Isuzu did more than award a contract. They transferred tools, opened their supply chain to us, and worked closely to help us meet demanding global standards," notes Skweyiya.
    Looking ahead, she says that VSL is eagerly anticipating the upcoming review of government's Automotive Production and Development Programme (APDP).
    "APDP 2 is vital to localisation and long-term industrialisation.
    "From the review process, we would welcome strengthened incentives for [vehicle manufacturers] to deepen local value chains, increased support for supplier development, as well as measures that enable emerging and midtier suppliers to scale sustainably.
    "These will improve competitiveness and secure long-term production mandates for South African component manufacturers."
    Skweyiya adds that VSL's growth strategy includes expanding productio...
    5 min
  • CEF faces probing questions from lawmakers on plan to revive refineries
    The Central Energy Fund (CEF) group of companies faced sceptical questioning this week from lawmakers over plans to revive the Sapref refinery in Durban and PetroSA's gas-to-liquids (GTL) refinery in Mossel Bay.
    During a marathon session of the Portfolio Committee on Mineral and Petroleum Resources held to deliberate on CEF's delayed 2024/25 annual report, CEF chairperson Ayanda Noah stressed the importance of the two refineries to the future of the group, as well as the recently formed South African National Petroleum Company (SANPC).
    Now being referred to by CEF as the SANPC refinery, the Sapref facility was sold for R1 to the CEF in 2024 by energy majors BP and Shell.
    The Mossel Bay GTL refinery, meanwhile, is also non-operational after PetroSA's well-publicised failure to secure new gas resources, despite the multibillion-rand Project Ikhwezi drilling campaign. In addition, a subsequent partnership deal with Gazprombank Africa aimed at reviving the facility was terminated due to non-performance.
    Noah told committee members that restarting activities at both refineries remained a board priority and said that a deadline of March 31, 2026, had been set for the completion of a bankable feasibility study into the revival of the Sapref/SANPC refinery.
    While describing the restart of operations at the Mossel Bay refinery as challenging, she indicated that CEF was expecting to receive proposals from PetroSA by the end of January regarding the resumption of activities at the site.
    Questioned about the technical and commercial viability of reviving Sapref and how such an endeavour would be funded, acting COO Sifiso Msabala said major capital investments would be required together with a strategic partner to both scale up output and to produce fuel in line with the country's clean fuel specifications.
    Msabala said the refinery's nameplate would have to be increased from about 180 000 bbl/d to about 450 000 bbl/d to ensure its competitiveness, and insisted that the site, which was damaged during the 2022 KwaZulu-Natal floods, could house a refinery of that size.
    Quizzed further about the commercial prospects of such a refinery, CFO Ditsietsi Morabe stressed the strategic nature of the project, which she said was designed to reverse the current trend of refinery closures and "address the issue of energy sovereignty".
    In parallel, CEF would seek to take advantage of the 15% allocation granted to it recently at the Island View Terminal in Durban, which had not been sold as part of the Sapref transaction. CEF was investigating using some of the tank infrastructure to store or blend final product ahead of distribution.
    However, it also still needed to resolve a claim by Sasol on the residual crude oil stored on the site at the time of the Sapref acquisition.
    Besides plans to resume refinery operations, CEF also listed several other projects that it said it was aiming to advance, including a sorghum-to-bioethanol venture and a gas-to-power project at Komatipoort, on South Africa's border with Mozambique.
    Msabala said CEF had received an environmental authorisation for an 800 MW gas-to-power project in Komatipoort and that it was currently pursuing a power purchase agreement, but did not provide further details.
    The State-owned company reported a profit of R553-million for the year, elevated by a non-operating gain of R1.84-billion arising from the increase in assets relative to liabilities arising from the Sapref acquisition.
    The gain helped offset an operating loss of R2.9-billion, on the back of lower PetroSA sales and the halt placed on the African Exploration Mining & Finance Corporation's coal supply agreement with Eskom during the year.
    4 min
  • Automotive market races to 11-year high as Chinese brands boom in ‘structural reset’ – TransUnion
    South Africa's automotive market in the third quarter posted its strongest sales in more than a decade as greater macro-economic stability, easing interest rates and a firmer rand supported renewed consumer demand, says TransUnion.
    According to the information and insights company's Third Quarter 2025 Mobility Insights Report, total new-passenger-vehicle sales reached 111 697 units - 23.4% higher year-on-year (y-o-y) - while new-vehicle inflation dropped to a record low of 1.5% (since tracking began in 2008).
    All of these conditions, says TransUnion, created one of the most competitive pricing environments in recent memory.
    "Affordability and choice are redefining South Africa's automotive landscape," says TransUnion Africa CEO Lee Naik.
    "Consumers are seeking greater value and flexibility, and manufacturers that meet this demand through innovation and pricing discipline are winning the race for growth."
    Although established vehicle brands returned to positive growth in the second and third quarter of this year, the domestic market's transformation is being led by Chinese manufacturers, as they are expanding nearly nine times faster than the overall market, with y-o-y growth of 89% in the second quarter and 88% in the third quarter.
    Their combined share has quadrupled since 2021 to more than 15%, powered by competitively priced, feature-rich sports-utility vehicles and sedans that appeal to cost-conscious, yet tech-savvy buyers, explains the TransUnion report.
    Top-performing value brands y-o-y included JAC (67% volume increase), GWM (54%), and Chery (35%), while BMW (27%) proved that premium marques can still thrive by combining desirability with strong product pipelines.
    India's Mahindra posted 42% growth.
    "This isn't a short-term surge, it's a structural reset," notes Naik.
    "The success of value-driven models shows how affordability, technology and trust are now the true levers of brand growth in South Africa."
    Younger, High-Income Buyers Sustaining Demand TransUnion's recent Consumer Pulse Survey shows a modest easing in purchase intent, with the share of respondents likely to buy a vehicle in the next three months declining from 19% in the second quarter to 17% in the third quarter.
    Purchase behaviour also remains sharply segmented across both age and income groups.
    Younger consumers continue to lead intent, with 21% of Gen Z and 19% of Millennials planning to buy a vehicle in the next three months, compared with 13% of Gen X and 8% of Baby Boomers.
    From an income perspective, high-income households earning R200 000 or more a month show the strongest intent at 34%, while middle- and lower-income consumers remain significantly more cautious in their purchasing outlook.
    Internal-combustion engine (ICE) vehicles remain the single largest category in consumer purchase intent, accounting for 42% of consumer preference, while interest in hybrid (39%) and plug-in hybrid (24%) models is steadily increasing.
    The shift toward electrification is most pronounced among Gen Z consumers, with 55% favouring hybrids and 32% considering battery-electric vehicles (BEVs).
    This generational shift toward greener technology is also evident among high-income buyers, with 75% considering plug-in hybrids, driven primarily by their perceived affordability.
    In contrast, preference for ICE vehicles remains largely affordability-based among lower-income segments.
    Higher budgets within affluent households enable greater consideration of hybrid plug-in hybrid, and BEVs, reinforcing an emerging electrification divide, says the TransUnion report.
    "The convergence of affordability, segmentation, electrification and connectivity signals a pivotal shift in the automotive industry," notes Naik.
    "The future belongs to brands and financiers that master both the value-driven present and the connected, electrified future."
    4 min
  • R3.4bn investment positions Traxtion for 2026 entry onto South Africa’s freight rail network
    Private railways company Traxtion expects to begin operating on South Africa's mainline network by the third quarter of 2026 after concluding a R3.4-billion rolling stock investment programme.
    The Harith-owned company described the acquisition as the largest private freight rail investment in South Africa's history and said it was aligned with reforms under way to open the country's rail system to private train operating companies (TOCs).
    In August, Transport Minister Barbara Creecy announced that 11 TOCs that had applied to operate routes on Transnet's rail network had met the requirements to do so on 41 routes across six corridors.
    It was indicated that some of the TOCs could begin operating in the second half of 2026, while others stated that they were likely to begin operating only in 2027 or 2028, with access to rolling stock being one of the key constraints to entering the network earlier.
    Traxtion, which already operates across ten African countries and has a rail and manufacturing services hub in Rosslyn, has confirmed that it will buy 46 Wabtec locomotives from KiwiRail in New Zealand for R1.8-billion, as well as wagons valued at R1.6-billion.
    The fleet includes 42 U26C partly modernised locomotives and four C30-8MMI fully modernised locomotives.
    The U26C fleet will now be upgraded in batches at Traxtion's Rail Services Hub in Rosslyn to C30MEI specification to include fuel-efficient 7FDL-EFI engines and advanced Brightstar control systems.
    The locomotives will be shipped in four tranches between April 2026 and August 2027, with each batch of 10 to 12 locomotives to undergo a four-month modernisation cycle.
    The first upgraded units will roll out in the third quarter of next year, which Traxtion says will mark the historic entry of its trains into South African mainline operations.
    CEO James Holley says the locomotives will help lower logistics costs, protect the road network, improve environmental performance, and create jobs.
    "We have structured this programme to maximise South African industrial value-add, such as local assembly, supplier development, and skills transfer, while getting modern locomotives and wagons into service as quickly as possible," Holley states.
    Traxtion says that there will be at least 60% local content across the programme and that a minimum of 662 direct permanent jobs will be added during manufacturing, assembly, commissioning and operation.
    The added capacity is expected to address about 5% of the national freight rail capacity shortfall, he adds.
    South Africa has set a goal of moving 250-million tons of freight by rail yearly by 2030, against current volumes of below 160-million tons and Creecy has indicated that the lion's share of the 90-million-ton gap is likely to be closed by private TOCs.
    Harith CEO Sipho Makhubela says the programme sets a new benchmark for how private investment, aligned with policy certainty and local value creation, can deliver transformative outcomes.
    "Harith is encouraged by the reform momentum, which is now translating into measurable commercial and socio-economic returns," Makhubela adds.
    The Presidency's project management office head Rudi Dicks - who is also overseeing the reforms being pursued under Operation Vulindlela, which includes the facilitation of private sector participation in the rail sector - has welcomed the Traxtion announcement.
    Dicks describes the R3.4-billion investment as critical to the reforms under way to open the freight rail network to competition.
    "This network sector has always been closed, and has always been operated by Transnet. We are introducing competition and Traxtion is going to be one of the major players on the network," Dicks says.
    4 min
  • Nersa reinforces shift to competitive electricity market as it approves market operator licence and new grid rules
    The Energy Regulator, which is the National Energy Regulator of South Africa's (Nersa's) highest decision-making body, has made three landmark decisions in support of the country's legislated commitment to transition to a competitive electricity market from one historically monopolised by Eskom.
    At its meeting on November 27, it approved the granting on a Market Operator licence to the National Transmission Company South Africa (NTCSA), a precursor to the launch of the South African Wholesale Electricity Market (SAWEM) in 2026, alongside new Grid Capacity Allocation Rules to facilitate fair and non-discriminatory access to the network.
    In addition, the Energy Regulator approved the appointment of a 14-member Electricity Market Advisory Forum, or EMAF, which will advise and capacitate Nersa in navigating the shift to a competitive electricity market and interface with key public and private institutions in relation to the country's market readiness.
    Chairperson Thembani Bukula described the decisions as historic milestones in South Africa's unfolding electricity supply industry transition, but also made it clear that many more decisions would still need to be made to meet the objectives set in the Electricity Regulation Amendment Act.
    The legislation, which came into force in January, lays the basis for a phased transition to a competitive electricity market and sets a five-year timeframe for the creation of a fully independent Transmission System Operator outside of Eskom.
    In the interim, the NTCSA, which remains a subsidiary of Eskom Holdings but with its own board and executive team, is expected to play the role of market operator and system operator, while overseeing the operation and expansion of the physical grid network.
    The conflict of interest associated with Eskom's ongoing shareholding of the NTCSA was evident even in the decision to grant the NTCSA a Market Operator licence, with the Energy Regulator doing so without also approving the licence conditions.
    CONFLICTS OF INTEREST
    Full-time regulator member Nomfundo Maseti said these conditions, along with the regulator's reasons for decision would be finalised within 30 business days.
    However, approval had been withheld, as Nersa had requested additional documentation from NTCSA, particularly in relation to what she termed an "independence roadmap" to show how it intended managing the potential conflicts of interest arising from its shareholding structure.
    While the restructuring of Eskom is still unfolding, concerns have been raised about both the pace and the nature of the unbundling of NTCSA, the full legal and commercial separation of which is viewed as crucial to levelling the playing field between Eskom Generation and independent power producers (IPPs).
    It was also indicated that the issuance of the Market Operator licence was but one "building block" in the establishment of the SAWEM, with the Market Code and Market Rules still to be approved.
    Now that the NTCSA had received the Market Operator licence it was anticipated that it would make a submission to Nersa on the Market Code, which would be key to determining the effectiveness or otherwise of the SAWEM in ensuring whether competition would help shape future electricity prices.
    Maseti indicated that Nersa was gearing up to consider the code, and was alive to ensuring that a fair balance was struck.
    Here, she made specific reference to the fixed and variable cost components in coal vesting contracts amid warnings that Eskom's move to have its primary energy classified as a fixed cost would result in such artificially low tariffs as to make it impossible for IPPs to raise finance to build new capacity to bid into the SAWEM.
    Potential conflicts of interest were also a key driver behind the formulation of the Grid Capacity Allocation Rules approved by the Energy Regulator, and which would be both Gazetted and published on the Nersa website in due course.
    Maseti said the new Grid Capacity Allocation Rules guar...
    5 min
  • South Africa unpacks big pricing and load factor changes to inaugural gas-to-power procurement
    Significant amendments to the request for proposal (RFP) documentation for South Africa's much-delayed procurement of 2 000 MW of gas-to-power capacity have been unpacked, including an updated fuel pricing formula and an increase in the minimum load factor to 50% for the 20-year duration of the power purchase agreement.
    Independent Power Producer Office (IPPO) head Precious Edward also used a virtual briefing on the Gas to Power Independent Power Producer Procurement Programme, or GASIPPPP, to reaffirm government's commitment to the new bid submission deadline of May 29, 2026 - this, for a programme initially launched on December 14, 2023, with an August 30, 2024, deadline.
    Edward said the amendments, which were initially communicated on October 20, had been made following a review of the clarification questions raised by potential bidders in relation to the legal, technical and pricing components included in the initial RFP.
    In addition, the change to the load factor, from an initial range of between 25% and 65%, was in line with the recently published Integrated Resource Plan 2025 (IRP 2025), which indicated that the higher load factor would be used for the initial gas projects allocated for entry into the country's electricity supply by 2030.
    The IRP 2025 has allocated 6 000 MW to gas by 2030 and a total of 16 000 MW by 2040; with the initial target appearing highly ambitious when assessed against the timelines outlined by Edward for the first bid window of GASIPPPP, which points to projects entering into commercial operation after 2030.
    The IPPO indicated during a virtual briefing on November 26 that it expected to announced preferred bidders three months after the May 29 bid submission deadline.
    It had allocated 12 months thereafter to preferred bidders to advance their projects to commercial close and a further three months to reach financial close. The long-stop date for commercial operation, meanwhile, had been set 36 months after commercial close.
    Besides changes to the load factor, the revised RFP has also reduce the required yearly minimum start-ups for the generators from 730 to 520, broken into 208 hot starts, 260 warm starts and 52 cold starts "taking into account technical limitations".
    PRICING MECHANISM
    Major amendments have also been made to the gas pricing mechanism, which has been aligned to "global liquefied natural gas (LNG) pricing realities", with the pass-through Fuel Charge Rate in any given month to be determined using a formula based on a proportional split between Henry Hub, Brent and the National Balancing Price that will be applicable to the seller.
    A new pass-through Fuel Fixed Cost Charge Rate formula has also been included to explicitly account for transportation and infrastructure costs, including LNG shipping and terminal costs, as well as gas pipeline and liquefaction costs.
    Bidders remain responsible for sourcing their fuel and for all supply and delivery risks, but the IPPO believes the updated formulas will help them in managing those risks.
    At submission, bidders are required to provide a rand price for producing a megawatt-hour for the plant's contracted capacity, energy and ancillary services as of the base date of April 1, 2026, and present that price at load factors of 50% and 60%, with an average between the two used for the evaluation. Prices will be indexed to South African and US inflation, and the fuel change rate will be indexed to the movement in the fuel price on a monthly basis.
    Bidders still need to secure all necessary environmental approvals and will also be responsible for securing access to the grid, with bid submissions requiring a cost estimate letter from the National Transmission Company South Africa for such connectivity.
    Edward said the RFP for the first bid window of the GASIPPPP remained available for access by all prospective bidders, but that further interaction with the IPPO on the RFP would be limited to the publication of briefing notes, with no addition...
    5 min
  • South Africa still in talks with US to cut reciprocal tariffs as it prioritises ‘butterfly strategy’ to raise exports to R3tr
    The Department of Trade, Industry and Competition (dtic) has again confirmed that it is continuing with its negotiations with the US in a bid to reduce the 30% reciprocal tariffs that have been imposed on many South African exports since August.
    In a presentation to the parliamentary portfolio committee, deputy director-general for trade Ambassador Xolelwa Mlumbi-Peter indicated that the immediate focus was on reciprocal tariffs, with a view to then pursuing a second round of talks on country specific commitments, as well as on a specific tariff offer.
    The tariff offer would affect all Southern African Customs Union (Sacu) members, and she reported that Sacu was aiming to finalise the offer with a view to "submitting it as soon as possible".
    Mlumbi-Peter stressed that the aim for South Africa was to negotiate an agreement that created a level of predictability on trade, reduced the reciprocal tariff and enabled trade to continue to flow, without compromising the country's ability to make policies that advance national interests.
    South Africa had experienced some recent relief after certain agricultural products, most notably citrus, were exempted from the reciprocal tariffs, alongside the exemptions already in place for critical minerals.
    Nevertheless, the country's exports were still affected by both the reciprocal tariffs and the Section 232 tariffs imposed on the basis that foreign imports threaten US national security, including the 25% duties being imposed on automotive and automotive components, as well as the 50% on steel, aluminium and semi-processed copper.
    Mlumbi-Peter said that the automotive tariffs affected 21.8% of South Africa's exports to the US, while the tariffs on steel and aluminium affected 13.5%.
    Reciprocal tariffs affected South African exports of chemicals (6.5%) other manufacturing (4.6%), agriculture (3.4%), nonelectrical machinery (2.7%), processed food (2.4%), other transport equipment (1.9%), beverages (0.8%), and electrical machinery (0.7%), while textiles, clothing and leather, paper and plastic products were all less than 1%.
    South Africa was also continuing to advocate, in parallel, for the renewal of the Africa Growth and Opportunity Act (Agoa), which expired on September 30, with Mlumbi-Peter indicating that a rollover had bipartisan support in Congress, while the White House had expressed its support for a one-year renewal.
    "What is expected is a straight rollover of the current benefits to the existing members, which will mean that South Africa … will continue to benefit under the programme," she said, indicating that Senator John Kennedy, of Louisiana, had introduced a Bill to renew Agoa for two years.
    Asked whether Agoa could coexist with reciprocal tariffs, she said because the reciprocal tariffs were additional to the most favoured nation tariffs, the duty- and quota-free access provided under Agoa would offer a "margin of preference" to beneficiaries.
    Trade, Industry and Competition Minister Parks Tau stressed, however, that South Africa was accelerating it strategy to diversify exports not only because of US developments, but rising protectionism and uncertainty in other markets.
    Implementation was being pursued under the so-called "butterfly strategy", where Africa represented the body and the 'wings' represented the rest of the world, including 27 new and emerging markets earmarked as priority markets
    The strategy is anchored by the African Continental Free Trade Agreement (AfCFTA), under which 24 countries were currently trading. In 2024, R485-billion of South Africa's R571-billion in exports to the rest of Africa took place under the terms of AfCFTA.
    The strategy aims to diversify exports both geographically and by product category, with a particular focus on increasing value-added exports and leveraging trade agreements and diplomatic efforts to enhance market access.
    The dtic has set a strategic target of growing the value of South African exports from about R2-trillion to R3...
    4 min
  • Eskom prioritises 14 municipalities for Distribution Agency Agreements to tackle R105bn arrear debt
    Eskom has identified 14 municipalities for the implementation of five-year Distribution Agency Agreements (DAAs), a controversial mechanism for dealing with arrear debt owed to the utility that now has Cabinet approval.
    Acting group executive for distribution Agnes Mlambo confirmed in a briefing to lawmakers that the arrear debt owed to Eskom currently stood at R105-billion, with the 14 municipalities representing 58% of this outstanding debt.
    She also highlighted the steep rise in municipal debt owed to Eskom, from R20-billion in Eskom's 2019 financial year to the current level.
    Eskom has warned previously that the debt could breach R300-billion by 2030 if left unchecked, which could undermine its financial recovery, as well as the unbundling of its distribution business.
    The municipalities being prioritised for DAAs are located in Mpumalanga, the Free State, North West and Eastern Cape and currently have average payment levels of only 31%. This in contrast to average Eskom payment levels of 94%, including 99.8% from non-municipal customers and 87.9% from municipal customers.
    The identified municipalities include Emalahleni, Matjhabeng, Govan Mbeki, Lekwa, Ngwathe, the City of Matlosana, the City of Mbombela, Thaba Chweu, Moqhaka, Enoch Mgijima, Disobotla and Dihlabeng, as well as the DAAs already in place at Maluti-a-Phofong and Emfuleni.
    The two active DAAs at Maluti-a-Phofong and Emfuleni were the outcome of court processes and Eskom confirmed that they had not performed as initially expected in ensuring a recovery in payment levels.
    Payment levels in Maluti-a-Phofong currently stand at only 25% despite an initial recovery to over 40% after the signing of the DAA in May 2023, while they are at 66% in Emfuleni, having been closer to 70% when the DAA was signed in October 2024.
    Nevertheless, CEO Dan Marokane expressed confidence that the performance of the DAAs would improve now that the mechanism had the support of both the National Treasury and Cabinet.
    He argued that this support would allow for the mechanism to be implemented more collaboratively than was the case previously, where the DAAs were the outcome of adversarial legal processes.
    As a result, there had been resistance to the initial DAAs which led the municipalities to either discourage direct payments to Eskom by consumers, or withhold revenue even when collections had increased on the back of the installation of smart meters.
    "The importance of the National Treasury having endorsed this approach is that it is no longer Eskom alone continuously trying to get alignment and collaboration with the municipality.
    "We now have the added benefit of the National Treasury on our side to force some level of collaboration in terms of behaviours expected once we start on this journey," he said, adding that the lessons learned from the initial DAAs also meant that it would employ additional levers to encourage a change in behaviour.
    That said, he acknowledged that ensuring a turnaround would not be an easy process as each municipality was different and Eskom staff would, thus, have to be flexible in the way they implemented the DAA in each case.
    He stressed that the intention was to help municipalities improve metering and billing systems, while raising collection and service levels to leave them in a better position at the end of the five-year period than was currently the case.
    That said, the initiative could still face resistance, as it involves a ringfencing of electricity revenues to ensure payment to Eskom, which could affect other services, as well as handing over billing and revenue collection to Eskom.
    In addition, any capital investment would be paid for through municipal funding mechanisms and the National Treasury would disburse the grant for the free basic electricity allowance through Eskom rather than the municipality.
    Electricity and Energy Minister Dr Kgosientsho Ramokgopa backed the DAA mechanism, arguing that it was a temporary intervention to arrest t...
    4 min

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