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  • Upcoming mini-Budget to include details on Independent Power Transmission pilot project
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    Details on the approach South Africa will be taking to piloting Independent Power Transmission (IPT) projects as part of a strategy to accelerate the expansion of its electricity grid will be included in the upcoming Medium-Term Budget Policy Statement (MTBPS), a senior official in the office of Electricity and Energy Minister Dr Kgosientsho Ramokgopa has confirmed.
    The MTBPS is scheduled to be released by Finance Minister Enoch Godongwana on October 30.
    Speaking during a virtual discussion hosted by RES4Africa, the ministry's head of strategic initiatives and international partnerships, Shaakira Karolia, reported that significant progress had been made to firm up South Africa's approach to private participation in the grid, following Cabinet's approval of a transmission finance pathway in December last year.
    Together with the National Treasury and the International Finance Corporation (IFC), the Ministry of Electricity and Energy had narrowed down the IPT procurement options to a build, operate, own and transfer, or BOOT, model, with remuneration based on capacity payments that would be linked to the transmission line's availability.
    South Africa, which has been studying IPT models used internationally, is expected to lean heavily on Brazil's approach, which includes a price cap set at the tender stage, and the first IPTs are likely to be implemented on transmission corridors in the Northern and Western Cape.
    Bidding is expected to be coordinated outside of the department along the lines of the Independent Power Producer Office, and it has been reported previously that this new office could be housed under the Development Bank of Southern Africa.
    Should the competitive auction model be used, bidders would submit a yearly revenue requirement to cover the capital, operational and maintenance expenditure of the IPT, as well as equity returns and debt repayments over the contract period, which is typically between 25 and 35 years in other countries.
    The National Treasury is also on record as stating that it is not keen to extend large guarantees to IPT projects and that it is working with the World Bank on the creation of a 'credit guarantee vehicle' that would provide guarantees without reference to government's balance sheet.
    Ramokgopa, Karolia said, would soon outline government's approach to IPT's as part of a broader strategy to be pursued with the National Transmission Company South Africa (NTCSA) to deliver on a Transmission Development Plan (TDP) that requires more than 14 000 km of new powerlines by 2033, alongside 170 new transformers and 40 capacitors.
    The TDP is expected to involve investments of about R390-billion and government has concluded that IPT should be integrated into the roll-out, owing to the financial and capacity constraints of Eskom Holding's NTCSA.
    NOT PRIVATISATION
    Karolia stressed that the IPT model endorsed by Cabinet did not amount to the privatisation of the grid, likening the approach to the one adopted by the South African National Roads Agency Limited to expand national roads using tolling.
    "We do not see IPTs as privatisation.
    "They are really private-sector partnerships to increase infrastructure development in the country - the ownership comes back to the State, and the NTCSA remains responsible for operating the transmission system," she added.
    IFC senior operations officer for Africa Tilana de Meillon, who has been working with government on the IPT options, said no whole-of-network concession was envisaged.
    Instead the proposal was for the private sector to be allowed to implement new transmission lines based on the needs of the TDP, primarily to spread risks and to mobilise financing.
    "The implementation agreement effectively only provides the support from the government to ensure the rights of the IPT to implement, own and opera...
    6 min
  • Don’t conflate Eskom-Sasol bilateral on LNG with ‘national strategy’ needed to avert gas cliff – IGUA-SA
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    The Industrial Gas Users Association of Southern Africa (IGUA-SA) has welcomed the attention that South Africa's impending "gas cliff" is finally enjoying from government through Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
    The body is cautioning, however, against conflating the recent signing of an agreement between Eskom and Sasol to jointly explore ways to shore-up demand to facilitate the importation of liquefied natural gas (LNG), which Ramokgopa attended, with the "national strategy" or "country plan" required to avert the crisis.
    This, because neither entity could adequately represent the industrial-consumption block that would play a central role in meeting the country's LNG demand, nor the coordinated an inclusive LNG solution that reflected the collective interests of all stakeholders.
    Eskom and Sasol have indicated that they will be jointly researching possible demand anchors in addition to existing industrial demand in Gauteng and KwaZulu-Natal, including gas-to-power (GtP) projects in close proximity to the existing Rompco pipeline from the Pande and Temane fields, in southern Mozambique, to Secunda, via Maputo.
    Executive officer Jaco Human told Engineering News that IGUA-SA's recent interaction with Ramokgopa pointed to the fact that government had fully grasped the urgency of the gas cliff, which had been largely ignored over the past ten years despite ongoing pleas and warnings from industrial consumers.
    He said he was also encouraged by the Minister's desire to address the issue as quickly as possible, given that Sasol had now officially extended the gas-supply plateau from its fields in Mozambique by a year to mid-2027.
    IGUA-SA was now eagerly awaiting the outcome of efforts by Sasol to extend the plateau further to mid-2028; an extension that Human said was necessary to ensure that there was sufficient time to finalise the contracts and infrastructure developments needed to begin importing LNG through Maputo by late 2027 or early 2028.
    He was more cautious, however, in his support for the bilateral memorandum of understanding between Eskom and Sasol, indicating that IGUA-SA would have preferred a multilateral gas-aggregation effort aimed at consolidating the fragmented market to enable secure, long-term gas infrastructure development and supply in order to find a "optimal solution" in the interest of the future users of LNG.
    Yearly industrial demand of about 60 PJ was currently the main existing anchor for LNG imports, given that Sasol's own demand would be limited in future to about 30 PJ to produce electricity, owing to the group's assessment that it was not commercially viable to use LNG to manufacture fuels and chemicals in Sasolburg and Secunda.
    The other demand "buckets" would arise from government's independent power producer GtP procurement programmes and from Eskom, which had plans to build a 3 GW GtP power station in Richards Bay.
    Human did not discount the prospect of Sasol emerging with a value-adding proposition for gas consumers in future.
    He argued, however, that such a commercial offering would be distinct from the aggregation that industrial consumers envisaged, which would be developed on a cost-pass-through basis rather than one underpinned by the profit motive.
    In the absence of any alternative market offering, IGUA-SA was pressing ahead with the formation of what it had dubbed 'GasCo', an "inclusive platform" in which government, international oil companies, gas suppliers and transporters, financial institutions and Sasol could all participate.
    "We look forward to Sasol making its offer to gas consumers," Human said, indicating that no such offer for LNG had been made to date.
    He stressed, however, that industry would not be supportive of any future market structure that sought to reinforce the dominance of a single ...
    5 min
  • Publication of Eskom's 36% tariff submission by Nersa heralds formal start of consultation showdown
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    The National Energy Regulator of South Africa (Nersa) has formally published Eskom's much-anticipated and much-criticised allowable revenue application for the coming three years ahead of what is likely to be a vigorous and potentially hostile public consultation phase.
    The documents have been published on the Nersa website following an assessment of its compliance with the methodology and approval to do so during a special Electricity Subcommittee meeting held on September 23.
    As has been widely reported, the sixth multiyear price determination (MYPD6) confirms that Eskom has indeed applied for allowable revenue of R446-billion for the 2025/26 financial year.
    If granted, this would translate to a tariff increase for direct Eskom customers of 36.15% on April 1 next year, and a 43.55% hike in municipal tariffs from July 1.
    The three-year application also includes total revenue requests of R495-billion and R537-billion for the 2026/27 and 2027/28 financial years, with associated hikes of 11.81% and 9.1% for the two outer years should the 36.15% increase have been approved in the first year.
    The application includes Regulatory Clearing Account (RCA) determinations to allow Eskom to claw-back revenue foregone in previous tariff periods and court outcomes, including a ruling allowing Eskom to recover residual amounts arising from the illegal removal of R69-billion from its asset base during the MYPD4 horizon.
    RINGFENCED SUBMISSIONS
    The MYPD6 application is accompanied by separated submission documents showing the specific allowable revenue requests of Eskom Generation, Eskom Distribution and the National Transmission Company of South Africa (NTCSA), which began operating as a wholly-owned Eskom Holdings subsidiary with its own board, on July 1.
    Ahead of the submission, NTCSA CEO Segomoco Scheppers stressed the importance of the unit receiving ringfenced revenue that could not be reallocated across other Eskom divisions, as had been the case previously, undermining investment in much-needed grid infrastructure.
    The NTCSA has applied for allowable revenue of R101-billion, R115-billion and R155-billion for the three financial years covered by the MYPD6.
    Eskom Generation is applying for R292-billion, R324-billion and R322-billion over the horizon, which includes revenue to continue operating and maintaining units at Camden, Hendrina, Grootvlei, Arnot and Kriel that would have had units shutting down during this period, but where permission has been granted to allow for ongoing operations until 2030.
    Eskom Distribution, which is expected to begin operating as a separate subsidiary in the coming year, has applied for allowable revenue of R53-billion, R56-billion and R59-billion for the period covered by the MYPD6.
    The submission also highlights the ongoing need for tariff restructuring, following Nersa's refusal to approve restructuring requests in 2020 and 2022, but states that restructuring proposals would be made in a separate application to the regulator.
    Eskom argues that restructuring is required to align tariff rates with divisional costs, reflect the evolving energy industry, and ensure revenue recovery.
    "The current tariff rates no longer accurately reflect the different services provided by Eskom.
    "Furthermore, the evolving nature of the energy industry necessitates the modernisation of tariff structures," the submission adds, highlighting the prevalence of customer-owned
    generation and the evolving patterns of grid usage.
    The revenue build up for 2025/26 outlined in the submission includes: R128-billion for primary energy costs, including R93.6-billion for coal; R93-billion for operating expenses, including R37-billion for employee benefits; R8.9-billion to cover arrear debt; R66.6-billion for purchases from independent power producers; R10-billion for international pu...
    7 min
  • Macpherson advertises key Public Works vacancies
    The Department of Public Works and Infrastructure (DPWI) has opened applications for several key permanent positions, as part of a move by Minister Dean Macpherson to stabilise the administration and governance of the department.
    Over the weekend, key vacancies were advertised, including the head of infrastructure, supply management executive for the Property Management Trading Entity, human resource management chief director and facilities management deputy director.
    The department is also seeking a permanent deputy director-general (DG) for the Expanded Public Works Programme, a deputy DG for policy research and regulation and a chief director for accounting and reporting.
    In a statement on Monday Macpherson emphasised the importance of filling these positions with skilled professionals, encouraging qualified South Africans to apply before the October 18 deadline.
    "The filling of these key positions with permanent appointments is part of the actions we have been taking to bring stability and good governance to the department since my appointment more than two months ago. These positions play a critical role in the department's functioning."
    "With the advertising of these positions, we are laying the foundation of a professional public service within the DPWI which has a diversity of skills and expertise to move us forward," Macpherson added.
    The recruitment drive comes at a critical time for South Africa, where infrastructure development is seen as a key lever to address the country's economic challenges. Strengthening the DPWI's capacity is expected to enable the department to oversee large-scale public works projects, which are essential for creating jobs, spurring economic growth and improving public services.
    President Cyril Ramaphosa underscored the importance of infrastructure investment in South Africa's economic recovery during his July address at the opening of Parliament. He vowed that the Government of National Unity would transform the country into "a construction site".
    Macpherson has echoed this vision, committing to ramping up construction projects nationwide and partnering with the private sector to boost infrastructure investment.
    "The advertising of these positions forms part of the greater work we are doing to build a strong DPWI to deliver our vision of turning South Africa into a construction site. By working together we can ignite economic growth, create jobs and build a more prosperous South Africa," he asserted.
    3 min
  • Sasol and Eskom to explore demand anchors for LNG as part of effort to avert 'gas cliff'
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    Eskom and Sasol have signed a memorandum of understanding (MoU) to jointly explore the potential to introduce liquified natural gas (LNG) to replace natural gas imports from southern Mozambique, which are currently set to decline sharply from 2027.
    The MoU was signed by Eskom CEO Dan Marokane and Sasol CEO Simon Baloyi at a ceremony held at Eskom's Megawatt Park, which was attended by Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
    Sasol announced in early September that the gas-supply plateau ahead of a so-called 'gas cliff' had been extended by a year from the initial timeline of mid-2026, and that work was under way to try to extend the plateau to mid-2028.
    However, Baloyi stressed that these efforts had simply delayed the inevitable decline in gas imports from the Pande and Temane fields and should be seen as a bridge to the importation of LNG, particularly given that indigenous gas sources were unlikely to materialise in time.
    Sasol had also resolved to play a central role in aggregating domestic demand to create the basis for LNG imports, as a way of providing gas users with longer-term certainty of supply, albeit at a far higher price relative to current prices.
    "[The extension] has now given us space and scope to be able to bring in LNG . . . and that time must not be wasted," Baloyi said at the signing ceremony.
    He also insisted that Sasol's plans could complement the aggregator initiative being pursued by large gas consumers under the banner of the Industrial Gas Users Association of Southern Africa.
    Non-Sasol domestic demand of up to 180 PJ/y is currently located mainly in Gauteng and KwaZulu-Natal, which is met through the Rompco pipeline from southern Mozambique to South Africa, as well as a pipeline to KwaZulu-Natal.
    Such demand is not substantial enough to secure competitively priced LNG from international sources and, through the MoU, the prospect of "anchoring" that demand with gas-to-power (GtP) generation, including at repurposed coal plants within proximity to the Rompco pipeline, will be explored.
    "The context of this MoU is on the back of seeking to exploit opportunities that may arise based on the infrastructure that already exists, namely the Rompco pipeline," Marokane explained.
    "It is this pipeline whose capacity will be redundant as indigenous gas from Mozambique declines, [and] the importation of LNG will take advantage of this installed infrastructure to access the markets that are already existing inland," he added. Indicating that the gas would, thus, not be used to supply the open-cycle gas turbines that currently use diesel.
    Marokane said the MoU would also provide Eskom with "optionality" to accelerate its GtP strategy. The State-owned company has indicated previously that it has a 20-GW-plus generation project pipeline that includes 4 GW of GtP, including a 3 GW project proposed for Richards Bay.
    Eskom was, thus, paying close attention to the updating under way on the Integrated Resource Plan with a view to ensuring that there was scope for it to pursue such projects, with Marokane noting that it was already in the process of procuring solar PV and battery storage capacity at two power station sites, Komati and Lethabo.
    Ramokgopa described the MoU as part of the country's emergency response to the impending gas cliff and said that government intended to support the initiative through various government-to-government initiatives, including with Qatar, which had expressed its support for South Africa's LNG ambitions.
    In their joint statement, Eskom and Sasol indicated that they would also explore sourcing gas within South Africa, the Southern African Development Community, and other parts of the African continent.
    No specific projects or timelines were provided with regards to implementing the MoU, with Marokane saying only th...
    5 min
  • Steenhuisen outlines vision for growing and modernising SA’s agriculture ecosystem
    Newly appointed Agriculture Minister John Steenhuisen is pushing a renewed focus on structural reforms, biosecurity and improved trade relations with other countries as the Democratic Alliance leader takes charge of the department as part of the Government of National Unity (GNU).
    In an exclusive interview with Engineering News & Mining Weekly, Steenhuisen highlights that other prioritised areas are more road-to-rail shifts in agricultural logistics, and the more widespread adoption of technology to reduce crime and increase productivity.
    Some agri-economists are optimistic that he will be able to advance the prospects of the industry, a mainstay of growth for the South African economy, having grown by 13.4% and created 21 000 new jobs in the first quarter of this year. Since 2008, its growth rate has averaged 7.5% a year.
    Industry bodies, such as the Agricultural Business Chamber of South Africa (Agbiz) and Agri SA, welcomed Steenhuisen's appointment in July and his subsequent maiden Budget vote, which the organisations say is focused on valuable interventions and relentless implementation.
    Agri SA said a noteworthy aspect of the budget was the allocation of R1.7-billion to support more than 6 000 small-scale farmers.
    The Minister says there is no need to "reinvent the wheel" and will therefore focus on driving the implementation of the Agriculture and Agroprocessing Master Plan (AAMP), which he deems a solid framework on which inclusive growth in the sector can be based.
    Steenhuisen emphasises the importance of blended finance to reduce barriers for small-scale farmers, as well as access to markets. There are also "massive" opportunities for small-scale produce to be procured by hospitals, schools and prisons to improve food security in the country.
    In the spirit of modernising the sector, he highlights the importance of strong partnerships between sectoral bodies and departments to foster a more efficient and effective regulatory environment.
    Some of the legislation governing the agriculture sector dates back to 1947, but "the world has moved on" and Steenhuisen wants to ensure that legislation aligns with newer products and technologies.
    The AAMP will be reviewed on a continuous basis to determine which aspects have been working and which ones have not, and where improvement is required, he adds.
    The Minister says the plan will evolve over time in a way that ensures the achievement of its objectives, including bigger value chains, more opportunities for small- and large-scale farmers, better biosecurity and expanding export markets.
    Steenhuisen cites beef exports to the EU as an example, which he deems "a huge opportunity" for growth and foreign earnings, particularly if South Africa can demand higher prices on the back of high levels of biosecurity.
    Other concerns in the agriculture sector involve logistics - "a key problem" - with road transport not only being costly but also resulting in goods being damaged because of potholes, or rural areas not having access to main roads at all, he explains.
    Steenhuisen is confident that efforts by the GNU to facilitate more private-sector participation in the rail industry bode well for agriculture and its transport system, with his department ready to collaborate with other government bodies to improve agriculture corridors and ports in the country.
    Another crucial area of collaboration will be addressing the high crime rate, which the Minister says disproportionally affects people in rural areas, where most farming activities take place.
    Steenhuisen attributes the high crime rate to a lack of effective policing and implementation of a rural safety plan: "Technology [is enabling] farmers to patrol large areas to not only deal with farm attacks but also stock theft. Farmers are implementing sniper cameras . . . to identify number plates and better track down people who have been in and out of certain areas - which can be a deterrent for criminals."
    He adds that, with technology "...
    9 min
  • Ramokgopa seeks to strike ‘delicate balance’ on Eskom tariffs, labelling mooted hikes ‘untenable’
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    Electricity and Energy Minister Dr Kgosientsho Ramokgopa has labelled a mooted increase in Eskom's electricity tariff of 36% "untenable" and "unaffordable" and has promised to work on an outcome that seeks to strike a "delicate balance" between the needs of consumers and Eskom's financial sustainability.
    In his speech during a special Parliamentary debate, the Minister also reaffirmed the need to transition the Eskom tariff toward cost-reflectivity, highlighting the burden on taxpayers should the utility's finances not be stabilised.
    This tax burden was also highlighted by the Democratic Alliance's Kevin Mileham, who led the debate for which his party had called.
    He noted that Eskom had received about R242-billion over the last ten years, before the recent approval of a R254-billion debt-relief package under which the utility was currently trading.
    Mileham also warned, however, that consumers would be left having to choose between electricity and food should Eskom receive the 36% hike for which it was currently applying, given that electricity tariffs had already surged by a nominal 945% over the past 17 years.
    The increase would be made even more unaffordable, he added should the National Energy Regulator of South Africa (Nersa) immediately implement an R8-billion claw-back awarded in favour of Eskom in line with a regulatory clearing account application for the 2021/22 financial year.
    Should the full amount be implemented on April 1 next year, it would add 4% to the overall tariff increase.
    In his response to the debate, Ramokgopa said the issue of Eskom's tariff hike needed to be addressed with urgency and compassion, and expressed optimism that a solution could be found that balanced Eskom's financial sustainability and protected vulnerable communities.
    "I'm talking about that delicate balance of ensuring the sustainability of Eskom that is needed for us to allow the economy to grow, [while cushioning] the poor and the middle-income earners in this country, so that we don't erode their disposable income."
    While indicating that he would be requesting Nersa to delay and phase-in the R8-billion claw-back, he also announced the following interventions:
    A review by the South African National Energy Research Institute of the of the current monthly free basic electricity allowance of 50 kWh for indigent households with the aim of increasing the benefits and ensuring that the benefits reach all ten-million eligible households rather than the current two million;
    A repurposing the Integrated National Electrification Programme, which received R5-billion yearly, to increase its penetration through the use of alternative technologies, with a PV-battery-inverter pilot project to be launched before the end of November; and
    Continuing to find a solution to the growing problem of Eskom's municipal arrear debt, which stood at close to R80-billion, alongside efforts to improve the capacity of municipalities to bill and collect electricity revenue.
    He also underlined the need for Eskom to improve its efficiencies and contain its primary energy costs, but stressed that cost savings alone would not be sufficient to ensure its long-term sustainability.
    "Financial sustainability requires improved operating cash flows and a shift towards cost reflective tariffs.
    "Without this, Eskom will remain dependent on government support, placing an ongoing burden on taxpayers," he said.
    Ramokgopa also stressed that Nersa would ensure full public participation when deliberating on Eskom's revenue application in December, and promised that government would be taking steps in parallel to find solutions to cushion consumers.
    "These increases are untenable, are unaffordable, and the country can least afford this situation.
    "We will do everything possible to address this. That's the assurance I'm giving t...
    4 min
  • South Africa’s first Just Transition perception survey highlights low awareness and concern over impacts
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    A new South Africa-wide survey shows that, while 62% of respondents support the shift from coal to renewable energy, a striking 65% have never heard of the term 'Just Transition'. In addition, the majority of respondents expressed concern about possible negative impacts for themselves and their families, with 29% indicating that they are 'somewhat worried' about such impacts and 20% reporting a 'high level of worry'.
    Compiled for the Presidential Climate Commission (PCC) by the Human Sciences Research Council, the survey involved some 3 100 respondents from across South Africa, making it the first nationally representative survey of public perceptions and attitudes relating to the Just Transition and climate change.
    In a presentation of the results, Dr Ben Roberts and Dr Thobeka Zondi indicated that knowledge of the Just Transition was higher among those who had knowledge of, and had concerns over, climate change, and lower among climate sceptics.
    Interestingly, a related spatial analysis revealed that proximity to coal mines and coal-fired power stations was associated with a moderately higher awareness of climate change, as well as less scepticism and stronger support for Just Energy Transition (JET) actions. Such proximity had no significant effect, however, on climate concern, personal pro-environmental norms, or concerns about the personal impacts of the JET.
    The perceived personal negative impacts reported in the survey related mainly to concern over the potential for higher electricity prices, a loss of jobs and the possibility of it increasing loadshedding.
    These concerns were inverted, however, in responses on the perceived positive impacts, which included the potential for reduced loadshedding, economic and job growth, lower electricity prices and improved health outcomes.
    The authors said the results indicated "in principle" support for the Just Transition on the back of expectations of personal and national benefits, rather than environmental ones.
    However, it also showed that many still had worries about the possible adverse personal impacts.
    The survey also pointed to a rising awareness of climate change in South Africa, with only 17% indicating they had not heard of the concept compared with 45% in 2007.
    It also showed that direct exposure to extreme weather events, such as the recent floods in KwaZulu-Natal, was a significant predictor of both awareness of, and concern about, climate change.
    The PCC indicated that it intended to repeat the survey at regular intervals to keep track of public perceptions about both climate change and national Just Transition actions.
    3 min
  • Creecy sets year-end deadline for rail Network Statement amid ‘complicated tariff balancing act’
    This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
    Transport Minister Barbara Creecy says that, despite Transnet's turnaround progress, the State-owned enterprise is not able to meet the target of increasing South Africa's yearly rail volumes to 250-million tons alone.
    The Government of National Unity is, therefore, prioritising efforts to open the network to third-party operators and private infrastructure investment in line with its "apex" goal of facilitating rapid economic growth.
    Addressing a Steel and Engineering Industries Federation of Southern Africa (Seifsa) conference in Ekurhuleni, Creecy revealed that she had set a year-end deadline for the publication of a final Network Statement that was attractive to private operators, but still met the revenue needs of Transnet.
    Making no reference to earlier commitments that the statement would be published by September, Creecy said only that finalising the document was "quite a complicated balancing act".
    A draft Network Statement was published by the Transnet Freight Rail Infrastructure Manager earlier this year ahead of public hearings held by the Interim Rail Economic Regulator Capacity, where the high tariffs implied when using the proposed methodology were heavily criticised by stakeholders.
    "What we understand when we interrogate the tariff is that the tariff has to be attractive to third-party players.
    "It also has to assist Transnet with its revenue-raising requirements, and so we are engaged in quite a complicated balancing act," Creecy told delegates.
    She highlighted progress being made by Transnet to improve rail volumes and port efficiency, but acknowledged that its recovery target for 2024/25 of below 200-million tons was not what industry, especially the mining industry, needed to grow.
    "So what we've been saying is that Transnet is not going to be able, in the current conditions, to recover on its own and we need an industry-wide collaboration in order that we can take forward the recovery."
    PRIVATE SECTOR PARTICIPATION UNIT
    The Department of Transport was also working on setting up a Private Sector Participation (PSP) framework for investments into the port and rail networks and would be setting up a PSP Unit to help ensure that projects could be progressed to financial close.
    Creecy indicated that the unit would be housed in the Development Bank of Southern Africa and would seek to draw lessons from reforms in the electricity sector, where independent power producers have invested billions into new generation.
    Deputy Finance Minister Dr David Masondo said that, through Operation Vulindlela, reforms were being pursued to rehabilitate the rail network and improve rolling stock, aligning with the freight logistics roadmap.
    "These investments will improve South Africa's logistics capabilities and re-establish us as a competitive player in global trade," Masondo said, indicating that the loadshedding and freight logistics crises had highlighted the risk of having single service providers.
    Creecy said that the opening of the electricity and freight logistics sectors to greater private participation represented a "paradigm shift" that had far-reaching implications for both government and the metals and engineering sector, which had historically pursued supply opportunities through entities such as Eskom and Transnet.
    "There are new opportunities, but those opportunities need to be approached in a different way . . . and I think that if you want to participate and compete in this new environment, it means you've got to interrogate what this paradigm shift means for the industry."
    Seifsa president Elias Monage urged government to consider a "strategic procurement" approach that was based on ongoing engagement with domestic industry on the infrastructure programme, and close the prevailing gap between local-content policy aims and the way procurement was being...
    4 min

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