<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
JEREMY MAGGS: Operation Vulindlela [notes] structural reform is beginning to unlock investment and improve state performance, with progress reported in electricity, in freight, rail, water, visas and digital government. But its latest quarterly assessment also shows 40% of reform actions are delayed or are off track. I think that raises questions about whether policy activity is actually translating into results that ordinary South Africans can see.<\/p>\n
Well, someone at the centre of all of this is Rudi Dicks, who\u2019s head of the project management office (PMO) at the private office of the president. Rudi, welcome back to the programme. So is Operation Vulindlela genuinely changing the economy or, as a result of this latest report that we see, still producing plans, laws and institutions rather than measurable results?<\/p>\n
RUDI DICKS: Hi, Jeremy, thanks for inviting me. Well, as I said, I think it\u2019s important to contextualise it. And no, it\u2019s not spinning. When we say that 40% is off track, it doesn\u2019t necessarily mean that they\u2019re not being implemented. They slightly off track because, as I\u2019ve explained, there may be technical aspects.<\/p>\n
So let\u2019s deal with two of them. Energy reforms and particularly the most fundamental reforms that we have never seen in the last 30 years in our energy space, the formation of the wholesale electricity market and, of course, the unbundling of Eskom.<\/p>\n
What we are seeing is getting into much of the weeds and the details and therefore requires additional technical work. So they are slightly behind schedule, but the work and the momentum continues, and I think that\u2019s really the important thing to understand.<\/p>\n
Similarly for logistics, we spent a bit of time on getting a network statement that\u2019s bankable, that can get third-party operators, private sector operators onto the rail network so we can unlock an additional 24 million tonnes. That needed quite a bit of work to ensure that we get an agreement on the network statement.<\/p>\n
So that\u2019s really it. It doesn\u2019t necessarily mean that we are not committed to the reform programme. It means that we are getting to where it really matters, the nub of issues that require for us to now say, this is how we\u2019re going to unbundle Eskom and create a transmission system operator. This is what we\u2019re going to do in logistics in moving forward. That, I think, is the important point that I want to make, Jeremy.<\/p>\n
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JEREMY MAGGS: It\u2019s not quick enough, though, to meet the urgent needs of the economy and its growth.<\/p>\n
RUDI DICKS: Well, certainly, of course, but reform is a slow process, isn\u2019t it? Unfortunately, I think there are huge amounts of expectation. We still stick with the numbers, both independently done by the Bureau of Economic Research and, of course, internally by Treasury, and the South African Reserve Bank (Sarb).<\/p>\n
But the reform is an important basis for us to catalyse economic growth.<\/p>\n
We still think that if we fully implement the reform aspects that we\u2019ve announced in phase two, that we will hit 3% by 2029, as we set out.<\/p>\n
JEREMY MAGGS: Let me pick you up on the wholesale electricity market that you referenced, due to open externally early next year. But I think the question is, how can a competitive electricity market succeed while municipal distributors remain financially broken and distribution reform is still facing significant challenge?<\/p>\n
RUDI DICKS: Absolutely. I think that\u2019s really the crux and the nub of it. If you had noticed, for example, the report that we released, I think there\u2019s a press release that we\u2019ve issued early today or late last night on the Eskom Restructuring Task Team, you would have noticed that as part of the unbundling and creating a transmission system operator, we have set up a separate work stream under that by the two Director-Generals, the Director-General in the Presidency (Phindile Baleni) and the Director-General in the National Treasury (Dr Duncan Pieterse), to particularly address fundamentally those concerns.<\/p>\n
Because you\u2019re spot on, if you\u2019re going to set up a wholesale electricity market, you\u2019ve got to fix the distribution and allow also municipalities, for example, or the electricity distribution utilities to participate in that market.<\/p>\n
So it is fundamental and what is that, financial sustainability. It\u2019s why part of the reforms is to ring-fence those utilities so that you are able to pay for the bulk electricity that you buy, professionalise it, but also ensure that you invest in maintenance and infrastructure.<\/p>\n
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So that\u2019s quite critical. A lot of the interventions that we\u2019ve done over the years have not achieved the desired results. So we\u2019ve got to think about the long-term reform around it. But your observation is correct. We\u2019ve got to deal with EDI (Electricity Distribution Industry), and we\u2019ve got to move with it as quickly as possible to ensure we can have a successful, competitive market.<\/p>\n
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JEREMY MAGGS: All right. Let\u2019s move on to rail that you also referenced. Eleven private train operators, if I have read this correctly, have signed rail access agreements. But again, the question is, when will businesses actually see more freight moving reliably by rail?<\/p>\n
RUDI DICKS: Well, certainly I think we\u2019ve seen some significant progress, [but] not knocking on the 250 million tonnes. The minister (Barbara Creecy) has set 250 million tonnes as the target for 2029, 2030. What we have seen from the low of 2023, when we were doing 149 million tonnes, we\u2019re now pushing at about 168 million tonnes in the last financial year.<\/p>\n
The private train operating companies would see an additional 24 million tonnes. So that\u2019s an important part as we move towards the target.<\/p>\n
A lot of it is dependent on the ability for us to be able to raise capital, both internally through the budget facility for infrastructure or design concession deals, private sector participation on fixing the rail network.<\/p>\n
It is really the rail network that is in a dire state, Jeremy, that requires for us to be able to make that investment so we can get more volumes on the iron ore line, on the Natcor (Natal Corridor), the line that runs from Johannesburg, which is our container line, on the coal line, on the chrome line.<\/p>\n
It\u2019s really a fact of us being able to put huge amounts of money quickly and fast, in partnership with the private sector, to ensure that we maintain and fix a broken system, a broken rail infrastructure, so we can get greater volumes. What we\u2019re doing is, of course, ensuring that we can support the maintenance that Transnet is busy doing, and the budget facility for infrastructure is an important aspect of that.<\/p>\n
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JEREMY MAGGS: The other big issue, of course, is water. It\u2019s a big problem, particularly in urban South Africa. The water project pipeline, I think it\u2019s valued at around R100 billion. How much, at this point, Rudi, is fully financed? How much is under construction and actually delivering water as we speak?<\/p>\n
RUDI DICKS: Well, a lot of them are already in quite an advanced stage. So you\u2019re correct, it\u2019s R100 billion. About R60 billion of that is close to financial close. So we are able to ensure that we can move towards construction and announce commercial operation dates.<\/p>\n
There has been a kink in our value chain of getting it from project pipeline into bankability, COD (commercial operation date) and then, of course, the actual construction. Part of it is now to ensure that the Infrastructure Fund of South Africa and the Water Partnerships Office are able to unlock that. We\u2019ve set a target because we don\u2019t want to continue hearing about a project pipeline, and that\u2019s quite an important part.<\/p>\n
The target is both at a wholesale level or at a raw water pricing level, at bulk and then, of course, also at distribution. So we\u2019ve got to move pretty fast and get many of those projects into construction. That\u2019s a critical focus of the National Water Crisis Committee, Jeremy.<\/p>\n
JEREMY MAGGS: Rudi Dicks, thank you very much indeed, head of the project management office in the private office of the president.<\/p>\n
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#Operation #Vulindlela #hit #growth #reforms #continue<\/p>\n","protected":false},"excerpt":{"rendered":"
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