OPERATION VULINDLELA IS OPENING THE PATH TO GROWTH

Dear Fellow South African,

The South African economy, like any other economy, cannot function, let alone grow, without efficient and competitive network industries. These industries – which include electricity, water, transport and telecommunications – are the arteries through which the oxygen of the economy runs.

Structural problems in these areas have long been cited as some of the main constraints on South Africa’s economic growth. Inefficiency and the high cost of network services are an impediment to doing business in the country.

A factory can only operate effectively with a reliable and affordable supply of electricity. A farm with irrigated farmlands can only produce food if its application for a water use license is processed timeously. A mine can only transport its minerals for export if the railways are functioning properly. And a small business cannot thrive if it lacks access to the internet or if the cost of data is too expensive.

To address and overcome these challenges, we set up Operation Vulindlela in October 2020 as an initiative of the Presidency and National Treasury to accelerate structural reforms in these network industries. While the responsible government departments and entities drive these reforms, Operation Vulindlela monitors and identifies challenges and blockages. Where needed, it facilitates technical support to departments.

Today, we are releasing an update report on the work of Operation Vulindlela for the first quarter of 2022. The quarterly report outlines the progress made by Operation Vulindlela and the departments responsible for these reforms.

Across government, our focus is on reforms that are fundamental and transformative; that reshape the way our economy works.

This includes the auction of high-demand spectrum for mobile telecommunications, which was delayed for more than 10 years and finally completed in March. The release of new spectrum will improve connectivity and bring down broadband costs.

The establishment of the National Ports Authority as a separate subsidiary of Transnet last year had been delayed for more than 15 years. This was the necessary first step towards enabling private sector participation and increasing the efficiency of our port terminals.

We have also reinstated the Blue Drop, Green Drop and No Drop system for the first time since 2014 to ensure better monitoring of water and wastewater treatment quality. We have published an updated Critical Skills List, also for the first time since 2014.

These are just some examples where, by focusing effort and attention on a limited number of priority reforms, this administration has been able to drive progress.

Through Operation Vulindlela, we have also been able to take a more focused and holistic approach to reforms, ensuring better coordination where multiple departments and entities are involved. 

The best example of this is in the energy sector, where a number of important, interconnected reforms are underway to change the way that we generate and consume electricity.

Milestones include the raising of the licensing threshold for new generation projects to 100MW, allowing these projects to connect to the grid and sell power to customers. We have revived the Renewable Energy Independent Power Producer Procurement Programme through the opening of new bid windows.

Changes to the regulations on new generation capacity have allowed municipalities to procure power independently for the first time. And legislative reforms will ultimately give birth to a new competitive electricity market, supported by the publication of the Electricity Regulation Amendment Bill and the work underway to amend the Electricity Pricing Policy.

The process of unbundling Eskom is on track, with the entity meeting its December 2021 deadline for the establishment of a National Transmission Company. By December this year we hope to complete the unbundling of Eskom’s generation and distribution divisions.

The quarterly report highlights a number of other important achievements, as well as areas where intensive work is underway.

In the water sector, Operation Vulindlela has been providing technical support to the Department of Water and Sanitation to implement a turnaround plan for the granting of water use licences, with a target to process 80% of all applications within 90 days.

Work is also underway to establish a National Water Resources Infrastructure Agency that will ensure better management of our national water resources.

In the transport sector, inefficiencies in port and rail have severely affected our ability to export goods. Work is underway to establish partnerships with private sector operators to invest in port infrastructure and improve the management of container terminals at the ports of Durban and Ngqura.

The White Paper on National Rail Policy, which was approved by Cabinet in March, outlines plans to revitalise rail infrastructure and enables third‐party access to the freight rail network. Transnet Freight Rail is already in the process of making slots available for private rail operators on the network.

A fully operational e-Visa system has been launched in 14 countries, including some of our largest tourist markets. A comprehensive review of the work visa system is also underway to enable us to attract the skills that our economy needs.

These reforms have been made possible due to better collaboration across government behind a shared reform agenda.

Many of these reforms are complex, involving new ways of working and even the establishment of new institutions. In some cases, it will take time for us to see their full impact. Yet they are the only way to shift our economy from stagnation to dynamism. 

I would encourage those who continue to raise concerns about the slow pace of reform to read this latest report. What has been achieved by Operation Vulindlela and the respective departments in a relatively short space of time should demonstrate the commitment of government to implementing reforms that are necessary to inject growth into our economy and inspire confidence in the business and investor community.

We call on business and investors to take advantage of the changes that are underway and turn their pledges and commitments into tangible, job creating investments.

The reform agenda is moving and its momentum is unstoppable.

Together, let us build on this progress and translate economic reform into growth, opportunity and employment.

With best regards, 

THE WORKERS HAVE SPOKEN AND WE MUST LISTEN

Dear Fellow South African,

Two days ago, South Africa’s workers joined millions across the globe in marking Workers Day, also known as May Day. This is a day on which workers celebrate the victories they have achieved in the fight for their rights and reaffirm their commitment to struggle for the improvement of the conditions under which they work and live.

At the advent of democracy, we decided that this should be a public holiday because the struggles of workers are fundamentally about the betterment of society. It is a day which all South Africans should honour.

This year, I was invited to address a Workers Day rally at the Royal Bafokeng Stadium in Rustenburg. I was, however, unable to address the gathering because workers there had grievances that they expressed loudly and clearly. While the main grievance appeared to be about wage negotiations at nearby mines, the workers' actions demonstrated a broader level of discontent. It reflects a weakening of trust in their union and Federation as well as political leadership, including public institutions.

These workers wanted to be heard. They wanted their union leaders and government to appreciate their concerns and understand the challenges they face. In raising their voices, these workers were upholding a tradition of militance that has been part of the labour movement in this country for decades.

As political and union leaders, we have all heard the workers and understand their frustration.

More than that, we are firmly committed to take the necessary action to improve their lives and their working conditions. This is not something that government can do on its own. It needs both labour and business, and indeed the whole of society, to work with government to implement an agreed set of measures to grow and transform the economy.

South Africans have seen how such partnerships can bring about real change. The progressive labour laws that we have in place are the product of engagement among all social partners. Together, these social partners devised an effective response to the 2008 global financial crisis and laid the foundation for the Economic Reconstruction and Recovery Plan, which is guiding our response to the effects of the COVID-19 pandemic.

It was such a partnership that led to the introduction of a national minimum wage in 2019, a process that I was privileged to lead, giving effect to a demand that had been made more than 50 years before at the Congress of the People in Kliptown. And it is these partners that are, at this moment, once again engaged in deliberations on how to accelerate growth and create employment.

The wage grievances of the workers in Rustenburg deserve the attention of all stakeholders, employers and labour so that a fair and sustainable settlement can be reached. As government, we are committed to play our part.

But the workers at the Royal Bafokeng Stadium also made plain what nearly every South African knows: the working class and the poor of our country are suffering.

They made the firm point that we must do more, and act with greater urgency, to address issues of unemployment, poverty, deprivation and hunger. At the same time, we must establish more efficient mechanisms to enable workers to participate more fully in the formulation and implementation of policy and programmes.

Since the advent of democracy, significant progress has been made in improving the social and economic position of the poor and working class through the improvement of conditions of employment, the general provision of basic services and access to education and health care.

Yet, the growth of our economy and the creation of jobs that followed the advent of democracy has been undermined over the past decade and more by the combined effects of the 2008 financial crisis, the sharp decline in commodity prices, state capture, corruption and poor governance.

The COVID-19 pandemic struck just as the country was emerging from the era of state capture. In addition to the loss of more than 100,000 lives, the pandemic caused massive damage to people’s lives and livelihoods. Our economy shrunk and more than 2 million jobs were lost in a period of 12 months. This was a massive blow to our country, from which it will take many years to recover.

While the pandemic has affected everyone in our society, it is the working class and the poor that have suffered most. They have also been the most affected by service delivery failures, corruption, crime and weaknesses in local government. It is the working class and the poor who were affected most by the public violence and destruction in July last year, and who were most vulnerable when catastrophic flooding struck parts of KwaZulu-Natal and Eastern Cape.

As the tragedies have struck our nation, we have not been idle, either as government or the social partners. We have responded with all the means at our disposal.

As the effects of the pandemic became evident, in April 2020 we introduced the largest social and economic relief package in our history. This provided cash directly to the poorest households, wage support to workers and various forms of relief to struggling businesses. As a result, many jobs were saved, many businesses were kept afloat and millions of households were kept out of dire poverty.

Some measures, like the R350 Social Relief of Distress, remain in place. The grant now reaches more than 10 million recipients. With the end of the National State of Disaster last month, we are engaging with various stakeholders on how to ensure that the grant continues to reach those who most badly need it.

This is happening alongside measures to promote employment, like the Presidential Employment Stimulus, which has provided work and livelihood opportunities to more than 860,000 since it was started. It includes the expansion of the Employment Tax Incentive to encourage small businesses to employ more people, a loan guarantee scheme that has been redesigned to provide finance to smaller businesses, and the reduction of the red tape that holds back the growth of businesses.

We are undertaking fundamental economic reforms that will improve the competitiveness and economic contribution of the energy, water, telecommunications and transport industries. These reforms, together with increased investment in infrastructure, will enable faster economic growth and employment creation.

In the long term, these reforms will unlock much higher economic growth. And as businesses grow, they will create more jobs, helping workers and unions in a virtuous cycle. However, the workers that gathered at the Royal Bafokeng Stadium and millions of other people across our country cannot wait for the impact of these reforms to be realised. That is why, as we implement these measures, we are seeking – within our constrained public finances – to provide a basic level of social protection to the most vulnerable.

Almost all of those who were at the Rustenburg rally would know someone in their family and their immediate community who is receiving an SRD grant, who is in a Presidential Employment Stimulus programme, who has received a NSFAS grant, or who is another way benefiting from some of these programmes.

While much is happening, there is still much more that needs to be done to unleash the potential of our economy and provide the employment opportunities that our people need.

That is why we need to all work together to ensure that it will not be long before the workers of Rustenburg – and indeed workers across the country – begin to experience the benefits of ports and rail infrastructure that can effectively carry our goods to export. So that we can all experience the benefits of a stable electricity supply that is cleaner and cheaper, of fewer restrictions on small and informal businesses, of better access for all to broadband technology, and of an exploration strategy that leads to an increase in mining investment.

The challenges that workers face this Workers Day are many and the hardships they endure are great. The road ahead will be difficult and there is much work to do. That is why we need to rebuild trust and confidence, and why we need to forge a social compact that not only has the support of workers, but also delivers meaningful benefits to them.

The workers have spoken. We must listen. And, together, we must act.

With best regards,
 

THERE IS LIGHT AT THE END OF THE LOAD SHEDDING TUNNEL

Dear Fellow South African, 

Last week much of the country experienced load shedding as breakdowns at several of Eskom’s power stations resulted in the loss of substantial generation capacity.  

Load shedding costs our economy dearly. It causes great frustration among all South Africans and creates hardship for households and businesses.

A stable and reliable supply of electricity is essential for almost every aspect of our daily lives and a necessary condition for economic growth. That is why we are focused on achieving energy security as one of our foremost priorities.

The country has been experiencing power shortages on and off for more than a decade. However, we are determined that this should not continue to be a part of our lives into the future. Even as we continue to experience crippling load-shedding, the reality is that much progress has been made towards ending our energy supply challenges.

To solve this intractable problem, we need to understand its roots.

South Africa’s fleet of coal-fired power stations are old and their performance is deteriorating. Despite warnings from energy experts about impending energy shortages nearly two decades ago, there was a delay in commissioning new generation capacity. When construction began on Medupi power station in Limpopo in 2007 it was the first power station to be built by Eskom in more than 20 years. Medupi has subsequently been beset by delays, costs overruns and breakdowns due to design problems, with many of these challenges linked to allegations of corruption. 

For years, the existing power stations were not maintained properly, particularly as these plants were made to ‘run harder’ to meet the country’s energy needs. There was insufficient investment in the technical skills needed to operate and maintain power plants.

This situation was made worse by the devastating impact of state capture. Billions of Rands were diverted from critical operational requirements at Eskom into private pockets. 

Eskom’s huge debt burden, including more than R36 billion of outstanding municipal debt, undermines Eskom’s ability to improve its maintenance, infrastructure build and other operations.

In short, the load shedding we experience now is the result of policy missteps and the impact of state capture over many years. This is the situation that we have confronted since the start of this administration and that we are all working to fix.

In doing so, we owe the board and management of Eskom our full support as they work to turn the utility around. They have to keep the lights on while rebuilding Eskom as a viable entity that fulfils its developmental mandate as a state owned enterprise, and positioning it for a just energy transition. 

We also owe our full support to the many hardworking employees of Eskom, including power plant workers. Despite many challenges, they are doing their best to keep our ageing plants running and supply the electricity the country needs. 

It may be difficult to imagine a future without load shedding, but the steps we are taking now will ensure that we get there.

The process of structural reform this administration embarked on in 2018 will have a far-reaching impact on the South African energy landscape, even if the changes will take time to bear fruit.

In 2018, we revived the Renewable Energy Independent Power Producers Procurement Programme that had been stalled since 2015. This enabled 2,205 MW from Bid Window 4 to proceed to construction, most of which has now been connected to the grid.

A further 5,200 MW of solar and wind power is being procured through Bid Windows 5 and 6. This additional generation capacity is due to connect to the grid from late 2023. The Integrated Resource Plan 2019 provides for a further 3,000 MW of gas and 500 MW of battery storage to be procured from independent power producers. 

In June 2021, I announced that the licensing threshold for new generation projects would be raised from 1 MW to 100 MW. This means that private investors do not require a license to build generation facilities up to this size and can produce their own power or sell it across the grid to other buyers.

A joint task team comprising all relevant government departments and the private sector is working to accelerate investments in new generation projects under 100 MW. There is a pipeline of 58 projects under development with a combined capacity of 4,500 MW, many of which will commence construction this year. The task team is working to speed up environmental authorisation and other approvals.

South Africa’s energy security can only be assured if we reduce reliance on a single utility for power and unlock private investment in generation capacity. This is one of the most important reforms contained in the draft Electricity Regulation Amendment Bill that was gazetted for public comment in February. 

The Bill provides for the establishment of an independent transmission and system operator. This means that while the national grid will remain owned and controlled by the state, there will be competition among multiple generators selling power to distributors and customers. 

The introduction of a competitive electricity market will unleash new investment in generation capacity and will be a key driver of economic growth.

This reform process has already begun with the establishment of a separate transmission subsidiary by Eskom in December 2021, with the unbundling of Eskom on track to be completed by December 2022.

For its part, Eskom is forging ahead with its maintenance programme and with correcting design defects in its plants at Medupi and Kusile. It is also decommissioning old power stations that have reached the end of their design life and repurposing others to use cleaner energy sources. Eskom is also bringing in additional skills to assist with maintenance, including former employees and experienced plant managers.

It is difficult to expect the millions of South Africans grappling with the inconvenience and hardship caused by intermittent power outages to remain patient as we resolve these longstanding challenges. It is difficult to convince them, as they sit in the dark, that we are making progress towards a secure and reliable supply of electricity.

But the reality is that the energy landscape is being transformed, the problems at Eskom are steadily being addressed and substantial new energy generation capacity is being built. 

It is difficult and unacceptable for South Africans to endure load-shedding. But we are doing everything in our means to ensure that, like state capture, it soon becomes a thing of the past.

With best regards, 

After several months of intense work, the Embassy is very pleased to inform that travel from South Africa to Portugal is now authorized  for essential and  non-essential travel.

As from 23 April, entry into Portugal is authorized regardless of the origin of the passengers (essential or non-essential travel).  
Mandatory to present:

- A valid vaccination EU Digital COVID Certificate/ recovery EU Digital COVID Certificate
- Or a valid vaccination certificate or recovery certificate issued by a third country, under reciprocal conditions
- Or a negative RT-PCR Test (72h before boarding)
- Or a negative Rapid Antigen Test (24h before boarding)  

More information see website (Portuguese):  https://dre.pt/dre/detalhe/despacho/4829-a-2022-182491196