Transcript Slide 1

BUDGET REVIEW AND
RECOMMENDATIONS REPORT
Presented by : Ms N Magubane
Director General
12 October 2010
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DoE Management Team
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Mrs. Thandeka Zungu: COO
Mr. George Mnguni: DDG: Corporate Services.
Mr. Dakalo Netshivhazwaulu: Acting CFO
Mr. Ompi Aphane: Acting DDG of Electricity, Nuclear &
Clean Energy
Mr. Zingisa Mavuso: Acting DDG of Hydrocarbons &
Energy Planning
Mr. Mohau Nketsi; Senior Manager of INEP BPU
Ms. Ditebogo Kgomo: Chief Director of Nuclear
Mr. Velile Kweyama: Director Internal Audit
Ms Nonhlanhla Ndebele: Office of the Director General
Mr. Sifindo Mbebe; Office of the Director General
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Presentation outline
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Overall Departmental budget review
Major funded projects.
Personnel budget outlook.
Unfunded key activities.
Austerity measures adopted to contain
expenditures.
• Overview of project performance.
• Conclusion.
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Introduction
• Objective is to highlight the department’s
budgetary and performance review for the
first six months of 2010/11, focusing on
major programmes.
• The presentation has taken into account the
following:
– Minister's Budget Vote commitments
– Department Strategic Plan 2010-11 – 2012-13
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Overall Departmental budget review
Programme
Administration
2010/11
Initial
R’000
104,205
Roll
Overs
R’000
Adjusted
Allocation
R’000
-
Expenditure
YTD
R’000
Exp as
%
Of
Budget
104,205
60,257
57.83
1,558,608
402,196
25.80
Hydrocarbons
and Energy
Planning
1,558,608
Electricity,
Nuclear and
Clean Energy
408,817
5,000
413,817
29,132
7.04
Associated
Services
3,463,760
56,000
3,519,760
1,618,750
45.99
Total
5,535,390
61,000
5,596,390
2,110,335
37.71
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Major funded projects
TRANSFER PAYMENTS
20 Year Integrated Energy Plan
REFSO
Transnet Pipelines
EDSM - Eskom
EDSM - Municipalities
INEP - Eskom
INEP - Municipalities
INEP - Non-grid
Original
Budget
2010/11
R'000
3,000
20,700
1,500,000
108,900
220,000
1,719,810
1,020,104
124,200
Exp YTD Sep
2010
R'000
0
488
350,000
62,221
57,510
721,116
137,443
879
Act Exp as a %
Available
of Budget
balance
Allocation
R'000
%
3,000
0.00%
20,212
2.36%
1,150,000
23.33%
46,679
57.14%
162,490
26.14%
998,694
41.93%
882,661
13.47%
123,321
0.71%
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Major funded projects
TRANSFER PAYMENTS
Working Energy Project
NECSA
NNR
EDIH
Original
Act Exp as a
Budget
Exp YTD Sep Available % of Budget
2010/11
2010
balance
Allocation
R'000
R'000
R'000
%
20,000
0
20,000
0.00%
574,110
471,709
102,401
82.16%
19,954
8,157
11,797
40.88%
61,582
25945
35,637
42.13%
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Organisation and establishment
structure of Energy
Structure
No. of posts
Interim Structure (initial)
325
Additional funded Positions
206
Filled Positions
458
Vacant posts
73
Total funded posts
531
Unfunded posts
394
Approved structure
925
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Key unfunded activities
Area
NERT
FIFA tournament
Clean Energy operations
International Affiliations
Accommodation
Establishment of SANEDI
Total
Amount (R’000)
10,000
150,000
3,420
11,000
9,000
17,000
200,420
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Adopted Austerity Measures
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Restriction on international travelling
Restriction of internal catering
Review of international commitments for
affiliations
Stringent measures for control of telecommunication costs
Review of internship programme
Restriction of advertisement on commercial
media
Review of process for appointment of
consultants
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Project
Planned
Completion
date
Financial
Implications
Comment/Status
Electricity Chief Directorate: Progress
Integrated Resource Plan December
None
Draft report presented to
Reporting.
2010
2010
IMC –Energy.
Draft report released to
general public for
consultation.
Establishment of
Independent System and
Market Operator (ISMO).
July 2010
None
Draft Establishment Bill
sent to other government
departments
Electricity Regulation Act,
Second Amendment Bill
June 2010
None
Awaiting finalization of
ISMO Bill in order to
incorporate and align.
DoE 1000MW IPP
June 2010
None
PPA negotiations 95%
complete.
Expected Financial Close
Feb 2011
Establish Regional
Electricity Distributors
June 2010
None Directly
Cab memo prepared for
IMC on way forward.
Standard Offer Policy on
Energy Efficiency and
Demand Side
Management.
June 2010
None
Done and sent to NERSA
for implementation.
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Project
Planned
Completion
date
Financial
Implications
Comment/Status
Electricity Chief
Directorate:
Progress
March 2011
None
The Strategic Stocks
Regulations were published
Reporting.
for public comments on 23
Development of the fuel
strategic stocks policy &
the relevant regulations
rd
Sept. 2010.
Deadline for submission of
comments is 23 October
2010
The draft Policy is still under
discussion in the Department.
Development of the LPG
Price Regulations
July 2010
None
The Regulations were
Promulgated on 14th July
2010
Review of the fuel
specifications & standards
March 2011
None
A draft position paper is
currently under discussion in
the Department and would
thereafter be presented
to the InterDepartmental Task Team.
Once considered by IDTT it
will be published for public
comments.
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Project
Planned
Completion
date
Financial
Implications
Comment/Status
Electricity Chief Directorate: Progress
Development of the 25
March 2011
R 4 million
The TOR was published on
Reporting. 1 October 2010 &
year fuel liquid
st
infrastructure plan
compulsory briefing session
to potential Bidders will be
held on 18th November
2010.
The project should be
completed within 6 months
after signing the contract.
Development of
petroleum pricing
framework
March 2011
R2.5 million
(2010/11)
R200k p.a
The Regulatory Accounting
Models for BSS, Coastal
storage, secondary
distribution, and secondary
storage and handling has
been finalised.
The final report will be
completed by 22 October
2010.
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Project
Planned
Completion
date
Financial
Implications
Comment/Status
Electricity Chief Directorate: Progress
Development of the
March 2011
R3 million for Governance structure
Reporting.
Integrated Energy Plan
the energy
which includes relevant
modelling
exercise
government departments
established.
IEP methodology
developed and approved
Draft plausible futures
complete.
Development of the
Integrated Energy
(Implementation )
Strategy
March 2011
None
Draft IEP Strategy
completed and circulated
for comment by other
government departments.
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Project
Planned
Completio
n date
Financial
Implications
Comment/Status
Electricity Chief Directorate: Progress
Development of the
March 2012 •R3 million
Process of acquiring service
National Integrated
for phase 1
provider to develop model for
Reporting.
Energy Modelling System
Regulations for the
Mandatory Provision on
Energy Data
March 2011
•R90 million
for entire
system
IEP in progress.
None
Draft regulations have been
gazetted & stakeholder
engagement process held.
Centralisation of energy data
which is currently collected by
the Department has started
Amended regulations have
subsequently been reviewed
by State Law Advisors.
Stakeholder inputs obtained &
amended regulations
forwarded to relevant
government departments for
inputs.
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Project
Planne
d
Comple
tion
date
Financial Implications
Comment/Status
Electricity Chief Directorate: Progress
Reporting.
Establish the
South African
National Energy
Development
Institute
(SANEDI)
March
2012
Publish Energy
Digest and
Energy Price
Report
March
2011
2011/12: R491million
2012/13: R601 million
2013/14: R787million
R3 million for phase 1
R90 million for entire
system
None
Business case for the
establishment of SANEDI
updated after input from
National Treasury and DPSA
Final recommendations made to
the Minister
Data collection in progress and
skeletal structures started
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Project
Planned
Completio
n date
Financial
Implications
Comment/Status
Electricity Chief Directorate: Progress
Licensing of petroleum
Ongoing
None
15, 769 Applications lodged
Reporting. since 2006.
products
1,200 yearly average ( past 3
years).
From April to September 2010
•298 Accepted/processed
applications
•16 Approved licences
• 8 refused applications
•Average 52 applications lodged
per month.
NOTE:
90 days legislated time for
application processing.
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Project report: Non Grid Electrification
Programme
Start: 01 April 2010
Finish: 31 March 2011
Deliverable
Completion date
Funding
Comment/Status
Install 1,000 SHS in
Limpopo (Solar Vision)
31 March 2011
R6 million
Some areas identified and
rollout will start immediately
after material delivery
Install 4,000 SHS in
Central KZN (KeS)
31 March 2011
R24 million
More than 50% of areas
identified. Installations in
progress
Install 4,000 SHS in
Northern KZN (NuRa)
31 March 2011
R24 million
Areas identified and waiting
for council resolution.
Material ordered and
installations will start after
confirmation
Install 1,500 SHS in
Eastern Cape (Ilitha)
31 March 2011
R 9 million
Areas are being identified
and negotiated with
Municipalities. There were
delays due to availability of
GIS data
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SWH Roll-Out : tariff funded programme
Roll out area
Number of Units
Remark
Nelson Mandela Bay
120 000
Commenced 20 July 2010. 3600 Units already
rolled out. Eskom agreed to ring fence the rebate
for the 120 000 units. The plan is to roll out 5000
units per month. A launch for the programme is
being planned with NMB awaiting Presidency on
the availability of the President.
Bloemfontein
40 000
MOU signed and 300 rolled already out
Kroonstad
40 000
MOU signed
Ekurhuleni
120 000
MOU is being finalised.
Potchefstroom
8 000
MOU signed and roll out is being finalised. Rollout commences 04 October
SWH Roll-Out : tariff funded programme
Roll out
area
Number of
Units
Remark
Mossel Bay
120 000
MOU signed and 400 rolled already out
Saldanha
Bay
Target to be
confirmed
MOU signed and roll-out commences 04
October
KZN (various 270 000
munics)
MOU’s have been signed for total of 270 000
in KZN
SWH Roll-Out : fiscal funded programme
Roll out area
Number of Units
Remark
Sol Plaatje Municipality
5400
Committed 5400. Eskom tender is at
advanced stage and negotiations with
suppliers now completed. Transfer of
funds to ESKOM targeted for 28
October. Roll out expected end of
October 2010.
Naledi Municipality
5400
Committed 5400. Eskom tender is at
advanced stage and negotiations with
suppliers now completed. Transfer of
funds to ESKOM targeted for 28
October. Roll out expected end of
October 2010.
Tshwane Municipality
10400
Eskom has been appointed as the roll
out agent for the municipality and this
project forms part of the Eskom
tender
Noupoort
6000
Committed 200 units for 2010
financial-year. Proposed inclusion in
2010/11 financial year.
Number of Units settled through Eskom rebate
programme to date
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A total number of 10 600 claims has been received as of end of
August 2010
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Eskom confirmed that they have settled 8700 units through the
rebate programme.
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The reason for the variance (1900 units) between the two figures is
because of the delays in the Measurement and Verification process.
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Target of total 6500 units for October in Bloemfontein, Kroonstad,
Mossel Bay, Potchefstroom and Saldanha
Roll out of High Pressure Systems
• DoE exploring programme with CEF to make
funding available to cover the gap between the
consumer willingness-to-pay and the
installation cost.
• Modelling exercise to be completed endOctober 2010
Spending patterns- INEP (‘000)
2009-2010; 2%
2008-2009; 1%
END…..
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