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28th November 2014

  

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By: Peter Fowles

The subject matter of columnist Sisa Njikelana’s article titled ‘Rehabilitating power infrastructure a matter of urgency’, published in the November 14 edition of Engineering News, will strike a chord with many of those intimately involved with the electricity distribution industry, both as service providers and as their customers.

Unfortunately, though, Njikelana falls into the very common media trap of blaming municipalities for the perceived inadequate state of electricity networks in some parts of South Africa when he says: “Parliament and other players in the industry expressed uneasiness about the lack of, or slow, response to the growing backlog with respect to the rehabilitation of the grid, especially assets under municipal ownership.” There is no doubt that some municipalities have not provided sufficient attention to this very important part of their operations, but could Njikelana have merely been quoting from a Pretoria News article published on November 5, in which Department of Energy (DoE) acting director-general Dr Wolsey Barnard is quoted as saying to Parliament, besides others, that the “unplanned outages like the ones that hit Joburg on Monday were caused by the poor maintenance of electricity infrastructure”? Do we know if these reported outages were actually the result of poor maintenance or a lack of maintenance? Could some of them have been the result of vandalism or simple equipment failure?

Barnard is also reported to have complained that the “backlog was huge, and lack of maintenance had been due to lack of money by municipalities”. In some cases, this is true, but who has taken into account the huge level of unplanned mandates for unfunded service delivery in municipal areas? What is the Eskom complaint every time we have a renewed electricity supply crisis? A lack of money. Why then go to Parliament to moan about municipalities only? Where are the statistics for the huge number of unplanned outages in Eskom areas of supply? Many of these outages adversely affect municipalities as customers of Eskom. And where is mention of those municipalities that are performing very well in the management of their network maintenance and upgrade, despite some serious challenges?

The Approach to Distribution Asset Management (ADAM) programme was the brainchild of the erstwhile EDI Holdings, a product of government established in 2003 and which government itself terminated in 2011. While industry stakeholders and politicians squabbled about the end result of the electricity distribution industry (EDI) restructuring process, many municipalities were reluctant to spend on refurbishing assets that were ‘soon’ to become assets of another service provider. Is this surprising?

The initial backlog estimate in 2008 indicated that the backlog at that time was “a total of R24.7-billion for maintenance, refurbishment and strengthening”, according to Energize e-News of October 7, 2009. What is often not reported is that almost 50% of this backlog at the time was on the Eskom networks and assets. Neither Barnard nor Njikelana has chosen to mention that the 2014 updated estimate, said to be now R68-billion, also includes the Eskom backlogs for network maintenance, refurbishment and strengthening. Why has the report on the updated assessment not been released for public consumption so that we can all be clear on the actual situation? Is the current estimate of R68-billion at 2014 values or at 2008 values (which would allow a more accurate comparison of actual growth)? Why has the DoE not reported on the success or otherwise of the mini-ADAM programme, which Njikelana rightly says was a minimal R320-million allocation to nine municipalities for the 2013/14 financial year?

When government resolved to terminate the EDI restructuring process in March 2011, the mandate for addressing the backlog in electricity network maintenance, refurbishment and strengthening was passed on to the DoE. In November 2012, the department took the ADAM principle for decision to Cabinet for approval. Cabinet approved the following with regard to the ADAM:

•notes the Electricity Distribution Asset Management (ADAM) Turnaround Programme; •agrees that the funding plan for the Electricity Distribution Asset Management Turnaround Programme be finalised as a matter of urgency; and
•agrees that the governance structure of the programme be clarified and that it be continuously aligned with the work of the Presidential Infrastructure Coordinating Commission and relevant Strategic Integrated Projects to ensure better coordination and implementation.

Two years later, we are still no nearer to a solution to this problem. The situation is characterised by a lack of leadership by the government department charged with trying to turn the situation around.

Njikelana’s final question on whether government and industry have the capacity and the will to resolve the challenges, some of which have deteriorated into a crisis, is valid. Whether the South African Local Government Association-Eskom partnering agreement is sufficient to start addressing the issues of rehabilitating the power infrastructure remains to be seen. The answer to the problem is a national issue.

 

Fowles is a strategic adviser to the Association of Municipal Electricity Utilities.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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