The Department of Mineral Resources and Energy’s (DMRE’S) budget for the 2020/21 financial year has been reduced by R1.5-billion, from the initial R9.3-billion, owing to the impact of the Covid-19 pandemic, taking the revised yearly budget for the financial year to R7.8-billion.
The Portfolio Committee on Mineral Resources and Energy has adopted its report on the adjustment budget, Vote 34 of the DMRE, notwithstanding minority opinion.
The committee was first briefed on the department’s revised budget for the 2020/21 financial year on July 7, subsequent to Finance Minister Tito Mboweni’s revised fiscal framework, tabled on June 24.
The committee raised concern about the biggest budget cut being to the Integrated National Electrification Programme (INEP), where there has been a R1-billion reduction from the initial allocation of R3-billion.
This budget cut means that the projected target of connecting electricity to 180 000 households in the current financial year, has now been decreased by 43 000 households. The committee is concerned that three provinces with the biggest electrification backlogs – KwaZulu-Natal, the Eastern Cape and Limpopo – will be worst affected.
In light of this concern, the committee has recommended that the department develop a mitigating strategy to ensure it spends all of the INEP grant on time, in order to avoid funds being reallocated or rolled over.
The committee has also encouraged the DMRE to consult with the National Treasury for additional funding for the programme, prior to the Medium-Term Budget Policy Statement being tabled in September.
Committee chairperson Sahlulele Luzipo says adequate funding on the INEP is of critical importance because it is one of the few service delivery programmes which addresses much needed electrification projects for South African households.
Further, the committee has recommended that the department increase and promote mine inspections, to ensure compliance with government regulations, rules and guidelines on the Covid-19 pandemic.
The committee is of the view that an increase in infection rates could have devastating consequences for the mining industry.