Thursday, 11 November 2021

Cape Town: Government, through Operation Vulindlela, has made progress on several key reforms outlined in its October 2020 economic recovery plan, says the National Treasury.

The 2021 Medium Term Budget Policy Statement (MTBPS), presented to Parliament by Finance Minister Enoch Godongwana on Thursday, reveals.

In the document, the department said the amendment of Schedule 2 of the Electricity Regulation Act (2006), raising the licensing threshold from 1 to 100 megawatts (MW), had made it possible for private power generators to sell directly to customers.

This, it states, would reduce pressure on the national grid and alleviate the risk of power cuts.

It said the pace and scale of private generation would largely depend on the ease of the National Energy Regulator of South Africa registration process, which needed to be streamlined.

“Amended regulations also enable municipalities to self-generate or procure power directly from independent power producers.

“Over the longer term, creating a competitive energy market will help contain the costs of generating electricity and support GDP growth.”

On the front of Transnet, government has announced the corporatisation of the Transnet National Ports Authority as an independent subsidiary of Transnet and appointed an interim board.

Treasury said the separation of port infrastructure and operations would create incentives for efficiency and competitiveness between port service providers – reducing delays, improving services and introducing cost discipline.

However, it said “critical reforms” in the telecommunications space had been delayed, constraining innovation and access to better-priced data.

It said these reforms included the release of spectrum through an auction and digital migration, delayed due to recent legal challenges launched by mobile operators.

In addition, the Independent Communications Authority of South Africa’s possible recall of temporary spectrum at the end of November will affect the quality of digital services for those working from home and leave millions of households without free access to educational and health websites.

Government assigned this spectrum in April 2020 to alleviate pressure on digital services in light of the COVID-19 lockdowns.

The department said the durability of the recovery would depend on the implementation of a broad range of structural reforms that inspire confidence and create an enabling environment for accelerating and sustaining economic activity.

“In the context of limited fiscal space, reforms that require little budgetary support – including regulatory reforms that enhance competition – are being prioritised.” it said.