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SIMON BROWN: I’m chatting with Rudi Dicks. He is Head of Operation Vulindela in the Presidency’s Project Management Office. Rudi, appreciate the time. Operation Vulindela launched in October 2020, so late last year was the fifth anniversary of it and I’m looking at the latest dashboard. It’s from late last year. There is a lot of green. It’s not finished, and I don’t think we want to say it is complete and pat ourselves on the back. But I do think we want to say that this has been so far – and continues to be – a fairly good success for the country.
RUDI DICKS: It has indeed, if I should say so myself. I would expect you and others who are looking at it from an external point of view [to say so], and I think that’s quite positive that you are able to say that. It is indeed, and I think the primary reason has been the momentum and sustaining it, and the effort that’s been put in by the team.
But more important is the political support and the support of the president to drive the reform programme. So you’ll see quite a bit of greens, as you say.
A lot of hard work still lies ahead. We have to deal with the fundamental stuff that is there – both in the logistics and transport sectors that are encouraging greater levels of investment, and similarly in housing, human settlements, for example, local government, and the constraints on our service delivery. But I think, as you say, there’s a positive degree of momentum and we just have to sustain it and push it through.
SIMON BROWN: That momentum is important because it helps breed confidence – not just for citizens of South Africa who sit here without load shedding as one direct example, but also for foreign and local investors, a belief that this isn’t just a sort of a one-off. This is a process, and that process continues.
RUDI DICKS: Absolutely. It’s all about what we do this for. We’re not doing it for the sake of just doing it because we think it’s an important part.
Of course it is important, but ultimately it is about investment. It’s confidence that drives the investment – and reducing poverty, inequality and [unemployment]. Isn’t that what we want? And if you can get investment that leads to economic growth, at least employment that leads to poverty reduction, that’s fundamentally what it’s all about – getting that confidence going, getting foreign investors, getting the local investors who have been most vocal and positive about the reform programme. So certainly that is quite an important part.
At the end of the day, what we want to do is create employment and ensure that South Africans have a better place to live.
SIMON BROWN: Absolutely. You mentioned local government. This is hugely important, but perhaps the biggest challenge is still sitting in Operation Vulindela.
RUDI DICKS: Absolutely. And here’s the complexity, because of course, as you know, local government is an independent sphere of government. It has its own constitutional powers. It has its own legislative provisions. It’s very different if you talk about the sort of reform that we can do in Transnet for …, or for the Ministry of Electricity, for Eskom. You have to develop it through the Intergovernmental Relations Framework [Act], and I think this is quite an important part.
But the first step that we are taking is the review of the local government process, and that’s through the white paper. That’s one of the reforms. In the time frame, it’s expected that in March/April the minister will release the final white paper, and for the listeners ‘white paper’ really means it’s a policy change that is there. It’s the assessment that we’ve done of three years of democracy.
The assumptions that we’ve made are not correct, right? So we’ve got to think through how we deal with issues in relation to where they happens at the coalface, where service delivery happens. Talk about water, talk about distribution of electricity, talk about basic services, fixing potholes, et cetera. So it’s a complex set of areas that we have to work with. We have to work with individual municipalities.
Our key focus is on the metros because that’s where the greatest population is – and they make the greatest contribution to GDP. That’s the most important part. How do we perform and ensure better performance of utilities – water utilities and electricity utilities? That’s the big focus right now and over the next few months and for the years to come.
SIMON BROWN: I take your point. It is the coalface. The cities are where we live. That’s where we experience metros. Metros, yes, but everywhere else as well.
On the energy front – and I’ve mentioned this already – load shedding is largely behind us. We’ve had some very good news out of Eskom just this week in terms of energy availability and the like, but there’s still more to do there. Perhaps one of the key projects is around the wholesale market for electricity generation, which is another big step forward for power in South Africa.
RUDI DICKS: Absolutely. And that’s clearly set out in the Electricity Regulation Act, which was amended. That was one of the key milestones achieved in the first phase of Vulindela. What we’ve got to do in this phase is implement that market reform and ensure that we create a market condition.
The first thing, of course, is the establishment of the South African wholesale electricity market. That’s fundamental. That’s very different from the way that we’ve generated and produced electricity, which is a single-buyer model. Eskom produces and dispatches and is the only market player.
In this instance, what we want to do, given the changes that we’ve made – particularly around private-sector participation in generation – is to create a market where people are able to compete.
The transmission system operator, who has functions set out in the Electricity Act, will be required to plan the market and therefore buy generated electrons or electricity – based on cheap price, based on efficiency, based on a whole series of factors that are important for the sort of market that we want.
But 120 countries have gone this route, including many of our Brics partners – for example China, Russia, Brazil, India – and we are sort of laggards. But we are moving in that direction and I think we’re moving at an exceptionally good pace to ensure that we do create a market condition for an independent DSO [Distribution System Operator] for generators to compete, and for us to ensure that we secure energy and reduce prices at the end of the day.
SIMON BROWN: Yes. And others have gone before us. It’s not the worst thing, because it means that maybe we can avoid some of the errors that they made.
We’ll leave it there. Rudi Dicks, head of operational Vulindela, I really appreciate the time.
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