Finance Minister Enoch Godongwana says although structural reforms have made ‘good progress’, load shedding and freight rail challenges remain an obstacle.

He was speaking during the Budget Speech held at the Cape Town City Hall on Wednesday.

‘We have embarked on a broad structural reform agenda that aims to address the challenges that have held back our growth.

‘This agenda has included areas like electricity, logistics, water, telecommunications and visa reforms. The Budget Review details the good progress that has been made in these areas over the past few years. But, obstacles remain and let me focus on the two largest of these,’ Godongwana said.

Godongwana said the rolling power cuts ‘disrupt production, operations and livelihoods’.

‘Reforming the sector will result in long-term energy security. We took the necessary decisions in the past five years and these are bearing fruit.

‘To promote further investments in renewable energy, this budget proposes an increase in the limit for renewable energy pr
ojects that can qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts,’ he said.

He revealed that in the coming week, the report on the independent review of Eskom’s coal-fired power stations will be released.

‘The review was done to inform part of the conditions attached to the debt relief plan. The recommendations will feed into Eskom’s corporate plans to bolster accountability and oversight.

‘It is through the combination of private investment in new energy projects, rooftop solar installations and improvements in Eskom’s generation fleet that load shedding will reduce, and reliability and security of supply improve,’ he said.

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Turning to South Africa’s logistics challenges, the Minister revealed that third-party access to the freight rail network will be introduced by May 2024.

‘In ports, a private partner has been secured to upgrade Pier 2 of the Durban Container Terminal. This should increase private investme
nt in equipment, enhance technological capability and improve operational efficiency.

‘Government has provided Transnet with a R47 billion guarantee facility to support the entity’s recovery plan and meet its immediate debt obligations.

‘Like Eskom, the guarantee comes with conditions. These conditions require Transnet to focus on its core activities, and for the entity to introduce private sector partnerships. This will improve Transnet’s sustainability and support the implementation of the Freight Logistics Roadmap,’ Godongwana said.

Source: South African Government News Agency