STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE AS AT 31 DECEMBER 2014 Presented...

STANDING COMMITTEE ON APPROPRIATIONSFINANCIAL PERFORMANCE AS AT

31 DECEMBER 2014

Presented by: Office of the CFO15 April 2015

1

PRESENTATION LAYOUT

• Quarter 3 Financial Performance Overview per

• Economic Classification

• Programmes

• 2014/15 Financial Performance Overview per

• Economic Classification

• Programmes

• 2014/15 Spending Challenges Experienced

• Remedial Actions implemented

• Principles of Efficiency, Effectiveness and Economy

2

QUARTER 3 – FINANCIAL PERFORMANCE Overview – Economic Classifications

3

VOTE 29: ENERGYYTD

BUDGET ACTUAL VARIANCE

PercentageVARIANCE

14/15 BUDGET

EXPENDEDR'000 R'000 R'000 % %

TOTAL ENERGY 5,731,756 5,240,500 491,256 8.57% 70.46%Compensation of Employees 217,994 196,729 21,265 9.75% 68.78%

Goods & Services 157,861 143,843 14,018 8.88% 58.79%Payments for Financial Assets -

-

- 0.00% 0.00%

Transfer Payments5,351,842 4,897,224 454,618 8.49% 70.95%

Payments for Capital Assets 4,059 2,704 1,355 33.38% 52.05%

QUARTER 3 – FINANCIAL PERFORMANCE Overview – per PROGRAMME

4

VOTE 29: ENERGYYTD

BUDGET ACTUAL VARIANCE

PercentageVARIANCE

14/15 BUDGET

EXPENDEDR'000 R'000 R'000 % %

TOTAL ENERGY 5,731,756 5,240,500 491,256 8.57% 70.46%

Administration 178,286 182,996 -4,710 -2.64% 71.12%

Energy Policy & Planning 40,635 31,540 9,095 22.38% 54.80%Petroleum & Petroleum Products Regulation 63,093 39,612 23,481 37.22% 46.86%Electrification & Energy Programme Management 3,568,205 3,462,571 105,634 2.96% 82.27%

Nuclear Energy 831,535 809,960 21,575 2.59% 95.99%

Clean Energy 1,050,002 713,821 336,181 32.02% 35.94%

Quarter 3 - FINANCIAL PERFORMANCE OVERVIEW

5

•Cumulatively at Dec 2014, the Department had withdrawn from the NRF a budget of R5.7 billion

•From the above, a total amount of R5.2 billion was utilized, resulting in a budget underspending of R491.3 million or 8.6%. The transfers category accounted for 92% of the total under spending.

Composition of the Quarter 3 under spending•Transfers & subsidies: R454.6m (8.5%) due to the underspending in the INEP Non-grid (R50.7m), EEDSM-Eskom for the SWHP (R300m), EEDSM Municipalities (R27m), INEP Municipalities (R65.7m) as well as international membership fees (R12.1m)

•Compensation of employees: R21.3m attributable to vacancies in the Department. This amount includes the notch-increase payments payable to qualifying SMS members

Quarter 3 - FINANCIAL PERFORMANCE OVERVIEW (Cont..)

6

•Goods and services: R14.0m below budget mainly attributable to delayed projects.

•The level of underspending decreased per quarter as follows:

• Quarter 1 - 69.1% of the budget was utilized• Quarter 2 - spending increased as 95.3% of that quarter’s

budget had been utilized by the end of that quarter • Quarter 3 - 110.7% was utilized including unspent funds from Quarter 2

•Comparatively, the total expenditure at the end of Q3 of 2014/15, R5.2 billion, is R1.1 billion or 26.9% higher than that of the same period of 2013/14. This is mainly attributable to an increase in the value of transfers made to Eskom, for the INEP electrification programme and to NECSA. Both these projects were allocated additional funding in 2014/15. NECSA received a once-off allocation for improvements to the SAFARI1 reactor as well as refurbishment of the Pelindaba site.

• As a result, the full year budget expended at the end of Q3 is 70.5%, which is higher than the 63.5% reported in the same period of 2013/14.

Quarter 3 - UNDERSPENDING PER PROGRAMME

7

Energy Policy & Planning•R9.1 million or 22.38% below budget mainly attributable to:•Vacancies in the Branch•Projects that could not be finalized as planned which amongst others are the 20 year liquid fuels road map and data collection for energy planning.•Cost containment measures which were implemented on costs such as venues and facilities, travel and subsistence and advertising contributed to the underspending.

Petroleum & Petroleum Products Regulation•R23.5 million or 37.22% below budget mainly affected by:•Vacancies in the Branch•Delayed commencement of major projects one of them being the Fuel specification testing project

Electrification & Energy Programme & Project Management•R105.6 million or 2.96% budget underspending mainly due to the following:•INEP Non-grid: R50.74 million (58.6%) below budget due to administrative delays which led to the late start of the project in the 2014/15 financial year.•INEP Municipalities: R65.7 million (6.6%) below budget, the direct impact of withholding funds from non-complying municipalities.

Quarter 3 - UNDERSPENDING PER PROGRAMME (Cont..)

8

Nuclear Energy•R21.6 million or 2.96% below budget mainly due to:•Vacancies in the Branch•The delayed payment of the annual IAEA international membership fee. The payment to the IAEA, which was estimated at R12.1 million, could not be paid as anticipated in December as the Department awaited the release of the formal contribution letter from the IAEA. This has been subsequently paid.

Clean Energy•R336.2 million or 32.02% under budget mainly attributable to the performance of the following projects:

• EEDSM Eskom: R300 million (52%) In October 2015, the Department cancelled the contract with Eskom for the implementation of the SWH programme. However at Quarter 4, an amount of R1,1 billion scheduled to be transferred to Eskom was not disbursed as planned. Approval by Cabinet to shift the implementation of the SWH programme back to the Department is still underway.

Quarter 3 - UNDERSPENDING PER PROGRAMME (Cont..)

9

• Clean Energy - Continued

• EEDSM Municipalities: R27 million below budget due to the withholding of conditional grant payments to some municipalities due to non-compliance to DoRA and conditions attached to grant payments.

• Of the twenty six municipalities participating in the 2014/15 EEDSM programme, five municipalities, namely, eThekwini, Greater Tzaneen, Cape Town, Nkonkobe and Tshwane failed to comply with the conditions of the 2014 Division of Revenue Act. As a result, an amount of R 33,5 million was re-allocated to other municipalities during the budget adjustment in October 2014.

• In addition, the Clean Energy Directorate has been conducting pre-energy audits in public buildings to determine the level of energy consumption. The pre-energy audit process was dependent on the installation of smart meters through the South African German Energy Programme. However, due to delays in accessing these public buildings for the installation of smart meters, the pre-energy audit service provider was only appointed in February 2015.

10

Compensation of employees•The Department was appropriated an additional R20 million in the current financial year in order to capacitate its line function Branches with specialized skills.•Delays were experienced in recruiting additional human resources due to the lack of specialised skills available in the Energy Sector, the long recruitment processes, as well as structural change processes which had to be followed.

Goods and services•The budget underspending in 2014/15 is attributable to delayed commencement of projects, and administrative challenges.•As well as orders that were placed, but the expenditure was pending at the end of March as a result of delays in delivery, late receipt of invoices and the consequent delay in the processing of payments.

Transfer Payments•External dependencies also play an important part, when funds are transferred to entities and municipalities.

2014/15 SPENDING CHALLENGES EXPERIENCED

11

REMEDIAL ACTIONS IMPLEMENTED• Spending progress is reported at the Finance Committee meetings, held six

times a year, and Branches are advised of the slow spending areas in the Financial Performance Report.

• In addition to the above, spending against the Procurement Plan is also monitored and reported at the Finance Committee meeting, for action.

• Where spending against the Procurement Plan may not be realized for reasons beyond the control of the Department, funding is redirected to other priority spending areas.

• In addition to the monthly BAC meetings, 6 ad-hoc BAC meetings were held to accommodate requests and in order to accelerate spending.

• The appointment of services providers for the INEP Non-Grid program posed the most challenges (delays) in previous years. The procurement process for the 2015/16 financial year was commenced in September 2014 in order for the service providers to be appointed by 31 March 2015 (before the commencement of the 2015/16 financial year).

• Due to the challenges experienced on the SWH implementation that was handled by Eskom, the Department resolved to terminate the implementing agreement with Eskom, and embark on a more robust SWH implementation model.

12

PRINCIPLES OF EFFICIENCY, EFFECTIVENESS AND ECONOMY

• Further to the National Treasury Instruction Note on Cost Containment Measures, the Department ensured that appropriate expenditure control measures were instituted to provide reasonable assurance that all expenditure is necessary, appropriate and paid promptly.

• Of the 27 cost containment measures provided for implementation, 22 are directly applicable to national departments and all 22 measures were immediately implemented by the Department.

• Of the 15 cost containment measures provided for consideration, 11 measures which were practical and implementable and these were immediately adopted for implementation.

• The key areas for savings optimization was the use of consultants, and travel and accommodation. Stringent measures were implemented.

• Local travel is limited to economy class tickets for all officials at the level of DDG and below. Similarly only group B vehicles are booked for these officials.

• Accommodation is limited to R1300 per night for bed and breakfast.

13


• The use of consultants is restricted to specific technical services only and requests are considered where such expertise and skills are not available in the department. These are normally short term assignments.

• Consultants are remunerated at the rates: (a) determined in the "Guideline for fees", issued by the South African Institute of Chartered Accountants (SAICA); (b) set out in the "Guide on Hourly Fee Rates for Consultants", by the Department of Public Service and Administration (DPSA); or (c) prescribed by the body regulating the profession of the consultant.

• The Department was chosen as one of the best performing departments for 30 day payments by DPME in the 2013/14 MPAT process.

• In terms of section 217 of the Constitution, all goods and services are procured in a manner which is fair, equitable, transparent, competitive and cost-effective.

14


• Wherever possible, the Department undertakes price negotiations with recommended bidders in order to achieve a reduction in the total bid price.

• The department participates in the SCM Improvement Forum, facilitated by the Office of the Chief Procurement Officer at National Treasury which is developing interventions to address weaknesses in procurement management and operations systems that undermine the efficiency and effectiveness of government procurement.

• Cost saving interventions in the ICT environment includes the use of shared printers to reduce printing costs and Voice over Internet Protocol (VOIP) telecommunication systems to reduce telephone costs.

15

2014/15 - FINANCIAL PERFORMANCE Overview - per PROGRAMME – Quarter 4

VOTE 29: ENERGYYTD

BUDGET ACTUAL VARIANCEPercentageVARIANCE

14/15 BUDGET

EXPENDED

R'000 R'000 R'000 % %

TOTAL ENERGY

7,437,795

6,218,372

1,219,423 16.39% 83.61%

Administration 260,601

255,466

5,135 1.97% 98.03%

Energy Policy & Planning 53,054

41,709

11,345 21.38% 78.62%

Petroleum & Petroleum Products Regulation

78,210

64,256

13,954 17.84% 82.16%

Electrification & Energy Programme Management

4,217,327

4,181,371

35,956 0.85% 99.15%

Nuclear Energy 846,529 845,313

1,216 0.14% 99.86%

Clean Energy 1,982,074

830,257

1,151,817 58.11% 41.89%

16

2014/15 FINANCIAL PERFORMANCE OVERVIEW

• The 2014/15 adjusted budget of the Department of Energy was a total of R7.4 billion

• As at 31 March 2015, the Department had utilized 83.61% of its adjusted budget, utilized as follows:

• Compensation of Employees

• Goods & Services

• Transfer Payments

• Payments for Capital Assets

• A budget balance of R1.2 billion remained at the end of the financial year representing 16.39% of the total adjusted budget, a major portion being under the Transfer payments economic classification.

14/15 % Budget

Expended

13/14 % Budget

Expended

96.47% 99.23%

65.76% 93.16%

83.03% 99.83%

72.44% 95.97%

83.61% 99.60%

2014/15 FINANCIAL PERFORMANCE OVERVIEW – Quarter 4

17

SPENDING TREND• The Department’s spending in 2014/15 has been negatively impacted by the

developments in the implementation of the Solar Water Heater programme (SWH).

• The SWH programme’s budget alone, accounted for 22% of the Department’s total budget of R7.44 billion

• The figures below, reflect the Department’s spending trend after adjusting to exclude the SWH programme’s figures for comparison purposes.

Year Final Appropriation

Actual Expenditure Variance

PercentageVariance

Budget Expended

R’000 R’000 R’000 % %

2014/15 5,801,394 5,718,372 83,022 1.4% 98.6%

2013/14 5,353,344 5,327,163 26,181 0.5% 99.5%

2012/13 5,913,849 5,838,355 75,494 1.3% 98.7%

2011/12 6,082,109 6,055,462 26,647 0.4% 99.6%

18

Quarter 4 - Roll over application

•The Department will be making a submission to the National Treasury motivating for a portion of the budget balance remaining to be rolled over into the 2015/16 financial year to enable the completion of some projects which commenced in 2014/15 and are currently underway.

• The rollover submission will include the following:

Transfer Payments –budget balance R1.17 billion•R1.14 billion to implement the SWH programme. Approval of the new implementation model in-house has been received from Treasury.•R35.5 million to pay service providers for services rendered under the INEP Non-grid project

Goods and services•R12.16 million is eligible to be motivated as a roll over amount into the 2015/16 financial year for all outstanding payments.

ROLL OVER APPLICATION - 2014/15

19

EFFORTS AIMED AT BUILDING INTERNAL CAPACITY TO REDUCE THE USE OF CONSULTANTS

NO BRANCH TOTAL UNFUNDED POSTS 1. Energy Policy and Planning 36

2. Clean Energy 38

3. Energy Programmes and Projects 55

4. Nuclear Energy 39

5. Petroleum and Petroleum Products Regulation 36

Total 204

• No consultants were used to perform core functions

• Review of the Organisational Structure• 847 Approved posts• 204 Unfunded Posts (Core functions)• Unfunded Post Per Branch

20

• Vacancy rate

• Training and Development

• 2015/16 targeted training focused on Nuclear

• Workplace Skills Plan – priority training only

EFFORTS AIMED AT BUILDING INTERNAL CAPACITY TO REDUCE THE USE OF CONSULTANTS

3rd Quarter Non – Financial Performance Report

21

PERFORMANCE SUMMARY OF THE 3rd QUARTER 2014/15 AGAINST THE APP

This report presents the performance of the Department of Energy (DoE) during the

third quarter of the 2014/15 financial year. DoE implements its Annual Performance

Plan (APP) through six programmes; Programme 1 – Administration, Programme 2 –

Energy Policy and Planning, Programme 3 – Petroleum & Petroleum Products

Regulation, Programme 4 – Electrification & Energy Programme and Projects,

Programme 5 – Nuclear Energy and Programme 6 – Clean Energy.

Out of a total of 33 third quarter 2014/15 targets, the Department achieved 7 (21%)

of its quarterly targets, 11(33%) partially achieved and did not achieve 15 (46%).

In total, 7 (21%) of branch self-assessments were moderated. Four were moderated

from “achieved” to “partially achieved”, two from “partially achieved” to “not achieved”

and one was moderated from “achieved” to “not achieved”;

22

23

Summary of Final Moderated Branch Progress, 3rd Quarter 2014/15

Branches/Units Number of

Quarterly targets in APP

Achieved Quarterly Targets

Partially Achieved Quarterly Targets

Not Achieved Quarterly Targets

Number of Targets

not reported

on

Policy and Planning 2 0 1 1 0

Petroleum and Petroleum Products Regulation 9 1 2 6

0

Nuclear 11 3 2 6 0

Clean Energy 2 0 1 1 0

Programmes and Projects 5 1 3 1 0

Corporate Services 2 1 1 0 0 Financial Management Services 1 1 0 0 0

Governance and Compliance 1 0 1 0 0 Total 33 7 11 15 0

Inter-Branch Comparison of Moderated Progress, 3rd Quarter 2014/15

24

Programme 1: Financial Management Services Progress, 3rd Qt 2014/15

25

Annual Target 2014/15

(from Strategic Plan - link to Technical

Indicator Description)

Quarterly Target(from APP)

Progress this Quarter("achieved", or "partially

achieved", or "not achieved", and support for the self-

assessment)

Comments(constraints, variances, likelihood of annual achievement, corrective

actions, etc)

Means of Verification(documents or other sources supporting reported progress)

Unqualified audit report by the Auditor-General achieved for 2013/14.

No target set for this quarter.

N/A N/A N/A

100% approved invoices paid within 30 days of receipt.

100% approved invoices paid within 30 days of receipt.

Achieved:

3 monthly reports on payments of approved invoices within 30 days of receipt were submitted to NT by the 7th of each month

No challenges anticipated Receipts from NT and payment registers: Report on approved invoices paid within 30 days delivered on November 7, December 4th and January 7. Total Payments in the third quarter: 751

Programme 1: Corporate Services Progress, 3rd Qt 2014/15

26


(from Strategic Plan - link to Technical Indicator

Description)




assessment)


actions, etc)


Vacancy rate below 10% at least maintained.

Vacancy rate reduced to 11%.

Achieved:

Vacancy rate currently at 10.14%

There might be improvement with the appointment envisaged in January 2015

Persal report

1.8% of people withdisabilities employed.

No target set. Achieved:

1.87% as at 1 December 2014

Once the officials are reflected on the Persal report the stats will change to reflect the new percentage

Persal report

42.5% of women in SMS positions.

No target set. Not Achieved:

38.55% as at 1 December 2014

Some women in SMS retired/resigned at the end of October and November 2014 which resulted in a decrease in the achievement.

Persal report

Programme 1: Corporate Services Progress, 3rd Qt 2014/15 (Ctd.)

27







assessment)

Comments(constraints, variances, likelihood of annual

achievement, corrective actions, etc)


20 Izimbizo PPPsconducted.

Five (5) Izimbizo PPPs conducted.

Achieved 5 Izimbizo conducted: (1) Meeting with Community of Goso (Lusikisiki) on electrification in the area on 01 October 2015. (2) Engagement with OR Tambo Municipal Council on 20 October 2015. (3) Feedback meeting with Community of Goso on 20 October 2014. (4) Public Engagement with community of Lunzwane (Alfred Nzo District Municipality) on electrification issues on 01 December 2014. (5) Nkungumathe Youth Development Forum (NYDF) Gala Dinner and Community Engagement on 12-13 December 2014.

Reports, communication plan

Programme 1: Governance and Compliance Progress, 3rd Qt 2014/15

28





Progress this Quarter("achieved", or "partially achieved", or

"not achieved", and support for the self-assessment)

Comments(constraints, variances, likelihood of

annual achievement, corrective actions, etc)


Average MPAT score of at least 3.1 achieved for moderated assessmentof 2013/14; with at leastthe following sub-scores:• KPA 1 – 3.3;• KPA 2 – 3.2;• KPA 3 – 3.1; and• KPA 4 – 2.9.

Average MPAT score of at least 2.5 achieved for moderated assessment of 2012/13; with at least the following sub-scores:• KPA 1 – 3.2;• KPA 2 – 3.0;• KPA 3 – 2.7; and• KPA 4 – 2.4.

Achieved:

The MPAT 1.4 self assessment questionnaire was submitted electronically by the Acting Director -General Dr Barnard on 9 October 2014.

The final score will be captured once the challenge period has been concluded. The final results will be released in April 2015.

Snap shot of the online MPAT system when the submission was done by the Acting Director General.

Programme 2: Policy and Planning Progress, 3rd Qt 2014/15

29





Progress this Quarter("achieved", or "partially achieved", or "not achieved", and support for

the self-assessment)



Means of Verification(documents or other

sources supporting reported progress)

Finalised IEP submitted to Cabinet

Assess economic impact of IEP.

Partially Achieved All the technical information that is used as an input to the process has already been submitted from DoE to National Treasury. The National Treasury will be conducting the Macro-economic Impact Asessment for the IEP.

E-mails from DoE to the National Treasury with attachments of technical information to input into the process.

Draft 20YRLFMP submitted to Cabinet for approval.

No target set. No Target Set. Although there is no target, progress has been made in that the Report has been analysed and shortcomings identified. Certain aspects of the Report, particularly on the storage and handling infrastructure, need to be refined.

The Document on the analysis of the 20 YLFIRM Report.

Programme 2: Policy and Planning Progress, 3rd Qt 2014/15 (Ctd.)

30


(from Strategic Plan - link to

Technical Indicator Description)



achieved", or "not achieved", and support for the self-assessment)


actions, etc)


Promulgated policy for the standard offer scheme for reducing energy in the building envelope.


No Target Set. No Target Set. No Target Set.

Norms and standards for municipal assetmanagement set with the concurrence of the energy regulator.

Submission of norms and standards to energy regulator for approval.

Not Achieved Awaiting the close out report from the Adam Pilot which was conducted by the Programmes and Projects Branch.

None

Programme 3: Petroleum and Petroleum Products Regulation Progress, 3rd Qt 2014/15

31










2 000 retail sitecompliance inspections conducted.

1 500 retail sitecompliance inspections conducted (cumulative target).

Partially Achieved 1463 retail site inspections conducted: October to December 2014. The shortfall is due to study leaves, unroadworthy GG vehicles used to conduct inspections, and NC inspector post vacant.

Inspections reports

Enforcement notices issued in 85% of cases where non-compliance isidentified during routine compliance inspections.

Enforcement notices issued in 85% of cases where non-compliance isidentified during routine compliance inspections.

Achieved Enforcement notices issued in 100% of cases where non-compliance is indentified during routine compliance inspections. Out of 414 retail site compliance inspections conducted in 3rd Quarter, 2 non-compliance cases were identified and 2 enforcement notices issued.

Enforcement notices

Programme 3: Petroleum and Petroleum Products Regulation Progress, 3rd Qt 2014/15 (Ctd.)

32



Description)


Progress this Quarter("achieved", or "partially achieved",

or "not achieved", and support for the self-assessment)




Enforcement notices issued in 95% of cases where non-compliance isidentified during routine fuel sample testing.

Enforcement notices issued in 95% of caseswhere non-compliance is identified during routine fuel sample testing.

N/A No sampling and testing conducted because of lapsed contract with service provider. Contract target of 1080 units for 2014/ 2015 financial year achieved.

N/A

100% of arbitrationrequests finalisedwithin the prescribedtimeframes.

100% of arbitrationrequests finalisedwithin the prescribedtimeframes.

N/A Not Achieved (Awaiting complainant to serve copy of the arbitration request to respondents and their subsequent representations before processing within 21 working days)

N/A

30% of licenseapplications where BEE ownership is at least 50%.



33







assessment)


actions, etc)


Progress reports on RASimplementation.

Progress reports on RASimplementation.

Partially Achieved The DDG suspended the RAS Technical Committee meetings because the Fuel retailers Association (FRA) took the Department to Court to seek clarity on the ownership of the Entrepreunerial Compensation (EC) which is part of the retail margin

Replying affidavit to the FRA Court Order


34







assessment)

Comments(constraints, variances, likelihood of annual

achievement, corrective actions, etc)

Means of Verification

(documents or other sources supporting reported progress)

Adjust the BSS asset base using economic indices.

Progress report on the BSS asset base study.

Partially Achieved The Department signed a contract with EPCM Consultants South Africa on 1st December 2014 and held the project inception meeting on 10 December 2014.

Signed contract and project inception report

Promulgation and implementation of the MDZ system.

Draft final report on MDZ review.

Partially Achieved The Department signed a contract with Menelisi Consulting on 4th December 2014 and held the project inception meeting on the same date

Signed contract and project inception report


35










Implementation and monitoring of the bio‑fuels pricing framework.

Implementation and monitoring of the bio‑fuels pricing framework.

Not achieved This target cannot be implemented until the Pricing Framework is concluded by the Policy Branch. They are reporting on progress in their quarterly report

Promulgation and implementation of the revised BFP.

Consolidation ofstakeholder inputs.

Not achieved The submission seeking approval to publish the Discussion Document for comments / inputs is still in the DDG's office

Submission

Programme 4: Programmes and Projects Progress, 3rd Qt 2014/15

36



Description)




assessment)




One (1) annual report on the allocation of funding and monitoring of progress on the\ number of additional households electrified with grid electrificationtowards the 2013/14target of 200 000 in theelectrification plan.


Programme 4: Programmes and Projects Progress, 3rd Qt 2014/15 (Ctd.)

37


(from Strategic Plan - link to Technical Indicator Description)




assessment)

Comments(constraints, variances,

likelihood of annual achievement, corrective

actions, etc)


Eleven (11) monthly reports on the allocation of funding and monitoring of progress on the number of additional households electrified with grid electrificationtowards the 2014/15target of 265 000 in theelectrification plan.

Three (3) monthly reports (September to November) on the allocation of funding and monitoring of progress on thenumber of additionalhouseholds electrifiedwith grid electrificationtowards the 2014/15target of 265 000 in theelectrification plan.

Achieved

Municipalities: Achieved to Date: 55 923 (including roll-overs); Eskom: Achieved to Date: 77 305 (including roll-overs). Total :133 228

Achievement:YTD households electrified: 133 228


38



Description)






actions, etc)

Means of Verification(documents or other sources

supporting reported progress)

Three (3) quarterly reports on the allocation offunding and monitoring of progress on the building/ upgrading of electrificationinfrastructure projectstowards the 2014/15target of:• 14 new bulksubstations built;• Ten (10) additionalsubstations upgraded;• 350 km new MV powerlines constructed; and• 220 km of existing MVpower lines upgraded.

One (1) quarterly report (2nd quarter) on the allocation of funding and monitoring of progress on the building/upgrading of electrificationinfrastructure projectstowards the 2014/15target of:• 14 new bulksubstations built;• Ten (10) additionalsubstations upgraded;• 350 km new MV powerlines constructed; and• 220 km of existing MVpower lines upgraded.

Partially Achieved:

2 new bulk substations built- Vryburg Ext 25 substation- Leeufontein feeder bay

5 additional substations upgraded- Phiritona substation P-3- Upgrading of K3 substation- Upgrading of K1 substation- Pile/Baimore upgrade, relocation & re-zoning- Voltage regulator for Mathiba

6.7km new MV power lines constructed- Botshabelo 132kV feeder line

4.3km existing MV power lines upgraded- 66kV overhead line from Main to Maokeng substation

Most projects are still in progress but behind schedule due to:- late starting,- design and scope changes,- delivery of long lead material, and- late appointment of contractors.

Projects are being fastracked and will be closely monitored to ensure that the annual target is achieved.

Eskom and Municipality monthly reports


39



Description)






actions, etc)


11 monthly reports onthe allocation of funding and monitoring of progress on the number of additional households electrified with non-grid electrification towards the 2014/15 target of 15 000 in the electrification plan.

Three (3) monthly reports (September to November) on the allocation offunding and monitoring of progress on the number of additional households electrified with non-grid electrification towards the 2014/15 target of 15 000 in the electrification plan.

Partially Achieved:

8277 non-grid connections were made against the 15 000 target.

Late signing of non-grid contracts by service providers.

Three (3) quarterly reports on progress made with regards to the constructionand operation phases of IPP projects.

One (1) quarterly report (2nd quarter) on progress made with regards to theconstruction and operation phases of IPP projects.

Achieved:

The 10th IPP report on construction has been completed. BW1 is at 99% complete and BW2 is at 57% complete. 24 IPPs have reached COD for Bid Window 1 and 5 IPPs have reached COD for Bid Window 2 and are into full commercial operation.

IPP Progress Report: September - December 2014


40


(from Strategic Plan - link to

Technical Indicator Description)


Progress this Quarter("achieved", or "partially achieved", or "not

achieved", and support for the self-assessment)



actions, etc)


Three (3) quarterly reports on progress made with regards to the constructionand operation phases of IPP projects.

One (1) quarterly report (2nd quarter) on progress made with regards to theconstruction and operation phases of IPP projects.

Achieved:

The 10th IPP report on construction has been completed. BW1 is at 99% complete and BW2 is at 57% complete. 24 IPPs have reached COD for Bid Window 1 and 5 IPPs have reached COD for Bid Window 2 and are into full commercial operation.

IPP Progress Report: September - December 2014

Three (3) quarterly reports on progress made in 2014/15 with regards to the establishment of two (2) IECs.

One (1) quarterly report (2nd quarter) on progress made in 2014/15 with regards to the establishment of two (2) IECs.

Not Achieved: Ngwaabe IeC construction is completed but the project is not operational due to technical electrical installation problem . The project was supposed to have been operational by December 2014 but has been delayed by Eskom inappropriate electrical installation (incorrect size of the meter box). Thembisile Hani IeC -the contractor for Thembisile Hani IeC has been appointed and the construction is expected to start in February 2015 but the project is now behind by 4 months according to the project time lines.

Ngwaabe IeC will be operational before end of Financial year 2014/2015. Eskom has committed to install the correct size meter box.

Thembisile Hani IeC is delayed and will not be completed before end of Financial year 2014/2015

Quarterly report

Programme 5: Nuclear Energy Progress, 3rd Qt 2014/15

41







assessment)



actions, etc)


Fully operational and funded NRWDI.

Oversee development of waste managementstrategies and plans from NRWDI

Not achieved Waste acceptance criterion document from NRWDI was only 20% complete and could not be assessed.

Develop implementation plan based on the Mission Report and commence withimplementation.

Incorporate inputs from stakeholders.

Achieved: EPREV action plan

EPREV action plan

Implementation of procurement process (if approved).

Implementation of procurement process (if approved).

Not achieved Still awaiting approval of the process.

Programme 5: Nuclear Energy Progress, 3rd Qt 2014/15 (Ctd.)

42







assessment)



actions, etc)

Means of Verification(documents or other sources supporting

reported progress)

Submission to Cabinet for approval ofimplementation plan to support Nuclear Fuel Cycle Strategy.

Nuclear Fuel Cycle Strategy implementationplan completed

Not achieved This document is taking longer than planned and is about 75% completed. Development of the strategy will be completed in the final quarter 2014-15.

100% of authorisationapplications considered within the eight-week time period.

100% of authorisationapplications considered within the eight-week time period.

Partially achieved: 56 authorisations were approved, 37 (66%) met the turnaround time of weeks

Delay in the approval process after submission was drafted as well as more workload due to a higher number of applications received and processed during this quarter..

Approved Submissions.


43








actions, etc)


Four (4) nuclearsafeguards complianceaudit submitted to the relevant decision‑makingstructures.

One (1) nuclearsafeguards complianceaudit submitted to the relevant decision‑makingstructures.

Achieved: Submission on Nuclear safeguards compliance audit report approved

Submission on Nuclear safeguards compliance audit report approved. Submission number: 2014/27779

Two (2) Nuclear security compliance reports submitted to the relevantdecision‑makingstructures.

No quarterly target Achieved: 1 nuclear security compliance report submitted and approved

The target which was set for the second quarter was not achieved during the second quarter performance period however it was only achieved during the third quarter.

Submission on nuclear security compliance report approved.Submission report No: 2014/27676

Submission to Cabinet for public consultation (if approved by the FOSAD Cluster).

Incorporated feedback from Chief State Law Advisor.

Not achieved NNRA Amendments received late by the Chief Directorate. Amendments will be sent to CSLA in the 4th quarter.


44







assessment)


likelihood of annual achievement, corrective actions,

etc)


Submission to Cabinet for public consultation (if approved by the FOSAD Cluster).

Incorporated feedback from Chief State Law Advisor.

Not Achieved NEA Amendments received late by the Chief Directorate. Amendments will be sent to CSLA in the 4th quarter.

This is for the NEA Amendment Act

Submission to FOSAD Cluster).

Submission of Draft Fund Bill to the Chief State Law Advisor for comments.

Achieved: Radioactive Waste Management Fund Bill sent to CSLA

Radioactive Waste Management Fund Bill sent to CSLA

Five (5) public awareness campaigns and community outreach events held.

One (1) community outreach event held.

Achieved: 2x public awareness events held. With the ADG’ and DDG’s media conference in October (broadcast live on TV).

2x public awareness events held. With the ADG’ and DDG’s media conference in October (broadcast live on TV).

Programme 6: Clean Energy Progress, 3rd Qt 2014/15

45





Progress this Quarter("achieved", or "partially achieved", or "not achieved", and support for

the self-assessment)



actions, etc)



M&E Moderated Quarterly

Progress and Comments

TWh of energy savings realised and verified from EEDSMprojects.

Implementation of the various interventionscommenced.

Partially Achieved.

There are 25 municipalities participating in the EEDSM programme in 2014/2015 FY. 20 municipalities submitted their business plans. 4 municipalities did not submit and others were still to spend the rolled over budget (i.e Cape Town, Ethekhwini, Nkonkobe and Greater Tzaneen). Mogale City Municipality is yet to submit a business plan however an extension was requested. Analysis of the actual energy savings is still in progress. Through the NBI/DoE the industry energy efficiency project, engagement with selected companies is in progress prior to conducting energy audits.

The allocations to 4 non performing municipalities have since been reallocated through the re-gazetting process. One municipality is yet to submit their BP with January 2015 being the deadline for submission. 1.2 Meeting were held to finalise the implementation process.

Copies of business plans and all correspondences (emails and letters). 2.2 Minutes or meeting reports

Branch self-assessment of "partially achieved" confirmed.

Programme 6: Clean Energy Progress, 3rd Qt 2014/15 (Ctd.)

46











Developed energy consumption baselines for additional 30municipalities.


Achieved:

20 municipalities submitted their baseline reports in line with their business plans.

A cumulative target of 30 municipalities was achieved. 4 other municipalities have since lost their allocation during the re-gazetting process. One municipality (Mogale City) is yet to submit their baseline document in January 2015.

copies of baseline reports and all correspondences thereof.

Promulgation of NEE strategy document (ifapproved by Cabinet).


Partially Achieved:

The submission to request approval of the second reviewed NEES document was approved by the Minister on 23/10/2014. The NEES Strategy Document was presented to the Employment sector, Infrastructure Development Cluster on 28 October 2014.

The DoE was requested to engage with DEA on their processes which have to be incorporated in the final version for Cabinet consideration.

Approved Minister's submission; Agenda, Minutes and Presentation to the Cluster.

Programme 6: Clean Energy Progress, 3rd Qt 2014/15 (Ctd.)

47










4485 000 solar water heating units installed in residential and commercial sectors.

Installationscommenced in identifiedmunicipalities.

Not Achieved:

419 664 SWH systems (cummulative) were installed by end of December 2014. 4.1 Instruction letter sent to SABS regarding the provision of feedback to all SWH RFRI respondents. 4.2 Letter sent to Eskom for termination of the DoE-Eskom Memorandum of Agreement (MoA).

Owing to Eskom's financial and operational challenges the DoE-Eskom MoA was terminated with effect from 08 December 2014. Presentation of the Revised Contracting Model to Cabinet, a model that incorporates new institutional arrangements was withdrawn from the Cabinet agenda to incorporate this item into the overall Demand Response Measures. The new submission is aimed for the earliest Cabinet sitting in 2015. Once more, only HP rebated SWH systems were installed in this quarter.

DoE / Eskom termination submission; Minister's Cabinet submission

Major Achievements and Challenges of 2nd and 3rd Quarter

Major Achievements:Municipalities installed 55 923 new electricity mains connections, while Eskom did 77 305 for a total of 133 228 (both inclusive of roll-overs). In addition, 8 277 homes were electrified with off-grid solar home systems;The Renewable Energy Independent Power Producer Programme is 99% complete for Bid Window 1 and 57% for Bid Window 2. Twenty-four IPPs have reached their Commercial Operating Date (COD) for Bid Window 1 and 5 IPPs have reached COD for Bid Window 2;The final scoping report for the Northern Cape solar park has been approved by the Department of Environmental Affairs. The Environmental Impact Assessment will now commence; The Solar Energy Technology Roadmap (SETRM) has been completed and will now be submitted to stakeholders for their comments; Fuel sampling and testing was exceeded by 330 units.100% (318) invoices were paid within 30 days.634 retail site compliance inspections were conducted.

Major Challenges:•A number of positions within line function units are not funded.

48

Thank You!

49

STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE AS AT 31 DECEMBER 2014 Presented...

Documents

Transcript of STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE AS AT 31 DECEMBER 2014 Presented...