Operation Vulindlela’s progress in removing SA’s biggest economic growth hurdles

Completing the unbundling of Eskom’s generation and distribution entities, and appointing a board for its transmission entity, are among the reform points Operation Vulindlela wants to see completed by the end of 2022.

The initiative – established by the Presidency and National Treasury to accelerate the implementation of structural reforms – revealed its plans to turn Eskom around at a briefing outlining its second-quarter performance on Friday (5 August).

Other reform points Operation Vulindlela seeks to assist with in the second half of the year include rapidly expanding new generation capacity, enabling private sector investment in energy generation, and introducing an electricity regulation amendment bill in parliament with the intention of reforming the electricity market.

“The final version of the Electricity Regulation Amendment Bill will be submitted to Cabinet and tabled in Parliament to establish an independent transmission company and a competitive electricity market,” the entities said in a joint statement.

Operation Vulindlela’s reform objectives follow President Cyril Ramaphosa announcing his own action plan to address load shedding and the country’s energy shortfall, on 25 July.

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Plans and progress

Operation Vulindlela was first introduced in 2020 under former finance minister Tito Mboweni, as government’s special economic reform programme.

It set 26 structural reform agendas across the energy, transport, telecommunications and water sectors, which are critical to addressing the country’s economic growth.

The initiative has so far managed to complete nine of the reforms – including the increasing of the licensing threshold for embedded generation from one megawatt (MW) to 100MW, the corporatisation of the Transnet National Ports Authority (TNPA), the release of the revised critical skills list, and the implementation of the e-Visa system in 14 countries.

A further 11 reform points are said to be on track towards completion.

Six of the hoped-for reforms are however proving difficult for government to achieve.

These include raising Eskom’s energy availability factor to above 70% and the total migration from analogue to digital.

“Significant progress has been made, and is being made, to implement these reforms and to address the urgent challenges that our economy faces,” says Minister of Finance Enoch Godongwana.

“Operation Vulindlela has been able to open the way for the reform agenda in a short space of time and has enabled the implementation of reforms which will have a real impact on investment, growth and ultimately jobs.

“The progress report that we have just released demonstrates that concrete actions are being taken to unlock the dynamism of this economy and place our growth on a higher trajectory.”

Digital migration delay

Godongwana noted delays in plans to migrate the country from analogue to digital broadcast signal – a necessary step in attracting investment in the telecommunications sector and enabling the rollout of 5G networks.

Analogue transmission was due to be switched off in SA at the end of March, but court action against the Department of Communications and Digital Technologies led to a delay. Government is yet to set a new date, says Godongwana.

Read: Govt delays cut-off date for analogue TV to September

The auction of high-demand spectrum has however been successfully completed, and five provinces have migrated from analogue to digital transmission.

“While the final switch-off date for analogue transmission has been delayed by a decision of the Constitutional Court, work continues to migrate remaining households to digital signal and complete this process,” Godongwana says.

“Government intends to provide a subsidised set-top box to any indigent households which have not yet migrated and complete switch-off in remaining provinces.”

Listen/read: What does the spectrum auction mean for your phone bill?

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