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Eskom profits down 34% South Africa

South Africa’s state-owned power company has released figures showing its profits are down by 34%.

Eskom’s figures also showed a worsening cash position, a fall in asset values and a gap of 50% between the funding it needs, and the funding it has.

The struggling company has received a number of government bailouts, but is also implicated in a corruption scandal involving South Africa’s president, Jacob Zuma.

There are allegations that certain contracts relating to Eskom were given to government allies, instead of being properly tendered out.

Eskom dominates the electricity market in South Africa and exports power to some of the country’s neighbours.

But in recent years, the size of its debts have regularly been cited by credit ratings agencies as a threat to South Africa’s economic stability.

Last month, the company elected a new board, prompting hopes that its fortunes can be reversed.

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Managers focused on furniture needs, not water – De Lille on Cape Town’s ‘derailed’ drought plan

Cape Town – Project managers in the City of Cape Town tasked with coming up with solutions about the drought spent lots of time talking about furniture they wanted instead of water projects, a submission by Mayor Patricia de Lille has revealed.

“At some of the very first meetings it was astounding to hear feedback from project managers who, when asked for updates on the plans to get additional water, instead spent a great deal of time talking about furniture for the ‘war room’ for the water resilience team,” she said.

“Instead of receiving substantial feedback on the actual delivery of water and commencement of projects, senior project managers spoke about desks and other office furniture needed for the war room and the costs to set it up.”

De Lille’s scathing submission also details how a year ago, when Cape Town’s water situation needed urgent tackling, some City officials did not believe there was a crisis and did not realise climate change was affecting the water supply,

Drought plan ‘veered off course’

By the end of October last year, her submission said, it worryingly appeared that a water resilience plan created months earlier was not actually moving ahead.

“It was apparent that the plan had veered off course and the commitment of the second date in October for ‘new water’ to come online would not come to fruition,” De Lille wrote.

“It was incumbent on me to step into the management of the water crisis even more hands on and more frequently.”

This means just three months ago the City was still not on top of the pending crisis.

– See our Water Crisis special report

De Lille’s version of how the drought crisis has been handled by her colleagues is contained in a submission, dated January 5 this year, addressed to the DA’s federal executive chairperson James Selfe.

It is headed: “Reasons why Patricia de Lille should not resign from her position as executive mayor of the City of Cape Town and reasons why the Democratic Alliance ought not to move a motion of no confidence against her”.

De Lille has been at the centre of several allegations and claims about her conduct. Many of the claims have been leveled at her by colleagues.

READ: 5 scandals that have recently rocked the City of Cape Town

The City council may debate a motion of no confidence against her this week.

In December the DA’s federal executive suspended De Lille from all party activities pending investigations into her actions.

Court action

De Lille has approached the Western Cape High Court over the matter.

A draft court order, dated last Wednesday and which News24 has seen, says that De Lille may still attend caucus meetings.

But the caucus may exclude her if the meetings go into allegations against her which are contained in two reports. If she is excluded, the caucus chairperson should inform De Lille of decisions taken during her absence.

‘Wholly inaccurate weather predictions’

De Lille’s submission to Selfe about why she should not resign said that before the winter of 2016 and 2017, the South African Weather Service predicted a higher chance of wetter conditions compared to 2015’s dry season.

“The prediction of rainfall and climate change does not fall within the mandate or expertise of municipalities, but we are now all too well aware that these predictions were wholly inaccurate,” she said.

In 2016 the City had implemented water restrictions. This was before it was required by national government to do so.

Disaster area declaration denied

De Lille said that by February 2017 “the situation was so concerning”, that she applied to national government to declare the City a local disaster area.

This, she said, was rejected on the grounds that this action would have been too early and the situation was not yet at crisis level.

“Had the disaster declaration been approved, we would have been provided with the legal mechanism to enable the City to move budget from one purpose to another, as well as had access to emergency funding,” De Lille said.

In January 2017 dam levels stood at 40.4% and daily water consumption stood at 880 million litres. A second attempt at getting national government to declare the City a local disaster area was again denied.

Officials didn’t believe it’s a crisis

“At this time national government and many of our own officials did not believe we were at crisis stage and remained of the view that water restrictions, and later reducing the water pressure, remained the best intervention that would see Cape Town through until the winter of 2017 when rains were expected,” De Lille said.

“Furthermore, many City officials did not see that climate change was introducing more uncertainty into our water supply and planning models.”

Extremely concerned, De Lille called on officials to provide plans on how to address the water shortage, saying more action was needed.

READ: City of Cape Town answers your water questions

De Lille said in May 2017, when dam levels were at 22%, she appointed Craig Kesson, the executive director in her office, as the chief resilience officer tasked with creating a team of experts and project managers to work with the City’s water and sanitation department to develop a new drought crisis plan.

She asked that the plan be developed in a week.

At that stage, De Lille said, officials were relying only on rain water and she had emphasised they needed to look at other sources of water.

The City’s new water augmentation plan was announced publicly in May last year.

Chance of CT drought ‘less than once in 1 000 years’

De Lille said that in late August, rainfall analysis by senior climatologists at the University of Cape Town “showed that the chance of this severe multi-year drought (in) Cape Town is less than once in a thousand years”.

The water team, she said, indicated that the first water from additional resources would be online in August 2017.

“This did not materialise and the team attributed this to the fact that a project of this unprecedented scale and complexity had never been done before,” De Lille said.

Another date of October was then provided for extra water resources to come online.

Seemingly ‘stalled’ plan

“At the end of October, it seemed that the Water Resilience Plan had not been moving and the responses to my questions on updates from the water task team became increasingly worrying,” De Lille said.

She had then started daily water meetings.

De Lille said Kesson had gone on study leave for most of October and early November, but when he did return, he did not attend all the daily water meetings.

“Despite this, I have continued to lead the senior management team to ensure that we address obstacles and remain focused on our work and timelines which I am checking on a daily basis,” she said.

De Lille detailed several interventions she had undertaken to deal with the water crisis.

These included getting expert guidance on groundwater, meeting water and sanitation minister Nomvula Mokonyane and asking National Treasury for help.

R2.6bn budgeted

“A key positive example of my leadership in this water crisis is the R2.6bn from the existing 2017/18 budget which the City made available for new water projects,” De Lille said.

“This was made available through savings and reprioritisation of existing budgets without impacting on service delivery and the Integrated Development Plan.”

She said she had also brought in external independent groundwater expertise to ensure this water augmentation process, which was cheaper and faster than desalination, was prioritised.

“These major achievements under my leadership have mitigated some of the disastrous consequences that the initially high proposed rates increases would have had for both the City administration and the people of Cape Town,” De Lille said.

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South Africa Hawks raid ANC leader’s office

South Africa’s elite police unit, known as the Hawks, said they are executing a search and seizure warrant at Premier’s office in Free State province.

The premier also happens to be the Secretary-General of the governing African National Congress (ANC), Ace Magashule.

The investigation relates to the Estina dairy farm near Vrede, from which the controversial Gupta business family – who are close to president Jacob Zuma – are alleged to have pocketed millions of dollars from a scheme originally meant for poor black farmers.

Evidence revealed in a tranche of WikiLeaks-style leaked emails showed large sums of money meant for the dairy project were allegedly siphoned-off to Gupta bank accounts and – eventually – paid for the family’s lavish wedding at Sun City, South Africa’s upmarket holiday resort.

According to the National Prosecuting Authority’s Asset Forfeiture Unit – which filed papers with the Bloemfontein High Court earlier this week – just two million of 220m rand ($169,00 – $18.5m; £118,500 – £13m) given to the project was spent on the farm, South Africa’s Times Live reported.

Brigadier Hangwani Mulaudzi, from the Hawks, confirmed the operation. He said they are looking for documents and any other evidence related to the farm project in a search expected to take the whole day.

“We have members from our serious corruption and cybercrime team that are that are executing those search and seizure operations at the Office of the Premier and the Department of Agriculture. It’s in relation to the Estina farm.

“People must watch this space…soon we will make announcements that will shake this country,” he emphasised.

The ANC responded by saying that its secretary-general Ace Magashule “is innocent until proven otherwise in a court of law”.

Speaking for the 106-year-old liberation movement, Khusela Diko also said: “The African National Congress is committed to root out corruption wherever that corruption is committed.

“We must allow the Hawks to do their work. The matter will go to court.”

Mr Magashule’s spokesman said they were cooperating fully.

In a separate process in the fight against what is known in South Africa as “state capture”, the government published terms of reference for a judicial commission of inquiry which is going to investigate President Zuma, his family friends the Guptas and other government officials in his administration.

President Zuma is under considerable pressure to come clean about dodgy government contracts and the influence his family and friends have had over state officials.

The Guptas and President Zuma deny any wrongdoing.

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Plane Crash on Ilovo Beach

Two pilots have escaped injury after the plane they were in crashed on Illovo Beach on Saturday morning.

Rescue Care spokesperson, Garrith Jamieson, said the incident happened just after 07:00 off Elizabeth Drive in Illovo Beach.

“Paramedics responded to the call to find that the plane was lying on its roof,” he said.

KZN EMS tweeted that the plane had made an emergency landing on the beach.

Jamieson said the two occupants of the plane were found outside and had sustained no injuries in the crash.

He said the events leading up to the plane crash were unknown, however all necessary authorities were on the scene and will be investigating further.

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Power to Zuma!

It’s official: President Jacob Zuma is under investigation. Also under investigation are current and former members of his cabinet, as well as his friends and family.

At the heart of this state capture probe is to officially confirm and put a legal stamp on what we already know: Zuma violated the Constitution of the Republic when he placed his interests and those of his family and friends above those of the Republic.

In so doing, he gave direct and tacit approval to all government officials – from ministers, bureaucrats and leaders of state-owned companies, among others – to do everything in their power not to serve South Africans but to do the bidding of the Guptas.

Multi-national companies from around the world were seemingly given the same impression that all that matters in South Africa is to massage the president’s friends and family for doors to open. It had become an “unofficial official” policy at Eskom, Transnet, Denel and others.

Zuma gave away the executive authority of the Republic, which the Constitution vests only in him to use in the interest of the nation. We must not forget that following two elections, in 2009 and 2014, Zuma entered into a contract with the Republic when he undertook, among other things, to “devote myself to the wellbeing of the Republic and all its people”. He also undertook to “promote all that will advance the Republic, and oppose all that may harm it”.

The terms of reference of the commission of inquiry on state capture, framed by former public protector Thuli Madonsela and being executed by Deputy Chief Justice Raymond Zondo, essentially constitute an inquiry on whether the crime of treason was committed.

If an executive of a JSE-listed firm were to face any allegation, even the mildest version of what’s contained in the state capture terms of reference – that he used his position to harm his company – a responsible board of directors would ask the executive concerned to step aside pending an investigation. Similarly, if any government official is under investigation, they are suspended pending the outcome. It’s the right thing to do.

Zuma has suspended many people. Presumably, he knows the significance of suspending a person while they are under investigation. Typically, the reasons are two-fold: to prevent further reputational harm on the institution (be it a company or organ of state) and to ensure the person under investigation does not in any way interfere with the investigation.

But as things stand now, Zuma is the president of the country. Whether we like it or not, he retains the prerogative to appoint and dismiss Cabinet ministers and a number of government functionaries. He approves ministerial travels abroad and signs bills into law. The list of his duties is long.

Technically, the question arises: Why would any government functionary risk their job or some perks by testifying against Zuma, who still wields state power? Some people might argue that, because he is no longer the leader of the ANC he won’t make appointments without the party’s approval. The counter argument is that his relationship with the ANC is not documented in the Constitution of the country.

Regardless of his totally diminished political popularity, he is the president the Republic.

Like private sector executives and state officials who get suspended pending investigation and disciplinary actions against them, Zuma should step aside or Parliament must fire him.

He should have long been fired anyway. The establishment of the commission of inquiry provides the latest justification out of a thousand others that have been ignored for Zuma to go.

He is too conflicted to retain his position as head of state while state officials are preparing themselves to testify against him. There may be Cabinet ministers who might want to spill the beans. But it won’t be possible while he remains in power.

Zuma doesn’t understand conflict of interests and even if he does, he doesn’t care. The question is whether his organisation, the ANC, cares. If it does, it must not dilly-dally and obfuscate issues around managing the transition carefully. It must act in the interest of the people and remove Zuma.

Now that the ANC talks about renewal, one assumes that they will dust off some of their lofty principles. One of those they should look at is their 1996 document entitled State and Social Transformation. It states: “Throughout the years that the ANC led with the slogan – Power to the People! – it waged a determined political and ideological struggle to ensure that, both in theory and in practice, this was not misinterpreted and vulgarised to mean – Power to the ANC!”

In the secret ballot judgment, the Constitutional Court said the slogan “Power to the People!” means all state power and resources are to be used in the interest of the people.

Zuma’s mission while he occupies the presidency is to safeguard his interests. If anything goes wrong now with potential witnesses to the state capture commission of inquiry, the ANC must know that it will be complicit because it failed to get rid of the highly conflicted Zuma.

In fact, keeping Zuma in power now is so reckless it is tantamount to giving Oscar Pistorius an AK47 while he is prison. We know what he is capable of.

Zuma’s AK47, which he uses for private purposes, is the public office he holds. For every minute he remains in office, the ANC is vulgarising its slogan. In short, it is chanting: “Power to Zuma!”

– Mkhabela is with the Department of Political Science at the University of South Africa.Z

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City of Cape Town set to reach out to the bottled water industry

With less than 80 days to go until Day Zero, the City of Cape Town may want to consider getting help from the bottled water industry.

South African National Bottled Water Association (Sanbwa) chairperson John Weaver said that some of their members have donated water to afflicted areas in the past and have sold water at a cost.

“This cost could be dramatically reduced were government to allow for an emergency water category that, for example, allowed bottlers to omit labels.

“Bottled water is regarded as a food product by the Department of Health and must comply with legislation covering, in addition to health and safety issues, packaging and labelling, which is very expensive,” said Weaver.

READ: Police, army will help secure Day Zero water distribution points – Zille

Sanbwa is a representative body of the bottled water industry and has a membership list which includes Bonaqua, Valpré and Clover Waters: Nestle Pure Life.

The bottled water industry has remained untouched during the water crisis as 90% of their members use renewable groundwater sources in their packaged products, according to Weaver.

“Groundwater is strongly buffered against drought influence because it is renewed (replenished) in a completely different way to surface water, which is mainly dependent on reliable rainfall, and is thus very susceptible to drought patterns,” explained Weaver.

The city’s Director of Trade and Investment Lance Greyling said that he was planning to consult with the Sanbwa in the near future. He has already had meetings with retailers in an attempt to dissuade them from profiteering off the drought.

Pricing of bottled water

However, Weaver said that any discussion on the pricing of bottled water with the city would be illegal.

“It is illegal in South Africa to discuss, fix and or manipulate the price of goods. So, even if the city were to approach us or any of our members, we are legally obliged to decline to continue the discussion,” Weaver said in an emailed response.

Weaver also said that, while there was no official report of increased sales in Cape Town, stockpiling was probable.

“There have been reports regarding consignments of 5l bottles, which apparently are sold out within hours of being delivered to Cape stores. We have had no official, nor unofficial reports of increased sales, but whenever there is hot weather or drought, sales do increase,” he said.

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Spotlight on groundwater as Day Zero moves up 9 days

Groundwater has become an increasingly important resource as Cape Town inches closer to Day Zero.

Dam levels have dropped by 1,4% this week, and unfortunately this means that Day Zero has moved closer by nine days, namely 12 April. The City is in the process of implementing “aggressive” pressure management operations and installing water management devices to properties with high water consumption.

SEE: #CapeWaterCrisis: ‘Privileged Capetonian’s guide’ to the water crisis will have you laughing then crying

The plan for Day Zero, when the taps will be switched off and residents will have to queue for water, has still not been released by the City’s Disaster Risk Management team, who have delayed its release by another week.

“If we want this disaster plan to be adopted with as little risk and inconvenience as possible, we need to look at the local context of each water distribution point. We need to build flexibility into the design of this plan to ensure that we can address any contingencies as they arise,” the City says in a statement.

Although desalination and aquifer projects are underway, they won’t produce enough water to avoid Day Zero. Many residents have also turned to boreholes to help alleviate the water crisis, pumping straight from the City’s precious groundwater.

Although a nationalised resource that falls under the jurisdiction of the Department of Water and Sanitation (DWS), as well as governed by a municipality’s bylaws, use of groundwater has been left largely unmonitored, until recently.

On 12 January 2018, the DWS introduced a new rule that stipulate that boreholes must be metered and a weekly summary must be sent to the department for monitoring. New boreholes require a permit and you are not allowed to pump more than 400m3 per hectare per year in Cape Town – which is about 1000 litres a day – though this may be reduced the closer we get to Day Zero.

 

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Ramaphosa arrives in Davos on wave of optimism as renewal beckons

Johannesburg – Deputy President Cyril Ramaphosa touched down at the World Economic Forum (WEF) in Davos on Monday afternoon with the wind at his back.

Ramaphosa will lead a boosted high-level government, business and labour delegation at the annual meeting in Switzerland, scheduled from January 23 to 26.

This year’s event is held under the theme ‘Creating a shared future in a fractured world’ and Ramaphosa will promote South Africa’s renewal and fight against corruption.

His visit comes amid reforms Ramaphosa is instituting to strengthen governance and boost investor confidence, especially at the country’s troubled state-owned enterprises. This includes overhauling the Eskom board over the weekend and forcing executives with a cloud over their heads out to pasture.

“This is part of an ongoing broader effort to restore confidence in the economy,” the South African delegation said.

“The South African government will continue to act decisively to address challenges at its key state-owned enterprises to restore public and investor confidence and to ensure that they fulfil their economic and developmental mandates.”

Ramaphosa will join various discussion platforms in Davos to develop a response to new strategies towards transforming governance in various parts of the world, the South African government said in a statement.

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ANC SEES PROGRESS IN FIGHTING CORRUPTION

African National Congress (ANC) president Cyril Ramaphosa says that the party is beginning to see progress in addressing corruption.

Ramaphosa presided over an ANC lekgotla at the weekend.

He adds that he’ll tell the World Economic Forum in Davos this week that South Africa is serious about dealing with the scourge as he tries to woo investors.

The theme for the World Economic Forum in Davos is “Creating a Shared Future in a Fractured World”.

Ramaphosa will join various discussion platforms in Davos with an aim to develop a response to new strategies towards transforming governance in various parts of the world.

“The forum presents South Africa with a platform to showcase its attractiveness as an investment destination and trade partner; set out plans that are unfolding to secure improved and inclusive economic growth, and contribute to efforts to respond to societal challenges globally,” a statement reads.

Ramaphosa will also hold various meetings with high-level political and business leaders from various countries.

The South African delegation, led by Ramaphosa, includes a broad range of leadership from various sectors of the economy and society, with Minister of Finance Malusi Gigaba as the lead minister and coordinator.

OUTCOME OF LEKGOTLA

The ANC NEC met on Friday night with a motion on the removal of state President Jacob Zuma reported to be under discussion.

But the party’s Khusela Diko has not confirmed this, saying that the ANC will communicate officially if there has been such a discussion.

With the KwaZulu-Natal and Free State PEC’s disbanded, their temporary steering structures are yet to be announced.

Meanwhile, the outcome of the party’s lekgotla which concluded on Sunday night will be announced at a briefing on Monday.

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Get those buckets ready. Rain is forecast for the Cape!

And now for the good news – rain is forecast this weekend for the drought-ravaged Western Cape.

Cape Town mayor Patricia de Lille warned this week that preparations were underway for “Day Zero”‚ when taps run dry in the Mother City.

But for residents facing ever-tightening water restrictions the approaching wet weather spell will be a welcome respite.

The South African Weather Service said on Friday that there was a 60% chance of intermittent rainfall for most parts of the province from Saturday.

“Rainfall is expected for the Western Cape on Saturday‚ clearing up by Wednesday‚” said forecaster Victoria Nurse.

Heavy rainfall was expected between Plettenberg Bay and Cape Agulhas‚ she said.

Weather SA tweeted: “Strong and gusty winds (65-75km/h) are expected in places over the Cape metropole and surrounding coastal areas between Table Bay and Hermanus from this afternoon (Friday)‚ subsiding early Sunday morning.”

Severe thunderstorms were forecast over the south-western parts of KwaZulu-Natal and northern parts of the Eastern Cape from as early as Friday afternoon.

Weather SA tweeted: “Severe thunderstorms over Umzimkhulu and Ntabankulu local municipalities‚ moving south-eastwards towards Mhlontlo LM.”