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1 National Planning Commission (NPC) Plan 2020: Dated 11th November 2011 The public’s comments are required by the 11th May 2012 Preface The NPC document can be found at http://www.npconline.co.za/ . It is 444 pages long. Contact number is 012 308 1791. Contact email is comments@npconline.co.za. But no-one answers this contact number and email address!! I have tried numerous times over the past 3 weeks. Eventually Donnae Strydom at the Western Cape Premier’s office gave me two contact numbers and the second one worked, 021 464 2115 and the man who answered this number at the Office of the Presidency had to try 2 numbers which rang and rang, before I got through to Lerato in Pretoria who answered my question, which was “what is the deadline for submission of public comments?” This date appears nowhere on the NPC site, nowhere in the NPC document and nowhere in Trevor Manuel’s speech. David Lipschitz Comments • Started on the 14th April 2012 • Ended 1st May 2012. 35 hours invested. One week of my time. • I view this 35 hours opportunity cost as an investment in our future in South Africa. My Comments in Square Brackets [] and indented. Text from the NPC document not indented. In the main, I have put text verbatim from the NPC document into this comment paper and then written my comments on it. [Here start my comments on each section of the NPC document.] Main topics by 2030: • Eliminate Poverty; Reduce Inequality; Use Capabilities of People and Country; • Needs: Education and Skills; Nutrition, Safe Communities, Social Security, Transport, Job Opportunities • Need: A Capable State; Leadership from all sectors; a pact for mutual sacrifice and trust 25 commissioners and Trevor Manuel. [The 25 commissioners and Trevor Manuel are the most powerful people in South Africa. Effecting and influencing strategy for the next 20 years.] [I went to a presentation at UCT on Thursday 12th.] NPC wants Active Citizenry, Effective Government working with the people, Strong Leadership in all parts of society. [How does the Active Citizenry engage with government, and with the NPC? Can we expect replies to our emails?]


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South Africans must participate. Faster economic growth [what are the constraints? Lack of electricity supply?]. A healthy population. The poverty line is R418 per month at 2009 prices per person per month!!! 39% of the population are below this level. By 2030, this should be zero %. Too few people work! The standard of education is low. Infrastructure is out of date. [electricity and ICT communications infrastructure?] Disease is increasing. Corruption is widespread. Increasing employment must be the highest priority reinforced by better quality education. South Africa must move away from its “resource based nature.” In 1994, government had an overoptimistic view of its capabilities!! [Note: I use the overall page numbers from the NPC document, so page 16 refers to page 4 of 444, which is page 4 after the index] Page 16 Over the next two decades and beyond, communities will need the resources and capabilities to become their own engines of development, and government must support this!! [What are communities? How do communities engage with government? How does government support communities?] [There is a focus on the poor in this document, but the middle class are getting poor at an alarming rate. How does government intend to deal with this new poor which are being created by government’s policies of squeezing every drop of wealth out of the middle class without creating an enabling environment for South Africa to grow?]


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Page 17 Higher taxation is needed to redress the wrongs of the past!! But at the same time the cost of living must decrease to allow wages to go further. Government must create the conditions … To date, government has done the easier things, like providing grants, water and electricity, and faltered at doing the difficult things, like improving education, promoting employment and building houses close to jobs. [“government has provided electricity”? How did government do this without building new power stations?] We must transform to a low-carbon economy. Page 18: Partnerships, based on mutual trust, are essential. We must unite the nation. At the moment we have a growing labour force, which makes up a significant share of the population. Internationally, this demographic window is often associated with rising incomes, faster productivity growth, higher savings and rising living standards. But this isn’t happening in South Africa. [why?] Page 20 (8 in the document): South Africa can use its resource base to upgrade its infrastructure!! If mining output does not increase, and if the associated rents are not extracted sensibly and used wisely, it will represent a tragic failure for the people of the continent! There are water resources in our neighbours’ lands. South Africa should use its resources to tap into these resources. [There is potential for 7GW of hydroelectric power in Lesotho. Hydroelectric is a battery in a renewable energy system.] Page 21: (9 in the document) Climate Change is a reality. The commission is concerned about the high domestic cost of broadband internet connectivity. [I am reliably informed that only 4% of Telkom’s fibre optic bandwidth is used]


4 Page 22: Government’s growth plan aims to create 5 million new jobs by 2020 and create 11 million new jobs by 2030. South Africans must make mutual sacrifices for longerterm benefits. Labour intensive manufacturing will create the best growth and longest jobs. [What sort of sacrifices? What sacrifices are government making? No business class and first class travel? No new cars for 10 years? Limited travel expenses? How is government incentivizing manufacturing? Why does government give rebates for imported Solar Water Heaters? How does this incentivize local manufacturing?] Page 24: South Africa has good natural resources. But over the past decade the mining sector has failed to match the global growth trend in mineral exports due to poor infrastructure and regulatory and policy frameworks that hamper investment. [eg: Lack of electricity supply] Page 25: Investment spending dropped from 30% of GDP in the 1980s to 16% in the early 2000s. Similarly public infrastructure spending is at long term lows. This must be fixed. Long term, users must pay the bulk of the costs, and the poor must be protected. Government must provide the financial guarantees to support long term capex (capital expenditure) repayments. These guarantees should reduce the cost of capital! The electricity crisis of 2008 should not be repeated. Policy and law should not conflict. Page 26: Human Settlements: Planning is at a local level; housing at provincial; water and electricity split between those responsible for bulk services and reticulation. This doesn’t work! Full responsibility should be at the municipal level. Compared with international standards, South Africa’s ICT infrastructure is abysmal. [Constrained by the Monopoly Telkom and its lack of vision and ability to use its infrastructure wisely. Similar to Eskom which constrains electricity growth whilst trying to hold onto power (in all senses of the word).]


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Page 26, 27 (14,15 in the document) Liquefied Natural Gas (LNG) terminals should be built. Exploration of shale and coal bed methane should be pursued [fracking]. This will diversify our energy mix and reduce our carbon emissions. 20 GW of RE should be procured by 2030. Electricity should be imported from the region. 11 GW of aging coal-fired power stations will be decommissioned. Accelerated investments in DSM (Demand Side Management Savings) should be made, including SWH (solar water heating). [Is the 20 GW only from Large Scale IPP’s? What about households and managing residential loads and Embedded Generators (NRS 097-2-1)] [What will this 20 GW cost the economy?] Page 27: South Africa needs to move away from the unsustainable use of natural resources, especially as water becomes scarcer. [Did two different people write about “unsustainable use” and “fracking”? Is fracking seen as sustainable?] Moving the economy on a sustainable path will be costly, socially and financially, and the poor shouldn’t have to pay any of this!! [In the past 5 years, the cost of electricity for the middle class has increased 150%. Surely if the middle class and rich are expected to pay for this, then the poor should be expected to give a little bit in terms of labour resources? After all, the NPC repeatedly states that if full employment is achieved, a lot of the social ills will disappear. And the NPC wants everyone to work together in mutual trust. This can be done if everyone gives, not only the people with money.] [If there is a carbon price, it should be levied on the producer of the poor carbon quality electricity, namely Eskom and it should come out of Eskom’s profits, which go directly to ANC coffers. The people didn’t decide on the coal path. Government and Eskom did. The people want cheap renewable energy. The people should not have to pay for government mistakes, especially when government ministers continue to buy expensive houses and cars and fly first class!!] There should be 5 million Solar Water Heaters by 2030. [This can only be achieved by long term planning and support, not by constantly changing the goal posts as happened in 2011 when South Africa got to 100,000 solar water heaters on its 1 million solar water heater program, and government said it was considering scrapping the policy and support]


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[This lack of sustained policy support is what has pushed investors out of South Africa and made many middle class South Africans a lot poorer. For example in November 2008, Government announced that Feed In Tariffs (FITs) would be introduced in April 2009. Many companies invested many millions of Rands to be ready for this, but the FIT was introduced for greater than 1 MW systems, no Photovotaics (PV) and no Power Purchase Agreement (PPA). In November 2009, PV was added at R3.96 per kWh, but again greater than 1 MW systems and no PPA. International statistics showed that South Africa had FITs and many international investors and venture capitalists visited South Africa. Approximately R5 Billion in factory infrastructure was put onto the table that would have created tens of thousands of direct jobs and hundreds of thousands of indirect jobs. But government vacillated and in 2011 declared FITs illegal! Sure if government declares a law illegal, someone should go to jail? Government moved to the British Tender system and thus moved South Africa 20 years behind the curve. In 2010, Britain finally admitted that its Tender system had failed, and it moved to the German FIT system. Germany implemented FITs in 1991 and had a target of 20% of Energy from Renewable Energy by 2020. It was called the 20 by 2020 campaign. Germany achieved 20% in 2011, 9 years early. They have revised their forecast to 35% of Energy from RE by 2020!! Germany employs over 370,000 people in its RE industry. As can be seen in the attached graphs, PV RE is growing at 35% per annum, and wind not far behind, but South Africa is no-where on this path.] [A path constrained by Eskom, Government, Telkom, a complete lack of understanding of the constraints that these monopolies put on the economy. I do not advocate privatization. I do advocate deregulation and leveling the playing fields.] [Government constantly changing its mind has forced capital to invest elsewhere. Some in government say that FITs are a bad incentive, but the oil industry is given incentives and the car industry still receives at least R5 billion a year in incentives.] [And government collects 2.5 cents per kWh in electricity levies which has just been increased to 3.5 cents per kWh in the 2012 budget. There is at least R15 billion in this fund, about a third of which has been spent on Solar Water Heating and Heat Pump subsidies. Furthermore government spent R9 billion on the Pebble Bed Modular Reactor (PBMR) research program over a 9 year period and there were up to 1000 scientists and engineers working on this at any one time. The R5 billion from the car industry, the R5 billion collected from the electricity levy annually, the R1 billion from the PBMR project add up to R11 billion of potential subsidies. Never mind the subsidies that are given to the big mining houses in terms of electricity generation and the huge subsidies being given to the IDZ’s. And then consider that Kusile and Medupi were budgeted at R79 billion each and are now estimated at R125 billion each, less than 5 years after build started and that they are 6 months behind schedule, and there will not only be electricity supply losses, but penalties to pay.]


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[There is so much waste and so much capital available in the South African economy. A few leaders with vision could turn South Africa around in a decade starting today.] [Also for every R1 billion that the government wastes on mismanaged and underquoted projects, 5,000 houses could be removed from the electrical grid permanently] Page 28 Here is a repeat of the blame to colonialism and the repeated statement that the rural areas have high levels of poverty and joblessness. [But on my visits to the Transkei areas of South Africa, I see well-fed, happy people. What is the definition of joblessness? Is it a Western Definition or an African one? And is the NPC advocating the everyone moves to the Cities? The Indian government is doing a massive program of rural electrification using RE to allow people to return to the countryside, yet to be able to compete on the international stage with electricity and communications. This is a good policy and something the South African Government and NPC would be well do emulate] Fisheries should be enhanced. [But earlier the NPC said that there is overfishing. What’s it to be? More fishing, or less fishing?] People should live closer to work. [Cape Town has the old District Six which remains undeveloped. Why? Cape Town has the local railway network and in many cases there are huge underutilized buildings and land within walking distance of railway stations. Why is this?] The commission proposed increasing urban population density. [How will it do this? How many more power stations will be required? Will communities have a say in this?] Page 29: The use of good quality agricultural land for agricultural purposes should have priority even if the land is close to human settlements. [I agree with this.]


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Pages 30, 31: Education. [Why not expand on your public-private program and bring back apprenticeships, understudies and on the job training? This will enhance mutual trust and confidence between employers and employees, automatically train more people, reduce unemployment queues and payments, and bring greater job awareness and satisfaction at a lower cost to government and the national coffers. With this approach government can be a watchdog, rather than a policeman] Page 31: The health system is crumbling and must be fixed. [This can easily be done with job creation. Stick to your two main focus areas. Job creation and education. The health system will automatically look after itself. Government cannot do everything. It is impossible. Stick to a few core principles as you outlined in your introduction and leave everything else to communities.] By 2030, the health system should be free for all. [There is no such thing as a free lunch. Who will pay for this? At what cost? And how many people will leave South Africa, due to a high cost of living, just at the time we want to attract talent?] More healthcare professionals should be on hand, especially in poor communities. [I haven’t read anything yet about support and programs for the squeezed middle class, black and white!] Page 32: The health system should focus on: • More people! [How will more people solve our problems? More managers? More administration? What we need is much better pay for the support staff, i.e. nurses, ambulance drivers, etc. We don’t need more high-level top heavy people.] At the same time we are told that at institutional level, health care management is in crisis. [So we have another paradox. Government want to employ and promote more management programs to fix the problem, thereby exacerbating it! And yet more money is being spent on research and consultants, rather than simply paying nurses and their peers more.]


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We need more management authority, more regulation and more governance in health care. [Again, more top heavy stuff, and no fixing of an existing broken system, bottom up.] Page 33 Government wants comprehensive social protection, mandatory retirement savings, unemployment benefits and voluntary retirement savings. [More costs for the middle class. I don’t have retirement savings and 4 years ago, I was 43 years old and I had no debt. Then government announced FITs and I invested and today I have R1m of debt. I don’t believe that retirement companies truly look after their clients and I believe I can do it better myself. I drive an old car and so does my wife and we don’t live it up. We tread lightly. And we believe that if the 10% that is put into retirement savings is put into a new way of saving, then the old fashioned and non-workable retirement savings programs can be slowly dismantled! This doesn’t mean that retirement companies will go out of business. It means a new paradigm and I can show it to you if you are interested. It will mean more money for the poor and middle classes, more savings, a lower long term cost of living, better health and long term financial well-being for all citizens., At the moment, the Retirement tax regime favours the retirement companies and doesn’t guarantee the worker that he or she will earn the proper retirement package.] Page 34 A capable state is an essential precondition for South Africa’s development. There is a real risk that South Africa’s national plan could fail because the state is incapable of implementation. [Hence I propose that ¾ of the laws of South Africa be scrapped making the legal profession and its laws more lean and mean. When last was the 6-minute dog barking per hour rule enforced? Why can’t neighbours deal with each other rather than paying the state to do this particular task?] [I also propose comprehensive deregulation of the Telecommunications and Electricity Sectors and that Local Loop Unbundling (LLU) be applied and not delayed even further. LLU was proposed in May 2006 and in 2010 it still hadn’t happened. As has been pointed out, lack of communications is severely hampering South Africa’s growth. If all people had equal access to communications resources and electricity, then everyone could compete from wherever they live. As Thomas Friedman says in his book “Hot, Flat and Crowded”, the world will truly be Flat when this happens.] [Page 35: The plan seeks to solve the problems by more high-level appointees whereas we know the problem is with implementation. Increasing the capability of the public service by adding more layers of communication and


10 people will not solve our problems. Replacing existing incompetent people and getting the people who spend their time on tea breaks will solve our problems. I’ve also heard that managers in the cities often say no to projects because the projects will mean they have to work. Well they are being paid and they should be expected to work for pay!] [Furthermore at every conference I have been to and meeting where government ministers are meant to be in attendance and / or speaking, these ministers are “called away on urgent business at the last minute.” I don’t believe this for a minute. These ministers are shirking their responsibility to be engaging with their public who they are supposed to serve as public servants. These publics pay these Public Servants’ salaries and expect respect in return. The most recent incidence of this was where Trevor Manuel didn’t turn up at the NPC meeting at UCT on Thursday evening the 12th April. Over 200 people from all over Cape Town and all walks of life arrived to hear Trevor Manuel speak and he didn’t show!] [Worse than this, at the Ministerial Conference on Energy at the One and Only Hotel where ministers from many African countries were present, every single South African cabinet minister who was invited was absent. The host of the event, the Minister of Energy, Dipuo Peters, gave an address where she promoted gas and left out Renewable Energy and then she left with her delegation. What an affront to the many ministers from the other African countries!] Page 36: The general cause of political instability is that policies change to often. [I have already written about this, and I’m glad that the NPC note that this is a critical concern which doesn’t only effect policy and political instability, but also effects investment, venture capital, and investors.] The NPC proposes that the RED’s, Regional Electricity Utilities/Distributors, be introduced to provide services on an agency basis. [However RED’s will make an unnecessary “super-profit” and this job can be better done by Community Clusters, Social Co-Operatives, and Community and Privately owned Electricity Services Providers (ESPs). ESP’s are similar to Internet Services Providers (ISP’s), except that ESP’s work with electricity and ISP’s work with data. There is a policy supporting Co-Operatives, and this should be looked at and implemented with urgency to help reduce costs at the coal face and return these savings to the consumer, rather than leaving them with an “agency” or middle man, which might abuse his power.]


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Page 36 Corruption is dealt with here. [In my opinion, if a payment is made before a project is implemented just to get it going and where there is no guarantee what the project will happen, this is a bribe. A payment made after the project happens and based on performance of the individual involved, can be considered to be a commission. This simply delineation of bribe and commission should resolve corruption once and for all.] [This applies to people who have to pay to tender to the government. This particular form of corruption favours the big companies over the smaller ones.] Page 37 The public protector and special investigative unit are underfunded, understaffed and subject to external influence. [What is the first thing that is proposed? More people! What should be the first thing? More funding for the existing staff and replacement of incompetent staff with competent staff.] We propose centralizing large and long-term tenders. [Actually the age of large and long-term tenders is past. What we need is localization of projects, which can be easily costed, staffed and resourced. Government cannot provide goods and services cheaper than their citizens anymore. That age is gone. It is time for government to work with communities to resource the communities at the community level and not to continue their focus on centralization, which may simply lead to more power in fewer hands and even more corruption.] People should be united by promoting mutual respect, inclusiveness and cohesion by acting on the constitutional imperative that South Africa belongs to all who live in it, and that all are equal before the law. [I agree 100%. As we live in a democracy and the law should represent the will of the people, the law should apply equally to large institutions, government, the rich, the middle class and the poor. At the moment, the rich and big business are advantaged, with cheap resources and incentives, for example, at the expense of the middle class and poor. An example of this is Time of Use Tariffs (TOU) and Bulk Water Supply. The daily rate for TOU tariffs should be scrapped and everyone should pay the same TOU tariff for electricity. This is the only way that all can be equal before the law, assuming that one uses the French Revolution definition of the law, as seems to be the case with the South African Constitution. Another example is that at the moment the Competition Court deals with competition and anti-competitive


12 behaviour in the marketplace, without considering government monopolies. This is uncompetitive and gives government an unfair advantage. In the past this didn’t matter as government could provide goods and services cheaper than communities could, but as I’ve said before, a paradigm shift has happened and communities, with government help, for example in the long term guaranteeing of cheap money, as mentioned before, can work together for each other’s good. Another point is that government makes the laws and is also active in business. There is a definite conflict of interest here. Lawmakers (parliamentarians) should have NO business interests and political parties should not be allowed to own shares in public or private companies.] Apartheid is still rife in South Africa. [This is true. In the old South Africa, the white government supported the government and gave rights to the whites, as the expense of the blacks. One could call this Apartheid 1. In Apartheid 2, which South Africa currently has, the government looks after itself and the members of the ANC and excludes all others from promotion, access, money and support. This must stop or it will lead to the disintegration of society and the exact opposite of the social cohesion and mutual trust government is seeking.] Page 38 It is noted that BBBEE and other policies can raise the level of social tension in an environment where there is no economic growth. [This is exactly what is happening in South Africa where economic growth is being hampered by silly old-fashioned and to be brutally frank, out dated policies with regard to communications and electricity infrastructure. See “The Age of Stupid” video on YouTube for a fuller description of just how stupid we all are, not just us in South Africa! And I’ve also written on The Age of Stupid before: See http://mypowerstationsa.blogspot.com/2010/08/letter-to-president-of-south-africa.html] [I support the Bill of Responsibility. Years ago I said that for every Right there should be an associated Responsibility. And I was boo-ed. For example: the right to life means the responsibility to protect life; the right to an education means the responsibility to learn; the right to freedom of expression means the responsibility to consider the other; etc.] Page 40 Total employment should rise from 13 million in 2011 to 24 million in 2030, i.e. unemployment should fall from 27% to 6%. [If the population grows by 1% for 10 years and then by .5% for 10 years, and if there is .2% population growth due to immigration, then we will have at least 57.5 million people by 2030. Will we be at 6% unemployment.]


13 The plan calls for annual GDP growth of 5.4% for 20 years to achieve the employment targets. [But the electricity sector growth is no-where near this demand. The only way South Africa can achieve 5.4% or higher growth is to allow the private sector to make electricity and use Net Metering to integrate with the Grid. As a first step the electricity grid must be deregulated.] Page 41: The Cost of living should be reduced. [How can the cost of living be reduced if the statutory costs go up by more than inflation every years?] [Re Point 12, reduce the administrative burden for companies with less than R5 million turnover. At the moment the government dramatically increases this administrative burden, e.g. by increased audit requirements, by increased reconciliations, two a year now instead of 1, and you want to increase this to 4 reconciliations, etc.] Page 42: [If the proportion of people with electricity is increased from 70% in 2010 to 95% by 2030, then with current electricity projects as suggested by the IRP2010, there will not be any electricity availability for business. By 2030, government intends building 40 GW of electricity, pretty much equal to the total electricity available in 2010! It has taken South Africa 150 years to get to 40 GW. How can we use old techniques to get to another 40GW in 20 years?] [About half of the 40GW should come from Renewable Resources. Does the NPC see gas and fracking as a Renewable Resource?] [I agree whole heartedly that South Africa should support the Lesotho Highlands Phase 2 process and increase this to 7GW if needs be. When I raised this at a recent conference, I was told that South Africa shouldn’t meddle in its neighbours’ affairs. I’m glad to see that the NPC are working out ways to solve this problem whilst making both countries more wealthy and less dependent on carbon unfriendly electricity generating schemes.] The Broadband definition should be increased to 2 MBPS per second by 2030. [This definition is wrong. MBPS stands for MegaBitsPerSecond and a byte is substantially bigger than a bit. 2 MBPS is way too low. New ADSL2+ routers are already in the market and many countries overseas had already adopted ADSL2+ by 2008. ADSL2+ provides for 20MBPS speeds and this should be the target by 2020!!!]


14 [As the “smart grid” develops and as Eskom seek to monitor and control remote transformers, switch gear, etc, much more reliable and robust data infrastructure is required. This can only be done by freeing up the 96% of available fibre in Telkom and implementing ADSL2+ within 3 months.] Page 43: Coal [What is being done to ensure that good quality thermal coal stays in South Africa and is used here? This will help to reduce our carbon footprint and reduce the maintenance cost of our power stations. What is happening with preventing Acid Mine Drainage from Coal Mining in future?] Gas [You know how I feel about fracking! It is a dangerous and out of date method of gas extraction and no good in: 1) a water constrained country like South Africa; 2) a country with a lack of legal enforcement; and 3) corruption.] Electricity [What does Ring-fence the electricity distribution business of the 12 largest municipalities mean and why is it necessary?] Liquid Fuels [I read in one of the PMG reports that one of the ministers was concerned about long term oil imports due to China’s very fast growth and the possibility that China might pay more than the going rate for oil which might damage South Africa’s contacts which come up for renewal in the next few years. If this happens, then how will delaying another refinery help us? And if we import petrol and diesel instead of making it here, how are we helped and what are our cost implications?] [What is South Africa’s policy regarding Electric Vehicles and will the SAVE, South Africa Vehicle Electrification Project, be restarted? Can I propose that taxes for Electric Vehicles be set at zero percent, for local manufacture, export and import?] [I read on the 19th that government had secured a new long term oil contract with Saudi Arabia. At what price and for what quantity?] Water and Sewerage [Will Biodigestors be installed?]


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Page 44 Green House Gas (GHG) Emissions. [Why must we reach the peak by 2025, especially when some are saying we are already at higher CO2 levels in the atmosphere than in the last 10,000 years? Why can’t we peak this year, using paradigm shifts, dramatically reduce our carbon footprint, and be a pioneer in electricity, water, sewerage, food and other organic and environmentally friendly processes? As you have mentioned, South Africans have the brainpower to do this. Ke nako, let’s do it!!] [Why wait till 2030 for Zero Emission Buildings. Implement it now! If people can’t follow established worldwide LEED benchmarks for buildings in South Africa in 2012, then new building should not be built. There was even a report recently that showed that in 2012 for the first time, the cost of building a LEED certified house was the same as a normal house!] [Instead of spending a huge amount retrofitting buildings built between now and 2030, build the buildings right in the first place. And this applies to RDP houses as well. RDP houses are often the poorest insulated, with no ceilings, no insulation, no curtains, and other bad design decisions. Although this might seem to save money, it dramatically increases the electricity use by these houses.] [You want leadership. You want Strong Leadership. Do it now. In the 19th Century when Britain took the bold step to instantly abolish slavery, the industrial revolution started within one year. See http://www.ted.com/talks/shai_agassi_on_electric_cars.html] [The carbon tax should be placed on the producer not on the consumer!] [969,000 more jobs in farming assuming farm land is available and that erosion and water scarcity doesn’t inhibit this growth.] Page 45 (33 in the document after the index) More people living closer to their places of work. [What about home workers, working from home? With fast ADSL, VOIP and other services, more people can work from home. This has huge benefits for the economy, including keeping rural people out of urban centres, while giving everyone access to the main economy. Another possibility is Remote Work Centres, e.g. in large buildings, where people can walk to work, but where they actually work remotely in a business environment. This will suit people who have children at home or where they find the home environment not conducive to work.]


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Page 46 18 months old re nutrition deficiencies. [In an early part of the document you mentioned 3 years old!] Page 49 Patient Record Keeping Systems [There are local ICT systems that should be used in the medical system. Not more important and unworkable and expensive imported systems with rates in Euros instead of Rands!] Increase the social service professionals from 15,000 to 55,000 by 2030. [At what cost? And Why?] National Health Insurance [Have the people asked for this? Has there been a referendum? What is international best practice? How can this be implemented in a country plagued by corruption?] Page 50 Building a Capable State [One of the current problems is the huge number of people in “Acting” positions, e.g. Acting Director of this or Acting Director-General of that. A major priority should be to formalize this employment thus ensuring long-term effective service delivery and proper KPIs] Improve relations between national, provincial and local government [There is so much blame going on here. E.g. with the road between Table View and Milnerton where the left lane was ”fixed” some years ago and was actually worse after the fix. The City of Cape Town said this is a government road. Government said it is a city road. And nothing has been done. I was on the Blaauwberg Ward Forum for a number of years and we must have spoken about this problem for hundreds of hours. I propose that decision making be devolved to the lowest common denominator and the same should apply for national roads that are within city boundaries]


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Page 51 Point 84: Make it illegal for civil servants to operate or benefit from certain types of business activity. [Why does the word “certain” need to be here? Why can’t it be all types? Are you purposefully leaving the door open to corruption?] [The same should apply to political parties. The ANC and other political parties should divest themselves of all their business interests. These conflict with the State’s purpose as public servants, promote graft, and leave the door open for government to misuse competition laws thus allowing monopolies in businesses owned by government whilst outlawing monopolies in private sector business. We also have the potential conflict of interest in the coal mining, nuclear and fracking industries where government might seek the profit motive at the expense of the people and the environment and in violation of section 24 of the South African constitution.] Page 53 The vision statement says “We are proud to be a community that cares?” [If people care more about money and status than life, health and the environment, then what have we really achieved?] We have become insular and find it difficult to recognize shared burdens. [I agree] [I also agree with your statement of how we should be and how we should feel in 2030, looking back on the last 46 (1994 to 2030) years of our democracy and the hundreds of years of African (Ubuntu) culture before that.] Page 56 We have built our own houses. [The only way to do this and achieve the rest of the dream is to decentralize power and create real, locally resourced and developed, internet and energy enabled, sharing and purposeful communities. I don’t see that the NPC’s plan of action will achieve this. We truly need to build our own houses, with local talent, local money and local labour, supported by the capital raising and debt security capability that central government can give to this new, clean and security 21st Century environment.] [I haven’t read anywhere about how you will take this message to the 50 million South Africans! This message of hope, dreams, foundations, togetherness, mutual affection.]


18 [Thank you for this incredible message of life in 2030. Let’s start implementing and living it now. Let’s make it part of our constitution and print 50 million copies and give it to very single person in South Africa for each of us to internalize and make a part of our life now and in 2030 and forever.] [8 hours for Introduction] Page 61: Chapter 1: Key Drivers of Change Page 63: Even with globalization the gap between rich and poor has increased. [The reason for this is simply that laws favour the rich and well connected and provide very big barriers to entry to allow Active Citizens to compete on a level playing field.] The three-year recession! [According to statistics I have there was only one year of recession in South Africa. In 2009 the economy shrank by 20%. But since then it has expanded by 35% meaning that 2012 will be bigger than 2008!!] The middle class have been weakened by the global financial crisis. [Actually the middle class have been weakened by huge increases in taxation. Eg Rates and Taxes, Water, Electricity. And many of these people who run small businesses now have to do a huge amount more administration. Not only tax reconciliations, but the problems with trying to do things on time like Compensation Commissioner returns only to be told there are delays in the process. These Compensation Commissioner delays show a lack of respect by government for business owners and give small business owners especially, a hard time, especially re time management and trying to remember which deadlines have changed and which have been responded to.] [There is no recession in the Asian Tigers. The BRICS countries besides South Africa are growing fast. I actually believe that Mexico should have been the 5th country in BRIC and not South Africa. But I believe South Africa has been admitted because of its resources and because of its power in Africa.] Page 64 [Waste is mentioned as a major problem for our fragile planet. But I haven’t read anything in this document yet about waste management.]


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Page 65 The public sector is locked into outdated national models that do not allow it to deal with global challenges. [Agreed] Treaties and conventions take too long to negotiate and are rarely enforced. [Take the COP process and COP17 for example. A complete waste of time and resources.] Page 68 Chinese income per capita will increase 7.25 times in real terms from 2010 to 2050, whereas South Africa’s income per capital will increase on 2.5 times. [What is the NPC doing about this?] Page 69 China’s 12th five-year plan tabled earlier this year (2011) showed a striking change in its growth strategy – from a focus on investment-driven, high-energy and low-cost manufacturing, to low-carbon industries, new energy, next generation information technology and high-end manufacturing. China’s goal is to achieve a 15% global share of these industries by 2020, compared with 3% now. If it succeeds, this change will have profound effects on the rest of the world. [This focus should be South Africa’s focus. We are part of BRICS. Let’s observe this Asian Tiger and copy its new strategy. We have the resources and capability to do it and to partner with China and BRICS to make it a reality.] Brazil, China, India, Indonesia, South Korea and Russia will account for more than half of all global growth, growing by an average of 4.7% a year to 2025, by which time their share of global GDP will have grown from 36% to 45%. [It is time for South Africa and Africa to shed its association with its colonial masters, England, France, Germany, Portugal, Spain, and the USA, which are part of the dying Western Empire, and change to a much closer association with the Asian Tigers, BRICS, Indonesia and South Korea.] Page 70 A number of drivers are behind this economic regeneration in Emerging Economies, including better education and economic management. [So it is obvious where South Africa needs to focus its attention as education and economic management is sorely lacking here.]


20 The middle class has earnings between US$6000 and US$30000 per year. Page 72 Africa grew at 5.6% per annum from 2000 to 2010 with three years topping 7%, ie 2002, 2004 and 2007. [Why is South Africa being left behind?] Page 73 Most African countries have not used their commodity wealth to reduce poverty. The proceeds of oil or minerals extraction have largely been consumed, rather than invested in people and infrastructure. [The NPC should take note of “The Resource Curse”, as shown at http://www.africafiles.org/article.asp?ID=26082. More on this on Page 84: “Finally, resource-intensive technologies, focused on satisfying high consumption demand, like holidays abroad in coastal resorts, wilderness areas, or iconic cities, increase carbon emissions and environmental damage. More on this on Page 111: “Higher commodity prices buffer the economy and create the appearance of growth, leading governments and companies to become complacent and under-invest in people and productivity growth.] Page 76 According to the International Telecommunications Union, the top five most expensive places in the world for fixed line broadband were all in sub-Saharan Africa. [10 Terabytes per second or 10 Terabits per second?] Average electricity costs of US$0.18 (R1.44) per kWh are about double that of other developing countries. [And even more expensive than electricity in Austin, Texas!] Page 80 We live in an era of “ecological deficit”, as natural capital (ground water, marine life, terrestrial biodiversity, crop land and grazing), is being degraded, destroyed, or depleted faster than it can be replenished. Waste and carbon-emissions per capita are climbing faster every year in an ecosystem with finite limits. Human activity is warming the planet. [South Africa will be growing the economy using Business As Usual till 2025, whereas the graph on Page 80 shows that we must change from Business As Usual immediately! Carbon emissions must peak this year in South Africa, not in 2025!]


21 The first paragraph on Page 81 also says this!! Unless emissions are checked soon, development will be reversed in many parts of the world, bringing major economic decline. Page 81: High-income countries are to blame for GHG’s. [But low-income countries have been supplying these high-income countries with resources for centuries. Most of the blame is therefore with the lowincome countries for shirking their climate responsibilities!!] The Energy Industrial Revolution now under way offers exciting opportunities. Page 82 Change is more likely to be bottom up. [I agree. Governments tend to look after themselves and create laws to enhance their own power. This uneven heavy-handed approach will back-fire as communities realize that they can do things cheaper and quicker than government can. Government should be a part of the solution, rather than a part of the problem] Page 83 The real divide in the next 20 years will be between those who have access to reliable [and affordable] electricity and those that do not. Another 4 hours to here. 12:18pm Sunday 15th April 2012 Page 87: Chapter 2: Demographic Trends Page 98 Better health and food security, better heath care, better education, higher skill levels, easy labour market entry and labour mobility as seen as key requirements for South Africa’s future. Education without jobs carries risks of its own. 12:26pm. Page 101: Chapter 3: Economy and Employment Page 103 Has a good table showing employment statistics. 32.4 million out of 50 million people are considered to be the Working-age population; the labour force participation rate is


22 considered to be 54%, and the labour force is considered to be 17.5 million with unemployment at 25%. 4 people are dependent on each worker. [Put another way, 65% of the population are available to work, and 54% of these are in work, so true unemployment is 46%. With the 54% labour force participation rate, only 17.5 million people are available to work, but only 13 million people are employed. So the government’s 25% unemployment figure is 4.5 divided by 17.5 million people. Where does the labour force participation rate come from? Who determines it?] Page 105 90% of employment will occur in SMME’s. [Where in the NPC document is there relief for SMME’s on the massive administrative burden SMME’s carry? SMME’s are unlikely to steal from themselves, unlike large corporates and governments with huge budgets and bigger opportunities for economic crime.] Public employment programs are an essential element of any employment strategy and another 1 million people must be employed by government annually by 2015! Exports must be promoted. [This means that incentives, for example the Solar Water Heater rebate, must only be for locally made Solar Water Heaters and not imported ones. Giving incentives for imports is directly at the expense of locally produced goods, jobs, and therefore exports.] Exports are needed to grow income and forex so that further imports of industrialization equipment can be done. [Read power stations!!] Page 108 (96) Substantial investment is made in R&D and the commercialization of South African innovations. [Accessing this finance is often difficult for the small SMME and help should be instituted to ensure that local products are commercialized to their maximum potential, thus increasing exports and reducing imports.]


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Page 109 Community based house building is essential. [This means the need to allow environmentally friendly, sustainable, African, building traditions, such as mud houses, clay, straw bale, etc, construction. The current building industry regulations prevent this type of sustainable building practice.] Page 110 [Why does manufacturing’s share of employment fall?] 8.24pm to Page 111 A decade of slow growth. [But elsewhere you have written about the BRICS countries plus Indonesia and South Korea growing quickly. Why isn’t this considered in the economic section? It’s almost as if government is putting the break on the economy by using the wrong words] [A country with high unemployment should seek to employ as many people in manufacturing as possible. This isn’t addressed.] Page 113 Overvaluation of the Rand. [This myth is perpetuated and leads to further underinvestment in productivity and product development. A strong currently is a result of a strong economy. South Africa needs a strong currently, not a weak one!] Page 114 An energy constraint that will act as a cap on growth and on our options for industrialization. [I’ve been saying this for years. I’m really glad that whoever wrote this has recognized this fact and put it into this NPC document. Thank you.]


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Page 114 The longer-term solution to skewed ownership and control is … [to level the playing fields so that SMMEs have the same advantages as large corporates. This means lowering barriers to entry, providing the same tariffs for electricity, etc.] Page 115 The goal is to treble the size of the economy in the next 20 years. [from R3 trillion to R9 trillion. If the labour force is currently 17.5 million people, then theoretically if the economy triples in size in the next 20 years, then 100% employment should be achievable. If it isn’t then the NPC and South Africa are again favouring high profit, low impact business and not looking after the common person.] Page 124 The median income from work was R2,800 per month in 2010 and R3,683 per month excluding agriculture. The bottom 25% earned R1,500 per month, the top 25% R6,500 per month, and the top 5 percent R17,000 per month. Women earn between 25% and 50% less than men. In South Africa, low-income households live far from the centre of economic activity. The costs of searching for and getting to work are high, and information about work is often unavailable. [An opportunity for a CSI (Corporate Social Responsibility) project?] Page 129 Rural communities will be activated through the stimulation of small-scale agriculture, tourism, and mining investments. [This won’t keep people out of cities. The “Flat” component of “Hot, Flat and Crowded” (book by Thomas Friedman) must be implemented. Rural communities must have access to electricity and fast Ethernet.] Page 130 [Your writer notes] “ a policy environment that traditionally favours concentration and large corporations”.


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Page 135 In 1971, 1.8 million people were employed in agriculture. 1.2 million in 1995 and 600,000 today. The number of hectares under cultivation has been falling since 1974, and the number of hectares under irrigation has not expanded since the early 1990s. [How are the NPC’s policies and the continuation of the idea that small farmers can produce enough going to help South Africa feed its population? Groups of farmers should be put together in large scale Co-Operatives to solve this problem.] Page 136 Mining has fallen from 21% of GDP in 1970 to 6% in 2010. Jobs have fallen from 660,000 to 440,000 in 2004 and has remained at that level. Mining, minerals and secondary beneficiated products account for almost 60% of export revenue. South Africa has failed to benefit fully from the commodities boom over the past decade or more. [The reason is simple: Lack of electricity supply.] Page 137 Electricity is the main constraint! Page 138 Enable mining firms to supply their own plant with an estimated potential of 2,500 MW by 2015. [As far as I know Government prevented Gold Fields from building its own 6 MW methane power power station in the 1990’s.] Page 139 Regarding manufacturing, some of the key challenges related to the available and cost of electricity, and the fast rising administered pricing for electricity. There has been extensive support for the motor industry [But hardly anything for Renewable Energy and the other Chinese strategic areas.]


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Page 140 Conditions will be created for a less cyclically volatile industry by emphasizing numerous, smaller scale, regionally dispersed projects to address backlogs that are more accessible to smaller firms and new entrants. Home insulation and installation of solar water heaters are labour intensive. The United National Environmental Programme defines the green economy as “a system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks and ecological scarcities”. Page 144 The public sector employs about 9% of the labour force, yet the wage bill exceeds 12% of GDP, very high by both developed and developing country standards! [Shows we are top heavy, and this NPC document shows that we aren’t productive and have huge inefficiencies. So we are paying more for less!] 9.33pm Page 149: Chapter 4: Economic Infrastructure In the transport and energy sectors – dominated by SOEs (State Owned Enterprises) – the economy has already been constrained by inadequate investment, alongside ineffective operation and maintenance of existing infrastructure. In the telecommunications field, dominated by private operators, the cost of services is prohibitive. [But could this be because of Telkom constraining the telecommunications environment?] [And could the lack of investment be because government keeps changing the rules? Eg announcing Feed In Tariffs (FITs) in 2008, and then “introducing” them in 2009, but making them impossible to get. And the cancelling FITs in 2011 and saying they are “illegal.” What kind of message does this send to investors?] end 9.39pm Sunday 15th April


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start 8.14pm Tuesday 23th April Page 149 (page 137) Current investment levels are insufficient and maintenance programmes are seriously lagging. Government can achieve better outcomes by … [Personally I think that Government should interact with active citizens so that active citizens can help with this process. Government is trying to increase investment but at huge expense.] Page 150 Natural monopolies. [This might be true, but allow deregulation and see what happens. The South African economy will grow very quickly!] Independent Regulatory Authorities [These aren’t independent. They look after government interests, which aren’t always the people’s interests.]

Regulators have not achieved the positive outcomes initially envisaged. Based on the performance of the ICT, electricity and port sectors, South Africa is slipping down international benchmark rankings. The reliability of electricity supply has deteriorated, and prices that were previously below uneconomically viable levels are now rising at rates that consumers are unable to absorb. Communications quality, speed and cost are significantly worse in South Africa than in comparable nations, with a similar situation in rail and port performance. [I have made this paragraph from the NPC document a big font and it shows the crux of South Africa’s problems.]


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Page 151 South Africa faces many challenges in the regulatory and policy environment. An improved regulatory performance is vital for national development. [But this is a challenge, and the fastest way to fix this is deregulation.] Institute a far-reaching review … [South Africa is incredibly good at reviews, making consultants and ministers rich, but not actually getting things done. I was on the Blaauwberg Ward Forum where I witnessed this problem first hand.] Page 152 By 2030, South Africa will have an energy-sector that promotes: • Economic Growth and Development • Social Equity including Affordable Tariffs • Environmental Sustainability [This won’t happen with the current strategy, which seeks “more of the same”, giving South Africa’s competitors a much bigger competitive advantage as they watch us bumbling along.] In 20 years (2030), gas will play a much larger role. Electric vehicles will be widely used. The high level of carbon emissions is exacerbated by the size of the energy-intensive beneficiation investments. [which are supported by high residential and SMME tariffs!] The quality of market competition and regulation in the energy sector has been far from optimal. Page 153 Lack of rail capacity has blocked the expansion of coal exports. The privately owned Richards Bay Port has export capacity one-third higher than existing rail capacity from the coalfields. [This shows that the private sector gets things right, whilst the public sector tries to catch up.]


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Perhaps the most successful achievement in the energy sector over the past 15 years has been the National Electrification Programme. In the early 1990s, 2/3rds of South Africans didn’t have electricity; now nearly 80% have electricity. [This “achievement” has been done without building power stations. How? By allowing the textile industry to close and 350,000 people to be out of work. In the bigger picture, how can this be seen as an achievement?] Page 154 We need to open new coalfields in the Waterberg coalfield. [What will the effect on the Orange River System be? How about Acid Mine Drainage? How will the private coal companies be charged to ensure that the public doesn’t have to keep picking up the cost of clean up?] Page 155 Shale Gas Fracking in the Karoo. [I’d like the NPC to produce a scenario that excludes Karoo gas from the energy mix. And that also suggests that the Karoo water resources can be used to create forests and farms. And takes account of a huge migration of people to the Karoo from coastal areas where sea level rises of 7 to 70 meters are expected over the next 100 years.] According to the United States Energy Information Administration (2011), technically recoverable shale gas reserves in South Africa form the fifth largest reserve globally. South Africa will seek to develop these resources, which could run 20 GW of power stations, half of current production, generating 130,000 GWh of electricity per year. [but ¼ of anticipated production in 20 years time] There is a need to increase private participation and investment in the electricity field. [yes] The Energy Integrated Resource Plan 2010-2030 shows options for renewable energy wind, photovoltaic, gas and nuclear energy. [Interestingly a risk table in this document shows that nuclear has the highest risk and wind the lowest.] The plan includes 21,500 MW of Renewable Energy by 2030, more than an African State! [But under control of government! Why?]


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Page 157 South Africa has yet to see the number and scale of private investments as seen for IPPs in other parts of the world. [The reason for this is because government keep changing the rules, eg the “introduction” of Feed In Tariffs in 2009, caused Billions of capital to be put on the table and then withdrawn. I spoke to a British investor on 24th April 2012 and he said he is “confused” by the constantly changing regulatory environment in South Africa. Me too!] Private investments will need to be accelerated. [yes. Just allow private people to invest before VAT and before tax] Government needs to expedite the establishment of an independent market and system operator. Kenya is doing good things in this market and could be emulated. Remaining regulatory uncertainties need to be resolved, including questions of independent power producers selling to customer other than Eskom, issues relating to wheeling over the grid, and rights to trade electricity. [the best way to do this is with deregulation, not with more reviews and regulation!] The government blames municipalities for the lack of functioning electricity distribution and says that maintenance backlogs exceed R30 billion. Page 158 The next 20 years will see smarter management of electricity grids through innovative control systems and smart-meters. More distributed generation systems are likely, both to meet local demand and to feed back into the grid. [yes] Government can’t keep funding Eskom and Eskom can’t get the funding it needs, therefore price increases are essential! There are, however, concerns that sharp increases could dampen economic growth and development. [150% increases over the past 5 years have already dampened growth!]


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Page 159 Subsidies need to be increased. [the problem is that the poor don’t have price increases, and don’t understand what’s happening] It will be extremely challenging to build the institutional and skills base for running new-generation nuclear plants. [well said. And South Africa’s skills base lends itself to Renewable Energy. We don’t have the nuclear and other engineers. And spare parts take a long time to get and are very expensive. So we could have a nuclear power station which sits idle for 18 months whilst we wait for a part.] A maximum of one year remains to agree on a decision-making process for new nuclear plants. [don’t build nuclear plants!] Page 160 Options regarding refineries. [I note that vehicle electrification isn’t considered here and power stations in the Karoo and Namibia could power these vehicles. And even with coal power powering electricity vehicles, EV emissions are 20% of petrol Vehicles.] Page 163 Contrast the potential for job creation as the energy system is transformed with possible job losses resulting from a move away from the coal mining industry. [I am concerned about this statement. It seems to protect an ailing industry without considering the future, even though the next line says:] Jobs created for a new energy system may require more skills, potentially supporting the international competitiveness of locally manufacturing energy equipment. Page 163 Phasing. What’s needed in the next 5 years.


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Page 165 Medium (10 years) and long term (20 years). Government will invest in R&D for clean coal! Shale Gas will be part of the energy mix! [Great! The Jury in South Africa is still out, but the NPC says Shale Gas will be part of the Energy Mix! And in November 2011, at the Powering Africa Ministerial Conference in Cape Town, Minister Dipuo Peters said that gas will be part of our energy future and didn’t refer to renewable energy!] By 2030, electric vehicles will be widely used. [What is the implementation plan for EVs?] [There are sections on water and transport, which I haven’t read in detail. Suffice it to say that government wants more regulation and control, whilst admitting that costs are spiraling and maintenance is falling.] Page 176 There will be a major move from private to public transport by 2030. [This ignores working from home.] Page 182 ICT Infrastructure Page 183 Pricing of services remains prohibitive. ICT is an enabler to everything else. Page 185 The digital divide – the gap between those who have access to services and the demand from those who are excluded by unavailability or prohibitive service costs – has to be narrowed. [The State needs to better manage its ICT infrastructure and ability to deliver services. Over the past few years South Africa has had a huge amount of mismanagement in ICT. CIPSA is mismanaged. It should take 1 day to change a director and registered address of a company, but it takes 4 months. Ofcourse this needs to be done properly, but people can be identified online, and fraud can be reduced. The same for passport, id, vehicle license, applications.]


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More skilled policy intervention is required! Page 188 Yet another policy review!!!!! [What we need is a very high-speed backbone with very low cost connectivity. Telkom, Neotel, the City of Cape Town, and others have recently put Fibre Optic cables in my street, but the cost of accessing it is still prohibitive!] Encourage the sharing of networks. [I agree] Page 191: Chapter 5: Transition to a low-carbon economy Part of the vision 2030 statement says: “We acknowledge that each and every one of us is intimately and inextricably of this earth with its beauty and life-giving sources; that our lives on earth are both enriched and complicated by what we have contributed to its condition.” Page 192 South Africa’s primary approach to adapting to the impact of climate change is to strengthen the nation’s resilience. This involves decreasing poverty and inequality, increasing levels of education, improving health care, creating employment, promoting skills development and enhancing the integrity of ecosystems. [This is basically the entire NPC’s strategy! As it should be.] Page 193 R&D in low-carbon technologies is required. There are links between climate change action, job creation, poverty reduction and economic competitiveness! [So why not go to this approach, rather than worrying about coal sector mining jobs?] South Africa has a systemic shortage of skills and capacity. The structural failure of the education system and continued high levels of poverty and unemployment have resulted in a poorly skilled workforce, which will require decades to transform. [Changing the education system every 3 years doesn’t help! This systemic shortage of skills and capacity lends itself to an energy system that doesn’t require highly trained university graduates to run it!]


34 Page 194 Over the past few years, South Africa has increasingly stated its ambition to act responsibly to mitigate the effects of climate change. Domestic and international statements include, among others: the Long Term Mitigation Scenarios (2006-2008); the Mitigation Potential Study; Cabinet’s vision of a peak, plateau and decline trajectory (2008); and South Africa’s Copenhagen Pledge (2009). The National Climate Change Response White Paper ... [I’m sorry. All this is Greenwashing. Where is the implementation since the Government’s White Paper on Renewable Energy in 2003? Greenwashing, the hypocritical making of one statement whilst doing another should be illegal and treated as fraud and when done by governments should be treated as treason.] end 10.30pm Tuesday 24th. Total approximately 30 hours so far. Start 9.20pm Sunday 29th

More detailed analysis is required. [Please no more analysis. Action is required!!! This government has become the world experts on analysis, making lawyers and consultants rich, but not implementing any of the suggestions] Page 196 In the left margin is a comment from an “NPC Jam” which ends: “I am proudly South African, I believe that we as South African have the resources necessary to improve the lives of every South African. We should not wait for the developed world to show us the way forward when in fact we can lead.” [Please implement this comment. Please don’t do more research.] Page 198 Planning must therefore follow rigorous and transparent processes, with full stakeholder engagement, and decisions based on a detailed analysis of the evidence. [How does government intend doing this when the email and phone numbers on the NPC site don’t work?]


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Page 201 Carbon Pricing [This should not apply in a country where the government decides on Coal power stations, and then forces its people to pay carbon taxes.] International experience shows that the most effective way to achieve a just and managed transition to a low-carbon economy is to internalize the social and environmental costs of GHG emissions. [All very well, but other countries allow competition. There is no competition in the South African electricity market!] Page 202 There is some debate as to whether the tax can be effective when the electricity generation sector in South Africa is subject to regulated pricing. [QED] [On the right hand side is a comment that people should buy smaller cars. Government officials drive the biggest and most expensive cars in South Africa. How will this proposal be internalized?] Page 203 Guiding principles for the transition. [All good, but they need to be heeded and implemented.] Page 204 to 205 By 2015, 2020 and 2030 [Nothing on Renewable Energy; everything on making government bigger with more international assistance]


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Page 207: Chapter 6: An Integrated and Inclusive Rural Community Page 213 [Avocados is mis-spelt. Should Magos be Mangos?] [Where will these crops be grown? What size farms give these crops economies of scale? Why isn’t government considering co-operatives for small-scale farmers?] Page 227: Chapter 7: Positioning South Africa in the World [This section discusses regional integration and says that South Africa will be disadvantaged by regional integration!] Page 245: Chapter 8: Transforming Human Settlements Apartheid planning consigned the majority of South Africans to places for away from work. [True, but the new roads and IRT’s (Integrated Rapid Transports) leave this situation as it is. In Cape Town, for example, there is ample room along the railway corridors to move people closer to work and CBDs. Many buildings and warehouses are vacant and a huge amount of space is available.] [People in South Africa want their piece of land. Holland solved this problem by giving people 2 to 4 meters of road frontage and therefore people built deep houses with maybe 4 or 5 floors. This could be done in South Africa.] [South Africa should follow the Indian lead and start getting people to stay in and move to rural areas. This can only be done with rural electrification and rural communications.] Page 252 There has been a sharp drop in rural employment. [Caused by national policies, which fragment farms rather than help to form co-operatives?] Page 269 Right hand side comment re Internet Connectivity.


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Page 270 Build an active citizenry to rebuild local place and community. It is impossible to develop and maintain sustainable human settlements in a participatory way if communities are disorganized and fractured, and if they have little confidence in their municipalities. Communities should contribute to practical problem-solving and upgrading schemes, and hold municipalities accountable. [I’ve been on the ward forum for years. We’ve tried this. Government doesn’t listen. Why?] Page 274: Chapter 9: Improving Education, Training and Innovation [We need a long-term vision and implementation, not something that changes every three years. We need quality schools and universities. If people can’t keep up, they must either receive extra classes, or the whole South African schooling system should be changed to a 21st Century System which puts ICT at its heart] Page 307: Chapter 10: Promoting Health Page 313 The overall performance of the health system since 1994 has been poor, despite the development of good policy and relatively high spending as a proportion of GDP. … At the heart of this failure is the inability to get primary health care and the district health care system to function effectively. [Yes, we’ve got amazing policy written by top Strategy Consultancies and top lawyers, but we don’t have the management capability or political will to implement these policies!] Page 320 NHI (National Health Insurance) is necessary because 100 countries have implemented it. [I mean really! 100 countries have global warming. Do South Africans need this? 100 countries have crimes against humanity. Does South Africa need this?] [How can middle class South Africans be expected to pay for the health of the rest of South Africans?] [As has been said elsewhere in the NPC document and this document, government’s ability to manage large quantities of money and resources is


38 sorely lacking. How is government going to add NHI to its management mix without first sorting out other problems? Also see pages 327, 329, etc] Page 333 [At the beginning of this section, the document says that most of the country are excluded from national health, but on page 333, it says that …]

… there are 28 million consumers of traditional medicine in South Africa and about 185,500 traditional medicine practitioners, with African traditional medicine being one of the major service industries in this country, with a turnover of R2.9 billion! [So it seems to me that government wants to stop this traditional healing and move people onto the Western Pharmaceutical gravy train where pharmaceutical companies and Western Styled doctors benefit and do the ancient traditional African medicine and African healers a massive disservice! You can see this in the figure on page 334, which ignores traditional healers. (There are also spelling mistakes in this figure)] Page 337: Chapter 11: Social Protection 11.15 pm: 32 hours Page 361: Chapter 12: Building Safer Communities Page 375: Chapter 13: Building a Capable State Page 413: Chapter 14: Promoting Accountability and Fighting Corruption Page 423: Chapter 15: Transforming Society and Uniting the Country [I haven’t read these chapters in detail as it seems like more of the same: • We realize we have a management problem • We’ll add more management to solve the problem!]


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I end with a summary of how I see things unfolding, in light of the NPC document. [My Summary [Having read most of the NPC document and spent 4,000 hours over the past 4 years researching and developing the economic landscape in South Africa, I have the following summary of the possibilities for South Africa.] [South Africa joined the BRICS countries in 2010. The BRIC countries (Brazil, Russian, India and China) and a few other countries, for example, Mexico, South Korea, and Angola, have been growing at 10% compound for the past 10 years. If South Africans were allowed out of their cages, South Africa could grow at 10% compound in real terms. With inflation at 5%, this would add R450 billion to South Africa’s GDP this year. As the government is 1/3rd of the economy, it stands to reason that the government’s share of this would be R150 billion.] [This is substantially more than the profits that the ANC Government get from their investments in coal mines, telecommunications companies (Telkom), utilities (Eskom R16 billion profit), and even much more than the yearly anticipated and possible increases in taxation with an economy growing at 2% in real terms.] [As we have seen since 1994 an economy growing at 2% in real terms does not create jobs, yet the NPC expects that 11 million new people will be permanently employed by 2030, even as South Africa grows from 50 million to 57 million people.] [The NPC plan seeks to address the mistakes of the past, some of which the ANC admit are their own fault, mainly by more administration, control and taxation. But in this document, you have seen that the central problems are with the people, systems and processes in administration / government, and therefore I believe that adding more people will simply exacerbate the problem.] [A further problem is that instead of adding policies that allow the economy to grow at 15% (10% in real terms), the government is adding more controls, procedures, administrative burdens on companies, and at the same time finding more and more novel ways of taxing her people. In my small business where my wife does the administration, and where I spend R19,000 on my accountants annually, I still spend a month on various government matters. If I billed this month and paid the taxes owing, I would pay the government much more than the amounts the government get from the administrative taxes. Other examples are the Electricity Levy, the Tolling System, the 150% increases in electricity prices over the past 5 years, the accompanying increases in water bills, rates and taxes, transport costs, fuel costs, taxes on fuel costs, environmental levies like the carbon taxes. The carbon tax is one of the worst taxes as the South African government decided on the coal path and decided that the best coal should be exported. Thus Eskom and the


40 government should pay this 12 cent per kWh tax and this should mean less Eskom profits and fewer fancy cars, business class and first class travel, and no new executive jets for our presidential team.] [At the same time as this, it is truly unfair that government should use South African’s taxes to build roads, stadiums, etc, and then charge South Africans for the using this equipment. The maintenance costs of roads are paid with the license fees. The capital costs were essentially paid when the road was built. Government is the only institution that can charge its clients for the same thing multiple times: once when it is built; then to use it; then when it is privatized; and then later when it is renationalized!] {According to David Murrin, in his ground breaking book on Government and National Strategy, “Breaking the Code of History”, in order for an economy to grow fast, it needs three ingredients: Population Growth, Resources and Electricity. South Africa has the first two, but not the last one. In the past 18 years, South Africa has given 2 million people electricity, without building a power station!! The way this has been done is by introducing minimum wages, especially into the textile industry, which at its height employed 350,000 people. Most of the factories have closed and the people are unemployed. New people have free electricity though! Paid for by exorbitant electricity prices paid by the middle class and rich and companies.] [I’m not saying that minimum wages shouldn’t be introduced. I’m simply saying that most economists work “Ceteris Paribus”, i.e. “all things being equal.” So with wages, for example, they say that there should be a minimum average. But they didn’t consider the bigger picture. A textile factory owner who I know paid his staff less than the minimum wage, but then had a number of bonus systems, based on weekly performance and paid weekly, for example an attendance bonus which the staff got if they were on time every day, a production bonus if they produced good quality goods, a rental bonus if they allowed the company to deduct their rent and pay their rent on their behalf, a Christmas bonus equal to 1 month’s wages, a loyalty bonus, which was paid from the second year onwards and which rewarded people who stayed at the company, a special bonus at the discretion of management, and others. There were staff parties, Christmas Packs, and a special bus that the company paid for to bring staff to the factory. All in all the staff earned more than the minimum wage. The same goes for farmers who gave their staff free board and lodging, but paid their staff less than the minimum wage. And in many cases, the factory owner helped the staff when they retired if they didn’t have enough retirement savings.] [The NPC calls for trust and loyalty. However, government’s policies have removed the trust and loyalty that exists in our economy by their short-sited and “ceteris paribus” policies.]


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[There are some very simple ways to fast track South Africa: • Deregulate the electricity and communications environments • Allow competition • Remove the barriers to entry, for example the R4560 rate per day to get Time of Use Metering for electricity in the City of Cape Town • If electricity prices increase, increase this for all people at the same rate. In July 2012, the poor will get a zero percent increase on a zero bill and don’t understand the problem. The middle class will get a 16% increase and the rich, many of whom own companies, will get 11%. Again the middle class are being squeezed • Reduce the prices of public transport and remove the fuel taxes as far as possible. This is to stimulate the economy • Allow private homeowners to invest in energy efficiency and renewable energy before VAT and before tax. The R15 billion sitting in the Electricity Levy fund can be used to fund this. Governments collects 3 cents per kWh as the electricity levy. It’s is meant to be ringfenced and used for Renewable Energy • Remove the unnecessary legal burden in South Africa. I sat on the Blaauwberg Ward Forum committee for some years and saw a number of laws enacted which were unnecessary. In many cases the problems could have been resolved simply by enforcing existing legislation. I believe that South Africa could remove ¾ of its laws and be a safer place • Remove people from government who don’t do their jobs and where there are multiple people doing the same job • Remove the huge administrative burden on small business. It is recognized in the NPC document and in international benchmarks that most new jobs are created by small business. India has the best recent track record of getting small business going. South Africa should follow this trend • Follow China’s lead with its new strategy. See page 19 of this document: “China’s 12th five-year plan tabled earlier this year (2011) showed a striking change in its growth strategy – from a focus on investment-driven, high-energy and low-cost manufacturing, to lowcarbon industries, new energy, next generation information technology and high-end manufacturing.” • Don’t charge the taxpayer twice for the same goods, e.g. roads • Remove the duties for all renewable energy and energy efficiency equipment. All of this will help the economy to grow very fast. Allow electrical cars to be imported without duties. Stop the R5 billion a year subsidies given to local car manufacturers and give it back to them to incentivize them to produce electrical vehicles. An electrical vehicle charged with electricity from coal produces ¼ of the carbon emissions as compared with a petrol powered car • Don’t incentivize imports, e.g. don’t give rebates for imported Solar Water Heaters and Heat Pumps. • Recognize that South Africa’s electrical grid, including power stations, transformers and switchgear are aging and that they are overburdened


42 and failing more often. Allow the private sector to makes its own electricity as far as possible, collect its rainwater, fix its own roads, etc. Let government be for the things that Communities can’t do themselves and allow the tax burden to slowly fall from its current unmanageable high rate.] I’d very much like responses to my comments. I’m happy to spend a day or more with the NPC showing them what is possible. Yours faithfully, David Lipschitz, BSc (Honours), MBA, NABCEP Entry Level Exam • A Patriot, an Active Citizen, Business Leader and someone interested helping work with Government for us all to become more Effective Please contact me on: • Office: 021 551 9935 or 087 2300 ESX / 327 • Fax: 0866 195 382 • Cell: 082 900 5903 • Email: david@mypowerstation.biz or david@orbital.co.za • Snail Mail: David Lipschitz, My Power Station Technology, PO Box 1080, Milnerton, 7435 • Skype: MyPowerStation • Also on Facebook: https://www.facebook.com/david.lipschitz , https://www.facebook.com/MyPowerStation , https://www.facebook.com/NetMeteringSA • And my Blogs: http://mypowerstation-sa.blogspot.com/ , http://repairyourworld.blogspot.com/ , http://afterthemayancalendar.blogspot.com/ , http://mypowerstation.co.za/ , http://netmetering.co.za/wp/

David Lipschitz comments on the NPC Strategy  

David Lipschitz's comments on the National Planning Commission Strategy for South Africa till 2030.

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