PPS Review
PPS Review
PPS Review
Content
04 Contributors 05 From the MD 06 Public Sector - Growth and leadership
19 Mining – New Era of Battery Drive Mining Technology 23 Legal Risks – Moving to Cloud 27 Cyber Attacks – Imminent challenges for businesses
SECTOR Review 29 Financials – Retirement Savings 08 Smart Cities IT Infrastructure
30 Renewable Energy – Insurance Focus
11 Shaping the economy Service delivery through technology
32 Water – Covid 19 Imminent Reality of Water Challenges
13 Women in Business Women entrepreneur making a mark
38 Featured – Next Generation of Mechanical Vapour
34 Climate Change – Challenges Facing the Power Utilities
Credits
Email| admin@skybritemedia.co.za | web: www.skybritemedia.co.za
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COPYRIGHTS: Public Private Sector Review is an independent publication published by SkyBrite Media. Full copyright to the publication vest s with SkyBrite Media, no part of the may be reproduced in any form without written permission from SkyBrite Media
Published by - SkyBrite Media Company registration| 2010/090351/23 Directors| Sandile Koni Physical Address| 14 Yusuf Arafat Crescent, Mandela Park, Cape Town 7784 Tel| +27 21 023 1169| Fax: +27 21 595 2262
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From the MD
It has been a long journey, The thought of putting together a communication platform for both the Public and Private sector has been a back and forth argument until we realized the need to create a common ground for the two sectors. The initiative, Public, Private Partnership has been the reason to create Public Private Sector Review journal. We look at ground covered since the inception of PPP, also to relate to the National Development Plan and Vision 2030. Public Private Sector Review aims to deliver cutting edge editorial content about the success of flagship projects in relation to the PPP initiative. There will be really something for every sector in this publication, from mining, engineering, construction, IT, agriculture, smart cities, infrastructure development, community development, and many more including CSI initiatives as well as Youth Development projects. Here is your source of information about the performance of our two sectors working together to financing the nation‘s infrastructure.
Managing Director
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Inspired leadership in public sector attracts CAs (SA) Working in the public sector is for pen pushers. The bureaucracy is mind-numbing. This is the Perception, but is it accurate? Thandi Mthombeni and Tshegofatso Lutle are CA (SA) trainees at the Auditor-General of South Africa (AGSA). But why work in the public sector? Especially when most graduates gravitate towards the prestige and rewards of the private sector? Today many graduates still hold onto the mistaken notion that the public sector presents a less dynamic work environment. When, in fact, the scope for professional development in the public sector is endless. At first glance the perception might be that it does not seem to be the smartest move. There is enough drama in the government space to rival the longest-running soap on our television screens. But on closer inspection the trainees are eligible for perks which make the AGSA, as the only constitutionally mandated audit firm in the public sector, an attractive proposition. Their opportunities start from day one. Besides a professional training environment with specific study support initiatives – they get sufficient exposure to ensure they are ready for the world after articles.
Leadership sets the tone Contrary to what has been the general perception of the public sector, trainees at the Auditor-General commend the organisation for its inspired leadership. ―Leadership is really important,‖ says Lutle. ―Inspiring subordinates is what differentiates leaders from managers.‖ ―Effective leadership is very important for team morale,‖ adds Mthombeni. ―If a team is led by a good leader who values people‘s views, gives them an opportunity to learn, and is able to customise their approach on a person by person basis, based on the situation at hand.‖ Their training has surpassed their expectations: shaping and challenging their thinking, professionalism and their ability to work as a team without compromising on the quality of their work or ethics. Auditor of the future
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The Auditor-General is seeking to create the auditor of the future. ―Having around 1 300 trainee auditors in our learnership is a big achievement,‖ says Ben-Johan Weideman, senior manager: technical and training officer at the AGSA. ―Managing a learnership this size effectively and professionally, is a big task and an accomplishment. Anyone working in human resources, training or overseeing learnerships would appreciate the high level of commitment which a learnership of this magnitude requires.‖ Weideman continues: ―One of our greatest successes is the study support and how it assists in professionalising the industry. We provide a dedicated study boot camp for trainees with focused lectures in an environment far removed from the day-to-day auditing space they are used to. This is reflected in the 2015 Assessment of Professional Competence (APC) results from SAICA where the Auditor-General produced a high number of candidates.‖ Lutle describes the training at the AGSA, as ―amazing‖. ―We are allocated a client portfolio within the public sector, but some clients have private sector characteristics. They are profit-driven public entities.‖ This tends to foster a mindset among employees that is value-driven and performance-based. Mthombeni sees no major distinction between working in the private or public sector based on her conversations with her contemporaries in the private sector. While this is open for debate, as Mthombeni has not worked outside of government, she concludes: ―Auditing is auditing irrespective of the audit client. The application of your mind, professional judgement and objectivity is the same.‖ ―Although our client base isn‘t as broad, we acquire a lot of experience as our clients are in different environments (government departments and municipalities). We have a lot to report on, including the financial statements, compliance with key legislation and auditing of performance against predetermined objectives of our clients.‖
Community service ―The AGSA, through its constitutional mandate, plays an important role in enabling accountability and thus promoting democratic governance in South Africa,‖ says Weideman. ―Because we derive our client base through our mandate and don‘t necessarily need to seek them, it requires so much more from us in terms of building public confidence through auditing; to stay committed to professionalism and being a responsible citizen. When graduates ask why I work for the AGSA, I tell them: ―where else are you going to get paid to deliver your professional duties and deliver a community service, thus making South Africa a better place and building public confidence? ―To explain this in practical terms, you need to look at your clients and the work you do differently and not just as a group of government departments in the public sector. For example, the Gauteng Health Department includes the Chris Hani Baragwanath Hospital, arguably the
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biggest hospital in the southern hemisphere and third biggest in the world. Now that is exciting! ―We are at the forefront when some of the biggest infrastructure roll-outs, investments and service-delivery contracts take place in the country. We audited The Education Department and its related processes when they introduced tablets to schools. Mining cannot exist without the Department of Mineral Resources. Financial management to deliver basic services at local government level is at the heart of our interest. Think of rhino extinction concerns. We audit South African National Parks.‖ The Auditor-General of South Africa has a constitutional responsibility to each and every citizen to strengthen our country‘s democracy by enabling oversight, accountability and governance in the public sector through auditing. Working in the public sector is anything but boring.
New 5G-ready smart city ‘taking shape’, says South African President
In his recent State of the Nation address, Ramaphosa said the new city will be 5Gready and aims to be an international exemplar for green infrastructure. He said the development will be a ―truly postapartheid city" that will "change the social and economic apartheid spatial architecture‖. Rural roads pilot The development is being led by the Investment and Infrastructure Office and the local governments of Gauteng and North West, working together with the cities of Johannesburg, Tshwane and Madibeng.
By Sarah Wray: Editor, SmartCitiesWorld The city is one of 30 new developments planned for Gauteng province. South African President Cyril Ramaphosa said a new smart city, which will be home to up to 500,000 people within the next decade, is ―taking shape‖ in Lanseria, Gauteng. The development was first announced in June 2019, when Ramaphosa noted that 70 per cent of South Africans will be living in urban areas by 2030 and major cities are becoming overcrowded. The development will be a “truly post-apartheid city" that will "change the social and economic apartheid spatial architecture," said President Ramaphosa.
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―Working with development finance institutions, we have put together an innovative process that will fund the bulk sewerage, electricity, water, digital infrastructure and roads that will be the foundation of the new city,‖ Ramaphosa said. He added that an "alternative rural roads programme" will also be piloted in the city and four experimental road stretches of 50km each will be constructed. An alternative rural roads programme will also be piloted in the city. He commented: ―This initiative will ensure costeffective solutions for the state, meaningful skills transfer and higher potential for labour intensive job creation than conventional roads construction methods.‖ Gauteng province plans to build 30 new cities, with investments totalling over R100 billion (£5.14 billion).
Fibre can transform society but only if governments are prepared to give a helping hand.
Only nine Organisation for Economic Cooperation and Development members have high speed fibre accounting for more than half their broadband connections. Korea leads the way with 82 per cent and Japan in second place with 79 per cent of total connections. The Nordic region fares particularly well, with four countries in the top 10. At the other end of the scale, some large economies‘ fibre provision is less impressive. France has only 20 per cent penetration, Australian 19 per cent, and the United States 16 per cent. Germany and the United Kingdom‘s performances are even less impressive, at four per cent and two per cent respectively. This matters in the connectivity age. Not only does robust fibre infrastructure support the fixed line needs of citizens and businesses, but it also provides the necessary backhaul capacity for mobile broadband networks.
By Stuart Large, Product Line Director & Business Development, Fotech Fibre provides more than just connectivity. But telcos need help, from financial assistance to relaxed regulation, for ubiquitous networks to become a reality, writes Stuart Large, Product Line Director & Business Development at Fotech. Fibre broadband has been the foundation of innovation in modern times, driving communication, knowledge and the sharing of ideas at high speed. However, too many enterprises and citizens are not able to tap into its advantages, leaving society worse off as innovation is stymied.
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Fibre provision matters in the connectivity age But fibre just doesn‘t bring the considerable benefits of data transmission. At Fotech, innovating with fibre is at the heart of our business, using crucial infrastructure to deliver new kinds of services. Our Distributed Acoustic Sensing technology can use a fibre cable to house thousands of vibration sensors, which pick up any disturbances on the line. These disturbances each have a unique fingerprint, allowing any operator to determine exactly what happened, when and where. This technology has myriad use cases within the modern city and smart city of the future. Take traffic. As cities‘ populations get even higher in the years ahead – more than two thirds of the global population will live in a city by 2050, according to United Nations figures – managing the flow of vehicles will be key. We‘ve been working with Spanish infrastructure and engineering company COMSA to manage traffic at roundabouts by changing traffic light sequencing using our technology. DAS was set up along a stretch of road through open countryside, an industrial estate and in a town. Our sensors have tracked the anonymised movements of pedestrians, cyclists and
vehicles. We‘re continuing to assess the data but it‘s already clear that enough can be collected for a modern, intelligent traffic management system that can lead to fewer traffic jams, decreased emissions and greater air quality within a city. COMSA is working with us because of our ability to match its needs with our DAS solutions and capabilities. Manuel Alfageme Alonso, COMSA‘s Head of Smart Systems Innovation, says: "I believe there is a clear potential for DAS making large infrastructures intelligent, by providing passive and permanent monitoring for multiple applications, reducing the infrastructure operational costs and bringing new values."
groundwork for 5G, as well as grow their fibre networks. They have long complained of digital giants profiting from their investments. It‘s an even bleaker picture in more remote parts of the country. Building fibre into areas with low population density is simply not cost effective. Return on investment is in decades rather than years. Governments need to do more to support telecoms companies in rolling out much needed fibre infrastructure. In addition to financial concerns, telcos can face onerous regulation in many markets leaving them with too many obstacles to deploy sufficient lengths of cable. Building fibre into areas with low population
Helping hand And that‘s only one way a DAS system can be used along a fibre network. Others include threat and fault location and we‘re excited about bringing further innovative solutions to market. But such innovations need to backed up with robust fibre networks stretching into all parts of a country and there is a considerable way to go before countries will match South Korea and Japan for provision.
density is simply not cost effective Some governments are realising that deploying ubiquitous fibre networks requires a public private partnership and are supporting companies to do so. Italy is one such example with its Banda Ultralarga strategy, providing subsidies to bridge the social and geographical inequalities generated by a purely private sector approach to deploying broadband. It aims to offer access to speeds exceeding 100MBps to 85 per cent of the population by the end of 2020. The European Commission, which is providing state aid for the project, said last year that citizens will gain access to significant services such as e-learning, telemedicine and teleworking following the fibre deployment. These services are even more critical in the wake of the coronavirus crisis.
Deploying fibre is costly and telecoms companies‘ CAPEX budgets are stretched. They are under pressure to improve the coverage of their existing mobile networks and lay the
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Smart cities are exciting because of the possibilities for tomorrow. New technologies promise to change every aspect of our lives, from our homes and places of work, to healthcare, transport and government services. But they can only do so with access to high capacity, low latency, superfast networks. The figures above make it clear that we are a long way from that. It is imperative governments step in where the markets can‘t to realise the use cases of the future. Smart cities will fail to achieve their potential if they fail to do so.
Shaping the economy with service As a small ripple can create a wave so can a company culture focused on service delivery transform an economy By Adnan Theba, Sales Consulting Director, Oracle EMEA
banks, often dealing with shorter queues and quicker service. This commitment to customer service has the potential to transform all public sector services and potentially the economy. This has already been proven in countries such as Singapore and Ethiopia. Visitors can access services or products required by government through self-service channels or very efficiently through specific departments making it easy for tourists and businesses to spend money. There is a correlation between those countries that embed a culture of customer service and those that have high-growth percentages. While not precisely quantifiable, this connection between service and culture ultimately impacts the attractiveness of a country when it comes to doing business. If it‘s easy to do business, as indicated by the World Bank Doing Business report, then research has shown that this drives economic growth.
The past few years have been categorized by significant changes in the technology landscape across the globe. From emerging technologies to the refinement of entrenched methodologies to the exploration of new technology frontiers – business, country, sector and vertical has been impacted by the relentless tide of change. However, organisations and the public sector are asking new questions that have been ignited by this change – how can enterprise and government best serve the people so as to best serve the economy and inspire growth and development? Traditionally, any discussion around a service-oriented culture would have placed the customer on the periphery and the organisation at the core. That has changed. Today, the customer sits at the core while the organisation loops around the periphery, providing service at multiple touchpoints along the journey. Service models are changing, attitudes are adjusting and the results can potentially transform business and economy. The Home Affairs department in South Africa is an excellent example of how government has put this concept into practice. Instead of long queues in dusty buildings to renew passports, citizens can access these services through
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Achieving this culture needs to walk hand-in-hand with technology as it is the primary enabler of this level of evolution. In the past, many government departments were unable to offer variety in location or service as they were limited in technology and backend capability. Today, technology has enabled the government to expand offerings and improve service to citizenry. In addition, customer service technology has the ability to help shape an economy as it too has taken several evolutionary steps forward. There are solutions that enable how people sell, how they get their message out to market, how they service customers, and how they learn more about customer needs. There are tools that allow for the interpretation of those needs and others that walk hand-in-hand with the customer through the entire lifecycle of engagement. These are customer experience tools and technologies that sit under the moniker of customer relationship management (CRM) but extend far beyond what the name suggests. One example of intelligent investment into technology and citizenry is Estonia, a tiny country in the north-east corner of Europe that showcases how technology can change an economy. From 1991, when it left the Soviet Union, to today, the country used public-private partnerships and investment into technology to bridge the digital divide, support citizen engagement and security, and create a culture
of transparency. From drafting legislations to initiating ideas with parliament to participating in decision making – Estonian citizens have access to everything they need to make informed decisions and participate in the future of the country.
Three factors that help drive a service oriented economy 1. A high level of openness inspires trust; a commodity that can change a country‘s culture and impact on its economy. Keeping promises builds trust. Once you have trust, you can get customers to mobilise and do things they wouldn‘t ordinarily do – they are more open to working with the organisation and more open to change. When citizens and customers are prepared to embrace change, organisations can continue innovating and improve what they bring to market. 2. Another factor is speed. When service is embedded into a culture, speed to market radically improves and gives the business the ability to focus on strategy and outsource more effectively. This will, in turn, have an impact on the kind of organisations a business surrounds itself with and the partnerships it forges – those that support the culture of service will work with those who share the same values and very
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different models and attitudes will evolve. 3. Simplifying processes through technology; on the public sector level, imagine the knock-on effect if administrative requirements such as TV licenses, liquor licenses, agricultural licenses et al were simplified and frustrations around queues and paperwork modified? The barrier to entry would be significantly reduced and this would ignite further growth, both from the home-grown entrepreneur and the international investor, all with a higher degree of compliance. It is vital that both government and organisations become more service oriented and digitised. There is a huge opportunity in South Africa to follow in Estonian footsteps and to become innovators and game changers. To learn from others who have made these changes, to learn from their mistakes and to follow a digitisation process that delivers to customer and citizen. Partnerships and initiatives designed to address legacy issues and ignite a service-oriented culture should be innovative and need to advocate for transparency. They must improve revenue streams, grow trust, enhance speed to market and customer service, and use technology‘s capabilities to enable effective
Women Entrepreneurs Making a Mark - Solving the Challenges of Non-Compliance and Absence of Financial Management in SMME’s.
Entrepreneur and Director of CN Outsourced Finance Nolukhanyo Makuni.
Entrepreneur and Director of CN Outsourced Finance Nolukhanyo Makuni - Qs & As
Q.Your background [Education, Interest and Family] A.I obtained my Bachelor of Accounting Science (Unitra) and Honours from the then University of Natal and qualified as a Chartered Accountant in 2004. I am an avid reader, although I have not recently been reading as much as I would like to, due to time constraints. I mostly read biographies of successful entrepreneurs and their individual journeys inspire me to ―write‖ my own story. I am married and a mother of three and we live in the West Rand.
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Q. A description of your business and the kind of industry your serve A. We offer outsourced accounting, tax and payroll services to SMMEs. We also offer Business Advisory services in financial and business management. Most of our clients are those that would not be serviced by the big four accounting firms because of the size of their businesses. Q. How did the business opportunity come up? A.I co-founded CN Outsourced Finance in 2013 with my business partner, Chwayita, whom I‘ve known for 18 years. At the time, we were both still employed full time and we came from an accounting background (I am a CA and Chwayita has an MBA). Our dream was to service small and medium-sized businesses that wouldn‘t normally be able to afford the kind of strategic financial advice offered by large corporate accounting firms. Q. What challenges did you encounter? A. Our biggest challenge in the beginning was finding clients. It‘s always hard to find the first one. We did work for family and friends, and finally started signing up clients through word of mouth. Cash flow was also a problem. We had to do without an income for the first couple of months. Fortunately, because we‘re in a service industry, our overheads weren‘t as high as they might have been Q. How did you overcome the Challenges? A. We heard about Raizcorp during a small business networking session and decided to apply for one of their programmes. We were accepted and we haven‘t looked back!
The Raizcorp guides don‘t only look at your business, but also look at you as an individual. They look at where you can improve yourself, and how that will improve your business. My personal guide has tapped into areas of my life that I really didn‘t think were an issue anymore but which, it turns out, were having a negative impact on the business. This has really helped us grow. Our guides are so invested in our business and rejoice with us in our successes. It makes us feel like we are not alone; we know they will support us through all the challenges that come along. When we started on the KTH BusinessDevelopment Programme, it was just the two of us and two interns. We now have six full-time employees and are in the process of hiring more interns. Over the next two months, we also have plans to employ more senior staff. In addition, our turnover has more than doubled. Q. What are the business growth plan? A. We‘re in the process of working with a few companies to form partnerships. The biggest part of our business that sustains us is our retainer income. A deal we recently signed will significantly increase this income. We‘re also signing deals with a few of the bigger companies in the industry that will benefit us all, and we continue to look for partnerships that advance our
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strategic focus. Q. What advice would you give to someone thinking of starting a business? A. If an entrepreneur had to ask for my advice, I would say that the journey of entrepreneurship is not an easy one and it‘s not a quick way of making money. You need to keep believing in yourself and stay focused on your main objective. There will be days when you don‘t receive an income and when you just feel like quitting but, as long as you stay focused on your goal, you will get through it. We are very grateful to KTH for this opportunity and for their partnership with Raizcorp. This journey has not just been about financial support; it has been about mentorship and about walking this journey with us. We have only been on the programme for 12 months but it feels like we‘ve had a relationship for years. We have seen substantial growth in both ourselves and inour business, and so have the other entrepreneurs on the programme. We‘ve been able to meet other entrepreneurs who have the same challenges as us so we feel like we are not walking this journey alone. It has been an exciting process, and we‘re looking forward to the next couple of months and seeing the impact of the changes we‘ve made.
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When you empower Women, you empower the Nation
was delivered by Dr Nomafrech Mbombo, Minister of Health in the Western Cape who spoke about equality for women and where we are in South Africa towards achieving gender equality. ―At the heart of gender equality is the Right to empower one‘s self for one‘s future,‖ she highlights. ―When you empower Women, you empower the nation.‖
Robben Island Museum Council Chairperson, Ms Bernedette Muthien welcomes guests at the annual Imbokodo Lecture, a prestigious event that honours and celebrates the Women who shaped South Africa.
On Thursday, 21 August 2019 Robben Island Museum (RIM) celebrated the Women who overcame adversity and helped build our nation and society. RIM‘s annual Imbokodo lecture honoured the Women who stood against the apartheid regime. The event also celebrated those Women who are making waves in South Africa in various male dominated industries. In recognising the women who stood the test of time, RIM‘s Imbokodo Lecture series seeks to celebrate the social, cultural, and political achievements of women as a mark of respect for those who have sacrificed their lives and freedom for a just South Africa. The lecture highlighted the significant role that women such as Sophia Williams, Lilian Ngoyi, Helen Joseph, and Rahima Moosa, who led the 09 August 1956 march to the Union Buildings in Pretoria to hand over petitions opposing the Pass Laws of the time. This brave act signalled the unified strength of women and led to the slogan, ―Wathint‘ Abafazi, Wathint‘ Imbokodo‖ (―You strike a woman, you strike a rock‖). The keynote address for RIM‘s Imbokodo lecture
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Dr Mbombo went on to explain the theme for this year‘s Women‘s month, #balanceforbetter, ―equality is our goal, and access is our Right towards a balanced world. The theme ‗think equality, build smart and innovate for change‘, importantly focuses on the social innovation for both genders where no one is left behind,‖ she explains. RIM Council Member, Ms Vuyokazi Menye concluded the evening by saying ―We are grateful to the democratically elected government for declaring August as Women‘s month. The theme for this year‘s celebration, ‘25 years of democracy, Growing South Africa together‘ for Women‘s emancipation, we salute our forbearers who were at the forefront of the emancipation for Women; we are here standing high on their shoulders, on the shoulder of all those female heroines,‖ she said. For more information on Robben Island Museum, please visit their website http://www.robben-island.org.za/ and for regular update, visit their social media pages: Facebook, Twitter, Instagram
BPI Launch Marks a New Era in Battery Driven Mining Technology in SA Battery Power Industries (BPI), an innovative battery driven mining vehicle solution provider has officially launched. BPI targets zero emission underground mining equipment with their advanced battery energy systems technology offering. BPI is a proudly South African OEM specialising in the development of battery energy systems, electrical traction systems and high speed charging systems for underground mining equipment. All of BPI‘s products are designed and manufactured in South Africa, by local engineers for the South African mining industry. BPI seamlessly combines extensive expertise in electronic, electrical and mechanical systems engineering. With experience in meeting mining industry related challenges through the implementation of the latest battery technology, BPI provides solutions to enhance the efficiency sustainability, and safety of mining operations.
Actual personnel battery system
BPI has its origins within local consulting engineering firm, Thuthukani Engineering Solutions. Over the past five years, Electrical Systems Engineer, Calvin Coetzee, has been working with key partners to develop advanced electric drive systems for mining vehicles as well as battery and charging systems. This has led to the commercial roll-out of electric hauler
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systems, electric personnel carriers, and electric low profile load haul and dump machines. The advent of these patented electric vehicle and battery systems designs developed by the team at Thuthukani captured the attention of the IDC who have provided BPI with a working capital facility to fund further commercialisation, R&D, and potential future manufacturing capabilities. Alongside their existing commercial systems, BPI is still in the process of securing additional R&D funding.
Battery System for Hauler Equipment
BPI‘s offering will consist of integration and supply of electric vehicle traction systems, battery powered mining vehicles, zero emissions technologies, EV-Lithium battery systems, and charging systems. BPI‘s capabilities include the design, manufacturing and integration of all necessary components for a full electrical traction system and related charging infrastructure. This includes the careful consideration and integration of all auxiliary systems and battery storage units, including; traction, cooling, electrical management, and distribution systems. ―Our designs are able to outperform traditional diesel-fueled vehicles on the market through their ability to eliminate diesel particulate emissions and achieve considerable energy cost savings and lower overall machine costs,‖ says Coetzee. ―We aim to remove all emissions and harmful equipment from use in mining operations as part of our innovation-led approach to sustainable mining. This approach applies innovative thinking and cutting edge technologies to address mining‘s major challenges.‖
simpler maintenance in the technology application. An additional benefit of BPI‘s technology is that many of the components and battery types used are completely recyclable.
Production Unit of Personnel Carrier Battery System Zero Emission Hybrid Traction System for 8 Ton
According to Coetzee, BPI‘s systems will offer a number of benefits to mining operations. ―Compared to traditional machines, the maintenance requirements on an electrical system is half that of traditional diesel powered machines. In addition to this, our type of systems allow for existing underground infrastructure to be used in order to charge and service this form of equipment. Our systems are also able to address some of the mining industry‘s biggest challenges – productivity, costs, fatigue and safety,‖ Coetzee explains. Ultra-safe is a concept that dictates BPI‘s approach to the design and integration of systems. This concept applies to noise reduction, zero-emissions, lower heat and
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This methodology is in line with BPI‘s mission to become a forward thinking firm operated and managed by a new generation of innovative engineers. ―A sustainable approach to every product developed will become entrenched in BPI‘s culture and this, along with safety and the creation of employment opportunities, will be our driving force. We are committed to creating opportunities for young, forward-thinking engineers in South Africa and will be putting considerable effort into future training and skills development programs,‖ Coetzee concludes.
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Experian cited as the most often used vendor for identity verification Independent research firm reveals top trends shaping identity verification in 2018 and discusses the importance of easy-to-use tools With fraud prevention and customer experience becoming increasingly important to South African businesses functioning in the digital world, Experian has been cited as the ‗most often used vendor for identity verification‘ in a survey of network security decision-makers published in a Forrester report. In the May 2018 ‘Top trends shaping identify verification (IDV) in 2018’ Forrester report, it states that a reliable, accurate, cost-effective and easy-to-use IDV is a core building block of any identity system. The report also discusses the importance of easy-to-use identity verification tools. ―With multiple online identities becoming the norm and the lack of face-to-face interaction online, the ability to recognise legitimate customers is even more important,‖ says Mark Wells, Chief Customer Officer at Experian South Africa. He adds: ―Fortunately, Experian has the data and technology to help businesses better identify their customers, make more informed fraud decisions and balance the customer experience.‖ The Forrester report also reveals the top trends shaping identity verification in 2018. Two of the trends mentioned in the report include poor identity verification, which continues to have serious consequences beyond transactions, while behavioural biometrics shows its strength with identity verification. Both trends are supported by findings from Experian’s Global Fraud and Identity Report, which was released in early 2018. The research shows businesses need to better identify their customers to combat online fraud. According to the report, 84% of businesses say the need for fraud risk mitigation could be reduced if they
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were certain about customers‘ identity. Furthermore, 75% of businesses expressed interest in more advanced security measures and authentication that have no impact on the digital customer experience. Experian offers identity verification capabilities specifically designed to deliver comprehensive online fraud management that can be deployed quickly so companies can better identify the fraudsters and stop fraud attacks before they happen. All of fraud and identity services are available through the Experian CrossCore platform, the industry's first open platform for fraud and identity services Square Kilometre Array (SKA), infrastructure development, etc.) • Commercialisation (business development, logistics, etc.) and • Regional Integration (advancement of conformity assessment, AfCFTA, connection of the National and Regional Metrology System Internationally, etc.) All NMS maintenance and product development are captured under the various research
programmes. Once the product has matured and is ready to be offered to industry as a service, the projects are captured under the Commercial Services programme. These projects then include dissemination services associated with traceability to the NMS that generate revenue. In cases where industry is not able to provide a measurement service or calibration, this service is then offered by NMISA (pending resources and affordability). If a measurement service is not routine and includes innovation or advanced interpretation, the service is captured under the Research programmes for development until such service can be offered to industry. The NMISA is part of the Department of Trade and Industry‘s (the dti) family of Technical Infrastructure (TI) Institutes. Together the TI is responsible for the measurement standards and sciences, procedures and the regulations as well as accreditation that gives confidence in goods and products and allows for successful prosecution in cases of non-compliance.
Failure to innovate could spell the end for many businesses Opinion by Lee Stacey,
industry, where the lifetime of products continues to shrink, the race to market has intensified. ●In the transportation manufacturing sector, companies are now competing with many tech giants, experimenting with autonomous driving, e-cars, digital services and mobility platforms. Only 45% of surveyed organisations have a risk management plan in place, though. In the absence of a thorough risk assessment, uncertainty may accelerate or underestimate the importance of a risk such as failure to innovate and meet customer needs, meaning that the balance of businesses may not even understand the magnitude of this risk.
Lee Stacey, Chief Broking Officer in Aon South Africa’s Commercial Risk Solutions Division Failure to innovate and meet customer needs is one of the top ten risks, at number nine, with participants in the survey reporting a loss of income experienced as a result of failure to innovate and meet customer needs increasing from 15% in 2017 to 25%. But despite the fact, the risk experienced an 11% reduction in risk readiness among participants in the survey due to digitisation, changing business models and readily available alternative products and services. The overall level of risk preparedness for this specific risk is nowhere near what it should be, bringing the need for a comprehensive risk management strategy into sharp focus. Examples where failure to innovate or meet customer needs affect industries: ●Well-known corporations such as Toys R Us, BlackBerry, Hitachi and The Concorde, are but a few of the many companies that have dwindled away due to failure to innovate. ●Those in the publishing and printing industry is trying to survive revenue shortfalls and staff downsizing due to a seismic shift in digital technology and people's reading habits. ●In the telecommunications
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An increasing number of industries are, however, focusing on risk management strategies. This fact, alone, means that there are an array of tried and tested tools and techniques available to businesses that can help to quantify and improve their risk preparedness, resilience and sustainability, and thus change the emerging trend. In the face of consumer needs and preferences that are becoming increasingly fickle: innovation is a necessity, not an option. It also means that disruptive technologies, such as artificial intelligence, blockchain or the Internet of Things may be the key to transforming the current playing field. This pushes traditional risk management approaches into a different sphere. Start-up companies tend to be more agile and experimental in their risk appetite and enjoys a significantly lowered exposure to the risk of failure to innovate. Larger corporate companies who tend to stay on the safe side of caution, have a few things to learn from their smaller counterparts in embracing an approach of managed risk-taking. It is up to every company to find the opportunity to reinvent itself in an ever-changing market where disruption is the fast becoming the norm. It is crucial for every company to adopt a risk management process that is able to identify opportunities to innovate and adapt to customer needs. Those that are unable to, will simply become irrelevant.
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Assessing legal risks in the move to Cloud by Wendy Tembedza,
the regulatory environment in which they operate. Certain sectors are required to comply with specific rules regarding how data is managed. For example, in the banking sector, the Prudential Authority issued a Directive D3/2018 and related Guidance Note G5/2018 (Banking Cloud Rules) on cloud computing and the offshoring of data for banks on 5 September 2018. In general, the Prudential Authority acknowledges that cloud computing is becoming an integral aspect of banking business operations and is permissive of the use of cloud computing.
With the fourth industrial revolution in full swing, businesses are looking for faster and more efficient ways to service customers. Customers are also increasingly tech-savvy and demand more from their service providers, including quicker access and more tailored offerings. To meet this demand, many businesses are moving to cloud computing to reap the many benefits that cloud can provide. These include scalability, agility and an ability to analyse data and interpret it in such a way that can help meet client demands. However, before moving any business functions to the cloud, a business must carefully assess legal issues that will have an impact on the ability not only to move to cloud, but also to have full beneficial use of cloud services. These issues relate primarily to: (i) the regulatory environment in which the business operates, which may impact a move to cloud; (ii) internal data hygiene related to compliance with data protection legislation; and (iii) ensuring that the business implements best practice in its corporate governance regarding risk mitigation. Regulatory environment The cloud customer will remain responsible for its own compliance requirements. As such, businesses should ensure that they understand
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The Banking Cloud Rules also set out comprehensive guidelines which banks must follow in order to comply with the regulator's requirements on the use of cloud computing and/or offshoring of data. Any bank considering a move to cloud must first ensure that it is compliant, and is continually taking the necessary steps to comply, with the Banking Cloud Rules. We anticipate that with the ever-increasing adoption of cloud, this approach may filter through to other sectors that will soon be subject to similar regulatory requirements. It is incumbent on the business to ensure that any move to cloud is compliant with the applicable regulatory regime. To assist businesses to understand their regulatory requirements, some cloud service providers (CSP) have produced useful materials assisting businesses' to understand the cloud offering in the context of the regulatory requirements applicable to specific sectors. Businesses should make use of such resources to understand their regulatory obligations before appointing a CSP. Internal business data hygiene In order to facilitate a move to cloud, a business should first conduct a data hygiene exercise to determine: â—?what data it has (for example sensitive personal information); â—?where the data is stored; and â—?who has access to the data. This exercise will help a business better understand the level of risk attached to moving
any category of data to the cloud. Importantly, this exercise will help determine whether it is even appropriate to move all or part of the data to the cloud.
cloud offerings to ensure that the CSP's offering meets the particular needs of a business in terms of, for example, cross-border transfer restrictions and requisite security controls.
An internal data hygiene exercise will also assist a business to comply with data protection legislation. In this regard, the Protection of Personal Information Act, 2013 (POPIA) will, once fully operational require entities that handle personal information to implement various controls regarding such personal information.
Businesses should also understand the importance of mitigating its risk outside of the CSP relationship. The prudent approach is to identify risk and put in place internal measures to mitigate this risk.
This exercise will therefore assist a business to determine whether it complies with POPIA requirements and what further steps may need to be taken to comply. This exercise will also help a business determine whether it has in place data processing documentation to meet its data management requirements. This may include a cloud computing policy, privacy policy, acceptable use policy and personal device usage policy. Importantly, any move to the cloud should be aligned with a business' data governance framework. Understanding cloud service options Some businesses may tend to think that implementing a cloud solution is a plug-and-play exercise which absolves the business from any responsibility for how cloud services are managed. Cloud services will not, in general, be tailored to the needs of a particular business. As such, a business will need to research various
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Guidance on what is required of businesses from a risk mitigation perspective can be found in the King IV Report on corporate governance. The Report provides that a business' governing body should govern technology and information in a way that supports the organisations strategic objectives. Importantly, when negotiating the CSP contract, a business should use the opportunity to ask questions about the nature and extent of the cloud service in order to determine whether the offering is suited to the business' needs. Important questions include the CSP's contingency plan, data storage (locally or abroad), service levels, access to data and audit rights. Established CSPs understand the importance of open communication in building trust in the cloud and are open to having discussions with businesses about various product offerings. Businesses should take advantage of this opportunity to satisfy them that a cloud service offering meets their requirements.
The Imminent Reality of Cyberattacks for Business No longer an if, but when a business will experience a cyber attack Participants in Aon's 2019 Global Risk Management Survey ranked cyberattacks and data breaches as #6 in the top 10 risks facing organisations today. The risk entered the Top 10 list for the first time (at #9) in 2015 and is projected to go from #6 to #3 in the next three years. Startling figures have changed the public perception of cyberattacks: ●Malware attacks in SA increased by 22% in the first quarter of 2019 compared to the first quarter of 2018, translating to around 13 842 attempted cyberattacks per day - Kaspersky Lab. ●A data breach in South Africa costs an average of R36.5 million - IBM security study conducted by the Ponemon Institute. ―When we break it down by industry; banks, retail, healthcare, insurance and technology companies consider cyberattacks or data breaches the top risk. These sectors rely heavily on digital advances to improve operational efficiency and increase their competitiveness. They were also the targets for the majority of mega cyberattacks in 2018,‖ says Zamani Ngidi, Principal Cyber Risk Consultant at Aon South Africa. Why have cyberattacks and data breaches become so rampant? Aon's 2019 Cyber Security Risk Report highlights some of the vulnerabilities: 1.The rapid expansion of operational data from mobile and edge devices, along with growing reliance on third-party—and sometimes even fourth-party—vendors and service providers, are heightening cyber risks. 2.The combination of faster networks and
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vulnerable devices - Internet of Things (IoT) and the forthcoming transition to 5G - opens more doors to destructive threats. 3.Employees remain one of the most common causes of breaches. In a 2018 Aon survey, 53% of respondents said their companies experienced an insider-related attack within the previous year. When an employee of a large healthcare company inadvertently opened a phishing email, nearly 80 million patient records on his system ended up in the hands of a foreign government. 4. As the number of merger and acquisition deals rises (M&A deal value topped US$4 trillion in 2018), companies with a flawless approach to cyber security might have acquired a target that lacks cyber protection measures. 5.Organised crime is now using former intelligence members for more sophisticated attacks, while state actors are both broadening the nature of their attacks and increasing their frequency. 6.Lastly, an ever-changing set of regulations from governments around the world compounds the difficulties of managing cyber risks. ―Despite the fact that the breadth and scope of cyber coverage has increased substantially since 2017, only 27% of participants in Aon's 2019 Global Risk Management Survey from the Middle East and Africa region purchased cyber insurance,‖ says Zamani. Top industries purchasing cyber insurance are as follows: ●Investment and Finance – 83% ●Healthcare – 81% ●Retail Trade – 78% ●Banking – 75% ●Insurance – 73%
Given that technology continues to impact
every job function, from the CEO to the entry-level intern, Zamani believes that it is imperative for organisations to establish a comprehensive approach to cyber risk. ―Businesses must continually assess their overallcyber risk profile, remediate where recommended and proactively manage their defences.‖ Cyber risk assessment The use of cyber risk assessments has risen 16% since 2015. However, only 59% apply any formal process to identify and evaluate cyber risks. ―This means that a significant number of boards and executives are making strategic risk management decisions with little to no data-driven insights when they tackle one of the most rapidly evolving risks,‖ explains Zamani. Of those risk management teams that are involved in cyber risk assessment activities, there has been a positive increase in the application of quantification techniques to 40%, up from 23% in 2017, to evaluate the financial exposures from cyber risks. Despite the increase, the majority of risk assessments are still not using any financial metrics to communicate the materiality of cyber
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exposure. The outputs from these assessments are not presented in a way that senior executives can understand their financial risk appetite, nor does it support data-informed capital allocation decision-making. ―Although there appears to be a positive correlation between the upward trending of risk assessments and quantitative techniques and the increase in captive utilisation (from 8% in 2015 to 16% in 2019) and insurance procurement (21% in 2017 to 54% in 2019), risk management teams need to be more actively involved in bridging the gap between technical cyber risk assessment activity and the enterprise risk management framework,‖ says Zamani. It is important for risk managers to gain a better understanding of the impact of cyber risk. ―The risk that cyber-crime poses affect all companies, big and small. This is where the insights and guidance from an expert broker that provides a holistic offering of advisory and security services is invaluable to enable organisations to anticipate and effectively manage their exposures,‖ Zamani concludes.
Solving the retirement savings challenge Lessons from around the world
The Netherlands and the UK: sharing the risk
Around the world, workers are being compelled to take more responsibility for their retirement savings as many employers move from traditional Defined Benefit (DB) plans to Defined Contribution (DC) plans.
through collective defined contribution plans
According to London-based Kevin Wesbroom, senior partner, Retirement Solutions at Aon, there‘s a massive global trend away from defined benefit plans to defined contribution plans. ―Employers are looking to transfer the risk associated with DB plans.‖
CDC plans occupy a middle ground between DB and DC plans in delivering a more consistent, DB-style income – with employees collectively sharing the retirement plan risk.
In some European countries, one possible compromise to the DB versus DC plan dilemma is the collective defined contribution (CDC) plan.
South Africa: Moving from Standalone Funds to Umbrella Arrangements
The CDC approach has been employed in countries such as the Netherlands, and the U.K. government recently confirmed it is considering introducing its own version of CDC plan in the near future. ―A lot of people are looking for what an old-fashioned pension did,‖ Kevin Wesbroom says. ―Collective defined contribution pension plans could offer a different way to tackle the problem.‖
South African employers started adopting Defined Contribution (DC) retirement fund solutions since the turn of the millennium.
CDC plans offer workers a retirement income structure in which employers‘ plan costs are fixed, similar to that of a DB plan.
―The megatrend in South Africa at present is a move away from standalone funds to umbrella arrangements,‖ says Derek Pillay, from Aon South Africa‘s Retirement Solutions Division. “The latest Financial Sector Conduct Authority‘s (FSCA) data shows that there are only 1 100 standalone funds remaining from the 13 000 standalone funds that were in existence in 2005.
The key is thatmembers‘ target benefit (typically the indexation on that pension) can be adjusted annually based on the plan‘s performance, meaning plan members‘ benefits could be reduced in difficult years. But those cuts don‘t have to be catastrophic and can be restored when conditions improve.
As workers look to cope with the changing retirement income landscape, several possible solutions and trends are emerging in countries across the globe:
The market is rapidly moving in this direction due to the economies of scale, lower running costs and wider member investment choices that umbrella funds offer,‖ he explains. Additional reasons include: ●Competitive asset manager fees. ●Employers‘ Trustee liability and accountability disappears. ●Digital experience – member web portal access. ●Default regulations compliant.
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―The experience of CDC plans in the Netherlands following the 2008 financial crisis is instructive,‖ Wesbroom says. ―Employers cut payments and it was pretty unpopular. But, in fact, the average cut in Holland, for example, in the midst of the financial crisis was only 2 percent of income – there were harsher consequences for those in individual DC plans.‖ Amid a government push for the development of Comprehensive Income Products for Retirement, Australia with the fourth-largest retirement system in the world, is seeing growing interest in CDC solutions. Ashley Palmer, practice leader, Retirement Solutions at
Aon Asia, notes that ―CDC solutions have been considered by some of the largest industry funds to deliver more secure member outcomes.‖ A regional approach: the Pan-European pension product The EU is also considering new types of savings vehicles to help tackle the retirement savings issue. A proposed Pan-European Pension Product (PEPP) is aimed at helping workers improve the way they save for retirement by offering a better option than many available across the fragmented European market. EU leaders envision a wide range of financial services providers offering PEPP personal retirement-savings products. PEPPs would offer standardized features and would offer EU savers the ability to take their pensions with them when they switch employers or move to another country. The product also provides more choice and consumer protections. Being able to offer their PEPPs across the EU would allow providers to benefit from scale and the ability to distribute PEPPs electronically across national borders. While PEPP effort has been slowed by debate over regulatory issues, the European Commission has indicated hopes to have the plan approved this year. The US and prioritising personal savings: helping workers become better savers In the US, focus on retirement savings has been around the level of savings and efficiency of existing vehicles used for those savings rather than on the vehicles themselves. Recently, employers in the US have started to more seriously explore retirement-income solutions within DC plans to help employees manage the longevity risk transferred to them with the shift from DB to DC. Promoting sufficient savings levels remains important. According to Aon‘s The Real Deal: 2018 Retirement Income Adequacy Study, to achieve financial independence by age 67, U.S workers aged 25 or older should save 16 percent of their pay and employer contributions annually. Yet workers tend to save only between 4 and 7 percent, and their employers contribute an average of 5 percent of pay.
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To help employees better prepare for retirement, many employers are looking to help their workers become better savers. Grace Lattyak, associate partner, Retirement Solutions at Aon, says, ―Employers can have a significant impact on how much employees save by educating them on the impact of small changes in savings rates, creating or expanding automatic contribution escalation features in 401(k) programs and setting higher savings targets for matching contributions and contribution escalation.‖ Employers may soon be able to support employees‘ savings for retirement by offering multiple employer plans (MEP), in which businesses join together in a single retirement plan and are supported by a third-party sponsor. Plan sponsorship would become more feasible for employers, creating leverage as costs are driven down across a common platform and plan design. The result is more opportunity for organisations to use best-in-class approaches and for providers to arrange lifetime income for employees. Communication, including tailored messages highlighting appropriate savings targets for different employee populations, is an important element of many employers‘ efforts. Employers are also providing financial wellness education and tools to help employees budget better and save more. Singaporean biometrics: compulsory savings with easy access In various parts of the globe, encouraging individuals – employees and retirement plan members – to participate in the savings process is a key part of improving retirement outcomes. Singapore‘s Central Provident Fund (CPF) is a compulsory comprehensive social security system that allows workers to save for retirement costs, including health care and housing, and both employees and employers contribute to the fund. Singapore‘s government moves to incorporate biometrics to provide citizens easier access to public services. In 2018, the CPF board redesigned its smartphone app to allow users to
use fingerprints or facial biometrics to log on – the first government agency to launch biometrics on a mobile app. Employing biometrics in the redesigned app allows fund members to easily access information on their various retirement savings accounts. The app has also improved its information display, further increasing ease of use. ―Across the Asia–Pacific region, most aspects of day-to-day life are done via a mobile device. A logical next step is the rise of financial wellbeing solutions to help solve the broader retirement-saving challenge. The most effective approaches are aimed at changing individuals‘ behaviours to both money and savings through incentivising smart habits,‖ Ashley Palmer explains. China: taking steps across personal savings and private pension plans Investing and incentivising long-term savings is also critical. China, for example, is aiming to tackle both. A recent survey found less than half of China‘s millennial population has begun to save for retirement. As the country‘s population ages, and as more pressure is put on the state-run pension system, Chinese officials have been working to improve the retirement-savings environment.
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In August 2018, the China Securities Regulatory Commission approved the country‘s first target-date retirement funds. The new offerings, similar to target-date funds offered in the U.S., are intended to encourage Chinese workers to save more for their retirement. China also rolled out a pilot program aimed at bolstering the country‘s private-pension plans by providing preferential tax treatment for contributions to individual retirement accounts, resembling the treatment of U.S. 401(k) accounts. Finding ways to improve the retirement outlook Retirement approaches reflect local customs, cultures and variances in state and private pensions, differing from country to country. As such, creative ways are emerging around the globe to help solve the issue. Indeed, many countries and regions might offer examples that can be copied elsewhere. ―There isn‘t a single answer to this challenge,‖ says Kevin Wesbroom. ―Understanding emerging approaches is a first step in addressing aspects of the retirement savings challenge. Indeed, many might offer examples that can be copied elsewhere,‖ he concludes.
A shifting insurance focus to large-scale renewable energy projects Across the continent and including South Africa, the majority of large-scale construction projects for infrastructure and renewable energy plants are undertaken through public-private partnership (PPP) agreements between governments and business investors. It takes these projects into a space where politics, regulation and corporate governance play distinct roles in how agreements are formulated and implemented for mega construction projects, according to Tirelo Tsheoga, Head of Distribution in Sub-Saharan Africa for Chubb South Africa. ―South Africa‘s construction and engineering sector is hungry for projects of this magnitude following a period of significant inertia and policy indecision with regard to renewable energy projects. At the same time, as a relatively new but rapidly growing sector, renewable energy projects come with significant and complex risks that involve many interlinked role players, massive price tags and onerous contractual liabilities due to the debt financing models in place. These projects must be underpinned by innovative and purpose-built insurance programmes that take into consideration the unique demands of each individual project,‖ explains Tsheoga. Chubb lists the covers that are typically required during the physical construction of a project: ●Construction All Risks (Builders Risk) – Ideally suited to contractors, property developers and principals, builders risk cover is available as either a single risk project solution or an annual policy. It primarily covers the construction project itself and also provides cover that addresses risks associated with contractors‘ plant and equipment, delay in start-up, non-negligent liabilities as well as public liability. ●Construction All Risks - Civil Engineering – typically for contractors involved in hydro projects, motorways, railways, pipelines and similar ventures with annual cover or single risk project cover. It is tailored to protect organisations against risks and liabilities associated with consequences of design, extended
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maintenance, natural catastrophes, property damage and primary third-party liability. It can, however, be extended to include delay in start-up and full design. ●Erection All Risks (EAR) - includes the erection and installation of electrical or mechanical plant and machinery. It‘s ideal for mechanical and electrical contractors looking for delay in Start-up, casualty, single project professional indemnity, annual contract cover or developers, manufacturers, power and energy companies involved in large and complex installations. ―An in-depth insurance discussion and analysis takes place around all the required insurance solutions once the Engineering, Procurement and Construction (EPC) contractor has been appointed for the project and the value of the project is determined and finalised. This would include aspects such as pricing on materials and equipment, labour, design and so on, in addition to required geotechnical studies such as soil samples and environmental impact assessments,‖ explains Tsheoga. ―Based on this, underwriters can then assess the risks involved, taking into consideration the timeframe required, expertise of contractors involved in the project, the quality and nature of materials utilised and risk management tools employed. Costs can then be attributed to the insurance component of the project from where the broking and underwriting teams will determine what percentage can be covered by local insurers with the risk appetite and financial ability to do so, and if and how much of the risk needs to be placed in global reinsurance markets,‖ says Tsheoga. The final selection of insurance needs to reflect local insurance legislation, adhere to multinational policy as well as offer a tax-optimised solution. ―It is an onerous task that requires experienced insurance management and a thorough understanding of all the potential and interlinked risks, which role players are affected and bear or share the risk, in addition to mature risk management practices on the part of the insured. Finding a solution that meets such a diversity of construction risks, especially across geographies, is an enormous task that needs strong and early collaboration between client, broker and insurer to develop the optimum risk management and insurance solution.
Shifting the power dynamic with prepaid The ongoing challenges faced by the South African power utility have made the front page yet again. The lights are off, loadshedding is back and the country is facing the complexities of power outages and unpredictable service. However, it‘s not all bad news, there are solutions that can help the flagging power utility recover its unpaid debt and get back on its feet and one of them is the prepaid electricity meter. Eskom has already recognised how prepaid meters can make a difference. With R18 billion in unpaid electricity bills from Soweto alone, the company is aiming to install more than 26, 000 prepaid electricity meters in the area by March 2020. The effectiveness of this solution has already been felt by the City of Johannesburg – the metro has claimed a 10% reduction in illegal electricity usage thanks to their use of prepaid meters. With prepaid meters helping to reduce theft and debt it is clear that they have benefits for government organisations, but what about private property owners? The Citiq Prepaid sub-metering system has been designed to put control back into the hands of property owners and their tenants. These meters never replace the prepaid metering systems for Eskom or the council, instead they add an additional layer of control which ensures all tenants pay fairly for what they consume. Prepaid electricity meters help people better manage their budgets and help them to lower the amount of electricity they actually use. These solutions allow for deeper control over how power is used on the premises, the type of appliances that people invest in, and how they ensure that their bills are paid on time. It‘s the latter that makes prepaid meters such a powerful tool in the country‘s arsenal – people have to pay their bills to get their power. ―There is little doubt that visibility into a household‘s energy consumption will make a big difference to monthly bills and usage,‖ says Citiq Prepaid Managing Director Michael Franze.
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―Sub-metering solutions can reduce average consumption by at least 15%, often much more, which makes such a difference to budgets and expenses. They can also help people identify which appliances are eating up power and when their usage tends to be the highest. They can then invest into appliances that are lower on energy usage and light bulbs and fixtures that have lower consumption rates.‖ ―The ability to keep the funds and payments administration separate from the relationship between tenant and owner is critical,‖ adds Franze. ―With Citiq Prepaid, funds are collected from tenants upfront and kept in a trust account. We then levy an 8.75% handling fee to transfer the funds to the landowner who can then pay the municipality directly. There‘s no altercation between tenant and owner around the bills or the usage, everything is transparent and upfront.‖ Prepaid puts control back into the hands of the tenant as well. They no longer have to carry the costs of the fellow tenant who doesn‘t care about their bills, nor do they have to comb through bills to ensure they‘re accuracy or endure variable billing periods. Costs are upfront, managed and precise. Tracking consumption from day to day, even from hour to hour, makes life easier and budgeting more realistic. ―The worldwide market for prepaid has been growing steadily over the past few years as more people recognise the benefits of pre-paying for services,‖ concludes Franze. The statistics back it up. Navigant Research estimated that by 2024, the installed base of prepaid meters is expected to reach 85.1 million global households. This is driven by the benefits that it offers alongside growing global awareness of the value of power and the need to change bad practice to protect the environment.
LEARNING FROM DAY ZERO WITH WATER HEROES Although the countdown to day Zero no longer scares South African citizens, the current Covid19 pandemic has put more pressure in areas who continue to live with little to no running tap water. This means citizens in these areas are unable to practise washing their hands often to prevent the spread of the Coronavirus. As most of us continue misusing water, what can we do to open our minds to the reality that South Africa is and has always been a water scarce country? Water Heroes is an initiative driven by an experienced Water Engineer to eradicate the misconception about Day Zero.
Founder of Water Heroes, Thokozani Zuma
This life changing initiative was started after seeing that once Day Zero was cancelled, the majority of water users in South Africa started to misuse water, thinking that it‘s all over. Water Heroes wants South Africans to continue living their lifestyles as though Day Zero was still in its inception. This idea was brought by when, between May 2017 and April 2018, Cape Town faced its worst drought period ever experienced in more than 120 years. Water Heroes is here to ensure that South Africans continue to save water beyond Day Zero by starting a campaign that rewards
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Water Heroes to ensure that no South African province will ever be faced with a challenge as bad as Day Zero. The main factors which brought this water crisis into play were the three consecutive years of below average rainfall which was a first in over forty years. Then the low rainfall period which was coupled with a seven year consecutive increase in water consumption levels which then plunged the Mother City to the worst drought period in recent history. The big positive out of this crisis was that Cape Town became the first major city in the world that managed to drastically reduce its water consumptions by more than half. The true Water Heroes in this instance are the City of Cape Town residents who heeded the call to be water wise by reducing their daily water consumptions and adopting a new fifty litres a day lifestyle. Water Heroes wants South African citizens to be aware that ―Day Zero‖ did not just start and end with the recent drought scare, South Africa has always been a water scarce country. Although the topic of ―Day Zero‖ is no longer a scare, South Africa still has a shortage of water! It is all up to us as the consumers to make sure that what we do today will prevent our country from running out of water tomorrow. We want each and every individual and business to play an important role in ensuring that water is saved and that every drop counts. After April 2018, Cape Town water crisis was not yet over as annual rainfall has been on a decline for the past six years. It is therefore critical that our Water Heroes remain water-wise to prevent ever going back to ―Day Zero‖ countdown. The message is clear; be water-wise and remain water-wise by adopting the fifty litres a day lifestyle. For more practical ways to reduce and maintain low water consumption volumes visit www.waterheroes.co.za or email savewater@waterheroes.co.za
From idea to execution: How Continuous Improvement can transform your business By Anna Chetty, Strategic Project Manager at RS Components South Africa Richard Branson knows a thing or two about ideas. One of his favourite quotes is from Alfred North Whitehead, the ground-breaking philosopher and mathematician: ―Ideas won't keep. Something must be done about them.‖ We‘ve all been there. A flash of inspiration hits: what a great idea! But we forget to write it down or, if we do record it, we get bogged down with other demands. Problems and barriers emerge. Instead of changing, things stay the same. In a company, this means stagnation. Ideas are the remedy for stagnation. They could be small yet highly consequential. How well a company can support and implement those ideas to innovate is a good predictor of future success. This is a challenge for many organisations. There are plenty of good ideas that aren‘t implemented. Execution falls short, often because the organisation‘s cultural support for ideation is lacking. It‘s a common problem, but one that has finally found its solution in a revolutionary concept: continuous improvement (CI). What can businesses do to create a CI culture and to deliver on their ideas? Let‘s start by better understanding what CI is and why it is so important. CI is an ongoing focus and mindset that drives improved products, services and processes. The objective of CI is to ensure operations are as efficient as possible by removing waste, reducing errors and finding opportunities to add value. A business can benefit from the fruits of CI: increased productivity, engaged employees, higher profits and innovation that will lead to happier customers. In CI, changes aren‘t exclusively pursued when there are serious issues at hand. It enables a company to
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never stop striving for improvement. The methodology is based on customer and employee feedback, as well as enabling employees to enact changes. This doesn‘t mean every employee has to become technically skilled. But if an employee has an idea, is there a pipeline they can follow? Will their ideas be taken seriously? Do decision-makers have access to resources and levers to support such an idea? CI culture is a gamechanger. It challenges the notion that change only happens through big projects and enables anyone in the organisation to participate. In CI, an idea can be pursued to its logical conclusion, spearheaded by the people who best understand those systems and processes. Someone loading a truck, for example, has a view of the processes and logistics involved. They are more likely to spot opportunities for improvement. A CI culture offers them that capability. This isn‘t achieved overnight. It is an ongoing effort that requires the support of the entire company, notably the leadership team. CI goals should be established and staff need to be trained to help deliver this change. If you create a culture of change and improvement, CI becomes embedded as a way of working. CI isn‘t a magic wand. Not all challenges require a CI project. Nor is it a system that you shoehorn employees into. CI empowers employees and recognises their efforts. It needs staff to be curious and engaged. But CI is also very flexible: even though it is an overpowering change agent, you can pace its rollout and adoption. A culture that invites ideas from all its people creates an engaged and passionate workforce, not to mention the immense goodwill generated with the customers you demonstrably listen to. Do not shoot ideas down. Encourage your staff to speak up and bring their ideas to the table. Allow ideas to have a real chance of becoming something more. Continuous improvement isn't a trendy fad. It’s the business culture of the future.
The Roadmap for Eskom 2019 and its impact on the IPP industry by Jason van der Poel, Alexandra Felekis, Mzukisi Kota & Mongezi Dladla at Webber Wentzel
wholly owned by Eskom Holdings and "its core functions will be to act as an unbiased electricity market broker, to promote capital investment within the industry and to catalyse energy efficiency and cost sustainability".
Background Eskom is facing financial, governance and leadership, operational, structural and climate change challenges. The Roadmap makes it clear that Eskom, in its current form, has failed. The Roadmap, in a high-level manner, outlines the process that will be followed in the restructuring of Eskom as well as actionable steps to mitigate the electricity supply risks, and to put Eskom and the electricity supply industry on a new path of sustainability. Among other things, the Roadmap seeks to:
address steps to restore Eskom's finances, including government support; identify measures to reduce Eskom's cost structure; and commit to a just transition, safeguarding the livelihood of workers and communities in observing South Africa's climate change commitments.
In order for it to achieve its objectives, this separate Transmission Entity will need to meet certain conditions that are set out in the Roadmap, including to:
The New Business Model
provide access to the grid on a non‐ discriminatory basis to the Generation Entity and IPPs; dispatch electricity from the existing asset base of generators and following clear least‐cost principles and penalise generators that do not perform as contractually agreed; and provide full transparency about the performance of the power system to all market participants and the general public.
Eskom Holdings will hold three subsidiaries, namely, Eskom Generation (Generation Entity), Eskom Transmission (Transmission Entity) and Eskom Distribution (Distribution Entity).
Governance and Leadership
The aim is to improve the power utility through greater transparency and accountability and to allow government more effectively to address generation, transmission and distribution challenges separately. Webber Wentzel note that the Generation Entity, the Transmission Entity and the Distribution Entity will not become separate state-owned enterprises and will not have any strategic equity partners from the private sector as had been mooted by some stakeholders.
One of the main drivers for the restructuring of Eskom is the necessity to improve the governance of Eskom. The restructuring of Eskom therefore aims to introduce a robust and transparent corporate governance at Eskom. Each of the subsidiaries having their own boards with separate mandates is intended to increase leadership's accountability for each of the functions. It will also be simpler for the boards to identify and address governance and operational issues within their functions.
In the immediate future, the creation of the Transmission Entity is a priority as it is the keystone in Eskom's reform. This entity will be
The Roadmap provides that the board of Eskom Holdings will be reinforced with individuals with
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the appropriate skills set and that a new CEO
Thoughts on the Impact of the restructuring of Eskom on the IPP industry Is a change in law required and how long will this all take?
for Eskom Holdings will be appointed "soon".
From a legislative perspective, what is of greater concern is how Eskom's debt will be allocated as a result of the restructuring. Neither the Roadmap nor the Minister of Finance's Medium Term Budget Speech 2019 provides any detailed guidance on how Eskom's existing debt will be managed or restructured. The ECA provides that Eskom's debt and interest, unless otherwise agreed between Eskom and the lender, must be a first charge against all revenues and assets of Eskom. The successful implementation of the Roadmap will thus requiresubstantial buy-in from Eskom's lenders. The Roadmap recognises this and specifically acknowledges that engagement with Eskom's lenders is required. In future however, and if the plan is to separate these subsidiaries from the Eskom group and establish them as independent state owned entities, then there will likely be a need for the appropriate legislation to be enacted.
The aim is for Eskom's transmission business to be fully functionally separated into a newly formed subsidiary of Eskom Holdings by 31 December 2021 and for the legal separation of the utility into three companies - generation, transmission and distribution - by 30 December 2022. We note that this restructuring of Eskom as is currently envisaged in the Roadmap does not in and of itself necessitate a change in legislation. Currently, Eskom is regulated by, among other things, the Eskom Conversion Act (ECA) and its Memorandum of Incorporation. Under these instruments, Eskom has the power, among other things, to incorporate subsidiaries, subject to other relevant regulatory statutes such as the Public Finance Management Act and the Labour Relations Act. Accordingly, the mere formation of the operational divisions into subsidiaries would not, in the ordinary course, require legislative changes. Setting up new corporate entities with independent boards will, however, be a timeconsuming task.
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The Transmission Entity will be the Buyer According to the Roadmap, the last phase of the restructuring will be completed by the end of 2022 with the three functions of generation, transmission and distribution housed in the three different Eskom subsidiaries. During the transitional separation period, the function of procuring new energy will remain with the Department of Mineral Resources and Energy (Department) and the buyer function will reside in the Transmission Entity. The Transmission Entity will buy energy from the generators under power purchase agreements (PPAs) procured by the Department and sell the energy under electricity supply agreements (ESAs) entered into with the Distribution Entity, municipalities or large power users. When the restructuring has been completed, the buyer for purposes of the PPAs entered into with generators (including the IPPs) will be the Transmission Entity and therefore the existing PPAs between Eskom andvarious IPPs will have to be transferred to the Transmission Entity.
This however, should not be of great concern to IPPs and lenders, provided that the sovereign guarantees providedby the Government of South Africa under the implementation agreements are not adversely affected. Distribution is only discussed briefly in the Roadmap. The Distribution Entity will be authorised to buy from the Transmission Entity, licenced municipal generators and embedded generation. The Roadmap states that further consideration will be given to the structure of the distribution sector as a whole and that the appropriate policy parameters will be formulated in due course. This is a fundamental shift towards an open and competitive market and should be welcomed by the private sector. However, the credit worthiness of the Distribution Entity will be a key challenge that will have to be addressed.
response to the load-shedding must be procured on an urgent basis. The Department intends to issue a request for information (RFI) that seeks information regarding supply and demand side options available that can be brought online in the shortest possible time at reasonable cost. Arguably the RFI responses will inform which technologies are procured or developed first and in what period of time. It is clear from the recently published 2019 Integrated Resource Plan (IRP 2019), that new solar PV and wind could be feeding electricity into the grid by 2022. At this stage the exact number of MW available to IPPs is an open question as all existing Ministerial Determinations will be revised to give effect to the IRP 2019 and some of these MW may be allocated exclusively to Eskom. What will Eskom's new Generation Entity mean for IPPs?
What does the Roadmap mean for the heavily anticipated Renewable Energy IPP Procurement Programme Bid Window 5 expected to commence next year?
Probably not much as the timing for establishment of the three entities is estimated only to be achieved by 30 December 2022. If the next bid window goes ahead next year, Eskom in its current form will still be the buyer. So what is relevant to Bid Window 5? The plan states that 2000MW that will stabilise the system in
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Regarding the generation of electricity, the restructured Eskom as envisaged by the Roadmap will have a Generation Entity that is responsible solely for generation. The Roadmap proposes that the current power plant base will be separated into a number of feasible smaller generation units, including renewables, with the intention that over time, the generation market will become more competitive and decentralised. All Eskom-owned power plants will be housed in this entity and the entity will contract with the Transmission Entity for the right to sell electricity
and use the grid in the same way as IPPs would need to. A key concern for IPPs is whether in fact all parties will be treated equally - will the agreements to be entered into between these affiliated entities be on a true arm's length basis or will priority be given on the basis that the majority of the required generation capacity is generated by the Generation Entity‘s assets.
distribution system have been granted sparingly by Eskom.
As indicated above, the idea of a more open and competitive generation market is reiterated in the Roadmap and therefore a level of competition could exist between the Generation Entity and the IPPs. Eskom will likely seek to broaden its business by diversifying into various sectors of energy production including renewable energy. Should this be the case, the allocations for renewable energy technologies in the IRP 2019 may not be sourced from IPPs exclusively, as may have been assumed by stakeholders.
On the premise that the grid will be available for all generators ofelectricity, rules and procedures for wheeling willhave to be put in place to ensure equality amongst all users. A key question will be whether it will be easy to put wheeling arrangements in place for captive power projects looking to sell to private third party off takers or whether priority will be given to power plants supplying the transmission and distribution entities.
Another key question is whether or not the Generation Entity will be permitted to participate in REIPPPP and compete directly with IPPs. The industry will however have to wait for the Ministerial Determinations in respect of this new generation capacity in order to ascertain whether the renewable energy MW allocations under the IRP 2019 will be sourced from the Generation Entity, IPPs or both. What does the Eskom split mean for captive power IPPs wanting to wheel electricity? Currently, the Electricity Regulation Act (ERA) governs the generation and sale of electricity in South Africa. The ERA contemplates access to the system by third parties and expressly obliges a distributor or transmission licensee to grant non-discriminatory access to the system to an IPP provided that: (i) the IPP has obtained the necessary license for the generation and sale of electricity to a third party; and (ii) the conditions of the distributor or transmitter's license are met. In addition to meeting the requirements in the ERA, an IPP will need to meet Eskom's wheeling requirements. To date, rights to wheel electricity on Eskom's transmission or
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The Roadmap echoes the ERA and includes non-discriminatory access to the grid as one of the objectives of the split. IPPs would be required to agree on wheeling arrangements with the Transmission Entity.
Conclusion Webber Wentzel sees the release of the Roadmap as a positive step in the commencement of a restructuring of South Africa's electricity supply industry to minimise Eskom's reliance on fiscal allocations and to stabilise electricity supply. Although the Roadmap provides some clarity on the way forward for the struggling utility, the process poses many questions that need to be answered to restore investor confidence and drive further private investment in the energy sector. To this end, the market is patiently awaiting greater clarity from the Government of South Africa on the management of Eskom's debt in light of the Roadmap, the appointment of a permanent Eskom CEO and how national stakeholders who oppose Eskom's restructuring will be managed. The questions to be answered in order to restore investor confidence in the South African electricity market will require a high degree of alignment between the Minister of Public Enterprises, the Minster of Mineral Resources and Energy and the Minister of Finance.
TLT-Turbo Introduces the Next Generation of Mechanical Vapor Recompression TLT-Turbo GmbH, a global ventilation fans and systems manufacturer, has launched a new range of mechanical vapor recompression fans, with ceramic hybrid bearings that provide an exceptionally long operational lifespan. Integrating the latest ventilation technologies, this fan offers numerous advantages regarding performance efficiency, minimal maintenance and high reliability. The TLT-Turbo fan for mechanical vapor recompression (MVR) has been in development since 2012 since the first case studies were carried out. Following intensive discussions with clients, TLTTurbo established that a need existed for low maintenance MVR fans. This was followed by four years of intensive research, product testing and consultations with clients. The first MVR fans were rolled out in 2016 while continual product improvement has remained a focus area for TLTTurbo.
The implementation of hybrid ceramic bearings is a key differentiator of the TLT-Turbo MVR fan. ―Our clients are amazed by the possibility of a hybrid bearing operating at high speed without circulating oil. Conventional roller bearings do not provide the required support for operating the fan in a broad operational speed range without running into harmful resonance frequencies (under critical operation). Thanks to continuous enhancement in recent years, especially through the use of ceramic materials, more effective roller bearings are available today. The use of hybrid bearings with steel rings combined with ceramic rollers has been established in many industrial applications and in the case of the TLTTurbo MVR fan, hybrid ceramic bearings mean significantly lower maintenance requirements and better operational performance,‖ Schmidt explains. The hybrid ceramic bearings used in TLT-Turbo MVR fans are life time greased and can be operated for up to 10 years without requiring maintenance. To enhance this benefit for clients, TLT-Turbo introduced an additional device to the fan‘s design that allows for the bearing to be re-greased from the outside in order to further simplify maintenance and to increase the fans‘ service life.
―MVR fans have been available on the market for some time but instead of just following the trend, TLTTurbo took time to ensure that we came to the market with a completely new, state of the art MVR solution,‖ says Mario Schmidt, Head of TLT-Turbo Global Vapor Fans business segment. ―And we continue to have on-going discussions and feedback exchanges with our clients worldwide in order to continuously adapt and improve our MVR offering to their requirements.‖ According to Schmidt, the features of TLT-Turbo‘s MVR fan, such as the lower maintenance requirements and the introduction of hybrid ceramic bearings, underscores their commitment to developing products in close alignment to their clients and their needs, and also speaks to TLT-Turbo‘s key objective for continual innovation.
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High motor speeds, a wide range of optimized impellers and the allowance for high temperature and pressure increases complement the lifetime greased hybrid ceramic bearings to ensure that clients benefit from the enhanced performance and efficiency that they have come to expect from TLT-Turbo products. These factors allow for operation of the fan below critical speed which ensures both reliability and safe operation. ―Reliability and safety are key concerns for our clients and TLT-Turbo has addressed this in the MVR fan by using high quality components. Thanks to the use of the hybrid bearings, no oil supply or oil pump is necessary which means that no oil can contaminate the product. In addition to this, the fan also features temperature and vibration monitoring and remote monitoring of the bearing is possible as well. Our entire manufacturing process is carried out according to all major quality standards, including DIN ISO 9001,‖ says Schmidt.
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