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SA Budget 2015: Eskom gets R23bn, schools get R1.1bn, etolls get to stay

Loadshedding hasn’t been as bad as it was for the last two weeks, but that doesn’t mean that Eskom is on the mend.

While the state-owned power producer might seem alright for now, South Africa’s Minister of Finance Nhlanhla Nene’s first full National Budget revealed that the electricity producer will receive R23 billion in June this year.

“The fiscal allocation of R23 billion will be paid in three instalments, with the first transfer to be made by June 2015. A special appropriation bill will be tabled, once the finance has been raised. If further support is deemed necessary, consideration will be given to an equity conversion of government’s subordinated loan to Eskom,” Nene said.

As part of his tax measures to promote energy efficiency, which Nene says still needs to be discussed with Eskom, the regulator and industry players, Nene will also implement an increase in the electricity levy to help ease Eskom’s demands.

“The first proposal is a temporary increase in the electricity levy, from 3.5c/kWh to 5.5c/kWh, to assist in demand management. This additional 2c/kWh will be withdrawn when the electricity shortage is over. Secondly, an increase is proposed in the energy-efficiency savings incentive from 45 c/kWh to 95 c/kWh, together with its extension to cogeneration projects. Other measures under consideration include enhancing the accelerated depreciation for solar photovoltaic renewable energy.”

Internet access and broadband played virtually no role in Nene’s speech, only for one point towards the end, where he announced that R1.1 billion will be allocated for broadband connectivity in government institutions and schools.

The National Broadband Policy, published over a year ago, calls for broadband access for all schools and hospitals at 10Mbps by the end of this year. In the State of the Nation address earlier this month, President Zuma confirmed that Telkom would be the preferred provider to deliver on this promise, and therefore we assume that it will also be the bulk recipient of the funds allocated today.

Another topic that many thought Nene would talk about, is the much-berated etolls in Gauteng. While it is not being scrapped, Nene said that new tariffs will shortly be worked on and communicated to the public once it is ready.

“Concerns regarding the socioeconomic impact of toll tariffs have been heard, and revised monthly ceilings will shortly be proposed. We will include a national contribution to meeting the associated cost in the Adjustments Appropriation later this year. Measures will also be taken to ease compliance and improve enforcement.”

Nene did warn motorist though, that they will be the primary source of refunding the construction costs.

“But cost recovery from road-users will continue to be the principal financing mechanism for this major road system.”

[Image – Shutterstock]

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