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Somerset West – The future of South Africa's fuel supply is one of the major decisions the national planning commission is expected to advise on, Kuben Naidoo, acting head of the planning commission secretariat, told the annual conference of the Bureau of Economic Research on Thursday.
He was explaining some of the difficulties the government's new planning commission faces.
Naidoo said there were three alternatives. The first is to build a new oil refinery, the second to build an oil-from-coal plant, and the third to simply expand the capacity of present refineries.
A fourth alternative would be none of the above, but to simply import more refined product.
Stressing that no decision has been made, Naidoo said the commission was faced with much conflicting advice.
Similarly, with regard to the decision to expand electricity supply, the commission was being urged to consider the price of electricity as the optimal determinant on the one hand.
But on the other, it was being urged to optimise the decision on the number of jobs that would be created.
The Coega conundrum
Another group believed the decision should be based on how much carbon was generated.
Naidoo also said things can go horribly wrong with all such decisions, and gave what had happened at the port of Coega as an example.
The specifications for the port were based on a plan that called for an aluminium smelter there. A special electricity supply was built to run power to the smelter.
Then the country ran out of electricity and that idea was cancelled.
The port had been given specifications that would enable it to ship out large numbers of aluminium ingots.
"It's not spec'd for cars," Naidoo said. "It's not spec'd for fuel imports. If Coega is to be re-spec'd it will cost another R7bn."
Asked about the impact corruption might have on future planning, Naidoo admitted that it was a serious problem.
"An increase in corruption could potentially undermine the legitimacy of the state," he said. "And that will undermine the ability of the state to fight corruption and to improve service delivery."