Zuma deals blow to Eskom

Cape Town - In his second state of the nation address, President Jacob Zuma announced that a separate system operator will take over the running of the electricity distribution network (the grid) independently of Eskom.

The new operator will thus be in charge of buying electricity supplies from all generators both Eskom and the independent producers.

According to officials, this will remove the evident conflict of interest when Eskom itself buys and distributes the power.

Zuma also gave a new total for the amount of cash to be spent on building new state-owned infrastructure over the next three years. The sum of R870bn, which was indicated in the medium term budget policy statement last year, has now been refined by treasury, and the figure the president gave is R846bn.

Although Zuma emphasised the need for laying the groundwork for stronger economic growth going forward and made mention of an industrial policy action plan, it was remarkably short of detail.

It is understood that the plan was presented to cabinet on Wednesday, and will be presented in parliament by Trade and Industry Minister Rob Davies later this month.

However, plans for rapid improvement in education, health and housing have been far more rigorously worked out, and he was able better detail each of them.

For example, he was able to tell MPs that a guarantee fund of a R1bn is to be set up to incentivise the private banking and housing sector to develop new products to meet the demand for housing from people whose incomes are too high to qualify for a state subsidy, but not high enough to qualify for a normal bank mortgage.

He was also able to say that 6 000 hectares of well-located public land will be set aside for low income and affordable housing, and government is working to upgrade informal settlements and will provide proper service and land tenure to at least half a million households by 2014.

On education he said the aim is to increase the number of matric students eligible for university admission to 175 000 a year by 2014. And on health he is promising a "massive immunisation programme" which is aimed to reverse the trend in which life expectancy at birth has dropped from 60 years in 1994 to just below 50 years today.

And to accomplish all these good things, the work of individual departments of state will be measured by their outcomes.

"Ministers who are responsible for a particular outcome will sign a detailed delivery agreement with the president," he said. "It will outline what is to be done, how, by whom, within what time period and using what measurements and resources."

- I-Net Bridge