Comments on the Expropriation Bill of 2015

1. Comments on the Expropriation Bill of 2015 Submission to Parliament’s Portfolio Committee on Public Works Eskom’s considerations as a public infrastructure service provider

2. Executive Summary • Eskom is currently experiencing significant delays in acquiring servitudes for the construction of transmission and distribution infrastructure, this is largely due to lack of an effective expropriation process as per the current legislation. • Legislative changes made todate does not addressed the delays • Two examples of these are the Mercury Perseus 765 kV power line were the expropriation process took 6 years to conclude and the Etna Glockner 400 kV power line which took more than 4 years since 2010 • These delays impact Eskom negatively due to an increase in construction costs and timelines and in the past have lead to stranded assets and under achievement of electrification targets • The ability to connect big business and heavy industry in an expedient manner is key for economic and social development • Eskom is recommending a fair process for all parties i.e. the payment of market related prices for land and that parties engage in a process that is transparent and can be concluded in a timely manner • Precedent for effective expropriation exists in companies such as Transnet and SANRAL • In line with the above Eskom is requesting that for public infrastructure, the power to expropriate vests with the Chairperson, Chief Executive, or similar executive head of the expropriating entity.

3. The acquisition of servitudes is often the longest activity in the construction of Eskom powerlines & Power plants…. Outputs TIME Activities 2 to 4 years assumed for land/servitude acquisition Scope defined 6-12 months Network Planning & Project Development CRA EA Land/ Servitude rights Line/ sub design EIA, Land Acquisition, Surveying, Design 3-6 years DRA ERA Procurement & construction Construction 18- 24 months

4. Delay in the construction of the Mercury Perseus 765 kV power line (Mercury sub-station near Orkney, to Perseus sub-station near Dealesville (FS)) * Unserved energy refers to the energy that would have been consumed by the end user had the network been in operation.

5. Delay in the construction of the Etna Glockner 400 kV power line (Etna substation in Johannesburg, to Glockner substation near Meyerton)

6. Impact on Eskom Government is at risk of not reaching its electrification targets unless the expansion of the transmission network can be expedited in time. For example, 44 086 connections in Limpopo and 23 135 connections in the North West Province may be at risk if transmission lines are not in place to evacuate power to these communities.

7. The ability to connect big business and heavy industry in an expedient manner is key for economic development, the following project are at risk…..

8. Eskom is committed to a fair and transparent process Requirements and commitment • To ensure a fair and transparent process: Land owners still have unfettered access to the Promotion of Administrative Justice Act. • To ensure speedy yet efficient and effective negotiations. • To spend public money cost-effectively and To pay fair compensation to the landowner and other rights holders • To fairly evaluate expropriation as a viable but last option. • To uphold the constitutional values set out in section 25. Impact of the recommendations • A process and expropriation powers that are aligned with existing precedents, with protection provided by the Constitution. • A process for acquiring and protecting land and rights without stunting the growth of the country. • An ability to deliver on national plans within expected timelines and budget. • In 2005, Eskom discussed the suggested expropriation process with AgriSA and TLUSA. Both unions indicated that this process will be acceptable, as long as they could exercise their constitutional rights to influence the final route during the environmental impact assessment process.

9. Precedent for effective expropriation already exists

10. Recommended principles to be incorporated in changing the Act…. The expropriation act shouldincorporate the following principles: • Provide the standardised process for expropriation. • Follow the existing precedent by vesting the power of expropriation in the Chairperson, Chief Executive, or similar executive head of the expropriating entity. • Limit this right of expropriation to rights required for a public infrastructure purpose or in the public interest.