Date: 08/05/2007

Source: KwaZulu Natal Provincial Government

Title: Mkhize: Night of the Stars Function

Speech by the MEC of Finance and Economic Development, Dr Zweli Mkhize on the Night of the Stars Function at Ushaka Marine

The Chairperson of Spring Lights Gas Company, Advocate Kessie Naidoo
The Deputy Chair Spring Lights Gas, Mrs Nora Fakude-Nkuna
Deputy Ethekwini Mayor, Logie Naidoo
CEO of Spring Lights Gas Company, Mr Motsamai Koapeng
Executive Director of Sasol Limited, Dr Bennie Mokaba
Shareholders
Customers
Staff members present
Ladies and gentlemen

It gives me great pleasure to be part of this prestigious celebration of the Night of the Stars. The growth in sales which has been reported by the Spring Lights Gas Company is an indication of success. Today is the day to say thank you, especially to customers who supported the company since its formation in 2002. In my budget speech on the 1st of March, I alluded to the fact that provincial government has made a decision that we'll not do business with companies that have failed to embrace government's broad-based Black Economic Empowerment. Through Black Economic Empowerment (BEE), government hopes to ensure that we bridge the gap between the first and second economy.

The Spring Lights Gas Company is one of the companies that has fully embraced BEE and has shown commitment to ensuring the growth of the economy in the province. I am told that since 2002 the company has sold 3,8 million Gigajoules (GJ) of gas per annum, which represent a 40% growth in sales volume. According to the company's projections, this figure is expected to grow further to 4,2 million GJ for the year ending June 2007. I am certain that in the process many jobs have been created and will continue to be created. This will address the problem of unemployment. Prior to 1994, energy provision was reserved for the privileged.

The democratic government's White Paper on the Energy Policy addresses the energy requirement of the poor. It seeks to enhance the efficiency and competitiveness of the South African economy by providing low-cost and high quality energy inputs to the majority of our people and the industrial sector.
Approximately 40% of all homes in South Africa and tens of thousands of schools and clinics are without access to electricity. The electricity distribution industry continues to experience high levels of non-payment and electricity theft. Although there has been good progress towards government's goal of "electricity for all" as far as electrification is concerned, government is fully aware that the increase in electrification would not be achieved soon due to affordability problems.

The inability to pay for electricity has resulted in electricity cut-offs and illegal reconnections. This calls for co-operation between government and the private sector. Gas has been identified as alternative to electricity. Apart from its affordability and portability, it is also environmentally friendly. Reports suggest that gas is the only energy source for power generation that is forecast to have a growth in demand. Gas is forecast to account for 24% of total power generation by 2010, increasing to 30% by 2020. The establishment of the National Energy Regulator in 2005 reaffirms government's commitment to sustaining this growth. The regulator will ensure a long-term reliability of energy supply required by industries in the energy business.

Gas infrastructure

Through Gas Infrastructure Plan, government has laid down a transparent system which can be benchmarked against any similar system in the world. This plan encourages international investment and it stimulates economic activity. There are number of challenges that this government is facing in terms of the provision of energy for the poor and these include the vandalism of gas pipeline in outlying areas. We are fully aware that gas suppliers and transporters always look up to government for protection of their infrastructure. Government's policy is that pipeline companies must introduce social development plans that would benefit communities in proximity of transmission pipelines. Communities will have a vested interest. Recently we've read about reports of companies collaborating with international organisations such as United Nations Development Programme and the Global Environment Facility with the sole purpose of addressing the energy crises in the country. We welcome such initiatives.

Friendly environment

Our constitution stipulates that everyone has the right to an environment that is not harmful to their health or well-being and the right to have the environment protected for the benefit of present and future generations. We have heard of cases of fuel leaks particularly in the Durban South industrial basin. Allow me to acknowledge the Spring Lights Gas Company's environmentally friendly policies. The company has been successful in its attempt to reduce harmful emissions that has plagued the community over the years. I am hopeful that the company will involve the community in any plans for future expansions.

Thank you

Thuthuka KwaZulu-Natal!

Issued by: Department of Finance and Economic Development, KwaZulu-Natal Provincial Government
8 May 2005