Thousands of people could lose their jobs as seven manufacturing companies in South Africa may have to shut their doors due the department of energy’s abrupt announcement of a R0 budget for the National Solar Water Heater (NSWH) programme, in the parliamentary portfolio committee last month.
Last year’s NSWH budget was R394 million.
In at least one factory – Isolar in Atlantis in the Western Cape – 85 employees have not received their salaries since February.
The NSWH programme started in 2010 as a rebate scheme under Eskom to replace existing electrified geysers with solar water heaters to alleviate the demand for power from the national grid.
The initial target was 1 million solar water heaters by 2014. Only 400 000 units were installed under the rebate programme and, in 2015, the department of energy took over the programme and changed the focus to providing solar water heaters to state-subsidised and unelectrified homes, setting a new cumulative target of 1.75 million units by next year and 5 million by 2030.
The existence of Isolar and other manufacturers was nurtured by the state programme, which also stipulated that 70% of the components had to be sourced locally.
Although questions sent to the department by City Press more than a week ago remain unanswered, unofficial sources City Press spoke to at the Africa Utility Week conference in Cape Town this week believe the NSWH budget was reclaimed by Treasury due to lack of expenditure and the failure of the programme.
To date, only about 87 000 of the proposed 1.25 million units have been manufactured, and the related installation phase of the NSWH programme has not been implemented at all.
The 87 000 units remain stored in warehouses around the country.
At the energy budget vote speech on Wednesday, DA shadow minister for energy Tandeka Gqada said she believed part of the reason for the programme’s failure was that it had been moved around – first from Eskom to the department of energy, then late last year to the Central Energy Fund supported by the Independent Power Producer office.
Gqada said this was problematic as the Central Energy Fund “has its own challenges” and managing the installation phase was not practical for it. Furthermore, the need for agreements with municipalities responsible for implementation was “too much of a risk”.
She said communication with the manufacturers affected by the removal of the budget was almost non-existent and it had “serious implications for our economy and our people”.
She said she had been in contact with three of the seven affected manufacturers that had won the bids to manufacture the solar water heaters.
They had designed their scope of work in line with the original documents they had signed with the department of energy and had invested a lot of money to deliver their orders.
“With lack of clarity and communication from the department, these companies will most likely close down,” said Gqada
Responding to questions on the NSWH at this week’s budget vote, Deputy Energy Minister Thembisile Majola said the department was “very worried” about the seven companies, but was “engaging with them”.
“We haven’t just let it go because every job loss is a concern to us,” said Majola.
Isolar general manager Andre Fourie said the orders from the department increased as the factory’s capacity increased, allowing it to grow from 15 staff members in 2016 to 85 currently.
“The whole idea was, in theory, beautiful,” said Fourie.
But he said things started imploding in November when they delivered their last purchase order, and no further order was forthcoming.
He said that, in December, the company received a letter from the department asking what its capacity for repair and replacement of solar water heaters was.
He believed the department was instituting the repair and replacement programme while the governing party was “sorting out the political shenanigans” relating to former president Jacob Zuma’s replacement by Cyril Ramaphosa as the head of the ANC.
Fourie said the repair and replacement programme was included in Isolar’s tender award, so no new procurement was necessary.
Briefing notes were sent, and the repair and replacement programme was due to begin on February 6. This was then moved to February 22 or 23, then to March 15. Then all communication stopped.
“There was nothing,” he said.
Early last month, Isolar was informed that the original tender cutoff date, which was March 31, had been missed, which meant further requests for proposals related to supply or repair and replacement were cancelled.
Administrative staff manning the phones at Isolar on a voluntary basis and hoping for positive news from the department said that, without salaries, some of their colleagues were facing eviction because they were not able to pay rent.
Others had used their jobs at Isolar to extricate themselves from the drug and gang culture that dominates Atlantis and were now sitting at home all day and were being dragged back into criminal behaviour.
Factory supervisor Jason Valentine (37), who goes to the Isolar factory every day despite having nothing to do, said he lived with his girlfriend in her parents’ house.
As she also worked at Isolar, neither of them was receiving an income and they were all living off her parents’ pensions.
“Things are getting difficult at the house. A person doesn’t feel good. You eat food that you can’t pay for,” he said.
Valentine said he also couldn’t get a loan to see them through because he didn’t know when, or if, they would get paid. Furthermore, the couple is expecting their first child in six months’ time.
Isolar administrators Shirmel Azure and Octavia Kotzee said the department still owed the company R40 million for the order that was completed in November. Even if new orders were placed, relationships with suppliers to whom the company owed money would have to be built up again from scratch.
Source; Citypress ')}https://newsoweto.co.za/thousands-south-africans-lose-jobs-companies-face-closure-rebate-scheme-ditched/BusinessFeaturedSA News