A full plate for David Mahlobo in the Department of Energy
The new energy minister will have to deal with issues around the nuclear build programme, ailing PetroSA and the Strategic Fuel Fund
Newly appointed Energy Minister David Mahlobo will have his plate full when he arrives at his new office, having to deal with issues around the nuclear build programme, ailing PetroSA and the Strategic Fuel Fund.
President Jacob Zuma on Tuesday morning announced a Cabinet reshuffle, the second one this year.
He replaced Mmamoloko Kubayi with Mahlobo, who was state security minister. Kubayi has been moved to the communications portfolio.
Mahlobo, according to his profile on the People’s Assembly website, has a BSc Degree (Microbiology and Biochemistry) and a BSc Honours Degree (Biochemistry) from the University of Zululand.
The new nuclear build programme is likely to be a top priority for Mahlobo.
SA’s nuclear energy policy has been mired in uncertainty, with opposition parties, energy experts and NGOs worried about the cost.
Some also claim the process has been predetermined to benefit Russian firm Rosatom.
The High Court in Cape Town earlier this year ruled that ministerial determination on nuclear energy was invalid as the National Energy Regulator of SA (Nersa) did not do the requisite public hearings.
Last month, the Sunday Times reported that former convicts Gayton McKenzie and Kenny Kunene travelled to Moscow at the same time as Mahlobo, who was state security minister at the time, and a delegation from the Central Energy Fund to sell themselves to Russian company Rosgeo as possible BEE partners.
CEF and government officials were in Russia to meet with Rosgeo a week before a R5bn gas deal was signed.
There were also contradictory statements from the Department of Energy, under Kubayi, regarding the Strategic Fuel Fund (SFF).
The SFF is in charge of the country’s strategic fuel stocks and has been embroiled in a scandal involving the sale of 10-million barrels of this stock without Treasury approval.
In August, Kubayi tried to suspend the Central Energy Fund (CEF) board over the SFF stock rotation issue, but she denied trying to do this. She had sent questions to the board about their role.
The investigation of the sale of the stock has been delayed since Kubayi said she had some concerns as a key financial analysis in the investigation was conducted by KPMG.
Kubayi has also told Parliament that her department planned to head to court to nullify its decision to sell fuel reserved at fire-sale rates, stating that the fuel could still be recovered.
However, the department’s acting director-general, Tseliso Maqubela, contradicted this, saying there was no way to be sure whether or not the fuel had been sold on.
Mahlobo will also have to deal with the troubles facing state-owned oil company PetroSA. The company has suffered huge losses over the past three years and has a projected loss of R2.2bn for the year to March 2017.
This follows its record R14.6bn net operating loss in the 2014-15 financial year.
The auditor-general has warned that there is a "material uncertainty" over the ability of PetroSA to continue operating as a going concern.