If you missed our interview with Ernest Grunewald (Episode 6 of The Global Energy Leaders Podcast), here is a transcription below.
Ryan Ray: Ernest, I've known you for almost three years now. It's been a pleasure to know you and to get to hang out with you in South Africa, and here in the States. Good to have you on the show today, and thank you for giving us just a few minutes of your time.
Ernest Grunewald: It's a big pleasure, and it's great to share information with all my colleagues and co-workers all over the world.
Ryan Ray: Yeah, it's funny you mentioned the international platform because that's where we met at the IRWA in Charleston, West Virginia, I believe was the first time we ever met and have had a good time hanging out ever since.
Ernest Grunewald: That's right, 2013.
Ryan Ray: Okay, so let's get into it. I know you guys had a Power South Africa initiative. What is the general state of energy and some of the difficulties you're facing in South Africa as we speak today?
Ernest Grunewald: Correct. What has happened is that a lot of rural areas in the country don't have the advantage of having electricity, or water, or sanitation, or sewer and so on. There are a lot of rural areas that are still on the old system where you use candle, and bucket system, and you have to go and look for water at the nearest borehole to try and get your services like that. There's a big drive in South Africa to get everybody the basic services.
From the electricity side, our company, our Eskom, which is a state-owned company, got a target to try and get as many houses electrified as possible and try to get everybody on by the date like you said.
Ryan Ray: You mentioned Eskom there, they're a huge company in South Africa. Sub-Saharan Africa, they have many deals going on as well. Could you break down who is Eskom, where are they working at, and what all do they have going on for the audience?
Ernest Grunewald: What has happened is that Eskom has over the years, they have worked out what does the country itself need so that it can be financially sustainable. They have then built power stations as they predicted the growth of the economy to grow. At times in the early '90s, late '80s, they had a lot of excess electricity as well.
Then we started forming a Southern African Power Pool where we would then go out and talk to our neighbors in a forum so that we can understand what their needs are as well. A lot of our countries do not have the same resources as what we have in our country. We started sharing electricity with them, obviously selling it to them, and building up a transmission grid to transmit this electricity through to them across the border so that they can get assistance for electricity as well. That's been going to our neighboring countries which is Botswana, Namibia, Swaziland, Lesotho, through to Zimbabwe and Mozambique.
Ryan Ray: Actually, when I saw you in this past July, I'd just come from Zambia. I believe when I was there they mentioned that Eskom is tied up with some of their power deals also. Could you tell us about that?
Ernest Grunewald: What this Southern African Power Pool wants to do is to have an interconnecting grid through all these Sub-Saharan African countries. Zambia also falls under the Southern African Power Pool. They are also included in it with a link again, from the Zimbabwe side into Zambia as well. All the electricity then goes into this network which is now starting to develop throughout the Sub-Saharan Africa.
Ryan Ray: A minute ago you mentioned that there's a percentage of the population that does not have these basic necessities that you, where you're at, in South Africa and where we're at in the United States, we have access to drinking water and power. What percentage of South Africa in these rural areas we're talking about that don't have access to kind of, we assume to be, the basic necessities of life?
Ernest Grunewald: The percentage, I haven't got the exact percentage. I can check it out for you as well and give it to you just now. I would say it's getting very close now in the rural areas maybe you can say round about, still about 40% of rural areas do not have it.
Ryan Ray: Okay, so about 40% of the rural areas is what we're looking at. You work for Eskom.
Eskom is heading up this charge to power these rural areas from the electrical standpoint. If you can break down in more detail, what is your role working for Eskom in this process?
Ernest Grunewald: What has happened is that we have now our president, Jacob Zuma, he decided in 2012 to set up a Presidential Infrastructure Coordinating Commission. Under this commission, he has formed 18 different strategic infrastructure projects. Now, how this will work then is that these strategic projects are looking at getting electricity to all, getting the transmission network up so it covers the country so that there's bulk electricity all over. Then the distribution network is to be beefed up as well so that to electrify all the places you need to get the distribution into to take the electricity from transmission substations through to the distribution areas.
Now, the way I fit into the story and my colleagues is we have to go out and acquire land for the substations for transmission and for distribution. We have to acquire servitudes for power lines or the distribution and the transmission lines so that we can integrate all the areas so that we can bring the electricity into the areas where they want to electrify and give people electricity.
Ryan Ray: Ernest, so one thing about South Africa, there's a lot of issues that go on with buying an easement, a right of way. Breakdown, for the audience, some of the difficulties that you have and the process that it takes to get an easement acquired.
Ernest Grunewald: Well, the first thing which is very similar to in the States is your environmental impact assessment where we have to get an independent environmental assessment practitioner to conduct an environmental impact assessment for our Department of Environmental Affairs at national government so that they can make a decision where the right must go through.
Now, our input into that environmental impact assessment is the technical and the financial side. Where we do have some hiccups sometimes is that the environmental people, like the people that deal with frogs, would say please take your power line and take it around the frogs, which is financially not right because you can mitigate frogs and go through frogs.
On the environmental side, there are some challenges, but we're managing to get that done quite well. On the environmental side, over the years we've built up a relationship with environmental people, with government department. Approvals used to take a long time. We've now dealt with the government, used forums with them so that we can get certain time limits set for reviewing documents, for getting approvals for documents.
Then the next step is to get the negotiations with landowners done. On that one, we have another problem arising in South Africa at this time that our farmers out there that produce food for us, they have about 13 different new laws, which is actually, in my opinion, preventing them from producing food for us. Now, with all those different laws that they now have to work according to, to carry on farming, when we come there as a government-owned company to put a big power line through their property, they're very anti, becoming straight away when you walk in by the door, they are the typical NIMBY, “No, not in my backyard.” Because we have enough problems with all the government laws, now you still want to come and mess up my property with another power line through a government-owned company.
Now, these typical laws you get are laws that are saying that companies must be black owned, and a lot of our farmers are still white, totally white. They've been pressurized to become black owned. They're also pressurized with labor laws that are setting up certain conditions which is making farming not financially sustainable. A lot of farmers are now trying to mechanize to get the labor side taken away. If you do that, then it's also another consequence because now your people are losing jobs. Then the labor problem comes up again.
Then with the other laws, like also the new farming act which is coming through now shortly will also prohibit certain subdivisions from land if you want to subdivide as well. Then there are also laws like if your laborer stays in the property to do work on the farm, then he gets certain rights, property rights on the property as well. There's a lot of laws now that are making farmers very anti-government. On that side, we have to work around that and negotiate with landowners and understand where their problem comes from in that area.
A law that also came through, which is now active from last year, 2015, is our SPLUMA law. That is a Spatial Planning Land Use Management Act. This act gives the municipalities in South Africa, of which there's about 286 of them, all of them have to have a spatial development plan for their municipal area. That spatial development plan has to talk to the provincial spatial development plan, which is our provinces are like your states. Then there's a national spatial development plan. Now, all three plans have to talk to each other.
Now, if you go and develop anything in that municipal area, you are actually affecting that spatial development plan which is, now it has to be re-looked at. Now, that means if we're going to take a power line along a route through about six or seven different municipalities, you now have to go and talk to the municipality and say, “Please open your plan. Let me see if I put my power line here, if it's going to affect any of your plans that you have for the future or for that land.”
Now, the poor municipalities are not all up and running yet with this spatial development plan, but they still have to look at our route and they are not resourced to look at it. That's another complicated issue which is now going to start delaying projects. However, we have now got the opportunity with government to talk with them to try and work out with the municipalities how do we make this easier for them and for us so that we can get our routes through all these different municipal areas. We're also very fortunate to have one of the people from government coming to our educational conference in March next year, same place as where you're going to give a presentation. They will also be presenting on the same issue as well.
Then the rest of the steps to get our rights registered at the Deeds Office, that works very well. Our Deeds Offices register our rights permanently for Eskom, no matter who the owner of the land is. We have permanent rights on the property no matter what the owners change is, which is a very good system and that works very well. In that area, it's not a problem.
Ryan Ray: One thing you mentioned that was pretty interesting is that you have Eskom, which is owned in some part by the government, and the environmental agencies, which are ran by the government as well, in conflict with each other. How does that work in a country where you have the government fighting the government, and the government is trying to get this initiative passed? Walk through that for us.
Ernest Grunewald: That is where the big complication comes in that each government department is more or less got its own set of rules, set of policies on how they want to do certain things. Now, if another governmental department comes in and needs to be in conflict with it, if you want to call it conflict, or come in to maybe complicate their planning or how they do things, it does cause problems in our country with the different government departments.
For that reason, the Presidential Infrastructure Commission which was set up, was set up to release pressure in that area where government departments should rather work together to make things work rather than saying, “No, please don't come this way. We're not resourced. Please don't come into our area. We haven't got the resources to help you out,” and then delay projects in that way.
We are very, how can you say, optimistic that we're going to get a big assistance through the PICC, then rather than trying to get government departments to do the work that they should do, in our opinion, that they're not doing.
Ryan Ray: The other thing that you mentioned, I want to circle back around to is the white farmers that are having a problem allowing you guys to acquire easements, because there's a government program that's encouraging companies to buy from black farmers and that has shifted the market to where the white farmers are now struggling. Walk us through what's going on with that and what those programs are all about.
Ernest Grunewald: What that all boils down to is that South Africa decided after 1994 that black people in the country must get opportunities now to get into business, get into jobs, get into land ownership, because they were refused those opportunities in the years before 1994. There are now acts that force everybody doing any business in South Africa to try and get black people to get into business, black people to produce goods, buy goods from black people and not from whites, so that only blacks are then given the opportunity to go into the different areas in South Africa.
They have a BEE, like they call it. It's Black Economic Empowerment trying to empower the blacks. Now, this has been happening since 1994 and it has grown very much at this time. We have one farmer, for example, now that I'm busy with, also a white farmer. He's now, just to show you how this thing is, now he upsets, because it's a racial thing, that the white farmer cannot find somebody to sell his goods to because nobody wants to buy goods from white farmers. They would rather buy the … He must now go and look for people that would like to buy food from a white farmer.
Your big organizations won't buy from white farmers anymore. You have to be a black empowered company to sell good. Now, when we went there now from our electricity company to go and buy ground from him and to send a surveyor, he said, “Sorry, the government has got a law that says blacks only. On my farm, I've got a law that says whites only.” Now I've got a problem. I have to now appoint white land surveyors and white valuers to go to his farm, otherwise, he doesn't allow us to get any right on his farm.
You can understand, there's a pressure building up in the country because of this, where on the one side the economic empowerment must happen, but it's to the detriment of another race in the country. We have to deal with that when we go out there now and acquire land and rights for our servitude and for our land for power lines.
Ryan Ray: I was down there about two years ago for the first time. We talked about some of these racial problems that are going on in South Africa. It seems that it's really not the day-to-day, racial tension between a white person and a black person. It seemed that theses government programs are actually driving this racial divide between the people. Can you kind of talk about that?
Ernest Grunewald: Correct. Where your racial tension is very light and you can hardly find it anywhere is in the big corporations and in the big areas of business, where racial integration has worked very well and everybody does their job without any racial undertones or any racial mention. Race is not even considered in big organizations like in Eskom, also in government, also in big business. However, when you go to the smaller person who is trying to economically sustain himself, that is where the pressure is.
Ryan Ray: I want to add a little note here, Ernest audio cut out. What he essentially said was, the people in South Africa day-to-day, they don't have a problem. It's the government programs that are causing this tension. You look at stuff like trying to get into universities or do commerce, that's what causes the racial tensions. It's not as white versus black as far as in the social groups. It's the economic impact from the government programs. Sorry to steal Ernest's answer there, but I want to clarify what he said. He said a lot of good stuff, but unfortunately, the audio dropped out on us right there.
Let's circle back around to the right of way acquisition process. It's a lengthy process in South Africa. It takes two, three years to go through this process of permitting, and applications, and acquisition. Is that correct?
Ernest Grunewald: Correct. Your environmentalists impact assessment program or that whole process, that one is about one-and-a-half years. The acquisition for the servitude on the land and rights side, the right of ways, that is two years. You're looking at three and a half years. Another point we also had a long delay was for our water use license. Our Department of Water Affairs and Sanitation now has to give, according to an act, water use license for you to cross any water body, be it a water body that only has water maybe once a year. All water bodies have to have licenses now as well to be crossed with a power line, or a road, or whatever pipeline.
On that one with our negotiations with the government departments we have managed to get a general authorization, where we can get that approval now within three weeks instead of 18 months as well. That has helped a lot. The present one with 18 months and two years is still standing, so it's three and a half years before construction can start.
Ryan Ray: Okay, so the last thing I want to get into is, and this is why I'm coming in March to do a presentation at your conference, is I want to discuss this issue to the audience that you have in South Africa with these nomadic people, and their migration patterns, and just all of the encroachment issues that come up with this. Because when I was there two years ago, one of the things that really caught me off guard was some questions about encroachments, and not really understanding the full grasp of what goes on in South Africa. Explain that for our audience and what is going on there, and how you're all trying to work through that.
Ernest Grunewald: At this time a remedy is going to be a bit difficult at the moment, because with the politics in the country, at the moment, our Ruling Party that has done very well to this date to sustain the country as far as growth, industrial growth, and financial growth, and electrification for all, doing a very good job at this time starting from 1994 until now. They are getting a lot of pressure from other government, you can say parties that are now in opposition. One of them is a radical group called the Economic Freedom Fighters.
Now, their leader, every time he stands on a stage to talk to them all, he says to them, “Please people, go and take land. If you see any open land, build your house. Please go out there and do it.” Unfortunately, in our country, there's quite a lot of people that are still illiterate, and not having jobs, so they have nothing to lose at all. With their leader giving them the go-ahead, they are occupying open land. A lot of the open land is our easements, our servitudes around the country. We're having that problem, and also in other open areas where we're still planning to build power lines which used to be open, are now occupied. It's all illegal occupation.
Now, on the one side, government is trying their best to also give everybody a place to stay, because that's part of our constitution that everybody should have the right of proper housing. That is also one of the big drives in government, which is very successful, but obviously not quick enough, because it's a big financial burden to try and get everybody to get a house.
Now, because they're so far behind, the people that don't have houses would occupy, illegally occupy any land. Now, from our side, when we have to go and acquire servitudes, if it's a new servitude and there are people illegally occupying ground, we then go to the local municipality that is in charge, who has jurisdiction over that land. We then speak to them, and our Natural Department of Housing, to bring up the waiting list for that area. Every part of the country has got a planned program for housing, but a lot of them have got on a waiting list which is only going to happen in 10 years time.
What we then do is we negotiate, and we with the departments, and the local authority to bring that area's waiting list higher up on the waiting list so that they can then get their houses quicker. We assist them, we negotiate with them, so that those people can get their houses in a proper town planned area, which is not illegally occupied just in a rural bush area with no water, no electricity, no sanitation. Then those people move out, and then we can build the power line as well. Two things are happening which is very good. The person itself gets his proper house, and Eskom can at least build power lines so that people can be electrified as well.
The other part of (inaudible- 27:38) is where people are illegally occupying our servitudes that already have power lines built on. That is also a problem that is happening all over the country. What we do there is we try and negotiate with the municipalities as well to try and get those people up on a waiting list as well. That happens too much, and it's happening that waiting lists cannot be moved up for existing people and for existing power lines, because they feel that the power line is not a threat yet, so they've lagging behind to try and get those people out.
However, in our southern part of our country, which is called the Western Cape, the coast of Cape Town, at one time the illegal occupants, they used like a paraffin stove. This paraffin stove fell over, and the very strong winds took that fire and burned down, it must be about 50 of these illegal shacks that has been erected. This huge fire, luckily nobody was hurt or killed and people ran away in time, but the huge fire tripped the electricity. With that risk of not having electricity for (inaudible- 28:59) the illegal occupation risk, the municipality in that area worked with us and managed to get them into proper housing as well.
What we then did was we worked the area under the power line is then converted to vegetable gardens, and into playing fields for football and other kind of sport. The community are quite happy now to keep that area open, and not allow illegal people erecting any shacks because then it goes onto their vegetable gardens and onto their sports fields. Those are the two scenarios on the existing and on to future lines.
Ryan Ray: Ernest, thanks so much for your time. It's come up a little bit. Let's get into it a little bit more. I'm coming down in March. What's going on? What's the event? Give the audience a little bit about what you guys have planned for that conference.
Ernest Grunewald: That South African Right Of Way Association, that's a name that we gave our association. In 1998, when internet started becoming a browser, we heard about the International Right Of Way Association. In 1998, I send one of my staff members across to the US to the conference in 1998. He came back with the information on how this is a very good association, how people can network, and get continuously educated and skilled. We straight away formed the association in South Africa, the South Africa Right Of Way Association, and then started with talks with IRWA to become a chapter.
We became a chapter, I think, it was in 2011, we officially became a Chapter 83 of the IRWA. Actually, the first chapter outside the USA and Canada. Now, since we've done that, we have been developing our co-members in the country. People have been taking the IRWA courses. We already have now registered, I think, at least about eight RWA, Right of Way Agents on the credentialing of the IRWA. We are very fortunate that the members of our association and of the chapter are very eager to be skilled to attend courses and conferences.
Our professional associations for our land surveyors, and for our land valuers, and our engineers dealing with rights of way related issues, need to want the professionals to continuously develop themselves as well. Our association has now got permission from these professional associations to get a certain continuous development points awarded to our programs, to our training IRWA courses and our conferences.
In March next year we have a two-day educational conference, which is an excellent conference. We've got excellent speakers. Thankfully, you will be there as well with an excellent presentation. We've got a few great presentations and great lectures coming up on the two days to give education on the challenges of South Africa and remedies on how to come across those challenges.
Our web page, SARWA, S-A-R-W-A, South African Right of Way Association, .co.za. Also on Facebook, SARWA. All the information is there. All the newsletters are there for what happens in the country. Some papers or previous papers from our government departments will be seen there. It will be great if people can have a look at it, and interact with us, and (inaudible- 32:50) our people, and we can all build a better global networking even more.
Ryan Ray: Okay, great. We will link to that in the show-note so people can find out where to register in South Africa for this conference. This is not just South Africa. There's people from all over the world that actually come to this thing. Several people from the states and people from Africa. This is a good crowd to be a part of. We'll link to that in the show notes so people know where to find it. What else would you like to plug or promote before we let you get off here today?
Ernest Grunewald: No, thank you very much for the opportunity there, Ryan. This was an excellent one and looking forward to chat to you when you come across again to South Africa.
Ryan Ray: Well, great. Well, hopefully when I get down to South Africa in March, I'll bring some equipment. Maybe we can record an updated episode and catch up on what's going on and cover some different topics for another show.
Ernest Grunewald: Excellent, that will be lovely.
Ryan Ray: Okay. Thank you, Ernest.
Ernest Grunewald: Thank you, and good night, good bye.
- Disclaimer: This episode of the Global Energy Leaders podcast was transcribed by Rev.com. The transcript may contain errors or omissions.