Economic, Investment & Employment Cluster Media Briefing

Q: Mr Gwanya was asked what the impact would be if the Expropriation Bill was withdrawn, whether it would be resubmitted and what the amendments would be.

A: Mr Gwanya replied that there was already an Expropriation Act in place and they were currently using that to deal with expropriations. The challenge was that that 1975 Act was not complaint with the Constitution in a number of ways. For example, it still relied on the “willing buyer, willing seller” concept, which was not constitutional. Parliament had been dealing with the Expropriation Bill, and it had not been referred back to the Departments of Public Works and Land Affairs officially. They would wait to hear from Parliament about the reasons why it has been referred back and take it from there.

Q: He was asked what the impact would be if the proposed amendment to current legislation was not in place.

A: Mr Gwanya said that it would lead to further delays. For example, in an area near Grahamstown in took four years to achieve an expropriation through using the current legislation. He expressed concern over this.

Q: Mr Gwanya was asked to comment on the Department of Land Affairs statement that there had not been enough consultation on this proposed bill, and whether he was in fact aware of the reason for the bill being shelved.

A: He replied that the issue fell under the Department of Public Works and not his department. He therefore could not comment adequately on the reasons for the bill being shelved. The Department of Land Affairs was still to be consulted fully on the matter. The statement referred to was in fact made by Public Works.

Q: Dr Shongwe was asked whether the continental cable he had referred to was the UhuruNet, when it would be in place and how much money was allocated to the project.

A: Dr Shongwe confirmed that it was Uhurunet, but he explained that government was partnering with several other projects that were laying cables along the coasts of Africa. The west coast would be completed in partnership with Infraco and a Nigerian consortium laying a cable from Nigeria to Europe. On the east coast was a Kenyan project led by the Kenyan government with a cable from Mombasa upwards, while Uhurunet would complete the leg from Mombasa down to South Africa. Government did not need to put money into the Uhurunet project because it had encouraged African investors to invest in the proposed business structure.

Q: Dr Shongwe was asked to clarify these partnerships and whether he was saying that the South African government was partnering with a Nigerian consortium who has built a link from Nigeria to Portugal, and was now building a link from Nigeria to South Africa and another link to Europe.

A: Dr Shongwe replied that the South African government was not the Uhurunet project. The project was made of three share blocks. One was the NEPAD Special Purpose Vehicle (SPV) made of African telecommunications companies. The second was made up of African investors and African telecommunications companies who might or might not participate in the NEPAD SPV. The third was made of international investors and philanthropic organisations that approached Uhurunet wanting to contribute to the project. He explained that the Uhurunet system was a four-fibre system that would encircle the whole continent. The Nigerian consortium has already begun the manufacture of two-fibre cable from Nigeria to Portugal. Uhurunet’s agreement with them was that Uhurunet could “piggy-back” on that contract and supply the second two-fibre cable. A similar agreement has been made with Introco on the west coast and the Kenyan project on the east coast.

Q: Mr Munzhelde was asked to expand on the issues raised by a recent court case where the Value Added Network Services (VANS) licence holders were celebrating because they had found a loophole in the law, and whether the Department of Communications would take any legal measures to close the loophole.

A: Mr Munzhelde replied that they were still studying the contents of the judgement and they would then make a decision about the best course of action to take.

Q: He was asked to explain the court’s judgement.

A: Mr Munzhelde said that in 2004 the Minister issued four policy directives and one of them addressed the issue of the whether VANS can self provide or not. Subsequently in 2007 the department issued directives which talked to the issue of ICASA’s investigations into whether some VANS can provide their own infrastructure. They contested the directive that had led to the judgement. He said the Department was considering whether it should affirm or strengthen certain areas of the policy.

Q: Mr Gwanya was asked to clarify his point that 1200 new positions had been created while Treasury has limited them to increasing personal costs by 15%. He was asked what proportion of staff costs would 1200 posts be, how it would affect the remuneration of existing staff and whether the new staff costs would come out of the 15% or be in addition to it.

A: Mr Gwanya said that the structure has been approved by DPSA and National Treasury had agreed to operate within the norm. There would be an incremental increase of posts over a three-year period. It would not affect the increases for existing staff since this was already provided for in the MTEF framework. In the meantime the Department would continue to outsource in areas where it did not have adequate staff capacity.

Q: Mr Gwanya was asked to explain what the 1200 increase would mean.

A: He said there were 3000 employees at the moment and the increase would mean an excess of 4000 posts.

Q: Regarding the Provision of Land and Assistance Amendment Bill, Mr Gwanya was asked how it would empower the Department to carry out its land reform programme, how it fitted in with the broader legislative environment and if it would compensate for the absence of the Expropriation Bill.

A: Mr Gwanya replied that the Provision of Land and Assistance Act 126 of 1993 already provided for expropriation. The current Act only allowed the buying of land and not the equipment on it. They had not been able to buy any movable assets on a farm and this had posed problems. For example, if they bought a dairy farm they could not buy the equipment that make the farm functional, and yet they had been paying for a fully functional farm. This Bill would allow them to buy these assets.

Q: Mr Munzhelde was asked to comment on the rapid deployment of infrastructure guidelines whether they had been gazetted yet, and whether the Department had had a briefing from Telkom on their plans for laying the SAT 4 undersea cables.

A: Mr Munzhelde said they were still in the process of concluding the matter of developing the submarine cables. There has been a gazette for public comment. They were busy finalising and incorporating the comments received form the stakeholders and would be able to gazette soon. The department’s assessment showed that in countries with these cables, the cost of communication was lower. Guidelines were being set up to provide a single authority who would give permission for various private groups to lay further cables as was the practice in countries such as the USA and India.

Q: Dr Shongwe was asked to talk about the Department’s discussions with Telkom.

A: He said government was a shareholder in Telkom and they have been informed of Telkom’s intention to participate in SAT 4. However, there was a modified initiative being developed by telecommunications companies and the Department was waiting to hear what this modified configuration was.

Q: Mr Gwanya was asked to explain how the R74 billion increase would speed up delivery when clearly it was current legislation that was slowing things down.

A: Mr Gwanya replied that they need the enabling instruments to be running and that they had identified which of these needed amendments, such as the Expropriation Bill. When the costs were estimated it was based on the current 9.8% escalation of land prices. The R74 billion was based on what was required to deliver the outstanding 19.8 million ha by 2014. Other delays must be expected and taken into consideration if the amendments were not made and this was being presented to Cabinet and other relevant parties. There needed to be an enabling environment in order to meet the target.

Q: Mr Gwanya was asked if there were any statistics indicating the success of restored farms.

A: He replied that such an assessment had not been done yet. There had been a review of the Land Redistribution for Agricultural Development (LRAD) grants in order to see what the challenges were. These were in areas of implementation, commercialisation and skills shortages. The Comprehensive Agricultural Support Programme (CASP) programme suggested areas of support required for overcoming these challenges. New entrants need technical assistance, subsidies, farm assistance for disaster management, infrastructure support and access to marketing channels. The Department of Agriculture had decided to review the CASP programme in terms of its effectiveness in these areas.

Q: Mr Gwanya was asked how National Treasury reacted to the request for R74 billion.

A: He replied that Treasury was open to the increase and had provided such increases in the past. For example five years ago they had increased the budget for restitution.

Q: Mr Gwanya was asked whether R74 billion was a new figure and what the previous budget had been.

A: He replied that the figure was based on the Department’s recent experience and that this was the first time this calculation had been made and presented to Parliament. The longer the process was protracted, the higher the figure would be because of increasing land prices. This was the budget needed in order to make the target by 2014. If the budget was not increased, it would take until 2025 to reach the target.

Q: He was asked whether R74 billion was a new figure or whether it was additional to the current figure.

A: He replied that it was additional.

Q: Mr Gwanya was asked to clarify the figures related to the LRAD and Settlement and Production Land Acquisition Grant (SPLAG) grants in his report.

A: He explained that LRAD had been revised to a lower figure of R111 152 with an upper limit of R430 085, while SPLAG had been revised from R20 000 to R111 152.

The briefing was adjourned.

ECONOMIC CLUSTER MEDIA BRIEFING: IMBIZO MEDIA CENTRE

3 SEPTEMBER 2008

ECONOMIC,INVESTMENT AND EMPLOYMENT (EIE) CLUSTER MEDIA BRIEFING BY DG'S

As at 31 July 2008, the Department of Land Affairs redistributed 4,8 million hectares of land; this against the target of 24.6 million ha by 2014. We are therefore left with 19.8 million ha to deliver by 2014, thus we need to deliver about 3.3 million ha per year.

The Commission on Restitution of Land Rights has thus far settled 95% of the claims lodged and about 4900 are outstanding, complex rural claims in different phases of settlement.

The major challenge related to land acquisition for land reform is the escalating land prices caused by inflation, change in land use (e.g. game farms, golf estates, pure speculation, etc). We have bought agricultural land at an average cost of R4000 per ha and that average is increasing rapidly. The average sugar cane land costs about R55 000 per ha, macadamia about R60 000 per ha and vine yards about R 100 000 per ha. We will need an additional R74 billion over the next six years in order to meet the 2014 target of 30% of agricultural land.

We have addressed the issue of the capacity to deliver by creating 1220 additional posts (which structure has been approved by DPSA) and this will be implemented over a three year period. We have also improved the land acquisition instruments by reviewing the Land Reform and Agricultural Development (LRAD) grant from R20 000 to R111 152/R430 085 and the Settlement and Production Land Acquisition Grant (SPLAG). We have also implemented Land for Agriculture and Sustainable Settlements (LASS) at 20% of our land acquisition budget for commonages and housing.

The Department also implemented the Pro-Active Land Acquisition Strategy through which 169 818 hectares were required for land reform purposes.

There are currently 521 settled projects in the implementation phase of post settlement support for Restitution. In plus minus 46% of the projects agriculture plays a major role as the only land use activity and livestock and crops are the main agricultural activities. On approximately 53% of the projects there is a variety of agricultural activities.

The projects have resulted in 1699 permanent jobs created, 3047 temporary jobs created and 857 people who are currently benefiting in terms of skills transfer and 488 in terms of training. The projects range from Housing, Live stock and cropping.

Where claims have been successfully restituted through the restoration of land, RLCC's facilitate through inter alia project steering committees, commitment from other stake holders and actual involvement to ensure sustainable implementation. On more than 14% of the projects, other government departments are involved apart from the Commission, mainly Agriculture, Municipalities (either separately or combined) and Housing. The Commission and DLA is working with Department of Agriculture in terms of the Land and Agrarian Reform Programme which addresses land

delivery, increase black agricultural entrepreneurs; at least 10% of agribusiness must be black, Access to agricultural support services and increase agricultural production by 10 -15% and espouses the following principles:

·           Access to service delivery (synergies) between DLA, DoA and Agribusiness) and support

 

·           Comprehensive support (multi-sectoral, sustainable agricultural production)

 

·           Corporative governance

 

·           Decentralization of decision making and implementation

 

·           Utilization of Partnerships

 

On 29 July 2008 to 1 August 2008 we had a multi stakeholder Agri-Consultation in Polokwane where it was resolved, amongst others to:

·           Accelerate sustainable Land Reform.

 

·           Increase black entrepreneurs in the agribusiness.

 

·           Increase agricultural production.

 

·           Increase agricultural trade.

 

·           Provide universal access to support services to target groups.

 

We have also identified the Land and Agrarian Reform Programme (LARP) as the vehicle for fast tracking the implementation of a sustainable Land Reform Programme

The Department has also entered into Memoranda of Understanding with Women in Agricultural Rural Development and the National African Farmers Union on working together on land delivery. The MoU with the Youth in Agricultural Rural Development is in the finalisation phase.

In terms of legislation the Provision of Land and Assistance Amendment Bill we would like to ensure sustainable use of land, where we are able to buy not only land but also relevant movable property such as agricultural equipment, tractors, shares in related business (value add). The Bill is currently in Parliament.