Infrastructure Development Cluster Briefing chaired by Minister Sibusiso Ndebele, Department of Transport


17 Aug 2011

Mr Sibusiso Ndebele, Transport Minister and Ms Dipuo Peters, Energy Affairs Minister answered questions posed by the media after the Infrastructure Development Cluster's post Cabinet Lekgotla Media Briefing document was presented (see Appendix below for Media Briefing document).


[Note: Transcript of Questions & Answers provided by the Infrastructure Development Cluster]

Journalist: I wonder if you just give us a little bit more flavour on the Infrastructure Commission that was announced post-cabinet Lekgotla. What will the exact composition of that commission be? What will it scope of work be? And when will it be convening. Secondly if you could give us some insight into the PRASA procurement processes. We had the information sharing with potential investors early in the year and I think there was a sort of a deadline around August or September for other expressions of interests or even a more formal tender documentation. Can you give us an update on that?

Journalist: Just a few questions if you don’t mind. On the toll roads it was recently decided by Cabinet that the extension of the Gautrain would be relooked at more generally is government having a rethink about whether this is a good idea in the light of popular opposition. For Minister Peters with regards to PETROSA whether there’s any finality on the size of the proposed refinery and what the process is there and related to that the restructuring of the Central Energy Fund. Thank you.

Journalist: A clarification of the user pay principle and your comments surrounding that, what if anything is Government at various levels perhaps thinking of doing to get willingness by consumers to pay. Also a clarification and perhaps an elaboration when you talk about cable theft which you regard as sabotage. One of the criticisms of our current legislative framework and that includes the recently passed Second Hand Goods Bill was precisely that copper theft and the resale of copper cables to second hand dealers and scrap yards would actually not be covered by anything more serious than perhaps theft or vandalism. What is the thinking behind that and what if anything would you like to do about it because clearly early this year and last year the opportunity to introduce a tight legislative regime was missed? So how can you refer it to sabotage when indeed there’s no such thing on our statured books at the moment. Also talking about copper theft, the Gautrain in particular given a commitment to extensively role out infrastructure programmes and given the billions spent on the Gautrain we now have seen disruption of services twice this week due to copper theft. What if anything is being done about that and clearly going forward similar situations may arise with Government’s future infrastructure investments. Thank you.

Journalist: Also on President Zuma’s Infrastructure Commission do you have any idea of maybe the first one or two mega projects that this commission will be looking at. Secondly in the press release it says that Transnet has been able to increase its rail volumes by about 1.4% above baseline. Are you satisfied with this increase it seems quite low for something that we desperately need also in the light of the Transnet top brass getting R63million for the past year. Does the two figures justify one another? Thank you.

Minister Dipuo Peters: Thank you very much for the opportunity to be able to present the cluster report to the public through the media and also thanks for the facilitators of this presentation. The Infrastructure Commission that is driven by the Presidency is informed by what the President employed on us to do which is to accelerate service delivery and this commission in particular would be different from the Infrastructure Cluster in the sense that the Infrastructure Cluster would be looking broadly at mega projects like the Department of Energy, Department of Water, DPE, NPC, Transport and many other departments that are under the Infrastructure Cluster. The Commission in particular would focus on service delivery at local government level. This Commission would be chaired by the Presidency but coordinated through COGTA and amongst the departments that would be part of it would be Department of Water, Energy, Human Settlement, Transport and COGTA itself. This is intended to make it possible that we can accelerate service delivery at the level at which people live which is in the communities. One of the key deliverables under the transport area would be dealing with challenges of the street infrastructure you would know that most of our streets have got challenges of pot holes and these would be one of the things that we would be looking into. The issues related to energy would be predominantly around the distribution infrastructure as we speak you would know that we are building massive electricity generation infrastructure. We are putting in place transmission but delivery to the end user is a particular challenge and that is why we have a system called the Approach to Distribution Asset Management which is the system that we would be looking at, being able to audit the infrastructure at local government level, making it possible that as we interconnect our people we can be able to make sure that the infrastructure for distribution is also in a good shape. So these would be the issues, I don’t want to pre-empt of the first meeting of the President because he would be chairing that meeting to be able to identify the particular areas of focus or particular projects that would be identified. What we know is that there are more than 61 municipalities that have been identified for quick intervention and making sure that we can be able as a cluster or as this commission to intervene to make sure that people can have water, available on their taps, to have electricity at the end of the switch. Make it possible that services at municipal level are addressed but in particular this commission will be looking at issues of the skills that are necessary at municipal level and to make sure that service delivery can be accelerated. So the Infrastructure Cluster that is chaired by the Minister of Transport would continue in its format to look at the different mega infrastructure from the different departments.

The questions related to the refinery, I remember at the presentation of the budget speech we gave an indication that we are still finalising as the Department the proposals that come from the Central Energy Fund in relation to PETROSA muted project of Mthombo. What I did indicate at that particular time was the fact that we are still working on the details, you would know one of the issues that we have been engaging in is the issue of equity oil so as to make sure that when we finally put pen to paper on the refinery date for the launching we know exactly for the next 20 years the supplier of equity oil to the refinery would be available. So those things are still being worked on an at the appropriate moment we will give the public and the media information.

I’m unable to give you the response related to the CEF restructuring because as you know there is a strategic planning session in the next few weeks and after that particular meeting we will then be able to give you the full details about the process going forward about the restructuring of the Central Energy Fund.

Minister before you can take the issue of the user pay principle, I just want to amplify the statement all of us know that South Africa has got more than 90% penetration for communication in particular cellular phones and they don’t come for free. People buy cellphones, they pay for airtime but when it comes to water, electricity and transport people complain about the user pay principle knowing quite well that we need resources to be able to provide the infrastructure but also to maintain and operate this particular infrastructure. So I want to just give an indication before you can switch on your cellphone you must make sure it is charged, you charge it with electricity. You don’t want to pay for the electricity to charge your cellphone but you want to pay for the airtime so that you can call and do whatever that you want to do. So that is why we said it seems there’s a bit of a challenge here, people are prepared to pay for the comfort but not prepared to pay for actual service delivery that is going to make it possible that they improve their lives.

On the issue of cable theft, it is correct that as a cluster we have submitted to the JCPS Cluster the need to make cable. The copper cable theft including in our situation as energy, electricity theft a serious economic offence. The Minister has put it clearly that it is sabotage, be it social economic and political sabotage. Because it is important for us to realise that as energy, as transport and as communications, we do need this copper theft to make it possible that we can provide the necessary services to the people. So a person who steals copper, who steals the cables is a murderer, a thief, is everything and a saboteur. Because as you would know without telecommunications, without electricity the health services, education and all the necessary services can come to a halt. The typical example of what happened to the Gautrain and that indicates to you the magnitude of just even a kilometre or whatever length of cable that can be stolen, what it has done to the economy of the country. And we need to start calculating to the economy, the cost to the lives of people of South Africa if anybody steals this particular important resource. Because for service delivery it is very central that we have the system. And as we speak there is no technology that has been able to replace copper for transport network as well as for electricity, as well as for the provision of telecommunications. So I have written to the Minister of Justice but we are also including it in the Electricity Regulation Act to make it possible that it doesn’t become a petty theft issue that it is treated like today, If you steal copper cables it is just treated like petty theft, and that is what people get off Scott-free. And I think it is important that we start putting more emphasis, even as a society on this particular services. I just want to indicate that as an energy sector we have also been exploring the smart grids as well as the smart metering systems. And I just want to indicate that it was disappointing for us as the energy sector that the first pilot on a smart metering system in Soweto could create the type of violence that the people in Soweto subjected to the councillors in particular. In essence the people there were saying to us that allow us to continue to steal electricity because for once this was a particular very intelligent system that was also tamper proof and it meant it reduced the number of megawatts or kilowatt hours that we could lose. And I want to applaud the Johannesburg Metro for their campaign that they have in dealing with electricity and illegal connections because it will actually reduce the number of people that actually steal electricity. Because that is actually resulting in the type of electricity supply interruptions that we have been having in our communities because people create leakages in the system. I just wanted to make that particular appeal that the media must also help us to be advocates for public education about the impact of cable theft on social economic development.

Minister Sibusiso Ndebele: I think we have covered most of the questions that have come through. But just to perhaps zero in on some of the issues. As South Africa we have a constitution that is applauded throughout the world that constitution is set to be one of the best in the world. It is so not because of a particular genius of South Africans, it is because we are a latecomer into democracy. Being a latecomer we have an advantage of learning from the other people throughout, that is why we have a constitution of this particular way. Similarly freedom is freedom to vote and civil liberties but it is also freedom of movement. If you don’t have freedom of movement then you don’t have freedom at all, I know it when we you are in prison, you don’t have that. Now movement cost money, it cost a road, it cost an airport, it cost rail, and someone must pay for it. And just like we have learned in terms of our constitution how to emulate the best in the world, how has the world paid for infrastructure, How does the United States do it, how does the European Union do it, how does the People’s Republic of China that have been led by the Communist Party of China from the 1st of October 1949 to date, how do they do it, all of them different systems use toll roads, so it cuts across these ideologies. Can we have a new South African method and innovation that can still have your infrastructure and not pay in this particular manner of user pays? And if we were to do so particular with our commitment that we have, it is a strong commitment to reversing these skewed development that South Africa is. We developed the centres Johannesburg, Pretoria, Cape Town, Durban, that is where the centre of development in South Africa is, Bloemfontein and so forth, and to the complete neglect of the countryside. So up to now the City has been silent about the countryside and the countryside has been silent. Now the City and the countryside must speak, we must speak about even the development of our country. When we say as Minister Angie Motshekga says all children that are seven years old should not be found at home at this time, they should be at school. It should be accepted and assumed that they will walk and drive on a road all of them, not only here in Cape town, not only in Gugulethu but also in the countryside as well, there must be those rules.

You cannot therefore say the whole country must work and contribute from Lusikisiki to the most rural areas; all of us must contribute only to the Ben Schoeman Highway. Because if you say nationalise that R20 billion debt that is what is being asked almost daily in the media, Minister must nationalise the debt. The debt came about through not through the Minister of Transport previous or SANRAL, it came from below. It was an initiative an excellent initiative by the Gauteng Government and it has really taken our country to a higher level. But the question is how do you then pay for it and you cannot make that initiative and then ask somebody else in Scukune and Transkei to then pay for it. Because if you say nationalise you mean that lady that buys baby milk must contribute towards that, it is something that we need to really work out as  a country for ourselves. We have said we expressed last week that it is a bolted horse, it is done, we have found it already done 2009 and it is a good infrastructure, it is done it must be paid for. But there are others that came in as part of that in terms of Gauteng is four other roads, because they have not yet started. We want the wisdom to say how do we proceed because Cape Town has not started. We want the wisdom, how do we proceed. We don’t want to start and then in the middle of the thing finishing and saying I am not paying. Or the N2 connecting Kwazulu Natal and Eastern Cape, we have not started all those, we want the wisdom to say how do we proceed. South Africa has a whole must come to grips with the situation, you follow the American model, European model, Chinese model, all of them come to the same conclusion. And we must willingly come to that conclusion and not have a goat that has escaped and say it is because of that one. Let’s take a sober decision and do it. At this point now anyone wanting to be in the front page just say we don’t want a toll, ok tell us what you want and then we will proceed in that particular way.
Transnet sorry, yes PRASA is, we are putting in an amount of R30 billion in these three years for new rail rolling stock particularly the revamping of Metrorail in Johannesburg, Pretoria, Cape, Durban in particular also the Eastern Cape. That is again the commitment to ensure that as we talk about tolling and all these things that public transport is actually made a preferred mode of transport. Transnet…

Journalist: (speaking off the mic)

Minister Sibusiso Ndebele: There is an operational matter perhaps would be best done by the Minister of DPE.

Journalist: I just wanted to get more clarity again on this Infrastructure Commission because what Minister Peters just outlined is quite different from what is both in the statement that we have in our hand and what Minister Collins Chabane outlined a few weeks ago after the Lekgotla. That the Infrastructure Commission will be looking at as it says in this press statement monitoring large projects and not necessarily the municipal level service delivery projects. I just wanted to get clarity on what the scope of that Commission actually is? Is it the service 5 delivery at the municipal level as outlined by Minister Peters or is the press statement that we received accurate and what Collins Chabane and Ebrahim Patel outlined a few weeks ago accurate?

Journalist: Minister Ndebele I wanted to get back to the point you are making about the importance of recognising the need for users to pay the services they are getting. I am worried about what appears to be policy incoherence. On the one hand you are emphasising wage moderation and on the other hand you are saying that the public must be willing to fork for skyrocketing electricity, energy, like road costs and stuff. Has there been any discussion at some level about what impact this kind of messages are actually having. Because on the one hand we are expected to accept that things are going to cost more on the other hand we are supposed to accept that we must accept inflation linked wages and stuff. The second question relates to the Gautrain. Is there any indication as to when the train will be fully functional in Gauteng because at the moment it only ends in Rosebank?

Journalist: Just with regard to the cable theft, do we know how much this cost the economy annually?

Journalist: Minister Ndebele just back on toll roads situation again. Do you think there would be less resistance from the public if they were not confronted on a regular basis with multibillion rand waste and corruption in Government? Secondly the multibillion rand taxi industry has been exempted from this. What message do you think that sends to other road users that the politically powerful and mega industry would surely can afford to contribute towards these costs is exempted from paying anything. Then if I may just take a quick flame throw to the Minister’s straw man who buys airtime but not electricity. Understandably airtime is a private commodity bought from a private company where as electricity is part of an infrastructure that tax payers surely can expect should be funded from the tax revenue base. I think a lot of the resistance comes in when costs goes in over and above what people are already paying tax for these services. Your comments on that please.

Minister Dipuo Peters: If I have to go to the first question. I think the statement as captured here is correct. And I just want to indicate that there is even amplification of the statement by this statement which says the intervention will systematically improve the capacity if State agencies to deliver infrastructure and help connect of all spheres4 of Government. In particular we believe that this has a bearing and I just want to make an indication that at the Lekgotla we made presentations about roads, water, human settlement as well as electricity and out of that was born this particular initiative. Because whatever we do at a national level has a bearing on local Government and the Local Government sphere needs to be supported. That is why you would find that the coordination of this work will be done through COGTA. So I just wanted to clarify the statement that I made, I believe it’s the way this Commission is going to be working.
The impact of those mega projects on service delivery cannot be over emphasised. The issue of wage moderation-user-pay model and I think the issues of wage moderation. The Minister of Labour as well as the Governance and Administration Cluster is actually dealing with those particular issues with the support of the Minister of Economic Development. The impact of the Wage Bill and on be it the economy or be it on the individual workers themselves. The issue of the user-pay-model I just want to indicate that it is in place as we speak. The reality is if you take the energy sector in particular, we have just taken a decision to accelerate what the President tends the need for us to create space for private sector participation. We have created space for 42% renewable energy in the Integrated Resource Plan, and all this will be delivered by a public private type of arrangement. We are calling on the private sector to contribute to the power generation. And in any case for us today to say that we need to be alive to the fact that the communications is private sector driven we should realise that equally as Government we have said that we are not going to give the total responsibility for power generation into the hands of private sector. Because we have a responsibility to make sure that we create infrastructure that would necessarily support economic growth and that is what we are doing.

So we are saying that as we speak like the Minister of Transport indicated the user-pay principle is in place. We have said that there is a need for us to unbundle and discuss as a total Government the issue of user-pay principle. So as to be able to address the fact that the tax payers is paying for it but at the same time when you use it you have to pay for it. But also the fact that as we speak we need to increase the infrastructure that provides the necessary services to the people. So the reality is we are talking about a model that is in place as we speak for provision of infrastructure. That is why we said it is important that we realise that where it is private sector driven or whatever for the health services as we speak. You would know that quite a number of people are prepared to pay the exorbitant amounts that are charged by the private sector but equally so when they go and run out of medical aid benefits they go to the public sector and are prepared to queue. But when they have the resources they say they are not prepared to queue. So it should not be a situation where in South Africa we then start saying that because you have money go private and then when you don’t have money they Government must provide.
Minister Ndebele has made a very explicit indication of how you arrive at the end decision on what needs to be paid for. And I think it is important that maybe Minister as an Infrastructure Cluster at another time we need to have a particular public discussion about the cost of power generation, the cost of getting water to the tap, the cost of getting the road in the condition that it needs to be at all time to the public can start understanding why they need to be paying a certain particular fee for the use of the particular services. So as to make sure that we can continue operation and maintenance because that is the area where we have been found to be really challenged on. Especially if you look at the electricity sector we are challenged at operation and maintenance.

Minister Sibusiso Ndebele: Perhaps let’s just deal with this toll issue. The toll that is an issue at this particular time is Johannesburg, Pretoria, Ben Schoeman. It is done, it is R20 billion. It has been loaned and it is time now for repayment. We cannot as a Government do anything about that because that loan was secured at the time it was secured, it is done. It has paid for quite a good infrastructure that is it. The proposed tolls then go to the four other freeways in Gauteng that are part of the Gauteng Freeway Highway Improvement Scheme, as we say freeways are not free. They are not yet done and therefore you can do something about it and not move, so no one will pay any toll. Because when there is an outcry to say no we don’t want tolls then it means the road can’t be done. There is a proposed toll for the N2 coming from Kwazulu Natal right up to East London connect to St Johns right up to East London. That is not yet done. We have major consultations that we will be making, indeed all stakeholders including labour, business and everyone we are having that summit end of September. Again where do we go now, that road is necessary to connect Eastern Cape and Kwazulu Natal, it will make it very easy but how do we pay for it. So there is no decision on how to proceed, there is a decision that the desirable and should be done but how do we pay for it, we need to do that. Then of course there is here in the Western Cape, Cape Town, Winelands and so forth it is not done, so we need to work out do we proceed.

So at this time really in terms of the controversial toll it is the one that is a done deal, it is a horse that is bolted and you can’t roll it away, there isn’t any other thing but to pay. You then say that even in paying we have said that we are committed as a Government that there shall be safe, efficient, affordable transport. Now who carries the majority of our people, 65% of them, is the taxi industry and then some bus, then some 25/26% train, then there is this 1% one car. So Cabinet has said you travel by train, you are not affected by toll, you travel by taxi in this Ben Schoeman one you are not going to be affected by toll. You travel by commuter bus you are not going to be affected by toll at all, you just get in there, there is no operator that is going to pass the cost to you, zero, nothing. So that toll is just a good road that you really find for free. Then the 1% one car private users then pay but even with then those who use that road regularly pay 40c per kilometre but if you use it regularly you get 31% discount. So Cabinet has really moved quite a very long way on this matter. If you are paying from 66c to 40c but you are a regular then you are entitled to 31% more discount, that is quite a lot of movement. So that is what has happened as far as that road is concerned.

Our issue therefore really is where to now, how do we proceed with the others. The others it is really no use saying we don’t want a toll in Cape Town or we don’t want a toll further in Gauteng and so forth, there is no toll. Let’s discuss how but we do need a good infrastructure, how shall we pay for it and once we have agreed on that we will move. So for the future we owe nobody and nobody has been offended except the congestion then lets discuss how that shall be done. We have listened and we say having listened lets now come with solutions. And no one is coming with a pre-ordained answer, lets come with the solutions.

Then on the question on of the taxi. I think let’s just also understand safe affordable, efficient transport who provides it in the majority is the taxi industry and the bus industry. What do we do with the train, Government pays they entire cost of moving a train completely and the user pays quite a small fair actually not commensurate with the cost of running a train. What do you do with the bus, the bus is operated by private business people but because they are providing this safe, affordable, efficient transport to move our people we subsidise them hugely. So that once they are not subsidised they will just park them and not move. But what happens to the taxi industry, nobody is subsidising the taxi industry it moves 65% of the population, it is not subsidised. Now it is asking for too much really then to say on that Ben Schoeman Highway they should move for free and anytime when you move there you will find about nine or seven or three and a half of them. It is not the route that they use most but in any case to exempt them is also part of contributing to the safe, affordable and efficient transport particular to an entity that is not subsidised by Government whereas similar entities that do similar jobs are subsidised.

Minister Dipuo Peters: On the similar principle I just want to make an example about the electrification value chain that in a situation of electricity Government guarantees the loan to Eskom but, I mean gets the loan from the private or from the funders World Bank or African Development Bank and others to build the power plant and the transmission lines. And equally so municipalities and Eskom must put in place the infrastructure to provide for the distribution and reticulation that will bring the power to you. At the same time you must remember on a daily basis, on an hourly basis the power plants must run on coal, gas, nuclear, oil or whatever type of primary energy. And that primary energy source as we speak is procured from the private sector and the private sector does not give it as the Minister has indicated for free. So I just wanted to amplify that particular aspect with the electricity value chain.

Neo: Ministers there was a question particular to you Minister Ndebele when will the Gautrain be fully operational because at the moment it goes up to Rosebank. Then there was another question about cable theft, do we have a sense of how much the cable theft is going to cost this economy.

Minister Dipuo Peters: Opi can answer that one from the electricity side on the cable theft, how much.

Unknown speaker (1): The plan is that by November the entire Gautrain operation will be up and running including the Park Station to Sandton. Basically it is the end of November.

Unknown speaker (2): Last year the direct cost was less than a R100 million but the indirect cost is a lot more substantial because of the disruption to the economy and we don’t have direct numbers in relation to that. Just the cost of the cable that has to be replaced the amount of work that has to be done to fix the problem and so on; last year was about ninety something million rand.

Your argument is completely valid in terms of users must pay especially in the light of infrastructure development. But do you think there perhaps wouldn’t be such a backlash and a sour taste in a lot of citizens mouths when Eskom executives walk away with a R3.5million bonus when there is still so much to finance and to be done. Thank you.

Journalist: To both the Ministers you spoke very passionately about the user pay principle. I would like to know is this something you would try and campaign around because it’s an issue that if one looks at rates and services and so on in municipalities those are also not paid. How are you going to change this and just on what you have actually done with the Ben Schoeman Highway is that you say there is a user payer principle but the people who are going to use the road most frequently are going to pay the least. You have given discounts to those who use the road the most, you have given discount to those using public transport so in fact the users who use the road the least are going to pay the most. So I want to know how this squares with this passionate commitment you’ve got to the user payer principle. Secondly at your briefing in February you told us about something you were going to do to fix pot holes that you were going to set up this unit that was going around the country fixing up pot holes. Can you tell us how many pot holes you have fixed? Thanks.

Journalist: Minister can you just tell us or maybe I need clarity on the issue. You said there is a major stakeholder consultation that will take place? Does that mean that there is a possibility that the proposed toll roads will not go ahead?

Journalist: Ministers have you applied your minds or give any consideration to concerns raised by companies who use South African ports. The shipping costs are now among the highest in the world and a lot of companies are concerned that they are not able to compete or remain viable and this is obviously a problem considering the drive to attract investors and grow the economy and create jobs. Can you just comment on that and especially in light of Transnet’s application for an 18% increase on those shipping costs?

Journalist: Minister Peters just on the issue of the renewable energy IPP tender that is out could you give us some insight into when you think the actual tender process will be completed in terms of the first renewable energy company actually getting their licenses and starting to build. When do you expect shovels to be in the ground for those first renewable energy projects? For Minister Ndebele on the toll implementation date for Gauteng not the other tolls that are not implemented yet but for Gauteng. What is your envisaged timeframe for that implementation date?

Minister Dipuo Peters: On the renewable energy procurement process I would indicate that on the 14th of September there will be an investors or bidders conference which would then give the necessary details to all the bidders. I want to indicate that procurement process will run up until towards the end of October where the Department together with the entire team that is working on this particular issue would be able to give the process going forward. I don’t want to get too much involved in procurement issues especially as a Minister up until the decision is finalised and we will then be able to deal with that at a later stage. I just want to say I subscribe to that idea of a public campaign and public education campaign about this user pay principle and to motivate our people to pay for services. You would remember in the early years of our democracy we had a campaign called Masakhane which was actually a campaign to encourage people to pay for services. I think we need to relook and dust off that particular type of campaign but like I said earlier on as the Infrastructure Cluster we really need to start engaging with the public for them to understand what it actually means for the road to be finally laid out for the transport infrastructure to be in place as a whole be it airports and all that. In particular for the other services like water and electricity which we all need on a daily basis so that public education programme is very important for us. As we speak I am very worried about the fact that our people don’t seem to understand the need for them to conserve the little resources they have. South Africa is water restricted and water scares country if we don’t have water we won’t have electricity because the electricity water nexus is interlinked. But without electricity you can’t also have water because you can’t purify the water, you can’t pump the water so it is important that we start educating our people. It is so important for our people to know that you should not allow your taps to run continuously but in particular with electricity it is so painful to see people using those battery charges clamps to connect electricity and use the supermarket trolley as a heater because what they do they clamp these things and then the electricity just runs through this and it becomes a bonfire during the day for anybody. People allow their heaters in winter to be running continuously that is why we have indicated we would be very soon almost like re-launching our public education programme on energy efficiency. You would remember that on the 18th of March, Eskom launched a 49m which is like the 49 million South Africans we are all interconnected, let us remember that if you don’t switch off those who don’t have actually their wish of having electricity getting more and more diminished because you who have electricity is wasting. As we speak we have got a role out of solar water geysers and I’m happy that DPE and Economic Development and Energy are working on a model to increase the uptake because we’ve got funding challenges that we are busy addressing. People who have now got solar water heating can give you an indication of the savings that they have realised. We are now talking about the need for us to start talking about heat pumps for pools so that you can then change your pool from using electricity to using the natural resources but all those technologies are still very expensive and the cost of this energy efficiency technology as well as renewable energy using technologies is one of those that we are addressing.

We are also talking about the need for municipalities to start using solar for street lights as well as for traffic lights and for billboards so that the electricity that they save can be deployed elsewhere in the industries that are supporting investments in that way we can then start saying we’ve got excess. But for now we’ve got challenges because there’s people in the rural areas in Eastern Cape, Kwazulu-Natal as well as Limpopo who don’t have access and the more you waste you must know that the more their chances of having access gets diminished because you are actually delaying the role out for those particular communities. Our people in the informal settlements the numbers of these shacks but we are also addressing the need for proper planning that is why one of the issues of the Infrastructure Commission driven by the President will also look at the new ways of building communities that is why Human Settlement is part of that Infrastructure Commission. So it is important for us to realise that we are here because we want to make it possible that people have got access but access can only happen if you take care of what you have and make it possible that you can save the little that you have but also pay for this particular services. So I am appealing through the media now to the public to start saving we know that when it gets cold people would want to switch on heaters in every room but it is wasteful because you are heating space that is not being used by anybody and that is why we say let us use gas for space heating and cooking and it makes it possible for us to engage about the availability and the cost of gas at another stage but we are making a special appeal. Let us use our infrastructure properly so that it can be able to become sustainable. Thank you.

Minister Sibusiso Ndebele: On Tuesday the 23rd we will be meeting here in Cape Town all the nine provinces and MEC’s, no one is going to be addressing them each one is going to say you received the money in the case of Eastern Cape you received just over R1billion in the case of KwaZulu-Natal you received over R1.1billion in the case of Mpumalanga and each one of them have got specific amounts that they received out of the R6.4 billion, what have you done that report comes to myself it then moves on to treasury and the Presidency because you can’t have straw roads and ghost roads that are build. The roads are very necessary people don’t have roads out there and if you put in R6.4 billion it actually does make a difference. By 2014 you have put R22 billion that difference must be seen it is not small money. Yes we could do with more but the money that we have is not small money and we need to see results. How many people have been employed in building those roads, where are they, let’s have photographs of them, let’s go there so that you don’t do like of old where a school would be build completely, staffed with teachers and so on and in fact there’s no school but there is personnel and everything else, on this one we can’t afford that. So all MEC’s would be reporting each one on how much, no speeches it’s just this road, this road and the remaining period this is what is going to happen and I’m not going back to Treasury certainly not back to the President to say you gave us R22 billion to 2014 we are sorry we are not able to spent it. Yes they don’t have roads but we are not able to spent, it can’t particularly when people don’t have jobs so that is what’s going to happen. So S’hamba Sonke is moving and the roads are being build there is uneven development in provinces, we will jack up those that are slowing down but there is progress.

On the question of the tolls, I think let’s agree at the risk of repeating myself. The horse is bolted as far as Ben Schoeman it is done by 2009 it was done already we are into 2010. The money was borrowed it has to be repaid in a particular manner but coming to differential treatment of different sectors. I think we’ve got to look at Ben Schoeman Toll but also look at the broad picture the historical debt that we have. If you say buses subsidy, huge subsidy if you just take KwaNdebele alone in Mpumalanga to Pretoria some 500 buses move every morning the subsidy is about R350 million, subsidy for those buses but more people are on the taxies going to Pretoria and Johannesburg from that same area they are not subsidised. So that is the issue it is not a political issue it’s a matter of equity what do you do, historically they were an illegitimate child of the transport system in South Africa, now they are legitimate but how do you then ensure that they are subsidised or as they carry these 66% of the population we honour this safe, efficient and affordable transport. Then we do it in these various ways one of them in terms of Gauteng Improvement is that we exempt them by exempting them we are exempting working people so that, that money is not passed on to the passenger and that is how it has happened. But it is a historical thing that we need to balance and in future when our transport is properly balanced and in Gauteng it is beginning to be through BRT the taxi industry for instance is a huge owner and shareholder in the BRT itself so that they migrate from just taxi to bus and it will happen in Cape Town and Durban and so forth. So in that way all of us start from the same starting line that’s how it is.

Neo: Thank you Minister there was a question about the ports and the rising shipping costs.

Unidentified speaker: Task team member: I think two ways one is as you know we have the Ports Regulator which is responsible for tariff determination in our ports and there are always every year dealing with this matter because Transnet is applying to the Ports Regulator for additional tariffs. They are always balancing the two issues which you are raising. On the one hand the need for avoiding increasing the cost of inward and outward shipping but on the other hand the need for us to have these massive investments in our ports the upgrades and so on. So the issue has always been there but I think the Ports Regulator has been able to manage this thing because they also engage the shipping companies on an annual basis when Transnet applies to them for tariff increases. If you look at for example last year Transnet wanted 12% and ultimately the Ports Regulator agreed on 4% precisely because they are trying to manage this. So it is an ongoing process it is a global challenge how do you determine tariffs and so on. The second one is that we are having this steering committee in Durban because as you know the Durban port is a major port in South Africa and Africa as a whole and one of the things we are trying to address is to see how we can reduce the cost of doing business in that corridor because part of the problem is that the costs are not necessarily in the port but even the entire corridor the rail the connections, and terminals and Johannesburg and so on. So we are looking at how we are going to deal with that and we are at a stage now where we have indentified key interventions we need to make throughout that corridor. So essentially that is basically how we are dealing with these challenges. Yes the shipping companies are speaking to us also saying that the ports in South Africa is expensive it is debatable as to whether we are the most expensive, these things are debatable. I think we have a regulatory framework which manages these kinds of things. The second question was the implementation date for the toll in our discussions with SANRAL they are saying they will be ready to be up and running in the next five months.

Program director: There was one more question on the pot holes?

Neo: The Minister answered that question when he talked about the fund that next week on the 23rd of August you are going to have a yes, the Minister dealt with that question.

Minister Sibusiso Ndebele: There will be reporting on progress it is called S’hamba Sonke that programme and it is ongoing and we want progress on Tuesday from each province on how far it has gone.



Statement on Infrastructure Development Cluster by IDC Chairperson and Transport Minister Sibusiso Ndebele

18 August 2011
A very good morning to you all, and welcome to this media briefing on the Infrastructure Development Cluster (IDC).
The work of the IDC emanates from Outcome 6: An Efficient, Competitive and Responsive Economic Infrastructure Network.
The mid-year Cabinet Lekgotla from 26-28 July 2011 focused on two priorities – service delivery and job creation. On service delivery, it was emphasized that the extension of water, sanitation, electricity, roads and other basic needs were urgent. Lekgotla further emphasized that whatever blockages existed to delivery must be attended to without delay by all spheres of government.

Infrastructure Commission
Given the centrality of infrastructure development, Cabinet resolved to elevate the management of this priority to the Presidency by establishing an Infrastructure Commission to be chaired by the President, supported by national, provincial and local government. The Infrastructure Commission will ensure systematic selection, planning and monitoring of large projects. This intervention will systematically improve the capacity of state agencies to deliver infrastructure and help connect the work of all spheres of government. The Job Creation Commission is chaired by the Deputy President.
Ensuring reliable generation, distribution and transmission of energy
A total of 11 176 solar home systems have been installed from March to April 2011. Municipalities will only start connections later this year, as their current financial year has just started.
The Inclining Block Tariffs (IBT), which provides for preferential tariffs for the indigent, has been incorporated into the NERSA tariff determination for 2010/12, and consultations are underway.
The Department of Public Enterprises (DPE) will be expanding its Build Programme monitoring approaches, not only to ensure that projects are on schedule and budget, but also to conduct forecasts to anticipate risks and ensure mitigation measures are implemented in advance. The DPE and national Treasury have put together a joint team to work with Eskom.
The Integrated Resource Plan was approved by Cabinet in March 2011. Various aspects of the Plan are being implemented (including co-generation as well as the renewable energy procurement programme). Other aspects such as nuclear will be presented to Cabinet for consideration in the coming months.
Five contracts signed with Independent Power Producers (IPPs), adding 373MW of electricity to the national grid, as part of the initiative to supplement Eskom’s electricity generation capacity.
Following the decision on the Electricity Distribution Industry, a process will be set in motion to develop a funding model for distribution infrastructure in collaboration with municipalities, NERSA, national Treasury and development financial institutions.

The maintenance and strategic expansion of the road and rail network, and the operational efficiency, capacity and competitiveness of sea ports
The Department of Transport (DoT) and national Treasury are engaging on a Rural Public Transport Grant, to facilitate rural transport infrastructure and operations improvements into the future. Such a grant should be a long-term commitment to the Public Transport Strategy and Rural Transport Strategy.
With regard to the improvement of strategic roads and implementation of the Road Infrastructure Strategic Framework of South Africa (RISFSA), national Treasury and DoT have rolled out the Provincial Road Maintenance Grant (PRMG) to the value of more than R22-bn as of 1 April 2011 over the MTEF, through the S’hamba Sonke Road Maintenance Programme. Of the R6,4-bn allocated for this financial year, 66 000 job opportunities are expected to be created.
Work is continuing with provinces and municipalities to reclassify their road networks, coordinated by the Roads Coordinating Body. A draft policy framework for the Road Asset Management System is also being developed with the assistance of the Development Bank of South Africa.
Phase A1 of the Gauteng Freeway Improvement Project (GFIP): Cabinet approved reduced toll tariffs on 10 August 2011 with qualifying commuter taxis and commuter buses being exempted. The user-pay principle is accepted throughout the world, but the only area people are willingly prepared to pay is in the telecommunications sector. In the areas of electricity, water and transport which improve their lives, such willingness is lacking.
After years of under-spending, Government is now making steady progress towards ensuring that rail is the backbone of South Africa’s public transport system.
The next phase of the Gautrain from Johannesburg to Tshwane opened for commercial service on 2 August 2011. Since the commencement of operations of the airport link in June 2010, approximately three million passengers have used the Gautrain on this link.
Yesterday (17 August), eight people were arrested while stealing copper cable from the ERPM mine in Boksburg. We are in discussions with the Departments of Police and Justice to intensify the fight against cable theft, which is sabotage. This market must be closed. This also affects other Departments including Energy and Water.
As of 1 April 2011, Government is spending R30.2-bn over the next three years for rail upgrades across the country, with R19.5-bn earmarked for capital spending to upgrade existing infrastructure, signaling systems and rolling stock.

The Passenger Rail Agency of South Africa (PRASA) is embarking on a bold programme to invest in new rail rolling stock, worth an estimated R100-bn over a period of 18 years, for Metrorail. This will significantly improve the country's commuter rail transport.
EThekwini is about to complete its full IRPTN operational plan, which includes both a road and rail component. Rustenburg has finalized operational planning, and officially launched the Rustenburg Rapid Transport Project on 21 July. Both Tshwane and Polokwane are reviewing their operational plans.
Increasing the Market Share of Total Freight to Rail to an annualized 250mt from the current 177mt: there is a 1.43% increase in rail volumes compared to baseline. The Transnet programmatic procurement has been completed, and an estimated 80-120 locomotives will be procured over the next 20 years.
Introduction of private operators in branch lines: three pilot branch lines have been identified (Belmont-Douglas, Nkwalini-Empangeni and Bethlehem-Kroonstad). The process to have three operators by the end of 2011/12 is on track.
The Transnet Build Programme: the widening and deepening of Durban harbour entrance has been completed. Four (4) new ships have been delivered to shore cranes at Cape Town Container Terminal, and five (5) fully functional berths are now operational at Ngqura. Overall, Transnet has spent 92% of the budget allocated to the Capex programme.
Improvement of productivity at the Durban Container Terminal: 26 crane moves per hour have been recorded and plans to reach the target of 35 in 2015 are on track.
Two major border posts (land ports of entry) at Vioolsdrif (Namibia) and the Golela Border Post (Swaziland) have been upgraded, and currently operational on a 24-hour basis, facilitating commerce and passenger mobility in the SADC region.

Ensuring maintenance and supply of water
New Water Augmentation schemes: De Hoop Dam, Vaal River Eastern Sub-System Augmentation, Mooi-Mgeni Transfer Scheme, Komati Water Scheme Augmentation, Mokolo and Crocodile River (West), raising of Hazelmere Dam and Clan William Dam are on track.
Development of 60 New Regional Bulk Water Infrastructure systems: four Water Treatment Works, four water supply schemes and three waste water treatment works have been completed. The rest of the projects are progressing as planned.
Maintenance of existing water resources infrastructure: rehabilitation of nine national dams and two conveyance projects are complete.
Removal of backlogs in the issuing of water licences: 2 506 water licences have been processed and concluded. The Department of Water Affairs (DWA) is in the process of developing an on-line system to fast track the process. Most delays are caused by insufficient information from clients, which make it difficult to finalize applications on time.
Revision of the Water pricing strategy: expected to proceed as per the time frames of the project.
The signing of the second phase of the Lesotho Highlands Water Project will ensure continued and sustained water supply to the country. This will ensure development of the economy and supply to our people. Included will be the development of infrastructure and a hydro-electric power project to benefit the people of both countries.

Information and Communication Technology
Digital Terrestrial Television rollout: 60% coverage has been achieved with digital video broadcasting (DVBT) standard. For the new standard of DVBT-2 (version 2), which was adopted by Cabinet in December 2010, the plan is to upgrade and rollout 75% coverage by 2012.
Broadband penetration: consultation process on the Broadband Implementation Plan is currently being embarked upon among the Broadband Intergovernmental Implementation Committee. The Broadband Initiatives Project Register has been initiated, and the broadband penetration coverage and usage audit is being fast tracked. The site surveys in three districts in KwaZulu-Natal have been completed.
Implementation of e-connectivity for schools: MoUs and User Requirement Specifications have been completed. The first phase of connecting the 125 Dinaledi schools and District schools (1 525 schools) have commenced.
The Local Loop Unbundling discussion document has been published by the Independent Communication Authority of South Africa (ICASA) for public submissions.

Nikelwa Tengimfene
082 574 5495
Issued by Government Communications (GCIS)


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