Infrastructure Development Cluster Briefing

[Note: Transcript of the media briefing was provided by the Infrastructure Development Cluster]

Remarks by Minister Richard Baloyi

Thank you very much Chair and thanks to the media houses represented here. Just on two things, one is when you look at the issue around the Expanded Public Works Programme the Government took a decision to address the question of providing some permanence. So that when you talk about such interventions to then say instead of having to engage people at employment opportunities for a project that comes to an end. Part two of the EPWP also added the issue around the Community Works Programme which is the programme which we are driving as Government through COGTA. And of cause we have created over 90 000 opportunities. I am sure ladies and gentlemen you heard when the Minister of Finance tabled the Budget that the target of moving above 250 opportunities by the year 2014 with an opportunity of growth, that is what he actually stressed. Because this is one area that we then say it is so critical that we need to address. The other point is in as far as municipal infrastructure. We have established an agent called MISA; actually we are at the final stages of doing that. To make sure that infrastructure development at municipality level when it comes to making sure that the continued provision of service is made possible comes with the maintenance. When you look at municipal infrastructure you then say take for instance when it comes to issues around electricity supply. You then say much as the bulk infrastructure we will talk about your distribution lines, we talk about your transmission lines. Right at a community level your articulation infrastructure, the issues of then saying for instance in some of these areas where municipalities are operating you find this municipality infrastructure having aged, you need to look at that. So MISA comes in to make sure that we deal with those issues. But also rollout because ours is not only to sustain what we have but it is also to field on what we don’t have. So that through infrastructure we will be able to reach out to all areas to provide services. Thank you very much.

Journalist: I would like to ask Minister Peters, the R300 billion allocation or provision in the Budget for nuclear, how secure is that number or is it a bit of a thumb suck. And what is the timeframe for rolling out that process?

Journalist: Minister Ndebele the provincial and national roads backlog, what is that standing at the moment in terms of rands. And what ideas and provisions are you making for funding that giving that toll roads have become as controversial as they have. And then secondly to Minister Peters on the Eskom price issue, at the moment I mean Eskom has worked out its tariff increases based on a certain amount of cost recovery for its infrastructure build. Are you saying that Government the fiscus will be prepared to recapitalise Eskom to make sure that it didn’t have to recover as much as it does from tariffs.

Journalist: Minister Peters my question is also to you, it is just a follow-up on the nuclear as well. When do you expect the international tender to be opened, submitted? Some people have suggested as early as April this year that is the EDF in Paris. And also could you tell me what the specifications are, I know that there is a Presidential Task Team looking at nuclear but what are the initial indications of the specifications of the tender. For example 1000 megawatts at R50 billion or something like that please.

Journalist: I wondered Minister if you could just clear up what to me seems a bit some confusing statistics between what you said an and the statement. You spoke of the Infrastructure Build Programme creating more than half a million jobs. Our statement says between 50 000 and 100 000 so which is it. Then also our statement and what you read out talks about infrastructure expenditure in the next three years of R3.2 trillion, on 43 projects page 1 talks about R845 million over the next three years. I just think we need some clarity about that.

Minister Dipuo Peters: Thank you Minister Ndebele and colleagues in Cape Town for the opportunity to respond to the questions. And I would want to apologise because the reason I am late was because of some of the questions that you are raising here in particular question two. If I have to start with that one related to the issues of the cost recovery model for the Eskom build. I just want to indicate that Eskom is still engaging with its shareholder Department which is the Department of Public Enterprises. Whereafter they would then be submitting their proposal to NERSA. And I would believe we all know that after the proposal has been presented to NERSA the National Energy Regulator of South Africa then NERSA would make the necessary determination and make the particular announcement. And after that I would believe that as Government we will then be able to give an indication on exactly how Eskom’s Build programme costs will be recovered. I would appeal for a little bit of patience on the part of our media so as to make it possible that we finalise the technical work and then be able to make the necessary announcements after NERSA’ determination. So you would know that once the application is with the regulator they would then have to go their own particular consultative route and then inform us after they have been able to engage the necessary stakeholders.

In relation to the two questions about the Nuclear Build. I just want to indicate that we really appreciate the indicated amounts that the Minister of Finance has made. But I would once more indicate that I am record as having indicated that there is a technical committee that is advising the Nuclear Energy Executive Coordinating Committee that is chaired by the Deputy President. Where after when all the technical work has been done and the necessary investigations been done we will then convene this particular platform. And after that we will then be able to answer the question of Wendall related to the type of tender and the specifications. I don’t what to prehend the work of the Nuclear Energy Executive Coordinating Committee. We believe that it also calls for us to allow for a little bit of more time. I think the amount of money that has been allocated as an indication for the Nuclear Build, it is not thumb suck, and we don’t actually say that is the end amount. But we believe that it is the beginning. You would know that we need a lot of preparatory work and planning work that needs to go into even before the work or the decision is pronounce. I just want to say this is one programme that the media will definitely be kept informed on.

Chairperson Minister Sibusiso Ndebele: Part of the intervention on infrastructure particularly in the road infrastructure is to reverse the uneven development that was artificially created. Sometimes it develops that way in other countries as well where all roads lead to Rome, the centre becomes overarching on everything, and everything else must serve the centre. And therefore you will find your road network being best in a particular provinces developed provinces around Johannesburg, Pretoria, around Cape Town, around Durban. As you go further to other provinces you will find roads even national roads become quite bad. So that your road infrastructure therefore the backlog is estimate that this time at R136 billion. I am sure you would have realised that contrary to what we was sort of believe before that once you declare road national the standard also can more or less be (unclear). But if you are moving from Umtata to East London you see how poor that road was and of cause it is under redevelopment now, the N2. If you are moving to the North West it is a similar thing just on the road network which is supposed to be of a higher standard. So the backlog is estimated at just over half a million kilometres. If our aim is to ensure that every school, every community centre, every hospital and clinic is reachable which is not the case now. There are places where which have got no roads at all and through the programme therefore of Isamba Sesonke where we said we are spending R6.4 billion in this current year, R7.2 in the  financial year starting in April and 8.4 all in all amounting to 22 billion by the end of this term of office. It is supposed to then meet this demand and actually bring up the rural provinces, rural areas up to speed both in terms of the maintenance of roads which will be full of potholes, which will be impassable even in good weather, and to create new roads that are going to make those people feel also free. That this one person, one vote is also one person one vote one value. Not a vote that gives you more if you are in Cape Town or Johannesburg and give you less if you are in Transkei. So that is what the R22 billion Infrastructure Build on rural roads alone is supposed to meet that demand. Of cause it will continue to R169 billion in the years to come.

Journalist: (speaking off the mic)

Chairperson Minister Sibusiso Ndebele: The funding is part of the Infrastructure Summit that the President is convening. Once we address the issue of how do you fund public infrastructure, road infrastructure, your dams and so forth, how do you fund this. The minister of Finance emphasised that we will use all forms of funding including emphatically the user pay principal. So you have the user pay principal, you have the fiscus and hopefully you begin to have the private sector coming in for instance in the case of the coal, mining. We then say the private sector must come in there because you have roads that are dedicated to coal homage. It can’t be expected that only the fiscus pays for that. So it is multifaceted funding from various sources. But as South Africans we do need to have this dialogue, how do we pay for this because even when the issues come from the people below afterwards it is thrown to the national fiscus to pay, you mean the whole country must then pay for that. And when you pay for that you make choices, you make a choice to fund a road in a developed city, abandoned completely a rural area that doesn’t have a road at all. So we need to have that balance so that we reverse the historical uneven development in our country.

Journalist: Just on the renewable energy allocation. There is an outstanding amount of megawatts, if that is fully taken up in the second window, what happens to the subsequent windows. I also wanted to get some clarity on the second sentence there about the other technologies. Because they were built in as I understood to the 3725 megawatts on offer but now it says that bio mass landfill gas and I think mini hydro will be taken up in a subsequent round. Does that imply that wind and solar will take up the full 3725 allocation. And therefore has an allocation shift that some people have been calling for been made already in that tender. If I could just ask on the e-tolling in Gauteng, just on the legal loopholes that still need to be closed for the enforcement of that e-tolling plan. Could you give me some insight into what that entails, what the legislative process is for that, and whether it can meet the April 30 start up deadline? And given that it is such a new innovation in terms of open road tolling, there is some concern about the contract for the management of that tolling with the Austrian/ South African consortium. Is there any claws to review that contract at any point to ensure that there is no profiteering? Thanks very much.

Minister Dipuo Peters: Thanks Terence for the question. I just want to indicate that we have already indicated that if the full allocation is taken we will then have to stop the, you would remember that it is 3625 if you include the 100 megawatts of Eskom it makes it 3725. So obviously if it is all taken up it means we need to look into the Integrated Resource Plan itself and make new determinations. That the route that we will be taking. With regard to your second question about the other technologies that we are considering. We did indicate that we have in the period of 2010 September placed a request for proposals and out of that there was an indication of the number of different renewable energy related technologies available in the country that can make it possible for us to generate power with renewable energy resources. And that is why we are saying with the intention to increase more competition we are allowing for that. You would also remember that the first window we didn’t get the requisite megawatts primarily because we focused on a specified type of technology. So we are opening them up so that we can then be able to generate more megawatts out of the process. So that will also take us faster towards attaining the objective of the first window. We are encouraging all South Africans to be able to participate in this particular initiative. You would know that in the country we have quite a number of landfill has sites that have been proven to be able to generate like the landfill gas site in Durban that is generated power for about 3700 households. So we also believe that there is potential for small hydro schemes in this country that we need to open up for. So we are saying there is ample opportunity. If you have realised we have said that we are sticking to our 60% in relation to local participation but we are also saying we want to continue with 40% South African participating in this renewable energy opportunities. This is one programme that we believe will make it possible for us to attain our green economy accord prescriptions. So we actually encouraging South Africans, we are encouraging every other company. And later in this few weeks the Department will sent a request for interest for different technologies to be able to address the risk mitigation scenario that we have attached or we have coupled too the  integrated resource plan. You would already realised that based on the fact that we have not pronounce on the Nuclear Build Programme, there is an indication of a delay of a year and that delay need to be covered by the risk mitigation scenario. And we also believe that these technologies can be able to come in and close the gap.

Chairperson Minister Sibusiso Ndebele: On the question of the e-tolling. That is a very upt observation that this was a first of its kind in the country, the urban tolling. We have had tolls for a long time in South Africa on your national roads. We have not had any people have understood the necessity for that, that you needed that money to build those roads not only to come from the fiscus but also to apply the user pay principal. But for and urban centre like Johannesburg, Pretoria, it is a first of its kind. We have learned quite serious lessons all of us which necessitate a new dialogue on the matter of how do we proceed. You know that this was phase one of the urban tolling proposed not by national Government but by the province itself Gauteng. To say phase one would consist in this one we have just complete and then phase two would be again the Gauteng Freeway Improvement Programme. You remember that early this year or last year we said lets hold the phase two of the Gauteng Freeway Improvement until we properly discuss again and all of us agree on how it was going to be paid for. And therefore the debate is very much open and it needs to be done. What has happened now is that R5.8 billion has been taken from the fiscus which is money that is taken not from the back pocket the Minister of Finance; it doesn’t have 2c in his back pocket. It is taken from other programmes and you have to have a way in which you don’t rob Peter to pay Paul. You got to have national consensus on how we actually pay for this infrastrcuture4. The infrastructure is good, it is necessary but then you have to work through how do you pay for it. You might aim for to lower your own expectations so that we don’t have a New York road everywhere. You will have a usable road that is able to meet the demands; it might be much more short term. Instead of a 50 year spend you might work for something that might give after 20 years but in that 20 years it is serviceable, so that is what we need to do. But what we want to say is one of the key lessons that we have learnt out of the GFIP is that never again shall we have a situation where a city or a province takes a decision that has got monumental national consequence and is taken only by a city or only by a province, when matters are taken in that particular way. Can you imagine if you were to build the ICC here in Cape Town as a city and then suddenly you say the whole province must pay or the whole country must pay? But the decision is taken by the city council and implemented by the city council and it goes that way. So one of the lessons that we have learned now is that in future we will consider very carefully and discuss and accept the implications of any decision of that kind that we take. It is in that context that GFIP phase two we said we hold it until we have this sort of discussion. Or Winelands in Cape Town we say lets discuss then we proceed in that particular way. But we have other projects that are supposed to be going in like the N2 from East London which is a job creator. It opens up the province of the Eastern Cape to Kwazulu Natal, it is quite critical; we need to discuss how we proceed with problems of that sort. But urban tolling is up for re-discussion.

Journalist: I think many people particularly in Cape Town will welcome the allocation in the budget for R4 billion for replacing rolling stock on the railways. Particularly Capetonians because I don’t know if you are aware that in the city 60% of commuters rely on the railway service for their commuting. But my question Minister is just in the last fortnight you may be aware that the railways has been in a state of disarray in Cape Town, and this is not the first time it has happened. So my question is why did your government had to wait until the system was just about disintegrating before replacing this rolling stock. Secondly the people who are affected by this are not people like yourselves who drive around with fancy Mercedes and wear fancy suits. They are people who are domestic workers who are trying to get to their place of employment; it is children trying to get to school. How do you reconcile this shocking neglect of I think to be fair to say of your predecessors rather than yourself with the state of socialist principals of your Government?

Journalist:  The first question is to Minister Molewa regarding the recent talks about carbon tax. If you could comment on the impact you expect on electricity prices and Eskom. I don’t know if it has been covered or whether you discussed it before. But sure income tax and carbon emitters of R120 a ton increasing by 10% per year is going to have a massive impact on electricity prices. Then a second question to the Department of Communications regarding the digital migration. I just came from a Committee Meeting with the SABC. They are saying they can’t take responsibility for digital migration because it is going to put them in the red, it is too expensive, and this is a national priority. I just wanted to know from the Department whether there is going to be additional funding for SABC if this is to be a priority that has to be implemented.

Journalist: The Lesotho Hounds Water Project (sic), has the Government of Lesotho agreed to the implementation of the second phase or are we in negotiations with them. That second phase was (unclear) in the 90’s if I am correct. Secondly going back to digital migration, who will handle the subsidy. What organisation within Government and what is the budget for that?

Journalist: First question goes to Minister Peters. In terms of the Nuclear Built, who will oversee the entire project? Is it your Department or DPE? Because when we speak to people who know the industry they say that your Department doesn’t have the requisite capacity to handle a project of this magnitude. Do you agree with that or do you think that your Department should be the Department managing this one. On the Infrastructure Development, the entire Infrastructure Project if you look at Finance Minister Pravin Gordhan what he said in his Budget. He made reference to 68% of the infrastructure money being spent in the last financial year, just 68%. How are you ensuring that this is fixed, that there is capacity and there is and that the money is spend. Maybe if not 100% but at least not 68%, higher than that. How will you make sure that the money that is allocated is spend on projects?

Journalist: Minister Molewa hydrologists are forecasting that as demand grows over the next decade the water that we have available, that there will be water shortages. I wonder if you could comment on this, how tight is it going to get. I know one of the things that the Department is looking at is the pricing of water. I wonder if you could just expand on that too, what exactly are you planning and what would the impact of that be on agriculture, on industry and on the consumer. If you could also then improve in your response the comment on ground water and desalination.

Journalist: To Minister Ndebele, on the GFIP, are you saying that GFIP was never approved by the national Cabinet. That no discussion was ever held in Cabinet and no decision was every taken to approve the GFIP. And secondly the GFIP has been in the strategic plan of SANRAL which is an agency under your Department for the last 10 years or more. Are you saying that you never noticed it was there, that you never took it seriously or what happened. And then to Minister Baloyi on the MISA when is that going to start working, who is going to actually run it. How is it going to work are you going to pull municipal funds into that agency, how is it going to work. And then secondly on the Siyanze Manje which has been one of the projects that have actually worked in terms of trying to build municipal capacity. Why have you taken that away from the Development Bank and put it under your own Department and do you feel certain that it will have enough capacity there.

Journalist: I see from the budget list of projects that the High Speed Rail Link between Durban and Johannesburg is still sort of in the frame of projects. Given all our backlogs and huge expenditures how do you justify the need for that and is it still something which is on your drawing board?

Minister S’bu Ndebele: Let me start with GFIP it was a proposal that came in formally from Gauteng province from 2006 presented to the national government and went backwards and forwards I think three times to cabinet and finally with the amendments it was finally endorsed by cabinet. And those roads that is why you find R21 or this national roads are normally N1 and N2 those roads were then transferred from the province to national because provinces don’t toll in order for them to toll you had to go through a process to transfer them to national. So it was something that was agreed to and of course the construction started so by 2009 everything was finished including the construction. That is why during the World Cup the major agitation was when it was going to open it is going to open in time for the World Cup. It is a good network that was necessary to reduce the congestion that existed between these two major centres, Johannesburg and Cape Town. The problem has been a gap in terms of the province moving forward and making the proposal and the proposal was agreed but when it comes to the implementation there comes a strong move against that very project. So we are not quarrelling against the project itself we are quarrelling with perhaps the politics that surrounded it post 2009. You now have agitation against a proposal that had been on the table in South Africa for the public for all the levels of government for more than four years. When you then come in and you are hit with a situation what is this thing we don’t want to pay and so forth but when it was proposed from the very beginning it was a toll, there was no question that the toll got sneaked in the middle it was proposed as a toll from the beginning. What we are saying is that henceforth we need to be very clear meaning that the public participation and the public endorsement everybody must know the implication of the demand. I am sure we are going to proceed with phase 2 but it must have this element of people understanding the implication to themselves as motorists as users of that road what it will be not afterwards to say no the national fiscus or this one must pay.

Secondly the question of the under spending the under spending of almost 40% on particularly this Isamba Sesisonke Project it was R6.4bn and I think we under spend by almost 40%. This was the first phase the money was transferred to the provinces and all they had to do was to do the co-ordination and you find in almost three provinces that money was not spend so it is going to roll over so that the citizens of that provinces are not going to lose out. So where it is supposed to be R6bn this year it will be R8bn so that the money go on but now it will be under SANRAL, they are establishing a project management unit that will ensure the province identify which are the roads and so forth and then they are build so that perhaps the capacity that was lacking in the province is then obviated. The question of the fast train has been on our books since it has been in the national plan of transport for a very long time, it is still there and it still a nice project and it is how the rail will progress in future there isn’t any other way in which it can progress but it is not now. What is on the books now is Metrorail, we need to develop our Metrorail from Soweto to Johannesburg from around Pretoria and Cape Town to be fast, efficient, comfortable and affordable and that is the project and it is a huge spend. If we are going to do the long distance line which is a tourist line that one might very well be done in instalments we might do Durban and Pietermaritzburg in a way going forward like we have done the Gautrain to Pretoria where does it proceed it proceed to Mpumalanga ultimately to Polekwane so we are doing it in instalments. So it will be in the books but not that it becomes a priority for now.

Minister Edna Molewa: The question on carbon tax what the Finance Minister indicated was that this issue of carbon tax still have to be finalised so we are still in dialogue as a nation. It is a matter that is also linked to what we have in our policy framework on climate change you would recall we stated there that there will be a carbon budget in other words industries would be allocated a carbon budget. Again it is a matter that is the policy but still to be finalised by ourselves collectively as a nation, I am bringing in that issue of a carbon budget because if we were to allocate carbon budget to particular industries, energy, agriculture and so forth that would naturally mean that particular sector has to do its best and spend some money in ensuring that they reduce the carbon emission in that particular industry of course within that trajectory that we have all spelled out as announced by our President in Copenhagen three years ago. In other words no pressures but still within in the collective agreement as we all agreed. The Minister of Finance said so because it is necessary that as a nation we must say how do we deal with this matter of carbon tax. You asked the question will it not have an impact on the price of electricity. We do believe in the dialogue that we are having as a nation we must finalise this matter in such a manner that it is actually dealt with very sensitively. We believe it actually is supposed to be much more of a deterrent to those who are polluters rather than broad carbon tax for everybody else who is even behaving very well. So that discussion and even our view from environmental side obviously would have to be filtered into the discussion that is taking place nationally. We are in touch with the Finance Minister and his team and making our inputs in that regard. So it is actually it will not be correct for us now to say that yes it will impact on electricity prices because it may well come out being something completely different that it is a stick more than a carrot or maybe even carrying some bit of a carrot and a stick but it is much more of a deterrent how we look at from where we sit. It is still to be finalised.

Journalist: Minister I’m sorry but Eskom is included in the plan? I mean they will also have to pay the carbon tax?

Minister Edna Molewa: Yes I am saying remember this is the reason why I linked the discussion with the carbon budget allocation. The carbon budget allocation well naturally we see not Eskom only but the electricity and energy sector as a sector that has got to contribute more than any other sector because currently that sector contributes much more on carbon emissions. And as I say within in our own trajectory without making it difficult for Eskom or any other energy producer to feel under pressure we’ve got to react by the way even on carbon reduction within our own ability as a country to actually reduce carbon. We are not necessarily going to be saying tomorrow you do 1 2 3 even if that company is under pressure. As stated in our policy we do say there will be dialogue and even support and assistance to various companies that find themselves in that particular situation. I hope that covers the issue.

The Lesotho Highlands Phase 2 has been concluded we were in Lesotho during the height of elections just towards the voting not during the campaign. We launched this project jointly with the Lesotho government it is right now under implementation it is being implemented jointly by the Lesotho Highlands development body as well as our Trans Caledon Tunnel Authority. So jointly those two they have been to raise funds in the public market of course we are coming in as government with the social element to augment. As we say in the document that the project is intended to augment and that brings me to the question asked earlier on, to augment our water resources by the year 2020 we think it is important that we should have finalised that project so that we augment the Vaal River system which we say potentially by the way as we do our water reconciliation strategies which are no longer on the Vaal system or on any catchment system but even city to city. We are now localising them as we do that water reconciliation strategies we do indeed find that there are areas in South Africa where we have a demand exceeding the supply already as we speak. So that project is intended to augment the Vaal River system by 2020 because we can see that there is a that potential shortage of course this is not the only program that we are looking at in augmenting our water in South Africa. It also goes along with the groundwater program as you have rightfully pointed out earlier on in terms of the question that we are looking at the availability of groundwater and of course we do know that South Africa has not yet tapped on the usage of our groundwater. There is also believe by our communities that groundwater is not necessarily good quality of water so we are in a campaign to dispel that myth but also where there are challenges indeed that underground water is polluted in the western parts of the North West Province we are working hard to ensure there is cleaning up programs that deals with that so that we use groundwater to augment our water resources. Desalination is one of the programs that we are using as I speak there are several desalination plants that we have already implemented in our country in Mossel Bay. The first one with Minister Dipuo Peters is actually in Mossel Bay that is fully desalination plant using alternative energy so the two goes together where we are not using coal power but alternative energy to pump water. Wherever you have electricity all these power stations that we talk about that you want to construct energy all of them need water and you need water to pump electricity. So already we have those desalination plants we will be considering some of them those that are closer to the oceans especially because desalination is quite an expensive program so it is under consideration and indeed it is one of the programs. It is not only those two that we are looking at we are doing within the water reconciliation strategy program we do know as Minister Baloyi illustrated earlier on that there are leakages in the system where we still have a lot of infrastructure especially in municipal areas that are leaking which we are working on a program through our support to municipalities to stop those leakages so that you have enough water that is capped and retained within the system. Just an example 41% of water losses in Free State that is what we are experiencing it is quite a lot that water if you had it back into the system it will take you longer to require additional water from the Sotho Highlands for instance. So yes indeed we are working on those programs and they are very crucial as I say.

I just want to touch on the question asked by Keifus just part of it the skills programme, as government we searched when we were looking at these infrastructure program that the President announced at the nation we didn’t look at program by program but we looked at the integrated of each and every strategic integrated project. There are quite a number of them and they will be announced properly to yourselves but integrated program now that integratedness also included in that you find the skills capacity. In other words we are saying how many engineers do we need for this strategic program for instance the Eastern Cape program where we are building the Umsombombo Dam all those projects the integrated programs, how many skills do we require for road construction, dams for whatever, what kind of skills, do we have those skills internal if we don’t have them where do we get them. So that in the thinking and in the program implementation already proactively worked in there is skills capacity and already we know we have looked at the Public Enterprises various departments where there is skills in particular the engineering skills where we can actually augment with those skills. It is not only the skills but legal capacity every other capacity that we would need in any other ship as it is. I rest my case there and I think I have dealt with the issues concerned.

Minister Richard Baloyi: Thank you very much. The case of MISA is a case where we are saying once it is finally launched announced of course we are waiting for the position of the Minister of Finance to share his views. The Minister of Public Service to talk in terms of the corporate form of the entity as concurred what remains is to in terms of the Public Service Act establishing MISA as a government component. When that is finalised which we are looking at the end of March to April it will assume a life of its own with the organisational arrangements taking on board on what is it that we need to do which is to have this ring fenced work as a government component. When you introduce the government component we are saying you will come with special purpose vehicles which means on the functions that you want to pay special attention to you would want to then say let’s remove the obstacles and the red tape, lets come with an arrangement than will then say you have this arrangement that it will not be so many stops because it is when you have so many stops that you actually have blockages in the systems. So MISA comes in as a government component linked to the Department of Co-operative Governance providing direct support in as far as municipal infrastructure, supply and maintenance is concerned. So that is how it is going to work of course the details will be provided as you take forward. The issue around what is happening now in as far as MISA is concerned; MISA already exists at a pilot stage working closely with the DBSA so that we acquire as much skills as possible to deal with this area that we are ring fencing. That then talks to the question that has been raised about the Siyanze Manje to then say as your ring fence you then say what are those issues that you put together. A lot of Siyanze Manje let me indicate that we continue to work with DBSA in as far as how we take the process forward even now after the pronouncement by the Minister of Finance that gives the green light that MISA is the way to go. We engage with DBSA and say let’s pull together until the final point is raised in as far as I will deal with that and then see as to how we go forward because the issue here is not a question of competing in terms of who does what it is a question of working together. That is why MISA comes in as a component linked to the department that promote intergovernmental relations to then say if we want to succeed in providing support to work at a local level we then say pull on all actors, DBSA is one of the those actors to then say let’s work together and deal with this issue. Thank you very much.

Minister Edna Molewa: Sorry I forgot something the tariff issue we already have an internal first draft of the tariff redoing proposals. It is quite an important thing for us and this is one that appears in the government infrastructure plan as announced by the President it would be said when the subs are announced that this program is one of the first deliverables the first that must be delivered first. In other words you don’t need to wait until we have a situation more or less like that which we have electrification there are currently various mechanisms various pricing strategies various tariffs which are different from one area to another, one institution to another. Even for the agriculture sector as you asked the tariff for agriculture is in some instances 60c a kw and in some other areas very high up so that inequality is what we actually want to address through this program industry wide. So that dialogue once we have finalised with the internal discussions we will again as well as go out to the public for participation before we even come to cabinet for finalisation. It is one program that we have already started with the tariff realignment currently every water board and municipality, water boards are required to come to the Minister when they require an increase of a particular tariff and percentages are different at different times. So every year there is that approach and we relay think this is not going to be sustained so we have to actually deal with that by the end of this year we will be having that program.

Minister S’bu Ndebele: Just to tie up GFIP, it is the first one in the country and it is e-tolling versus the normal one that all of us are use to where you come to the toll road and you pay and your pass and if you don’t pay you take a u-turn and you go back. So but e-tolling doesn’t even if you wanted to pay you won’t be able to pay until you received the notice and it is a new phenomenon legally speaking and therefore you need to ensure that our legal framework also accommodates that. Therefore the amendment we are going to be piloting in parliament would be the transport law enforcement and related matters amendment bill which therefore covers the e-tolling. It is a legal contract that we have entered into by using that road it was paid for in that particular way and in needs to be repaid in that particular way so it covers the legislative gaps that exist. In terms of our own procurement we are not longer going to have the yellow tracks of government this building a road its government pays the bill as the Minister of Finance was saying, I want a road of 100km and here’s the money are you able to do it and then I pay you. Then the private sector comes and build the road we put conditions to say there must be representivity, BEE all that it is required by law for us to put but once that is done and satisfied what that person does with that money is a different matter. So it has indeed happen that a person has taken their shares and say are they mine so I can sell them and a person then sells them and he sells them to somebody not in Cape Town or Johannesburg but to somebody in Australia or Austria and that is what it is. Perhaps as we now move we need to be discussing all those issues, I don’t think we will depart from the issue of BEE, representivity but how to ensure that actually you don’t have profiteering of that nature as it comes. Finally what one want to say is that we will champion the accessibility of the country and it is normal that virtually in every country the city becomes the centre, Paris becomes the centre and then you go out in this country it was enforced through homeland policing and so forth and those areas were neglected whether you go there wearing an overall or a suit the point is that you must build those roads all those kids must be able to travel on a road to go to school. I am sure our own record here will be that in the past 18 years we have done that and there is a particular emphasis in the first five years of our democracy. In the first ten years it was mostly on bridging the social inequality your pensions, schooling, health facilities so that everyone has access to it so the emphasis was not on infrastructure so it was not a question of neglect it was a question that this new government first democratic government what does it do. Then it reverses those social inequalities so the emphasis was on that in the first instance and if you look at the plans that talking about transport Mr Mac Maharaj and Mr Dullah Omar, Mr Jeff Radebe had I don’t any of us can fault them. Then you then say at this stage what is the emphasis the emphasis becomes the opening up of the rest of the country because we are now in a position to do so it is not a matter of the previous ones neglected it but that was the exigencies of their time and it has got progression.

Minister Dipuo Peters: I thought when we announced the Nuclear Energy Executive Co-ordinating Committee we did mention the process but I think I need to clarify something. We all know that in terms of the Electricity Regulation Act the Minister of Energy makes policy as well as the plan related to power generation in this country. We have done that we have introduced the integrated resource plan which speaks to the 23% nuclear so as to make it possible that we can balance in terms of what Minister Molewa said about our long term mitigation scenario for greenhouse gas emissions. What I want to indicate there is that in terms of Section 34 of that Electricity Regulation Act the Minister of Energy determines who should build what with which technology and NERSA concurs with the licensing processes. I just want to make it clear that we understand that Eskom is a public utility and DPE is the government shareholder with regards to government’s relationship with Eskom. Secondly DOE and DPE does not build once the determination is done we all know that we are building Kusile and Medupi but it is not the departments that are building it is Eskom with the private sector companies because the determination was done that this must be build by Eskom. I want to indicate when we determine we will be determining in relation to whether it is IPP or Eskom and with their technology partners to do the building. It will be partners who are international or local so the DOE or DPE capacity to build does not come into play. DOE and DPE is government departments which are part of the Nuclear Energy Executive Co-ordinating Committee that is chaired by the Deputy President and in this committee we have the Department of Water Affairs, Department of Trade and Industry, National Treasury, Economic Development, DST, Higher Education and we believe all these departments have a role to play to make sure that we have a successful process that would lead to ultimately getting any nuclear plant on the ground that adheres to the regulations and laws and policies of this country. You would know the role of water affairs with water licensing, environmental impact assessment issues but also between DOE, DPE and National Treasury we are dealing with funding models and I want to indicate as South Africa as we speak we know the DTI has established what we call the Nuclear Industry Association of South Africa so that we can realise maximum benefits out of the money that South Africa will be spending in the nuclear build. I think the South African industries should be very excited because they know they have a government that has their interest at heart but also more that the determination from 23% of nuclear is actually encapsulated in the new growth path where we have said ourselves 5 million jobs over a period of ten years. And we need to look at how can we use power generation to make it possible that we can grow the areas for job creation and be able to maximise the potential in the build of this magnitude for local manufacturing. So I just wanted to makes sure that we understand that DTI as we speak has established an artisan training centre on the premises of NECSA and I am inviting the media to go and see that. We have also established a public education centre on the premises of NECSA so that we can build the understanding of South Africans about the different nuclear applications not only in relation to power generation but also how nuclear can be used broadly. Also just to indicate that the month of March we have set aside as an energy month where will be convening different public engagements and I want to say we have work closely with the media and we regard the media as an important stakeholder. We work together and we appreciate the work the media did in terms of educating the public about what the integrated resource plan is where we are going to make inroads and how we are going to mitigate the potential of the integrated resource plan not performing as anticipated. We are working together with renewable energy and I would believe that it was this media of South Africa that made it possible to monitor the rebate processes so as to be able to get to the point at which we could have 28 bidders qualifying for the first round. I also want to indicate that we all understand and I am happy that in the statement made reference to the IRP 2010/2030 so that we can realise that this is a plan that is going to run for the next 20 years. Hydro for import comes from different areas we still have to make a determination on that whether we would be acquiring it from Mozambique from Zambia, Namibia, and Lesotho or wherever. We also have to make a determination related to the next coal plant because you would know that there is coal in our plan and that determination is equally as important as the nuclear built. So the issue that we are trying to close bringing in competition between the Department of Energy and DPE in relation to the build is a dangerous type of competition because it is not the departments that are going to engage industry. We then have a role in determining which industry we will be partnering with as much as we have not done it with Medupi and Kusile we would allow whoever who is determined whether it is IPP or Eskom to build the line that engages with the industry because they would be the ones procuring the service. Let us understand the role of different departments; Ministers in Cape Town have indicated that we work together, energy and water work very closely together because we believe we can’t have energy without water. So equally you would find that for the nuclear build we need water. That is why we are putting together this thing so as to be able to arrive at a point where we can say this is what we as South Africa we are satisfied that the programs on this built will create jobs inside South Africa to benefit South Africans. Let us consider safety and cost to the people of South Africa and thank you very much.

End of briefing

THE INFRASTRUCTURE DEVELOPMENT CLUSTER
MEDIA BRIEFING

28^th February 2012
Cape Town

Ministers
Deputy Ministers
Directors-General
CEOs
Deputy – Directors-General
Distinguished Guests
Members of the Media
Ladies and Gentlemen

We welcome you to the Infrastructure Cluster briefing to share with you progress and to provide more detail on the work of the Cluster to fulfil its mandate of building an efficient, competitive and responsive economic infrastructure network.

It is the mandate of the Presidential Infrastructure Coordination Commission (PICC) to oversee the implementation of infrastructure projects that stimulate social and economic growth.

President Jacob Zuma pronounced during the SoNA on South Africa’s infrastructure plans, which include both our economic and social infrastructure that will unlock key mineral resources and exports. This infrastructure plan is coordinated by the Presidential Infrastructure Coordinating Commission which was established in September 2011, bringing together Ministers, Premiers and Metro Mayors under the leadership of the President.

There are a total of 43 major infrastructure projects over the next three years amounting to R845billion of which R300 billion is in the energy sector and R262 billion in transport and logistics projects.

These cover the economic infrastructure projects which are the mandate of the Infrastructure Development Cluster. We are reporting on the five key economic infrastructure areas and these are:

Transport
Energy
Water
Telecommunications
Public Works

The PICC has already identified projects and clarifying long-term investment plans to drive economic change.

These projects include the construction of roads, power stations, rail and pipelines infrastructure. These are aimed at addressing South Africa’s infrastructure to boost economic growth and create much needed jobs.  Government has succeeded in rolling out a massive infrastructure programme, which was able to allow us to broaden universal access to basic services like electricity, water and housing, etc.

Infrastructure development plan

Government took a decision to ensure that infrastructure investment is one of the central priorities of this year (2012) to address several weaknesses in the State’s infrastructure capacity.

Investment in large-scale infrastructure developments such as electricity plants, rail and road upgrades and water management, is government’s contribution to job creation and economic growth.  This will be supported through the build programme which itself will help sustain between 50 000 and 100 000 jobs in the construction sector up to 2015.

Over the next three years, government plans to invest R844 billion to remedy the skewed implementation of infrastructure during the apartheid years, and to meet the demands of a growing economy and population by building roads, hospitals, dams, schools, electricity plants and ports and rail systems.

In his Budget Speech, Finance Minister Pravin Gordhan announced that the budget review lists 43 major infrastructure projects, adding up to R3.2 trillion in expenditure in the next 3 years.

The development and integration of rail, road, water, energy and Information and Communication Technology is central to the country’s growth initiatives. Our rail, road and water infrastructure is centred on two main areas in Limpopo; the Waterberg in the Western part of the province and Steelpoort in the eastern part.

To ensure that the benefits of the infrastructure programme are widely spread, government intends to include development targets in the project and tender specifications covering jobs, skills, industrialization and local content, small and medium enterprises and empowerment and greening the economy.


Transport Projects
Public Transport

As part of South Africa’s Public Transport Strategy (PTS), we are moving towards a high quality integrated Mass Rapid Transport Network which includes: rail, taxi, and bus services. So far the Bus Rapid Transit System has recorded 45 000 passenger trips in Johannesburg, and 100 000 in Nelson Mandela Bay.

People need a public transport that is safe, reliable and confortable to travel to work, school or anywhere else they need to go. We are achieving an effective, affordable and safe Integrated Rapid Public Transport Network in our cities.

The Taxi Recapitalization Programme together with trains and buses form part of the mass mover concept of transporting people to various destinations of choice. In 2011, 44 184 Old Taxi Vehicles were scrapped with over R2.2 Billion paid out as scrapping allowances.

Roads Infrastructure projects

Government is committed to building a modern and sustainable transport system – one that connects our communities, supports our economy and protects our environment. The Department of Transport through the South African National Roads Agency Limited and Provincial Departments of Transport is making sure that national and provincial roads get the necessary attention to address the backlog in road construction and maintenance programmes.

Through the S’hamba Sonke Roads Programme launched in April last year, Government makes a clear commitment for a targeted capital investment programme on the roads infrastructure particularly in the rural areas.

Through the S’hamba Sonke Programme, the Department of Transport has created more than 13 280 jobs and spent more than R1.7 billion since its launch.  During the 2011/2012 financial year the S’hamba Sonke Programme created 68 000 full-time employment opportunities, and between 2012 and 2014, 50 000 employment opportunities are envisaged.

Rail Network projects

A feasibility study which covered engineering, economic, legal and financial analysis for the procurement, financing, operating and maintenance of new rolling stock was completed during 2011. The study found that the project for the acquisition of new rolling stock was economically viable.  The results of the feasibility study were submitted to Cabinet on 9 November 2011, who supported the Passenger Rail Agencies of South Africa’s (PRASA) intension to proceed with the acquisition of the new commuter coaches.

The acquisition of the coaches will be divided into two 10-year batches, with approximately 3 600 vehicles included in each batch. The cost will be approximately R 5.2 billion per annum (2011 Rands) with the first payments to be made during the 2014/15 financial year. It should be noted that it is not possible for PRASA to purchase the new coaches off its balance sheet and the cost of the coaches will be funded from the fiscus.

As the new fleet will be introduced over a period of 20 years while the existing fleet is being phased out, new depots with the necessary equipment to maintain a modern fleet will be required, whilst the existing depots are retained to maintain the existing fleet.

At this stage it is anticipated that a minimum of five new depots will be required for the new trains at a total cost of approximately R4.6 billion.  Furthermore, infrastructure interventions amounting to R 13.5 billion will be made on the existing networks to optimise the technological benefits of the new coaches.

The establishment of local manufacturing industries will result in substantial sustainable jobs over the twenty-year procurement period and the redevelopment of rail engineering capacity and skills that have been lost over decades of underinvestment in the local rail engineering industry. The feasibility study on rail projects estimates that over the 20-year duration of the project, approximately 65 000 direct, indirect and induced jobs will be created.

Movement of goods and economic integration

We are working on an efficient movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor. This project is intended to connect the major economic centres of Gauteng and Durban and at the same time connect these centres with improved export capacity through our sea-ports.

There is going to be expansion of rail transport in Mpumalanga, connecting coalfields to power stations. This will enhance a shift from road to rail in the transportation of coal, which has caused a deterioration of roads in the province.

South Africa champions the North-South Road and Rail Corridor, which is part of the African Union’s NEPAD Presidential Infrastructure Championing initiative.

Durban – Johannesburg Corridor Infrastructure Projects

There is need for us to maintain a balance between freight and passenger services. Without freight logistics the economy would grind to a halt. The 2010-2050 Vision for the Durban – Gauteng Transport Corridor provides an integrated transport solution to the growing expansion requirements of the corridor which will form the foundation for the establishment of a Southern African Regional Freight Corridor. The work that is being done includes the expansion of ports, finalization of rail and road projects; finalizing the concept of the Harrismith Freight Logistics Gateway, Cato Ridge and Tembo-Springs.

The Port of Durban, the Durban-Gauteng Corridor, Logistics Hubs and Terminals are project development components aimed at speeding up the transportation of goods.  The State is also looking at the necessity of reducing port charges, as part of reducing the costs of doing business as this was raised sharply by the automotive sector in Port Elizabeth and Uitenhage during the performance monitoring visit to the sector last year.

The expansion of the iron-ore rail line between Sishen in Northern Cape and Saldanha Bay in the Western Cape will create large numbers of jobs in both provinces. The iron-ore capacity on the transport-side will increase capacity to 100 million tons per annum and this will allow for the expansion of iron-ore mining over the next decade to feed the developing world’s growing investment in infrastructure and industrial activities.

The development of a major new South Eastern node

Government will develop a major new South Eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape region, and expand the province’s economic and logistics linkages with the Northern Cape and KwaZulu-Natal.

Mthatha revitalization project
The implementation of the Mthatha revitalization project is proceeding very well and this is a Presidential special project. Work is at an advanced stage to improve water, sanitation, electricity, roads, human settlements, airport development and institutional and governance issues.

Energy Projects
Integrated Resource Plan

Through the Integrated Resource Plan 2010-30 the Department of Energy has commenced and implemented a number of policies and strategies that address the mandate of energy provision and the need to reduce dependence on coal which has a negative impact on the environment.

The IRP proposes the development of new generation capacity for South Africa which takes cognisance of the need to optimise costs, promote job creation and mitigate adverse climate change. It makes provision for 9, 6 Gigawatts of nuclear power; 6, 3 GW of coal, 11, 4 GW of renewable, and 11,0 GW of other generation sources.

To date the implementation of the IRP is evidenced by the Renewable Energy Independent Power Producers (IPP) Bidding Programme for the provision of 3 625 Megawatts of capacity from Independent Power Producers. So far the IPP process has lived up to expectations by attracting international investment worth R50 billion which will boost sector employment growth.

The first of the five window bidding processes commenced in August 2011 and, was successfully concluded with the announcement on 7 December 2011 of 28 (out of 53) preferred bidders at COP17 for a total of 1 416 Megawatts.
Preferred bidders offer to build 631.53MW of Solar Photovoltaic; 150MW of Concentrating Solar Power; and 633.99MW wind energy projects. Some of the outstanding 2 309MW will be offered in the 2^nd window which closes on 5 March 2012. Soon after this, government intends to initiate a bidding round for the other technologies, viz. Biomass (including sugar and paper), Biogas, Landfill Gas, cogeneration and Small Hydro.

In order to increase competition in each subsequent window, the MWs are capped per technology. The maximum MW available in the Second Bid Submission window of 5 March 2012 is Onshore Wind, 650 MW, Solar Photovoltaic, 450 MW, Concentrated Solar Power, 50 MW, Biomass, 12,5 MW, Biogas, 12,5 MW, Landfill Gas, 25 MW, and Small Hydro, 75 MW.

In this way we hope to increase competition and to increase local content. Note that the target for local content has been increased for window 2 (to a target of 60% in respect of certain technologies) whilst the minimum 40% South African Equity Participation remains the same.

An interdepartmental team is considering the best approach for determining the next round of electricity tariff increases for Eskom, due to take effect from April 2013. This involves developing a model that seeks to balance the socio-economic impact of increasing electricity prices, the country’s competitiveness, Eskom’s financial viability and the necessary policy considerations for implementing the Integrated Resource Plan.

The IRP provides for up-scaling nuclear capacity by 9.6 Gigawatts, in order to boost the national base load for electricity supply in recognition of current generation shortages. Concerns regarding the safety of nuclear energy in light of the recent Fukushima incident will be factored into the South African approach, to ensure that proper safety measures are put in place and that they are overseen by the appropriate expert authorities.

In November 2011 Cabinet approved the establishment of the National Nuclear Energy Executive Coordination Committee (NNEECC) to oversee the roll-out of the nuclear build programme, and the Department of Energy is currently leading the interdepartmental team in finalising the implementation plan. The NNEECC is headed by the Deputy President as the authority for decision-making, monitoring and ensuring general oversight of the nuclear energy expansion programme.

The Integrated National Electrification Programme (INEP) is the backbone of the electricity delivery programme for communities who have previously been under-served in terms of grid and non-grid connections. The INEP focuses primarily on servicing rural areas and newly established formal urban and informal settlements. By the end of March 2012 the programme will have connected more than 64 356 households compared to 41 431 in 2010/11.

A total of 2 million connections have been completed through the Government’s electrification programme over the last 10 years.  To date 45 000 Solar Home Systems have been installed and are managed by independent energy service providers (referred to as Concessionaires).
In addition to the Solar Home Systems programme, to date 220 000 Solar Water Heaters have been installed nationwide against the 1million target to be reached by 2014/15.

We have come up with a Road Map which will provide government with a clear picture of infrastructure requirements. Examples of the requirements are refineries, storage and handling facilities. We need to create an environment that encourages investment in the sector; improves price stability of liquid fuels; promotes an integrated government-wide approach to deal with liquid fuels; and empowers stakeholders to deal with sector supply disruptions.

In addition to the initial Road Map, in November Minister Peters directed the Department to conduct an audit on the existing six (6) refineries as a mechanism to establish the status of their reliability, availability, and capacity levels.  With an average capacity of 708, 000 barrels of crude oil equivalence per day, it has become difficult that the country’s liquid fuel demand far outstrips supply. The audit is expected to be completed by the end of March 2012.

The Electricity Regulation Amendment Bill seeks to provide for an improved regulatory framework given the massive capital expansion programme in the sector. It also improves the procedure for the expropriation (with compensation) for energy services servitudes by creating clarity on the process the Minister of Energy follows in requesting the Minister of Public Works to grant permission for expropriation.
With regard to ensuring the development and implementation of Coal Haulage Road-to-Rail Logistics for Eskom2’s fleet of coal-fired power stations, a Cooperation Agreement between Eskom and Transnet has been concluded and signed by both parties in November 2011. The Cooperating agreement will therefore guide the Haulage agreement which will detail the routes and sources of coal to be transported.
About 8 million tonnes of coal per annum are projected to be transported via rail by end of March 2012, increasing this to 28 million tonnes by 2018/19.
As part of government’s contribution towards climate change objectives, Eskom is expected to start construction of the 100MW Wind Power Plant in Sere in the Western Cape and a 100MW Concentrating Solar Power Plant in Upington in Northern Cape respectively.
It is anticipated that both projects should be completed by 2016/17. These projects have been made possible by the successful negotiations of the loan agreements linked to the Clean Technology Fund for Eskom’s Renewable Support Projects. These projects, which are co-financed by the World Bank and the African Development Bank, will be used as catalysts for Government to achieve its Renewable Energy targets as set out in the Integrated Resource Plan (IRP).
The total amount secured for these projects from the developing funding institutions is a total $615million, which has been guaranteed by the Government. President Zuma will formally open the Port of Ngqura next month and a formal handover should accelerate the growth of the latest port.
The Grand INGA MoU signed with the Democratic Republic of Congo is a milestone in working towards sustainable African partnerships aimed at developing strategies for low carbon economies and interconnected energy systems. Located on the Congo River, the Grand INGA project is expected to generate approximately 40 000MW of hydroelectric power for regional distribution.
Water Infrastructure Projects

Water infrastructure contributes to the strength and backbone of our economy. Our government together with the government of Lesotho concluded a bilateral co-operation agreement for the construction of the Lesotho Highlands Water Project 2 which is set to augment water supply to the Vaal River System.

The area supplied by the Vaal River System stretches far beyond the catchment boundaries of the Vaal River and includes most of Gauteng, Eskom’s power-stations and Sasol’s petro-chemical plants on the Mpumalanga Highveld.

The area also includes the North-West and Free State goldfields around Klerksdorp and Welkom respectively, iron and manganese mines in the Northern Cape, Kimberley, a number of small towns along the main course of the river as well as several large irrigation schemes.

In addition the Vaal River System meets the water resource needs of 60% of the national economy and serves 45%, or 20 million, of the people in the country. This will add an additional 151 million cubic metres to the existing yield of 2986 million cubic metres per annum by the year 2020.

Through the related infrastructure development, comprising mainly the Polihali Dam water and energy initiatives, security for both countries will be enhanced.  The water supply from this project will also provide additional water security for SASOL and Eskom.  

The Department has and will continue to invest heavily in the maintenance and construction of bulk water supply infrastructure over the next two years. We expect to complete among others, Phase 2A of the Olifants River Water Resources Development Project in the Limpopo province which entails the completion of the construction of the dam wall at the Dehoop Dam.

In addition, the Mokolo from Crocodile Water Augmentation Project Phase1 – which comprises the construction of a pump station and a 46 kilometre pipeline that will deliver water from the Mokolo Dam to the Medupi Power station and for the expected growth in the Lephalale Municipality, is also to be completed this year (2012) at a cost of R2.077 billion. The Komati Water Augmentation Project will supply water to Duhva and Matla Power stations, this will also be completed this year.

In KwaZulu-Natal, the Mooi Umngeni Transfer Scheme 2 along with the construction of the 42meter high Spring Grove Dam and the associated transfer schemes will supply water to about 5 million people and the industrial sectors in the Durban and Pietermaritzburg areas.

In the Western Cape, resource-poor farmers will benefit from the Olifants-Doorn River Water resources Project, which comprises the raising of the Clan William Dam by 13meters, to provide additional water.

Our regional bulk water infrastructure programmes are well on course. An investment of R2.23 billion will be made in the 2012/2013 financial year.  These include the construction of 43 regional bulk-scheme projects that are currently ongoing. Twenty seven (27) of these are in the rural parts of our country while 16 are in urban areas.

The Department of Water Affairs undertook a Water Resource Study of the Mzimvubu Water Project in 2006 in which nineteen (19) possible dam sites were investigated at preliminary level. From the preliminary investigations, a site at Ntabelanga on Tsitsa River, a tributary of the Mzimvubu River, was found the most promising for a dam. This finding will need to be confirmed, in consultation with key stakeholders, in the on-going feasibility study.

Communication Development Projects

Government is committed to reducing the cost of communication, increasing our broadband penetration and reducing the digital divide in both urban and rural contexts.

Broadcasting Digital Migration

With regard to Broadcasting Digital Migration, the Set-Top-Box Manufacturing Sector Development Strategy has been finalized. The strategy makes proposals on how the STB manufacturing sector could be supported through implementing interventions to support the existing manufacturers and introduce new ones.

The Set-Top-Box Scheme for Ownership Support Rollout Framework has been finalized. It provides a framework within which the STB subsidy will be rolled out to the five million poor TV-owning households. The approval of the strategy and framework will facilitate the manufacturing of STBs in time for digital terrestrial television launch.

The STB industry is expected to create 23 500 direct and indirect jobs. These jobs are expected to come from the actual manufacturing of the STBs and antennae, installation of the STBs and antennae and the repair and maintenance of the STBs.

Expanded Public Works Programme Projects

The Infrastructure sector of the Expanded Public Works Programme contributes significantly to the creation of work opportunities in the country.  The target is to contribute 2,374.000 work opportunities out of a targeted 4.5 million work opportunities of the Expanded Public Works Programme; which makes up 53% of the target. The sector has created 781,734 work opportunities against the sector target for EPWP phase 2, which represents 33% of the target.

By the 2^nd quarter of the 2011/12 financial year, the infrastructure sector of the Expanded Public Works Programme had created 241,177 work opportunities out of the 440,000 targeted for the 2011/12 financial year.  These 241,177 work opportunities were created from 2,802 projects worth R63 Billion from all spheres of Government.

Funding for the infrastructure development plan

The government initiative to develop infrastructure will be funded in various ways, some of which were outlined by the Minister of Finance in his Budget Speech:
The fiscus meets the costs of public-service facilities such as schools and courtrooms, hospitals and rural roads.
Public entities such as Eskom and Transnet finance their investments from internally generated surpluses and borrowing from the capital market.
In some cases, a mix of tax finance and cost recovery is appropriate – we make budget contributions to the costs of commuter transport services and electricity and water service delivery to low-income communities, for example.
The first round of over 1 200MW of renewable energy projects was recently successfully tendered to independent power producers.
 Private sector capacity can also be mobilized through construction and operating concessions, for example in the management of industrial development zones, freight logistics and ports operations.

The Development Bank of Southern Africa will play a coordinating role in raising finance, in partnership with multilateral finance institutions, foreign investors and other investment funds.

The Industrial Development Corporation similarly invests directly in income-generating projects, in partnership with other investors.

Ladies and Gentlemen; Ministers, Deputy Ministers, DGs and DDGs are present to respond to questions targeted in their respective departments and areas.

The President will convene a Presidential Infrastructure Summit to discuss the implementation of the plan with potential investors and social partners.

I thank you.