Eastern Cape Covid-19 Economic Recovery & Investment Plan; with Ministry

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Meeting Summary

Annual Reports 2020/21

The Eastern Cape Development Corporation (ECDC) and Buffalo City Metropolitan Development Agency spoke on their strategies and contributions to boost job creation, economic growth and investments post Covid-19. Investment promotion interventions were detailed which included the film industry. Trade promotion was possible through virtual trade missions providing access to other countries. Markets are slowly opening. The InvestSA Eastern Cape One Stop Shop was discussed as well as improving infrastructure and increasing flow of operations. Other topics were the Imvaba Cooperative Fund; the Informal Business Support Programme, the Business Compliance support programme and Business Incubation.

Buffalo City Metro provided a socio-economic outlook for the metro looking at city growth and investment over 25 years. It discussed the impact of Covid-19 and the Economic Recovery and Investment Plan that included automotive and infrastructure development. The Buffalo City Metropolitan Development Agency spoke about the following developments: Water World Fun Park; Court Crescent Recreational Park; Duncan Village Route Development; Marina Glen; Sea View Terrace; Sleepersite Precinct; Waterworld Hotel and Ocean Discovery Centre; Signal Hill Precinct.

The Department of Public Enterprises (DPE) and the Eastern Cape Government presented on its youth development skills and development collaboration. It also outlined its State Owned Companies involved in the Eastern Cape.

The Transnet CEO spoke to its challenges and pressures necessitating a change in how Transnet works. It had developed a new approach to strategic thinking but needs to improve the movement of containers. It addressed investment initiatives to grow the organisation; its Strategic Infrastructure Roadmap (SIR); Transnet’s segment strategies such as for manganese; Auto and Containers Sectors: Capacity for Growth (Solution for storage away from Port; Ford had indicated interest to move vehicles). It reported that Eastern Cape would see significant OEM investments in the Auto sector and it noted the growth potential of the manganese sector.

The PRASA Board Chairperson and the Minister of Public Enterprises also contributed to the discussion.

Meeting report

The Chairperson requested that the briefings focus only on key issues. The Minister of Public Enterprises who would be joining later. There were apologies from the Eastern Cape MEC for Economic Development who was unable to attend due to issues that arose.

Eastern Cape Development Corporation (ECDC) briefing
Mr Ayanda Wakaba, ECDC CEO, presented on the following topics:
• About the ECDC
• ECDC Post COVID-19 Trade and Investment Promotion Interventions
• Investment Promotion through Films
• Trade Promotion through Trade Missions
• Creative Industry Interventions
• InvestSA Eastern Cape One Stop Shop
• Support for Enterprise Development
• Support for Cooperatives Development

Buffalo City’s Socio- Economic Outlook
Buffalo City Municipal Manager, Mr Andile Sihlahla, presented:
• The Buffalo City Metro economy mirrors the national economy
• Growth levels have been low since 2012 due to global commodities down-cycle which has led to SA economic slump – SA is too dependent on commodities exports as core source of growth.
• The economy contracted by 7% in 2020
Prospects for 2021 onwards are better with 4% growth forecast – possibly better in light on new national forecasts, dropping to 2% to 3% for the Medium Term Revenue and Expenditure Framework (MTREF).
• We want to pick this up to 3% to 5% with the right measures to increase competitiveness and investment.

Buffalo City Metropolitan Development Agency (BCMDA) briefing
Mr Bulumko Nelana, CEO of Buffalo City Metropolitan Development Agency, spoke to the following developments: Water World Fun Park; Court Crescent Recreational Park; Duncan Village Route Development; Marina Glen; Sea View Terrace; Sleepersite Precinct; Waterworld Hotel and Ocean Discovery Centre; Signal Hill Precinct (see document)

Mr M Dangor (ANC, Gauteng) said in the Middle East there were different cultural practices and he offered to help the Executive with any assistance needed. He asked if there had been any consideration of sheep and cattle export.

Ms H Boshoff (DA, Mpumalanga) said investments needed to be attracted and developed. The province had no power to attract investors and should seek assistance from national government. She asked what plans were in place to ensure a greener economy. She asked for the number of non-core assets ECDC had and for its monetary assets to be used for funding. She asked how the ECDC would assist the tourism industry.

Ms Boshoff asked how Buffalo City would execute its plan to be the cheapest metro. She asked how Nestle and Sundale Dairy would be retained. She asked about talk of certain companies moving away and how to ensure that other companies would not follow. She asked for the cost to install solar panels on government buildings and RDP houses. She asked all three presenters how tourism would be assisted.

Mr T Apleni (EFF, Eastern Cape) said the 'plans were beautiful' but asked if the three agencies engaged with each other and said it was not possible to implement the plans. Further, the opportunities would not be able to reach the youth in rural areas. He asked how the agencies would advertise opportunities to all people especially those in Buffalo City. He said it would help if the minimising of corruption was implemented instead of being talked about.

Mr K Mmoiemang (ANC, Northern Cape) said there needed to be co-ordination among the role players.

Ms L Moshodi (ANC, Free State) said the proposed employment of the 280 people should be youth and she requested that women candidates be considered.

The Chairperson asked for the ECDC plan to ensure success in infrastructure and asked for a report on work done thus far. He was impressed by the pictures of the East London developments and asked if there were developments in township and rural areas. He asked how market access would be assisted. He asked about Dimbaza Industrial Park and said that other than the fencing and lights in Dimbaza, nothing much was happening. People were promised this. What facilitation was being done in the tourism industry about job security? People were lobbying for services in Dimbaza and the Hall of Fame had no activities in the building. He hoped there would be a swimming pool in Mdantsane.

Buffalo City response
Mr Andile Sihlahla, Buffalo City Municipal Manager, responded that the Metro applied to the Presidential Fund for the projects but it was declined because the projects did not meet the threshold. All activities related to digitalising platforms and applications were going to be done in the investment centre so that applicants have necessary skills. To ensure that the metro was the cheapest it would do business with the private sector to ensure cheaper prices. Nestle and Sundale were planning on expanding which shows confidence in the city.

The rural roads programme would not be done in the near future because there are many rural areas in the municipality. Mdantsane roads were being fixed in every unit. The municipality was struggling to get funds and Covid-19 had derailed the progress that was being made. Awareness to communities was being addressed by the mayor to inform people about opportunities available for SMMEs in rural areas. SMME incubators were established by the municipality to prepare SMMEs for work by assisting with business plans. This was run by the Economic Development Department. Where possible some SMMEs would be given startup funding and all information would be available on the Metro website. In Zwelitsha a huge Water World plant was going to cater to Bisho and surrounding rural townships. In King William's Town there was a development proposal around Victoria stadium that the BCMDA CEO would elaborate on. Effort was made in all the areas and there were plans to build a fire station in Berlin. He asked for assistance from the Select Committee to ensure that the East London Port was widened so that ‘bigger vessels could dock there’.

BCMDA response
Mr Bulumko Nelana, BCMDA CEO, replied that the City Manager’s presentation touched on renewable energy plans that intended to complement Eskom’s supply of energy to ensure energy security in Buffalo City should all development plans be successful. Work was being done with the Development Bank of Southern Africa (DBSA) on bulk infrastructure planning for the various developments and the funding models were presented.

On youth access, part of the conditions for leasing of land was that developers were required to table a development strategy with priority being given to designated groups such as youth and ensuring localisation was a significant part of that. BCMDA would monitor and report regularly on the breakdown of beneficiaries of developments especially on construction, property management and equity participation. The intended ratio was 50:50 for participation of men and women. From a geographical standpoint, effort was being made not to be biased towards the coastal region.

One of the leading projects he forgot to mention was the project for the Redevelopment of Victoria Grounds with R350 million invested and 100 permanent jobs. The Metro does allocate land parcels from time to time. This was the first allocated to BCMDA and the Agency has shown it can move on the development of the land parcels together with the private sector. There would be more land developments in the region as well. Work was being done with CSIR to develop an agri-park or agri-development on the land of the community working alongside the Department of Land Reform and Rural Development. The project was at the land assembly stage. Once that is completed, the land will be fenced and it will start introducing farming equipment and so on.

The Heritage Tourism programme provided an entry to the township economy. There are six routes that would be developed in total. They would be starting with Duncan Village but partners were being looked for to package the other five routes to ensure they were commercialised equally.

ECDC response
Mr Ayanda Wakaba, ECDC CEO, replied that ECDC had an asset portfolio of about R1.3 billion, a significant component of it was residential but there was commercial and industrial infrastructure and vacant land. The private sector was included as investor of commercial properties. The industrial infrastructure was being funded by the Department of Trade Industry and Competition (DTIC) of which 35% of the property was in the Mthatha area, 17% in the Queenstown area as well as Butterworth and Buffalo City. The tourism industry was led by the Eastern Cape Parks and Tourism Board. The important role played by ECDC was being an implementing agent for social structure such as schools and health facilities on behalf of the Departments of Education and Health. ECDC also acted as the Programme Management Office for the Department of Economic Development for economic infrastructure. The role of the Programme Management Office played a part in the Dimbaza industrial centre. There were partnerships in place with DBSA, Small Enterprise Finance Agency (SEFA), Small Enterprise Development Agency (SEDA) and work with the Department of Small Businesses Development on a number of initiatives. Provincial based partnerships were developed such as the Eastern Cape Rural Development Agency (ECRDA) and most developmental efforts employed were with these partners. Focus was mainly on commercial utilisation and stimulation of economic activity and retail sector.

The Dimbaza initiative was funded largely by DTIC. There were three phases; firstly the construction of access roads as well as rehabilitation of bulk services including storm water drainage and fencing which was substantially complete. The second phase was the high mast street lights which was yet to commence. A contract was concluded the week before for a contractor to initiate the second phase. The third phase would deal with the waste water plant upgrade. Accessing funding for the programme was on a piecemeal basis. For the current financial year they would be able to proceed to the high mast street light project.

The DTIC Trade and Investment Promotion were working on lining up investors that would take up space in the Dimbaza Industrial Park. Units were being upgraded within the industrial centre as investments were being secured. The few new entrants into the centre were effective from 2020 but unfortunately the project was resource driven and due to constraints it was delayed due to shortage of resources. The master plan was being reviewed as some of the propositions in the master plan would not be appropriate for the centre as the aim was to bring developments that were organic to the development of economic activity in the area to manufacture or localise commodities that were commonly used in the area. He acknowledged the concern about the pace of implementation and said a board would be created soon which would be tabling a comprehensive progress report. He offered to share the report in future and such report could be shared with local stakeholders as well. He noted that Buffalo City was also a manufacturing and automotive hub; not only the Nelson Mandela Bay Metro.

Mr Phakamisa George, ECDC Acting Head: Trade, Investment and Innovation, spoke about the Export Development Programme (NEDP), a capacitation programme that ECDC did in participation with the private sector. The mentors in the programme were members of Export Eastern Cape who through the years had been awarded as part of the top twenty exporters. The mentors set aside time to mentor the participants through the Export Development Programme. Mentorship was not only done through talks, but also included checking up on participants at their factories and showing them the process for export production to ensure their success. Some incentive was provided to mentors for their time spent on mentoring participants. The 12 month initiative culminates in a marketing implementation plan developed by each participant with the assistance from individual mentors.

On market access, Mr George replied that the creative industry market access was through the Eastern Cape Craft Collection Shop which was an investment of the Provincial Government. It created a platform for all enterprises mainly from rural areas whose products were marketed directly to mainstream domestic and international markets. Work was being done to open up an online sale platform to enable companies with international clients could order online and have the products delivered to the respective countries.

The brand was already created and recognized but other products were given access to art exhibitions. KAMERS/Makers was considered one of the most significant exhibition in South Africa with an international outlook. The first round was in Tshwane – ‘KM Pretoria Spring 21’ – where sales were generated. The second was held two weeks ago in Stellenbosch. What was important was not only the sales generated but also the contacts received by the enterprises through the exhibitions. The stores had not had a lot of stock available but were a platform to market the products. Since 2019, the annual Eastern Cape Export Symposium and Exhibition was a platform it created that had gained popularity. Information on new market opportunities and exhibition spaces were provided where companies were able to put their product on the market. For example, companies in the footwear and leather industry were able to get the attention of buyers in Rwanda. There were also business to business sessions where buyers interested to get more details from a particular Eastern Cape supplier could do so.

A new Economic Development unit was being established within the ECDC to attract companies to the Eastern Cape. For example the livestock one from the Middle East had since created a demand for more than 30 000 tons of feed. The Rural Enterprise Development RED Hub project in Mqanduli as well as Mount Ayliff through ECRDA get more companies to produce inputs into the feed manufacturing process. The maize produced by farmers in those areas are consolidated in storage facilities in Mqanduli and Mount AyIiff. The latest negotiation with Transnet is to resuscitate the branch line from Mthatha to East London to bring produce from Mthatha to East London. The mainline from Northern Cape had been completed and the manganese deal was almost about to take off because the mainline went up to East London. The small to medium short term plan was to have manganese on rail from the Northern Cape because they wanted zinc and iron ore to be transported on rail lines and not on roads.

Mr George noted that ECDC had partnered up with Invest Buffalo City to develop the Buffalo City Metro area.

Further questions
Mr Phumelele Ndamase, Eastern Cape Provincial Legislature Chairperson of the Economic Development Committee, said that from the oversight function of the Economic Development Committee, observations were made about the transformation agenda that must be supported by the development finance institutions (DFIs) and the Eastern Cape Development Corporation (ECDC) in venturing into new opportunities where they looked at ways to recoup monies.

At some point he was fighting with the MEC about the ECDC's performance which was thought to be on the verge of collapse in 2020. Looking at the industrialisation in the province there were challenges. One was the policy documents of 2010, 2014 and 2017. The Economic Development Department in 2010 produced the Provincial Industrial Development Plan. In 2014 the Planning Commission produced Vision 2030. In 2017 there was the Economic Transformation document. He asked if the Department, together with the entities including ECDC, would be able to have a cut out strategy in dealing with industrialisation in the Eastern Cape. He asked to be informed of any changes in strategies. Were previous plans to be abandoned or changed so there could be a clear understanding about these plans from 2010, 2014 and 2017 to determine their feasibility in the year 2021? He asked ECDC if it was ready to engage in innovation that required investing. He was not sure what would be invested would be recouped as far as industrialisation was concerned in the Eastern Cape.

Mr Wakaba, ECDC CEO, replied that the ECDC was still committed to Industrial Development and work done in the priority sectors was part of the commitment in the development. The work included the revitalisation of the industrial centres but conceded that resource constraints hampered progress and there have been gaps and a lot could have been done in the past that did not happen according to plan. Engagements being done about funding and recapitalisation of the organization should make a big difference in empowering the organization to do better in this area. They were willing to explore various methods to ensure different outcomes.   

Afternoon session
The Chairperson requested that DTIC brief the Committee only on key issues.

Deputy Minister of Trade, Industry and Competition overview
Deputy Minister Nomalungelo Gina thanked the Committee for the opportunity given to DTIC to present on the strategic role that it was playing in the Eastern Cape in building the economy of the Eastern Cape. The Eastern Cape Government needed to be commended for its green economy efforts. The economy of the Eastern Cape had suffered during the lockdown period but the economic structures in the province were making sure that there was sustainability in the province and this needed to be commended.

In growing the economy, DTIC was looking at manufacturing and industrialising the province at large. A lot of investors were being attracted to come and invest in the Eastern Cape. The critical role being played by the Eastern Cape Special Economic Zones showed resilience and were key in the role they played in the Eastern Cape. At the moment when looking at investment and performance, the Eastern Cape was doing well. About 32% of the total South African investment was going to the Eastern Cape. The country was relying on the role that the Eastern Cape was playing too. The sector master plans were considering what the province was doing in clothing, textiles, manufacturing and all other sectors to ensure economic growth in the province. There were good relations with the province and municipalities. She hoped that the East London East London Industrial Development Zone (ELIDZ) was still having good working relations.

She apologized on behalf of Minister Patel who was held up in another meeting. She thanked Deputy Minister Fikile Majola for being part of the discussion. She introduced the DTIC team including Mr Jacob Maphutha, Acting Deputy Director General: Spatial Industrial Development and Economic Transformation

Department of Trade Industry and Competition (DTIC) briefing
Mr Stephen Hanival: DTIC Deputy Director General: Chief Economist, made the following points:
• Social Pact to drive localisation of R200 billion over five years
• Localisation aims to build dynamic firms and local industries’ capabilities as suppliers to domestic, regional and global markets
• 42 products identified across sectors including: agro-processing; health-care; basic consumer goods; capital goods; construction-driven value-chains; and transport rolling stock
• CEO champions from the private sector have been identified to drive implementation for localisation across these 42 products
• Private sector funding of R355 million raised for technical support (experts, supply-chain managers, etc) to implement the strategic localisation initiative.

Completed Projects Automotive Sector
• Ebor (Buffalo City) - R130m
• MA Automotive (Buffalo City) – R487m
• Mercedes Benz (Buffalo City) - R10,5bn
• VM Automotive (Buffalo City) – R344m
• ZF Lemfoerder (Buffalo City) – R240m
• Auto Investment scheme has supported 38 companies in Eastern Cape since 2019, with R2.7bn grant amount unlocking R9.2bn investment.

Industry master plans will further support efforts to industrialise key sectors

• Motherwell Rail Link Development Intention
• Original Deployment of New Fleet in the Eastern Cape
• Critical Planned Infrastructure Programme
• High Level Programme Plan and required enablers
• PRASA contribution to National Development Plan for Eastern Cape socio-economic benefit.

Minister of Public Enterprises overview
Minister Pravin Gordhan said the Transnet strategy broadly was to take the current capabilities and make sure that they would be done well. The Transnet approach had been changed to key customer segments as they had to deal with changes but even in those segments the operational levels should be significantly improved. They would begin to look at investments that would focus on the future of the different ports and rail corridors and ensure projects like Road To Rail succeed more than they had to date.

DPE / Eastern Cape Youth Skills Development Collaboration
Mr Kgathatso Tlhakudi, Director-General: Department of Public Enterprises (DPE), presented.
An MOU was signed between DPE and the Provincial Department of Works and Infrastructure in August 2021. The State Owned Companies (SOCs) in the DPE portfolio will deliver training in artisan trades and host learners in skills development interventions. Transnet has formally communicated its support.
• SOCs will host the agreed number of learners in specified trades and other learning programmes.
• SOCs shall provide trade testing where such capacity is available.
• SOCs will leverage this collaboration to also partner with local TVET colleges.

Transnet briefing
Ms Portia Derby, Transnet CEO, and Ms Yolisa Kani, Transnet Chief Business Development Officer, presented. Eastern Cape was a beneficiary of Transnet’s Key Segment Strategies Focus, in alignment with the Eastern Cape Growth and Development Plan. The segments prioritised for growth and optimisation were containers, automotive, manganese, fuel and gas and agriculture initiatives

Ms Boshoff asked for confirmation from DTIC about the location of the Oyster Bay and Wesley-Ciskei wind farm locations, how much power they would generate and if they would be completed in 2021. She asked what the cost would be for the 50% local content requirement for IPPs to procure solar PV panels locally in comparison with imported panels and what the guarantees were. She asked if DTIC had collaborated with the Department of Education to see how the sanitary pad programme could benefit school girls in the Eastern Cape.

Ms Boshoff said to PRASA that she had seen what had happened to the Blue Train which was not commuting anywhere when it was derailed and asked for more information about that. She asked about for information about the Moloto Rail Corridor as the programme in Mpumalanga had not been completed and how that would affect the Motherwell Passenger Rail Corridor link.

She said to Minister Gordhan that they could not say that the whole board must be fired. The problem with Eskom had been ongoing. She asked if steps had been taken against officials for the persistent failure to fix the electricity crises.  

Mr Mmoiemang asked if there had been a turnaround in the declining Transnet operational performance of the past especially the challenge to its balance sheet. Was it able to respond positively on the basis of its balance sheet to make critical infrastructure investment because for the freight system to grow, there had to be massive infrastructure investment. Key to that was the capacity of Transnet to be able to do so through its balance sheet. He asked about the 7 October Eastern Cape railway line [of the Gqerbha to East London] as the Eastern Cape railway line had been dormant to a certain extent for the past five years due to the Railway Safety Regulator (RSR) intervention in 2018. On the matters raised by the DPE Director General, they need to ensure ease of doing business to ensure partners were able to attract investors and to prevent investors from going to other areas.

He asked, considering the 2018 closure of the railway line, if it could be predicted that the new opening of the railway would be one that would be a smooth transition. It was important that rehabilitation first took place. He asked about the decommissioning of the manganese terminal at Port Elizabeth for the sole purpose of relocating it to Port Ngqura in Coega. How will the process unfold to ensure the impact does not distract from the export of iron ore and manganese through those terminals? He asked if an oversight exercise could be possible for the Coega railway. The mismanagement of the supply process was a challenge and could delay and derail this key infrastructure programme.

The Chairperson asked if a railway station could be opened right next to the Walter Sisulu University. In previous meetings, railway signal concerns were raised with PRASA about the Berlin line. The Department of Transport stated that those lines were the responsibility of Transnet and it was the duty of Transnet to put in the signals because without them the number of accidents were increasing. He asked if PRASA should not be considering opening a station at Dimbaza for the community travelling from Qonce and Dimbaza.

The Chairperson noted that the municipality's unpaid Eskom debt was close to R1 billion and asked why Eskom could not sell electricity directly to the consumers and take away the markup because it was no longer a markup if the municipality was taking the whole amount. He asked about the disciplinary cases at Eskom and Transnet – what action was being taken against those on the wrong side of the law? He asked about the land parcels. There was a theatre in East London that was also used for world boxing matches that was not developed which was said to belong to Transnet and he asked if the theatre was included in the land parcels. There should be no unfair competition in investments between Buffalo City and Nelson Mandela Metros.  

Public Enterprises Minister response
Minister Gordhan replied that Transnet would have to attract investors and to develop muscle to get investors and equipment. The entire state needs to be involved in getting the logistics and infrastructure. He referred to the CEO’s presentation saying whenever there is a limitation on a budget, creative measures need to be taken. On the Buffalo City business forum, Transnet needed to appeal to what needs to be done. Ford and the municipality made an agreement in Gauteng already. There needed to be an even handedness to manage opportunities. Everything needs to be done to ensure people are empowered. More investors need to be drawn in to develop infrastructure. The terminals needed to improve.

DTIC response
Mr Hanival replied that the wind farms were on-shore wind farms. One was at Oyster Bay in the Kouga municipality. The Wesley-Ciskei project was foreign-owned in the Peddie area with a 34.5 MW capacity and was on the Eskom grid. Oyster Bay was completed and Wesley-Ciskei was on the verge of completion which should be by the end of 2021 but they were not on a commercial level.

Mr Hanival confirmed that the solar panel lamination would be done at the Coega Industrial Development Zone (IDZ) where the Chinese solar company, LONGi Solar, was partnering with a South African firm, ARTsolar, as its supplier. DTIC was hoping that by designating solar panels, it would encourage risk mitigation. The solar lamination needed to be done in South Africa. The push from designation was to encourage firms to localise more on the back of this risk mitigation. Once international solar PV players had a good sense of the pipeline for Independent Power Producer (IPP) projects, there was hope to see some of the big producers actually locating plants in South Africa. There were already two manufacturers in the Eastern Cape and DTIC hoped to convince foreign investors to invest in the Eastern Cape in solar panel production as well.

It was difficult to say how much the cost of the local content requirement would be – calculations were done on the potential cost raising impact but due to the medium term pipeline of demand for solar panels, the prices were fluctuating. At the moment there was not a significant cost premium being paid and currently it was under 20% but it also depended on the size of the panel, how much was localised in panel production and where the panels would be used, and how they would be transported. Currently there was not a significant premium paid and it was creating a market for other solar panel manufacturers to seriously consider locating to South Africa.

The sanitary towel initiative was brought by a woman entrepreneur and they had not yet engaged with the Department of Education and would consider the implementing the suggestion. The team was able to assist the company in winning its first tender which helped the cash flow of the company.

Mr Thami Klassen, DTIC Chief Director: Special Economic Zones (SEZs) and Industrial Parks, replied that currently there were two major projects. Vulindlela Heights industrial park in Mthatha had been supported twice although there were many challenges in the project including theft of the security features and fences installed there. There was continuous engagement with the municipality about finding a better solution. The municipality needed to be responsible for maintenance. The development of sites would take a zonal approach through enclaves. The Wild Coast SEZ proposal aimed at developing a new city due to congestion in Mthatha. There were plans to refurbish the airport which would give rise to the agro-processing sector. There had been help in developing the area.

Mr Maoto Molefane, Chief Director of Special Economic Zones, said the Moloto Project was registered with National Treasury as a Presidential Infrastructure Coordinating Commission (PICC) programme. A feasibility study had been conducted by the Department and the public-private partnership (PPP) process had been followed but needed to be updated and resubmitted to Department of Public Works. The Committee would be updated on the feasibility study.

PRASA response
Mr Leonard Ramatlakane, PRASA Board Chairperson, said he would be interested in participating on the debate for the development of the corridor and would be interested in taking a lead role if it were to materialise. The recent derailment of the Blue Train should be answered by his Transnet colleagues as it was still under Transnet. No casualties were sustained and the derailment was still under investigation. On transport for Dimbaza, he would like to see how PRASA could participate after consulting with the planning team. For the east side of the Eastern Cape, PRASA would want to see more property upgrades in the projects taking place there. The cost of procurement would be in line with its corporate plan and structure in terms of restoration of services.

High volume corridors would be considered to address scarcity of resources but the challenge of lack of resources prohibited the implementation of plans. The East London-Berlin line was slow as it relied on manual authorization due to the signal problems. The signals had been identified as part of the refurbishment plan. Currently there was use of diesel locomotives to pull the train. Once the signal matter had been addressed it would change the situation and there were plans of including a faster train from East London to Berlin.

DPE response
Mr Kgathatso Tlhakudi, DPE Director-General, replied that forensic reports were lodged with findings and recommendations. There were 754 forensic reports and 47 cases were emanating from these that had been referred to law enforcement authorities for criminal charges to be pursued. So far 64 employees had been dismissed, 79 employees issued with warnings and 40 employees had resigned to evade accountability.

Mr Tlhakudi said that the income stream of municipalities needed to be diversified.

On Original Equipment Manufacturers (OEMs), he said in some of the entities there had good intentions to diversify the supplier base to increase opportunities for people and cut out middle men who increase the markup.

Transnet response
Ms Portia Derby CEO of Transnet said Transnet was not in a position to do expansions due to its balance sheet. Investments based on the historical injustice of the infrastructure built in the old Transkei required more what was possible. A broader response from government was needed to help that area to develop. The population density was such that economic activity should be considered to support communities in the area. Transnet had the responsibility to ensure exports took place and that ports were built up effectively but that there were investment efficiencies as well. There was sufficient capacity for 185 000 units from Mercedes Benz.

Meeting adjourned.

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