Hansard: NCOP:Plenary; Questions: Cluster 4 – Economics
House: National Council of Provinces
Date of Meeting: 24 Oct 2013
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Minutes
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START OF DAY
THURSDAY, 24 OCTOBER 2013
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
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The Council met at 14:03.
The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENT
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START OF DAY
(Announcement)
The CHAIRPERSON OF THE NCOP: Hon members, I have been informed that the Whippery have agreed that there will be no notices of motions or motions without notice. I have received a request that the question addressed to the Minister of Finance be taken last, and Labour be the second last. We will now proceed with the questions as printed on the Order Paper. However, I don't see the Minister of Agriculture, Forestry and Fisheries in the House currently unless there is another Minister who has been assigned to answer on her behalf. If there is no one, I am going to take the following Minister because we have a long Order Paper today. Does the House allow me?
The HON MEMBERS: Yes!
The CHAIRPERSON OF THE NCOP: Thank you very much. In place of Finance we are going to take the questions of Transport because Finance is now going to be last. Transport will get in the place of Finance. Have I made myself clear?
HON MEMBERS: Yes!
The CHAIRPERSON OF THE NCOP: Thank you very much. Communication is not yet here because they were supposed to come after Agriculture. I will go straight to the Minister of Economic Development. I will now call upon the Hon Patel, to deal with Question 147 asked by the hon Mnguni. Hon Mnguni is not in the House. Can I check whether he has sent somebody to stand in for him according to the rules? Minister, you can respond to the question if you wish to. But according to the rules, if the member who asked the question is not in the House, you are not forced to answer the question. For the sake of other members and the public, you can if you wish to.
QUESTION 147
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The CHAIRPERSON OF THE NCOP
Question 147:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, I do indeed wish to avail myself of the opportunity, thank you for the question that was put to us. Since the adoption of the New Growth Path in October 2010, the department has worked very closely with the private sector, within government itself and with foreign investors.
Since the adoption of the new growth path the economy has generated about 750 000 net new jobs. The provinces with the largest increases in jobs were Gauteng, Limpopo and Mpumalanga, which together created about 450 000 jobs in the two years to the second quarter of 2013.
The provinces with the lowest growth in jobs were the Western Cape, North West and Free State, which together created 31 000 jobs over this period.
If we look at the rate of growth, not just the absolute achievement of jobs, then the fastest percentage change was in Limpopo, Northern Cape and Mpumalanga. The growth in Limpopo and Mpumalanga in particular, points to the success of government's infrastructure roll-out plan. In particular, I draw attention to the fact that in Limpopo we have the Medupi Power Station with some 15 000 people employed and in Mpumalanga, the Kusile Power Station under construction with also a substantial number of people employed.
In the infrastructure programme, which is one of the programmes that the government has initiated to address both economic growth as well as job creation, we have 18 strategic integrated projects and there is a question later that deals with this to which I will therefore respond in a bit more detail.
The second part of the strategy has been the expansion of industrialisation efforts partly connected to the infrastructure build programme but also expanding investment in the real economy across a number of different sectors. Turning next to the growth, growth has averaged around 3% a year over the last few years with a dip more recently, particularly as a result of global economic uncertainties. Commodity prices had recovered initially from the 2008 downturn, but they began to fall again from 2011. Because we are such a significant exporter of minerals, they impact very directly and materially on our growth rate.
The build programme that is the infrastructure programme has seen public investment climb, from a post recession low of about 6,8% of gross domestic product, GDP, to the current rate of over 7,5% of GDP.
Connecting infrastructure and industrialisation is government's localisation programme which seeks to provide opportunities for local manufacturers off the back of the infrastructure programme. We also have in place a strategy to improve skills development in the economy and in particular to shift skills to more technical areas, so that more investment occurs in the field of engineering at university level as well as the expansion of FET colleges.
On the countercyclical element of the question, the core of any countercyclical strategy is that the budget would not contract during economic downturns and it should grow more slowly during upturns. The Minister of Finance yesterday in the Medium-Term Budget Policy Statement indicated the direction of public policy in this regard. Those then constitute the reply to the question that was put.
The CHAIRPERSON OF THE NCOP: Thank you, Minister. Are there any follow-up questions? May I request that people making follow-up questions today go straight to their questions and not give a thesis of a question. Also, follow-up questions must arise from the question asked on the Question Paper.
Mr G G MOKGORO
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr G G MOKGORO: Hon Chair, my question to the Minister is: Is there any indication which shows how many jobs have been created in the Northern Cape, in particular?
The MINISTER OF ECONOMIC DEVELOPMENT: Chairperson, indeed there is an indication of the job numbers in the Northern Cape. I don't have that information immediately available, but I hope during the course of the session, before I get to my last question, I will have that information and will weave it into one of the other replies.
Mr D A WORTH
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr D A WORTH: Hon Chair, I would like to just ask the Minister this question: With regard to the automotive motor industry has there been any visible effect on the economic patterns as recently, with all the labour unrests? Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: Chair, indeed, there is a question on the Order Paper, directed to the Minister of Trade and Industry, which goes to this issue. I have been asked by the Minister of Trade and Industry to represent him here today, and in fact there is a request that the Trade and Industry questions follow immediately after the Economic Development questions. If it's your decision that we follow that, I may be able to reply with more detail at that point.
The CHAIRPERSON OF THE NCOP: You will take them all at the same time; your follow-up question will be answered then, hon Worth.
QUESTION 151 - The MINISTER OF ECONOMIC DEVELOPMENT / Kn//LIM CHECKED// END OF TAKE
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The CHAIRPERSON OF THE NCOP
Question 151:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, the question relates to the increase levels of industrial funding by the Industrial Development Corporation, the IDC, in the past two years. I am pleased to note that the period 2001-12 and 2012-13 saw the value of IDC's finding approvals increasing to R26,6 billion compared to R18,1 billion in the preceding two year period. This is an increase of 46%. As a result of this increase, the IDC was able to increase the levels of funding into the economy and R24 billion was disbursed to businesses over the past two years. We measure both the approval rates and the disbursement.
Funding approved over the last two years is expected to create and save some 68 000 direct jobs compared to 56 000 in the previous two years. I think that this points to the important role of the Industrial Development Corporation in lifting the rate of fixed direct investment and in supporting jobs in the economy. Although the level of funding is an important indicator and the number of jobs are also important, they do not represent the entire story of the IDC.
Let me briefly turn to the price of steel which is an impediment to the development of the downstream fabricated metals industry. The IDC at the back of its investment is now also looking at strategies regarding the supply of iron in supporting small steel producers and is further investigating the viability of large projects. Hon members may have seen the announcement made last year about the IDC acquiring a major stake in Scaw Metals which is one of the iconic South African companies.
Another example of the IDC's investment footprint is that directed at the green economy. South Africa is a carbon intensive economy. This means that we emit a very high CO2 for each 1% of the gross domestic product, GDP. Our job is to reduce that impact; in part we do so by promoting the green economy. Over the next few days I will be visiting a site in Upington in the Northern Cape where the IDC is a coinvestor in a very large solar plant that will be producing green energy on scale that will go into the national grid.
These examples point to the qualitative impact of the IDC. The final example that I would like to cite is that of agro processing. Agro processing plays a major role in the development of the economy and it is also important for food security. Two of the projects approved in the recent years were implemented in 2013 and they illustrate this point. One of these located is Reitz in the Free State and it is the fifth largest chicken abattoir in the country with a capacity to slaughter 150 000 chickens per day and indirectly resulting in the beneficiation of 80 000 tons of maize per year.
So, by the IDC coming in at the top end of the supply chain and close to the consumer, it also pulls in agricultural inputs, and in this case, maize. Whilst that is important to us, part of the IDC's mandate is to support the growth of a group of small scale farmers. Therefore, the IDC looks also at how to ensure not only that we get the maize inputs and the abattoir capacity but that we create opportunities for smaller farmers.
A new diary in the Eastern Cape produces long life milk and other dairy products from milk sources in the region. It is estimated that the diary will increase the demand of milk from farmers, primary producers in the province by 18%. So, just one diary that the IDC coinvests in will lift the production of milk by close to 20%. These are examples of the impact of the IDC.
We have also done some work on small business development and over the last few years we have been looking at how to improve the delivery capacity of our small business agencies. Last year we launched the Small Enterprise Finance Agency, Sefa, and I am pleased to say that in the first year of its existence it more than doubled the approval rate of loans to small businesses compared to its two predecessors together. These are indications of the direction we need to go to.
When I reflect on it, the level of funding for small businesses is not yet close to what is needed. However, we are creating the capacity to dramatically scale that up. Early indications are that this year we will do significantly better than last year. Last year as I indicated was double the throughput rate of the year before that. Now we see that the small business lending pipeline is beginning to open and it will have a positive effect on the economy. I thank you.
Ms B P MABE
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The MINISTER OF ECONOMIC DEVELOPMENT
Ms B P MABE: Hon Chairperson, thank you Minister for the positive response and also appreciate the role that the IDC is contributing towards the building of the economy, particularly towards job creation. A number of things come into my mind, the issue of training and capacity building and the sustainability of the projects you are funding.
I would also like to know the types of funding that you give to these small businesses, is it in a form of a loan or a grant? If it is a loan, how do you recoup the money? Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: I would like to start with the question of training and capacity building of smaller businesses. We have two agencies: the first one is the Small Enterprises Development Agency, also known as Seda, its job is to provide technical support to small businesses; and then we have a funding agency which uses the submitted business plan of the applicant and evaluates it. In the past these were very disconnected, we are now ensuring that there is greater co-ordination between these two agencies. When a small business wants to apply for funding, immediately you have a technical support to get a proper business plan in place.
The second part of the question is sustainability. Again I am going to confine myself to the small business side where I think that the question was principally directed. We look at a business plan of an entity because most of what Sefa disburses is in a form of loans. There is a small allocation of grants on capacity building but the primary role of Sefa is to provide funding through loans to small businesses that cannot access loans from the commercial banks.
If a project is capable of generating support from Standard Bank, ABSA and so on then small businesses go there. However, when the risk profile is too high or the cost of the borrowing is too high for the small businesses then Sefa becomes the institution of choice that small businesses rely on.
Can we do more on building the sustainability of small businesses? I think we can. It is a global trend that you have a relatively high failure rate amongst small businesses. We are doing two things: we are helping to strengthen small businesses to bring that failure rate down; the other part is to recognise that many small businesses are new entrants. These are people who come with a great idea, with passion and they get into the economy and learn something.
As a result you will always find a small business funding agency which relies on public funding will have a higher rate of poor performing loans than the commercial banks because our risk appetite is a bit higher. I think that we need to do both, to build capacity and also have a greater risk appetite. Thank you.
Mr D A WORTH
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr D A WORTH: Chairperson, I would like to ask the Minister regarding the funding by the IDC or the Small Enterprise Finance Agency, whether they consider looking at any biofuel industry be it for maize or sugar. Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: Thank you very much for the question. One of the IDC's big projects at the moment is a biofuel project in Cradock in the Eastern Cape. The project is intended to have two components. The one component is support for the building of the plant that will do the refining. The other part is to stimulate small holder farmers who will provide the feed stock for that plant. It is the first of a number of projects like that.
The Department of Energy has done an excellent job in creating the policy framework that will require a portion of South African fuel in future to be generated from renewable sources. At the moment we are looking at range of feed stock. There are discussions with farmers in KwaZulu-Natal about sugar cane but we have already agreed about sugar beet as a feed stock and there are few other products that are also in the pipeline.
I think that this represents one of the challenges that we face, the green economy is a necessary and an important area to invest. With solar power generation and wind farms, we do not create enormous numbers of jobs. The capital to labour ratio favours relatively high capital investment. Biofuel though is different because it grows the feedstock on the farms that is used in the process. We think that the jobs dividend will be very significant in this regard. The IDC has positioned itself to be a leading lender to the development of the biofuels industry. Thank you.
Mr S D MONTSITSI
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr S D MONTSITSI: Chairperson, understanding the first world to be the Europeans and the west and also submitting that the early centuries and the market economy mostly on the west, strived highly on the back of emissions and that the current measures to request most in particular, the African countries to limit the current use of gas and oil in order to avoid emissions does it not bother on ensuring that African countries do not develop to the same extent as the west has done in the early centuries? Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: I thank the hon member for the question and I think that that question goes straight to the heart of the dilemma faced by developing countries at the Copenhagen talks on climate change. We recognise and President Zuma put forth the argument that the development requirements of the south, and particularly of the African continent, is so significant that we need to ensure that the climate change regime does not constrain us in any significant way.
At the same time we have also recognised that climate change, if it continues unabated, will have a very dramatic and costly impact on Africa. It will disturb climate systems; it will change weather patterns and will have a potentially devastating effect on African agriculture. Therefore, we have a responsibility towards our own continent and towards our own future to ensure that we have a less carbon intensive economy.
How do we square these two considerations? On the one hand you have development needs and the costs towards being greener. On the other hand is the reality that if we do nothing Africa will pay a very heavy price. The way we have done that is in all the climate change treaties and in the negotiations including the Cop 17 that we hosted in eThekwini. We have made it clear that we need a policy framework that recognises the problems of developing countries. In short, it has two key components: the first component is that we can commit to climate change goals provided that developed countries make technical and financial assistance available, so that as we carry the costs of these adjustments to our technologies they do not all come from the envelope of our own limited resources. Northern countries have a responsibility because they have benefited from a very intensive carbon growth in the past. Therefore they ought to put some of those resources into the south.
Secondly, we recognise that those are the big developed countries that our large emitters have a bigger contribution to make in reducing emissions than the smaller southern countries. So, the programme to achieve our goals has been carefully calibrated not to have a damaging effect on the African economies. In this regard for an example, we use a concept called business as usual.
We forecast that if we make no change, what will be our carbon emission in five, 10 or 15 years time. We then scale it down. It does not mean that the actual number of the level of emissions will decline; it is just that the growth rate will be moderated. Therefore, we have gone into detail to ensure that we structure our treaty commitments in a manner that is compactable with our development goals. That is, South Africa's position is a position that is one supported strongly by Brazil, China and India. So, there is a block of southern countries that pursue that agenda in climate change talks. Thank you.
Mr R J TAU
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr R J TAU: Hon Minister, I have a specific question in appreciating your responses. With regard to the funding, how do you assist or recoup loans especially after the new entrants and the emerging fail. After the failure or collapse of those small and emerging enterprises, what do you do to recoup? Do you take the commercial route, the credit bureau, etc? Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: Thank you very much for the question hon Chairperson, I think that each of the applications that an enterprise makes for loans, whether small or large, is accompanied by a set of joint commitments. In a case of a small company, Sefa would make commitments to a sum of money that will be made available on preset dates. In some of these cases, companies would provide collateral or cede a portion of their income by way of repayment.
The truth though is that in a number of cases, recovery is not possible. That is why if you look at the Sefa financial statements you will see an impairment rate. An impairment rate is that portion of loans which are irrecoverable. A company in good faith and an entrepreneur went in, they either ran the business well and something out of the ordinary happened or they had a lot of enthusiasm but not enough business skills, so they ran a commercially poor operation. Whatever the reason is, they lose everything, Sefa often finds that it can't recovery anything.
There is one more interesting Sefa programme that I wanted to share with hon members. Sefa provides a guarantee to the big commercial banks, when the commercial banks provide approved loans to small businesses, and those businesses collapse. A portion of the risk is carried by Sefa; the banks pay Sefa a premium or sum of money for that.
However, we want to increase the risk appetite in the society because that is what entrepreneurship is about. It is not a guarantee that you are going to make money. It is not a guarantee that you are going to succeed, but it is an opportunity for a viable enterprise to rise. If we close the doors and we only take on support for companies that have an absolutely perfect business plan that is guaranteed to win, then we will leave many potential entrepreneurs out of the economy. We try to find the balance.
Even the IDC which tends to make bigger loans, hon members may have seen that there has been a rise in the impairment ratio and that means that that they are demonstrating a greater preparedness to take risks. It is still the IDC's total asset base, and I am happy to say that it is still growing quiet robustly. There is no chance of the viability of the IDC being affected but it does say that it is prepared to take more risks and Sefa does the same. Thank you.
QUESTION 188 / JN / END OF TAKE
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QUESTION 151 - The MINISTER OF ECONOMIC DEVELOPMENT
Question 188:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, Question 188 relates to the National Infrastructure Plan, NIP. The department, through the work it does with the Presidential Infrastructure Co-ordinating Commission, PICC, currently monitors more than a 150 active project clusters on a quarterly basis. So, every quarter, we provide a detailed account of every project in those project clusters. We monitor spending levels, construction progress, construction jobs, localisation, and so on.
Part of our work is to collect data from the site project managers and the departments at national and provincial level. Part of our monitoring work is to send teams of officials to undertake site visits and compile reports that go to the PICC and to Cabinet. Furthermore, part of our work involves the President or line Ministers visiting infrastructure projects to ensure that we are, in fact, achieving the progress that we aimed at.
The question is about the challenges we are finding. These vary by project, but they often include regulatory delays, where one needs permission for something from a public authority, and there are some delays in it; court challenges, where someone who was the unsuccessful bidder in a tender takes the successful bid to court; contractors who underperform – sometimes small ones who go into liquidation, but in other cases, like the Medupi Power Station, very large multinational co-operations who underperform. There is also poor planning. In many cases, we find that there are good levels of planning, but we have come across infrastructure projects where the level of planning was not adequate. Finally, there is weak integration of different elements of a plan – you will find an excellent school being built, but the supply of water to the school is delayed. So, you have a project that is complete only in part.
Our work in the PICC is to unblock this. I have the Chairperson of the Management Committee, Minister Gugile Nkwinti, sitting here today, as well as a member of the Management Committee, the Minister of Energy, the hon Ben Martins. We have recently looked at not just a project-by-project unblocking but a legal framework. We crafted it in the form of an Infrastructure Development Bill that will now be submitted to Parliament and it will help to speed up processes. I look forward to receiving the support of this august House to process the Bill as expeditiously as possible so that the new administration can build on the successes of the past four years. So, infrastructure is a great success story. Yes, it has challenges, but we are also rolling out on a very wide scale. The Infrastructure Development Bill can help us very, very greatly.
I would like to conclude by illustrating the scope of our oversight visits. Over the past few weeks, each of the Ministers that you see here today would have visited infrastructure sites. For example, I have visited eight infrastructure projects in four provinces. In KwaZulu-Natal, the Cornubia Integrated Human Settlement, where 450 houses have been completed, is a massive project with many more houses being built now. The King Dinuzulu Hospital in Durban has been completely revamped and is a very modern hospital now. The Transnet multiproduct fuel pipeline pumps diesel and petrol from eThekwini to the economic heartland in Gauteng. There is also the Pier 2 Durban harbour expansion, where we have invested in massive new capacity to move cargo rapidly between ship and port.
We are confident about the economy, so we want to invest in the infrastructure that can support it. I recently visited a small Eastern Cape village near Mthatha to open the Vulindlela Junior Primary School. With the Premier of Gauteng, we looked at the Rea Vaya integrated public transport system in Gauteng, and we also launched Phase 1B. I would like to say that part of that was a visit to a bus company that is now producing the buses for the Rea Vaya programme locally. Of course, with the President and colleagues we visited the Grootvlei Power Station in Mpumalanga.
By way of illustration, sometimes the question is asked whether government has been able to develop additional energy-generating capacity successfully during the last four years. People would say, look, we know you are doing great work on the Medupi and Kusile Power Stations but that is for the next administration to complete. What have you done?
So, together with my colleagues, we aggregated all the smaller power stations that we have brought back into service. We revamped them and spent billions upgrading them. If you look at the output of those power stations, they are roughly equivalent to having built a new Koeberg Nuclear Power Station. This is just what we have done in the last four years. That is energy that is now going into grid. So, this is a success story that we can justly celebrate as South Africans across party political lines. Thank you.
Question 194 - The MINISTER OF ECONOMIC DEVELOPMENT AZM MNGUNI/ /Robyn – checked/ END OF TAKE
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QUESTION 188
Question 194:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, the question relates to whether South Africa is lagging behind other African countries and developing countries in economic growth and what our strategies are.
I would like to start by recognising that South Africa remains Africa's largest and most diversified economy, with the largest industrial capacity in the continent. So, when we see the questions that are often raised in the media, that compares us with the rest of Africa, we need to make two points.
The first point is that there are countries on the continent with higher rates of growth than South Africa. There are also countries with lower rates of growth than South Africa, but of the fastest growing economies on the African continent, many indeed, most of them are much poorer than South Africa. The fact that they are growing fast, and provided that a fast growth is an inclusive job-creating growth, helps those economies to lift millions of Africans out of poverty and it is something that we should celebrate. It is not a competition for South Africa; it is something that is good for the continent.
The second part of the answer, surely, must be that fast growth elsewhere on the continent benefits our economy. It creates markets for South African goods; helps to create more stability on the continent – which is good for investment – and deepens economic integration. In Pretoria, one of the motor companies that operates there is Ford Motor Company. It decided to locate the manufacture of its Ranger bakkie in South Africa. It exports to 102 countries using Pretoria as its base. What is really interesting is the African story. One out of five Ford Ranger bakkies made in South Africa is sold to other African countries. When Nigeria grows fast and Angola takes off and does well, it benefits jobs in South Africa. So, we celebrate the growth of the continent and we know that we too will benefit.
As regards other developing countries, since 1994, if you take the growth rate, the average Compound Annual Growth Rate for South Africa has been roughly the average of middle income countries if you exclude China. China's growth has been extraordinarily high. If you take China out of the basket, we track the average.
However, our challenges are vast. We need to create more jobs and generate more resources to tackle the enormous legacies that we have inherited. Part of government's strategy is to try to lift the structural rate of growth, not just the growth that you get because iron ore prices are going up, but the rate that you get because you fixed the problems in your economy. One of the biggest problems in the economy was lack of infrastructure. Investors came to us and said: "We would like to put up a plant. Can Eskom provide us with the energy? We looked at the energy requirement and said: "We are not sure we can do it." You have to invest in the energy. A company wanted to expand its operations and asked: "Can we rapidly move our goods from Springs in Gauteng to the port of Durban to export them?" we may not have the rail or the road infrastructure in place. That is why infrastructure investment is so significant.
Over the next few years we will be investing a lot more in infrastructure; expanding education and skills development; and the industrial policy action plan that sets out the overall strategy of government on industrialisation. The real concluding point that I want to make is that Africa is an opportunity for us and Africa's growth benefits South Africa. We have tracked the average of growth rate in developing countries, but we want to do better, hence the big investment in public infrastructure and our education system.
I thank you.
Mr K A SINCLAIR
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The MINISTER OF ECONOMIC DEVELOPMENT
Mr K A SINCLAIR: Hon Chairperson and hon Minister, a recent report by the International Monetary Fund, IMF, indicated that the slow economic growth in South Africa can certainly not only be blamed on the world economic situation, and that internal factors like strikes and other related uncertainties might be instrumental in hampering growth. In terms of the context of your question and response, what are your remarks on that?
The MINISTER OF ECONOMIC DEVELOPMENT: Thank you very much for the follow-up question. I think, without question, the sources of slow economic growth have both global and domestic basis. I have covered the global side which is that our key trading partner, the European Union, has been in recession for a long period. We are seeing now the beginning of recovery in some of the bigger parts of the European Union, EU, but there are still parts of the EU that are not growing.
The second part is the domestic factors. Last year, the strike in the platinum sector, unquestionably had a negative impact on our overall economic growth. Therefore part of our long-term vision is a compact, broader set of agreements between business, labour and government that lays the basis for growth. Government has initiated the conclusion of a number of social accords.
What is at the heart of the social accords? It is the idea that we must work together to create more wealth, but that wealth must also be shared in a more equitable way; and workers must see a stake for themselves in the prosperity that we are seeking to build. If we can do that – other countries have done that successfully – then we are able to lift our rate of growth. It is not only the physical issues of level of investment that are the drivers of growth and jobs, but it is also the success with partnerships.
Developing partnerships in an economy and society with high levels of inequality is a tough proposition. You do not have the natural sense of everybody being in the same boat. There is often a perception on the worker and on the shop floor that there are two realities; a reality for one part of the population and another reality for the vast majority of the poor. We need to bridge that. We need to create a common vision of where the economy is going. I think we have invested very much in building that. Later, when we deal with the auto sector, I will point to some of the steps that government has taken there. I think that it is fair to say that there are both global as well as domestic factors that affect the rate of growth.
Mr D A WORTH
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NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 69
The MINISTER OF ECONOMIC DEVELOPMENT
Mr D A WORTH: Minister, does the department at all, invest or assist firms? Let us say, for argument sake, they want to expand Maputo harbour. Indirectly, it might assist South Africa or take business away from us. Let us say, for argument sake, in Namibia. What is the department's vision on that? Thank you.
The MINISTER OF ECONOMIC DEVELOPMENT: One of the agencies that report to the department is the Industrial Development Corporation, IDC. I have given the IDC a specific mandate to help with the industrialisation of the African continent on the basis that Africa's growth is not at the expense of South Africa for the reasons I have alluded to earlier.
The IDC today is active in a number of African countries, investing in Namibia, West Africa and Mozambique. One of the biggest projects historically in the IDC has been the Mozal project that is a partnership with Mozambique and a big generator of income for Mozambique. The IDC is a key partner in that. I am delighted to say that we are seeing an increase in the footprint of the IDC. Not very long ago, the IDC coinvested in the major cement-manufacturing operation in Ethiopia. It is active in a number of other African countries such as Tanzania in the hospitality industry. It is really going out there, helping us to achieve the high growth rates in other African countries that we see.
In constructing many of its agreements, the IDC builds a supplier pipeline back to the South African economy. Finally, I would like to return to the issue of Maputo harbour. In our own long-term thinking in the Presidential Infrastructure Co-ordinating Commission, PICC, we see the development, obviously, of eThekwini and Richards Bay as important, but we see integrating Maputo harbour, in our own thinking, for the movement of goods and particularly commodities like coal and so on from Limpopo, via Maputo, to markets elsewhere in the world. In general, we remain very positive about those kinds of projects. Ultimately, even though there may be different political boundaries, we are slowly forging a common economy in Southern Africa.
I thank you.
QUESTION 196 / KC//A N N(ed) / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 70
"National Council of Provinces Main",Unrevised Hansard,29 Oct 2013,"Take 70 [National Council of Provinces Main].doc"
QUESTION 194 - The MINISTER OF ECONOMIC DEVELOPMENT
Question 196:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, South Africa convened the Brazil Russia, India, China and South Africa, Brics, summit at the end of March this year. It was the first time that the summit was held on the African continent. It brought together the heads of state of arguably, some of the most significant societies in economies globally. However, something unusual was done. For the first time since the formation of Brics, a host country, in this case South Africa, asked that there be a further or a side event and we asked that because we wanted to connect what Brics could do with not just South Africa, but with the African continent. President Zuma then extended an invitation to a number of African countries and we were pleased that some 15 African heads of state or government came to Ethekwini. They included the heads of state of Ethiopia, Senegal, Chad, Ivory Coast, Mozambique, Uganda, Libya, Algeria, Egypt, Rwanda, Congo-Brazzaville, Angola, Benin, Equatorial Guinea and Guinea-Conakry.
So, out of these we sat down and asked: How can Brics support African industrialisation? That summit was held a little more than six months ago. Therefore, it won't immediately impact on the trade figures, it takes a while for the investment to kick in and the greater trade to be developed. However, we have no doubt that if you look at the last few years an ever-increasing part of our trade is with the rest of the continent. We started on a very low base.
Perhaps I should share with hon members an interesting statistic. If you look at the level of intraregional trade - countries trading with their immediate neighbours – you will find that for the European Union, it is about 70%, for Asia, if you take Japan as a developed economy out of Asia, it is about 45%. If you take the African continent, it is 12%. The reason for that is that we have not developed the diversified economies that allow us to trade with each other. So, that is what this heads of state and government meeting was about - how to deepen industrialisation on the continent. That goes back to my earlier question. When we see high growth in the rest of the continent, we are delighted and happy because it is part of creating a vibrant opportunity for South African goods to be sold and for South Africa to buy from places, as trade is a two way street and it helps to support the growth of African economies.
At the meeting itself, infrastructure development was looked at and what can be done about road transport and rail. Part of it is the North-South Corridor, to link the City of Cape Town by road with the City of Cairo, which was a dream that an imperialist, Cecil John Rhodes, had more than a century ago. It is the responsibility of the democracy to give effect to that - to hook up, through road and rail transport, the various economies.
President Zuma also, separate to the Brics summit, launched trade talks with 25 other African countries to create a free trade area. If it is successful, it will be 600 million Africans in one market. It means when a company wants to expand they have this enormous market that they can produce for. All these indicate how central Africa is to our own future and to the economic strategy of this government. I thank you.
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 70
The MINISTER OF ECONOMIC DEVELOPMENT
Mr D A WORTH: Chair, I would like to ask the Minister about the Congo River. It is said that it could supply a vast amount of power. I think it is called the Inga scheme. There is talk and it has been alluded to that they have started on that. Can the Minister elaborate on anything with regard to that project? I thank you.
The CHAIRPERSON OF THE NCOP: Minister, do you want to take the question? I do not know how it has to do with your department, but if you wish to, it is fine.
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, the expert on the issue is sitting right in front of me, that is the Minister of Energy and perhaps the question can be directed to him. However, let me just make one point and the Minister of Energy is absolutely on top of the details of this. The river that we are talking about is called the Inga River. Its geological features are such that it provides an opportunity for an unusually high level of hydro energy to be generated. South Africa is partnering with the Democratic Republic of Congo, led by the Minister of Energy, on behalf a team of Cabinet members, and I think perhaps when the Minister of Energy has the floor, if the Chairperson allows him, he could supplement these comments. Thank you.
The CHAIRPERSON OF THE NCOP: No, I think Mr Worth understands what I am saying. I have heard from the beginning that the question does not belong to your department. So, Mr Worth knows who to direct the question to.
QUESTION 199
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 71
QUESTION 196
Question 199:
The MINISTER OF ECONOMIC DEVELOPMENT: Chairperson, can I just make a point that we have not been able to obtain details from the hon Nyambi as the Question relates to a certain company. We have looked into the details and the report is not available. However, I would be happy to reply to the second part of the Question, which refers to the President's view in the state of the nation address that the economy needs to grow threefold.
What is the platform for our higher growth strategy? Its first leg is infrastructure because infrastructures are at the heart of growing just about every other sector of the economy. Earlier on, I have spoken extensively about the infrastructure.
The second leg is to use our mineral resource base. As we have emphasised, it is not the export of raw minerals that is going to lift this economy but rather beneficiating more of those minerals. Hence the Department of Mineral Resources is doing a lot of work with other economic departments on how to strengthen beneficiation.
Next month, President Zuma will be visiting the Northern Cape. During that visit, he will go to a small town with the unusual name of Hotazel. [Laughter.] That is the name of the town where the world's largest manganese centre plant is located. It is a coinvestment by the Industrial Development Corporation, the IDC. This is the world's largest manganese centre plant where the major shareholder is a Black Economic Enterprise, a BEE, company. The owner of the BEE Company is a black female and she is the active executive chairperson of the company. So in one example, we have beneficiation tapping our mineral resources and real BEE; and not someone who sits silently and wait for dividends. This is someone who is making things happen there.
The third leg is agriculture and agro-processing - the key part of lifting the rate of growth. I am really pleased to note that those who are fans and students of the quarterly labour force survey produced by Stats SA, would have seen a significant growth in agriculture jobs in the last 12 months. The other legs are well-known as the job drivers of the New Growth Path. They go to the areas of manufacturing, knowledge economy, green economy and of course, the opportunities on the African continent. Those represent the platforms that we use.
Complimenting that is the investment in skills development, particularly making sure that the further education and training, FET colleges work. We have launched the construction of two more universities and we will be building 12 new campuses for FET colleges in the next period, as part of investing in our people. That is our plan to lift the growth rate and make sure that it is more inclusive. The benefits of that growth must reach the poor. It must be a job reach growth. I thank you.
QUESTION 145
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 71
QUESTION 199
Question 145:
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry): Chairperson, I do not know whether there is a bonus scheme for a number of Questions that are answered in one sitting, but here it goes. [Laughter.] The Question relates to the Incubation Support Programme, the ISP, of the Department of Trade and Industry, whether the programme is still on track. Yes, indeed, the Incubation Support Programme is still on track and has already yielded successes.
The hon members might still recall my earlier reply on the Small Enterprise Finance Agency, Sefa, and small business support. Just making funding available is not enough. An Incubation Support Programme is literally "the holding of hands" of small businesses by larger companies where we ensure that small businesses are supported as they deal with problems of starting up or expanding an operation.
As of September this year, 30 applications had been approved to the value of about R410 million. The total value of investments that was leveraged through the Incubation Support Programme is about R817 million. A very large number of jobs have been created as a result of this. We have a breakdown of approvals: In the Eastern Cape – four, in the information and communications technology, firms and agriculture; Free State – three; Gauteng – seven; KZN - one in the clothing sector; Limpopo - three and all are in manufacturing; Mpumalanga – four; Northern Cape – one; North West - zero and Western Cape - seven.
On 10 October this year, the Minister of Trade and Industry launched the Sasol ChemCity Business Incubator in Sasolburg. ChemCity is a multi-sectoral facility which seeks to expand, and it is the first project to be approved under the new Incubation Support Programme, to the value of R26 million over three years. Here we are building a partnership with Sasol to ensure that it brings more companies into its supply chains, leveraging off the supply chains of large companies. That is one of the other elements of our small business programme. Other companies like Eskom and Transnet have agreed in principle to partner with the Department of Trade and Industry, the DTI, to sponsor a number of incubators. I thank you.
Mr B A MNGUNI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 71
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry)
Mr B A MNGUNI: Minister, thank you for the answer. However, I just want to find out if there has been any failure rate in this Incubation Support Programme.
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry): Chairperson, the Incubation Support Programme is new. It was launched in September 2012. Therefore, we do not have the information available as yet on whether there were companies that folded after being included in the programme.
However, I have no doubt that over time; we will find that the success rate in the Incubation Support Programme is likely to be higher than the average success rate, precisely because it supports small businesses so actively. This does not mean that there will be no failures. It is the nature of a market economy that some companies succeed and others fail. It is our responsibility to learn from the reasons as to why companies fail and see whether in the design of incubation, we can reduce that risk; not to eliminate it, but just reduce it. I think that is what the Incubation Support Programme is about. Thank you.
QUESTION 148
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 72
QUESTION 145
Question 148:
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry): Thank you very much for the question, this question goes back to the issues raised in the auto sector. I am pleased to indicate that over the last few weeks, we have had meetings between the Minister of Trade and Industry and players in the auto sector to look at the impact of industrial action and what we can do. Therefore, we have really been building confidence in South Africa's location for automotive manufacturing in spite of the fact that there has been strikes in the sector.
On 17 October, Minister Davies held a joint meeting with the National Association of Automobile Manufacturers of South Africa, Naamsa, with the CEOs of the major manufacturers and with Numsa the trade union. They all reaffirmed the commitment to work together to improve competitiveness in the industry and enhance South Africa's attractiveness as an automotive manufacturing destination.
The strike has therefore ended. There are some lessons that are coming out of the strike. Two weeks ago, I had the opportunity to visit the Marcopolo factory in Germiston. The Marcopolo factory assembles buses. At the launch of this programme, the CEO of Mercedes Benz was present.
He gave a brief speech in which he says: We are thankful and happy that the strike has ended, and I would like to tell the audience here today that the strike ended on a particular afternoon. I think he said the first afternoon of the day but whatever the afternoon was.
That late afternoon, we sent an SMS to every employee of Mercedes Benz asking them to return to work the next day. We expected that some would come and that it would take a couple days to get back to full production. To our surprise the next day, 99% of the workforce arrived at work. We have reached an agreement with the trade union to introduce twelve-hour shifts, to catch up on the lost production. We are confident that we are going to be able to do that.
Last week there was an article in one of the newspapers, which talked about the Ford Motor Company. The global President and CEO of Ford Motor, Allan Mulally, visited South Africa and he was asked at the motor show about the prospects for the industry in light of what had happened. I quote from the Business Day:
Mr Mulally was anxious to ease fears over Ford's plans. He said the group was happy with its global manufacturing operations, which were 'pretty much, where we want them to be.' Silverton is designed to build up to 110 000 ranges annually and the current model is due to continue until at least 2018.
Mr Mulally said production would continue as planned and the group did not intend to build assembly facilities anywhere else in Africa. He said reliability of delivery was critical for any plant and observed: "We are continuously re-evaluating our plant footprint across the world."
Then he said:
This is quite significant that the company is looking at expanding its operations as part of growing the market elsewhere in the continent. He looked to South Africa as the place where they are going to put that additional investment.
You see, it is recognition from Mercedes Benz, Ford and other companies; but of course they do not welcome a strike. They want labour peace and co-operation. However, when a strike occurs they sit through it, as soon as it is resolved they get back to their employees. They workout a plan to catch up on the lost production and they get on with the work.
In the auto sector, we have multiyear agreements. Generally speaking, when you conclude an agreement you have a couple years of labour peace and when the contract comes to an end that's when the bargaining starts again. So, I recognise that there has been some anxiety about the strike but I think the indications are that we will recover. We will be able to grow, and that we remain an excellent choice for investors from across the world, and in fact, for domestic investors. I thank you.
Mr B A MNGUNI (on behalf of Mr D D Gamede)
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 72
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry)
Mr B A MNGUNI (on behalf of Mr D D Gamede): Chairperson, we are told that South Africa's automotive industry is somehow uncompetitive due to inefficiencies and labour costs. How much money is government going to put in to make sure that the automotive industry in South Africa still remains competitive?
The MINISTER OF ECONOMIC DEVELOPMENT (for the Minister of Trade and Industry): Thank you very much. Firstly, I would like to start by saying that we have a very significant support programme for the auto sector. It is done through a system where we encourage companies to make fewer models but we expand the production for each model so that the unit cost comes down and they become price competitive. Through the programme that the government has in place, we have been able to see a vast expansion of local production.
Since one of the questions relates to BMW, I visited the BMW plant last year to launch the manufacture of the new 3 series. At the time, BMW had one of the global executives present from Germany. We talked about the efficiency in the plant, and he said to me, from a quality point of view, the 3 series manufactured in South Africa is pound for pound absolutely as good as the best made in Germany. Germany is the gold standard for the production of luxury vehicles.
Here we have seen clearly an indication from companies that we got the quality right. Vehicle prices are driven by technology, training and how many units you manufacture. The bigger your production runs, the more - the lower your unit cost and the more efficient you become.
As we expand the African market, remember the importance that President Zuma touched on, during the free trade talks for the African continent. The more we can create a market of real size. Hon members, just consider in Brics, we are the smallest nation by population, 52 million people. The next biggest country, Russia, has about three times that population. Brazil has four times the number of people in South Africa. China and India of course are enormously large populations. Therefore, the auto sector's efficiency is certainly going to be a function in part of market size.
In the other elements of training, we have worked with the auto sector when Ford had a slowdown in its production, the IDC partnered with Ford. When BMW had difficulties with the global sales, we allowed them to use the training layoff scheme which was introduced by government in 2009 to tie them over. We therefore see a lot of partnership between government and the auto sector to try to keep the sector as an efficient sector.
Currently in 2012, we were producing some 539 000 vehicles domestically, and we were exporting 277 000 of those vehicles. You do not sell one out of five of your Ford Range of bakkies elsewhere in the continent if you do not get your quality right and if you do not get your price right because that's what people are looking at.
Indeed there are challenges that we must continuously improve the quality and the efficiency of producing vehicles. However, we also have a great success story to tell. I think that part of our job as government is to bring these realities into the public discussion and to share them with a very important constituency. Those are Members of Parliament. I thank you.
QUESTION 174
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 73
QUESTION 148
Question 174:
The MINISTER OF ECONOMIC DEVELOPMENT (on behalf of the Minister of Trade and Industry): The question is directed at the Department of Trade and Industry, DTI, and it relates to further education and training, FET, colleges in the Eastern Cape and Ekurhuleni.
The DTI has signed a memorandum of understanding with Ekurhuleni Further Education and Training College on 4 April last year as a hosting institution to pilot a centre for entrepreneurship programme. An agreement was also signed with King Hintsa FET College on the 3 October this year. The launch of these institutions was a significant milestone. Centres of entrepreneurship at Ekurhuleni FET College and at the King Hintsa FET College were launched by the Deputy Minister, the hon Elizabeth Thabethe.
The first phase of the establishment entailed putting proper governance structures in place, deciding on selection criteria to determine eligible participants, embarking on capacity building with the colleges, and putting monitoring and evaluation instruments in place. So, as we put resources and effort into the FET Colleges, we make sure that we help to improve their long-term capacity.
The DTI has also commissioned research to determine the level of readiness of institutions to host these centres of entrepreneurship and they undertook feasibility workshops as a preliminary step for the study. During the current financial year feasibility assessments were conducted at 42 FET Colleges in all nine provinces and at three universities of technology: in the Western Cape, KwaZulu-Natal and Gauteng.
In respect of the other part of the question, we note that the feasibility assessment process has not been concluded, but that preliminary results are available. These indicate that a potential number of institutions are showing critical elements regarded as necessary ingredients for hosting the programme successfully. The department envisages that two more institutions will participate in the next financial year and the department will continue to identify institutions for participation.
The study that I have sited earlier also revealed that capacity of lecturers is a key constraining factor that can hamper progress and affect the delivery commitments.
To address this problem, the University of Johannesburg has been appointed to assist with designing a capacity-building strategy and programme to enable participating institutions to manage the programme successfully. The DTI is also collaborating with the Department of Higher Education and Training to review the entrepreneurship curriculum content and to strengthen the capacity of lecturers in this regard. I thank you.
QUESTION 179
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 73
QUESTION 174:
Question 179:
The MINISTER OF ECONOMIC DEVELOPMENT (on behalf of the Minister of Trade and Industry): The question asked is with regard to the commitment in 2009 by the Department of Trade and Industry to work closely with the Economic Development Department to address the challenges of disparities in the spatial economy and promote rural development. So, the question is, what has the DTI done?
In responding to the question on behalf of my colleague, we make the point that spatial disparities, particularly the overconcentration of our industrial economy in a few regions, remain a concern of government. One of our industrial policy objectives is to ensure balanced development – that we don't have only two or three major centres of growth but every other province being labour-supplying areas providing people, but with no economic opportunity.
So, some of the particular projects include the Regional Industrial Development Strategy that guides our interventions in creating additional industrial hubs and ensures that industrial development programmes don't lead to further marginalisation of underdeveloped areas. They are strategic integrated projects, SIPs, that the Economic Development Department are actively involved in as part of the Presidential Infrastructure Coordinating Commission, PICC.
So, working with the DTI, what we have done with these strategic integrated projects is to unlock opportunities elsewhere. For example, the Northern Cape has had slower jobs growth in the past. The example that I gave earlier of the manganese sinter plant is an opportunity to grow the Northern Cape economy. Similarly, in SIP 1, we are working very hard to unlock the enormous coal, chromium, platinum and palladium reserves of Limpopo.
So, that's another area in which the DTI is an important partner.
Third, regarding special economic zones in this area of work, the DTI has completed work on a policy framework and also on the Special Economic Zones Bill which is now before Parliament. A total of 10 proposed special economic zones, SEZs, have been identified and those that pass the economic viability test will be developed into key industrial hubs. The idea is to make sure that these zones help to address spatial imbalances.
The DTI is also working in partnership with national and provincial departments on small-scale regional clusters. They are implementing 33 projects in 25 districts across the country. The department recognises that this is not yet being done on scale. We need to expand it a lot more. But this is the beginning of the process that will ensure much greater equitable development.
Finally, the DTI is also working with the Economic Development Department in the provinces on finalising a Small- and Medium-Enterprise Action Plan. The Minmec met recently and agreed to a number of steps that the various national and provincial departments will take to expand lending and technical support to small businesses. I thank you.
QUESTION 190
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 73
QUESTION 179
Question 190:
The MINISTER OF COMMUNICATIONS: I'm responding of course to Question... [Interjections.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Please hold on, hon Minister.
My apologies, hon Minister.
I have been informed that the Minister of Economic Development will continue with questions for the Department of Trade and Industry.
The MINISTER OF ECONOMIC DEVELOPMENT (on behalf of the Minister of Trade and Industry): Hon House Chair, there are another 43 questions on behalf of the DTI that I intend to address. [Laughter.] I should ask that that be struck from the record!
The next question, which is question 190, relates to progress that has been made in the establishment of co-operative academy in collaboration with the Department of Higher Education and Training.
Firstly, the DTI initially mooted the proposal for a co-operative academy. The reason was very clear. As we expand co-operatives we need to ensure that we strengthen the business skills of people in the co-operative movement.
The mandate for the establishment of a co-operative academy has now been transferred from the DTI to the Department of Higher Education and Training. The process of establishing this institution has started. The Minister of Higher Education and Training has established a ministerial task team in September of this year to seek advice on all aspects pertaining to the establishment of the academy. The task team is composed of stakeholders within the co-operative movement, academics and civil society. The DTI also serves on the task team and it is hoped that the task team will complete its work within the next six months.
The DTI will continue to work very closely with the Department of Higher Education and Training to ensure that the academy is established.
As to the second part of the question, the DTI has indicated that Education and Training is one of the seven core International Co-operative Alliance principles of co-operatives. Continuous education is important to the long-term success of co-operatives as well as to the creation of the possibility of new enterprises. The academy will therefore equip co-operatives with much-needed technical and managerial skills and knowledge that will aid them in running their operations successfully.
As to the final part of the question, I advised hon members that the ministerial task team will determine the actual cost of setting up and running a national co-operative academy. We are looking at different costing models that the DTI and Higher Education and Training should consider. The ministerial task team will also make recommendations regarding the accreditation of materials and courses that will be used by the academy. I thank you.
QUESTION 208/MALUTA//nvs / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 74
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 74 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-74] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 190
Question 208:
The MINISTER OF ECONOMIC DEVELOPMENT (ON BEHALF OFFOR THE MINISTER OF TRADE AND INDUSTRY): Thank you very much, House Chair and I am pleased to indicate that this will be the last of the set of questions. Various industry stakeholders from different sectors including the major income-generating sectors of the economy decide on their transformation plans based on the shape, size and the characteristics of a particular sector. Upon receiving such applications the Minister of Trade and Industry then apply his mind to the process, in order to determine whether to develop a sector code or not. That is in relation to the first question that was asked.
The DTI has however identified the need to develop a transformation plan for the mass grocery industry for the wholesale and retail sector based on the provisions of the Broad Based Economic Empowerment Policy. A need for the study was informed by the low level of transformation in the sector which contributes approximately 13% of the gross domestic product of the country and accounts for about 18% of South Africans who are in employment. It is also one of the few sectors of the economy where there is mass participation by black people; however, this takes place mostly in the informal industry. Currently the level of transformation in this sector is low. Most retailers are at BBBEE level four or lower. It is important to note that transformation in the mass grocery industry cannot be addressed without looking at transformation across the value chain, from farm to fork as they say, due to the strategic interdependencies of the industry with other industries. This would encompass the AgriBEE Charter, the Financial Sector Charter and other relevant charters. The DTI strongly believes that transformation also fosters long term value chain partnerships.
On the second question that the hon Leese has asked, the codes of good practice are universal and cover all sectors of the economy except those that are peculiar and have developed their own sector codes.
On the third question, currently the DTI is working with the Department of Mineral Resources to ensure alignment between the two policies. On the fourth question, yes my colleague the Minister of Trade and Industry is aware that certain sectors require licences and as such the conditions for applying for licences need to be aligned to the relevant sector code. And on the fifth question that was asked, my colleague the Minister of Trade and Industry is willing to consider all the challenges and peculiarities of different sectors and provide guidance in their implementation. I thank you.
Ms E C VAN LINGEN
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 74
The MINISTER OF ECONOMIC DEVELOPMENT (ON BEHALF OFFOR THE MINISTER OF TRADE AND INDUSTRY)
Ms E C VAN LINGEN: Thank you, Chairperson.
Afrikaans:
Me E C VAN LINGEN: Of moet ek nou Afrikaans praat, want jy praat so mooi Afrikaans op die radio.
English:
We would like to know, the licences for the casino industry was issued more than 10 years ago. There was a special appeal from them that the licences that were issued to them were not in line with the original sector code. This is why we asked the question, or they have asked the question, as to whether certain exemptions will be considered or not.
The MINISTER OF ECONOMIC DEVELOPMENT (ON BEHALF OFFOR THE MINISTER OF TRADE AND INDUSTRY): Hon Chairperson, I think the specific nature of the question is different to the original question but I would be very happy to pass it on to the Minister of Trade and Industry and perhaps my colleague, the Minister, to directly communicate with the hon member, and given the nature of the question and my earlier reply may I just state for the record that job growth in the Northern Cape between October 2010 when the New Growth Path was adopted and June 2013 was 34 000 new jobs. I thank you.
QUESTION 136
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 74
QUESTION 208
Question 136:
The MINISTER OF COMMUNICATIONS: Chairperson, just to say the Deputy Minister Stella Ndabeni-Abrahams would have been quite happy if the Minister of Economic Development continued to answer questions as he is very close in achieving an entry in the Guiness Book of Records. We would have been quite happy. Also because I have just stepped off a plane from a very cold country Estonia this morning and I have made my way here. So I am half asleep and half awake. So I don't take full responsibility – he has just given me the notes – for the answers I give.
But let me say, yes of course. The question is appropriate and is about the SABC and what is being done about it. Essentially we say yes, we are attending to the matter. To the first part of the matter we say that we have in fact formed a Joint Task Team which comprises members of the SABC obviously, the Auditor-General's Office, …
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau):Hon members, order. Can you please listen to the responses because that will prevent us from making follow-up questions and end up asking new questions.
The MINISTER OF COMMUNICATIONS: Yes, which reinforces my point that maybe we should have asked the Minister of Economic Development to answer all the questions. But to come back to my point wherever it was where I was at… Yes, this is it. The fourth party, excuse me, is our department. So we have set up the Joint Task Team, amongst its concerns is to examine firstly – would you finalise the shareholder compact of the SABC? We said we are not happy with the shareholder compact, that it must include the recommendations of previous Auditor-Generals' reports. We are about to finalise that. We in fact had a response from the SABC this week and we need to finalise that.
The second aspect is progress on digital migration. I think people are familiar with that. We need to move from analogue TV to digital TV. The third aspect is to look at the long-term financial sustainability of the SABC. Yes, they met the requirements in terms of the guarantees given by government, namely the loan they got of 1,4 million from government in 2009. Now what about its long-term financial stability. Fourthly, key positions including the Chief Financial Officer, the Chief Operating Officer etc have not been filled. We have been assisting without undermining their operational autonomy to finalise those positions. From what I can tell we are very close from solving the impasse over the position of the Chief Operating Officer now. Finally we are looking at the SABC Multi-Choice contract that has been finalised now. Finally, to find out and establish more exactly from the SABC where it fits in terms of its long-term strategies and indeed how financially sustainable it is.
In addition with reply to section (c) without further relevant details, we have as a Department of Communications communicated to the CEO of the SABC to say that we want reports on time. But on our side, to be fair, we have not been giving them sufficient enough feedback. So we commit ourselves to engage more rigorously on their quarterly reports. It applies not only just to the SABC but to other state-owned companies too. I thank you.
Mrs B L ABRAHAMS
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 74
The MINISTER OF COMMUNICATIONS
Mrs B L ABRAHAMS: Hon Chairperson, hon Minister. I like to know regarding analogue and digital TV. What about the poorest of the poor? Will government be subsidising them?
The MINISTER OF COMMUNICATIONS: Yes, the policy has not changed. Government committed itself in its broadband digital migration policy to contribute around 70% of the cost of the set-top boxes. As you might know it is in the public domain. We had a team of facilitators trying to settle the disputes between broadcasters on whether the set-top box which is basically a decoder in common sense language should have some sort of control system. The big word is encryption. Whether it should have some system which you actually have to access in a particular way to watch the programmes like you would do for example on Multi-Choice or DSTV. Whether it should have that or not. Those facilitators have reached an impasse in respect of the negotiations. They have brought their final report to us. We are going to Cabinet shortly to take a final decision on the matter.
QUESTION 140 / PJJCONRADIE/ END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 75
QUESTION 136
Question 140:
The MINISTER OF COMMUNICATIONS: House Chairperson, it is a question on the SABC and the Universal Service and Access Agency of South Africa, USAASA, and the challenges they have flowing from issues of governance.
These are the replies we received from the respective parties. The SABC says that, where losses have been identified in the first instance and recovery is required, disciplinary and/or criminal action will be instituted to ensure recovery.
Secondly, a true and accurate estimate of time cannot be provided as each case is different.
Thirdly, as an answer to part B, the amounts for the 2012-13 financial periods are as follows: fruitless and wasteful expenditure not condoned – R50 000; payment for services not provided and disciplinary action initiated against the responsible persons – R2,4 million.
Regarding USAASA, where losses have been identified and recovery is required, disciplinary and/or criminal action will be instituted to ensure recovery. A true and accurate estimate of time cannot be provided as the cases obviously differ. Criminal cases were brought against seven of its former employees that were alleged to have transgressed the supply-chain management processes in the 2010-11 financial year, with the Midrand Commercial Crime Unit. There are no claims or losses in the subsequent year. They go on to say that civil action was instituted against all seven former employees to retrieve losses suffered and as much of the said amount as possible. USAASA has also instituted legal processes to recoup the funds from the transgressors. USAASA has also solicited the involvement of the Hawks and awaits progress in this regard. I thank you.
QUESTION 162
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 75
QUESTION 140
Question 162:
The MINISTER OF COMMUNICATIONS: House Chairperson, the question is asked by Ms P M Themba, who is my friend, and I didn't think she would ask such a difficult question, but here it is. She asks about the inaccessibility of the Post Office to disabled people – which is a very good question, the lack of proper management during the last illegal strike, and the lack of a proactive plan.
Having discussed these with the Post Office, our response is briefly as follows. Regarding accessibility, there are currently 906 South African Post Office, SAPO, braches that are being installed with counters for the alternatively abled. The action plan is to actually install a further 423 of such counters over the next three years and the balance will be done over the further three years.
In respect of the installation of ramps for the alternatively abled at SAPO branches, there are currently 1 461 branches which have these ramps. The plan is to install a remaining 119 over the next two years. Needless to say, as a Ministry, we welcome a follow up question on that in order to monitor progress as regularly as it might be possible.
In respect of the illegal strikes, SAPO management implemented various contingency measures to ensure that customer inconvenience was mitigated. These measures were firstly, the collection of mail form Witspost and Tshwane retail offices after hours; secondly, mail destined for areas outside of Gauteng was generally moved around midnight; thirdly, in addition to replacement labour, administration staff from the head office and the unaffected surrounding offices was utilised in various depots to assist in clearing the backlog; and fourthly, SAPO's key and major account holders where communicated with individually in order to explain the situation and the contingency measures undertaken.
I think we, as the Ministry and the Department, have met the SAPO board five times over the last three and half months. On two of these occasions we discussed this matter and on one occasion some very deliberate consideration was given to it. We are prepared to work with them in order to assist them to ensure that they are better prepared to manage strikes.
In respect of subsection (c) of the question regarding the lack of proactive action, by answering subsection (b), the attempts being made to be proactive have, in a way, been communicated, if you like. But additionally, all contingency actions planned and undertaken are intended, of course, to mitigate any potential loss of revenue that might ensue as a consequence of any strike action, legal or otherwise. SAPO's governance framework provides for the board to take decisions in the form of board resolutions and as clear processes for the implementation of board resolutions as well as enforcement mechanisms to be applied in the event of failure to implement such resolutions. SAPO is unaware, it says, of any board resolutions that management has failed to implement.
Regarding the delays in filling vacancies, SAPO has a number of vacancies across the business, and appropriate processes are being followed to ensure that suitable candidates are identified to fill these vacancies. Over the last six months the organisation has advertised a number of posts that are set to be filled in the immediate future. Here again, we have been vigorously pursuing them on this matter because we want those key posts filled. We think they are seriously challenged as it is and, with these vacancies, they are not able to cope with some of the challenges. We are, in fact, meeting them very shortly – in the next two to three weeks – to take those matters further. I thank you.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 75
The MINISTER OF COMMUNICATIONS
Mr D A WORTH: Hon House Chairperson and hon Minister, do you know that the South African Post Office is now called snail mail. If you send a postcard now it might just get there by December. If you send a letter to Estonia it might never get there.
Minister, even the UK had problems – the Royal Mail has been privatised. With email and other such means of communication available these days, very few people write letters. They might use the Post Office to send a parcel or whatever. In order to resolve this, do you think the Post Office Bank will, in the long term – and there is a Bill going through at the moment - rectify the situation by making the Post Office a real viable entity for the future? Thanks.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Hon Minister, you have probably noted that the question is not quite relevant insofar as it is not a follow-up to what has been asked. But you are at liberty to respond to the new issues raised by the hon member if you feel like doing so. However, you are not obliged to do so.
The MINISTER OF COMMUNICATIONS: House Chairperson, yes, I understand. However, I understand he is likely to pose that as a formal question if I don't reply now. In order to save time for everybody, here is a simple answer. In fact, we do agree, though not with all you say but only with the subtext thereof. The post office is in the internet age now. Even in our own country, mobile phones reach the most rural areas and people use SMSs. Not only our Post Office but post offices all over the world are similarly challenged. As I said, I have just returned from Finland and Estonia. Interestingly, post offices remain under state control in both these countries that are neighbours to each other. We discussed with them yesterday morning on how they function. We got a whole lot of ideas and we are going to table a report to the House hopefully at some stage, you will see. If you have any proposals, please, let's have them.
But what we have done is that we asked our own department to start using the Post Office more than it uses private sector courier services. Now, obviously, the Post Office, from its side, has to show its greater efficiency in order for government, municipalities, provinces, perhaps for Parliament too, to use them more efficiently. So, at some appropriate stage we are going to approach Cabinet and urge all the departments to prioritise using the Post Office.
There are many other things a Post Office in a country like ours... Estonia is a very advanced country industrially and so is Finland. We have huge underserviced areas that no private sector company is going to reach. So, the Post Office is here to stay. It is part of our developmental state ethos and orientation.
In the first week of December we will have a meeting with them and will bring in some experts to look at how a post office will function in a developing society, in an internet age with such a high penetration of cell phones. It can be done and it is being done by developing countries. We have to and we are doing that.
If you have any specific proposals, kindly send them to us. Thank you indeed.
QUESTION 163/Sam//nvs / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 76
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 76 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-76] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 162
Question 163:
The DEPUTY MINISTER OF COMMUNICATIONS: House Chairperson, the question relates to the findings by the Auditor-General and how we are going to address the challenges that have been raised. The question was asked by hon Themba.
The response is as follows. Firstly, as the department, we have made it a point to improve our compliance with the Public Finance Management Act, PFMA. That is the first thing. We have put policies and other measures in place to ensure that the department complies.
Secondly, we have not received any negative reports regarding irregular expenditure in the previous financial year. This also indicates the fact that we have improved. We then put some measures in place to deal with irregular expenditure at the following levels.
The first level involves ensuring that supply-chain management policies and procedures are in place so that we are able to ensure that procurement in the department is done within the law and according to regulations. This is of course done by the supply-chain management unit together with the departmental bid adjudication committee as appointed by the director-general.
On the second level, we have to ensure that project managers are required to confirm the project deliverables before they procure the services. This means that, upon receipt of an invoice, they must first check that everything is in place. They need to ensure that financial due diligence was conducted to ensure that all required compliance requirements have been met before the procurement is done.
The third level ensures that, in case an irregularity has been detected in the process, the transaction is disclosed in the register and an investigation is undertaken to determine if there was negligence on the part of the officials. Disciplinary steps must then be taken by the accounting officer if it was discovered as such.
On fruitless and wasteful expenditure, we have put internal controls in place in the form of policies and procedures to ensure that we prevent losses. Hon members will know that fruitless and wasteful expenditure refers to expenditure that was made in vain and could have been avoided had reasonable care been exercised.
In the event that such expenditure is detected after the event – for example, a no show at a hotel or a loss of assets – an internal investigation will be conducted to determine the circumstances that led to the expenditure being fruitless and wasteful. If the investigation confirms that there was indeed negligence, full recovery of the loss is authorised.
To date, the department has recovered money from officials on all matters that were legally confirmed to be wasteful and fruitless due to noncompliance and negligence.
In this financial year, 32 fruitless and wasteful expenditures were recorded. Of these, 20 were finalised, recoveries were effected in 11 cases, and nine cases written off. The other 12 are still under investigation.
Now, how do we then ensure that we prevent the recurrence of these findings and strengthen compliance? We have ensured that we develop a comprehensive action plan that forces management to address all compliance issues in the department, including the findings made by the Auditor-General.
The action plan focuses mainly on the following issues that were raised by the Auditor-General: on human resources, we have to fill all the vacancies in management and ensure the performance of each and every employee; on performance information, we need to make it a point that the targets that are set all talk to the SMART principles as the Auditor-General expects from us; on expenditure management, we have to ensure that payment of suppliers within 30 days against the correct invoices – as agreed to by our government – happens; on supply chain management, we have to institute constant monitoring of procurement requests from business units to ensure that they are line with departmental policies and procedures; on financial management, we have to ensure accurate disclosures and recording of financial information in the quarterly financial statements; on IT, we need to ensure that we upgrade the IT infrastructure.
The director-general, through various governance committees, provides oversight over the work of the department to ensure compliance with policies and procedures. This is so that we address that challenge of the department being referred to as leaderless.
On training of officials on compliance, all new employees are going to be trained and inducted into departmental processes and policies.
Lastly, as I indicated earlier, the department has improved, particularly on compliance with supply-chain management procedures. The Auditor-General has already spoken to this. It is however acknowledged that, through continuous efforts and the implementation of this action plan, our department will attain a clean audit, come 2014. Thank you.
QUESTION 165
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 76
QUESTION 163
Question 165:
The DEPUTY MINISTER OF COMMUNICATIONS: Hon House Chairperson, the question about the strategies that have been developed and implemented by the department to improve accountability and address other challenges was asked by hon Jacobs.
Hon members, you will recall that, at some point, we went to the portfolio committee in the NA, and we still expect it to come to this side to present the action plan we have developed in the department. We have to strengthen the performance agreements of employees to ensure that everybody is held accountable and delivers as per the expectations.
A comprehensive plan has again been developed to address all the issues that were raised. We are awaiting your confirmation of the date so that we can come to this side to brief you on it and engage with you on it so that you advise us.
We again aim to achieve a clean audit through the implementation of the plan – that is, if you support the plan we are going to present. As the Minister has indicated, we will welcome any other suggestions that come from your side to address all the challenges that have been raised. Thank you.
Mr M J R DE VILLIERS
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 76
QUESTION 163
Mr M J R DE VILLIERS: Hon House Chair, this is not a point of order. I would like us to get some order. You said 142. Now, the questions are actually on different pages. Now we must look for it. Do you have the page number?
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Page 38.
Mr M J R DE VILLIERS: Thank you very much. [Interjections.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): No, there is no confusion. What you have to do is follow the direction of the Presiding Officer. That is all you have to do. There is no confusion. [Interjections.]
QUESTION 146:
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 76
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau)
Question 146:
The MINISTER OF ENERGY: Hon House Chairperson, Your Excellencies, hon members of the NCOP, the Department of Energy, in collaboration with other government departments, has made substantial progress regarding the facilitation of the emergence of a biofuel industry.
The reply to part A of the question is as follows. In Government Notice R.719 of 30 September 2013, published in Government Gazette 36890, the Minister of Energy announced 1 October 2015 as the effective date for regulations regarding the mandatory blending of biofuels with petrol and diesel. The mandatory blending regulations were promulgated on 23 August 2012, to come into effect on a date still to be announced by the Minister. The determination of the effective date sends a positive signal to potential investors as it will provide certainty regarding a secure market for locally manufactured biofuels.
A biofuels implementation committee, BIC, chaired by the Department of Energy and comprising the oil and biofuel industries has been established to address all matters pertaining to the practicalities of blending biofuels with petrol and diesel. The inaugural meeting of the BIC was held on 30 August 2013, and the next meeting will be held on 29 October 2013.
Meanwhile, the Cabinet-mandated interdepartmental biofuels task team continues to provide the necessary guidance and oversight on matters pertaining to the implementation of the biofuels industrial strategy.
The response to part B of the question is as follows. Matters that are still outstanding are the conclusion of, one, the biofuels pricing framework including the administration of the biofuels subsidy scheme and, two, the criteria for eligibility of manufacturers of biofuels for the subsidy scheme.
I turn to the reply to part C of the question, which is as follows. The biofuels industry strategy is premised on amongst others, the creation of a substantial number of new jobs through broadening agricultural development by bringing marginal and underutilised farming land into production for biofuel feedstock. It is also premised on the deepening of agricultural development by unlocking animal feed value chains which are currently import intensive, but which would benefit substantially from the by-products of biofuel production.
Among projects that are furthest in development are the Industrial Development Corporation's Arengo project and Mabele Fuels Pty (Ltd), a sorghum-based bio-ethanol project at Bothaville in the Free State. Mabele Fuels has indicated that its 2 200 185 000 liters per annum capacity plant will deliver 15 000 to 18 000 direct and indirect jobs to the Free State province.
Although one would not like to commit hastily to a particular figure, I hope this gives an indication of the job-creation potential that this sector has. Various meetings with relevant stakeholders are being held in order to expedite the resolution of all outstanding matters. Thank you.
Mr B A MNGUNI / nvs / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 77
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 77 [National Council of Provinces Main].doc"
The MINISTER OF ENERGY
Mr B A MNGUNI: House Chair, hon Minister, maize was ruled out as a feedstock for biofuel due to the fact that it will increase prices and would therefore make it difficult for the poorest of the poor to access staple food. Are there any crops that the department would like to recommend so that they act as feedstock for biofuels in order to create jobs?
The MINISTER OF ENERGY: We are in consultation with the agricultural sector in order to look at alternative agricultural products that can be utilised in regarding the manufacturing of biofuels. We are sensitive as you have said that maize still forms part of a staple diet in this country. Therefore we would not like to see farmers moving away from maize production for edible stock and in turn concentrate solely on biofuels.
The alternatives are being investigated so that justice can be done to the individuals who act in the agricultural production sector so that their businesses remain viable. However, the other end of the equation should also be to ensure that we retain and maintain the capability of South Africans who depend on maize as a staple diet, to be able to have access to it, without it being highly priced. Thank you.
QUESTION 152
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 77
QUESTION 146
Question 152:
The MINISTER OF ENERGY: The reply to section (a) of the question is, yes. Empirical research indicates that electricity tariff increases over the past three years have pushed inflation up and might have some marginal industries, for an example, foundries and smelters, being economically unviable.
The reply to the second portion of the question is as follows, this trend of steep tariff increases is not peculiar to South Africa in relation to other developing countries. In contrast to other developing countries, South Africa has embarked on a massive building programme which is mostly funded by tariffs. Other developing countries, particularly in Africa, do not have the same scale of capital expansion and therefore their tariff increases are not as steep as those in South Africa.
Incidentally, the steepness of the tariffs increases is a function of our past in respect of which we kept tariff increase very low for almost a decade and a half. As we begin with the capital expansion programme, in this regard we referred to the development of Medupi and Kusile it is inevitable that tariffs will have to increase. Nonetheless we do not believe that they have to increase at a fast rate.
In terms of section (b) of the question, in so far as global trends are concerned, electricity tariffs are much higher in developed world due to their electricity infrastructure investments that have being made or are being made. In other words, the trend globally is to avoid concentrating capital investment over a short period, but rather to roll it out constantly over a longer period in order to avoid steep increases in tariffs.
With regard to the third section of the question, South Africa has now introduced the integrated resource plan, IRP, which outlines the constant investments needed over a period up to 2015. In addition, a funding model is being designed to implement the IRP in a manner that will keep tariff increases affordable to the economy. I thank you.
Mr B A MNGUNI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 77
The MINISTER OF ENERGY
Mr B A MNGUNI: Minister, thank you very much for your answer, we just want to find out that in the midst of these electricity price increases, some companies like Nimec SA which manufacture automatic parts and mainly exports to Europe and the US, when we met them early last year, they said that they might be thinking of having other alternative energy or perhaps moving into other countries if tariffs continue to increase. I just want to find out if there are other companies that are for that which have decided to move out of the country due to these increases?
The MINISTER OF ENERGY: We are mindful of the competitive nature of the industry where companies would like to be charged a particular tariff rate. However, as we said in our response earlier, electricity prices in South Africa were kept at an ordinarily low level for a number of decades.
Therefore in order to ensure that there can be security of supply and the equipment we use is up to date, there will be a need as we put new power stations into stream so that tariffs charged meet the demands of the industry, are relevant and make it possible for us to be able to improve the equipment we have. By doing so we will be bringing more power stations into stream, eventually the price should be affordable by the consumer. However, there has to be a balance with regard to the outlay to ensure security of supply and also keep an eye on tariffs that are in sync with what the South African economy demands.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 77
The MINISTER OF ENERGY
Mr D A WORTH: I would like to ask the Minister and I hope that I am not deviating too far from the question as put here. What does the Minister think of the green energy source such as the solar and windmill power? What is your estimation, do you think it is going to contribute towards the total energy production of South Africa in a few years time, will it be 5%, 3% whatever the amount? Thank you.
The MINISTER OF ENERGY: Cabinet has taken a decision that we will utilise all sources of energy. We are busy with the renewables and within the remit of that we are looking at solar energy, windmill energy and also as part of our remit of our sources of energy supply, we are also looking at nuclear. So, we are utilising all forms of energy and we are also mindful of the coal that we have as a resource in this country. However, in order to mitigate our carbon imprint, we are also placing emphasis on the other forms of energy. As South Africa we are utilising all the resources that we can, therefore it will be a mixed supply.
QUESTION 154 / JN / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 78
"National Council of Provinces Main",Unrevised Hansard,29 Oct 2013,"Take 78 [National Council of Provinces Main].doc"
QUESTION 152
Question 154:
The MINISTER OF ENERGY: Chairperson, the reply to the question is as follows: Yes, the implementation of the solar water heating programme requires the utilisation of systems that meet 70% local content on collector and tank as designated under the Preferential Procurement Framework Act.
The Department of Energy has developed a contracting model to maximise localisation and job creation. The revised contracting model entails amongst others, incentivising local manufacturing and empowerment of small and medium enterprises for the installing of solar water heating systems. It is expected that the revised contracting model would increase the local content and the number of jobs through the value chain of the solar water heating programme in terms of local manufacturing, distribution and installation.
The department has developed an online monitoring system for verifying the number of systems installed. In addition to that, the department has established a dedicated project management unit to monitor and report on the achieved deliverables, including jobs created, small and medium enterprise development and number of systems installed. A steering committee has also been established, comprising of the Department of Energy, Department of Trade and Industry, the Department of Economic Development and state-owned entities like Eskom, the Industrial Development Corporation, IDC, the South African Local Government Association, Salga, and the National Treasury.
In addition, the department provides quarterly progress reports to the Presidential Infrastructure Co-ordinating Commission. I thank you.
Mr A LEES
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 78
The MINISTER OF ENERGY
Mr A LEES: Hon Chair, I have a question to the Minister. Mr Minister, you talked about empowering small medium contractors, which is great. It is really needed. However, the question is with regard to the competence of people who have already erected these things. When you drive past the areas where the solar water heaters has been installed, very few of them actually face north.
By far, the majority that I have seen and I have not done a proper census, face in all sorts or other directions which makes them, especially if they face south, almost useless. Is this not an issue that needs t o dealt with?
The MINISTER OF ENERGY: I am not sure as to which particular area are you referring to and to which one have you gone to. However, the specifications as such that, when they are installed in houses, because of the weight of the equipment, the house has to be structurally sound. That determines where and how you should install. In most cases that I am aware of, it is a basic function to ensure that they face in a direction where the maximum amount of heat can be generated, so that the function can function optimally.
If you could provide us with the information that you have, but also as Members of Parliament, there should be recourse that we can effect for our constituencies by pointing out where contractors have installed in a manner that is not in line with the prescripts as installation should take place. We will be interested in learning about the areas that you are referring to and what has been done in that regard. I thank you.
Mr W F FABER
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 78
The MINISTER OF ENERGY
Mr W F FABER: Chairperson, and hon Minister, I would just like to ask a question about the service on these units. If something goes wrong, who will be looking at it? Will the cost go to government or after the installation, is it then the responsibility of the occupants? I just like to know how that is going to be handled; because I know that sometimes, if water gets cut off for instance, some of these units do have an overflow, and can develop problems and burnout, results which, you have to redo the elements or put in the water pump and so on. My question is: If something goes wrong, who takes responsibility? Is it the occupant or government? How do we do that? Thank you.
The MINISTER OF ENERGY: There are number of factors there. Obviously government assists in the rollout of facilities, but there are contractors involved in the installation thereof. After the installation, at times, there are unforeseen circumstances. With the initial rollout of the solar water geysers, some of the components were manufactured outside South Africa. You find that the water quality outside South Africa and the different levels and degrees of water quality, depending on where you are in the country, also becomes a factor.
Therefore, I am saying that all those factors have to be addressed and then the responsibility has to be taken. In most cases, the people who benefit from this programme are indigent and poor people. Government becomes sensitive that they cannot always mitigate all the aspects that are malfunctioning. We have the responsibility to ensure that contactors perform according to their contracts and that we assist the poor and indigents, so that they also derive the best services.
QUESTION 184
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 78
QUESTION 154
Question 184:
The MINISTER OF ENERGY: House Chairperson, the reply to the question is as follows: In section A of the question, yes, the Department of Energy in collaboration with the German International Corporation, and the South African Local Government Association, have embarked on a mentorship and couching initiative, as part of the broader South African German Energy Programme, to assist municipalities in planning and the implementation of the energy efficiency and demand side management programme.
In Section B of the question, the plans and strategies to resolve the Energy Efficiency Demand Side Management, EEDSM, implementation challenges entails capacity-building, workshops, development and implementation, monitoring and implementation tools such as comprehensive guidelines for the development of business plan and reporting mechanisms, technology identification and selection and support on procurement procedures, including the development of templates for technical tender specifications and proposals.
Firstly, in this regard, the department has conducted four capacity-building workshops to empower, participating municipalities on project implementation in accordance with developed guidelines; secondly, municipalities should be provided with enough resources to bet the improved management of the programme implementation, establishment of energy offices with specific focus on energy efficiency and clean energy; and thirdly, the initiative by the Ministry's office to regularly engage with political counterparts at local government, i.e. mayoral offices, councillors and municipal managers, is one of the interventions put in place to ensure improvements in the implementation of the programme. I thank you.
QUESTION 185.../TM / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 79
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 79 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-79] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 184
Question 185:
The MINISTER OF ENERGY: House Chairperson, the reply thereto is as follows. Yes, the department has been collaborating with municipalities, National Treasury and the National Energy Regulator in addressing electricity distribution problems particularly, the decline in-service delivery due to deteriorating infrastructure. The approach to Distribution Asset Management Program is intended to address these problems. In so far as municipal tariffs, a guideline has been developed as a means of regulating municipal tariff increases in line with the Constitutional requirement for national government to determine norms and standards for municipal set charges.
The framework for infrastructure rehabilitation is at an advanced stage in line with the approach to Distribution Asset Management starting with 10 identified municipalities. Thank you.
Ms E C VAN LINGEN
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 79
The MINISTER OF ENERGY
Ms E C VAN LINGEN: Chairperson, may I just ask the Minister, he says that they are starting with 10 municipalities but I thought there were 23 of those municipalities that had critical problems and that they would all be addressed. Then, this programme for maintenance of infrastructure needs to kick in very quickly and although 6% of the annual tariffs must be used on maintenance. The municipalities do not do that. So, I want to know from the Minister when will he implement this programme that he is talking about and what will it cost? Does he know of hand?
The MINISTER OF ENERGY: House Chairperson, I would like to perhaps respond to the first portion of the hon member's question regarding of the number. Our estimation is that there might be more than 23 municipalities that need urgent assistance, but 10 have been prioritised as being in a very perilous and crucial state. Across various provinces, the department and the stakeholders that it engages with will address the10 most crucial ones. In regard to the cost implications, we would be able to send the House the relevant information but I do not have the requisite figures at hand right now.
QUESTION 203
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 79
QUESTION 185
Question 203:
The MINISTER OF ENERGY: The reply to the question is as follows. The Integrated Nuclear Infrastructure Review, INIR, report has not yet been tabled in Cabinet because it is still undergoing other government processes before it is tabled there. The other government strategic nuclear stakeholders have requested to reveal the report prior to it being released to the public. So, the short answer is that there are other government entities that we are engaging with regard to the refining of the report. Thereafter it's tabled to the Cabinet. The Cabinet expresses its view and with the necessary amendments then it's made available to the public for public comment.
Ms E C VAN LINGEN
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 79
The MINISTER OF ENERGY
Ms E C VAN LINGEN: Chairperson, I thank the Minister for his reply, but I am a little bit confused because in the select committee of the NCOP, we have been told by the department that this report is before Cabinet and until Cabinet is done with it we can't see it. Now, the Minister is saying to us it has not been to Cabinet and I am wondering where it is now and how long this process will take. Thank you.
The MINISTER OF ENERGY: Hon member, I am not exactly sure what was reported to the select committee. I was not part of that particular meeting, but I will find out. The process is as I have articulated it. Before the report goes to Cabinet, it has to have all the relevant details. Then Cabinet as a collective would apply its mind thereto and gives the department the requisite guidance. Thereafter with the incorporation of all the additional information, it will be made public and members of the public will have adequate time to comment thereon. Thank you.
QUESTION 141 / GG/END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 80
"National Council of Provinces Main",Unrevised Hansard,29 Nov 2013,"Take 81 [National Council of Provinces Main].doc"
QUESTION 203
Question 141:
The MINISTER OF MINERAL RESOURCES (for the Minister of Labour): House Chairperson, thanks to the hon Mabija for the question. The reply to question 141 is as follows. The compensation fund continues to face the same challenges which were experienced in the 2012-13 financial year, which are centred around human resource capacity and systems compatibility to enable the fund to deliver on its mandate.
With regard to the issues raised in the Auditor-General's report, the position of chief financial officer was filled to deal with audit findings and other challenges in the area of finance. Other vacant critical posts in finance, such as directors of financial control and supply chain management, will be filled as a matter of priority.
In order to improve the claims turn-around time, the fund is in the process of piloting a system which is tried and tested and compatible with the business of the fund. Based on the lessons learnt from the pilot, the fund will be able to redefine its business processes to improve service delivery. Thank you.
QUESTION 159
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 80
QUESTION 141
Question 159:
The DEPUTY MINISTER OF MINERAL RESOURCES (for the Minister of Labour): House Chair, in response to question 159, the Department of Labour has provided the framework within which trade unions and employers engage in collective bargaining. The department is not a direct role-player in collective bargaining processes. However, if there is a deadlock, the Commission for Conciliation, Mediation and Arbitration, the CCMA, does intervene.
There are a number of initiatives that are aimed at countering further conflict in the labour market and strengthening social dialogue and collective bargaining. The department does actually monitor developments in the labour market, including the effectiveness of policy implementation through its research monitoring and evaluation agenda. This programme results in a number of publications which are available on the website of the department.
The most recent report of relevance is the 2012 Annual Industrial Action report. Thank you.
QUESTION 160
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 80
QUESTION 159
Question 160:
The DEPUTY MINISTER OF MINERAL RESOURCES (for the Minister of Labour): House Chairperson, I think we are doing very well [Laughter.] In response to Question 160, indeed during the previous financial year, the department placed 269 employers under the director-general's review process. All the companies reviewed were issued with recommendations to comply with the aspects of the law. They did not comply in terms of their employment equity plans. All the companies have accepted the recommendation and have committed to implement those recommendations. In this financial year, we are focusing on following up on those companies to check if they have implemented those recommendations.
With regards to part B of the question, as part of implementing the specialisation model, we have created a principal inspector post for employment equity positions in all the provinces. This is in order to ensure that transformation of the labour market, as envisaged by the employment equity legislation, continues until the labour market fully represents the demographics of our country.
In answering the C part of the question, as part of our strategic plan in this financial year, we are solely focusing on following up on those companies that have been reviewed in the 2012-13 financial year. The intention is to deal decisively with those that have not implemented the recommendations of the review process. At the end of the year, we will be in a position to establish the extent of noncompliance. We are going to refer those that are not complying to the Labour Court for litigation. Thank you.
Mr S D MONTSITSI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 80
The DEPUTY MINISTER OF MINERAL RESOURCES (on behalf of the Minister of Labour)
Mr S D MONTSITSI: Chairperson, very quickly, it is true that the Employment Equity Act is an instrument to create parity within the work environment. However, unfortunately there are companies whose objectives are to subvert it in the sense that they usually budget for the noncompliance, and when inspectors come they would be ready to provide a cheque for noncompliance costs.
My questions to the Minister are follows: Firstly, is there a time in which the Ministry will increase the penalty for noncompliance? Secondly, is it possible to effect much more stringent measures to ensure that there is transformation of the labour industry in South Africa? Thank you.
The DEPUTY MINISTER OF MINERAL RESOURCES (on behalf of the Minister of Labour): Hon House Chair, I would like to thank the hon Montsitsi for the questions. The hon members will recall that when the Employment Equity Act was passed, it was actually an affirmative action legislation to deal with the groups that we call "designated groups", which included blacks, amongst them African, coloured, and Asian. In that context, we were trying to deal with the problem of the past.
In terms of compliance, it is an ongoing matter that is monitored by the commission. In terms of whether the issues of penalties will be increased or strengthened, we would just say that we will come back at the end of the year, after the review process that we would have been given, for those companies to look into the matter. So, I think that the best we can do is to ask the Minister of Labour to give updates to members in various select committees on this matter.
QUESTION 161
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 80
QUESTION 160
Question 161:
The DEPUTY MINISTER OF MINERAL RESOURCES (for the Minister of Labour): House Chairperson, the reply is as follows: It should be noted that the current wage determination for farm workers is a wage determination which will run for the duration of three years. For the next two years, wage increments in the farming sector will have been determined by the CPIX plus 1,5%, and the current wage determination will lapse on 29 February 2016. This was done in order to create certainty and predictability in the labour market.
The hon members would know that our labour laws protect all the employees, regardless of their nationality. The basis of our labour laws is employment relationship, and not the nationality of an employee. All employers are expected to comply with our laws without determining an employee's nationality.
Strikes in the farming sector were beyond the issues of wages. They bordered along socioeconomic issues and the plight of farm workers. The Minister of Labour has requested the National Economic Development and Labour Council, Nedlac, to look at the issues affecting farm workers, which will be crosscutting across government departments. Despite the department increasing wages in the sector, it should be clear that this increment will not deal with the plight and the conditions under which farm workers find themselves. We sincerely hope that Nedlac will come up with a transformational charter that will address the plight of farm workers. Thank you.
QUESTION 164
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 81
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-81] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 161
Question 164:
The DEPUTY MINISTER OF MINERAL RESOURCES (ON BEHALF OF THE MINISTER OF LABOUR): House Chair, the Commission for Conciliation, Mediation and Arbitration, CCMA, has a dedicated section which monitors and evaluates the quality of dispute resolution functions of bargaining and statutory councils. The CCMA also manages the accreditation of councils which is aimed at ensuring that statutory institutions maintain a high quality dispute resolution service to their clients.
The department together with the CCMA also organises consultative meetings with bargaining and set statutory councils where strategic labour market issues and the improved dispute resolutions are discussed. In respect to non-statutory collective bargaining institutions such as the bargaining council forums, which exist in certain sectors, the CCMA is actively involved with these bodies and provides dispute resolution services to them when required. Thank you very much.
QUESTION 167
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 81
QUESTION 164
Question 167:
The DEPUTY MINISTER OF MINERAL RESOURCES (ON BEHALF OF THE MINISTER OF LABOUR): House Chair, the Department of Labour together with National Economic Development and Labour Council, Nedlac, and the CCMA is in the process of engaging with organised business and organised labour to arrange for a labour relation's Indaba where current challenges facing labour relations will be discussed and practical solutions sought.
The department does however monitor developments in the labour market and thus engages parties to certain disputes to try and encourage a settlement as happened in the recent strike in the motor retail industry sector. With regard to part B of the question, a number of initiatives have taken place that are aimed at countering further conflict in the labour market and in strengthening social dialogue and collective bargaining. This includes initiatives by the President in October 2012 leading to the release of the full package of issues to respond to the economic challenges agreed to at a high level dialogue on the economy.
The initiative by the Deputy President resulted in the framework agreement for a sustainable mining industry and similar initiatives by the Department of Mineral Resources in respect of the mining industry. The department has been a participant in all these processes. A facilitated process to explore a new centralised bargaining arrangement in the platinum sector was undertaken earlier in 2013. All unions and mining companies agreed to a centralised collective bargaining except for the Association of Mineworkers and Construction Union, Amcu.
That is the response, Chair, at this stage there is one question left and it is a new question. If there are any follow up questions, we can give over to the Minister of Labour [a garele] to finish off.
The HOUSE CHAIRPERSON: No, stick to the mandate. You have been mandated and you accepted it. [Laughter.] Are there any follow up questions? Hon Sibande?
Mr M P SIBANDE: No, thank you. I'm covered, Chair.
The HOUSE CHAIRPERSON: Any other member? That brings us to the end of the questions relevant to labour. I thank the Deputy Minister for standing in for the Minister and we welcome the Minister's monitoring whether the questions are answered properly. We then proceed to questions related to transport. The Deputy Minister.
QUESTION 158
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 81
QUESTION 167
Question 158:
The DEPUTY MINISTER OF TRANSPORT: House Chair, hon members the question relates to building capacity by the Department of Transport in order to conduct oversight over public entities that are reporting to the Department of Transport. The Department of Transport in 2011/12 restructured the department which led to the public entities oversight function residing within the branches or the modes of transport and these are the maritime, aviation, roads and rail branches to allow alignment of the strategic plans and annual performance plans to the strategic objectives of the department.
Further, the Department of Transport in October 2013 advertised posts to build capacity over oversight of state-owned entities in all modes of transport. This process, we hope, will lead to the appointment of more personnel and we believe that it will further strengthen the oversight function of the department over its entities. Thank you.
QUESTION 168
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 81
QUESTION 158
Question 168:
The DEPUTY MINISTER OF TRANSPORT: House Chairperson, the question relates to progress made with the establishment of the new coach building and locomotive assembly plant in Gauteng province. The building of a local factory for the manufacturing of the trains is part of government strategy to revitalise and strengthen the capacity of our rail engineering sector which will create over 33 000 jobs and develop skills of about 19 500 people who will actually be trained.
The agreement for local production and supply of various components by South African companies at over 69% from the second year of the programme is clearly giving effect to the goals of the Industrial Policy Action Plan 2, Ipap 2, of the government. The factory will be built in Ekurhuleni, Gauteng, and will be operational by July 2016. The land space for the factory is approximately 35 hectares, which is 1,2 kilometers long and 0,3 meters wide. In addition, 10 hectares of land space will be developed for the industrial park to house suppliers of Gibela. Full production of the local factory is scheduled for September 2018 with a minimum production output of 250 new coaches per annum. The expected production from the local factory is 3 480 new coaches, which is equivalent to 580 trains. Thank you.
QUESTION 169 / LN/Checked by Nobuntu / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 82
QUESTION 168
Question 169:
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-82] [National Council of Provinces Main][90P-5-085b][es].doc"
Question 168
Question 169
The DEPUTY MINISTER OF TRANSPORT: House Chairperson, the question relates to whether the department has finalised its National Transport Master Plan, which we refer to as Natmap. The answer to the question is: Yes, the National Transport Master Plan 2050 preparation has been finalised and final reports for phase 1 to 4 for the national department and for each provincial chapters are readily available for reference prior to Cabinet's final approval.
The Natmap 2050 process was finalised in May 2012. This was followed by an extensive second round consultation with critical stakeholders to minimise any margins inadvertent errors. The department is in the process of convening an Interministerial Cabinet Committee of 15 honourable Ministers to give the Natmap 2050 final approval before it is tabled before the full Cabinet for approval. Once the proposed Interministerial Cabinet Committee has approved the implementation schedule we are optimistic that everything will be in position by the end of February 2014.
Meanwhile, there has been no official implementation of the Natmap 2050 recommendations, however any voluntary implementations of any proposal by any stakeholder is welcome as it is a sign of confidence in the professional work done under the Natmap 2050. Thank you.
QUESTION 170
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 82
QUESTION 169
Question 169
Question 170:
The DEPUTY MINISTER OF TRANSPORT: House Chairperson, the question relates to whether the department has developed any (a) short-term, (b) medium-term and (c) long-term strategies and/or programmes to address and resolve the struggling rural transport networks.
The answer is: Yes, in relation to public transport the department is in the process of developing national guidelines for the implementation of rural transport network plans in district municipalities.
The purpose of the guidelines is to assist district municipalise to develop integrated public transport networks appropriately and effectively. The national guidelines on rural transport networks plans will promote uniformity and standardised approach of implementation. The process of developing the national guidelines is expected to be finalised by the end of this financial year.
In the medium to long term, the department shall facilitate the roll-out of the integrated public transport in all district municipalities. A public transport network planning approach would integrate current and future services to support rural local economic development linkages within the target priority areas but will have to be rolled out by municipalities themselves. Thank you.
QUESTION 173
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 82
QUESTION 170
Question 173:
The DEPUTY MINISTER OF TRANSPORT: House Chair, the question relates to progress made in (a) shifting the transportation of coal from road to rail in Mpumalanga, (b) fast tracking roads in the North West, (c) integrating different modes of transport.
Yes, the following progress has been made on the transport of coal from road to rail in Mpumalanga: An Interministerial Committee on Energy has been established consisting of Eskom, the Department of Transport, Sanral, Mpumalanga Department of Public Works, Roads and Transport, Gauteng Department of Roads and Transport and the National Treasury. The committee commissioned a number of working groups focusing on each of the outstanding work areas, in the Energy sector, which has material effect on Eskom revenue requirements.
The Coal Haulage Logistics Working Group is the one looking at the development and implementation of mechanisms to fund coal haulage maintenance and refurbishment; and to review and ratify the road to rail migration plan. Eskom made R950 million available from their own funds in 2010-11 financial year in order to rehabilitate some of the high priority routes. A joint team between the Department of Transport, Sanral and Mpumalanga Department of Transport, Eskom and Transnet Freight Rail have worked on this, and work continues to happen on the identified roads. The following can be reported: 47 kilometers national routes; 19, 8 kilometers in Mpumalanga; and 18, 2 kilometers in Gauteng province.
With regard to fast tracking routes in the North West: Yes, the following progress has been made on fast tracking roads improvement in the North West: The Strategic Infrastructure Programme 4, Sip 4, in the North West, roads have been identified in terms of the Infrastructure Reporting Model for future expansion. Sanral has been identified as the leading entity to co-ordinate the infrastructure delivery under Sip 4. Sanral has done routine road maintenance as identified by needs assessments. Moving forward, capacity improvement on other major infrastructure projects is also planned.
With regard to the question relating to integrating modes of transport in Cape Town, Nelson Mandela Bay, Rustenburg, eThekwini and Tshwane: Yes, again progress has been made on integrating different modes of transport in the five metros that have been named. These metros have all completed operational and business plans for Integrated Rapid Public Transport Plans. They are based on the Cabinet approved Public Transport Strategy and Action Plan of 2007, and are supported by conditional grants from National Treasury, known as Public Transport Infrastructure Grant and the Public Transport Network Operational Grant.
The plans allow for the development of networks in the municipalities which include train and bus trunk services, feeder services to both modes and supportive nonmotorised infrastructure which enables walking and cycling to become more meaningful methods of gaining access to the public transport. The plans are being implemented on a corridor-by-corridor basis.
Cape Town and Johannesburg are already operating services on over 250 kilometers of trunk and feeder networks. Nelson Mandela Bay has opened a small pilot network involving 25 articulated buses. Rustenburg, eThekwini and Tshwane are busy constructing infrastructure and will open services in 2015.
The last aspect of the question is related to improving commuter rail networks in the metropolitan areas. We can report here that: After 2010, Passenger Rail Agency of South Africa, Prasa, supported by government, embarked on an ambitious programme to modernise rail commuter services. Prasa signed, on 14 October 2013, agreements with Gibela Rail Consortium led by Alstom, providing for the design, manufacture and supply of 3 600 coaches.
The replacement of the old signal with a modern signalling system is underway in Gauteng, Western Cape and KwaZulu-Natal.
In addition, Prasa is investing over R32 billion over the next three years to upgrade infrastructure such as stairways, stations, platforms, depots, workplace improvements, etc.
Prasa has identifies key commuter corridors for modernisation and enhancing capacity. As part of this, over 579 coaches and 57 stations have been refurbished and upgraded in the 2012-13 financial year. This is part of government's effort to keep the metro systems operational and ensuring that the system responds to the travel demands of citizens. Thank you.
Ms B V MNCUBE
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 82
The DEPUTY MINISTER OF TRANSPORT
Ms B V MNCUBE: House Chair, my follow-up question is: Does the department and/or Prasa have a programme of commuters education? What is normally happening in Gauteng if the train is late in order to avoid commuters burning the train when it actually comes? Is there any programme put in place in order to educate the community to preserve what they have and not be driven by their anger and vandalise things? Thank you.
The DEPUTY MINISTER OF TRANSPORT: House Chair, this is a very important issue which I think is a responsibility for all of us. During the opening of Bridge City on Saturday last week, the President made a call to all South Africans to desist from destroying their property, and I think this is what the Minister of Co-operative Governance and Traditional Affairs also said and therefore it is our message as well.
It doesn't matter how angry people are, it doesn't matter whether they want and demand services, but they can't destroy what they have in order to gain what they don't have. This is a message from all us. Of course we have such a programme; we say this each time we address communities.
It calls for all of us to relay this message because it doesn't only affect the Department of Transport, Prasa and the Department Co-operative Governance and Traditional Affairs, but it affects all South Africans. Therefore, it's a message that must be delivered by all of us to our communities. Thank you.
QUESTION 198 / LIM.../ END OF TAKE
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 83
"National Council of Provinces Main",Unrevised Hansard,07 Nov 2013,"Take 83 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-83] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 173
Question 198:
The DEPUTY MINISTER OF TRANSPORT: Hon Chair, the question asked whether the department has any plans and strategies in place to address and resolve the lack of funding in order to undertake road maintenance. The answer to the question is: Yes, the Department of Transport established the Sihamba Sonke Road Maintenance and Rehabilitation programme, a provincial road maintenance programme, in April 2011. The programme is funded through the Provincial Roads Maintenance Grant to supplement the provincial equitable share in provinces.
The provincial roads budget from the equitable share addresses the new roads construction projects. SA National Roads Agency Limited, Sanral, as an entity of the department, constructs new roads within the tolls as well as non-tolls budgets. The current backlog in infrastructure has been quantified and amounts to more than R149 billion. Therefore, there are plans within the Medium-Term Expenditure Framework, MTEF, to address the R149 billion backlog. However, it will not come at once. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Hon Faku, any follow-up question?
Ms Z C FAKU: I am satisfied. Thanks, hon Chairperson.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Any follow-up question? Ntate Mashile?
Mr B L MASHILE
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 83
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT
Mr B L MASHILE: Chairperson, I wish to ask for clarity from the department with regard to the issue that relates to public participation on all the infrastructure developments that the department is intending to do.
You will remember the issues relating to Gauteng projects and the Gautrain as well as complaints that emanated in relation to public participation. Has the department been scaling up to ensure that we settle the issues of public participation whenever we spend this money on new roads infrastructure? Thanks.
The DEPUTY MINISTER OF TRANSPORT: Chairperson, firstly, the processes that are laid out in the Constitution of the Republic of South Africa demand that we involve the public. That is the nature of how we do things in South Africa, but of course, as we do it sometimes, you may find that people do not take note of what we do at a particular time. Therefore, we are called upon to probably upscale our consultation; something which we are doing.
As we speak, this month, we are engaged with October Transport Month activities. We are actually visiting communities. In the communities, we also have what we refer to as transport councillors that get information from the people, particularly in relation to road constructions and all other activities. Sometimes these activities come from the communities themselves, but of course, the whole arrangement in South Africa is that you have the local government, provincial government and the national government.
The responsibility of building local municipalities' roads is at the local municipality, provincial and national levels, respectively. We are indeed upscaling the consultation. We have ways of doing that as mandated by the Constitution but it is our wish, as the department, to involve people. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Is there any other follow-up question? In the absence of any, that brings us to the conclusion of questions relevant to Transport. Let me take the opportunity to thank the Deputy Minister for availing herself to answer questions in the Council.
Hon members, my life has been made a little bit difficult. This is because I have just been informed that hon Minister Nel is standing in for Minister Tina Joemat-Peterson. I have been looking at him and asking myself which questions he was going to reply to. It is only now that I have learnt, hon Minister, that you should have been the first to answer questions on behalf of hon Tina Joemat-Peterson. Please, accept my apology for that. Can we then go back to the questions that are relevant for Agriculture and Forestry in order to allow the Minister to respond to those questions? That brings us to question 130 on page 34.
QUESTION 130
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 83
QUESTION 198
Question 130:
The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, it is an honour to stand in on behalf of the Minister of Co-operative Governance and Traditional Affairs, who was standing in on behalf of the Minister of Agriculture.
South Africa is the second to third largest citrus exporter in the world. This citrus industry employs about 100 000 workers. Between 45% and 50% - in other words, 650 000 tons - of South Africa's citrus export volume goes to the European Union, EU. The rand value of South Africa's exports is R6 billion, with half of that going to the European Union market.
The reply that I have here has a very detailed table that sets out the top 15 countries to which we export, and I am certain that this table will be supplied to the hon member. After the European Union, Russia is the second largest recipient of citrus exports from South Africa, with a share of 10%; followed by the United Arab Emirates at 8,4%; and Saudi Arabia at 6,9%. All of those figures are for the year 2012.
The second part of the question relates to phytosanitary regulations. South Africa is of the opinion that the EU phytosanitary import requirements in respect of citrus black spot, CBS, are more stringent than can be technically justified for protecting the health of potential hosts of the relevant pathogen in EU member states. These measures have an unduly negative impact on the citrus industry and value chain which play a significantly important role in the rural economy of South Africa and its developmental priorities.
In the beginning of the 2013 export season, South Africa communicated additional risk management steps for CBS to the EU. These were implemented during the season. South Africa was confident that these additional risk management steps would significantly reduce the risk of CBS being present in exported fruit. Because of the tendency of CBS symptoms to appear over time and storage, however, visual freedom from CBS does not guarantee freedom from CBS. The EU continues to find consignments of South African foods with CBS.
To date, 29 notifications of CBS non-compliance were received from the EU. From 16 to 20 September 2013, the department, together with the citrus industry and other role players had several meetings to discuss strategies to deal with CBS issues. It was agreed that the CBS Risk Management System needs to be looked at and amended to ensure that South Africa complies with EU requirements.
The third part of the question is whether other countries and markets have similar phytosanitary regulations. The answer is that countries such as the USA, Japan, People's Republic of China, India, Iran and Reunion require that citrus exported from South Africa should be free of CBS. In addition, most countries also require that South African fruit should be free of fruit flies, false codling moth and other pests of quarantine concern to the importing country.
With regard to CBS, in order to ensure compliance when exporting citrus to the above-mentioned countries, the fruits are sourced from recognised CBS-free production units and orchards of the Northern Cape, the Western Cape and Free State provinces. Furthermore, for other provinces where CBS is present, fruits are inspected by the Perishable Products Export Control Board and the department's inspectors. If no symptoms are found, the consignments are approved for export.
For fruit flies and false codling moth, the fruit usually undergoes a prescribed phytosanitary cold treatment for a specific period at a specified temperature to mitigate the pest. I hope that replies to the satisfaction of the member. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Hon Ntwanambi, do you have any follow-up question?
Ms N D NTWANAMBI: No, Chair!
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: In the absence of any other member, hon Worth, you may ask your question.
Mr D A WORTH
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 83
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT
Mr D A WORTH: Chair, through you, to the Minister: If I could also have a copy of that reply. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: If there are no follow-up questions, we then proceed to the next question.
QUESTION 131 / /Mosa//A N N(ed)/ END OF TAKE
UNREVISED HANSARD
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Thursday, 24 October 2013 Take: 84
"National Council of Provinces Main",Unrevised Hansard,31 Oct 2013,"Take 84 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-84] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 130
Question 131:
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, I think that by agreement with the member that question will stand over. We have informed the Table accordingly.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Ok, is it agreed to? Then question number 131 will stand over.
QUESTION 149
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 84
QUESTION 131
Question 149:
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, similar to other member countries within the Brics group, such as Brazil and India, the South African government has identified subsistence and smallholder producers as vital role-players to ensuring food security and contributing towards the country's gross domestic product, GDP.
To this end, government has developed comprehensive programmes strategies and policies geared towards the support and development of subsistence and smallholder producers. Through these initiative, vast resources has been invested over the years to ensure food security for all and to stimulate Black Economic Empowerment, BEE, within the agricultural sector.
Through the department, the South African government has introduced comprehensive farmer support strategies that will address the many challenges faced by producers. These strategies also encourage farmers and other role-players to participate in the agricultural value chains so as to contribute to job creation, rural development, etc.
The department's existing intervention strategies geared towards farmers development and support include the Comprehensive Agricultural Support Programme, CASP, the Ilima-Letsema and the Micro Agricultural Finance Institutions of South Africa, Mafisa. The strategies and programmes therefore make interventions through the following support pillars: on and off farm infrastructure support; technical and advisory assistance and regulatory services; training and capacity-building; marketing and business development; information technology management; production inputs; financial assistance and mechanisation.
The other government initiatives such as the Fetsa Tlala Integrated Food Production Initiative, is also being implemented to ensure that family farms and smallholder producers are well resourced to plough every available land, particularly those in rural areas. The initiative intends to support subsistence and smallholder producers to put 1 million hectares under production by 2018-19.
The overarching goal of the initiative is to ensure food availability and thus contribute to the National Development Plan's, NDP, goal of ending hunger by 2030. The department furthermore aims to improve the provision of relevant support to increase the number of smallholder producers from 250 000 to 300 000 by 2020. I thank you.
Mr B A MNGUNI(ON BEHALF OF Mr D D GAMEDE)
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 84
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES)
Mr B A MNGUNI(ON BEHALF OF Mr D D GAMEDE): Chair, ... [Interjections.] - Deputy Minister, the Minister is still creating that -. The financial assistance that is going to be given to small farmers in order to increase production is it in line with the World Trade Organisation or the Doha tariff trade regime or is it besides that? Are we not going to be blacklisted because we are supporting our farmers?
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Maybe the Deputy Minister of Finance was anticipating that question that is why he was tipping him off.
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, in fact, you are very correct. I was leaning over to my colleague to ask whether he would not mind taking that. I think it would be correct that I relay that to the Minister but a written reply will be provided to the member.
Mr M P JACOBS
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 84
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES)
Mr M P JACOBS: Chair since we come from the agricultural province, I know maybe the Deputy Minister may not have the answers. Maybe he can send us that information. How many emerging farmers and farms are they assisting in the Free State?
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): I think that would be covered by the earlier response.
QUESTION 172
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 84
QUESTION 149
Question 172:
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, the World Organisation for Animal Health, OIE, conducted assessment on the performance of veterinary service from 01 to 19 October 2012. The department together with the provincial veterinary services has adopted a draft action plan following the organisation for animal health performance of veterinary service report.
The action plan is thus still in the consultation stage and is not being implemented and therefore question bid has not arise. The department intends to consult wildly and work closely with stakeholders in finalising the action plan. The development of the veterinary strategy requires a holistic approach and the involvement of all stakeholders. In this regard, the department interns to engage all stakeholders in the development of the strategy as the next step in the process. Thank you.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 84
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES)
Mr D A WORTH: Chair, through to the Minister, the veterinary services had complained that the vaccines they are using coming from amongst other places, Onderstepoort, are ineffective. They are not working efficiently. Has your department received any notification to that effect and what is being done about it? Thank you.
The DEPUTY MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, similarly I request that the hon member be replied to in writing.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): I anticipate a similar trend continuing. May we agree on the following process that if a Minister is standing in for another Minister or a Deputy Minister is standing in for another department, could we then hold back our follow up questions because obviously we will not be able to get the details as we wish to? Ok.
QUESTION 178 / C.I//JN-ed// END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 85
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 85 [National Council of Provinces Main].doc"
QUESTION 172 - "National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-85] [National Council of Provinces Main][90P-5-085b][es].doc"
The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS
Question 178:
The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): Chairperson, this is a fairly comprehensive reply. In the past the forests sector was dominated by large capital-intensive industries with a high concentration in ownership and management. Communities did not own the land or plantations. They were just employed.
The introduction of the Broad-Based Black Economic Empowerment, BBBEE, Charter for the Forest Sector, which is both a transformation and growth charter, and the thorough implementation of the land claims process, has resulted in communities now owning the land. Furthermore, they have joint ventures with established companies, thus securing a market for them at the end of the rotation period.
All of the timber is sold at market value and this ensures that the communities are advantaged, as there is no loss in terms of the value of their timber. Companies provide business management and technical support to the communities, thus transferring skills to ensure that when the venture term ends the community is able to run the business sustainably.
In the departmental strategic plan, afforestation was identified as a rural-based activity that can contribute significantly to rural development, and economic and employment opportunities for rural communities.
In line with the commitments of the forest sector charter to streamline licensing, water pricing and support for protection, promotion and enterprised development, the department funded the Environmental Impact Assessment, EIA, process in the Eastern Cape to assist communities with the afforestation licensing process. The Eastern Cape is dominated by high unemployment and high levels of poverty, and afforestation is a potential source of employment.
The departmental initiative of conducting EIAs has benefited 35 communities. Once the licences have been issued by the Department of Water Affairs, the communities will be able to start planting with the assistance of the private sector. The department is in the process of finalising the protocols which will benefit the communities that are in partnership with established companies. The protocol documents protect both parties and ensure that there is no exploitation of communities.
The agreements that communities conclude with the big forestry companies often stipulate a long-term supply of timber to the company concerned. This is not to the benefit of the community as the company concerned will, for a long time, buy timber at a price that's not market related because this has been predetermined years ago. Communities will not be able to sell their timber to any other person, other than the one that they have an agreement with.
The department, through section 29 of the National Forests Act, is able to enter into community forestry agreements. The department has received some requests from Eastern Cape communities, such as in Ntabankulu, Matatiele and Mqanduli, to enter into these agreements and these are currently being investigated according to the prescripts of the Act. Most of the communities currently benefit in estate plantations such as small saw millers that source timber from these plantations. Other uses are for subsistence, where they source firewood, honey and mushrooms.
In terms of leased plantations, the private companies pay rental for the use of the land, and those communities that have been identified as landowners through the land reform process are receiving this rental. At present the department has dispersed lease rentals to the amount of R92 million to eight settled land restitution claims, collected from the SiyaQhubeka and Singisi forestry packages. The department further encourages these communities to resolve issues that they have experienced with the companies.
In addition to this, the forestry companies are providing small business opportunities to local communities through their preferential procurement policies when awarding tenders for the following forestry activities: harvesting of timber and pulp wood; and supply of raw material to small processes.
Singisi and SiyaQhubeka are also operating owner-driver schemes in terms of which drivers from previously disadvantaged communities have been handed over the ownership of the trucks and the Bell loaders that they are operating. These vehicles were fully paid for in 2011.
The forestry companies are also facilitating and funding local economic development projects such as bee farming, nurseries, wood carving, poultry farming, sowing vegetable gardens, sport and catering projects. The forestry companies have also granted bursaries to young people from the local communities to further their education at institutions of higher learning. They have enlisted young people from local communities as apprentices in the various engineering trades. They are also offering in-service training and learnerships in skills such as supervisory skills, clerical skills, chainsaw operators, mechanical harvester operators, Bell logger operators and firefighters, to persons coming from the local communities. They are also providing funding to schools, crèches and winter schools in their area of operation as part of their social responsibility. Chairperson, I hope that the reply is sufficiently comprehensive to the member's liking.
QUESTION 182 - The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 85
QUESTION 178 - The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS
Question 182:
The DEPUTY MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS (ON BEHALF OF THE MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES): The reply is no, the department has not developed any measures. The department has indicated its commitment to maintaining animal welfare standards. The department has also indicated that there is currently no legislative basis for preventing the export of live ruminants by sea.
The department utilizes suitable legislation to ensure that the animals in question are appropriately treated and transported in a suitable vessel, through prior inspection of the vessel and the conditions of quarantine.
Firstly, in this regard animals are quarantined and monitored by the veterinary authorities and are certified for export if they meet the import requirements as outlined in the import permit issued by the importing country.
Secondly, the department has engaged the Mauritian Veterinary Association, MVA, which, upon arrival of the animals in Mauritius, the MVA has to ensure that the animals arrive safely, were appropriately fed and afforded water during the voyage.
Through the platform offered by the World Organisation for Animal Health, the department engages regularly with trade partners and the Office International des Epizooties, OIE, member states to ensure that international norms and protocols are followed.
The department is commencing with the legislative process to review the current legislation. The department intends to repeal all the existing pieces of legislation dealing with animal welfare as they are old and outdated. The department intends to consolidate these Acts into one animal welfare Bill. In this process the department will work with all of its stakeholders.
Thirdly, as to why animals are not being slaughtered in South Africa and the meat, rather than live animals exported, market dynamics dictate how the producers and traders conduct their business. In this case it's not unusual internationally for the animals to be transported to a point of slaughter. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Thank you, hon Minister Nel. I appreciate the fact that you took the time to answer on behalf of Minister Tina Joemat-Pettersson.
Hon members, I have been informed that yesterday the Whippery agreed that at this time, which is five minutes before 17:30, members should be afforded a 10 minute break because we need to finalise these questions today, during this plenary.
The Council resumed at 17:24.
QUESTION 143 - The DEPUTY MINISTER OF MINERAL RESOURCES TH / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 86
QUESTION 182
Question 143:
The DEPUTY MINISTER OF MINERAL RESOURCES: House Chairperson, thank you very much to hon Mabija for the question. The question is 143 on page 141 on the question paper. The reply is as follows. Yes, the mining sector experienced growth in employment in 2012 of 2,3% relative to the preceding year, representing creation of 11 754 jobs. The number of operating mines and quarries rose from 993 in 2004 to 1 579 in 2012, indicative of a 59,01% increase. A total of 64 302 jobs were created during the same period, averaging 9 186 jobs per annum.
In relation to part (a) of the question, the answer is yes, in line with the New Growth Path, the department estimated that the mining industry would create 14 000 jobs over a 10 year period. However, the global challenging economic situation has had a negative effect and impact on job creation.
The last part of the question, the current social and labour plan is emphatic on investment in community development proximal to mines, while the mining charter sets targets for, amongst others, human resources development, offsetting mechanisms for beneficiation, procurement and enterprise development, all of which are contributory to creating entrepreneurial and employment opportunities that contributes towards eradication of the triple evils of poverty, unemployment and inequality. Thank you very much.
QUESTION 155
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 86
QUESTION 143
Question 155:
The DEPUTY MINISTER OF MINERAL RESOURCES: House Chairperson, thank you very much for the question and the answer is as follows. The collective bargaining system within the mining industry is actually regulated by the Labour Relations Act which is administered by the Department of Labour. In the earlier responses by the Minister of Labour, we did indicate progress that has been achieved in this regard. Thank you very much.
QUESTION 175
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 86
QUESTION 155
Question 175:
The DEPUTY MINISTER OF MINERAL RESOURCES: To the presiding officer, hon House Chair, thank you very much and I appreciate the question asked by hon Boroto. The response is yes, actually, the Department of Mineral Resources, has submitted the Mineral and Petroleum Resources Amendment Bill 15 of 2013, MPRDA Bill, to Parliament at the end of May 2013. Imbued in the MPRDA Amendment Bill, amongst others, is the alignment of the mine environmental functions as espoused by the MPRDA, National Environmental Management Act, and the National Water Act. Both the MPRDA and the National Environmental Management Act Amendment Bill are currently being deliberated upon by the various portfolio committees. The Department of Mineral Resources has further obtained Cabinet's consent to publish and gazette the Mine Health and Safety Draft Amendment Bill for public comments. This Bill seeks to provide for the protection of health and safety of employees and other persons at mines by making provision for the enforcement of health and safety measures.
Part (b) of the question, the mineral beneficiation strategy was adopted as policy by Cabinet in 2011 and the implementation framework, intended to give effect to beneficiation is being finalised.
Part (c) of the question, the percentage of enquiries and investigations into fatal and injury accidents reported has been remarkable, which is 83% and 85% respectively. The number of statutory health and safety inspections and audits conducted were way above the midyear targets, which stands at 5 052 and 274 respectively. A total of 33 of tripartite workshops were conducted to promote health and safety amongst the stakeholder groupings, which are employers, employees and unions.
All the above measures and uncompromising enforcement strategies contributed to the promotion of health and safety as the primary priority. This has led to the percentage reduction in occupational injuries and fatalities at Republic of South Africa mines, both at 35% and 7% respectively. There has been an overall improvement in the turnaround times taken to process administrative tasks, complaints and appeals.
Lastly, part (d) of the question, the rehabilitation of derelict and ownerless mine sites is progressing in line with commitments outlined in the current financial year Annual Performance Plans. Thank you very much.
QUESTION 193
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 86
QUESTION 175
Question 193:
The DEPUTY MINISTER OF MINERAL RESOURCES: Once more House Chair, the reply is also, yes, to this question and on part (a), the department has prioritised and accelerated implementation bilateral agreement with the Russian federation which seeks medium to long-term sustainability measures in the industry. The technical team has met to further expand practical modalities to give effect to product development, market diversification, research and development as well as mechanism to enhance productivity. The findings of the platinum group metals, PGM, sector will be used as a yardstick and replicated with specific adjustments to the gold sector.
The second part of the question is that intervention will be made as and when the need arise. Thank you very much, House Chair.
QUESTION 201
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 86
QUESTION 193
Question 201:
The DEPUTY MINISTER OF MINERAL RESOURCES: With regard to this matter, House Chairperson, on part (1) the department does not plan to rehabilitate closed mines, but derelict and ownerless mines. Part (2) of the question, 17 mine sites have been rehabilitated to date, within the current financial year, and (b)financial resources have been secured to augment capacity to implement National Environmental Management Act and human resources capacity will be created to execute this task. Part (c) of the question, an integrated licensing approach has been agreed upon by the three departments, namely Departments of Mineral Resources, Environmental Affairs and Water Affairs. Thank you very much.
QUESTION 202 / GG / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 87
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 87 [National Council of Provinces Main].doc"
"National Council of Provinces Main",Unrevised Hansard,24 Oct 2013,"[Take-87] [National Council of Provinces Main][90P-5-085b][es].doc"
QUESTION 201 - The DEPUTY MINISTER OF MINERAL RESOURCES
Question 202:
The DEPUTY MINISTER OF MINERAL RESOURCES: Chairperson, the answer to part (aa) is yes, the MPRDA and related legislation refer. The answer to (aaa) is also yes, they are compelled in terms of the MPRDA and related legislation in terms of complying with that law. Regarding (bbb) we must also confirm that the answer is yes, the MPRDA does require that guarantees be provided. Lastly, to (ccc), the answer is also yes, amendment of the MPRDA introduces appropriate functions of up to 10% of revenue in the event of gross negligence resulting in noncompliance, especially on such critical attributes as environmental noncompliance, including acid mine drainage.
Ms B V MNCUBE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 87
The DEPUTY MINISTER OF MINERAL RESOURCES
Ms B V MNCUBE: Thank you Deputy Minister. My follow-up question is, as you answered yes, that your department intends to develop policies or legislation, I just want to pre-empt here and ask if that legislation will include that whoever pollutes the environment or the water or makes people sick in relation to these dangerous chemicals that are coming from the mine, to say let them pay and not leave it for the State to rehabilitate, to pay for people who are claiming that they are now sick because of the outcome. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): That was a statement, but I don't know if the Minister wants to concur or respond to a statement. I leave it to your discretion.
The DEPUTY MINISTER OF MINERAL RESOURCES: No, no, I appreciate the statement. It is confirmation that we are on the right track. The MPRDA, as it stands, provides for what the hon member referred to as the polluter pays. The issues that we are dealing with are issues of the past, before 2004 when the MPRDA was promulgated. The derelict and ownerless mines are those which the State has taken responsibility for to try and rehabilitate and deal with, including the issues of mine drainage. But, going forward, after this the mines do have to make provision, under the current law, for environmental guarantees, so that as they continue they must also do what they call concurrent rehabilitation. This is in line with the charter that we spoke about as well. So, as the processes are now, the legislation does cover that, but we're also trying to strengthen legislation in terms of the amendment Bill that is with Parliament now, to ensure that we strengthen the penalty provisions. Thank you very much.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): Thank you, hon Deputy Minister. (Interjections.) Is that a follow-up question? (Interjections.) Yes, you may continue, hon member.
Ms E C VAN LINGEN
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 87
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau)
Ms E C VAN LINGEN: Chairperson, what concerns us here in the Northern Cape is that the one mine has been sold to another owner for R218 million, or billion, and the problem is that the outstanding budget for the rehabilitation on the mine is something like R700 million. So how can a sale like that, and a transfer, actually be allowed, from one owner to another, if there is so much outstanding on the rehabilitation? And this is a transaction that is taking place now. Thank you.
The DEPUTY MINISTER OF MINERAL RESOURCES: Thanks to the presiding officers. They have now exchanged seats.
The issue relating to the sale of mines is regulated by section 11 of the MPRDA. In other words, there is nobody who can sell mining rights or a mining property without the consent of the Minister. That is the first point, and before a mining right is given, or even a prospecting permit, you have to demonstrate that you have the guarantees or the money in trust to do rehabilitation. So the exiting company should have had enough guarantees to do the rehabilitation. If they exit, before we release this money, the new company must demonstrate both technical and financial expertise, that they are able to deal with taking over the mine, they are able to deal with the environmental issues etcetera, etcetera. So it cannot just be a transfer like that.
That means, if the hon member has specific issues about which she is worried, that we may be able to engage and look into this specific question of the Northern Cape. But as the law stands, it not just dumping your problems onto others, and we do that. That cannot be acceptable. Thank you.
QUESTION 132
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 87
QUESTION 202
Question 132:
The MINISTER OF PUBLIC ENTERPRISES: Chairperson, in relation to labour, a new partnership agreement was signed by all major contractors, all unions and Eskom. This partnership agreement addresses issues that were raised by labour representatives and has paved the way for sustained on-site peace and productivity.
The Medupi management team has adopted extended working hours with a 24-hour, 7-day presence to manage an overseas contractor's performance. Contractors are working extended hours on a multiple shift basis. Daily meetings are held between the Medupi site management and contractors' site managers to resolve concerns, interface issues, integrate work areas and so on. Weekly meetings are held with the contractors' managing directors to give immediate authorisation for construction decisions. Secondly, in specific instances where there are breaches of contract and noncompliance with contractors' schedule requirements, contractual penalties are being imposed. The following is being undertaken.
Firstly, no conditional relaxations are being offered to the implicated contractors. Secondly, all contractual remedies are being explored to ensure timeous delivery, including withholding of the estimated amount of remedial work exposure to Eskom. In third place, extended warranties and guarantees have been secured from some of the contractors. Fourthly, the deferred liability period is being extended and the insurance liabilities are being reviewed.
The recent revision of the project cost, from R91 billion to R105 billion, is partly due to the delays relating to nonperformance, in line with the provided schedule. Similarly, the revision of delivery of first power from 1 December 2013 to the second half of 2014 is occasioned by delays due to nonperformance, in line with the provided schedule. Thank you.
QUESTION 138
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 87
QUESTION 132
Question 138:
The MINISTER OF PUBLIC ENTERPRISES: Thank you. South African Airways, SAA, has just developed the long-term turnaround strategy, or LTTS. This LTTS aims to assist the airline in focusing on becoming commercially sustainable in the long term, while also achieving government's developmental objectives. Critical in the LTTS is the containment of financial losses and stabilisation of the company's finances in the short term, as well as pursuing efforts to reduce the high debt levels.
The LTTS has various short-, medium- and long-term initiatives, which include a review of the network, the replacement of aircraft, which is aligned to the network, the improved scheduling of flights and linking staff performance agreements to the implementation of the strategy. The implementation of these initiatives should lead to returning the airline to profitability.
The profits generated will be used to reduce the high debt levels of the airline. The airline will also build its asset base by using the funds that will be generated from operations as well as the funds that will be received through the recapitalisation of the airline. The funds will be used to acquire aircraft and to settle some debts. The acquisition of aircraft will strengthen SAA's asset base.
The department is driving the whole State Aviation Policy so as to ensure that there is coordination and alignment of objectives between the different government departments in relation to air transport. Thank you
Mr S D MONTSITSI / Henk Bax / END OF TAKE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 88
"National Council of Provinces Main",Unrevised Hansard,09 Dec 2013,"Take 88 [National Council of Provinces Main].doc"
Take 88 Question 138 (cont)
The MINISTER OF PUBLIC ENTERPRISES
Mr S D MONTSITSI: Just quickly, Chairperson. I want to find out regarding the purchase of new flights, whether there are new routes that are going to be opened up as a result, and whether there are routes that are profitable to the South African Airways, SAA, which are still going to be explored or if there are routes that are going to be closed, because the SAA is not performing on those routes. And secondly, can you assure me of stability within the organisation, the SAA, as far as management is concerned. Thank you.
The MINISTER OF PUBLIC ENTERPRISES: Thank you, hon Chairperson and hon Montsitsi. The network strategy is a critical pillar of the long-term turnaround strategy. It entails a number of issues. Firstly, deciding what routes are profitable to the airline that we are going to maintain and sustain. Secondly, what new routes will be profitable that we need to get on to. Thirdly, what routes are unprofitable that we need to stop using.
At the centre of this are the foreign policy objectives of our country and how we pursue them using our own aircraft. That means that we are in the process of making decisions about Brics, about existing routes, about other routes where we don't operate. Related to that will be a decision about what alliances to forge, because in some instances we don't necessarily have to fly the SAA metal on those routes, but through alliances and code sharing, whether bilateral or multilateral, we would then be able to take South Africans on those routes and bring the people from their different countries of origin to South Africa as their destination. Now related to that would be a question regarding the utilisation of our aircraft, our fleet replacement and fleet procurement strategy.
So, all of these are part of one integrated strategy that we are working on at the present moment to address the question of our route network and the profitability of the airline. The other critical issue is that some of the route networks might be unprofitable, but we might find that it is strategic for South Africa to travel those routes, and this is going to form part of the 'Whole of State' aviation policy framework, so that we make those decisions on an integrated basis working together with other departments.
Now regarding the second question that the hon Montsitsi asked, the management of SAA is stable. The critical aspect in implementing a turnaround strategy is that you must have a CEO committed to implementing the strategy, and who enjoys the full backing of both the board and the shareholder. In this instance those essentials are there.
If there are any changes at the level of other positions in the management, they will be occasioned by the needs of the turnaround strategy as the CEO and the board are implementing them, because when you implement the turnaround strategy it is inevitable that you might have to shake the tree a little bit, move some people out, bring others in. It's part of how you manage turnaround strategies, but insofar as the critical posts, those regarding the board and the CEO posts are stable and therefore at a broader, more strategic level, the management and governance of SAA is stable. Thank you.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 88
The MINISTER OF PUBLIC ENTERPRISES
Mr D A WORTH: Has the Minister and/or his department given any consideration to privatising part of SAA, even if it is a minority 40%, and if not, what guarantees are there that SAA, in the next financial year, are not going to ask for a R6 billion bail-out or further haemorrhaging on the tax payer's money. Thank you.
The MINISTER OF PUBLIC ENTERPRISES: To start with, the question regarding partial or full privatisation of SAA we have not yet considered. We believe that the present turnaround strategy is strong on its own. It has been subjected to a review by a body of very professional international consultants who have turned many international airlines around and they have found it to be robust enough. They have made suggestions which we are going to incorporate in the strategy as we implement it. I think the fundamental point here is that we must understand the thinking of this government, that we believe that it is necessary for South Africa to own an airline.
For an economy that is on the most southern tip of the southern hemisphere, where we are very distant from the major global markets, it's necessary for us to be able to move passengers from South Africa to those global markets and move those passengers from those global markets to South Africa. Therefore, the security of air travel is fundamental to the pursuit both of our economic development objectives as well as our foreign policy objectives. And that is why we do not have the luxury of SAA failing.
In an instance where you bring in a private shareholder, or you privatise SAA, the reality is that you might find yourself losing jobs. You might find yourself pulling out from strategic routes, that are strategic for the country, but not for the private shareholder and we will find ourselves being unable to implement some of the transformation objectives which SAA can as a result of being owned by the state, such as the training of black and female pilots, young black and female artisans, and other such projects.
When we place the issue of the profit, the bottom line, as the fundamental issue in relation to SAA, something will have to give. We will have to implement some trade-offs and in most instances it is the developmental goals that will have to go. Thank you.
The MINISTER OF PUBLIC ENTERPRISES
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 88
QUESTION 138 - The MINISTER OF PUBLIC ENTERPRISES
Question 139:
The MINISTER OF PUBLIC ENTERPRISES: Hon Chairperson, the department is taking significant initiatives to leverage the capabilities of Transnet Engineering, Denel and Rotek, to support the localisation of strategic and complex industrial components. These include a comprehensive strategy processed by Transnet Engineering on the back of the locomotive fleet procurement to prepare the company for the localisation of a range of locomotive components that have historically been imported.
Transnet Engineering is positioning itself to play a developmental role in facilitating investment and capability building in relevant rail and port supply chains. In this regard it is planning a supply development summit relating to work on manufacturers to explain how the company will play this role and receive supplier feedback. In this regard Transnet Engineering is making progress in terms of moving up the value chain in partnership with the Transnet Operating divisions to become the prime contractor in the manufacture of locomotives and of other mission critical equipment in the rail, port and pipeline supply chain.
They are further developing their capital goods and manufacturing capabilities in order to reduce the imported content of the investment program of our state owned companies whilst increasing our exports. Transnet Engineering has a key role to play in driving the development of our national manufacturing capabilities in the rail and port supply chains to leapfrog our industrialisation program to the next level.
As we speak, a number of weapons are already being manufactured and assembled at Transnet Engineering, including fuel weapons, highly technical and complex fuel weapons, as well as the automotive weapon the President is going to unveil next week in the Nelson Mandela Metro, in Port Elizabeth.
Furthermore, Denel's core business relates to the localization of strategic and complex industrial components in the aerospace and defence industries, and then the exporting of products relating to these capabilities.
A dialogue has been established between Denel, Transnet Engineering and Rotek to see how they can collaborate around the localisation of products in their respective sectors. We are further facilitating discussions between Denel Aerostructures, SAA Technical and SA Express Technical to explore the possibility of establishing an aerostructures manufacturing capability within South Africa. The department is reviewing how these entities are managed from a shareholder point of view so that they can be more effectively leveraged to achieve their localisation and industrialisation objectives. The objectives of industrialisation has been put at the centre of the efforts of our state owned companies and all of them understand the strategic direction that the shareholder, the South African government, is taking in regards to industrialisation and the development of manufacturing capabilities. Thank you.
Mr S D MONTSITSI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 89
The MINISTER OF PUBLIC ENTERPRISES
Mr S D MONTSITSI: Chairperson, I quickly just wanted to check how far we are from capacitating Denel in manufacturing local flights.
The MINISTER OF PUBLIC ENTERPRISES: Hon Chairperson, Denel is very highly capacitated. Further to this, because of the improvements of the company over the last 12 to 18 months, which have seen its international order book expanding drastically and our relations with the SA National Defence Force being stabilised and improved, the possibilities for a further enhancement of its capabilities and contribution in the further development of the industrial programmes in our country, including its possible collaboration with SA Airways, Eskom through Roadtec as well as the SA Express, is going to play a very critical role in South Africa's industrial and manufacturing programmes.
As we speak, the company is busy expanding as a result of the opportunities that have arisen in the recent years. One of the critical areas in this regard is the resolution of the A400M contract with airbus. This has resulted in the A400M programme and work packages being undertaken in South Africa and expanded, enabling the companies to develop the arrow structures capabilities for itself, and the country as a whole. Thank you.
QUESTION 144
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 89
QUESTION 139
Question 144:
The MINISTER OF PUBLIC ENTERPRISES: Hon Chairperson, yes, the strategy for retaining skilled staff has been developed. It contains various variables. Firstly, the creation of an employer brand to ensure that we market the Department of Public Enterprises as a brand and an employer of choice; align the department's value proposition to the preferences of relevant talent segments; exit interviews conducted with all exiting employees to ascertain the trends and reasons for leaving with the view to implementing corrective actions; facilitating feedback sessions with new recruits to determine alignment to the Department of Public Enterprises' brand with their personal experience; and monitoring regular culture surveys implementation plan to ensure proper implementation of agreed corrective action.
Secondly, the variable involves creating a healthy and exciting place of work which is referred to as leaving the brand experience. Within that, this entails effectively managing and driving the department's transformation agenda. Implementing a focused diversity management programme which confronts the challenges of transformation, both in terms of employment equity and developmental state principles, we have commenced a focused management training to drive good leadership and management practices in the areas of people management, to create the desired behaviour and culture conducive to the success of the department.
Thirdly, the element is for people joining people, in terms of which we look at issues such mandatory induction programmes for all new recruits to fast-track them and assimilate them.
Fourthly, it involves developing a learning and development culture within the department, focusing on departmental and individual training need analysis to inform the skills gap of the department, and to implement career management programmes to assist employees on career choices and progression.
Fifthly, the effective performance management which involves individual performance agreements being signed are aligned to the department's priorities, plans, implementing quarterly rewards and recognition for high performers, in line with the Department of Public Enterprises' strategic objectives.
With regards to this, I must mention two points: Firstly, the department has employed a Deputy Director-General for Corporate Services; and secondly, the diversity at the level of our top management, where five out of our seven deputy director-generals, DDGs, are female, has ensured that the culture of diversity in the department is understood and well embedded. Therefore, staff members are able to exert and assert themselves, and work within that diverse environment.
Our challenge is to always poach from the skills-base of the department. This is not so much on the private sector, but on the state-owned companies. This is part of what we are trying to challenge through this programme which contains the five pillars I spoke about earlier. Thank you.
QUESTION 156
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 89
QUESTION 144
Question 156:
The MINISTER OF PUBLIC ENTERPRISES: Hon Chairperson, the first point to make in this regard is that the long-term turnaround strategy is first and foremost, the SAA's one. Except for us as the department, it is the SAA that must have an implementation plan and ensure that it complies with all the targets outlined in the long-term turnaround strategy. However, to avert the previous experience of turnaround strategies that were not implemented, and to ensure the implementation of this particular one, I have taken steps, some of which I shall outline.
The department has established a ministerial task team, which will consist of senior members as representatives of the department as I have indicated, and will involve, the SAA, the SA Express and Mango, to accelerate the implementation of the long-term turnaround strategy. However, it will also consist of other relevant departments like the National Treasury, the Department of Transport and others, ensuring a focused and integrated approach to the co-ordination of the implementation plan.
The steering committee which is led by the Deputy Minister and I, supported by the director-general will be responsible for overseeing and providing strategic direction in the implementation process. This will ensure that a broad range of expertise is available to accelerate the implementation of the strategy. The department has also included key milestones and outputs in the shareholder compact to monitor the airlines' performance in this regard.
With regard to the question about the estimated costs for implementing the strategy; the answer is that they are being reviewed by both the National Treasury and my department. This will be determined in the next few months.
With regard to any probable job losses, the long-term turnaround strategy, the LTTS, does not anticipate any. The focus will be on improving and enhancing labour outputs. The LTTS has focussed on human capital development that seeks to create and drive a high performance value-based culture to deliver commercially sustainable outcomes. Thank you.
The CHAIRPERSON OF THE NCOP: The hon Themba is not in the House. Is there anybody standing in for her? If you want to raise your hand, please do so, but if you do that, I am not be sure what that means.
Ms B P MABE: Hon Chair, I am standing in for the hon member, Ms Themba.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 90
Ms B P MABE
Mr D A WORTH: Chairperson, there is a question directed to the Minister with regard to job losses in the SAA. I have read, heard or seen that the SAA, including - for that matter – the SA Express Airways, which is part and parcel of it, have lost, to a large extent, the technical capacity which does possible major overhauls of aircrafts. They go to places like Hong Kong, where there are South Africans living there, and the planes get serviced there at a fee and then brought back. What are your comments on that?
The MININSTER OF PUBLIC ENTERPRISES: Hon Chairperson, hon member, employees in any company would resign from time to time; you cannot stop that. And that does not relate to the question whether there will be any job losses in relation to the long-term turnaround strategy. But in relation to the SAA and the SA Express Airways, both of them retain their technical subsidiaries. And both the SAA technical and the SA Express Airways technical teams continue to provide services for maintenance, repairs and overhauls for the SAA and the SA Express Airways, including other privately owned airlines which are operating in South Africa.
As I have indicated, part of what the long-term turnaround strategy entails is the review of those capabilities and how we can consolidate and optimise them so that we build them up, and ensure that we rebuild the skills base. The airlines already have a lot of young people who are undergoing training. We have partnered, in certain instances, with other FET Colleges such as the Ekurhuleni FET College, where technical skills are being trained and developed, and are going to be used for our facilities. So, in that regard, we are already implementing a robust programme of training and developing the skills.
I am not too worried about the people who are resigning and going to other countries, because we are developing the skills. And I think the message we had driven to our state-owned companies in the past few years was that they need, in anyway, to expand their training numbers so that they do not train more for than their own needs but for the economy as a whole. It was to anticipate the very fact that during the period when very limited training was taking place; the skilled personnel age levels were rising up to a point where, if we did not intervene and started the training, you would have us being faced with a serious skills challenge, when most of the skilled people reach retirement age. But because of the training that we are undertaking, I am not worried. I think that a number of the people who have gone outside will comeback and we will use some of them as mentors and trainers. Thank you.
QUESTION 195
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 90
QUESTION 156
Question 195:
The MINISTER OF PUBLIC ENTERPRISES: Hon Chairperson, the Ministers of Public Enterprises and Co-operative Governance have engagements on the need to resolve the municipal debt. These engagements have led to the establishment of a task team, including the Departments of Public Enterprises, Co-operate Governance and Traditional Affairs and Eskom, as well as the top ten defaulting municipalities, to develop sustainable mechanisms to resolve the municipal debt.
Furthermore, Eskom is legally bound by the Public Finance Management Act, the PFMA, to manage debt and has a robust credit management policy in place which is applied to recover debts.
Eskom continuously engages with defaulting municipalities to collect the arrears whilst making sure that the current account is paid in full and on time. Interventions include the signing and acknowledgement of debt letters and the realistic payment plan.
In addition, the respective provincial Premiers and the National Treasury are kept informed of the debt level and the progress in arresting the escalation of the debt. Eskom also engages provincial Treasuries and the Co-operative Governance and Traditional Affairs; Cogta, to facilitate discussions with defaulting municipalities, where municipalities renege on payment plans. Eskom initiates the disconnection of the electricity supply in line with the process as stipulated in the Promotion of Administrative Justice Act 3 of 2000. Key stakeholders are informed in advance of any pending disconnections. Government departments are subjected to the above- mentioned revenue management principles, and where third parties are involved, Eskom applies the process as in the Promotion of Administrative Justice Act.
When municipalities or government departments with arrears renege on payments plans, Eskom initiates the disconnection of electricity supply in line with the process outlined above, including municipalities and government departments that have third party connections.
Government departments with third party connections that renege, will be dealt with in terms of their contracts with regard to disconnections and the recovery of outstanding debts. Such disconnections may place a burden on consumers within the municipal boundaries, as customers may have paid their accounts to the municipality in full and on time.
In engaging with municipalities and government departments, Eskom takes into account the possible impact on consumers. Eskom has a comprehensive maintenance programme to operate on its entire infrastructure as stipulated in its licence. This refers only to Eskom's areas of supply. Municipalities are separate, independent entities from Eskom's maintenance programme. Thus Eskom does not have "line-of-sight" over municipal networks, and does not have any measures and strategies regarding municipal infrastructure maintenance. Thank you.
QUESTION 142
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 90
QUESTION 195
Question 142:
IsiZulu:
UNGQONGQOSHE WEZWMISEBENZI YEMPHAKATHI: Ngiyabonga kuwe Sihlalo weNdlu nakuLungu elihloniphekile uMabija.
English:
Our reply to the question is that the Department of Public Works has not met some of its employment equity targets. For instance, for people with disabilities the target is 2%, yet the department has only achieved 1,2% thus far. The department has a target of 50% for women in senior management positions, but only 42% has been achieved in this regard. The reason for not meeting the targets is that the department has slowed down in the filling of positions due to the current pressure on the budget for compensation of employees.
The department has prioritised the filling of professional and technical positions, which falls within the scarce skills category, where skills availability remains a critical challenge. The filling of these positions does not necessarily address the employment equity targets. So, in terms of the measures or strategies to address and rectify this matter, I, as the Minister of Public Works, have seen to the establishment of a consultative forum between the department and the disability sector to create a platform for people with disabilities to raise concerns and challenges they are facing. Also, it is for this particular sector to advice the department on measures and best practices it can put in place to attract, manage and retain people with disabilities, as well as how the construction sector can play a role in improving the conditions for people with disabilities. Thank you.
Ms B P MABE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 90
The MINISTER OF PUBLIC WORKS
Ms B P MABE: Chairperson, hon Minister, noting the fact that you have not yet reached the target of 2%, I want to know if within the current staff, there are people with disabilities and whether they are given responsibilities or tasks according to the jobs they applied for or if they are just there for the sake of reaching the targets?
The MINISTER OF PUBLIC WORKS: Chairperson, these people are certainly given responsibilities which they are qualified for. And I need to add that as the department, we are striving to meet that target of appointing the 2% of people with disabilities by 31 March 2015, and 50% of women in the senior management service by 31 March. Thank you.
Mr G G MOKGORO
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 90
The MINISTER OF PUBLIC WORKS
Mr G G MOKGORO: Chairperson, I just want the Minister to indicate how many people with disabilities have already been absorbed by the department and in addition to that, how many can the department still absorb?
The MINISTER OF PUBLIC WORKS: Chairperson, I cannot give the exact numbers now but the percentage is that, on disability, I said it is 1,2% thus far. We will be able to deal with the 2% in a few months time, and we might even go beyond the prescribed 2%. So, we are on course. We will be able to absorb more, given the discussions we had with the construction sector, in terms of the training programmes which we want to put in place.
QUESTION 197
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 91
QUESTION 142
Question 197:
The MINISTER OF PUBLIC WORKS: Chairperson, yes, the Construction Industry Development Board Act of 2000 was established by Parliament in the year 2000. Its responsibilities include establishing norms and standards for the behaviour of the persons and companies in the construction and building industries. This is further to any professional organisation that they may belong to. To that extent, the Act and the policies of the Construction Industrial Development Board, the CIDB, empower it to perform these functions and even take action against companies that collude with others to fix prices.
The ethical conduct consultants and professionals are monitored by six professional councils whose activities are co-ordinated by the Council for the Built Environment, which we call the CBE. Therefore, within the department, we have created a separate governance, risk and compliance branch which will independently monitor the conduct of the construction companies and individuals who enforce and fight against fraud and corruption. This is a new branch.
A project was initiated to address the supply chain and finance challenges. The supply chain management processes are being critically reviewed, with the assistance of the National Treasury. I hope the Deputy Minister will not desert me on this one. We confirm that we will deal with wasteful expenditure and combat corruption.
Mr M P SIBANDE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 91
The MINISTER OF PUBLIC WORKS
Mr M P SIBANDE: Chairperson, I want to thank the Minister for his positive response. However, Minister, maybe if it is possible, can you please indicate in particular, the big companies, because the perception given is as if it is only small companies that are inflating prices. If possible, could you please give us that in percentage if it is available.
The MINISTER OF PUBLIC WORKS: I am sorry I did not follow the question.
The CHAIRPERSON OF THE NCOP: Hon Minister, did you follow the question? Mr Sibande, please repeat your question.
Mr M P SIBANDE: Minister, I started by thanking the Minister for his positive response. However, the question is that because the perception which is given with regard to corruption and inflating of prices is as if it is only small companies or constructions which
are doing that. What is the status quo of the big companies which might be involved?
The CHAIRPERSON OF THE NCOP: Minister, did you get it?
The MINISTER OF PUBLIC WORKS: Chairperson, the question of corruption knows no colour and no size. The recent information which is being touted as collusion is not collusion, but it is in fact corruption. We are talking about very big companies. What I need to indicate is that both big and small companies are involved in corrupt practices, but it is just that we do not talk about overall percentages; we deal with them case by case.
Mr G G MOKGORO
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 91
The MINISTER OF PUBLIC WORKS
Mr G G MOKGORO: Chair, I was going to ask the same question, but I am just going to enrich it.
The CHAIRPERSON OF THE NCOP: No, hon Mokgoro, there is nothing like enriching. [Applause.] You can take your seat if your question has been asked and you have no further question. Please take your seat.
Mr G G MOKGORO: No, no, no, I do have a question.
The CHAIRPERSON OF THE NCOP: Ask your question, hon member.
Mr G G MOKGORO: Chairperson, I would like the Minister to indicate to us as to what concrete measures has his department taken in order ascertain that there are no further occurrences of such things. Thank you.
The MINISTER OF PUBLIC WORKS: Chairperson, we cannot vouch and say that there would be no recurrence. All we have to do is to strengthen our internal processes. However, corruption starts within the supply chain. We have to strengthen those processes and ensure that things are done according to the book. Where it occurs, we will have to deal with the peoples and the officials in the private sector because people are operating in syndicates.
There are syndicates of individuals outside the department and syndicates of officials inside who are working together. Where we discover such, we will have to be hard. That is why we are very hard and expelling people. However, for the companies, we go the criminal cases route. We approach the court and even try and reclaim the lost money from the side of the government.
Chairperson, I hope you have noticed that I jumped Question 171 and instead answered question 197. I hope you will notice that. Thank you.
The CHAIRPERSON OF THE NCOP: I have not noticed that, but thank you very much for notifying me.
QUESTION 171
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 91
QUESTION 197
Question 171:
The MINISTER OF PUBLIC WORKS: Chairperson, Question 171 is in relation to the skills and turnaround issues. At the beginning of my term as the Minister of Public Works, I started calling upon the retired professionals to submit their CVs to the department, as an initiative to addressing the skills shortage with regard to professionals in the department. The received CVs for the retired engineers were processed in the Department of Public Works' Projects and Professional Services branch.
The implementation of the Occupational Specific Dispensation, the OSD, has assisted in retaining professionals who were already in the department. However, it has not assisted in attracting new talent to the department due to the prescriptive minimum appointment requirements - the qualifications and experience and lack of flexibility with regard to the retention and production level of the OSD. Do not blame me for this, but blame the hon Mncube and the hon Jacobs who were part of the negotiations on this issue.
The department has also significantly reduced the filling of positions due to the expenditure on the budget for compensation of the employees. The department has appropriated R66 million from the National Treasury during the medium-term Budget period in 2012, to build its professional and technical capacity. Part of the funding would fund the filling of the 88 professional and technical positions. The 88 positions, which is 40% of the 219 technical and professional positions were advertised, 46 appointments were approved and 27 candidates have assumed duty.
The positions that could not be filled through the normal processes of advertising are targeted to be filled through skills search and head-hunting. The process of rectifying the shortage of skills is a continuous one, which the department is fully committed to addressing, and thereby contributing to the availability of critical professional skills in the country.
We will be able to supply the details of the situation about the vacant posts in the department, and the different technical professional engineers. By Engineers we are talking about three or four different types of engineers - quantity surveyors, town planners, valuers, architects, project managers and so on. We will be able to supply that when we give the answer in written form.
QUESTION 180
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 92
QUESTION 171
Question 180:
The MINISTER OF PUBLIC WORKS: Chairperson, our reply to this question is that policies are developed as and when required to ensure certainty, sustainability and growth of the organisation. The first set of policies, many of which have been legislated, regulate the construction and the property industries.
The second set of policies entail internal operational policies that guide the department in the administration such as human resources, finance, strategic planning and other areas. These policies also give effect to the department's mandate subject to the applicable legislative framework regulating the Public Service. The Auditor-General's report identified the lack of policies in this area.
In response to the second part of the question, a complete list of these policies is provided and will be approved in the 2013-14 financial year. The department is currently reviewing older policies and developing the new ones across its business units in the Property Management Trading Entity, the PMTE, asset management or asset investment management, finance and the supply chain management, internal audit, human resources, information services and security services. This is in response to the department's own assessment of the need for the policies and also, to the Auditor-General's management report. I have listed almost 30 additional policies which we will be able to submit when we will be making our submission as part of the written list, because it might be too long a process to talk about all of them one-by-one.
Ms B P MABE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 92
The MINISTER OF PUBLIC WORKS
Ms B P MABE: Hon Chair, I want to know whether the current policies that are guiding the department are in line with the new dispensation of this government.
The CHAIRPERSON OF THE NCOP: The new dispensation of this Parliament? I did not hear the question. I also want to hear.
Ms B P MABE: Chair?
The CHAIRPERSON OF THE NCOP: Please repeat your question.
Ms B P MABE: I wanted to know if the current policies are in line with the current vision and mission of this new democratically elected government.
The CHAIRPERSON OF THE NCOP: Alright. Hon Minister.
The MINISTER OF PUBLIC WORKS: They are, to an extent, but you will recall that any policy will never be static; they remain dynamic as issues are changing under each government. What might have been there in 1994 or in 1999 might have been changed by the new policies of government, and we have to keep on adapting those policies.
But we must accept that in terms of the land question - because we deal with a lot of land issues – in terms of the property management, there is a lot which we still have to do. That is why, for instance, we are also fast-tracking the Expropriation Act. So, there are a number of issues which might need to be updated and re-adapted.
QUESTION 210
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 92
QUESTION 180
Question 210:
The MINISTER OF PUBLIC WORKS: Chairperson, in terms of Question 210 which mainly relates to requesting the information from the provinces, my response is no. At this stage, I cannot provide details because the information required is so extensive and should be provided to me by the affected provincial departments. So far, they have not yet done so because the questions were only received by us last week and provinces have to respond in detail. It is becoming a trend that people do not respond within a very short space of time. I can only provide a response in a written reply at a later stage. Thank you.
QUESTION 219
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 92
QUESTION 210
Question 219:
The MINISTER OF PUBLIC WORKS: Hon Chairperson, yes, the turnaround plan is still on track in terms of the seven-year turnaround plan. It is a Seven Year Turnaround Plan. The report of the Auditor-General indicates the progress of the Department of Public Works and the Property Management Trade Entity, the PMTE, in turning itself around.
The department has moved from a disclaimer to a qualified opinion. With regard to the Department of Public Works and the PMTE, the number of the disclaimed items was reduced from 13 in the previous financial year to only five in the 2012-13 financial year. It is anticipated that the department will improve from the qualified to unqualified and the PMTE from a disclaimer to a minimum of unqualified reports in this current financial year. So, the target for the resolution of all the matters is 31 July 2014.
Yes, there has been progress in finalising the organisational structure of the department. The structure has been reviewed as follows.
The department has developed a draft functional organisational structure emanating from the review of the current structure in order to align it with the department's strategic plan. But I must indicate that public works, especially the PMTE, does not just need a functional structure; it needs a very complex structure, given the nature of its business, which must be transacted not just at national level but even at provincial level.
So, the mandates and the core functions of the Department of Public Works, which are mainly derived from the legislative mandate such as the Department of Public Works White Paper of 1997, the Government Immovable Asset Management Act of 2007 and the Constitution, were considered. And by the way, Public Works does not have an Act, it just operates on those pieces of legislation and that is a very serious gap.
So, the following key principles underpin the draft organisational structure: a clear distinction between core, support and shared services; established secretariat shared services which is the team of assistants; the span of control benchmarking with the generic functional structures from the Department of Public Service and Administration; and capacitation of the various functional areas such as the regional offices, the office of the director-general, legislation and policy regulation.
I want to emphasise the capacitation part of the various functional areas such as regional offices. A lot of work of public works does not happen at national level, it happens at regional and provincial levels. Sometimes it is even very difficult to have the synergy between the provinces and the national government because provinces have their own heads of department and political heads. We are not only talking about levels now but we are talking about spheres of government. So, that co-operation should not to be imposed but should be done through consensus.
So, in the main, the proposed structure separates the Department of Public Works branches and the PMTE branches. A lot of work is around property management which should be run by highly technical people such as accountants, chartered accountants and actuaries, people who are very clued-up on property management issues - property lawyers and so on. So, the Department of Public Works branches like projects and professional services, key accounts managers, Expanded Public Works Programmes, corporate services, governance and risk management are some of the branches which we are putting in place.
On property management, which involves Asset Investment Management, Aim, the inner city regeneration, the Facilities Management Registrar of the State Assets, separate financials and the supply chain management, shall report to the director-general and will also be accountable to the Ministers, but we have started a process of recruiting and making them a governance case. So, this structure, which was decided in 2006 - so far nothing has happened in that regard - is going to start operating by the end of 2013-14 financial year.
Furthermore, with regard to the relevant skills or relevant details, the department is currently in consultation with internal governance structures in addressing the two critical issues pertaining to the structure; finalising the development of the business model which will further be aligned with the draft organisational structure; and addressing the transitional PMTE model and its development as a government component – not as a private entity but as a government component that will operate like Sars.
It still has to be considered by the director-general before it is presented to me as the executive authority, but that also has to go to the Cabinet. So, the director-general and the executive committee of the department are set to finalise their position by the end of 2013, after which it will be considered at the end of November for implementation next year. It is a very complex matter. I think bringing technical experts in the property industry will be very helpful because they will not just operate generally along the lines of the department but need have to specific expertise. Thank you.
Mr R J TAU
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 93
The MINISTER OF PUBLIC WORKS
Mr R J TAU: Chair, I would like to thank the Minister for the response. The gist of Question 219 is precisely about the extent to which the national turnaround strategies, and national norms and standards which have been set, speak to what is happening in our provinces. Those strategies have been informed by the experiences of Taking Parliament to the People. Next week, in Gauteng, you will see the disjuncture between what is intended to be done at the national level and what is happening at the provincial level. Therefore it would have been good if we could get a sense of what the department is doing to ensure that those national norms and standards that have been set find expression at provincial level.
The MINISTER OF PUBLIC WORKS: Chairperson, I want to be honest here. I would have loved this matter to be debated across the departments, that is, the question of spheres versus the levels of government. Theoretically, if you develop a national policy you expect the other spheres to take their cue from that and implement but, in reality, we are sitting with a lot contradictions. It seems as if it is discretionary for people to implement norms and standards. This is not only happening in the Public Works, by the way.
Part of the problem is what the Constitution says with regard to some of the issues, like spheres of government, where you have to reach decisions by consensus. You can't force them to do as you want according to the norms and standards; it has to be by consensus. So, it depends on various intergovernmental forums and also on Minmec. Sometime you may agree at Minmec, but afterwards people say, nonsense, we are a different sphere of government; we are going to do it our own way, not that way. And you don't have that authority to enforce it. I think this has happened in various departments where you will find this particular frustration.
I am not saying that there is something wrong with our Constitution; it is a question of political will. How long are we going to continue saying about a number of things that they are discretionary instead of mandatory? In fact, I am one of the Ministers who are dealing with the issue of infrastructure and who want to enforce that co-ordination and integration. It is very difficult because people start arguing about turfs. Sometimes it works very well when people have the political will but sometimes it becomes a case of, this is my turf, and so on. But we are trying by all means to make it work.
One example where we have succeeded very well is when it comes to the issue of the Asset Register. On the issue of the Asset Register, we developed a framework at the national level. We had serious discussions and, at every Minmec, it remains a standing item. We agreed, all of us, to establish teams which are going to work jointly. That is, in each province and every province there will be a team that will work with the national team. It seems that it is going to work and it is working because we have listed almost 70% or 80% of the assets which are supposed to be in our register. Because there are assets at national level, assets at provincial level and assets at municipality level, by the way, but you have no control over those municipalities unless there is co-operation. There are also assets which are in between; nobody knows where they belong. However, when the audits come, people very quickly want to disown what is there so that their register remains very clean.
But what I am trying to say is that when there is co-operation, it does work. So, on some of the issues we seem to be working well but it is a question of political will. I think it is a question of this House, the National Council of Province, whipping everybody into shape to work together.
Mr G G MOKGORO
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 93
The MINISTER OF PUBLIC WORKS
Mr G G MOKGORO: Chair, I want to know whether the Constitution prevents any department from coming up with legislation to normalise and concretise relationships between the spheres of government. If the Constitution does not prevent that, then why can the department not come up with a Bill or legislation that will normalise relationships between the spheres of government? If we are going to depend on a political will, we won't get anywhere. You may have the political will to work on a particular project but, with the next project, something different happens. My question is, does the Constitution prevent a department from coming up with legislation that will normalise relationships?
The MINISTER OF PUBLIC WORKS: Chairperson and hon member, it doesn't. That is why we realised that one of the gaps was the absence of a "Department of Public Works Act", which was supposed to deal exactly with those issues. We have started those discussions but unfortunately, given the urgency of this particular term, we had to prioritise. Such an Act is going is going to need significant consultation, but we have already started with the discussions so that whoever comes in with the new administration takes it forward.
But you would also know that on several occasions, national departments have tried to come up with some legislation. These were sometimes be challenged by other provinces in the Constitutional Court. So, it is a very tight one. You need a balancing act when you deal with these issues. People would argue that we are a sphere of government but not a level of government. We are in a process of developing such an Act.
But even if you were to develop such as Act, when it comes to the issue of interpretation, people will argue that if it imposes on them then it is unconstitutional and we should go back to the Act. We have a lot of precedents regarding that. But that does not mean there is no need for a Department of Public Works Act. We need it more now, as it will be a framework for all of us. Thank you.
QUESTION 150
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 93
QUESTION 219
Question 150:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, I thought I would come in the place of the Department of Science and Technology. I am sorry for fiddling.
Regarding the main part of Question 150, the answer is, no. This time the reopening of the lodgement of claims is going to be electronic, not manual. So, the challenges will be minimal because we have learned from previous experience.
We have also developed a Citizens' Manual for Land Claims in all the 11 official languages, including the languages of the Khoi and the San. So, unlike what is happening currently, we don't anticipate problems or many challenges.
In terms of part (a)(i) and (ii), of the 79 000 claims that were lodged with the department, 77 334 had been completed as at the end of March this year. But 71 292 of those are financial claims and only 5 865 were for land restoration. As at the end of March this year, the outstanding number of claims was 8 733.
Finally, the Commission on Restitution of Land Rights is not in a position at the moment to determine how much it will cost the fiscus after reopening because there are quite a number of variables that are involved here. It is also not in a position to determine the amount of money that it will cost to settle the remaining 8 733 claims. This is because there is going to be a lot of research and as a result some of them may be approved and some may not, we are not sure. The rest of the question falls away. Thank you.
Ms B P MABE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 93
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Ms B P MABE: Hon Chair, I am pleased to hear the Minister saying that they are not experiencing any challenges. I, however, know for a fact that, when we conducted our oversight, we came across delays in many areas that were caused by disputes amongst beneficiaries. I wonder if the Minister is not aware of that. If he is, then what have they done about it? I know in Mpumalanga, in particular, there is a backlog caused by disputes amongst beneficiaries. Thank you.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, the main question was about land claims that are still to be lodged, but I am going to respond to the question raised.
Indeed, this is true, not only in Mpumalanga but also across the country. This is an area in which all political parties are failing the country. All these people who get land belong to political parties, yet, when they fight, none of the political parties is ready to walk in and solve the problems. The Communal Property Associations, the CPAs, are fighting, trusts are fighting and all sorts of things come in and stall development.
We appeal to hon members representing those constituencies to assist government departments in solving these problems. It will really be appreciated. But indeed, I support and agree with the hon member that there are problems. Thank you very much.
Ms N D NTWANAMBI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 94
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Ms N D NTWANAMBI: Chair, I'm not sure whether this is a question. If it is not, you'll rule me out.
IsiXhosa:
Sihlalo noMphathiswa, ndikhe ndadibana nemeko, apho abantu abanezindlu zikamasipala, bathi xa benze amabango abo omhlaba umasipala lowo ubaxuthe ezo zindlu ngoku. Lithini isebe kulo mba? Ingaba ukhona umthetho oza kunqanda loo nto kusini na?
English:
The CHAIRPERSON OF THE NCOP: Yes, it is a new question, but the Minister can share respond to it if he wants to. Minister, you are not forced; but if you want to share the information you can.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: I really want to respond to the question, but I am not clear about the question here. What is the question?
The CHAIRPERSON OF THE NCOP: Chief Whip, what is your real question? The Minister does not understand your question.
Ms N D NTWANAMBI: Chair, perhaps let me write to the Minister and furnish him with all the details.
Rre G G MOKGORO
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 94
Ms N D NTWANAMBI
Setswana:
Rre G G MOKGORO: Modulasetulo, mo sešweng jaana, molao wa go tsenya ditopo tsa mafatshe o sale wa busediwa mo tirisong. Jaanong ke kopa Tona a ntlhalosetse gore merafeng e e tsentseng ditopo tsa mafatshe ... [Emisiwa.]
The CHAIRPERSON OF THE NCOP: Sorry, Mr Mokgoro, the Minister has to put on a listening gadget first.
The CHAIRPERSON OF THE NCOP: Can you come and help? Minister, are you ready? [Interjections.] Just help the Minister, please. Are you okay? Continue hon Mokgoro.
Setswana:
Rre G G MOKGORO: Mo merafeng e e neng e tsentse ditopo tsa mafatshe a yone, ya a fitlhela, mme morago ba bona gore gona le dipolase tse dingwe tsa maburu tse ba di rekileng ka morago ga 1913, tse e leng karolo ya mafatshe ao a setseng a neilwe batho. A go kgonagala gore merafe eo e ka boa mme ya tsenya kopo ya ditokwana tseo tsa mafatshe tse di saletseng kwa morago? Ke a leboga.
English:
The CHAIRPERSON OF THE NCOP: It seems members are running away from the real question. Anyway, Minister, would you like to take that one?
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Yes, this is exactly part of the reason why we are reopening the claims process. It is exactly that. We are anticipating that a lot of people, who have never even lodged claims with the department, will simply come and occupy the land that has already been allocated. We think we are really going to solve such occurrences by reopening the process. Once a law has been passed, they should be free to come in and submit their claims thereby joining those people who are already on the land from which they were removed. Thank you.
QUESTION 166
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 94
QUESTION 150
Question 166:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chairperson, the answer to the main part of this question is, no, it should not be a problem because the communal land tenure model that we were introducing institutionalises. It actually institutionalises the existing land use rights, because in communal areas there is one outer boundary title deed. So, that title deed is, in a traditional institution, held by the traditional council or chief. Internally, people have land use rights, but those land use rights are not institutionalised.
In other words, what we are going to do now in terms of the communal land tenure model is to institutionalise those rights by legalising them so that people can use them as collateral, as well as bequeathing them from generation to generation. Those things have been happening except for using it as collateral with the bank and so on. So, it should not be a problem.
With regard to part two, the answer is, yes, this is linked to what I have just said. The model is based on the existing relations on land. Except that, with the current model, there is no articulated relationship between the municipality or the state and existing administrative institutions like traditional councils, communal property associations, the CPAs, etc. Currently, with the new situation, that relationship is well articulated. The state provides the framework through the Constitution and the law. It also provides for the governance structures which are traditional councils or trusts or CPAs where they apply. It further provides for investment and development entities so that communities, in their space, can benefit from the land they own communally.
Of course, the answer to part three is, no, since 1994, one of the key principles of the land tenure policy reform has been to move away from subservient forms of land rights towards legally enforceable land rights - I have just described that - in a manner which is consistent with the Constitution's commitment to basic human rights and equality.
The objectives of the new land tenure model are the following: To ensure equitable access to land among beneficiaries that hold or own common land rights in terms of social status, gender and class; to realise sustainable and utilised land so that they can attain social cohesion and development; to ensure clearly defined property rights among community members, supported by an effective governance system - I have just described that, that is what is really new here, to articulate those relationships, not just socially and politically, but in terms of the economy as well; to establish mechanisms to effectively monitor land rights infringements within communities; and finally to promote effective land rights adjudication and mediation processes within communities, including through the alternative dispute resolution mechanisms.
We are introducing institutions because we think that, in most cases, poor people cannot afford to go to court. We are creating institutions such as the Land Rights Management Board with various Land Rights Management Committees which are multidisciplinary. Various other institutions such as like municipalities and departments like the Police and Human Settlements are serving in these committees and solving problems, if there are any - whether between farmers and farm workers. Trade unions are also working in these rural areas. The rest of the question falls away. Thank you.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 94
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Mr D A WORTH: Hon Chairperson, as I understood the Minister, and I hope I understood him correctly, those people living on the ground or land in the former homeland territories will not be given freehold rights. In other words, they will not be given title deeds for the ground that they are farming on. It will still fall under the traditional leaders but there will be some sort of tenure security, even though they will not be given title deeds to that bit of ground that they are living on. Am I correct? Thank you.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, in a nutshell, that is correct. Thank you.
QUESTION 176
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 95
QUESTION 166
Question 176:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, this question relates to the comprehensive Land Management Policy. This question is very important in that it introduces us to the Land Commission. We have developed this policy, which proposes the establishment of the Land Commission for the country, and it has been approved by government. We now have legislation that will be coming to this Council. It has gone through government processes and it is now out for public comment.
It is coming here and we really hope that with the passing of this legislation, a lot of things will happen because it is meant to ensure that as South Africans – all of us as a nation – we fully understand who owns South Africa and who owns the land. This institution should be able to force people who own land in our country, whether they are nationals or non-South African nationals, to disclose their land holdings and the extent of those land holdings. In so doing, we will know exactly who owns land and where.
In terms of the Bill that is before us, there are areas in the country which should be prohibited from being owned by non-nationals. We need to know exactly, and therefore, force people to disclose their land holdings and where those lands are, so that in those areas where foreign nationals are prohibited from owning land this issue is addressed. Without that kind of institution, the current institutions that we have are, as of now, not in a position to enforce the disclosure of landownership.
During this financial year of 2012-13, the department completed an audit. We conducted an audit and we are satisfied that the results we have reflect relatively close to the current situation. We still have 7% of the land of South Africa that is unaccounted for. We know that approximately 80% of land is still privately owned and about 14% is in the hands of the state. We are satisfied that we are getting close to that.
The second phase of the land claim which we have just completed tells us what rights exist over the land; what buildings exist on the land; the current usage of the land and buildings; the state, division or department which is the holder of the title; and who is the occupant of the land. Owing to the challenges of our system, which are not of our own making, we have to interact with a couple of departments, like the Home Affairs, Department of Science and Technology, Statistics SA, the Justice and Constitutional Development, etc, to know what the nationality and race of the people who own the land are because our Deeds Registry does not reflect that. It just reflects group areas because from 1994 we actually did away with the registration of people on the basis of race. Statistic SA does that and we have to get that information with regard to nationality and race in order to complete the audit so as to know exactly who owns what.
If you take the Northern Cape, it is generally privately owned. You would also know that many people have received land from the state through restitution. Once we talk about privately owned land, we are not talking about race as to which race is dominating there, because since 1994 many people have been given land by the state in terms of the Restitution of Land Rights Act. The rest of the question falls away.
The advantages of the policy are to resolve those challenges relating to who owns and is able to own land in South Africa and to enforce disclosure, which is critical. It will also enforce a system of compulsory disclosure. This is a very important part.
I think that when there was the workshop organised by the National Assembly, this august House may have been represented there. The question about how South Africans can buy property in Cape Town is a critical question, amongst others. So, not only are we talking about it, but it is coming here.
Another institution which we are creating is the Office of the Valuer-General. The Bill is coming here because on Wednesday, which was yesterday, Cabinet approved the Bill to be brought to Parliament. It relates to the establishment of the Office of the Valuer-General, which is one of the two institutions that are very important. It is going to come to this Council. The legislation establishing these institutions will ensure that land in South Africa is accessible and affordable to the state in the public interest.
As we move along, we are going to have to debate. The hon Minister of Public Works spoke here about turfs. We are hoping that, over time, this law, which is going to be tabled here to be passed, will actually impact, not only on public and state land, but all land in South Africa. For now it is going to be state land in the main. Thank you very much.
Ms B P MABE
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 95
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Ms B P MABE: Hon Chair, I think the Minister will agree with me in saying that the land issue in South Africa is a burning issue. Twenty years down the line as government, we are still developing a policy that will make us fully understand who owns the land. Furthermore, I hope it will also indicate how the people acquired that land if a large portion is privately owned.
My question is with regards to the available land that the Minister talked about. I missed his reference to the percentage that he said is owned by government; whether that land is aligned with other spheres of government; whether we know what percentage belongs to local government, provincial government, or is tribal land; and if there is any land available that can be accounted for. Thanks, Chair.
The CHAIRPERSON OF THE NCOP: Ms Mabe, that question deals with figures. In terms of the Rule the Minister cannot produce those figures in a supplementary question as he has to go and look for them and then respond to it.
Minister, do you have the figures? I won't force you to answer the question as I know what the Rule says.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, I indicated that about 80% of land in South Africa is privately owned, about 14% is owned by the state and 7% is unaccounted for. I am rounding up when I say 14% as it is closer to 13%.
The point is that the hon member raises a very important question about how the land was acquired in the first place. We all know that, but we also have to recognise that we are constrained by our Constitution as we are a constitutional democracy. There was a cut-off date of 19 June 1913, so anything this side of 1913, even with the reopening, that is going to apply.
The President announced in Parliament that we are exploring exceptions to the 1913 cut-off date in the form of heritage sites, historical landmarks and the case of the Khoi and the San. We are working on that and we are developing a policy in the manner that the hon member is raising the question. We will come here – because it is going to be a major policy – and persuade both Houses of Parliament to accept and adopt the policy proposals. We are engaging the Khoi, the San and all South Africans on this question. Thank you very much.
Mr G G MOKGORO
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 95
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Mr G G MOKGORO: Chair, the Minister might not be able to answer this question but let me ask him anyway. Maybe he has the information or the intention.
My question is whether we are perpetually going to continue buying land at prices as determined by the market, or does the government or the Minister's department have a vision for the foreseeable future, to change that situation to something different, which could really alleviate the problem of us who don't have money being able to buy land. Thank you, Chair.
The CHAIRPERSON OF THE NCOP: That looks like a new supplementary question because the actual question deals with the issue of land management. Minister, once again it's at your discretion.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Hon Chair, let me take the opportunity to respond to that question as I think it is important.
The willing-buyer, willing-seller model, which is market-based, is actually a very good model on a horizontal level between Jessop and Mangaliso. They can sell land to one another because it is cheap, but once the state enters the land market the price increases. I know it's easy to say that the farmer raises the price of the land, but it's not necessarily the farmer. It is sometimes fraudsters within the department, or conveyancers and valuers. A lot of things happen between the state and the farmer.
I would not embarrass the hon Chair, who works in his constituency, but just over a year ago he asked me why I was so slow in settling a claim in place X in his constituency. I told him I would find out. I asked him what the reason was. He said that my department had said that it was too expensive. I told him that I would give him three chaps to go with him to meet with the farmers in order to find out. They went there, met with the farmers and the farmers asked the Chair where he had gotten the figure stating that they were asking R35 000 per hectare. I would have paid R70 million. I paid R6,9 million because the farmers had caucused, came back and said R7 500 per hectare. I am talking about the Chair and that is why I said I hope I am not going to embarrass him.
The CHAIRPERSON OF THE NCOP: Not at all Minister. You are not embarrassing me.
THE MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: It was through his intervention when he came to me that I paid that amount. We therefore developed this policy of Property Evaluation, which establishes the Office of the Valuer-General in order to tamper with what is happening between the state and the farmer, and to deal with evaluation because it is the evaluation process which is uncontrolled in the country. We want to control it so that when the state enters the market it remains fair. We are actually going to use the constitutional principle of Just and Equitable in transactions when it comes to the public interest.
It is what I meant when I said that the Bill that Cabinet approved yesterday to be tabled in Parliament is a Bill that establishes that institution. Actually, we would be very happy if both Houses of Parliament could pass that law before we rise. It would really be a bonus because, even if we passed the reopening but not this Bill, we will still have problems relating to people being able to afford buying land, without this institution that we are talking about. Thank you, Chair.
QUESTION 177
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 96
QUESTION 176
Question 177:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Chairperson, this question again relates to the communal land tenure model. It specifically refers to the Ingonyama Trust Board in KwaZulu-Natal.The board experiences a number of challenges. The Ingonyama Trust has listed the challenges as inadequate human resources, illegal land occupations, the valuation of land being a very expensive task, and the problem of the payment of municipal rates. Royalty revenue was a major income generator for the Ingonyama Trust when mining operators on trust land were paying the trust directly. Now, with the change of that as a result of the Mineral and Petroleum Resources Royalty Act, Act 28 of 2008, mining operators on trust land are paying directly to Treasury. So, those are the challenges that are raised by the Ingonyama Trust.
Let us just remember that the model I talked about will affect the Ingonyama Trust, because the communal land tenure model we are talking about is going to affect any communal land in the country, including Ingonyama Trust land.
The Ingonyama Trust Board is working on a revised organogram, in terms of the challenges. The Ingonyama Trust Board is looking at expanding its staff complement, which comprises 27 at the moment, but it wants to expand that. There is a letter sitting in my office, stating that it wants to discuss these matters with us. We are going to meet with the board very soon and discuss this question of how, because when it presented its strategic plan for the 2013-14 financial year, I did not approve the expansion of the organisational structure, because I wanted to discuss it with the board beforehand and find out and also ensure that it understands the direction in which we are going.
We have had a workshop with the Ingonyama Trust and its constituencies, organised by the Ingonyama Rural Development Trust, so we have had a workshop in which the new communal land tenure model was presented to them. We are hoping that when we meet with them and discuss the new approach in terms of the communal land tenure model, it would make a difference in terms of how they would also relate to the constituencies and how the resources of that communal land are shared amongst communities, not just at a high level but at the grass-roots level. Thank you very much.
Mrs A N D QIKANI
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 96
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Mrs A N D QIKANI: Chairperson, I would like to thank the Minister for his response to this question. I want to know whether there is any timeframe by the department to solve the challenges of the Ingonyama Trust. Is there a timeframe established by the department, just to make sure that, at least, it can finalise the challenges of the Ingonyama Trust?
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Chairperson, I am trying to say that it is not about the Ingonyama Trust. It is about a policy that will affect the Ingonyama Trust. I have held workshops with the Ingonyama Trust and its constituency in KwaZulu-Natal. I have held a workshop with the government of the province of KwaZulu-Natal on this question, and I have held a workshop with the ANC on this question. All of them ask this question. So, I have had to say to them that this is the direction in which we are going. I have had a workshop with all in a strategic session, organised by the National House of Traditional Leaders, including all provincial houses of traditional leaders.
All of them, without exception, have accepted the model. I have been invited by Mpumalanga, and I will go to the province before the end of this month or at least the middle of next month, because we agreed at the national workshop that I should visit the various provinces. So, in terms of the timeframes, I will try the best I can to complete that round of consultations with them. There are other people, at the same time, with whom we are consulting with regard to this. It is not just the traditional leaders. I think that the timeframe issue is going to be very difficult to predetermine right now, but the issue is very hot out there. Thank you very much.
QUESTION 207
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 96
QUESTION 177
Question 207:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Chairperson, this question is about Crossways Agri Village in Thornhill in the Qaqane district in the Eastern Cape. The answer to the broad question is no. The Department of Rural Development and Land Reform has not purchased any land for development at Crossways Agri Village.
I am advised that about 90% of the development – this is a private development – in the first phase was sold out, and work is under way to prepare the land for the building of the first 110 houses. The entire development will have 740 owned title units in the next seven years, I am told. The completion of the entire development will house about 2 000 to 3 000 people.
No sale of land occurred, and, as such, there were no proceeds, because it talks about proceeds that went to the community. There are no proceeds, because no land was sold there. The project was put on hold by our department to allow the private sector to contribute towards the initial investment. Hence, there are no projects in the current financial year. The department will take stock and look at whether or not it should actually continue with the strategic partnership with the private sector. The idea was that – and we think that it is a good idea – we create this link, because it is an opportunity that is created there.
Thornhill is generally a community of black people, but it is a community that is adjacent to farms which had been acquired by this private sector developer. Our discussion with the private sector developer is that we want to integrate the development there, because in the Crossways Agri Village, a dairy parlour had been brought in. People are working there, but we want to acquire equity for the community there. That is what we wanted to do. We have done that in the Free State with Bloemfontein Abattoir. It is working very well. We have just acquired 30% of that. We are busy with the process now, but the red meat farmers there already have a market. We are working with 16 farmers that we are organising into a secondary co-operative, so that they can do that. We have started that and have seen that it is working; so we want to do it there. That is why we had pulled back there at Crossways Agri Village. The community there is conflicting a lot, so we thought that we should leave them, as they were fighting, and go to a place where ... because we are not going to learn lessons where they are fighting. It would take a lot of our time. So, we went to the Free State, and we are running it well there. We see how it can work. So, we hope that it would work, as well. Thank you, Chair.
Ms E C VAN LINGEN
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 96
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM
Ms E C VAN LINGEN: Chairperson, I would like to ask the Minister a question, because I do not quite understand his reply. He said 90% of the land in the first phase was sold. Then he said that no percentage of the proceeds was paid over to the community trust. I was under the impression that 2% of the proceeds would be paid over to the community trust for development in the community. He must just help me, because he cannot say that 90% was sold and then say that no land was sold. There must be proceeds if 90% of phase one was sold. Thank you.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM: Chairperson, this is a private development. When I talk about 90% here, I talk about privately owned land, which is adjacent to a community of black people, consisting of coloureds and Africans; they live together. These black people work for the farms there. We were supposed to acquire equity from this land, but we have not done that. That is where I say we have not bought any land; it is still the developer who owns the land. So the 90%, the 2 000 to 3 000 people living there, and the 740 houses are all plots which the developer wants to sell and is actually selling to other people.
It is a privately owned thing; we have no business there. Because it is an opportunity for us, we want to negotiate that we buy equity in the business for this community in Thornhill, so that they do not only have jobs there but can share in the ownership of that. I mentioned the example of Bloemfontein Abattoir, for the black farmers there. So, we have not bought any land. The land belongs to the private developer, but we want to purchase equity from the business for this community. Thank you, Chair.
QUESTION 181
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 97
QUESTION 207
Question 181:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and Technology): Chairperson, the reply to the question a is as follows: Competitiveness is defined by the World Economic Forum as a set of institutions, policies and factors that determine the level of productivity of a country and measured by the World Economic Forum on three sub-indices, twelve domain pillars underpinned by over 120 components. The Department of Science and Technology has targeted programmes in human capital development as postgraduate, research and development infrastructure and knowledge generation, and a portfolio of medium-term research and development programmes. All these interventions are aimed at a general crosscutting increasing South Africa's capability.
The Department of Science and Technology's targeted industry initiatives consist of multiyear research and development programmes wherein the Department of Science and Technology funds knowledge generation, and firms being responsible for the adoption of this knowledge.
The relationship between science engineering and technology interventions and the national economy is difficult to correlate. One of the primary reasons being the delayed impact effect of the science engineering and technology interventions, a known science engineering and technology impact factor.
The answer to question b is as follows: Interventions from the Technology Localisation programme are primarily aimed at improving capabilities and competences for participating firms. A targeted sector in this regard is the foundries. Examples of direct contributions to competitiveness improvement include the following: firstly, quality improvements in the way metal casting takes place was achieved through the use of a gas detector system in castings; secondly, a generic costing model was developed that enables foundries to generate more accurate quotations and lastly, the Department of Science and Technology funded a technology assisted package which enabled the University of Pretoria to develop a design model for small transformers for Power Technologies (Pty) LTD, Powertech. Powertech has secured new transformer orders, created 30 new jobs and will be opening a production line for small transformers based on the locally developed knowledge. The following future plans can be emphasised amongst many others.
The Department of Science and Technology has received additional funds from National Treasury's economic competitiveness support programme for local production. These funds will be used for the substantial upscaling of the technology localisation programme. The department is also finalising an action plan for emerging industries called the Emerging Industries Action Plan, the EIAP. The EIAP will contain a list of large research and development programmes with a demonstrated potential for new industry development with the commensurate commitment from funding agencies to ensure that these flagship programmes are commercialised. Thank you, hon Chair.
The CHAIRPERSON OF THE NCOP: Thank you, hon Minister, hon M L Moshodi is not here; any follow up question? No follow up question. Thank you very much. Question 189. I see people already saying we have got to complete the questions today. [Laughter.]
QUESTION 189
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 97
QUESTION 181
Question 189:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and Technology): Chairperson, the answer to the question is yes, the construction of the Square Kilometre Array, the SKA, in South Africa, which will be implemented in phases, will be funded by an international organisation consisting of 10 member countries, of which South Africa is one them. For phase one, the acquisition cost for SKA has been capped at R6,45 billion. Preliminary estimates for the operations cost put the potential net foreign inflow into South Africa for phase one of the SKA only at close to R18 billion over the lifetime of the project.
The funding model in relation to respective financial contributions is still being negotiated at the international level. The construction budget for phase two of the SKA has yet to be determined. It is likely that the bulk of direct economic return on investment would be from operating the SKA.
South Africa would attain an appreciable amount in construction contracts, split between both infrastructure construction and high-tech industry. Typical operational costs which will be funded by the international SKA organisation range between 6% and 8% of the capital cost, or approximately R670 million per annum in direct foreign investment. This is typically to pay for electricity, data transport and infrastructure maintenance.
Local benefits would primarily or principally be in the form of direct economic benefits due to major construction activities. Targeted skills development programmes undertaken by the South African SKA project in the area, are ensuring that suitably skilled local persons will have employment opportunities during the operations phase of the facility.
Lastly, national benefits are broad in scope, and range from direct economic benefits to the construction and operation of the SKA facility, to indirect benefits as a result of the South African scientists, engineers and the high-tech industry participating in a globally collaborative project that is developing cutting edge technology. The SKA will have a positive impact on the international perception of South Africa as a viable destination for investment in high-tech engineering, information and communications technology infrastructure and the development of highly skilled experts in the next-generation ICT technologies. Thank you, Chair.
The CHAIRPERSON OF THE NCOP: Thank you, hon Minister. Ms Makgate is not in the House. Any follow up question? Question 191, hon Minister.
QUESTION 191
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 97
QUESTION 189
Question 191:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and technology): Hon Chair, the response to this question is quite long and I will not go into details because the details are available here. Suffice to say that the reply to question one is that the Department of Science and Technology achieved most of its strategic goals. Evidence indicates that of the 66 indicators set out in the 2012-13 financial year or the Annual Performance Plan, the Department of Science and Technology achieved 47 of the 66, which is 71% and 14 or 21% were partly achieved. Only 8% could not be achieved.
The indicators listed have not been achieved. The reasons for non- achievement are detailed. However, I suggest that we leave out the details. The hon members will read them on their own. The hon Minister here is accounting on why the department could not achieve that 8% of the indicators.
Suffice to say that measures have been put in place to provide an early warning on areas concerning the department's performance. The department prepares two types of reports on a quarterly basis. One report is used as a management tool aimed at ensuring that weak areas are identified and addressed timeously. The other report is prepared in line with the National Treasury's compliance guidelines and standards for performance management. Greater effort is being applied in ensuring alignment between the department's indicators of performance and those of its entities. The Performance Information Management System has been implemented to streamline performance reporting and will be extended to entities in due course.
The Performance Analysis report was developed and areas of improvement were identified.
Internal Audit is in the process of auditing internal control processes of the line programmes that implement the projects and interface with the broader Nasa Standard Initiator, the NSI, stakeholder community. Thank you, Chair.
The CHAIRPERSON OF THE NCOP: Hon Minister, can I ask the staff member to print the whole response as Hansard please.
You can get a copy of the response from the hon Minister.
QUESTION 192
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 98
QUESTION 191
Question 192:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and Technology): Hon Chair, the Department of Science and Technology has made use of the Organisation for Economic Co-operation and Development's review of the research, development and innovation capabilities of South Africa – that is, in 2007 – as well as the Ministerial Review Committee report of 2012 to assess the current science, technology and innovation landscape. These reviews, together with the regular and rigorous internal monitoring and evaluation processes of the Department of Science and Technology, and its councils and entities, assist the department to assess the opportunities and challenges or weaknesses of South Africa's research, development and innovation system.
Clearly, the next section of the question falls away.
Following the report of the Ministerial Review on the Science, Technology and Innovation landscape, the Minister convened a Science, Technology and Innovation Summit in July 2013. This summit provided a forum for the government, academia and business to engage in a valuable and frank discussion on the opportunities and challenges to achieving a focused, aligned and more competitive system of research development and innovation in South Africa.
The Department of Science and Technology has introduced a number of strategic initiatives and policies to address some of these challenges and opportunities. Examples of these are the establishment of the Technology Innovation Agency, the Intellectual Property Rights from the Publicly Financed Research and Development Act, the establishment of the associated National Intellectual Property Management Office and the Offices of Technology Transfer.
Lastly, the 152 research chairs that have been established, together with the centres of excellence and centres of competence are part of the detailed strategies that the department has put in place to respond to the challenges and opportunities in key areas. These include the following: bioeconomy; the palaeosciences; information and communication technology, ICT; energy; nanotechnology; and climate change; as well as to provide the research base for the beneficiation of our mineral resources in the platinum group metals and titanium.
Chairperson, may I say that there is also an annexure here which would really be helpful in the broader understanding of the question. I will also make it available. Thank you.
The CHAIRPERSON: Alright. Thank you.
QUESTION 200
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 98
QUESTION 192
Question 200:
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and Technology): Chairperson, yes, the Socioeconomic Partnerships programme of the Department of Science and Technology has yielded successes.
The work of the Socioeconomic Partnerships programme supports three major outcomes, that is, industrial development and competitiveness; improving quality of life and service delivery; and contributing to the greening of society and the economy. In each of these areas, the programme funds a number of projects and initiatives, each of which has different outputs and impacts. In each of the areas, the programme has already yielded important successes, and as projects and initiatives mature, they will continue to yield further success over the next few years.
With regard to industrial development and competitiveness, the department provides funding support to a network of technology stations located within various universities of technology. Using the Department of Science and Technology funding, the technology stations were able to buy equipment and to employ skilled technologists who provided technology-based services to thousands of small and medium enterprises.
The Socioeconomic Partnerships programme also funds research activities aimed at developing new industries and firms. There are a number of areas in which the programme is attempting to develop new industries. These include fluorochemicals, titanium, information and communication technologies, biocomposites, etc. Each of these areas is at different stages of development and has enjoyed significant success.
It is a longish answer, again, hon Chairperson. It is three pages long. If the hon members wish to follow the same example of the previous question, I would be very happy. It is a long one.
The CHAIRPERSON OF THE NCOP: We can table it, Minister.
The MINISTER OF RURAL DEVELOPMENT AND LAND REFORM (for the Minister of Science and Technology): Thank you very much, hon Chair. That is all. Thank you very much.
The CHAIRPERSON OF THE NCOP: The question will be tabled and all answers will appear in the Hansard.
QUESTION 133
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 98
QUESTION 200
Question 133:
The DEPUTY MINISTER OF TOURISM: Chairperson, the organisational structure of the Domestic Tourism Branch within the national Department of Tourism is provincially focused and is divided into two regions, the northern and southern. The department engages through workshops and other fora: the Provincial Co-ordinating Forums composed of provinces, the SA Local Government Association, Salga, the Tourism Enterprise Partnership, the Culture, Art, Tourism, Hospitality and Sport Education Training Authority, Cathsseta, and SA Tourism. Here, the importance of allocating a budget for tourism development and the promotion and maintenance of tourism infrastructure is emphasised.
The department also facilitated the development of a Tourism Budget Programme Structure in partnership with National Treasury for provincial tourism departments. The exercise entailed the identification of core tourism focus areas or programmes to be pursued by provinces. The focus areas were taken from the National Tourism Sector Strategy, and provinces were able to come up with a budget structure for tourism.
The department is also in the process of rolling out their capacity building programme. This is partly intended to create better understanding of tourism and its benefits at local level, thereby making it easy for municipalities to see value and allocate budgets for tourism. In relation to that, the pilot project has been implemented to train municipal officials in areas like research, planning and policy. Moreover, the department has awareness creation sessions on the importance and benefits of tourism with municipalities. These include the rolling out of a tourism toolkit for local government, which outlines typical tourism infrastructure that municipalities ought to maintain.
Apart from that, the department hosted the Local Government Tourism Conference in February. This emphasised the importance of tourism at local level and the need to ensure that there is a budget allocation for tourism initiatives.
Parts b(i) and (ii) of the question are not applicable. Thank you.
QUESTION 134
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 98
QUESTION 133
Question 134:
The DEPUTY MINISTER OF TOURISM: Chairperson, our national Department of Tourism continuously engages other government departments and agencies across all three spheres of government where any such department can assist the national Department of Tourism in delivering its mandate.
With reference to the example on the impact of road infrastructure on tourism, it should be noted that the national Department of Tourism has engaged the Presidential Infrastructure Co-ordinating Commission, the PICC, on the inclusion of key road infrastructure links for tourism into the 18 strategic integrated projects, Sips, already identified in the National Infrastructure Plan. For example, we have the R74 road along the Sterkfontein Dam in the Free State, which falls under Sip 2 and the Madikwe-Pilanesberg network of roads in North West under Sip 4.
In addition, the department continuously interacts and collaborates with the Department of Transport and a number of its agencies on a number of tourism-related issues. Some examples include collaboration with the Road Traffic Management Corporation and the Cross-Border Road Transport Agency on aspects related to enforcement on illegal tour-guiding practices; and the engagement with the SA National Roads Agency, Sanral, and the Airports Company of S A, on matters related to tourism signage and the provision of visitor information services, air service bilaterals, passenger movements, statistics and issues pertaining to airlift.
In a similar way, our department has good relations with and engages constructively on a regular basis with a number of other government departments and entities, such as the Department of Home Affairs, the Department of International Relations and Co-operation, Statistics S A, etc, on various aspects and projects towards achieving our vision of becoming one of the top 20 tourism destinations in the world by 2020.
Furthermore, we have an existing formal partnership agreement in the form of a memorandum of understanding with the national Department of Arts and Culture. The identified areas of collaboration are centred on issues of development and the promotion of arts, heritage and cultural tourism, including the joint implementation of the National Heritage and Cultural Tourism Strategy, developed in 2012.
With regard to the Department of Public Enterprises, the Department of Tourism participated in the consultation processes co-ordinated by Public Enterprises to solicit input on the long-term turnaround strategy of the SAA.
QUESTION 135
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 99
QUESTION 134
Question 135:
The DEPUTY MINISTER OF TOURISM: Hon House Chairperson, the response to this question is that, after the reconfiguration of the department in April 2012, the establishment of 602 posts was approved, of which 111 were not funded.
Upon the establishment the department in 2009, it was structured around the existing functions which served the tourism industry to a large extent. However, the new strategic direction of government required the reconsideration of the composition of the department. The establishment was as such reconfigured and extended to approve posts being funded in a phased-in approach.
The department is functioning well. In the first year, after the reconfiguration, it prioritised the training of affected staff and the recruitment of suitably skilled staff into the newly funded critical posts in the reconfigured areas.
The function of the Tourism Incentive programme was recently taken over from the Department of Trade and Industry. Whilst some posts were funded to deal with this function, further posts are to be funded in the new financial year.
The department has identified the critical posts, which include senior management posts, and funded such in the initial stage. The establishment, therefore, is funded using this phased-in approach. Our focus in terms of funding for 2013-14 will be on the assistant director posts in the international management branch and in the domestic management branch
The answer to part (e) is not applicable; to part (2)(a) there is none within the Medium Term Expenditure Framework; to part (b) and (c), it is also not applicable. Thank you.
QUESTION 153
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 99
QUESTION 135
Question 153:
The DEPUTY MINISTER OF TOURISM: House Chairperson, the answers to Question 153 (a) (b) and (c) are that the department has achieved some major successes in terms of the Social Responsibility Implementation programme, the SRI. For example, we have a partnership model on national department level working with the private sector, provincial departments, municipalities and other tourism stakeholders to ensure that in the long-term, the projects are viable and bearing fruits; and that a thorough assessment is done before funding can be approved. The approved projects are thus relevant and address the gaps and needs of the industry.
The skills and training projects which the department initiated since 2010 are addressing the shortages of skills in the tourism and hospitality sector, particularly targeting the youth. The youth who enrolled in the various SRI training projects did not only gain theoretical knowledge but also the practical hands-on experience through the placement in the hospitality places. The majority of the youth who exited the projects have been employed and others have started their own businesses.
The Chefs Training project won the Expanded Public Works Programme's Kamoso Award as the best sector model. This is a demonstration of the changes that the department has introduced in funding viable projects. One of the learners from the projects got a contract to manage a canteen in one of the mines around Mokopane in Limpopo and employed six of his fellow students. Two ladies opened a successful catering company in the Eastern Cape whereas in Gauteng, the top five learners opened a Top Five Restaurant in Braamfontein.
The speech is quite a lengthy one. I would also be happy if the hon members could accept to have the rest of the responses in writing, but I can continue until the Chairperson gives the direction.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT : Are we agreed.
The HON MEMBERS: Yes.
The DEPUTY MINISTER OF TOURISM: Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT : Alright, the House agrees to receive the entire response in writing. Thank you.
QUESTION 211
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 99
QUESTION 153
Question 211:
The DEPUTY MINISTER OF TOURISM: House Chairperson, we have responded to Question 211 by drawing up a list of all the 21 infrastructure and five training projects in the Eastern Cape province that were funded in terms of their respective categories. We have given the name, commencement date, time, status of each project, costs for each approved project, budget and the remaining budget. So, if the hon House can allow me again to present the detailed report of the projects in writing ... [Interjections.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT (Mr R J Tau): I can see the nodding of the heads. Is it agreed to!
The HON MEMBERS: Yes.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Alright, that is fine.
QUESTION 212
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 99
QUESTION 211
Question 212:
The DEPUTY MINISTER OF TOURISM: Hon House Chairperson, the answer to part (1) is that in 2010, tourist arrivals by air were 2 628 251 and those who came by land were 5 455 301. In 2011, tourist arrivals by air were 2 511 226 and those who came by land were 5 828 128. In 2012, tourist arrivals by air were 2 88 4423 and those who came by land were 6 303 945.
Take note that the information on arrivals by ports of entry is collated by Statistics SA and the Department of Home Affairs. What we have here is the exact breakdown, which can be requested from Statistic SA and the Department of Home Affairs. However, according to the departure survey, leisure accounts for 60% of South Africa's tourism arrivals, 30% is business and other purposes of travel account for only 10%.
The answer to part (b) is that the main source of tourists by region for the period 2010 to 2012 is as follows: Our own continent, Africa, is the largest source of tourist arrivals, followed by Europe, the Americans, Asians, and Australians.
In response to part (2), South Africa has fantastic products to market, which makes it one attraction. Therefore, South African tourism's effective and targeted marketing campaigns in our key markets have been instrumental to the growth that has been achieved to date. The campaigns have been targeted at driving positive awareness and improving conversion to attract tourist arrivals to our key markets.
Lastly, our marketing plans are in place and are based on sound market research and deep consumer insight. Through these campaigns we are certain that we will continue to grow tourism in our country. Thank you.
Mr D A WORTH
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 99
The DEPUTY MINISTER OF TOURISM
Mr D A WORTH: House Chairperson, to the Deputy Minister, which country's tourists – I take it there are records – spend the most money – that is, the most important thing pend the most money here in South Africa? Thank you.
The DEPUTY MINISTER OF TOURISM: House Chairperson, if you look into, for instance, countries like Japan, there will be big spenders but there will be fewer numbers coming from that particular country. So, it depends on when we have to collate the entire numbers because Europe is one of our top source markets. When you collate the numbers and the actual spending, then they will vary. Thank you.
QUESTION 137
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 100
QUESTION 212
Question 137:
The DEPUTY MINISTER OF FINANCE: Hon Chairperson, firstly, I would like to refer the member who asked this question to a response that was provided on 16 August 2013 in relation to Question 2076 in the NA, where we laid out the position of the Government Employee Pension Fund, the GEPF, in some detail. I would be quite happy to furnish the House with that detail so that I do not bore the House with the numbers.
We also would be tabling the GEPF's annual report in Parliament, and I have been advised that the GEPF will shortly be publishing the most recent actuarial evaluation report on its website. In their latest report, the GEPF's actuaries indicate that the GEPF is 100% funded relative to the actuaries' best estimate of the liability owed to contributing members and pensioners, the data reserved and the reserve held in respect of past discriminatory practices.
The additional contingency reserves are intended to allow for lower than projected future returns on investments, higher life expectancy, higher salary increases and higher adjustments for consumer inflation and pension values amongst other economic demographic uncertainties. The actuaries report that if the full value of these reserves were allowed for, then the GEPF would be 70,4% funded. At the date of the previous actuarial evaluation in 2010, the fund would have been 74,1% funded on the same measure.
The liabilities are long term and ongoing in nature. Its actuarial position is subject to unavoidable uncertainty in the economic demographic and other trends. It is consequently not realistic to expect that actuarial reserves would be fully funded at all times. The funding of contingency reserves is expected to have improved since the 2012 actuarial evaluation was completed.
However, in keeping with the Government Employees Pension Law Amendment Act 35 of 2003 and the rules of the fund both the board of trustees and the Minister of Finance are advised by the fund's actuaries on its funding position and changes to benefits or contributions that may be required. That is the abridged response, Chairperson. However, if details are required, as I indicated, we have a detailed response which has been tabled to Parliament. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Thank you, Deputy Minister. Hon Montsitsi, any follow-up?
Mr S D MONTSITSI: Yes, they can print the details.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: I take it that there is no other follow-up.
QUESTION 157
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 100
QUESTION 137
Question 157:
The DEPUTY MINISTER OF FINANCE: Chairperson, this is a bit of a lengthy response, but let me indicate that the census data is used extensively across all three spheres of government to inform the planning of government programmes and decisions on the allocation of resources. At the moment, the Presidency is busy aligning all strategic plans of the government - the national, provincial and local government - to the National Development Plan, the NDP.
The census results as enquired by the member and other data produced by Statistics SA are a major aspect of what informs our National Development Plan. The National Treasury has, amongst others, used data from Census 2011 to update the formula used to determine the allocation of the equitable shares to both provinces and municipalities, and some of the largest conditional grants which will be the Municipal Infrastructure Grant and others.
The census data is also used to determine these allocations as it provides an objective way of measuring the needs of different provinces and municipalities. For example, the census data gives an indication on the number of school-aged children in a province or a number of households that need free basic services and other amenities in a municipality. Funding is therefore targeted where the need for services is as determined by these numbers.
Updating the data used with the results of the Census 2011 means that more money is redirected to provinces and municipalities that have been growing faster so that they will have the resources that they need in order to build schools, clinics, and provide basic services to their growing populations. This data is also used to inform policy in government in general. For example, we are reviewing the structure of the conditional Municipal Infrastructure Grant based in part on a comparison of the backlogs during the period of Census 2001 and Census 2011, respectively. The comparison indicates areas where we have made good progress in reducing backlogs in access to services and also identifies other areas where progress has been slow.
Census data is also used in a wide range of government planning documents that are regulated and monitored extensively. Departments, provinces and municipalities are required to use the most recent credible data to inform these plans. These include census data, and other data produced by Statistics SA according to its mandate, together with data produced by government departments and other agencies.
The monitoring of departmental performance with respect to the targets contained in the NDP is performed by the Department of Performance, Monitoring and Evaluation. Following the release of the latest status in 2011, provinces and municipalities have also been advised to use the data obtained from this census in their planning and budgeting through fora such as the annual benchmarking exercise conducted with provincial treasuries and through the Municipal Finance Management Act, the MFMA, budget circulars issued by the Treasury to advice municipalities on budgeting. Let me also stop there with this response. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Thank you, hon Minister. Is there any follow-up? Hon Themba is not here. No follow-up; then let us proceed.
QUESTION 183
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 100
QUESTION 157
Question 183:
The DEPUTY MINISTER OF FINANCE: Chair, I take it that this is one but the last. Yes, the National Treasury undertakes a range of measures and strategies to monitor and assess government spending with the aim of improving results. In addition to compliance with the comprehensive legal requirements regarding the consolidation of publication of revenue and expenditure data across all spheres of government in terms of the Public Finance Management Act, the PFMA, Municipal Finance Management Act, the MFMA, and Division of Revenue Act 2 of 2013, the National Treasury regularly undertakes a range of additional analysis of expenditure and performance information.
The National Treasury is undertaking various reforms as they relate specifically to local government in strengthening the entire municipal accountability cycle. Recent reforms include, among others, the implementation of a budgeting, in-year performance and the grant monitoring system. To this end, budget and financial information is consistently analysed and published in various forms including the consolidated Medium-Term Revenue and Expenditure Framework budget information for all 278 municipalities; quarterly 71 publications on actual performance against the adopted budget of the municipalities; and the conditional grants' financial performance.
These publications incorporate formal press releases as well. Over and above, there are: An expenditure report which is regularly tabled in Parliament; the annual state of local government finances and financial management report; the biennial Local Government Budget and Expenditure Review; the quarterly and annual consolidated report on the MFMA implementation; and the correspondences to provincial treasuries and municipalities based on assessments of the section 41 reports of the MFMA, which are actual amounts owed by municipalities to bulk suppliers, water boards and Eskom in guidance on corrective measures.
It is a bit lengthy; about three to five pages remaining. If the House allows me, I would be quite happy to also table this for print for the House. [Interjections.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: They agree, definitely! [Laughter.] I take it that there are no follow-up questions. We then proceed to question 187 by hon Chaane.
QUESTION 187
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
Thursday, 24 October 2013 Take: 100
QUESTION 183
Question 187:
The DEPUTY MINISTER OF FINANCE: Chair, this is the response to the last question: Yes, the National Treasury undertakes a range of measures and strategies to monitor access to government spending with the aim of improving results. We have also conducted extensive analysis of government spending almost in the same form as in the previous response. The results were completed and used throughout the budget process, together with the consultation.
We have also published concise budget information in the Estimates of National Expenditure and the Adjustments Estimates of National Expenditure to increase transparency and accountability. We also conduct regular briefings to the Standing Committee on Appropriations of which Mr Chaane is Co-Chairperson; the Select Committee on Finance and the other House.
We also present monthly and quarterly reports which are completed with a detailed analysis of national and provincial in-year information. We also have in-year meetings with the national departments and provincial treasuries to discuss spending patterns and trends; building influence and drive improvement; analysis of departmental strategic plans; and the annual performance plans, the APPs, quarterly performance reports and annual reports as the reports become available throughout the year.
We also provide a detailed expenditure reviews which are currently underway in partnership with the Department of Performance, Monitoring and Evaluation to provide an in-depth understanding of performance linked to expenditure and investigate the value of areas of public expenditure. These are comparatively new initiatives and details on them are provided below, which I would also be happy to table unless the members would want me to go through them. However, there are quite detailed new innovations that we have introduced. Thank you.
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: Thank you, hon Deputy Minister. Are there any follow-up questions?
Mr S D MONTSITSI: I just wanted to check if you are serving dinner, Chairperson? [Laughter.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: No, that is not a follow-up question, hon Montsisi. [Interjections.]
Ms N D NTWANAMBI: But the answer is, yes, Chair! [Laughter.]
The HOUSE CHAIRPERSON: COMMITTEES AND OVERSIGHT: That concludes the questions relevant to Treasury. We shall now proceed to another set of questions. I just wanted to check whether you are still awake. That concludes the business of the day!
Before we adjourn, you are invited to dinner at the Old Assembly.
The Council adjourned at 20:26.
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