Hansard: NA: Unrevised Hansard
House: National Assembly
Date of Meeting: 04 May 2022
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Minutes
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Watch: PLENARY (HYBRID)
PROCEEDINGS OF THE NATIONAL ASSEMBLY
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The House met at 15:00.
House Chairperson Mr C T Frolick took the Chair and requested members to observe a moment of silence for prayer or meditation.
The HOUSE CHAIRPERSON (Mr C T Frolick): Order hon members! Order! In the interest of safety ... Order hon members! In the
interest of safety ... Hon members, the House has started its proceedings. It’s now time to end your bilateral discussions
and to take up your seats. Please keep your masks on and restrict your movement as far as possible. Stay in your
designated area. You are requested to sign the attendance slips that have been provided on the desks in front of you. The only item on today’s Order Paper is Questions addressed to the Ministers in Cluster 5: Economics. There are four supplementary questions on each question and parties have already given an indication of which question their members wish to pose a supplementary question on. Adequate notice was given to parties for this purpose. This was done to facilitatev the participation of members who are connecting to the sitting through the virtual platform. The members who will pose supplementary questions will be recognised by the presiding officer. In allocating opportunities for supplementary questions, the principle of fairness, amongst others has been applied. If a member who is supposed to ask a supplementary question through the virtual platform is unable to do so due
to technical difficulties, a party Whip on duty will be allowed to ask the question on behalf of their member. When all supplementary questions have been answered by the executive, we will proceed to the next question on the Question Paper.
The first question has been asked by the hon Mangcu to the Minister of Transport. I have been informed that the Minister will be answering questions here from the Chamber. The hon Minister? The hon Minister of Transport? May I request the Chief Whip of the Majority Party to ascertain the movements of the Minister because this session was set down specifically for questions to Ministers and we expect Ministers to be present when they indicate that they will be in the Chamber.
We cannot delay the business of the House due to the unavailability of a Minister who is supposed to be here. I don’t think the shadow Minister is prepared to answer the question. {Laughter.]
An HON MEMBER: Well prepared ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon members, I suggest we proceed to the next question. We proceed to the next question and that question has been asked by the hon Cachalia to the Minister of Public Enterprises. Is the Minister of Public Enterprises on the platform?
The MINISTER OF PUBLIC ENTERPRISES: Yes, I am, Chairperson.
The HOUSE CHAIRPERSON (Mr C T Frolick): Thank you, hon
Minister. Hon Minister, you may proceed.
Question 288:
The MINISTER OF PUBLIC ENTERPRISES: Good afternoon Chair and hon members. The government has not considered declaring a state of disaster to respond to the energy challenges that we are facing in the Republic of South Africa. For the information of hon Cachalia, in terms of the Disaster Management Act, a disaster means a progressive or sudden widespread or localised natural or human caused occurrence which causes or threatens to cause death, injury or disease;
secondly, damage to property or the environment and infrastructure; and thirdly, destruction of the life of a community and the magnitude of that exceeds the ability of those affected by the disaster to cope with its effects using only their resources.
The facts that have emerged in the most recent report from the commission chaired by the Chief Justice, hon Zondo, released on Friday, 29 April 2022, states that:
The evidence proves a scheme by the Guptas to capture Eskom, install the Gupta’s selected officials in strategic positions within Eskom as members of the board, the committees of the board and the executives, and then divert Eskom’s assets to the Gupta’s financial advantage.
Clearly the evidence before the commission further:
revealed quite clearly that part of the reason why some of the state-owned companies have performed as
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badly as they have and why some rely on government
bailouts year in year out, is the calibre of some of
the people who are appointed as members of the
boards of these companies or who are there chief
executive officers and chief financial officers.
State capture contributed to the energy crisis, as the
commission’s evidence revealed. For example, it says that
Eskom concluded a coal supply agreement with Tegeta for the
supply of a total quantity of 13 ... almost 14 million tons
and the agreed contract price was R3,7 billion, commencing
1 April 2015 to 30 September 2025.
Executives in the boards of Eskom at that time were tirelessly
working to benefit the Guptas by providing long-term
contracts, increasing the scope and budget while completely
flouting public procurement prescripts. There was evidence
before the commission as to how this was done by various
officials and where no due diligence was actually undertaken.
Notwithstanding this, these are the various initiatives that
government has been taking for the last few years in order to
restore energy security in South Africa:
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Firstly, since March 2018, government and the Eskom board and
management have been working diligently to restore good
governance, operational stability and financial sustainability
in Eskom;
Secondly, this is in addition to the restructuring of Eskom to
meet the requirements of the new trends in the energy market;
Thirdly, the Integrated Resource Plan, IRP, 2019 was developed
by government to provide a medium-term perspective on the
energy transition that South Africa will have to undergo;
Fourthly, Eskom has made various attempts to overcome the lack
of maintenance in the past, with various philosophies and
approaches in respect of maintenance, some of which are
working and admittedly, some of which are not;
Fifthly, restoring engineering and operational discipline
which disappeared during the state capture period;
Sixthly, acting against corruption, for example against ABB
and retrieving R1,5 billion, McKinsey a billion rand, Trillian
and a R3 billion claim against ... former board and management
of Eskom as well;
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Seventhly, changing procurement practices, which is still work
in progress; and
Eighthly, completing the Medupi and Kusile build projects,
notwithstanding the various difficulties that are confronted
by Eskom.
Preparing for renewables and the just energy transition are
among some of the things that Eskom is undertaking.
There should therefore be a distinction made between a state
of disaster just for dramatic effect as compared to a power
system emergency, which falls within the purview of the
system’s operator and based on criteria determined by this
operator. At all times the main imperative is to avoid the
total collapse of the grid as has occurred in California and
more recently in Texas of the USA. There are therefore
internal plans to manage the power system that would allow the
system’s operator to implement up to stage 8 load shedding in
order to protect the grid from total collapse. Eskom manages
the stability of the grid with load shedding as a key
mechanism to mitigate against a grid collapse. At this stage
there is absolutely no requirement for Eskom or government to
declare such an emergency.
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Mr G K Y CACHALIA: While President Ramaphosa vows to do
everything to make load shedding a thing of the past, and
indeed once announced that load shedding had ended, as I speak
we are currently being hit with stage 2 load shedding, an
unacceptable reality of some 15 years’ duration under the ANC,
highlighting this government’s chronic inability to keep the
lights on. Experts the world over agree that the staff
complement at Eskom is hugely bloated and that tens of
billions of billions of rand in savings from the retrenchment
of deadwood cadres is patently needed for the much-needed
maintenance and reinvestment. Moreover, the chief executive
officer, CEO, recently identified incompetent plant operators
as a major factor contributing to the current mess.
In view of this, will the Minister prioritise the future of
our electricity security, as his job demands before securing
the votes in placating unions that in any case cause the
President to unceremoniously flee their ire in a police Nyala,
and will he take the necessary steps to free the much-needed
financial resources by not blocking these retrenchments as
well as allowing fit for purpose employees to fill the much-
needed gaps?
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The MINISTER OF PUBLIC ENTERPRISES: Thank you Chairperson and
hon Cachalia. Clearly it is our priority as government and
certainly within my portfolio, but more importantly of the
board and the management to ensure that we prioritise
stability within the energy system. However, the reality as
has been repeated on many occasions, is that Eskom requires a
space of about 4 000 to 6 000 megawatts of additional energy
so that the necessary maintenance can be undertaken.
It is also a well-established fact and this is also in the
report of the Zondo Commission, that there has been neglect on
the maintenance side for many years, particularly during the
state capture period, in order to ensure that “the lights stay
on.” That is the legacy that we now have to overcome.
As far as the staff is concerned, there is no doubt that there
is a possibility for trimming the staff numbers, but unlike Mr
Cachalia, we have a social responsibility as government not
just to placate unions but to look after workers, to look
after their families and to look after the wellbeing of
communities as well. And, far more important than putting them
out on the streets when we have the high level of unemployment
that we do, is to attempt to retrain them, to reorientate them
towards the new developments as far as renewable energy
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investments that will be taking place all over the country,
but particularly in the near future on Eskom land as well.
So, there will be some stability in the next year or more, but
what we require is this 4 000 to 6 000 megawatts of energy
which needs to be brought online. And that is certainly our
priority.
Mr S N SWART: Thank you, House Chair. Arising from your
response, hon Minister, and in addition to your references to
the Zondo Commission, the ACDP welcomes your comments of the
weekend that all sections of society should understand the
negative and devastating impact that corruption and state
capture has had on institutions, and that the real corruptors
must be held to account. More importantly hon Minister, you
said that those who have benefitted in one way or another must
stop being treated as little heroes because they are not.
Hon Minister, when the ACDP served with you and other Members
of Parliament on the Parliamentary inquiry into Eskom we had
no idea of the exact extent of the looting and corruption
which the Zondo Commission has now quantified at a staggering
R14,7 billion.
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Would you agree, hon Minister, that had this R14,7 billion not
been stolen, it would’ve gone a long way to fund much-needed
maintenance and stabilise the ... [Inaudible.] ... supply at
Eskom, and if so, that further and more urgent steps should be
taken by law enforcement agencies to recover these funds,
wherever they may be, and ensure that those implicated are put
behind bars?
The MINISTER OF PUBLIC ENTERPRISES: Chairperson, I would
certainly agree with the hon Swart that had that ... and I’m
sure if we do a little bit more homework the amount of money
might even be more than that, hon Swart ... who played a very
important role, together with a number of members of the
Opposition and the ANC, during the Parliamentary inquiry into
Eskom in 2017.
However, hon Swart is absolutely right. That money could’ve
been used to do more maintenance, to stabilise the energy
situation in South Africa, and one can’t but absolutely agree
with him that the time has now come for the law enforcement
agencies to not only just show their teeth but to use their
teeth and ensure that that which the public of South Africa
wants, which is that these affected and listed people in these
reports to now account for the manner in which they have done
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a disservice to this country and find themselves, where
appropriate, in orange overalls as well.
On the question of funds being retrieved, that is also an
absolute priority as well, and as I said earlier on, Eskom
through its board has taken an important initiative in lodging
a claim of over R3 billion against former directors on the
Eskom board during the state capture period and the management
of that time as well. So there is absolutely no doubt that the
state capture activities had a massive and negative effect on
Eskom itself and therefore on our country and its economy, but
the key now ... as we worked together during the 2017 period,
is for us to put our collective efforts together and make sure
that a vital institution like Eskom is put on its feet again,
whilst at the same time inviting private-sector investment
into the renewable industry. Thank you.
Mr W W WESSELS: Thank you, hon Chairperson. Chair, would the
Minister agree that the crisis facing Eskom is not limited to
inefficient generation of electricity but also goes to the
incapacity of the electricity network, and that a lot of
energy is lost ... electricity that is produced ... is lost
because of the incapacity of the grid ... of the network? And,
will the Minister then make an effort to recruit people that
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were in service of Eskom that do have the expertise to assist
at this stage but who were retrenched because of various
reasons? Will he make an effort to recruit those people with
the necessary skills to assist us in this crisis?
The MINISTER OF PUBLIC ENTERPRISES: Thank you, Chairperson.
Hon Wessels, I agree that the generation side of Eskom’s
business has a huge challenge but where I beg to disagree with
you is that we have an incapacity in the transmission grid.
The transmission grid in South Africa, which is now under the
control of a separate entity, Transmission Company SA, as part
of the restructuring of Eskom, is one of the best-run grids in
the world and they operate on world-class standards. The loss
of electricity that you speak of is the normal loss that one
would see. I’m no electrical engineer but this is what I’ve
learnt. As electricity is generated at a particular wattage it
then gets reduced over long kilometres of these lines to the
appropriate voltage that is utilised in one’s home or in a
particular business. So, the grid itself and the system’s
operator that I referred to in my earlier response, operates
at world-class standards and we have no fear.
Where we do need to give further attention to is the extension
of that grid, and you’ve heard in the public domain the CEO of
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Eskom speaking of about R100 to R150 billion investment that
needs to take place in extending the grid, particularly in
parts of the Eastern Cape, Northern Cape and some other parts
of the country where renewable energy plants are being
installed and invested in, and that is work in progress in
terms of planning in that particular area.
In terms of recruitment of previous employees who have the
necessary experience, some of that is happening already and
the Eskom management and board is not shy in that particular
regard.
Mr B N HERRON: Thank you House Chair and Minister. Minister, I
think we can agree that we all understand what brought us to
the position that we are in with regard to the Eskom crisis.
So we can leave the blame game behind us and let the law
enforcement authorities deal with it. However, Minister, I
think what South Africans need right now is a stable
electricity supply, and the question really is how do we get
that immediately or as soon as possible? Do we have the
expertise in South Africa and in Eskom in order to stabilise
electricity supply and to give South Africans what they need
now, and let the law enforcement authorities deal with what
hollowed out Eskom in the past?
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The MINISTER OF PUBLIC ENTERPRISES: Chairperson, with great
respect, I think hon Herron must distinguish between what he
calls blame game and understanding the true root causes of
some of the challenges and problems that we face today. I
think dismissing it as blame game doesn’t actually help. It’s
like going to a doctor and the doctor tells you that the cause
of your symptoms is x and you say, don’t worry about the
causes, just treat my symptoms. That is a sure way of ending
up on the wrong side of life.
As far as skills in Eskom is concerned, Eskom can ... has the
basic skills in generation distribution and transmission but
it can certainly do with a lot more skills in relation to
generation expertise and experience as well, to train the
younger generation of engineers and operators that are within
the plant at this point in time. That is a matter that the CEO
is giving attention to at the moment.
There is no easy and quick fix in terms of getting a stable
electricity supply but there are a lot of initiatives at the
Mineral Resources and Energy Department that Minister Mantashe
is taking in order to ensure that Bid Windows 5 and 6 are
beginning to become operational and attention is being given
to other parts of the IRP 2019 with a view to quicker
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implementation in that regard as well. Similarly, attention is
being given to the utilisation of gas as a step-down
possibility as we keep in line with the commitments that we’ve
made at the various Cop conferences that have been taking
place around the world.
So yes, there is sufficient foundation to build on but at the
same time there are new and additional things that need to be
done. Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): Thank you, hon
Minister. Hon members, can I just request those members who
are on the virtual platform to keep their microphones muted.
It causes a disturbance to the hon Minister who is responding
and also to the members who are in the House.
I will now return to the first question on the Question Paper,
Question 246, that has been asked by the hon Mangcu to the hon
Minister of Transport. Welcome hon Minister.
Question 246:
The MINISTER OF TRANSPORT: Thank you very much, hon members.
As a policy department the Department of Transport is working
with all key stakeholders with an interest in the development
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of an efficient and competitive rail system in the country to
bring about a rail renaissance. This will position rail as a
backbone of our transport system both for passengers and
freight.
Historically, there has been significant under investment in
rail infrastructure negatively affecting the competitiveness
of rail. The White Paper on National Rail Policy presently
approved by Cabinet acknowledges the need for investment in
rail infrastructure, building on in existing programmes in
respect of both freight and passenger railway.
The life scale vandalism and theft of rail infrastructure has
undermined efforts to develop rail infrastructure but efforts
are underway to replace and rehabilitate the damaged
infrastructures.
One pursue measures in place to secure a new investment. The
work to develop rail infrastructure is ongoing and will be
given impetus by the implementation of the new policy
trajectory articulated in the White Paper on National Rail
Policy. Central to this is the establishment of a central rail
planning unit within the Department of Transport to work on
medium-term and long-term planning for the implementation of a
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number of rail intervention strategies going forward. This
will be a specialised unit with expertise to conduct research
and inform rail infrastructure development choices, amongst
others, both for passengers and freight.
The policy requires the finalisation in the publication of the
National Rail Master Plan to guide the country in terms of
rail development priorities, identifying strategic corridors
required for investment and types of rail infrastructure
development, timelines and cost.
Rail infrastructure development will be co-ordinated from the
centre and implemented simultaneously across the country in
strategic corridors as identified in the National Rail Master
Plan. However, the current efforts will continue and will be
integrated into the Master Plan. Thank you, Chair.
Mr L N MANGCU: Thank you very much, hon Chair. Minister, key
to the policy of just alluded to of moving freight from road
to rail are two entities, the Passenger Rail Agency of South
Africa, Prasa, and Transnet. How do you plan to co-operate or
make co-operation between Prasa and Transnet to make sure that
the dwindling numbers of freight being moved by rail now are
increased? And secondly, what is your plan to remove all those
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bottle mess that are causing this decline of freight movement
on trains? Thank you, hon Chair.
The MINISTER OF TRANSPORT: Thank you very much, hon member.
The long distance freight and passenger transport is primarily
on the Transnet freight rail network. Prasa is in discussion
with Trnsnet on catering for passengers in their current
access approach to market to invite third party operators.
Where access is required to freight to go through Prasa
network the agreement between the two entities will be based
on giving the priority to passenger traffic currently Prasa
and Transnet a collaborate between our trains operations
units.
Ms Y N YAKO: Minister, Jola, in 2006 the Railway Safety
Regulator released report that printed a concerning picture
about the safety of our rail infrastructure. Again, in its
2017-18 report the regulator reported a 21% increase in theft
of assets and malicious damaged to property. Railway transport
does not work to its capacity because of theft of railway
infrastructure, amongst other things. Has your government
consider reintroducing railway police to safeguard railway
infrastructure and ensure that this form of transport is
utilised optimally to ease the pressure from roads? Thank you.
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The MINISTER OF TRANSPORT: Thank you, hon member. The issue of
railway police within the rail passenger network is not a
decision that we are not considering. The main question is the
question of resources. And I am going to be honest with you
because I don’t want to say something here and then tomorrow
when you go for your oversight you don’t see railway police,
you say I came to Parliament and I promised you something that
we can’t implement.
We do have 2 000 plus railway police deployed in the network
from SAPS. And we have inherited that on the past. And from
the SA Police Service, we do have guards. It is complemented
by security companies, which are being deployed as we recover
different corridors in the county.
So, to answer your question, if you go now, for instance, in
Mabopane and other corridors that we are reviving, you asking
well, I am telling you one answer is Mabopane. You go to
Mabopane ... [Interjections.] ... No everywhere else where we
are reviving the passenger rail network the strategy is, we
deploy security. So, that is happening everywhere in the
country. So, that is what I wish to answer to you but you will
see railway police, which is 2 000 plus not deployed within
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the railway network in terms of passengers and all of that,
which is quite inadequate and not enough.
South Africa still needs boots on the ground in terms of the
police and so on. And it will not be in a position today to
deploy extra police within the rail network. So, we are
complementing that the security companies and we are doing
very well at the present moment with regard to that.
Rev K R J MESHOE: Thank you, Chairperson. The government has
for years allowed people to invade land and build shacks
wherever they wanted. They did not make state land available
to needy people who needed a place they will call home. It was
therefore not surprising when some invaders started building
along railway lines as has happens in Siyahlala Informal
Settlement in Langa. By so doing, these families have
prevented Metrorail from reopening the central line beyond
Langa.
My question to the hon Minister is, why is government not
complying with the Western Cape High Court order that ruled
that families in the Siyahlala Informal Settlement should be
moved and housed on land that has basic services as that will
enable the free movement of goods and people on rail,
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particularly workers who need safer and cheaper mode of
transport? And we all know that trains are always cheaper. So,
why is the court order not implemented so that that route is
open for passengers? Thank you, Chair.
The MINISTER OF TRANSPORT: Thank you, hon Meshoe. As we are
speaking now, we are working with the Government of the
Western Cape. We are working with the Cape Town Municipality,
Human Settlements under Human Settlements Housing Development
Agency, HDA. We are also working with the Department of Public
Works.
The Department of Human Settlements has secured a piece of
land where they would be moving the people to comply with the
court order. What we are doing as the Passenger Rail
particularly Prasa is to continue with our work. If you can go
to Langa now you will see the work that we are doing to secure
the rail network. Once people are waiting to be resettled, we
believe that we must continue with our work and to secure the
network.
And I can assure you that you are going to see the line open
very soon for trains once people are resettled to a new piece
of land in the Western Cape.
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Myself and the Minister of Human Settlements, we are meeting
tomorrow to finalise the preparations of land that has been
secured by government. So, we are working tirelessly. We have
been working to move people from rail tracks in the Western
Cape. And the main issue as you would know, which is an
obstacle and impediment in the Western Cape is securing land
parcels, which has been a bigger challenge here.
The Department of Public Works did give us a leap piece of
land but when we went to occupy the land, we were also met
with another court interdict, particularly from the owners of
land. So, the question of land in the Western Cape is a
question of ownership. Those who owned the land versus those
who do not have. And then the people who owned the land are
those who are very rich and wealthy. And they would not easily
agree to give us the land to be occupied by the people who
would be moving from the tracks in Langa in areas we have
actually mentioned.
But finally, we do have a piece of land and we are going to
move people. Even before we do that, the work of getting the
trains running in the central line has started. And you are
going to see the trains running, the blue trains, you are
going to see them back at the central line. And I am very
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excited about that. So, come with May as we embark on this
journey. So, I was with your people in the Western Cape
working with them, the DA government, working with your
municipality, who are very co-operative, working with me to
move people soon. So, don’t come here in Parliament and haul
because I am working with those parties to move people on the
tracks of land. Thank you very much. [Time expired.]
Mr A M SHAIK EMAM: Minister, first of all thank you. The
matter at OR Tambo Airport is resolved and all 105 ports entry
are now working at the airport. Thank you very much.
Minister, this rail network if implemented will go a long way.
First of all, less damage to the roads, less accidents and
less fatalities. So, I think there are positive side of the
story. However, my question is: have you ever made an
assessment on what then is going to happen in terms of job
losses to the long distance busses and the trucks industry and
other things? Have you done some kind of assessment though
that will see that we don’t lose jobs although there is no job
that is going to be created because they are going to be run
from depot to depot and all those kind of things? Thank you.
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The MINISTER OF TRANSPORT: We do have the study of the World
Bank in relation to the rail situation particularly the
Passenger Rail in South Africa. And that the current model in
terms of financing sustainability of the rail network in South
Africa is not sustainable. And that is why in our National
White Paper Policy, we are talking about private sector
investment not privatisation. And what it will mean is that,
we are now going to attract private money to come and support
our work in the passenger rail network. And the details of
that will be unpacked when we launch the National White Paper
Policy for South Africa. It’s the first that we are launching
which has been approved by Cabinet.
We are also going to look into the branch lines, which are now
not been utilised. If you talk about areas like Botshabelo and
Thaba’nchu on the Free State and in many other areas like in
KwaZulu-Natal, Mafikeng and the Johannesburg, all those branch
lines as we look to them now they are not being utilised. So,
we are going to work with the private sector to come to the
party so that we activate those branch lines for both the
purposes of passenger rail network and freight in implementing
and bringing to realisation the policy of moving from road to
rail.
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So, the White Paper in itself give us enough space to realise
the implementation of this policy. And when we launch it like
we said we are going to have a unit that is going to see its
implementation. We have costed it and most of the money is not
going to come from public purse. It will be through working
together with the private sector. The policy itself open up a
space for everybody to come to the party.
So, the future is bright from where we are now in terms of the
rail situation of South Africa. And I think you will see also
as we speak to different stakeholders in terms of the policy
already the appetite of them coming forward to participate
practically in the implementation of the policy - it is quite
encouraging. You are right, there are job losses, including
with regard to Autopax at Prasa.
And what we have said is that Autopax, it has lucrative routes
in terms of transporting people and all of that. But at the
end of the day it is a liability for us to see how we want to
deal with its sustenance and preserving jobs. Thank you,
Chair. [Time expired.]
Question 291:
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The MINISTER OF PUBLIC ENTERPRISES: Thank you, Chairperson.
The project that hon Maotwe refers to aims to develop and
support the strategy of moving towards managed third party
access, as Minister Mbalula has just been referring to on
sections of Transnet network, driving freight density,
improving profitability on the network, and supporting the
migration of traffic from road to rail.
Transnet is therefore conducting a phased project regarding
the sale of slots to enable private operators access to
sections of Transnet Freight Rail. In the case of slot sales,
the phased project is limited to the sale of operational
access privileges in the form of slots with no impact on the
rail network ownership. Transnet Freight Rail will continue to
be the network owner and the network manager in addition to
being the dominant operator with what I call “grandfather
rights to the network.” In all cases of private sector
participation, Transnet retains the ownership of the assets.
Transnet has also implemented a strategy, renewed capacity
development and efficiency improvement. The strategy
encompasses several private sector participation initiatives
in concert with Transnet’s own direct investment. This
strategy involves private partners supporting capacity
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development and operational efficiency enhancement through the
crowding in of investment in ring-fenced assets, partnered
driven investment and equipment, tools, techniques and access
to international trade and commercial networks.
Private sector participation processes is currently underway
include amongst others the Durban Container Terminal Pier2,
where a request for a quotation has been issued. Secondly, the
Ngqura Container Terminal where also issued. Thirdly, the
Ngqura and Richards Bay liquefied natural gas import terminals
in both instances request for information phases have been
completed.
Transnet is also developing and pursuing a programme of branch
line concessions in line with what Minister Mbalula has just
said. This process is at various stages of development and
implementation. The services that Transnet is selling is
access to the network rather a complete rail service. A detail
registration, capacitation, validation and certification
process has been developed to manage the process of private
sector operators being allowed to bid for slots as was
initiated on 04 April 2022.
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It is important to note that the sale of slots is not a
privatisation process but is a service offering from Transnet
albeit utilisation a different operating model. Thank you,
House Chairperson.
Ms O M C MAOTWE: Thank you very much, House Chair. Minister,
you just said that part for the tracks might be out for
concession, and that on its own, is part of privatisation. I
don’t know how do you not understand that term. It is now very
clear that the ruling party has no interest or appetite to
lead industrialisation despite the high levels of high
unemployment where more than 7,9 million people who are
willing to work, willing to relocate anywhere in the country
and willing to learn in new industries cannot find work. More
than 3,8 million people have given up on finding work and even
more people are economically inactive. We know that there is a
deliberate programme to collapse state-owned enterprises,
SOEs, so that they can be sold to cronies by a fraction of
their true value. They are deliberately destroying Transnet so
that they can privatise it.
We want you Minister to confirm today whether or not you are
saying that there are no plans to privatise any of the
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Transnet industries in the medium-term? I thank you, House
Chair.
The MINISTER OF PUBLIC ENTERPRISES: Thank you, Chairperson.
privatisation is a process where, - if you have 30 000km of
rail in South Africa, you say I am putting every kilometre of
rail in South Africa on sale to the private sector. This is
not what is happening. I have just said in my initial
response, Chairperson, for all to hear, that the railway owner
remains Transnet, the principle railway operator remains
Transnet, that all that is being implemented with here is
that, if for example on a particular corridor 70 trains have
to pass in the day whereas there is a potential for 80 trains,
then the other 10 can be made available to the private sector
for a certain period of time. And this will then teach us some
lessons about how private government sector and can co-
operate. So, I don’t know whose confusion it is certainly not
mine. That this is not privatisation, this is a service
offering as my initial response said.
We are very aware as the government that the unemployment is a
major issue in South Africa. What is important in creating
jobs in South Africa is that we need investment and to get
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investment in South Africa we need to create a climate of
stability that welcomes investment in South Africa.
So, I think some of us, hon Chair, need to look in the mirror
and ask the question, am creating and contributing to
stability in this country and creating a climate where I can
get investment that would create jobs and therefore and
industrialisation as well?
This is an old tired rhetoric that we have heard time and
again about collapsing SOEs and selling them to somebody or
the other which requires no response whatsoever because that
is not the intention at all. Hon Maotwe knows that and this
mere political rhetoric for its own sake. Thank you, House
Chairperson.
The HOUSE CHAIRPERSON (Mr C T Frolick): Thank you, hon
Minister. Hon members, you know when you ask a question you do
it with the reason to get a response or answer to your
question. It doesn’t assist us that while the hon Minister is
replying to the follow up question that you just switch on
your mic and you interject and there is also other Ministers
in the House, who are ordinary members and who are also
responding at the same time. It doesn’t assist the process.
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These are quite serious matters that we are dealing with and
let’s give each other sufficient space to respond to and deal
with the matters at hand. The next follow up question is to be
asked by hon Dlamini.
Mr N E DLAMINI: Thank you, House Chair. I think the issue of
privatisation has been well explained. In terms of the private
sector participation in the rail network, how is it going to
assist in terms of security knowing that currently we have the
spates of theft of rail and the security around the security
around the railway line. ... [Inaudible.] ... that have been
identified, are they busy now, with what?
The MINISTER OF PUBLIC ENTERPRISES: Thank you, hon Dlamini for
your question. This might not be if you like, a direct
assistance in this particular instance but this is part of the
conversation that Transnet and the interested parties from the
private sector would be having in regard to this specific
issue of the availability of slots.
However, we you look at the coal line from Ermelo to Richards
Bay, the coal industry there has played a very active part in
contributing to the security of parts of that line that needs
to be extended further to ensure that there are drones
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operated for parts of the line to ensure that there is
security deterrence for anybody who wants to interfere with
the signalling system or engage in copper theft or other
equipment theft as well. That is the kind of co-operation that
we would like to see on all the rail corridors. And I am sure
Minister Mbalula would like to see that in relation to
Passenger Rail Agency of South Africa, Prasa as well.
There is absolutely no doubt, hon Dlamini, as you pointed out
that copper theft and rail theft and other infrastructure
theft and vandalism is having a major and disastrous effect on
the efficiency of logistics in South Africa. And we are
certainly working also with the South African Police Service
to ensure that special teams are made available at appropriate
points where these vandalism projects are run in order to
ensure that we understand who is behind it.
I want to reiterate that it is my firm view that the export of
scrap metal must be banned for a start and that will ensure
that there is no market externally for those sorts of
infrastructure that are stolen or vandalised in one way or
another. Of course, this is a matter that the Department of
Trade, Industry and Competition, DTIC, is working on and the
sooner we have a strong set of measures in that particular
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regard I believe it will begin to change the face of theft of
infrastructure as well. Thank you very much.
Mr G K Y CACHALIA: Can the Minister detail the terms in
details of the discussions that have been in progress since
April 2021, and please do not recite the mantra of sensitive
commercial information the nation needs to know. Perhaps you
will tell us who is going to absorb the costs of the
dereliction of infrastructure while signing up to a two-year
contract while government retains ownership ... [Inaudible.]
...
The MINISTER OF PUBLIC ENTERPRISES: Thank you, hon
Chairperson. I didn’t hear the last sentence or two that hon
Cachalia said...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Cachalia, don’t be
unfair. While the Minister is still trying to ask you, you
already switch on your microphone, against the rules again and
you simple carry on, that is not acceptable, sir. Will you
just repeat the last part of your question so that the
Minister can respond to you please?
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Mr G K Y CACHALIA: I am not sure where the last part begins.
But I will say perhaps he will tell us who is going to absorb
the costs of the destruction and dereliction of infrastructure
while signing up to a two-year contract while government
retains ownership thereof. And the last part that he didn’t
hear was a question, ... [Inaudible.] ...?
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Minister, I hope
you got the part that you couldn’t hear now?
The MINISTER OF PUBLIC ENTERPRISES: Yes, which I will ignore
for now. Thank you very much. I don’t have the terms and
details in front of me. But the process was initiated in April
2022, not 2021. So, it is a fairly new process. Secondly, I am
aware that Transnet has had various forms of feedback from
interested private sector parties, some of which has been
publicised in the press as well.
Thirdly, the initial proposition from Transnet was the
availability of slots, the use of equipment of the private
sector, the [Voetstoots] basis, meaning as the railway
infrastructure stands at the moment.
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However, Chairperson, I think we are all aware that certainly
in KwaZulu-Natal, as a result of the recent floods and the
damage that has been caused to infrastructure generally and
the human lives as well, and in this instance, to the railway
infrastructure, the railway line between eThekwini and Cato
Ridge won’t be operational for quite a while. It is currently
undergoing serious evaluation. And various processes are in
place in order to as rapidly as possible like Transnet did on
the Bayhead Road within the Durban harbour to restore the line
to full functionality. And that answers the question about the
state of the infrastructure. I am sure that Transnet and the
interested parties would have further conversations about the
two-year contract or anything that pertains to that as well.
If Mr Cachalia has the necessity for any further information
he can put forward a written parliamentary question we will
certainly make the details available. And if there is any
commercially requirement not to pass on this information at
this stage we will let you know at that point and time. Thank
you.
Mr K P SITHOLE: Thank you, House Chairperson. Hon Minister,
considering that infrastructure is not a movable asset, what
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other benefits are being offered to attract private sector
investors? Can you please provide full details?
The HOUSE CHAIRPERSON (Mr C T Frolick): The question was asked
on behalf of hon Buthelezi. Thank you.
The MINISTER OF PUBLIC ENTERPRISES: I think it is well
accepted hon member who ask the question on behalf of hon
Buthelezi that infrastructure is not a movable asset but I
imagine that if for example there is an investor that wants to
co-invest with Transnet in the new pier that needs to be
developed in the Durban Harbour which will require deepening
of the harbour, it will require the reclamation of some of the
harbour land so to speak and it would involve a fair number of
billions of rands in order to undertake. That would provide an
additional facility for example a shipping line that wants to
move a certain type of goods or containers in and out of
Durban and utilise it as its hub as its offloading point as
well.
So, to the best of my knowledge there is a number of operators
within the maritime sector that have demonstrated interest in
that kind of a project. They will have worked out that there
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are benefits for themselves in contributing to the
infrastructure.
As many have done in other parts of Africa and other parts of
the world as well in order to create a more sophisticated port
environment both in terms of infrastructure but also in terms
of equipment like cranes, ... [Inaudible.] ... etc, which
will benefit not only the ships that end up in that particular
harbour but also the terminal operations that this particular
entity might want to conduct.
So, there are a rage of benefits from an infrastructure point
of view but also from a trade point of view and a shipping
point of view that various parties will be interested in.
Thank you.
Question 248:
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Hon House
Chairperson, thank you hon Tshabalala for the question. As of
the end of March 2022, the Presidential Employment Stimulus
has supported 869 942 jobs and livelihood opportunities since
the programme was launched in October 2020. The breakdown is
as follows: Jobs created are 677 675, jobs retained are 40 399
and livelihood supported are 151 868. This represents 70% of
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the total stimulus targets across the two phases, with phase
two still underway.
The Department of Public Works and Infrastructure was part of
phase one during which we created 1 886 job opportunities for
young professionals in the built environment. The Department
of Public Works and Infrastructure has also applied to the
National Skills Fund in the Department of Higher Education and
Training, and has secured funding which targets to train 8 300
Expanded Public Works Programme, EPWP, participants. So, the
breakdown for the 8 300 is artisan development programme 400,
learnerships 450, accredited skills programme 700 and capacity
building 450.
Furthermore, the Department of Public Works and Infrastructure
has partnered with the Financial Sector Conduct Authority to
capacitate EPWP participants on financial literacy matters. In
the 2022-23 financial year, a total of 4 750 participants will
be capacitated through financial education. Through the EPWP
and the infrastructure sector, we are also developing skills
by training youth in artisans trade through the National Youth
Service Programme.
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In terms of entrepreneurs, the Department of Public Works and
Infrastructure we are collaborating with some public bodies
implementing the Vuk’uphile Learnership Programme which trains
contractors to implement infrastructure projects that are
labour intensive and for this year we are planning to do 70
contractors.
All of this contribute to enhancement of employment in the
construction and infrastructure delivery in the country. We
also provide non-financial support to EPWP participants that
aim to start and undertake their own businesses. This support
is through the training on a programme called Start and
Improve Your Business. In 2022-23 we plan to support 205
participants. Chairperson, through these various training
initiatives, EPWP endeavours to empower women, youth and
people living with disabilities to improve their
employability. Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): Thank you, hon
Minister. I have been informed that hon S R van Schalkwyk will
take charge of the first parliamentary question on behalf of
the hon Tshabalala, and this is inline with Rule 137 subrule
10 paragraph A. Hon van Schalkwyk?
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Ms S R VAN SCHALKWYK: Hon House Chairperson, to the hon
Minister, thank you for your response in terms of this
question. Taking into account the current economic
environment, especially with regards to the high unemployment
rate that we have in terms of youth, women and people with
disabilities, it is encouraging that you are taking into
account those designated groups when you identify them for
employment opportunities.
We also welcome the initiative of the EPWP which is really a
welcomed relief for the needy and the poor. But, hon Minister,
we have a challenge in terms of this initiative — there is no
real transfer of skills taking place, which limits the
employability of these individuals partaking in these
programmes. So, I want to ask, hon Minister. You already
indicated the opportunities that have been created, but what
are your five-year targets that you have set and whether the
department will indeed attain those targets that have been
set? Thank you very much.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: The total
employment targets for the five-year Medium-Term Strategic
Framework, MTSF, is 5 million work opportunities. The EPWP
funding does not include training, so we apply for training
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funding from the Skills Development Fund in the Department of
Education, and then we partner with other private sector
bodies to also provide skills.
We must remember that we are also then passing on the money to
the provinces, municipalities and the non-state sector and the
non-profit organisations sector. Those sectors then develop
their own training skills within the EPWP programme.
I will agree with you that we need to begin to look at ...
because EPWP is temporary, sometimes only six months, maybe we
need to extend the period to one year to enable people to get
the transfer of skills. But then you are going to reduce the
number of opportunities for new people to come into the EPWP.
It is a concern that we need to address with the investment
that government is making into EPWP. I thank you.
Ms S J GRAHAM: House Chair, to the Minister, while it is
admirable to speak of the 186 beneficiaries of the
Presidential Stimulus Programme in the department and the
target of 5 million potential job opportunities in the
Expanded Public Works Programme, this goes a little way to
address the scourge of unemployment in this country. In fact,
7,9 million people who were unemployed by the end 2021 with
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278 000 more people joining the ranks of the unemployed in the
last quarter. The second highest job loses emanated from the
construction sector with 35 000 people losing their jobs. Job
seekers in the 15 to 24 years band sits at a staggering 66%.
Work opportunities are not jobs; they are a form of social
grant; a stipend at half the rate of the minimum wage in
return for eight days of work a month. No child grows up
dreaming of becoming an EPWP worker. We have to do more than
work opportunities.
Minister, what are you doing to create real sustainable jobs
that support people and their families as opposed to mere work
opportunities that are merely a form of poverty alleviation?
Thank you. [Applause.]
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Hon Graham, I
will agree with you that the intention of EPWP is to assist
with poverty relief and also government comes to the help of
the poor and the unemployed in many other ways in terms of
grants — the R350 Social Relief of Distress Grant. There are
many of these assistance to poor people.
In terms of creating sustainable jobs, it is the
responsibility of both the public sector and the private
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sector to create jobs. Therefore, government must create the
conditions conducive and the environment contusive for the
private sector to create jobs by investing in infrastructure,
and that is exactly what we are doing. We are leading by
investing in infrastructure and then getting the crowd in
effect by the private sector to create jobs.
In terms of infrastructure, government has already launched an
infrastructure investment plan. We have gazetted more than 52
investment plans. In a question, later on, I will give the
breakdown of what we have completed in terms of infrastructure
and also what is still under construction. That is the
contribution from the Department of Public Works and
Infrastructure.
Also, in terms of the Economic Reconstruction and Recovery
Plan, there again, the President has identified infrastructure
as the flywheel of the economy. So, with the partnership with
the private sector and us going though with the investment
conferences raising funding — because we can’t get all the
funding out of the fiscus for the projects — we have been
successful in June of 2020 where we were able to raise
R304 billion for infrastructure from the private sector. And
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that is the partnership that we are continuing to grow to
create more sustainable proper jobs. Thank you.
Ms M E SUKERS: Chair, will the hon Minister kindly tell the
House how the crisis currently brought about by the floods in
KwaZulu-Natal would be utilised to maximise the opportunities
presented for job creation inline with government programmes
such as the EPWP programme, to put together a comprehensive
recruitment strategy to repair and rebuild the province over
the next two year period using the opportunity of
infrastructure rebuild and repair of basic services to advance
the goals of skills development by employing graduates and
unemployed youth, thereby ensuring that the disaster funds
have both short-term and long-term value aligned with the
goals of programmes to upskill and create employment of
especially young people? Thank you.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Hon
Chairperson, like I said that the local municipalities in
KwaZulu-Natal and the provincial government, MEC Sibiya of
Public Works and Human Settlements have designed specific
projects for the KwaZulu-Natal floods that will be driven by
the province and the municipalities to help with the clearing
of the mud and general work opportunities for EPWP.
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In terms of the graduates, the Department of Public Works and
Infrastructure in terms of our Rural Bridges Programme, we
have now identified 18 for the current financial year plus
another six, and just yesterday I receive a request for
another 28 rural bridges that were destroyed in KwaZulu-Natal.
There we bring in the young professionals. The interns that we
have paid bursaries for to go to universities we take them out
to these projects of the rural bridges together with the
Department of Defence so that they can get the transfer of
skills and training on the job. There is a good co-ordination
between the eThekwini and the other municipalities. We are
providing multidisciplinary professional skills; quantity
surveyors, architects and engineers to assist the
municipalities to do the assessment of the floods in KwaZulu-
Natal and that report has been submitted.
I am going back to KwaZulu-Natal tomorrow where we are handing
over three bridges that we have completed and also to take a
look at the government buildings. Forty government buildings
were destroyed by the floods and we have done the assessment
and again that will create job opportunities. Thank you.
Mr M G E HENDRICKS: Hon House Chair, it is quite clear that
employment for the poor is in the Minister’s department. I
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would like to know from the Minister whether she has the
capacity and the energy to take responsibility for full
employment for the poor? thank you very much.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: I certainly
have the energy, hon Hendricks. I think as a collective, as
the three spheres of government, the responsibility is
enshrined in our Constitution that we all have the
responsibility to deal with socioeconomic rights of our
people. Therefore, I think if we work together and put all our
resources and manpower and energy, we will be able to make a
dent in poverty. I certainly have the energy; I can promise
you that. Thank you.
Question 267:
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Thank you,
hon Chairperson and thank you to the hon Zondo, I was in
KwaZulu-Natal two weeks ago, hon Chairperson, and we have
identified on our immovable assets register 616 parcels of
land ... [Interjections.] ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Hendricks, your
microphone is on. Please switch off your microphone, hon
Hendricks. Hon Minister, would you just start afresh?
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The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Yes. ... We
then had to do verification and also do suitability in terms
of a criteria to see whether it is suitable to be used for
land resettlement. After we have done the desktop exercise, it
has been reduced to 258 land parcels from the Department of
Public Works and Infrastructure. The KwaZulu-Natal government
has also contributed 193 parcels of land. And then we are
still waiting on the eThekwini metropolitan to give us their
list of parcels of land from their immovable asset register.
But the criteria that we have applied to make sure that the
land is suitable and to exclude those parcels of land that are
not suitable was, whether we had dams nearby, encroachment
fences, whether it is illegally occupied, whether it was zoned
for parking, protected areas, public spaces, or for railways,
rivers, road reserves, servitudes, harbours water canals, and
especially whether it is a wetland. So, that is the criteria
that we have applied. We have also excluded pieces of land
which was earmarked for human settlements development.
And tomorrow when I go back to the province, we will be
meeting with the MEC and the Department of Human Settlements
that will be responsible for building the top structures. The
municipality will be responsible for providing the bulk
infrastructure like water, sanitation, and electricity. So it
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is a collaborative effort by all three spheres of government
to try and resettle communities as soon as possible. We are
also engaging with the communities in terms of social
facilitation to inform them about the options of resettlement.
As we know, our communities do not like to be too far away
from where they currently live and the Human Settlements
Department and the Housing Development Agency, HDA, is busy
with that process. I thank you.
Mr S ZONDO: Thanks for your response, hon Minister, as no time
should be spared in bringing immediate house relief to those
who lost their homes as a result of the recent devastating
floods in KwaZulu-Natal. Hon Minister, your department has
also identified a number of state-owned buildings that were
damaged by the floods which includes the magistrates’ courts,
police stations, a military base and museums. How soon can we
expect the repair of these buildings to be completed and what
interim measures are in place that will ensure that the
service delivery from these affected departments continues,
especially the magistrates’ courts and the police stations?
Thank you.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Thank you,
hon Zondo, yes, we have completed the assessment of all the 49
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buildings, including the KwaZulu-Natal Museum. We have
deployed 108 professionals internally and externally from the
private sector, and formed multidisciplinary teams that are
helping us to do the assessments quickly. The
multidisciplinary teams are also helping other municipalities
to do the assessments. We have started the procurement for 30
of the buildings and I will get feedback tomorrow about the
other 19 buildings. But the assessments have been done and we
are working as fast as we can follow due process, doing due
diligence, making sure that we follow all the processes of
National Treasury in proceeding with the procurement to repair
these buildings. So, I will give the hon member an update from
time to time as to where we are. We have also assisted the air
force base that was completely flooded with mud and the rain,
to get generators in for them, to help them to clean up the
air force base, and also to secure the fence of the air force
base because some of those containers were blown right over
the highway into the air force base. So it is all work in
progress. Thank you, hon member.
Ms S R VAN SHALKWYK: Minister, you have just explained to us
how many land parcels has originally been identified but that
number has now been decreased, and you are venturing now into
the local and provincial spheres to establish more land
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parcels. What other avenues are you going to use if you do not
find ... [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Mahumapelo! Hon
Mahumapelo, your microphone is on and we can hear your
discussion. Please switch it off. Hon Van Schalkwyk, you can
continue.
Ms S R VAN SHALKWYK: Yes. Thank you, hon Chair. Can you give
us an indication of what avenues you might be using to ensure
that you did satisfy the need and will that ...
[Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members!
Order! Hon Mahumapelo, please ensure your microphone is off,
otherwise you will be removed from the platform. Continue hon
member.
Ms S R VAN SHALKWYK: Well, will it now mean, Minister, the
original timeframe that you indicated will now be amended
taking into consideration that you are struggling to secure
the relevant parcels? Thank you.
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The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Minister, I hope
with all these interruptions you got the gist of the question
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Yes. No, hon
Van Schalkwyk, there will be no delays. In fact, two days
after the floods, we were able to start the identification
process. What I was saying is that the national government is
contributing 258. The province is contributing 193 land
parcels. Ethekwini must still add their land parcels to it.
The process that we will follow is that once the Human
Settlements Department has identified and they have their
business plans are ready, at that stage, we will then transfer
the land gratis [without charge / free] either to the
municipalities or to the provincial government. So, no, we are
on track, and if we should run out of land parcels, I will
approach Minister Pravin Gordhan and see if the state-owned
entities do not have any land there, and also the Minister of
Transport to see if any land is available from them. Thank
you.
Mr B N HERRON: Thank you, House Chair, thank you, Minister,
public land belongs to all South Africans. It is held in
custody on our behalf by different spheres of government and
state-owned entities to be used for land reform and other land
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needs in our country. There are devastating floods in KwaZulu-
Natal but they are precarious and vulnerable communities
across our country. I think, to some extent with regards to
KwaZulu-Natal you have answered my question. But what role is
being played by the state-owned entities and other spheres of
government with regards to addressing land reform and land
needs in our country? Thank you.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Hon Herron,
hon Chairperson, the land reform agenda is based on the
Presidential Advisory Panel recommendations of which
government has accepted 85% of the recommendations. So, in
terms of that, we looked at land reform or land distribution,
land restitution, and also land tenure. And again, there is an
Inter-Ministerial Committee, chaired by the Deputy President,
where we report, on a monthly basis, about the pace of land
that must be released. I can tell you that for human
settlement since 2019, we have released it 13 185 properties;
for restitution, 204 properties. And then also another 120
properties for tenure. So, if we want to have a successful
land reform programme in our country, we cannot just rely on
the land that is owned by the national government. Minister.
Pravin Gordhan has already come to the table and said land
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parcels belonging to state-owned entities, they are willing
and able to release to form part of the land reform programme.
But we need to get into the provincial immovable asset of
every province. I am busy doing that. I know exactly what
every province has got on their asset register. We now need to
turn to all the metropolitans in the country and see what land
they are sitting with because we cannot have land reform and
at the same time municipalities are selling off well located
land to developers. So the co-ordination at the Inter-
Ministerial Committee ... I know what is available in Cape
Town ... [Interjections.] ... and you can just keep quiet.
[Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! Order, hon
members. Order! Hon Minister, let me just hear why this hon
member is rising. Will you take your seat, hon Minister? Hon
member, why are you rising?
Ms B M VAN MINNEN: On a point of order: I think the Minister
must not send direct messages.
The HOUSE CHAIRPERSON (Mr C T Frolick): No, that is not a
point of order, hon member. [Interjections.]
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The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Ag shame man!
The HOUSE CHAIRPERSON (Mr C T Frolick): It is not a point of
order. [Interjections.] Order hon members! Hon Minister, you
have a few seconds left to conclude your response.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Yes. Thank
you. I am pleading, Chairperson, that all three spheres of
government must release land for land reform and do not just
point the finger at the national government. Thank you.
Mr A M SHAIK EMAM: Hon Minister, has your department done an
exercise as to exactly how much land is available in South
Africa from all spheres of government that might be suitable
for housing given the fact that, and I think you are aware of
it, that many of these municipalities, Cape Town I think has
got about 500 000; Ethekwini has got about 500 000 all on the
waiting list. And secondly, and this is a problem countrywide,
and I am asking this so that we could ensure we make land
available for housing throughout the country, instead of
allowing people to live on dangerous ground. But very
importantly, a Jackie Joseph from Tsitsikamma has been writing
to your department, land that fell under the former Prime
Minister, John Vorster, 15 hectares are standing there and he
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is looking to grow hemp. He is looking to be able to grow
wheat. He has written to your department since 2020 without
response. If you have not received that, Minister, I request
that if you can get that information and then correspond with
him. Thank you, Ma'am.
The MINISTER OF PUBLIC WORKS AND INFRASTRUCTURE: Thank you,
hon Shaik Emam, certainly I would like to see that
correspondence and go and investigate as to what the response
was from the department. Because in terms of Government
Immovable Asset Management Act, GIAMA, there is a process to
be followed where the people have to make an application, and
then it goes through public participation and all of that. And
I will appreciate if the member can assist me with that
information.
Well two state land audits have been done and I have answered
in many parliamentary questions the details of the state land
audits. One was done in 2014 and the other in 2017. If you
look at that land audit, you will see exactly what amount of
hectares of land we will need to transform and to make sure
that we integrate our country. So, the audits are there, but
we need to now take our lead from the National Spatial
Development Framework that will be approved shortly. And that
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National Spatial Development Framework must guide us to where
we must build houses. What is zoned for agriculture? What is
zone for commercial? Because the time is long overdue, 28
years in our democracy. We must integrate this country and
especially our cities. Thank you. [Applause.]
Question 257:
The MINISTER OF PUBLIC ENTERPRISES: Thank you, Chairperson and
thanks to hon Tshabalala. The Transnet Freight Rail,
historically underinvestment in infrastructure and maintenance
backlog dating back to the 1990s, has resulted in an aged and
unreliable network that does not support the efficient
movement of trains. While this constraint impacts Transnet’s
ability to fully exploit the increasing demand for coal, the
interventions that the Transnet Freight Rail, TFR, as it is
called, has put into place to deal with the maintenance
backlog that started to show some improvements.
In recent months TRF has rammed up the corridor with up to 26
planned maintenance events per day with major maintenance and
activities conducted during the annual shut down planned for
July 2022. A significant amount of work has been undertaken
internally to improve procurement timeframes for key contracts
which has been a significant cause for delays in the past.
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The finalisation of major bulk materials and on track machine
contracts has led to faster and more efficient resolutions of
historical and new maintenance issues as they arise.
Given the increase to focus and maintenance and the corridor,
TFR expects to remove 42% of the current speed restrictions by
the end of July. This will mean an additional six clocks will
be restored which will result in more volumes for both the
customer and the TFL itself.
However, to take full advantage of the opportunities that are
available and to decrease the cost of conducting business in
South Africa, we must urgently restore the network back to an
acceptable international A standard. With some 30 000 checked
kilometres this will require massive investment.
The other constraints to our performance is the unavailability
of locomotives to service the corridor. The impact of setting
aside the 1064 locomotive programme has seduced Transnet
Freight Rail’s overall system capacity for the transportation
of coal to Richards Bay coal terminal from an annual capacity
of 77 million tons to an annual capacity of 60 million tons.
Thank you, Chairperson.
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Mr N E DLAMINI: House Chairperson, I am not J Tshabalala, but
I will take the question to replace her. With reference to the
government’s limited funding for the state-owned corporations,
in what ways will Transnet implement structural reforms
intended to build private sector confidence and engage in new
infrastructure investment in the context of public-private
partnership? Thanks, Chair.
The MINISTER OF PUBLIC ENTERPRISES: Thank you, hon Dlamini.
Chairperson, structural reforms is a very important part and
they talk to reforms that we require in South Africa. They are
currently monitored in the Presidency through Operation
Vulindlela. Key amongst those has been, firstly, the
establishment of the Transnet National Ports Authority, which
was done last year as an independent subsidiary of Transnet.
The ports authority plays a very important part as landlord on
the one hand, but ushering in ships and providing other
services at out ports.
The second element in this particular regard is to extend the
port facilities, for examples, at Durban, but at the other
ports as well through investments both by Transnet which has
limited finances and through private sector participation as
well. I have made reference to this earlier in the day in
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relation to the new terminal that is proposed at the Durban
Harbour, Ngqura, Richards Bay and later at the other ports as
well including East London. Those reforms will also assist
particularly exporters and importers in various parts of the
country.
The third element is to restore, as I have just indicated, the
rail capacity and the rail efficiency to a completely new
level to an international standard. That will endure that rail
operations become truly efficient and become cost effective
for the commercial sector to utilise instead of roads as we
discussed earlier in the afternoon. That will change the
picture as far as logistics in South Africa is concerned by
moving the transportation of goods from road to rail as well.
Similarly, other structural reforms are also planned. Thank
you. [Time expired.]
Mr G K Y CACHALIA: House Chairperson, it is common course that
Transnet rail and ports woes have contributed huge losses in
potential earnings to our coal miners, even as global
constraints on supply, a surge in prices for thermal coal of
at least 46% in Asia and rocketing gas prices are the order of
the day. In belated recognition of the Public Enterprise’s
failure government is now seeking private sector involvement
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which we applaud. Will the Minister without tired references
to force majeure eventuality which we warned time and time
again, tell us by what date ... [Interjections.]
The ACTING HOUSE CHAIPERSON (Ms R M M Lesoma): Hon Cachalia,
the Table assists us. If there is anyone who switched off the
mic please just unmute him or it hurt if he does it for the
second time. Thank you very much.
Mr G K Y CACHALIA: Will the Minister, though, without tired
reference to force majeure the eventuality of which we warned
against time and time again, tell us by what date and on what
terms the much-needed private sector on boarding will take
place.
The MINISTER OF PUBLIC ENTERPRISES: Thank you Chairperson and
thanks to hon Cachalia. The fact that there is huge demand for
coal is certainly and an acknowledged fact particularly
arising from the current events in Europe, but also an
increased demand for coal in the eastern part of the world as
well. There has also been increased prospects for coal miners
as a result of the increased in coal prices as well. I have
just explained that due to limitations, firstly, on the
security front, secondly, in terms of the absence of the
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complete set of the 1064 locomotives and inefficiency within
the rail system itself including vandalism, all of these
factors conspired against Transnet rail being able to do its
best in this particular regard.
The reference to force majeure is not a tired reference. It
was, in fact, the basis upon which the coal companies and
Transnet have negotiated a new set of contracts and addendum
to contracts a status of work should have raised a point where
there is some finalisation between the two parties, but I was
not totally briefed on that at this stage.
Nobody can say exactly what date and what terms the private
sector participation will occur. The process has been
initiated. The request for information, RFI, request for
quotation, RFQ, and so on have been issued. Those need to be
properly processed. They need to be diligently examined and
finally negotiations need to take place between the chosen
parties and Transnet to the satisfaction of both. At this
point in time better say that there is a process that is in
motion and once we have created a clarity we can certainly
advise Parliament on that. Thank you.
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Mr D W MACPHERSON: Chair, on a point of order, I don’t want to
disturb the Minister as he is reading very carefully, but it
is very clear that when the ANC ask a Minister a question they
have a prepared answer to read. But when a member of the
opposition asks, then they have nothing to read. It really
makes a mockery of this Questions session.
Ms J TSHABALALA: On a point of order, Chairperson of the
session. It is Judith Tshabalala on virtual.
The ACTING HOUSE CHAIPERSON (Ms R M M Lesoma): Hon J T, allow
me to handle this. Thank you very much.
Ms J TSHABALALA: He is out of order. Thanks.
The ACTING HOUSE CHAIPERSON (Ms R M M Lesoma): Hon Macpherson,
you know it very well that that is not a point of order. It is
a point of debate and your perception. Shall we proceed and
take a supplementary question. [Applause.]
Ms O M C MAOTWE: Thank you very much, Chair. The Minister has
just said that because of the decision they took of suspending
the 1064 programme, it has led to the reduction of tonnages.
No, that’s no brainer. You can do better than that. What are
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you still waiting for? Why can’t you take back some of the
locomotives in service? My question is, Minister, the Minerals
Council of South Africa reported that coal investments in the
country saw a decrease of over R2 billion between 2010 and
2018. There is also pressure from civil society organisations
who are litigating against the use of coal as well as the
global pressure to transition from coal to renewable energy.
Now, realistically speaking, what impacts do all these
attempts to limit mining cumulatively have on the ability of
Transnet to reposition itself as a global leader in rail
transportation for goods? Thank you, Chair.
The MINISTER OF PUBLIC ENTERPRISES: Thank you, Chair. With
reference to the hon member from the DA as you correctly
pointed out that it is perception but perhaps it is delusion
as well. The follow-up questions are not with prepared
answers. They are spontaneous answers just for your
information. One when you might or might not become a Minister
you will realise that.
In reference to the hon Maotwe, I am not sure what is a no
brainer. If a manufacturer or the original equipment
manufacturer, OEM, does not deliver full - as I have given
some of the details of the 1064 locomotives earlier that were
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required - and there is no delivery of some of these
locomotives and they are not efficient in one respect or
another, I am not sure what you will take back. So the fact of
the matter is that the country and the coal industry
understand that there is a shortage as far as locomotives are
concerned and that limits the capacity of the Transnet rail to
do the work that it is required to do.
As far as coal is concerned, and the just energy transition is
concerned, it is fairly clear both from the Integrated
Resource Plan IRP 19 and also discussions from the UN Climate
Change Conference, Cop26, and future discussions at future
Cops as well that coal will be part of global energy system
although on a declining basis for some times to come. Our
responsibility in South Africa is to contribute to a
decarbonisation process. If all of the other work that is
being done within Transnet in the next couple of years,
Transnet will return itself to a world-class logistics
company. And I am quite confident of that. Thank you.
Mr S S ZONDO: Chairperson, the supplementary question will be
asked by hon Zondo on behalf of hon Buthelezi. Hon Minister,
given the global debates on phasing out fossil fuel and
phasing in all emissions emitting technologies in line with
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the ultimate war of reducing emissions to reduce the global
warming and the fact that Eskom generates a bulk of its
electricity from coal fire power stations. Does the department
have plans in place to not only profit from the use of coal,
but also to invest in the technology to achieve the balance of
reducing the climate change as advised by the UN
Intergovernmental Panel on Climate Change? Please, provide
full details. Thank you.
The MINISTER OF PUBLIC ENTERPRISES: Thank you very much, hon
Zondo. Government has been indicating on various occasions and
most recently last year prior to the Cop26 event that took
place Glasgow where the President signed a statement together
with several other world leaders. Government is committed to
reducing the usage of fossil fuels.
It is true that approximately 41% of carbon emissions in South
Africa is through the production of electricity. That is why
Eskom for sometimes now has been preparing its own just energy
transition, that is, how it will decommission certain power
stations and ensure at the same time that under the umbrella
of the IRP 19 there is a replacement of the megawatts that
will be lost as a result of the decommissioning of coal power
stations. That balance and that roadmap is certainly in place.
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as soon as money is available. You have heard about the
R8,5 trillion dollars that certain countries have made
available for some elements of the costs of this transition
process including retraining workers, both in coal mines and
power stations. Those are contributions towards reducing
carbon emissions in South Africa and meeting the target of 1,5
degrees that South Africa has committed itself to.
Eskom itself does not profit from the utilisation of coal, but
the coal industry certainly does profit from the selling of
coal both to Eskom and to the world as well. Thank you, Chair.
Question 277:
The MINISTER OF TRADE, INDUSTRY AND COMPETITION: Hon Chair,
hon Macpherson, hon members, food prices have gone up sharply
both in South Africa and globally.
According to the food and agricultural organization’s
database, between February and March this year, global food
prices saw the largest single month increase in more than 30
years.
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South Africa imports about R84 billion worth of agriculture
and food products annually. So, these trends affect local
consumers very substantially.
The World Bank, about nine days ago, issued a food security
brief and then identifies a number of causes driving food
prices, and it’s worth quoting, they say:
Even before COVID-19, reduced incomes and disrupted supply
chains, chronic and acute hunger were on the rise due to
various factors including conflict, socioeconomic
conditions, natural hazards, climate change and
[Inaudible.]
The impact of the war in Ukraine has risked global food
security with food prices likely to remain high for the
foreseeable future and expected to push millions of
additional people into food insecurity.
And then they go on and provide information, for example, that
as of April 2022 the agricultural price index is up 43%
compared to January 2021. Maize and wheat prices are 56% and
55% higher respectively, while rice prices are the only ones
that have come down by 17%.
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They continue by saying the war in Ukraine is a major shock
for global commodity, markets affecting wheat, maize, edible
oils and fertilizers.
And then they provide information on the extend of fertilizer
price rises: 20% up since January, three times higher compared
to a year ago. These are extraordinary increases. I can add,
of course, the impact of rising oil prices that will affect
the entire food value chain.
Domestic supply chains were also affected by, amongst others,
COVID-19; and the recent floods in KwaZulu-Natal will have a
significant impact on food prices.
On the other hand, the data seems to suggest that the food
prices of locally produced products have increased at a slower
rate than a number of imported items over the last three
months. Favourable weather and good local crops for certain
products have also assisted to keep prices lower, than
otherwise it could have been ... except, of course now, with
the floods.
To address high food prices government has taken a number of
measures, I will highlight a few. First, we’ve supported
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efforts to scale up local production of food products in both
agriculture and food processing. This included the
announcement of a special fund by the Department of
Agriculture, Land Reform and Rural Development, DALRRD, and
Industrial Development Corporation, IDC, to support local
farmers, by PepsiCo to support small-scale farmers and by the
Department of Trade, Industry and Competition, DTIC, to sugar
farmers affected by the July 2021 unrest. Local retailers have
been encouraged to support local producers. The DTIC supported
the building of a new R1,3 billion edible oil refinery plant
in Richards Bay.
Second, the competition authorities have been monitoring food
markets, which included an investigation into sudden price
rises as was the case with garlic and ginger; hon members will
recall. And it’s now launched a market inquiry to fresh food
produce which will look at the structure of the market and
whether that contributes to higher food prices.
Third, the DTIC has put conditions to new tariff measures to
contain price rises. Recent tariff adjustments have sought to
peck price rises to no more than the rise in Consumer Price
Index, CPI, and/or another appropriate price index.
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Fourth, National Treasury announced reduction in the general
fuel levy, which is expected to save a R120 each time a farmer
fills up a Hilux bakkie.
And finally, the DTIC and DALRRD has put industry partnerships
together in the sugar and poultry sectors and cooperated with
the citrus industry to address their concerns to expand South
African exports of citrus fruits. Thank you very much.
Mr D W MACPHERSON: Minister, I think we can all agree that
South Africans are battling and buckling under the price
increases that they are being subjected to. People are
battling to feed their families, children are going hungry,
malnutrition is on the increase and it is really difficult for
families across the length and breadth of the country.
But the government has to shoulder some blame for the
increases that we are seeing. For many, many years government
has put massive tariffs on many products into this country
with the notion of trying to create industries while locking
out imports into this country. And we have seen that with
cement, steel, poultry prices. Administered prices by
government contribute to the increase in goods and services in
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this country. Electricity increases are out of control and so
are water.
So, the government did the right thing, Minister, by relaxing
the duty on fuel; that was the correct thing to do.
Do you think that it’s not the right thing to relax the tariff
and Value Added Tax, VAT, on critical protein sources like
poultry, that feeds millions of South Africans and keeps
hunger at bay for them? Thank you very much. [Applause.]
The MINISTER OF TRADE, INDUSTRY AND COMPETITION: Hon
Macpherson, I think you are absolutely right that ordinary
South Africans are battling to feed their families and that we
need to think of ways in which we can enhance quality of lives
and bring down the price of basic foods.
One of the challenges we face is the trade-off between jobs
and prices. And in an area like the poultry industry, as an
example, it’s a significant employee of labour. We are trying
to encourage many more small-scale black poultry farmers to
come in and supply commercial markets. So, we got to find that
right balance to ensure that South Africans also have jobs. At
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an unemployment that is really at about 40% job creation is
absolutely fundamental and we have to address that.
At the same time, I think you correctly point to a number of
challenges with tariff increases. When tariffs on imported
goods go up there is the tendency, this is how markets work,
when you create protection, in all likelihood the prices will
rise.
So, what we are seeking to do now is to mitigate that by
putting conditions for applicants, put in an application to
require them to commit not to increase prices beyond either
the Producer Price Index, PPI, or the CPI.
That is one element of it. The other part is, of course, to
increase supply. The law of demand and supply indicates that
if you can produce many, many more products and scale up the
quantities you can bring down the unit prices.
Energy remains an enormous challenge and a deep
industrialisation of the food value chain would be enhanced as
we overcome the energy blockages and Minister Gordhan is, of
course, working very closely with Eskom to see how we can fix
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the institution and help to bring down the long term energy
price path.
On the final that you’ve raised on VAT I know that Minister
Godongwana has an enormously difficult job. On the one hand
VAT generates the resources that pays, among others, for
social grants, which is a key means and I’m glad to see that
there’s cross-party support for these grants [Time expired.]
and at the same time he’s got to be able to generate the taxes
for that. Thank you very much. [Applause.]
Ms N E MOTAUNG: Minister, climate change poses a serious
threat not only to the environment but also to the livelihoods
of millions of people around the globe.
The recent floods in KwaZulu-Natal are indicative of the
extent to which livelihoods can be destroyed in a matter of
hours.
According the Pietermaritzburg Economic Justice Dignity Group,
which has indicated that the natural disaster can occur in
KwaZulu-Natal would mostly likely results in the increase in
the price of basic foodstuffs in the near future. This is a
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view also articulated by the Minister of Agriculture, Rural
Development and Land Reform.
Has the department done an analysis of the impact this will
have on households? If not, why? And if so, what measures have
the department put in place to mitigate against the further
increase in food prices as anticipated? Thank you, House
Chair.
The MINISTER OF TRADE, INDUSTRY AND COMPETITION: Hon Motaung,
I agree with the work that’s been done by the Pietermaritzburg
Economic Justice Unit that identifies the impact of the floods
on food prices.
KwaZulu-Natal is an enormous food basket for South Africa. In
2019 about ... close to a quarter of all agriculture value add
was generated in KwaZulu-Natal, it accounts, hon Motaung, for
about the third of the country’s dairy herd, probably about
10% of poultry and is a significant employer also of workers
and opportunity for small farmers.
We will see PricewaterhouseCoopers, PwC, did some work on the
likely impact and they’ve identified the number of channels
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through which se we may see price rises as a result of the
floods.
The first of this is obviously damage that the floods have
caused on agricultural lands. In the sugar industry I’ve seen
calculations by the sugar growers of damage of more than
R200 million.
The second leg of it is in logistics: port and rail line.
Minister Gordhan pointed to the rail line disruption that the
floods have caused between KwaZulu-Natal and Gauteng and, of
course, initial damage at the port that is now being largely
addressed.
The third channel is at the factory level. Both food factories
but also the suppliers of critical inputs into food like
fertilizer. There’s a very large fertilizer factory in
KwaZulu-Natal, the Foskor factory. So, all of these are likely
to have an impact.
The DTIC has worked with the KwaZulu-Natal province to do a
survey to identify the extent of damage and what it will take
to turn that around and how soon it can be done. As that
survey is completed we will have a better sense of the actual
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steps that would need to be taken. But a number of measures
are already being rolled out to try to ensure that farmers and
factory owners are able to get back to production as quickly
as possible.
Finally, on the ports and logistics side Minister Gordhan and
I went to KwaZulu-Natal recently and we did an evaluation of
the main logistics lines and what it will take to be able to
fix those much quicker than it would normally be the case.
Thank you very much.
Mr M TSHWAKU: Minister, I think this question says: What
measures are taken in terms of cushioning the food the South
African consumers who are currently experiencing the increase
in the prices of food?
So, we want to give you the answer or we want to actually give
you the suggestion.
One of the braven ways of ensuring that the country develops
internal capacity to stand on its own in the global trade is
to develop the capacity for import in substituting
industrialization. This will mean that we develop the capacity
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to produce and procure our own milk, our own chicken and other
foodstuffs.
Generally, we consume what we produce as far as practically
possible.
What steps have the department taken to ensure that we improve
the ability of the country to produce the foodstuffs that we
can produce instead of importing these from the other
countries?
I hope that from you, Minister, we’ll get a simple answer
because sometime you have a lot of [Interjections.] paragraphs
that I really don’t understand. I just joined you now and I
hope you’ll [Time expired.] give us a proper answer. Thank you
very much.
AN HON MEMBER: House Chair, on a point of order. The hon
member behind the latter speaker can she put on her mask and
stop being upset. Thank you.
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon members,
in the beginning we were urged, all of us, to put on our masks
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and we don’t need to be reminded. And I request all members to
put on their masks. Thank you very much.
Hon Minister, you may proceed.
The MINISTER OF TRADE, INDUSTRY AND COMPETITION: I agree with
the hon member that a localization programme can assist with
food security and indeed in challenging times like this it can
also help to bring down the moderate food prices.
I don’t agree with the hon member that these are simple
answers. When one finds a simplistic answer you simply
mislead.
Let me give a few examples on this. We looked at price rises
over the last three months, from January to March, and global
food prices increased by 17,5% and South African domestic food
prices went up by 1,5%. So, that would support the idea that
we’ve got to do more things locally, we’ve got to be able to
build our capability. How do we do that?
So, we’ve got a couple of examples of how we do that. Firstly,
we make available funding to small-scale farmers. We’ve
launched now, together with Minister Didiza, a special fund
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that the Industrial Development Corporation is administering
to support small-scale farmers.
Secondly, we work with companies to build factories, food
factories that would otherwise not be here. As an example, we
are working with a company to build an edible oil refinery in
Richards Bay that would be able to produce R500 million worth
of South African value as soon as that is completed.
Thirdly, we work with large companies to support procurement
from smaller companies. For example, Coca-Cola has now agreed
to take a certain portion of all the sugar that they buy in
the making of Coca-Cola and bring it from small-scale farmers
and to buy it locally.
Fourthly, we work with large retailers to get them to support
local farmers. For example, Shoprite, Pick n Pay, Woolworths
and Spar have all increased the level of local sugar that they
buy and it’s close to 100% of normal sugar if you exclude
speciality sugars.
And finally, we work with industries to see how we can improve
output from farms and from factories through competitiveness
enhancement programmes and measures like that. So, there are a
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few examples [Time expired.] obviously in the limited time I’m
not able to deal with all the things that we do, but I’ve
given five examples [Interjections.] I hope that is helpful to
the hon members [Applause.] He’s smiling wisely, he wants to
cheer and [Interjections.] [Inaudible.]
Mr M TSHWAKU: On a point of order, Chair. I wanted to ask in
terms of why are still importing chickens? [Interjections.]
The chicken we still importing [Interjections.] [Inaudible.]
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon members,
two points that I want to speak to: firstly, if you rise for
the point order be specific and be clear in terms of what
point of order and you follow the rules and shall be applied;
secondly, [Interjections.] order, hon members. Hon members,
order, please! Hon members, in the beginning we urged all of
us to put on our masks and I would say to the political party
Whips, if your members don’t want to put the masks inside the
House, can they be swopped with the members that are going to
respect the rules of the House. [Interjections.] No, hon
Maotwe, I’m making a ruling. It goes to everybody. Thank you
very much.
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Mr F J MULDER: Hon House Chair, my question is very much in
the line of some of the previous speakers but with a little
different angle.
Would the hon Minister agree that in the current environment
where global supply chain backlogs are showing no signs of
easing and is further driven by conflict-related export
disruptions from the Russia-Ukraine war, that he mentioned?
It is now absolutely essential to eradicate corruption, to
create a stable state that stimulates localization to become
even more self-reliant country that is less dependent on
imports of food and goods; and by the eradication of
corruption also become a more attractive and competitive
exporter of goods. Thank you, hon House Chair.
The MINISTER OF TRADE, INDUSTRY AND COMPETITION: Hon Mulder, I
think first let’s start with corruption. Corruption is
ultimately theft from the poor, corruption undermines the
economic fibre of the country, it damages the Gross Domestic
Product, GDP, and jobs.
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We calculated in 2017 and we released the figures in the
public domain in the middle of 2017 the enormous negative
impact corruption has on the South African economy.
In addition to that I think, hon Mulder, your point about
building the capability of the state so that we can localize
more is one that is well-made, it’s one that this government
strongly is pursuing.
I’m really happy that both the EFF and the FF-Plus have put
questions that are essentially in support of government
policy.
On localization I would urge you to buy local, to support
local farmers and to expand demand for locally produced goods.
In these uncertain times, across the world, countries are all
saying that in the old paradigm, in the old days the only
issue was competitiveness. Now, increasingly, they are about
supply security, they are about building resilient economies
and we’ve got to be able to invest in building resilient
economies.
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So, I certainly want to support hon Mulder’s call for greater
levels of localization. Thank you very much. [Applause.]
Question 255:
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon House Chairperson, hon Mbuyane, the theft of scrap
metal is a major challenge to the country’s infrastructure
programme, damaging passenger rail lines, electricity supply,
freight lines and even health care facilities. It is driven,
amongst others, by a massive spike in global demand and global
prices that incentivise people to steal copper cables and
metal by the destruction of functioning infrastructure. They
sell it to middle persons. These products are then exported
mainly to the Asian continent and used in their metal
factories, foundries, steel minimills and so on.
The DTIC has taken a number of steps to address this. Firstly,
it supported the law enforcement agencies a number of years
ago through work done to support changes in the legislation to
make the criminal penalties tougher – up to 20 years in jail –
and to limit the right to bail in particular circumstances.
This was subsequently taken through Parliament. It was passed
into law and was promulgated by the President. The first few
prosecutions have started to take place under this new law.
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Secondly, the DTIC introduced a price preference system,
supported by an export tax that was introduced recently that
has an effect of dampening the supply of scrap metal for
export because that’s where a huge demand exists and that’s an
engine that pulls the destruction of South Africa’s
infrastructure.
Lastly, because we recognised that these two measures are not
sufficient, the department has commissioned a research at what
further measures can be taken and is currently evaluating a
number of proposals. These will be taken through Cabinet for
consideration. Hon members will recall the President referred
to this challenge in the state of the nation address in
February, this year.
The proposals made by different stakeholders range from a
complete ban on export or sale of scrap copper cable, to
control sales in domestic markets, restrictions on the use of
cash for scrap so that an electronic proof of origin is in
place to a licencing regime to scrap metal merchants. These
are all measures that have been looked at. Each of them have
both advantages and disadvantages. These have to be evaluated
and thought through. Once Cabinet has had an opportunity to
reflect on them, we will be able to come back and indicate
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which of those elements are appropriate to deal with the
problem of theft of scrap metal. I thank you.
Mr S H MBUYANE: Thank you very much, Minister, in as much as
there is legislation with regard to regulating the trade of
second hand metals, the fact of the matter is that even the
law enforcement agencies are seemingly losing the fight
against scrap metal sales. What is your view, as the Minister,
to expand and deal with this matter because the ANC has just
proposed to call upon government to consider the total ban of
the scrap metal export? Has the department considered what
would be the impact of the total ban on the export of scrap
metal? Will the industry be sustainable on the economy or
whether the benefit of permitting the continued export of the
scrap metal overweigh the protection of public infrastructure
of government? Thank you.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon Mbuyane, I think the question points to the
complexity that we are trying to weigh out. Let’s start with
the research that we have done. We have looked at the
international experience. Are there countries that prohibit
the export of scrap metal? The answer is, yes, there are some.
We have looked at the trade regime. Are we in? Do we have
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trade agreements that would limit us? We have carefully
evaluated that. We have looked at the interests of those who
exports scrap and their legal rights for their business but we
have also looked at the enormous damage that scrap metal
exports cause to the economy.
Scrap metal is a critical input in the domestic value chain.
We need it for our steel minimals like the one in Gqeberha. We
need it for foundries like the ones in Gauteng. It is used in
the country’s infrastructure programme. There is a strong
argument to be made for some degree of restriction, which may
include some scrap metal pipes or copper cable that would be
limited for export. Late last year, we put in place export tax
on scrap metal. We have seen a number of the players in the
sector relabelling the export of scrap metal and sometimes
just doing the basic smelting of it. There is a constant
battle between the regulatory framework and those who profit
from the export.
When the research is done and when it has gone through the
system, hon Mbuyane, we will have a very explicit and clear
answer. The kind of considerations you pointed to, are exactly
what policy-makers have to take into account. I hope, hon
Mbuyane, that that goes somewhere into answering your question
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whilst we complete the research and take it through the
Cabinet process. Thank you very much.
Mr D W MACPHERSON: Thank you very much, Minister, just some
advice, if I may, any idea that the ANC gives you, you should
ignore it because it will be a bad idea. [Laughter.]
Both Minister Gordhan and My Mbuyane have said that you should
ban scrap metal sales. You should go as far away as possible
from that idea because every economic idea they come up with
leads to ruin.
The question, Minister, is: The hon Cuthbert posed a written
question to you on 22nd February, asking what quantitative and
qualitative data are you using to make these decisions and
what is exactly informing this decision around this particular
policy? He also asked: What discussions are taking place with
law enforcement to go after those that are stealing
infrastructure and selling it - that I do agree with Mr
Mbuyane on that more needs to be done – but there were no
details provided in that question – what data are you using to
make these decisions? What are the discussions with the police
about going after those that are stealing our infrastructure?
[Interjections.]
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Ms J TSHABALALA: House Chairperson, that’s another question
from the primary question. It’s up to the Minister as per the
Rules to answer that ... [Interjections.] ... You shut up.
Ms O M C MAOTWE: Who recognised Judith to speak?
Ms J TSHABALALA: Sit down, Maotwe. It’s another question from
the DA. It can’t be correct. Hon Maotwe, you are out of order
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Order. Hon
members ... [Interjections.]
Ms J TSHABALALA: Sit down, Maotwe. You are out of order,
Maotwe.
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon Tshabalala
... [Interjections.]
The MINISTER TRADE, INDUSTRY AND COMPETITION: I am quite happy
to take the question. [Interjections.]
Ms O M C MAOTWE: She is doing this for the third time. Can you
remove her from the platform? Completely out of order. We are
busy here.
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The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Order. Hon
members, allow me to guide the proceedings. Hon Macpherson, is
that a point of order? Before you do that. Hon members, you
must indicate even when you are on the virtual platform that
you would like to raise a point of order. The same applies in
the House. You can’t do both. You can’t raise your hand for
the point of order and engage at the same time. Hon
Macpherson, your point of order, hopefully.
Mr D W MACPHERSON: Yes, thank you, House Chair, that you have
ruled on this and we appreciate it. If members are going to
continue ... [Inaudible.] ... please throw them off. Thank
you.
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Thank you. Hon
Minister, you may respond.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon House Chair, I am pleased to advice hon Macpherson
that the data we rely on would include trade data ...
[Interjections.]
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The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon Minister,
one second. Hon Judith, your hand is up from the virtual
platform. Hon Tshabalala.
Ms J TSHABALALA: It’s fine, House Chairperson, I will abide by
your ruling and your order in this instance, but I wanted to
rule the member out of order. It’s fine, the Minister is
willing to take the question. Thank you.
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon Minister,
it is your discretion whether you answer both questions or one
of them.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much. I would start with the data question. We use a range of
data. Some of it would be trade data looking at exports both
in the scrap metal category - because there has been an
allegation that there may be evasion – and look at associated
trade categories to be able to be able to see the pattern.
We compile data from state-owned companies, for example,
Transet make available to us data on the damage caused by
scrap metal theft or copper cable theft on their operations.
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Hon Macpherson would be delighted to know that the Western
Cape government has publicly indicated the deep challenges
that are caused by theft of copper cable from the Metrorail
system.
The damage is enormous. We would also take examples of the
output of the mining industry on copper. We look at what is
South Africa’s copper output and compare that with South
Africa’s copper export to be able to see the difference
between these two because that would be made up either by
misclassification or by scrap copper. Most scrap copper
appears to be taken illegally from the country’s networks and
systems.
On the question of law enforcement, we work closely with them.
Minister Cele and his team are very seized on this matter. We
also work closely with ... at the time when a Bill was
introduced to Parliament that provided for stiffer sentence on
this and other measures to make it easier for the law
enforcement agencies to crack down.
Having said that, it is an enormous challenge for the police
to try to monitor every possible site where copper cable may
be taken right across the country, 24 hours a day, 365 days a
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year. Even though the law enforcement agencies have some
successes, it is not sufficient to be able to protect the
country’s infrastructure. For that reason, we need these new
measures. I look forward to hon Macpherson also supporting us
as we take these efforts. He would then be delighted to know
that he would also be supporting the ANC in this position. In
that way, helping to build South Africa. Thank you very much.
[Applause.]
Mr F J MULDER: Thank you, hon House Chair, can the Minister
tell the House if the introduction of the export duty in the
Customs and Excise Act as such has contributed to a decline of
illegal export of scrap metal and more effective control of
corruption and whether the officials at the South African
trade ports and corruption at the trade ports has been
eradicated? Thank you, House Chair.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon House Chair, I am very popular with hon Mulder
today. On the question of the measures that have been taken,
initially the price preference system and now the export tax,
it would be too early to make a definitive judgement on the
export tax. On the price preference system, in the first
period when it was introduced ... essentially what it entails
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... Let me just explain the price preference system. It
requires scrap merchants when they collect scrap to sell it to
domestic users. Only when domestics users are not able to take
it up at a price discount can they export it.
We saw initially a decline in the export of scrap metal in the
main category, but we subsequently saw a rise in associated
categories which is evasion. Hon Mulder, very interestingly,
that would be fraudulent misrepresentation by people in the
private sector, the persons who will in the forms around the
export. Some years ago, we worked with a private sector player
to try to track examples of illegal actions in the export of
scrap metal and the police have acted against the individuals
concerned.
It is absolutely clear that we need to have not only very
tight controls at ports of entry to be able to monitor the
effectiveness of the measures we bring into place but also to
have tough prosecution of individuals, whether they are public
officials or individuals in the private sector. This is
causing serious and deep damage to the economy and to society.
Sometimes when South Africans have no lights or electricity,
is not always Eskom’s load shedding. In a number of cases, it
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is the damage to public infrastructure, and that, we must act
against. Thank you very much.
Mr M TSHWAKU: Thank you very much, House Chair, Minister, the
recent estimates of metal theft indicate that it is costing
Eskom, Transnet and Telkom about R7 billion on an annual
basis. These scrap metals find their way into the export
market because you are saying you have considered the banning
of the exportation of scrap metals. What have you done ...
what impact would such a step have on the livelihoods that
sustains people who does the recycling of scrap metals?
You have been running after these people saying they are
taking ... [Time expired.] ... have you gone to the source,
the people who are buying, which is mostly white people?
[Interjections.]
Ms B M VAN MINNEN: I think the member is out of order to point
at one of our members, saying that member is white. That’s
classification. [Interjections.]
An HON MEMBER: Chair, it was in the direction of the people.
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The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon members,
may we have order. We can do better than this. May we allow
the Minister to respond?
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, the first part that I would like to say is illegality
and theft, those kinds of actions know no colour. We have seen
people of different colours taking part in this activity, and
the law need to be absolutely ...
The ACTING HOUSE CHAIRPERSON (Ms R M M Lesoma): Hon Minister,
my apologies. You know, the hon member from the second row of
the DA and also on the same row, the EFF member, if you don’t
feel like putting the masks, please swap with your hon member
from outside. Everybody shall put the mask while inside.
Proceed, hon Minister.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, House Chairperson, we have done a quantification
exercise on the cost of theft to South Africa. The work has
not been completed. We have looked not only on the loss of
Transnet and Prasa, we have also looked at the impact that
this has on the economy, for example, when mines can’t operate
because the energy system has been disabled because of the
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theft of copper cables or metals, when factories can’t
operate; we have looked, amongst others, at things like the –
that would be the gross revenue that is forgone, the money
that otherwise would have been earned that is forgone – we
have looked at the additional cost of security that’s been
imposed as a result of this because a lot more people now need
to monitor this. It is a provisional figure. It’s not a figure
that we would yet say it’s our final figure, but our initial
estimate is that the damage that is caused could be as high as
R46 billion. Potentially, if we do a further modelling
exercise on the knock on effect, it is likely to be even
higher.
On the question of the livelihoods of people who are
collecting the scrap metals, there is a legitimate and legal
trade, which is to collect real scrap metals lying there
somewhere and sell it to a local foundry or a local minimill.
We want to be able to protect that.
Then there is another business. A business that goes about
digging up pavements and digging out the copper cable and
using sophisticated equipment to cut it. People come with
bakkies late at night. They would have five or six vehicles
casing the place, making sure that the police don’t come. All
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those things, it is organised syndicates. We have absolutely
no sympathy there. The law must act without any fear or favour
and crack those syndicates.
The jobs of many South Africans are affected. Every time that
Metrorail in Cape Town is unable to operate, thousands of
workers are late for work, those factories have additional
costs, they lose production. In fact, it is in the country’s
interests that we act on these things ... [Time expired.] ...
Thank you very much.
Question 244:
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much hon Herron for the question. The question relates to the
confectionery industry. Sweets and confectionery industry is
an important industry and part of the key value chain that
starts from the growing of sugar right through to the
production of all the things we like, chocolates, candies, and
so on. The sector, of course, the candy producing sector
expressed its concern about the cost of raw and refined sugar
inputs.
The confectionery industry itself has some protection from
imported products through tariffs that range from 37% for
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sugar confectioneries to 20% for chocolates. Most products are
either at or close to the ... [Inaudible.] ... of bound or
maximum rates with the exception, hon Herron, of chewing gum,
which has a duty of 25% against ... [Inaudible.] ... of
maximum rate of 37%.
The department also seeks to open markets for products from
the South African confectionary industry. They have access to
Southern African Development Community, SADC, markets and to
the four other countries in the Southern African Customs Union
and to the European Union, EU, and US markets through our
trade facilitation arrangements. Now we are building this
African Continental Free Trade Area which will create an
additional market that at its peak, will be as big as
1,2 billion persons.
The industry has access to raw materials currently from
Eswatini on a duty-free basis, and it has quotas specific
access to the EU and UK markets. This is now the raw sugar. In
addition, sugar is accessed from different parts of the world,
including Brazil. Coming to the key part in the question,
removing duties from raw sugar, hon Herron, is not government
policy, given the very large number of farmers and workers who
are employed in sugar cane production, KwaZulu-Natal,
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Mpumalanga and other parts of the country. Very often, people
who have a precarious livelihood really struggle to put food
on the table. So, instead of trying to take away the little
bit of protection that upstream producers have, we are working
with the industry to promote greater local consumption of
sugar and confectionery and to identify measures to improve
the diversification and the competitiveness of local sugar
producers. Thank you.
Mr B HERRON: Thank you House Chair and thank you Minister for
the answer. Clearly, the balancing act from the sugar cane
farmers through to the mills and then the converters being the
confectionery sector is an important balancing act for the
contribution to our economy - but also the growth of jobs and
job opportunities. Africa is apparently showing the largest
growth of consumption of confectionery products in the world
and far outstripping the rest of the world. So, there is great
export opportunities for South Africa and South African jobs
will be created in the confectionery sector – if we can get
this balancing act right.
I hope the Minister will agree that there is an absurdity in
the current situation, where iconic South African are Chappies
Bubblegum which was launched in South Africa in the 1940s. It
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is now manufactured in Pakistan and Eswatini because it is
more cost-effective to manufacture it there and bring it back
into South Africa. The Cadbury Flake which has a flake which
we call the Flaky is being manufactured in Egypt and being
reimported back into South Africa. It is an iconic South
African product. So, there is something broken in the sugar
tariff regime that I think we need to fix. I hope that the
Minister will address that in the Sugar Masterplan.
Whilst trying to protect the jobs that are in the farming
sector, well, we do understand that there are jobs to be
created and there are jobs that are being exported as these
products are being manufactured outside of South Africa when
they used to be manufactured here. We have a more urgent
crisis right now which is the flooding in KwaZulu-Natal and it
has caused a shortage of sugar for the confectionary sector.
They are just simply not able to access the raw material. Can
the Minister consider as part of the flood relief regime a
temporary tariff relief for importing sugar for the
confectionery sector? Thank you, House Chair.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon Herron, for putting a more balanced view on the
challenges on both sides of the equation. Let me start by
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saying that the opportunities to grow on the African continent
is fast. Africa is a young population, rapidly urbanising, and
there is a growing middle class and food consumption of the
continent is going up. In addition to that, South Africa’s
confectionery suppliers and access to a range of sources for
raw sugar are not confined only to South African sugar.
I would advocate and recommend that they use South Africa
sugar but they are able to bring sugar from Eswatini - which
is a very significant sugar producer free of any duties. So,
there is zero duties on sugar coming across the border from
Eswatini. In addition to that, they can bring sugar in from
other SADC countries regulated by quota, which is also
available to them at prices that they otherwise will not be
able to afford. We have a bit of flexibility in our system. On
the question of Chappies Bubblegum, the sugar that Chappies
uses in producing the bubblegum in Eswatini, that same sugar
can be landed in South Africa free of duty.
So, clearly in that example, the price of sugar is not a
fundamental constraint. There may be other constraint, but it
is not the price of sugar because a factory in Eswatini will
get the sugar at the same price as a factory in South Africa
because of the agreement we have in the Southern Africa
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Customs Union, Sacu. But I think you made a good point that we
need to find ways in which we can localise even more of the
sweets that South Africa produces.
A recent example has been measures taken by National Treasury
to try a careful balance between the sugar levy – the Health
Promotion Levy, and the need to protect jobs. Minister
Godongwana has tried to find that balance to ensure that South
Africa remains a producer of sugar products. We are looking at
how to improve the competitiveness part of it so that is at
the level of the ... [Inaudible.]. ... [Inaudible.] ... play
quite a key role because they are the collectors of raw sugar
and they move the sugar in refined from to other value chains.
One element of it is to diversify sugar by considering a
biofuel strategy that will use South African produced sugar
which may then both create greater economies of scale - you
can produce more or you can bring the price down, but you
would also have greater scope for imports. We are looking very
carefully at the impact of the floods on the sugar industry.
As I indicated in an earlier reply, the damage has been
estimated to be more than R200 million. KwaZulu-Natal
represents that careful balancing act. On the one hand, the
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industry in KwaZulu-Natal has been very badly affected. Some
farmers have been absolutely devastated. We have to be able to
find a way in which we can sponsor them as rapidly as
possible, as soon as the new sugar crops come on stream. At
the same time, we need to be able to ensure access to sugar
supplies. So, we are looking at it very carefully. Thank you
very much.
Ms R M MOATSHE: Thank you very much, hon Chair. I will take
it. I’m hon Moatshe. Hon Minister, South Africa and other
member states of the Southern African Development Community
have placed industrial development at the core of the regions
integrated development agenda with agro-processing,
specifically in the sugar confectionery value chain being an
important area in which industrial development can be pursued.
Hon Minister, are there any collaborative efforts in place to
achieve this integration? How is the production and
distribution of the sugar confectionery value chain organised
in terms of interfirm linkages, governance and regional
logistics? Thank you very much, hon Chair.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very,
hon Moatshe for that question. So, within the southern African
region - if I go beyond Sacu, let me just start with Sacu
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which is as smallest as five countries. Eswatini is the major
supplier of raw sugar, some of which goes to South African
mills, and some of which are milled in Eswatini. Then, if we
look more widely in southern Africa, there is a confectionery
industry that is growing. There are users of sugar elsewhere
in the continent, Botswana and Namibia for example, who have
indicated their desire to be growing their production of food
products that uses sugar. That is one part of the value chain.
Coming to the question on the logistics system, of course
sugar is largely moved globally by ship. Brazil in fact has
even an expression for it, which it calls High Seas Sugar to
distinguish it from sugar that we get from neighbouring
countries. So, on the African continent, we use a range of
means like rail, road and so on to move sugar. But the
competitive advantage that we will get is if we are able to
invest more on sugar logistics. If you go to the Port of
Durban, you will see an entire terminal which is a sugar
terminal, given the importance both of importing and exporting
of sugar. Bringing together both the integrated supply chain
between all of these elements and other advantages that the
African continent has, can catapult industrial development on
the continent.
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Consider for example, Africa is a massive producer of raw
cocoa. We export that cocoa to Belgium, France and to many
other parts of the world. It is made into chocolate there and
it is exported back to the African continent. But we have all
the elements. We have the cocoa; we’ve got the milk; we’ve got
the sugar. It is about organising these different inputs to be
able to produce these sweeter products that all of us like.
That constitutes the opportunity for the African continent.
Thank you very much.
Mr D W MACPHERSON: Minister, with the Sugar Masterplan, there
is a lot of moving components in the plan, of which
confectionery and end use one part of the plan. Another part
of the plan and an important part of the plan is around
diversification of sugar cane and the use of ethanol. For many
years this issue has been discussed by your committee, your
predecessor discussed it and you discussed it, and there seems
to be very little movement on the diversification into
ethanol, which is a pity because if we went further down the
road on that, we will be having greater access to synthetic
fuels, which will alleviate many motorists be spared from
inflation. By when can we expect a finalisation and concrete
plan on the diversification into ethanol and an announcement
in that regard. Thank you very much.
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The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much for that question, hon Macpherson. The strategy in the
Sugar Masterplan has two elements of diversification. The
first is to try to work with farmers to diversify the crops
that they produce. So, they are not as reliant on sugar
production, some will be nuts or essential oils. There is a
range of alternative crops that are pioneered already by
farmers. There tend to be larger farmers that have the know-
how to be able to do that. So, we still have to make sure that
small scale farmers are not left out in the diversification of
crops.
The second element is industrial use. Confectionaries are one
element as the hon Herron pointed, and so is the use of sugar
in things like beverages, for example the colas, and sugar
that we use in our teas. A third element of it is the
diversification into synthetic fuels, and the final one is
into the production of other products for example, if you
check in the supermarkets, some bottles have a small picture
of a green plant on the side, that means a portion of that
bottle has been produces with renewable resources.
The Department of Mineral Resources and Energy is responsible
for the biofuel strategy of South Africa. They have gazetted a
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first set of comments on that. As the Department of Trade,
Industry and Competition we support them, we work with them
and we encourage them to move with dual speed.
One of the challenges has been the challenge of the subsidy
that would be required in order to be able to support the
production of biofuels. When the fuel price is high as it is
at the moment, no subsidy is required. When the fuel price
drops substantially as it did in early 2020, but even prior to
that, then all of those businesses will be unable to operate.
Investors in this area have proposed that government should
have a default subsidy arrangement in place.
National Treasury is under a little bit of work just as the
Industrial Development Corporation, IDC, and it is because of
the costs attached to it that we have to be fairly circumspect
at times when the fiscus has been quite constrained. I am
still encouraging my colleagues who work on this in other
department to see what they can do to get this done as quickly
as possible, because this can also increase employment over
and above what we have at the moment. Thank you very much.
Mr F J MULDER: Thank you ... I couldn’t hear you clearly. Will
the hon Minister agree that the introduction of the so-called
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sugar tax by the Department of Health in 2018 as a health tax
and the recent neglect of the Department of Trade, Industry
and Competition to implement the correct formula for import
tax on sugar for 34 weeks in 2021 could have negative impact
on the confectionery manufacturing industry in South Africa?
Thank you, Chair.
The MINISTER TRADE, INDUSTRY AND COMPETITION: Thank you very
much, hon Mulder. I think I heard most of the question and to
the extent that I have heard it correctly, it talks about the
health protection levy and the potential increase on that levy
and the impact that it would have on confections on industrial
uses of sugar. If I understood that question correctly, with
any tax of whatever nature, there is always careful ...
[Inaudible.]. There are winners and losers in them. And
economics is one of those dismal sciences where there are not
too many instances where you have a complete win-win in these
things.
So, on the one hand we need to protect the health of
populations. World Health Organization has lobbied that
governments needs to take steps to try to find public health
measures. In the case of diabetes, things like the price of
sugar beverages will be cited. On the other hand, in a country
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like South Africa, with enormous unemployment challenges, the
challenges of rural poverty and of the difficulty that small-
scale farmers have to shift from one type of production to
another type of production, we have to take into account how
price increases on the final product depresses consumer demand
and in that way, damages jobs. And this balancing act has to
be carefully looked at. So, that is what National Treasury has
to balance most recently in looking at the health predictions.
Thank you very much.
Question 258:
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Acting House
Chairperson, good afternoon members of the House. To respond
to hon Myeni for the question he had asked and of course we do
understand the concern that the hon member is raising in
relation to the number of our offices as related to our
agencies. Whether we talk about the rural or the townships, as
things stand Small Enterprise Finance Agency, Sefa has only 10
regional offices throughout the country and we are also
sharing with the Small Enterprise Development Agency, Seda
which has 54 branches throughout the country.
As I indicated earlier, this is not enough. We have got so
many townships and rural areas that need access to these
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services that we render at Sefa and Seda. That is a reason we
have taken a cautious decision that we are going to be working
with Local Economic Development, LED offices in all local
municipalities and we will beef up the capability. The fact
that there are LED officials it does not mean that they
understand the services that we are offering. Therefore, we
are looking for unemployed graduates that will be placed in
those LED offices to assist all the small businesses that are
in those areas with the services that we render at Sefa and
Seda.
I want to emphasise that at the centre of this, we are also
introducing a hybrid model as we have seen during the Covid-19
period that people need not to go to the offices physically.
Others will be able to ensure that they participate using
their cellphones whether it is applications or other things.
That is why we are busy developing a digital platform that
must also give access to those that are digitally literate
whilst we appreciate that we still have a high rate of digital
illiteracy. At the centre of that is the cost of data which
people are complaining about and we are also looking at that.
Thank you Acting House Chairperson.
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Mr E T MYENI: Hon Acting House Chairperson, hon Minister what
are the reasons that some enterprises go through the Seda
applications successfully yet fail to be financed by your
entity, Sefa?
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Acting House
Chairperson, as we have been embarking on a number of
roadshows and indeed this has exposed the limited information
or us being unable to raise awareness in terms of the services
that we are offering. Seda, by its nature and mandate
according to the legislation is responsible for business
development support and as part of doing that they do consult
with the consultants that develop business plans.
No consultant can come up with the business plan that they
believe is not bankable. But, when you cross the floor to the
offices of Sefa which is responsible for the financing of the
business plans, there is a lot of things that they have to
look at. These are guided by all the legalities in terms of
the provincial authority and the Public Finance Management
Act, PFMA in ensuring that they undergo due diligence of each
and every business plan. When it comes to that you will find
out that although you have a great business plan but when you
go directly to the person, applying for funding, you do not
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meet particular criteria and others go to an extent of not
submitting all the reasonable information that is required by
Sefa.
Our responsibility as the department is to make sure that we
give access to all small businesses. Access to funding whilst
we facilitate, through partnerships, access to markets. At the
centre of that is to enhance the capability of the
constituency that we are responsible for as we make them
understand the business component in terms of the requirements
that are put in place by all those funding institutions. We
also have a responsibility not to just decline from the Sefa
perspective and say you have not met a, b, c and d but refer
the applicant to Seda. Then Seda will assist the applicant
with the relative things that were raised by Sefa.
In summary, Sefa will recap that the applicant has applied but
does not have relative requirements and therefore the
application is not approved. The applicant will then take the
relative requirements to Seda where assistance will be
rendered and after intervention by Seda, the applicant can
then come back to Sefa and apply for funding. This is the
resolution that we have taken to be the only way to enable
maximum participation by small businesses in all the supply
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and value chain that we are talking about. Thank you, hon
Acting House Chairperson.
Mr J N DE VILLIERS: Hon Minister, exactly as you explained
that one of the problems with the agencies between Seda and
Sefa is that people get moved from pillar to post. They are
send back to Seda and then send again to Sefa. There is
something that we can all agree on, that the merger of these
two entities is the priority to help small businesses. Now,
this has been called for as early as 2015 by the DA and six
years later, last year 2021, this was actually approved by the
Cabinet for the first time.
In the six years that have lapsed there has been a lot of
uncertainty. Key leadership positions in Seda and Sefa led to
instability and bad service to small businesses. Hon Minister,
my question is, can you commit to a deadline to set time and
date where the merger of Seda and Sefa would be accomplished?
Thank you, hon Acting House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Acting House
Chairperson, let me thank hon De Villiers for that correct
question. Indeed, the reason we have started right now before
we undertake the legislative processes that will lead to the
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merger of both agencies we said, it is important for them to
come up with integrated systems. It is important that they
start collaborating.
The first thing is to agree on what methods must be used on
those that are applying for business development support that
must also talk to the financial side. That is the first thing,
whilst we are taking the processes of the legislative
amendments because the merger means that these companies are
scheduled differently according to the PFMA. That is a need
for us to go back to the Seda Act which incorporates Sefa and
make amendments in terms of accommodating the functions that
are being brought by Sefa whilst we are doing away with Sefa.
We have asked the Cabinet to give us 20 months, we have
started of course this month, May and you can count and I
think it ends it 2024 January. Because of the period that we
undertake when we do legislation, we are hopeful that the high
level panel will also have an appreciation of that urgency of
one agency that must be able to resolve the issues that are
faced by small businesses.
We are trying to stabilise within this 20 months’ period as
you are aware that in the six years you are talking about,
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there was a moratorium that was put in place because we were
pushing for the merger. We are lifting the merger and we have
appointed an interim board that must make sure that whilst we
are busy ensuring that the agencies that are developing the
current mandate but there is a transitional period that is
undertaken so that by the time we finalise the process, things
run smoothly and that the work is continuing.
We will come back of course during the Budget Votes on 10 May
to give details and go back to the portfolio committee in
terms of the project plan. We have committed to Cabinet that
every six months we will be going back to give progress so
that there is certainty in terms of what and how is the work
we are undertaking. This will be to ensure that we indeed have
one Small Business Development Agency. Thank you so much.
Ms B MATHULELWA: Hon Acting House Chairperson, Minister, the
informal sector is said to contribute about 17% of the
country’s employment but yet it is the most under supported in
the country. The absence of your offices in the townships is
evidence of the negligence of township entrepreneurs. What
have you done to change the perception that you do not care
about township businesses? What steps have you taken to
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protect township businesses from protection extortion which
endanger the security of township business?
IsiXhosa:
Asinakulala sidle ezi ziphakamiso zonqwanqwado zingasisi
ndawo. Vulani iPalamente ngokupheleleyo nina qha niyeke ukuba
ngoozungul’ichele bezifonyo apha.
English:
The ACTING HOUSE CHAIPRERSON (Ms R M M Lesoma): Order hon
members, just one second hon Minister. Hon members, you are
consuming time and we do not have enough time left for the
questions. I will request that we familiarise ourselves with
Rule 84 so that we are not, from time to time, called in
order. By the way, you will be called in order. Your
unbecoming gesture and utterances, Rule 84 speaks to that.
Ms J TSHABALALA: Hon Acting House Chairperson, on a point of
order: I have raised my hand because the hon member from the
EFF has asked a question that is not related to the principal
question. According to the rules, it is up to the Minister to
answer that question but it has got nothing to do with the
principal question.
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The ACTING HOUSE CHAIPRERSON (Ms R M M Lesoma): Thank you, hon
Tshabalala. Hon members, there are rules in the House and when
the House Chairperson made a Ruling, it was to conscientise
you about not wearing a mask. Rule 84 applies to unbecoming
gestures and utterances. If you do not listen hon members, we
will follow the due processes and we will do the correct thing
to be done. You may proceed hon Minister.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Acting House
Chairperson, thank you very much.
IsiXhosa:
Mathulele ohloniphekileyo, ayinyanisekanga into yokuba
asincedisani nooosmashishini basezilokishini. Xa ungena apha
eKhayelitsha, besiphaya kule veki iphelileyo sinikezela
ngezixhobo zokusebenza.
English:
That was the second time this year. I am talking about the
Western Cape. We have been to the Eastern Cape and we are
doing it throughout the country. This is the programme that
seeks to provide dignity to all the informal businesses but
not only to provide them with dignity but to ensure that we
give them access towards the proper value chain to make sure
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that we are responsible, not only as government but together
with the private sector.
The first thing that we do is to provide them with the
equipment in terms of support. I am sure you know that on
daily basis the municipalities, again through the LED offices,
are inundated with request from the informal businesses from
the beauty industry and all other informal businesses. They go
and make requests of the equipment that they need and indeed
it has been provided. We are working with associations that
are responsible for informal business support. As we do that,
because we understand that as the government or as the
department alone, we really cannot hit the nerve where it
matters. It requires us to collaborate with other
stakeholders.
The ecosystem that we are responsible for is very big and it
does not matter whether you talk about the transport sector.
We have the taxis sector, whether you talk about Uber or any
other business. Those are the stakeholders in the department
that are not formalised. Ours, is to engage with them in terms
of finding how do we compliment the work that is being done by
the different sector departments whilst we agree that those
who want to be formalised are assisted by us with the process.
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Once more, this is a programme that is targeting townships and
rural enterprises. To top it, as we grew up from being very
small or micro we offer them the support that we give from
R50 000 to R1 million through the townships and rural
enterprise. Again that is the programme which has gained my
support and many businesses have tapped into it.
I think what we all should do hon members now, is to make sure
that we participate in our constituency offices to make sure
that the legislative environment beginning from local provides
a conducive environment for the informal traders. As we talk
about them being chased away forever or their security that
cannot be done by the department. The solution is required
from all of us to say what is it that we want for South
Africa.
We must leave aside the politicking because we are talking
about the contribution towards unemployment and the growing of
the economy and that needs no politicking. This is a matter
that we have all committed to in the National Development
Plan, NDP Vision 2030. Come 2030, we are going to create
11 million jobs and the NDP says:
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Out of the 11 million jobs, nine million jobs must come
from small businesses.
Now, any responsible lawmaker here is supposed to understand
all those clauses in the NDP Vision 2030 and therefore
identifies how he/she is going to contribute to ensure that
South Africa can grow and reduce unemployment. Thank you very
much. [Applause.]
The House adjourned at 18:03
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