Questions & Replies: Economic Development
2010-08-20
THIS FILE CONTAINS 25 REPLIES.
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QUESTION NO.: 3515
DATE OF PUBLICATION: 26 NOVEMBER 2010
Mr S J F Marais (DA) to ask the Minister of Economic Development:
(1) Whether (a) his department and (b) any entities reporting to his department provided any financial support to the National Youth Development Agency (NYDA) for the World Festival of Youth and Students to be held in Pretoria in December 2010; if not, why not; if so, (i) what amount was provided to the NYDA, (ii) from which budget were these funds drawn, (iii) who made the decision to provide these funds to the NYDA and (iv) how is this (aa) decision and (bb) amount justified;
(2) whether the NYDA made any other request to (a) his department and (b) any entities reporting to his department to provide support to the festival; if not, what is the position in this regard; if so, what are the relevant details? NW4354E
REPLY
The Economic Development Department (EDD) and entities reporting to it did not provide any financial support to the National Youth Development Agency (NYDA) for the World Festival of Youth and Students to be held in Pretoria in December 2010. Furthermore, the NYDA did not make any request for support to the department and entities reporting to it.
QUESTION NO.: 3467
DATE OF PUBLICATION: 26 NOVEMBER 2010
Mr S J F Marais (DA) to ask the Minister of Economic Development:
(a) How many employees of (i) his department and (ii) any entities reporting to his department who are on level 11 salary scale and above have been suspended with full pay (aa) in the 2009-10 financial year and (bb) during the period 1 April 2010 up to the latest specified date for which information is available and (b) what is the total amount of money that was paid by his department in respect of these salaries? NW4302E
REPLY
The Economic Development Department (EDD) has not suspended any official in the 2009/10 financial year and up to the end of November 2010.
The International Trade Administration Commission of South Africa (ITAC), the Competition Tribunal and Khula Enterprise Finance Ltd advised that they have not suspended any official during the period referred to in the question.
The Competition Commission suspended one official on 8 September 2010. The official was dismissed on 19 November 2010 and the matter is on appeal. The official was paid R 118 304.51 over the suspension period.
The Industrial Development Corporation (IDC) suspended one official for eight months in 2009/10 financial year, from May to 31 December 2009. The official has since been dismissed. While on suspension, the employer paid the official an amount of R478 833.00 over the suspension period.
The South African Micro-Finance Apex Fund (Samaf) suspended two employees during 2009/10 financial year and the details are as follows:-
· One Director at level 13 and was paid a total amount of R 98 305.00.
· One Deputy Director at level 12 and was paid a total amount of R 142 104.00.
No employees were suspended by Samaf from 01 April 2010 to the end of November 2010.
QUESTION NO.: 3375
DATE OF PUBLICATION: 19 NOVEMBER 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
How many companies that were funded by the Industrial Development Corporation defaulted in repaying such loans in the 2009-10 financial year? NW4205E
REPLY
There are 43 clients in default (indicated by the level of impairments) for the financial year 2009/10. A significant number of these were approved in prior years.
QUESTION NO.: 3374
DATE OF PUBLICATION: 19 NOVEMBER 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
Whether his department intends accessing cheaper loans through its institutions from (a) third world and (b) Chinese development banks; if not, what is the position in this regard; if so, what are the relevant details? NW4204E
REPLY
Of the three development finance institutions reporting to the Economic Development Department (EDD), the Industrial Development Corporation is the only institution that borrows on international and local markets to meet its investment mandate. The IDC sources funds at the most competitive rate possible so the benefits can be passed on to clients.
The traditional sources of funding include commercial banks, other development finance institutions and other lenders largely from the developed world. The IDC adopted a strategy of diversifying its sources of funding to ensure access to funds in the context of tighter international liquidity when the international economic crisis hit, as well as to identify opportunities to reduce its cost of borrowings.
Together with continuing engagement with traditional funders and exploring local funding sources, the IDC has been engaging with financial institutions in developing countries. Notable in this regard is the conclusion of a funding arrangement amounting to USD100m with the China Construction Bank. In addition, the IDC has negotiated a new facility with the African Development Bank amounting to USD 200m.
Interactions with other financial institutions in developing countries, including other Chinese institutions, are ongoing.
QUESTION NO.: 3315
DATE OF PUBLICATION: 12 NOVEMBER 2010
Mr N Singh (IFP) to ask the Minister of Economic Development:
Whether, with reference to the latest unemployment figures released by Stats SA (details furnished), the Government will reach its target of creating 5 million jobs by 2020; if not, why not; if so, what are the relevant details? NW4140E
REPLY
Government's New Growth Path sets out a number of measures to achieve the national target of 5 million new jobs by 2020.
The New Growth Path proposes measures to ensure that in the medium to long term we not only reverse unemployment trends but also ensure much more rapid employment creation through a combination of macro and microeconomic strategies (policy package) to enhance overall competitiveness with targeted interventions to support innovative employment-creating activities.
The key variables that will affect the achievement of the target are the rate of economic growth and the employment-intensity of growth. Government will support efforts for employment creation in the following priority sectors: infrastructure, the agricultural value chain, the mining value chain, the green economy, manufacturing sectors, which are included in IPAP2, and tourism and certain high-level services.
Not all of the steps required to secure the necessary employment and growth outcomes can be done by Government. Social partners have a key role to play and a major contribution to make. Ensuring that the benefits and sacrifices for the New Growth Path are equally shared requires extensive social dialogue.
QUESTION 3258
3258. Mr E J Marais (DA) to ask the Minister of Economic Development:
Whether, in light of the need for foreign fixed capital investments, he supports the potential acquisitions of Massmart by Wal-Mart; if not, why not; if so, what are the relevant details? NW4074E
The Minister of Economic Development:
The matter is under consideration and no final view has been taken. The Honourable Member's attention is drawn to the reply given to parliamentary question 3100, attached hereto, which provides further details. .
QUESTION 3256
3256. Mr E J Marais (DA) to ask the Minister of Economic Development:
Whether he intends revisiting the industrial development corporation mandate not to use food products in the production of bio-fuel; if not, why not; if so, what are the relevant details? NW4072E
The Minister of Economic Development:
There are not current plans to revisit the IDC's mandate on the use of food products in the production of bio-fuel. The existing mandate is based on the Biofuels Industrial Strategy of the Republic of South Africa, issued in December 2007, by the then Department of Minerals and Energy. The executive summary of the strategy notes:
"A significant change to the draft Strategy is to adopt a short term focus (5 year pilot) to achieve a 2% penetration level of biofuels in the national liquid fuel supply, or 400 million litres pa. The target has been revised down from the 4.5% target that was initially proposed in the draft Strategy document. The following crops are proposed for the production of biofuels in the country: for Bioethanol, sugar cane and sugar beet and for Biodiesel sunflower, canola and soya beans. The exclusion of other crops and plants such as maize and Jatropha is based on the food security concerns. Further research is still needed to test usability of these in the country. The 2% level can be achieved without jeopardising food security."
QUESTION NO.: 3223
DATE OF PUBLICATION: 12 NOVEMBER 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
What is the (a) total cost and (b) number of copies of each (i) annual report and (ii) report on strategic plans that was produced by (aa) his department and (bb) any of its entities in the 2009-10 financial year? NW4037E
REPLY
The information requested by the Honourable Member is contained in the table below:
| Department/Entity | No. of 2010-2013 strategic plans printed | Amount | No of 2009-10 Annual reports printed | Amount |
| Economic Development Department | 600 hard copies | R 11 563.02 | 540 hard copies and 470 CDs | R 200 005.48 |
| Industrial Development Corporation (IDC) | 70 hard copies | Printed and bound internally | 3000 hard copies and 4000 CDs | R 1 184 000.00 |
| Khula Enterprise Finance Limited (Khula) | 75 hard copies | R 3 855.43 | 2500 hard copies | R 266 800.00 |
| South African Micro-finance Apex Fund (Samaf) | 300 hard copies and 300 CDs | R 45 234.59 | 2000 hard copies and 500 CDs | R 64 475.63 |
| Competition Commission | 70 hard copies | Printed and bound internally | 1500copies | R 223 579.48 |
| Competition Tribunal | 506 hard copies | R 3 365.00 | 250 hard copies and 10 CDs | R 124 970.00 |
| International Trade Commission of South Africa (ITAC) | 100 hard copies | Printed and bound internally | 590 hard copies and 2 CDs | R 67 260.00 |
QUESTION NO.: 3100
DATE OF PUBLICATION: 29 OCTOBER 2010
Mrs E M Coleman (ANC) to ask the Minister of Economic Development:
(1) Whether he has been informed of the proposed acquisition of a certain company (name furnished) by a certain company (name also furnished); if so,
(2) whether he will investigate the impact of this proposed acquisition on economic development; if not, why not; if so, what are the relevant details;
(3) whether, in light of previous experiences of this nature and the current hardships experienced, he has taken any steps to ensure that the poverty levels are not increased as a result of such an acquisition; if not, why not; if so, what are the relevant details? NW3829E
REPLY
I have been advised of the proposed acquisition of Massmart, a large retailer that controls retail franchisers Game, Macro and Dion, by Walmart, the largest retail group globally.
I have met with the CEO of Massmart as well as the Executive Vice President of Walmart, in October this year. At that meeting, the two companies provided the rationale for the proposed transaction. A number of areas of clarification were pursued in the meeting.
An initial scoping of issues indicated that government would need to consider the impact of the proposed transaction on the following:
- The local manufacturing supplier industry, including small businesses in manufacturing and the level of imports
- The shape of the retail sector, including small businesses and the impact on competition
- Food security
- Consumer interests
- Labour relations
- Local ownership levels in the retail sector and
- The exchange rate.
Following the dialogue with Walmart and Massmart, I have set up a advisory panel to identify the relevant policy issues and implications of the proposed acquisition, particularly from an economic development perspective.
The panel members, who all serve in their individual capacity, are Mr Goolam Ballim (Standard Bank Group Economist), Mr Geoffrey Qhena (CEO of the Industrial Development Corporation), Dr Iraj Abedian (Pan-African Investment and Research Sevices), Mr Duma Gqubule (Kio Advisory Services), Dr Neva Makgetla (Deputy Director General, Economic Development Department) and Mr Malose Kekana (Khula Enterprise Finance).
Officials from my department have also met with Walmart/Massmart representatives to obtain further details on the proposed transaction.
The Economic Development Department (EDD) will also meet key stakeholders, including retailers, manufacturers and trade unions representatives.
We will hold further discussions with the two companies, Massmart and Walmart, as these processes unfold. In addition, the two companies will need to go through the necessary regulatory processes.
During the envisaged further discussions with the two companies, a number of issues identified in the report of the advisory panel and the views of stakeholders, will be canvassed. This will include the issues of the impact of the proposed transaction on social and economic development, local jobs including in supplier industries, small businesses and consumers.
QUESTION NO.: 2475
DATE OF PUBLICATION: 3 SEPTEMBER 2010
Dr D T George (DA) to ask the Minister of Economic Development:
Whether, with regard to the public sector strike, an assessment of its impact on projected economic growth has been conducted; if not, why not; if so, what are the relevant details? NW3045E
REPLY
No assessment of the specific impact of the strike on the economy has been conducted by the Economic Development Department (EDD). In the public sector, services are generally not priced on the market. This makes the cost of forgone production difficult to establish.
QUESTION NO.: 2398
DATE OF PUBLICATION: 30 AUGUST 2010
Mr P J C Pretorius (DA) to ask the Minister of Economic Development:
Whether (a) his department or (b) any of its entities has signed any contractual agreements with a certain company (name furnished or any of its affiliates (i) in the 2009-10 financial year and (ii) during the period 1 April 2010 up to the latest specified date for which information is available; if so, (aa) what is the nature of each contract, (bb) what is the monetary value of each contract, (cc) what is the (aaa) start and (bbb) end date of each contract, (dd) what are the details of the process that was followed for the signing of each contract, (ee) who else tendered for each contract that was awarded and (ff) what amount did each tenderer quote in each case? NW2967E
REPLY
The Economic Development Department and the entities reporting to it have not entered into any contractual agreement with the company referred to in the question.
QUESTION NO.: 2374
DATE OF PUBLICATION: 30 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
(a) What steps were taken by the International Trade Administration Commission of South Africa to reduce the turnaround time to assess and issue (i) import permits from five to three days and (ii) export permits from five to two days and (b) why were these steps only taken in the 2009-10 financial year? NW2943E
REPLY
(a)The International Trade Administration Commission of South Africa (ITAC) upgraded its electronic import and export permit system to enhance the processing of import and export permit information and the submission of such information to the South African Revenue Service and applicants.
(b) These steps were initiated in the 2008/09 financial year. ITAC advises that problems with the service provider contracted led to a delay which resulted in the finalisation of the upgrade only during the 2009/10 financial year. ITAC has now introduced measures for new contracts, including penalties in contracts where timeframes are not met, in order to avoid a recurrence.
QUESTION NO.: 2373
DATE OF PUBLICATION: 30 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
(1) How much money has been spent by the Industrial Development Corporation (IDC) on the pebble-bed modular nuclear reactor (PBMR) during the period 1 January 2005 up to the latest specified date for which information is available;
(2) whether it will be possible to recover any of the funds spent by the IDC on the PBMR; if not, why not; if so, what are the relevant details? NW2942E
REPLY
(1) Between the period of 1 January 2005 up to 31 December 2005, the IDC spent R193 million on the PBMR project.
(2) The IDC advises that the funds that were invested in the PBMR were for a feasibility study, which means if the study shows that the project is feasible, it will be possible to recover IDC investment from the PBMR when the project reaches a stage where there is an entity or utility like Eskom that buys the reactors. Should the project not be viable, the IDC will not be able to recover the investment. The IDC advises that past IDC-funded projects like SASOL were started on a similar basis.
QUESTION NO.: 2372
DATE OF PUBLICATION: 30 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
(1) Whether a costing has been done of creating a production capacity of at least 300 million litres per annum of fuel grade bioethanol as proposed by the Industrial Development Corporation (IDC); if not, why not; if so, what are the relevant details;
(2) whether the biofuel will conform with accepted international carbon standards; if not, why not; if so, what are the relevant details;
(3) whether the biofuel will be made available to resource poor farmers in all provinces; if not, why not; if so, what are the relevant details? NW2941E
REPLY
The IDC is sponsoring pre-feasibility studies in three bio-ethanol projects (each producing around 100 million litres per annum). Each of these projects has other co-sponsors and commercial partners. These projects are:
- Sugar beet & grain sorghum-to-ethanol project in Cradock, Eastern Cape.
- Sugarcane-to-ethanol project in Hoedspruit, Limpopo.
- Sugarcane-to-ethanol project in Makhatini, KZN.
(1) According to the IDC, the 300 million litres of bioethanol will require 3 plants producing about 100 million litres per annum. Each project will cost in the region of R1.7bn in 2010 terms (capex and working capital). The cost per plant can vary by about R100 million to R200 million depending on the available infrastructure of the site. This cost excludes the agricultural component of a project. The agricultural throughput is usually procured on an off-balance sheet, arms-length basis. The agricultural cost will vary as per the type of crop as well as the procurement model used.
(2) We have been advised that the carbon footprint of the biofuel plants is positive and the energy balances of each project will also be positive. The IDC advises it has no knowledge currently of biofuel projects globally that are actively generating revenue from carbon credits due to the difficulty in establishing an agricultural baseline. Therefore, the projects have not pursued carbon standard certification at this stage. It can be pursued at a later stage should it be warranted.
(3) The biofuel that IDC is investing in is ethanol and needs to be blended with petrol prior to distribution and use in a normal petrol car. The biofuel will therefore be sold to the oil majors/wholesalers who will blend and sell the required volumes. We are advised that the denatured ethanol on its own cannot be used as motor fuel unless the car was a 'flex fuel' vehicle. Flex fuel vehicles are not generally sold in South Africa.
QUESTION NO.: 2256
DATE OF PUBLICATION: 20 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
Whether his department and/or any of its entities has purchased any 2010 Fifa World Cup Soccer tournament (a) clothing or (b) other specified paraphernalia; if not, what is the position in each case; if so, in each case, (i) what are (aa) the details and (bb) the total cost of the items purchased, (ii)(aa) how many items have been purchased and (bb) why, (iii)(aa) to whom has each of these items been allocated and (bb) why have these items been allocated to these persons and (iv)(aa) on what basis was the decision taken to purchase each of these items and (bb) on whose authority was the decision taken to make these purchases? NW2764E
REPLY
| Department/ Agency | Reply | ||||||||||||||||||||||||
| Economic Development | EDD has not purchased any FIFA World Cup Soccer Tournament clothing or other specified paraphernalia for the account of the Department. | ||||||||||||||||||||||||
| Competition Tribunal | During 2010 the Competition Tribunal incurred total expenditure of (a) R 12 989.80 on soccer shirts and (b) R 219 .45 on flags for the office. 30 soccer shirts costing R 12 989.90 were given to full-time Tribunal staff and the security staff in the building we occupy and the flags purchased were used to decorate the open area occupied by staff in the office. On an annual basis the Tribunal funds the entry of staff member's participation in a team building activity and purchases a T shirt for staff to use at this function and other corporate activities as part of team building. The Executive opted to forgo this expense and instead use the money for Soccer T shirts which were worn on "Football Friday" by the staff. In addition staff wore the T shirts for photographs in the annual report which this year had a soccer theme. The purchase of the shirts served two objectives: part of team building amongst staff through an association with the World Cup and secondly, as part of public relations as staff has regular contact with members of the public in performing their duties. The Executive approved the expenditure. | ||||||||||||||||||||||||
| Khula Enterprise Finance Limited | Khula Enterprise Finance (Khula) bought 100 soccer t-shirts at R100 each and a total cost of R10 000. The t-shirts were bought for staff as part of a team building exercise that was undertaken in June 2010. The Managing Director at the time approved the expenditure. | ||||||||||||||||||||||||
| Competition Commission |
The EXCO approved the expenditure. The above is per audited Annual Financial Statements of the Commission. | ||||||||||||||||||||||||
| South African Micro-Finance Apex Fund (Samaf) | Samaf has not purchased any 2010 FIFA World Cup Soccer Tournament clothing or other specified paraphernalia. | ||||||||||||||||||||||||
| International Trade Administration Commission of South Africa (ITAC) | ITAC has not purchased any 2010 FIFA World Cup Soccer Tournament clothing or other specified paraphernalia. | ||||||||||||||||||||||||
| Industrial Development Corporation (IDC) | The IDC purchased World Cup apparel including scarves, beanies, blankets and gloves (2500 packs at a cost of R1,034,949) for clients/ stakeholders, the Accounting Authority, the Accounting Officer, senior management and other employees. The Executive Committee approved the expenditure. |
QUESTION NO.: 2224
DATE OF PUBLICATION: 20 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
(1) Whether his department or any of its entities has (a) purchased or (b) leased any buildings for administration (i) in the 2009-10 financial year and (ii) for the 2010-11 financial years; if not, why not; if so, in each case, (aa) what is the cost of the building, (bb) what is the size of the building, (cc) why was it bought or leased, (dd) what will be its use, (ee) who will occupy it and (ff) approximately how many persons will occupy the total space of each building;
(2) whether his department and any of its entities intends purchasing or leasing any buildings for administration for the (a) 2011-12, (b) 2012-13 and (c) 2013-14 financial years; if not, why not; if so, in each case, (i) what is the cost of each building, (ii) what is the size of each building, (iii) why will it be bought or leased, (iv) for what will it be used, (v) who will occupy it and (vi) approximately how many persons will occupy the total space of each building? NW2732E
REPLY
The Economic Development Department (EDD) has not, nor intends to purchase a building. The following agencies do not own buildings, nor do they plan to purchase a building: the Competition Commission, the Competition Tribunal, the International Trade Administration Commission (ITAC), Khula Enterprise Finance Limited (Khula) and the South African Micro-Finance Apex Fund (samaf). The IDC owns one building.
The staff, office space and cost of accommodation for EDD and its agencies are as follows:
| Department / entity | Staff | Square metres | Annual cost |
| EDD | 38 | 525* | R913,185 |
| IDC | Owns its building | ||
| IDC regional offices (10) | 43 | 1773 | R2,570,000 |
| Competition Commission | 138 | 3674* | R7,048,000 |
| Competition Tribunal | 18 | 786* | R1,283,859.24 |
| ITAC | 130 | 1438* | R2,349,000 |
| Khula | 80 | 1938 | R4,212,000 |
| Khula regional offices (11) | 3 per office | 1732 | R2,805,891.96 |
| Samaf | 33 | 485* | R 617.928.70 |
| Samaf regional offices (9) | 4 per office | 1692 | R1,541,790.09 |
* On the dti campus
Certain agencies require public meeting facilities eg hearing rooms, conference facilities and public waiting areas.
EDD and Khula intend moving to larger premises in the near future.
EDD is planning to relocate to Block E of the dti campus which is 4258.1 square metres. The lease amount will be R617, 211.59 per month. The resultant square metre rate is applicable for the 2010/2011 financial year and is subject to 6.5% annual escalation fee. The approved structure totals to 265 staff members.
In anticipation of expanding its operations Khula is sourcing accommodation of 3000-4000 sqm for approximately 140 people at approximately R700 000 per month.
The Competition Commission has indicated that it will need additional space in the near future.
The Department and agencies do not keep records of the cost of buildings that it leases or rents. Buildings are leased for the purpose of supplying office space and a place where the public may access certain services. Further details will be available in the financial statements of agencies and the Department.
QUESTION NO.: 2090
DATE OF PUBLICATION: 6 AUGUST 2010
Dr P J Rabie (DA) to ask the Minister of Economic Development:
Whether the statement by a certain company (name furnished) that anticipates that the closure of the Saldanha Steel Plant will result in 4 000 workers losing their jobs has had an adverse effect on the proposed (a) industrial development zone, (b) 200 MW renewable energy plant and (c) floating dry dock for oil and gas exploration facilities; if so, what are the relevant details in each case? NW2491E
REPLY
The closure of any large manufacturing operation has substantial negative effects on employment, social welfare, economic development, investor confidence and tax revenues. Following the threat to close the Saldanha Steel plant, three government departments, namely, Trade and Industry (the dti), Mineral Resources (DMR) and the Economic Development Department (EDD) engaged with the relevant companies and concluded a new interim pricing agreement. The threat of the plant closure has accordingly been withdrawn.