Economic Cluster


27 Sep 2016

The Economic Cluster led a media briefing on progress made in the implementation of the Cluster’s Programme of Action (PoA) towards achieving the goals of the NDP: Vision 2030. Ministers presents: Gugile Nkwinti (Rural Development and Land Reform), Deputy Minister of Tourism, Ms Tokozile Xasa, and chaired by Minister Naledi Pandor (Science and Technology).


Questions and Answers:
Journalist: I am wondering if we can get an update from the Department of Trade and Industry as to what is happening with the Itac Safe Guard investigation, how close is it to resolution, as well as details of the pricing model with ArcelorMittal, and do you respond to the growing criticism of the pricing model in the market. Secondly, can you please provide some insight on when the RFPs will be published, and some update on the Renewable Energy Programme. Can the Department of Energy provide some details about the Renewable energy supply tender?

Mr Lionel October, Director General: Department Trade and Industry: the pricing model has been agreed by both government and ArcelorMittal, and we have had some extensive discussions with the downstream steel applicators as well. There is consensus on the model we will use to moderate the price increases which will be provided by ArcelorMittal, the full detail of the model is available. Itac has already introduced tariffs on the number of steel products and those that that are still in the pipeline, the full details will be made available.

Minister Pandor: Government has discussed the matter of the continuation of the IPP (Independent Power Producer programmes), and has affirmed that the IPP remains part of government’s response to the energy strategy of the country. It is government that determines policy and the programme is part of government’s policy, and the role of entities is to implement what has been determined by government and its policies.

Department of Energy: As far as the Department understands there is no energy tender, the Minister will announce the publishing of the RFPs on Friday, 30 September. However, I am not certain whether that is the publishing date or it will just be the announcement of when the publishing will occur.

Journalist: How are the 30% set-asides embodied in regulation or legislation. For clarity, on the black industrialist programme, the R500 million reflected as an allocation – is it for the quarter or totals of amounts from the inception of the programme.

Journalist: As government formulates policy, and agents like Eskom ought to implement those policies, are you saying that government is telling Eskom to continue with the IPP programme, and if so, have you had any discussions with Eskom on that.

Mr Lionel October: The R500 million figure is for the quarter, and progress to date from the inception of the programme this year in January is 22 black industrialists have been approved by National Treasury and by the DFIs. Our target for the first year is 30 black industrialists, and we are moving closer towards achieving our target. We will try and attain the quantum of the approved industrialists in investment terms.

Director-General: The Department of Energy is responsible for formulating policy which Eskom as an entity must implement. So the IPP programme forms part of government policy.

Journalist: To the Minister of Labour, mention was made at some stage about legislation providing for struck balance. Are there any changes made on that or what is the status on that?

Journalist: Has the broadband war room convened yet, and who are the members of the war room and what is its mandate and priority in the coming year

Minister Pandor: The war room has not yet convened, the convener of the war room, Minister Siyabonga Cwele, will provide us with some details once we have met on exactly what we will be doing. Minister Cwele will provide a greater and in-depth detail on the plan and the mandate of the war room as well as its priorities in the coming year. With regard to the IRP, our next cluster meeting is set to discuss the next step and to process what is proposed as a cluster and it will be taken up to Cabinet structures and once everything has been finalised the documentation with all the information will be furnished to the public

Mr Lionel October: The sector employs about 119 000 people in primary and downstream steel industry. As government we had a joint-working group with the industry itself as well as the Department of Economic Development and DTI looking into ways in which we can save the industry. There is an excess of steel in the global market of about 450 million tons, many countries are also sitting with the same problem where their steel industries are being decimated. So it is within this context where we have to protect the high end steel manufacturers, because the high end steel industry is one of our lucrative industries in the country. For the past 10 or 15 years we have been working towards banning the importation of steel, because the prices are not competitive or fair for the downstream steel industry. So we came up with a formula to determine the price, and ArcelorMittal has agreed to the pricing model that we have proposed. Our main focus is to save jobs within this industry.

Journalist: The Minister of Energy went on record in Parliament and said that the RFPs will be published on 30 September, so now this uncertainty is creating confusion. The Minister already set the date to publish

Journalist: In the annual report (Economic Development) the Minister of Economic Development mentions the drive to toughen up the competition policy, so what is your thinking as the Department of Economic Development to make a collision and monopolistic practises more difficult.

Director-General: as we were implementing the competition law there are certain adjustment areas we need to improve on. A number of amendments will be introduced soon, and we are looking at areas around public interest, criminalisation and toughening up the fines.

The briefing was adjourned.