Speaking during the July update on the government’s programme of action for 2006, the second report back since the State of the Nation address, Public Enterprises Minister Alec Erwin said in Pretoria on Tuesday that all of the programmes in the five focus areas of the economic and investment cluster were “well on track”.
He said the macro-economic models of the government were designed to keep track of the macro balances in the economy in the “largest capital programme this country has ever seen”.
He said they would look at the import component of the balance of payments (BOP), but said the overall position looked good. Erwin said the BOP constraint was actually much looser now, but it would still be watched very closely, as would all global developments.
He said the major economic programmes would attract foreign investment, but that a major focus area locally remained rebuilding the engineering and supplier industries and improving competition.
He said certain programmes were, in fact, held back by supplier constraints on items like train wheels (demand from China and India was also not being met, he said) and cranes for ports, but he said the government was aware of these long-range supply conditions.
He said it therefore made economic sense to develop the local manufacturing base.
Comprehensive sector strategies by the Department of Trade and Industry would support the programme.
Erwin announced in Cape Town in June that local industries had to improve their productive capacity to take advantage of government’s estimated R360-billion infrastructure expenditure over the next five to seven years.
A third of the investment is to be driven by Eskom and Transnet, which would contribute 1,5% to GDP through their capex progammes in the next five years — Eskom is to invest R97-billion, with R65-billion in the power generation sector, R11-billion in transmission and R15-billion in distribution. This would involve the development of a power station and a pump storage project.
Erwin said on Tuesday that Eskom’s “largest single project ever” would allow suppliers to rebuild.
“Upgrades at Spoornet will be announced before the end of the year. Have a look at the Transnet results later today, with key ramp-up being locomotive purchases, improvements on the lines and safety,” he said. He mentioned specifically the line to Saldanha and a programme to upgrade the coal line with greater volumes through Richard’s Bay. He said some slowdowns were seen on the mine side due to rains. He also announced that major engineering works on the Durban-Gauteng corridor were to be completed by March 2007.
In a separate statement the government announced the City Deep depot had been completed and 400 jobs would be created over the construction phase and would be sustainable for nine months.
The government also announced in the release that the Gautrain project was “in its final stages of negotiation”.
Erwin said a major part of the government’s programme was also skills development and said they were fast-tracking these programmes, like getting more maths and science graduates through the system via scarce skills programmes, including learnerships and apprentices. The skills programme was aimed at supporting 90Â 000 unemployed people, the statement read.
On employment, Erwin said: “No one can be complacent on employment. However, SA’s economy is doing relatively well in this regard.”
Erwin also mentioned a bio-fuels project was on track and that a presentation would be made in July with funding going into the next medium term budget policy. In a statement the government said a task team had been established and that the DOA was compiling a list of suitable crops to be used as feedstock for biofuels. The bio-fuels strategy was due in December.
Erwin also said a key area was to promote research and development and said the Minister of Finance was to allow 150% private sector spending and that increased levels of expenditure would increase to 1% of GDP.
He also said broad-band accessibility announcements would be made later in the year, and said it related to “positive announcements”. The government said in a separate statement the aim was to bring down costs by developing high speed national and international broadband capacity.
Erwin added that a R185-million Tourism Enterprise Programme funding programme was under way for 2006/07 to 2008/09. The government statement in this regard said the South African Tourism 2006/07 budget had been raised to R425-million.
On a question about the alleged German kickbacks in the arm’s deal, Erwin said there was an investigation in Germany and he was not aware of the outcome. However, he said that the government believed the major contracts of the arms deal had been well managed and had been successful.
On the recent power failures in the Western Cape due to power outages at a Koeberg nuclear power generator — Erwin said the “people of Cape Town needed to be congratulated” and that the investigation had been completed with findings due by mid-August.
Newspapers alleged at the time that Erwin had said sabotage may have been behind it, which he denied having said, referring instead to “human instrumentality”.
He said they would soon know whether this was caused by “humans” or “aliens”. – I-Net Bridge