Date: 09/06/2004
Source: Gauteng Provincial Government
Title: P Mashatile: Gauteng Provincial Media Briefing, June 2004
GAUTENG PROVINCIAL GOVERNMENT MEC BRIEFINGS STATEMENT, BY FINANCE AND ECONOMIC AFFAIRS, MEC PAUL MASHATILE, 9 June 2004
After ten years of democratic governance the emphasis of our strategic objective has evolved from an idealist view of society to a realistic understanding of social transformation. In defining our transformation agenda in 1994, we realistically focused on the need to manage people's expectations on what the government would be able to achieve given the limit of resources at the disposal of the then new government. Our projections of delivery during the 1999 elections was once more looked at thoroughly to ensure that we did not build an imaginary world that would collapse much to the disappointment of our people.
Once again when we reached out to our communities during the election campaign, the ANC developed a delivery framework that was consistent with the resources available to the government. Our election manifesto that we have now adopted as a governance policy framework stays the course of realism in our promises in its articulation of the contract with the people. We have shied away from populist mobilisation to sober consideration of the public expectations. We are therefore convinced that the public mandate to the ANC is a sober, achievable assignment that our people have given.
Overview of the Economy
Economic development of the country has been the epicentre of our development strategy. Our new trajectory is premised on the context of a diversified and competitive framework of economic development. Since 1994 we were convinced that our ability to reverse the legacy of deprivation, poverty and joblessness hinged on a stimulated economy that would start expanding and accommodating new entrants to the main economy. With this understanding we tried to locate the role of the state in social development. It was in this context that we agreed to position Gauteng as a smart province that would propel the growth of strategic industries in line with global smart economies and developmental trends.
Currently the department is reviewing our Trade and Industry Strategy with a view to integrate it into a yet to be developed growth and development strategy together with local economic development intervention strategy. To this end the department will be hosting a provincial growth and development summit later this year after full consultation with economic players.
In consultation with the Premier I will be establishing an Economic Advisory Working Group of eminent individuals with diverse experience in matters of the economy, labour and business.
Blue IQ initiatives
In terms of the Blue IQ projects, we have now moved into the second phase of commercialisation of the projects, which entails securing private sector investment into the projects. Linked to this, we have decided to revisit the current eleven projects of the Blue IQ to ensure that we accelerate sector interventions in those areas of the provincial economy that will give momentum to growth of our economy. In assistance to this process we will be combining the Blue IQ programme with the Blue IQ Investment Holding, which is a section 3(c) company that is 100% government owned. The new entity will be headed by a single CEO to be appointed by myself within the next month and a Board of Directors yet to be appointed. In keeping with the mandate of the new term of government, we will ensure that while some of the Blue IQ projects may not be labour intensive, they should comply with requirements for Broad Based Black Economic Empowerment and as well as SMME support. In this case the experience of South Korea is instructive when it comes to surrounding high tech industries with a multiplicity of supplier industries to broaden the economic yield.
The Gautrain project, whilst it is part of the Blue IQ project, will operate independently of other projects and will report directly to me as a special project. In July I will be accompanying the Premier to go and inspect the facilities of the two companies that are biding to build the train and its infrastructure. This will mark the acceleration of the project. With our successful bid for the soccer 2010 World Cup, we want to ensure that by then the train is in operation as part of national infrastructure development.
The following are some of our plans for Blue IQ projects:
* The Wadeville-Alrode Industrial Corridor is ready to be handed over to the Ekurhuleni Metro to facilitate new investment and economic activity
* The Newtown project is on course and proving to be successful with vacancy rates for office space dropping
* Linked to the Constitution Hill development the construction of a super basement, three office complexes and the residential component are on schedule albeit with an unexpected cost escalation caused by the relocation of the mortuary
* The Kliptown project will see the commencement of the construction of the Walter Sisulu Square of Dedication. During this financial year we are planning to open the taxi rank and retail centre. We have made progress in getting the support of the business sector to make way for the construction of the Freedom Charter Monument. A housing strategy has been finalised with the Greater Kliptown Community Forum
* Dinokeng project has now been completely moved to the department and will fully operate under Blue IQ
* The Cradle of Humankind World Heritage Site has also been fully relocated into the department under Blue IQ. We will be seeing acceleration of infrastructure development on site in preparation for the construction of the Interpretation Centre Complex at the Sterkfontein Mohale's Gate
* The Johannesburg International Airport Industrial Development Zone will progress until 2005 in terms of the road project. The spin-off of this project is that it has impact on property sales around the area that is under development. A further spin-off is the Airports Company of South Africa and Denel are now intending to open a new economic node that will generate jobs for the East Rand. We are in the process of reviewing the IDZ option for the area together with the DTI to identify alternative intervention or alternative variations of IDZ type that will maximise the growth potential of the area. By the end of 2004 a firm decision on the way forward will have been made
* With regard to the City Deep Logistics Project and City Deep Infrastructure Project, we have fulfilled our obligation and are now ready to exit the project. We have tabled a proposal for a logistics and distribution hub and we are planning to engage third parties - who own and operate essential inputs - to the project. Until this matter is finalised with third parties, the project will be frozen
* The site construction of the Innovation Hub is underway. The buildings will open in December 2004. During this year we will intensify our negotiations with potential anchor tenants. Linked to the Innovation Hub we have established a venture capital outfit in the name of Blue Catalyst, which we will use to encourage smart initiatives and link them with relevant players in the market
* The Automotive Supplier Park and AIDC initiative have reached a stage where the department has to scale down its involvement and give way to private sector investors. In terms of our exit strategy negotiations are underway with a preferred bidder to buy our stake in the initiative
* The Blue IQ Young Minds initiative will continue. We are in the process of looking for private sector partners to take the initiative forward.
Attracting Direct Foreign Investment
In addition to encouraging domestic investment by the private sector, we are hoping to increase foreign direct investment into the Gauteng economy to R1.9 billion and creation of additional 9 600 jobs in the current financial year. We will be reviewing our marketing offices abroad with a view to see how we maximise their impact and extend their reach within regional economies.
Transformation of the economy
In trying to address the challenges of parallel economies (the first and the second) we will be looking at a numerous options of stimulating both economies, and to elevate the second economy and integrate it to the first. The development of small, medium and micro enterprises has become our top priority for job creation. In this regard we will investigate the possibility of financial and non-financial support. The department will be setting up a new directorate that will support SMMEs in line with the pronouncement of the President and the Premier. In terms of the government departments, the GSSC and government agencies broadly, we are targeting a minimum of 30% of procurement spend to SMEs.
In addition to SMME support we are planning to put aside an average of 45% of provincial procurement for Broad Based Black Economic Empowerment.
I will shortly institute an investigation on the introduction of co-operatives on the economic front to ensure that we try and spread the economic benefit more broadly amongst our people.
These targets are going to be closely monitored across the province by the provincial treasury to ensure compliance.
Integration of Development Planning
The process of rationalisation of functions within government has necessitated that development planning be combined with the economic planning function. This will assist in ensuring that economic and spatial planning is combined to ensure consistency and coherence in our development plans. In this regard we will be able to plan and implement expeditiously. This integration also provides a new platform for the department to play a proactive role in supporting local economic development, which had been located in the local government department.
Treasury
We are positioning provincial treasury improve its efficiency of allocations and effective utilisation of government resources. Over and above this responsibility, treasury will be playing a crucial role in monitoring the meeting of targets by individual departments when it comes to affirmative action obligations involving procurement.
Agencies
All agencies will be repositioned to play a role in job creation and BEE and SMME support. Their structures, management and mandate will be further consolidated to ensure requisite capacity and leadership. Their role will be monitored by a new function in the department to ensure effectiveness and accountability.
Within a short period I will be announcing the HOD, the new Head of Treasury and the new CEO for the Blue IQ Foundation.
For more information please contact: Keith Madonsela-Khoza
Cell: 082 908 7742
Issued by: Department of Finance and Economic Affairs, Gauteng Provincial Government
9 June 2004
Source: Gauteng Provincial Government
Title: P Mashatile: Gauteng Provincial Media Briefing, June 2004
GAUTENG PROVINCIAL GOVERNMENT MEC BRIEFINGS STATEMENT, BY FINANCE AND ECONOMIC AFFAIRS, MEC PAUL MASHATILE, 9 June 2004
After ten years of democratic governance the emphasis of our strategic objective has evolved from an idealist view of society to a realistic understanding of social transformation. In defining our transformation agenda in 1994, we realistically focused on the need to manage people's expectations on what the government would be able to achieve given the limit of resources at the disposal of the then new government. Our projections of delivery during the 1999 elections was once more looked at thoroughly to ensure that we did not build an imaginary world that would collapse much to the disappointment of our people.
Once again when we reached out to our communities during the election campaign, the ANC developed a delivery framework that was consistent with the resources available to the government. Our election manifesto that we have now adopted as a governance policy framework stays the course of realism in our promises in its articulation of the contract with the people. We have shied away from populist mobilisation to sober consideration of the public expectations. We are therefore convinced that the public mandate to the ANC is a sober, achievable assignment that our people have given.
Overview of the Economy
Economic development of the country has been the epicentre of our development strategy. Our new trajectory is premised on the context of a diversified and competitive framework of economic development. Since 1994 we were convinced that our ability to reverse the legacy of deprivation, poverty and joblessness hinged on a stimulated economy that would start expanding and accommodating new entrants to the main economy. With this understanding we tried to locate the role of the state in social development. It was in this context that we agreed to position Gauteng as a smart province that would propel the growth of strategic industries in line with global smart economies and developmental trends.
Currently the department is reviewing our Trade and Industry Strategy with a view to integrate it into a yet to be developed growth and development strategy together with local economic development intervention strategy. To this end the department will be hosting a provincial growth and development summit later this year after full consultation with economic players.
In consultation with the Premier I will be establishing an Economic Advisory Working Group of eminent individuals with diverse experience in matters of the economy, labour and business.
Blue IQ initiatives
In terms of the Blue IQ projects, we have now moved into the second phase of commercialisation of the projects, which entails securing private sector investment into the projects. Linked to this, we have decided to revisit the current eleven projects of the Blue IQ to ensure that we accelerate sector interventions in those areas of the provincial economy that will give momentum to growth of our economy. In assistance to this process we will be combining the Blue IQ programme with the Blue IQ Investment Holding, which is a section 3(c) company that is 100% government owned. The new entity will be headed by a single CEO to be appointed by myself within the next month and a Board of Directors yet to be appointed. In keeping with the mandate of the new term of government, we will ensure that while some of the Blue IQ projects may not be labour intensive, they should comply with requirements for Broad Based Black Economic Empowerment and as well as SMME support. In this case the experience of South Korea is instructive when it comes to surrounding high tech industries with a multiplicity of supplier industries to broaden the economic yield.
The Gautrain project, whilst it is part of the Blue IQ project, will operate independently of other projects and will report directly to me as a special project. In July I will be accompanying the Premier to go and inspect the facilities of the two companies that are biding to build the train and its infrastructure. This will mark the acceleration of the project. With our successful bid for the soccer 2010 World Cup, we want to ensure that by then the train is in operation as part of national infrastructure development.
The following are some of our plans for Blue IQ projects:
* The Wadeville-Alrode Industrial Corridor is ready to be handed over to the Ekurhuleni Metro to facilitate new investment and economic activity
* The Newtown project is on course and proving to be successful with vacancy rates for office space dropping
* Linked to the Constitution Hill development the construction of a super basement, three office complexes and the residential component are on schedule albeit with an unexpected cost escalation caused by the relocation of the mortuary
* The Kliptown project will see the commencement of the construction of the Walter Sisulu Square of Dedication. During this financial year we are planning to open the taxi rank and retail centre. We have made progress in getting the support of the business sector to make way for the construction of the Freedom Charter Monument. A housing strategy has been finalised with the Greater Kliptown Community Forum
* Dinokeng project has now been completely moved to the department and will fully operate under Blue IQ
* The Cradle of Humankind World Heritage Site has also been fully relocated into the department under Blue IQ. We will be seeing acceleration of infrastructure development on site in preparation for the construction of the Interpretation Centre Complex at the Sterkfontein Mohale's Gate
* The Johannesburg International Airport Industrial Development Zone will progress until 2005 in terms of the road project. The spin-off of this project is that it has impact on property sales around the area that is under development. A further spin-off is the Airports Company of South Africa and Denel are now intending to open a new economic node that will generate jobs for the East Rand. We are in the process of reviewing the IDZ option for the area together with the DTI to identify alternative intervention or alternative variations of IDZ type that will maximise the growth potential of the area. By the end of 2004 a firm decision on the way forward will have been made
* With regard to the City Deep Logistics Project and City Deep Infrastructure Project, we have fulfilled our obligation and are now ready to exit the project. We have tabled a proposal for a logistics and distribution hub and we are planning to engage third parties - who own and operate essential inputs - to the project. Until this matter is finalised with third parties, the project will be frozen
* The site construction of the Innovation Hub is underway. The buildings will open in December 2004. During this year we will intensify our negotiations with potential anchor tenants. Linked to the Innovation Hub we have established a venture capital outfit in the name of Blue Catalyst, which we will use to encourage smart initiatives and link them with relevant players in the market
* The Automotive Supplier Park and AIDC initiative have reached a stage where the department has to scale down its involvement and give way to private sector investors. In terms of our exit strategy negotiations are underway with a preferred bidder to buy our stake in the initiative
* The Blue IQ Young Minds initiative will continue. We are in the process of looking for private sector partners to take the initiative forward.
Attracting Direct Foreign Investment
In addition to encouraging domestic investment by the private sector, we are hoping to increase foreign direct investment into the Gauteng economy to R1.9 billion and creation of additional 9 600 jobs in the current financial year. We will be reviewing our marketing offices abroad with a view to see how we maximise their impact and extend their reach within regional economies.
Transformation of the economy
In trying to address the challenges of parallel economies (the first and the second) we will be looking at a numerous options of stimulating both economies, and to elevate the second economy and integrate it to the first. The development of small, medium and micro enterprises has become our top priority for job creation. In this regard we will investigate the possibility of financial and non-financial support. The department will be setting up a new directorate that will support SMMEs in line with the pronouncement of the President and the Premier. In terms of the government departments, the GSSC and government agencies broadly, we are targeting a minimum of 30% of procurement spend to SMEs.
In addition to SMME support we are planning to put aside an average of 45% of provincial procurement for Broad Based Black Economic Empowerment.
I will shortly institute an investigation on the introduction of co-operatives on the economic front to ensure that we try and spread the economic benefit more broadly amongst our people.
These targets are going to be closely monitored across the province by the provincial treasury to ensure compliance.
Integration of Development Planning
The process of rationalisation of functions within government has necessitated that development planning be combined with the economic planning function. This will assist in ensuring that economic and spatial planning is combined to ensure consistency and coherence in our development plans. In this regard we will be able to plan and implement expeditiously. This integration also provides a new platform for the department to play a proactive role in supporting local economic development, which had been located in the local government department.
Treasury
We are positioning provincial treasury improve its efficiency of allocations and effective utilisation of government resources. Over and above this responsibility, treasury will be playing a crucial role in monitoring the meeting of targets by individual departments when it comes to affirmative action obligations involving procurement.
Agencies
All agencies will be repositioned to play a role in job creation and BEE and SMME support. Their structures, management and mandate will be further consolidated to ensure requisite capacity and leadership. Their role will be monitored by a new function in the department to ensure effectiveness and accountability.
Within a short period I will be announcing the HOD, the new Head of Treasury and the new CEO for the Blue IQ Foundation.
For more information please contact: Keith Madonsela-Khoza
Cell: 082 908 7742
Issued by: Department of Finance and Economic Affairs, Gauteng Provincial Government
9 June 2004
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