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SOE projects to benefit SA’s economy

30th September 2010

By: Sapa

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State-owned enterprise (SOE) infrastructure projects, such as those undertaken by Eskom and Transnet, will have positive spillover effects for South Africa's economy, Public Enterprises Minister Barbara Hogan said on Thursday.


"By aligning skills with national economic objectives, these projects will alleviate poverty and create jobs, real jobs," she said at the launch of the South African Chamber of Commerce and Industry's (Sacci) SA First Campaign.

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"We are committed to making sure that there will be benefits not only for Eskom and Transnet from these infrastructure projects."


From 1976 to 1994, investment by the public sector fell from 16% to 5% of gross domestic product.

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"The situation remained the same until 2004 when both Eskom and Transnet announced investment programmes," Hogan said.


Apartheid had caused a huge backlog in infrastructure development, as the then-government found it difficult to raise funding.


Presently, however, government had taken the lead in infrastructure investment.


"The department of public enterprises is funding a build programme to overcome the backlog in infrastructure development and we are revitalising supplier industries necessary to support this programme through the competitive supplier development programme."


Hogan said that both Eskom and Transnet had maintained institutions for providing required skills, such as learning academies.


"Both Eskom and Transnet were the major providers of apprenticeships in the past and we are going back to that."


Training the country's unemployed youth was a priority, as this would enable them to be employed in a state-owned enterprise "or elsewhere".


According to Hogan, Eskom's new projects - Medupi, Kusile and Ingula -would create 40000 direct jobs, as well as benefit the economy and the communities surrounding them.


The minister had spent nine months discussing funding models for Eskom with Treasury and other stakeholders.

"We came up with no less than 47 different trajectories," she said.


Turning to Transnet, Hogan said the freight parastatal's capital spending would reach close to R90-billion over the next five years, mainly to accommodate the planned growth in freight volumes.


"We know that Transnet's past inability to carry freight rail put constraints on SA's growth," she said.

 

 

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