TRANSPORT MINISTER, DULLAH OMAR OPENS THE BAKWENA PLATINUM HIGHWAY

Rusternburg, 7 February 2002

Launching the new Bakwena Platinum Highway the National Minister of Transport, Dullah Omar said his department is developing an infrastructure development programme dedicated to addressing infrastructure problems in the country.

Minister Omar said the use of Public Private Partnership (PPP's) like the one used to development the R8.8 Billion Platinum Highway is one such mechanism that proved very successful in addressing roads maintenance and development of infrastructure in the country.

Minister Omar added that the development of Infrastructure lays the foundation for development. "Investment in national infrastructure provides confidence in the economic, political and cultural growth of the country" He added.

The N4 Platinum Highway closes the link between the Maputo harbour in Mozambique with Walvis Bay in Namibia, creating the first high quality transcontinental route in Sub-Saharan Africa.

Through this project more that R2 Bn will be injected into the economy, and more than 3000 direct jobs will be created during the construction period.

It is also accepted that the multiplier effect of road construction that ranges between 4 and 6, will have an impact on the created jobs. When taking the lowest figure of 4, it is expected that an additional 12000 indirect and induced jobs, within the zone of influence of the project, will be created.

The Minister added that the road would lead to better utilization of road, maritime and rail transport infrastructure. "Through the project, export and shipping times are reduced with as much as ten shipping days while the distance by road between Johannesburg and Windhoek is shortened by some 500 Kilometers" Omar said.

The N4 PLATINUM HIGHWAY is one project of infrastructure provision capable of transforming citizens lives, allowing them full participation and equal opportunity in the society.

Adjudicators under the auspices of Project Finance International have awarded the project "deal of the year". It is a great honour to receive such international recognition for a project in South Africa.

IMPORTANT FACTS AND FIGURES ABOUT THE PLATINUM HIGHWAY

Black Economic Empowerment

Black empowerment is a major objective of government and the agency. Shareholding is but one of the black empowerment components. Black economic empowerment and development is entrenched within the concession contract and SMME's will receive:

20% of the value of the design contract,
15% of the value of the construction contract and
50% of the value of the operations contract.

A project of this nature will render an enormous contribution towards social upliftment and empowerment of the people in the region. The use of targeted procurement ensures the development of entrepreneurs, SMME's and the growth of affirmable business enterprises (abes).

Initiatives such as

Job creation,
Training,
Capacity building and
Skills transfer

Are entrenched in the concession contract to ensure that the quality of life of the people of the region is bettered.

Although this aspect of the concession contract will be rigorously monitored, we are confident that BPCC will surpass the targets and do us all proud.

The benefits of the project

The project is of important significance to the country, especially as

Approximately R800m will be direct foreign investment (fdi) while prominent spanish firms will for the first time enter the country.
The European investment bank has once again shown confidence in the country's toll road programme and the stable environment in which public private partnerships are promoted.
This project also realised a break-through as 50% of the equity will be offshore based signalling a vote of confidence from foreign investors in the professional manner in which the South African national roads agency handles and manages toll concessiorojects.
This project also serves as a case study for the importance of having all government role-players singing from the same song sheet.
This is the third project implemented under the umbrella of public-private partnerships and brings the total amount committed by the private sector to approximately R8,8 Billion. This is indeed a new era signalling the flourishing partnership between grnment and the private sector.

Regional

Macro-economic impact studies have shown remarkable findings relating to the introduction of the n4 platinum highway on economic activities in the region. Some of these findings are:

GDP
An analysis revealed that the project will contribute at least R2, 2 Billion per annum to the GDP of this amount, at least 61% (R1, 35 Billion) will manifest in the region itself. The sectors that will benefit the most are:

Financial and business services = 15,0%
Trade = 14,8%
Construction = 7,1%
Food = 6,4%

Personal income
The project also impact on personal income. It is estimated that the impact will amount to approximately R1, 8 Billion per annum, of which 18,7% is destined for households in the lower income group approximately 50% of the total personal impact will be within the region of the project.

Job creation
It is anticipated that close to 7000 jobs will be created within the region alone that will ultimately have a positive impact on the regional economy.

The road will help to realize the economic potential of the region by stimulating economic activities and opportunities, especially in the following sectors:

Tourism - an economic appraisal study has shown that more than 200 potential projects in the tourism industry have been identified with a potential of creating 9000 jobs
Mining - the toll highway will stimulate the development of new mining activities and diversification leading to higher export of minerals and the creation of additional jobs.
Industrial - a variety of opportunities for the establishment of livestock, automotive and food processing plants are currently being pursued which will lead to additional job creation and economic growth in the region.

Enquiries: Mike Mabasa on 083 680 7048
Info also available on www.transport.gov.za