PARLIAMENTARY MEDIA BRIEFING WEEK
12 FEBRUARY 1998
Good morning ladies and gentlemen. At my briefing after the opening of Parliament last year, I invited the media to hold my department accountable to our Business Plan for 1997/98. In front of you is the progress report on the targets of the Business Plan as contained in the performance agreement between my Director General Ketso Gordhan and myself.
As you can see we have made progress in all areas, even where we have not quite reached our targets. Three areas to take note of are:
1. The privatisation of the Airports Company South Africa. As you know six bidders were shortlisted to buy a 20 percent stake in ACSA as a strategic equity partner. Milan has withdrawn after it successfully bid for 30 airports in Argentina last month while Montreal and Frankfurt have decided to combine their bids. Final bids will be submitted in mid-March and we expect the successful bidder will be announced, on schedule, at the end of that month. Certain amendments to the Act will need to be passed in the current Parliament to facilitate the sale.
2. The Moving South Africa project, which maps out a 20-year strategic plan for transport in this country, is currently in Phase II and we expect the report to be complete in August this year. This innovative and exciting strategy exercise is a R20 million investment by my Department in the future of the transport sector and the role it can play in making our economy increasingly competitive globally.
3. I don't think that many South Africans were unaware of our road safety campaign ARRIVE ALIVE over the December holidays. It is still too early to count the number of lives saved in the campaign as the figures need to be verified through Central Statistics. I have released updated statistics today that wrap up this stage of the campaign (it ended on 31 January). Besides almost the million-and-a-half prosecutions that resulted from our increased law enforcement activity, the greatest success of the campaign was that we forged national, provincial and local authority co-operation for the first time in the road traffic fraternity.
It is this spirit of co-operation that we will take forward into the next phase of ARRIVE ALIVE where we plan to make road safety campaigns an integrated and on-going part of road traffic management.
Our Business Plan for the 1998/9 financial year will be released next month and is a public document, so will be made available to you all.
For the purpose of this briefing I would like to highlight two major areas of activity:
RESTRUCTURING OF THE DEPARTMENT OF TRANSPORT and JOB CREATION AND EMPOWERMENT.
I am not sure how many of you are aware of the restructuring that is taking place in the Department of Transport. In line with our policy document, the White Paper on National Transport Policy, we are moving away from being an operator and provider of transport services to a regulator and policy-making organisation.
In the department we have identified four areas of activity which have a defined set of customers with the mechanisms for introducing user charges and which can be run more efficiently commercially, operating at arm's length from government in an agency.
The four agencies will provide services currently done by the department and effectively subsidised by the state. Government will retain policy and regulatory control of all four agencies, which will be funded through user charges to the industries they serve.
The three agencies that will be established on 1 April this year are:
- The SA National Roads Agency (SANRA); - The South African Maritime Safety Authority; - Cross Border Transport Agency for the issuing of cross-border permits; - and in October this year, we will open a Civil Aviation agency.
They will also reduce the DoT staff by almost 75 percent - from over 1066 posts as of 1 April 1998 to 262 people by 2 October this year. Approximately 401 current members of staff will go to the agencies while 260 will take voluntary severance packages, go on pension or be redeployed in the public service or private sector.
We expect that by 1 April 1999 to have 220 people working in a new and very different national Department of Transport, whose core business will be policy and promotion, and safety and regulation in order to develop integrated and competitive transport services in this country.
The introduction of these agencies will also save government more than R20 million a year as 80 percent of the current jobs in the department will have been effectively scrapped and off the public pay roll.
The establishment of the first three agencies has been approved by Cabinet and the legislation is currently going through Parliament. The legislation for the Civil Aviation has been finalised and will go to Cabinet in March and I am confident that it will open as scheduled on 1 October.
All changes to the DoT are being made in the context of our commitment to affirmative action and transformation. When I became Minister of Transport in 1994 there were only white men in management positions, today we now have 21% women and 22% black people in management.
This commitment is also found in the parastatals that report to Transport. The Airports Company has 40% black senior management, the SA Rail Commuter Corporation has 38% and the Air Traffic Navigation Service has 20%. We are confident to achieving the Black Management Forum's affirmative action target of 30% by the year 2000.
Our commitment to the RDP and Gear is incorporated in all our parastatals and our projects. We consistently encourage strategies that will promote empowerment, growth and development in the economy.
Because of limited time, I will only outline as an example the Chief Directorate of Roads to show how my department, in partnership with the private sector, is using contracts to create jobs and empowerment opportunities for previously disadvantaged people.
The N: toll road to Warmbaths (which the Deputy President opened last year) is a good example of participation by the private sector with government in job creation. Private funding of R650 million was used for the construction of the 122 kilometers of road.
Like most of the contracts we award, the tender stipulated that 121/2% of the contract's value - that is a minimum of R50 million - was spent on empowerment through SMMEs, training and job creation. The record of this project in terms of empowerment is impressive:
- small businesses and subcontractor were awarded the opportunity to borrow money at the same rate as large corporate companies
- 190 people were trained and supported to become fully-fledged owner-operators of plant, able to continue their business after the completion of the project
- approximately 800 people within the immediate vicinity of the project were directly employed by the contractor
- orders and subcontracts to the value of R61,43 million were awarded to 131 emerging enterprises
- an accredited civil engineering training centre was established and 1,982 training certificates were awarded
- 108 community members and 408 subcontractors were given training ranging from basic literacy to on-site vocational training in general construction practices and foreman skills
- training in business practices and the support given to SMMEs led to the creation of 59 SMMEs and about R54,3 million being ploughed back into the provincial economy.
The Chief Directorate of Roads currently has three major Build Operate and Transfer road projects valued at more than R5 billion in the planning and construction stages and which will upgrade or extend the national road network by 1,300kms.
Using conservative estimates that every R1 billion of construction gives rise to 42,100 jobs, we expect these three projects to provide 210,500 jobs over the next eight years. 39,500 of these jobs will be direct employment over the construction period, while 81 percent of the work (171,000 jobs) will be in indirect jobs and induced jobs in related industries which are more sustainable in the long term. These projects are the:
- N4 - MAPUTO CORRIDOR DEVELOPMENT: This R2 billion toll road project between Witbank and Maputo (N4) is the first cross-border project in the region and one of only a few in the world. The contract was signed In May 1997 and financial closure was on 12 December 1997. Construction will start next month. We conservatively estimate that between 40,000 and 60,000 jobs will created in the corridor development.
- N3 - CEDARA TO HEIDELBERG TOLL ROAD: Four bids were received to tender a portions of the national road between Johannesburg and Durban that needs to be constructed, reconstructed or rehabilitated. The preferred bidder for the estimated R1,5 billion project will be announced in June 1998.
- N4 - PLATINUM TOLL ROAD: This new project, from Pretoria via Rustenburg to the Botswana border, will provide a cross-Southern Africa road from the west coast (Walvis Bay in Namibia) to the east coast (Maputo in Mozambique). Three consortia have been pre-qualified to tender for the estimated R1,5 billion project and the preferred bidder will be announced towards the end of the year.
Roads also contributes to both the RDP and Gear with on-site training of consulting engineers, civil contractors and the use of construction services.
On the former, we have a dedicated programme of appointing previously disadvantaged and for emerging black companies on their own or in joint ventures with larger established firms. The focus is on fair distribution of work and the development of skills. The total cost of consulting engineering's services is R120 million and more than R300 million since 1994.
The development of SMMEs, optimisation of labour and training are now part of road construction and maintenance. Currently more than 30% of the work is targeted towards SMMEs with a value of R150 million. The labour content has increased from a previous 12% to 18%.
Training and the development of skills is provided for in every contract and is shared by the department and the contractors. Over the period January 1995 to date 8000 people have been trained. This is in addition to the literacy classes that we have run with huge success of five recent projects. The reasons are obvious - for any job advancement in the construction industry the ability to read a tape measure or a drawing is vital, and these classes have opened opportunities to many workers.
This short briefing will give you an idea of how challenging 1998 will be for my Department. Not are we rightsizing our organisation but we are fundamentally transforming the work we do and the role we play in this country.
We have finally come to the moment of action after three years of carefully policy review and planning, and look forward to our new role and the challenges we face in moving South Africa into the next millennium.