"Reviewing Achievements; Looking to the Future"
The Foyer, Paul Sauer Building, Adderley Street, Cape Town, 18 February 1999
Good evening, ladies and gentlemen.
It’s a pleasure to be here today as it gives us a chance to review Intersite ’s achievements over the past few years as the Manager of the SA Rail Commuter Corporation property portfolio and to look forward to its future as the manager of the large land portfolio of the South African National Roads Agency.
The presentation that Intersite’s managing director, Jack Prentice, will give this evening is testament to the successful implementation of our policies; particularly in the areas of public/private partnerships and the use of state assets to further economic empowerment while improving the quality of life for all our people.
In our country, with its large discrepancies in wealth and access to resources, it is essential for the private sector to play an active role with government in the development of the economy and the country for all our citizens.
But for a partnership between business and government to work it must be on a win-win basis for both parties as charity is not a long-term and sustainable solution to the infrastructure needs and problems of our country.
This partnership is crucial if we are to find a solution to the crisis that faces our the public transport system.
To give you just a taste of the problem: the Moving South Africa report, which outlines a strategic vision for an integrated transport system over the next 20 years, found that 2,8 million people (13 percent of our urban population) are stranded and their numbers will grow by 28 percent (to about 3,6 million) if nothing is done between now and 2020. Add to this the 4 million commuters who are captive to one mode of transport and the gaps in our public transport system become very evident.
The reasons for this are not hard to find.
Prior to 1994, public transport, like all other areas of state activity, was geared to serve the needs of a minority elite (the private car user) and many of the policies and programmes were ideologically driven without regard for the fundamentals of economic viability and sustainability.
The rail commuter network, an asset worth billions, was neglected in favour of the interests of the driver of the private vehicle.
The legacy of the apartheid era was under-investment and dilapidated and badly maintained infrastructure.
In fact, what we inherited could not even be called a public transport system as it was fragmented service run in the absence of integrated passenger transport plans and authorities.
The challenge for my department, and indeed this government, has been to undo the legacy of the past and to align the planning and provision of transport in terms of the needs of all the citizens of this country: that is to transform this system into a customer-driven transport system that is sustainable and integrates the different modes in order to cut travelling time to a minimum, and to create a platform on which a proper passenger transport system based on inter-modalism could be developed.
On one level we had to restructure working operations to put the contractual obligations on an accountable and commercial footing.
In terms of rail commuter transport this process is finally drawing to a close after long negotiations between MetroRail, a division of Transnet that falls under the Minister of Public Enterprises, and the South African Rail Commuter Corporation, of which I am the shareholding Minister.
But on another level we also had to improve the service in terms of what the customer experienced directly (from the facilities on the stations to the quality of the seats in the trains) to encourage commuters to use the rail network.
This of course had to be done within our budget constraints. And this is where Intersite has played a significant role.
Intersite has unlocked the potential value in the property portfolio of the SARCC, while financially contributing to government and having a positive impact on the lives of the many thousands of South Africans who walk through our stations daily.
Intersite has turned the property portfolio’s latent value into an income-generating tool through utilising the property assets not earmarked for future rail expansion and integrating them into the economic mainstream through commercial development.
The majority of these commercial developments, totalling almost R800-million, were completed on a leasehold basis, thus avoiding the temptation of short-term gains while ensuring long-term recurring income for government in years to come as well as increasing the asset value of the portfolio.
In the Western Cape, Intersite has completed some 22 public-private sector partnership developments to a value of R269-million. Of the approved national projects worth R584-million, some 60% will take place in this region.
Of a total investment of some R1,3 billion on the portfolio, R480-million was capital expenditure. Of this, Intersite’s Western Cape region has invested R55-million in capital expenditure over the past five years.
Since its inception in 1992, Intersite has contributed a cumulative amount of R400 million to the income stream of the SARCC, which in turn has played a role in reducing the subsidy requirement from central government on an annual basis.
The private sector in this region is to be commended for forming partnerships with government on much-needed infrastructure projects, while also seizing the unique business opportunities which the station developments offer.
An example is the R34-million development in Mitchells Plain, when a brand new station was incorporated into a shopping complex and an innovative community trust was launched which holds R100 000 equity in the centre.
We have, in line with our objective to rehabilitate rail infrastructure, achieved our goals through a number of commuter station upgrades, from Soweto in Johannesburg to KwaMashu in KwaZulu-Natal, Bellville in Cape Town, Mabopane in Pretoria and to Park Station in Johannesburg.
Intersite is proud to be releasing 11 new SARCC sites for development proposals. In addition, Intersite is launching nine public-private sector developments totalling approximately R100-million.
These developments are taking place at Belhar, Vasco, Fish Hoek, Southfield, Stellenbosch, Crawford, Kuils River, Kenilworth, and Thornton stations.
Seven sites adjacent to national roads in the Western Cape are also being released today.
The achievements of Intersite, ladies and gentlemen, makes it fitting a fitting manager for the South African National Road’s Agency’s property portfolio to Intersite.
I am quite positive that Intersite will bring the same hard work and innovation to the National Roads Agency property portfolio, which is worth more than R135 billion nationally.
Having spent seven years building and perfecting systems and procedures and cultivating networks of contacts, it makes sense for Intersite’s expertise in the public asset management and development sector to be shared on another government portfolio and in particular one which also reports to the Minister of Transport.
This will undoubtedly contribute to achieving our objectives of integrated land use and transport planning, thereby contributing more effectively to growth and the subsequent job and business creation.
In conclusion, I would like to thank the team at Intersite for the visible contribution they have made to improving the lives of the people who use our rail system. Thank you.
Didi Moyle
PA and Media Liaison Officer to the Minister of Transport
Pretoria: (012) 309 3131 (phone) or (012) 328 3194 (fax)
Cape Town: (021) 457260 (phone) or (021) 461 6845 (fax)
email: moyle@mweb.co.za
or moyled@ndot.pwv.gov.za
(Pretoria only)
cell: 082 808 5108