National Infrastructure Plan: briefing by Presidential Infrastructure Coordinating Commission, with input from Department of Tourism; Third Term Committee Programme: discussion

Tourism

11 June 2013
Chairperson: Mr D Gumede (ANC)
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Meeting Summary

The Presidential Infrastructure Coordinating Commission (PICC) briefed the Committee on the National Infrastructure Plan. The PICC was considered one of the most important structures for infrastructure development in South Africa. The President had established the PICC with a view of fast-tracking infrastructure development. The PICC integrated and coordinated infrastructure projects. The intention was to use infrastructure as a springboard for economic development as well as to mobilise resources internally and to increase South Africa’s tax base. Departments identified infrastructure projects to which National Treasury made allocations. The PICC did not fund projects. The Committee was given a breakdown of eighteen Strategic Integrated Projects (SIPs). These SIPs were categorised as either catalytic, as enabling socio-economic development or cross cutting. The SIPs covered social and economic infrastructure across all nine provinces with emphasis on lagging regions. The eighteen SIPs comprised of five geographically focussed SIPs, three spatial SIPs, three energy SIPs, three social infrastructure SIPs, two knowledge SIPs, one regional integration SIP and one water and sanitation SIP.  Specifics and detail on each SIP was provided. Special mention was made of SIP 11: Agri-logistics and Rural Infrastructure in that it could cater for tourism by way of rural development. Rural tourism infrastructure was covered in SIP 11. The NDT needed to feed information into SIP 11.In order to achieve what was outlined in the SIPs an enabling environment was needed. Some challenges identified were poor planning at institutional level, slow approval of projects, and the late start of projects, high costs and monopoly pricing and poor quality of execution. In response to some of the challenges identified actions were taken. There was a programme to coordinate improvement in project related skills, with project management and engineering skills within the state. National, provincial and local structures were aligned. Investment plans were also aligned with funding allocations. There was furthermore long-term support for long term projects, especially regional projects. Central to projects was job creation and industrialisation. The issue of shortage of skills also needed to be addressed. Training and development was taking place.

The National Department of Tourism was also given a brief opportunity to explain how tourism benefits could be accessed via specific SIPs. SIP 1 related to the unlocking of mineral resources with the Waterberg acting as a catalyst. The area was a key destination in the Limpopo Province and domestic tourism was an avenue which needed to be exploited further. SIP 2 which was the Durban-Free State-Gauteng logistics and industrial corridor was also a strong tourist destination. There was a road that needed infrastructural upgrade but work on it was on the books. On SIP 3 the building of a new dam at Mzimvubu included a section for recreational purposes. It was an opportunity for tourism given that lodges etc could be built. SIP 4 looked at unlocking economic opportunities in the North West Province. From a tourism point of view there was a planned upgrade of roads, rail and air to take place in the North West.  SIP 6 aimed to develop capacity of 23 district municipalities which was also part of the Rural Tourism Development Strategy. The SKA and Meerkat telescopes had huge potential for tourism and infrastructure needed to be developed. The NDT was working towards alignment and integration with the PICC. There was a need to prioritise and identify which NDT projects fitted in with SIPs.

Members felt that in order to ensure that tourism interests were included in SIPs, a tourism body needed to sit on the PICC Technical Task Team. In addition, they asked what authority the PICC had and why the SIPs had not established manufacturing sectors and Small Medium Micro-sized Enterprises in rural areas to keep people from moving to urban areas and. Concern was also expressed about the lack of implementation and coordination, skills development and where the budget for the huge infrastructure development plan was to come from.

The Committee also briefly discussed a skeletal Draft Third Term Committee Programme.
 

Meeting report

Chairperson’s opening remarks
The Chairperson said that the Committee looked towards the National Development Plan (NDP. The Committee looked towards the Presidential Infrastructure Coordinating Commission’s to promote tourism growth, provide access to new markets and also to unveil sights of historical value. Were there structures in place to identify opportunities for tourism? Did each project make provision for tourism?

Presidential Infrastructure Coordinating Commission (PICC)
The PICC briefed the Committee on the country’s National Infrastructure Plan. The briefing was undertaken by Ms Kailash Bhana PICC and Ms Pumela Salela Chief Director: Economic Policy Branch,National Department of Economic Development.

Ms Bhana explained the organisation’ mandate and gave a breakdown of its structure. The PICC was considered one of the most important structures for infrastructure development in South Africa. The President had established the PICC with a view of fast-tracking infrastructure development. The PICC integrated and coordinated infrastructure projects. Its work was not only in the short term but also the long term. The intention was to use infrastructure as a springboard for economic development as well as to mobilise resources internally and to increase South Africa’s tax base. Departments identified infrastructure projects to which National Treasury made allocations. The PICC did not fund projects. The PICC monitored large infrastructure projects. If projects were huge the PICC would assist departments with their applications to National Treasury for funding.

Ms Bhana noted that a spatial mapping exercise was undertaken to determine key gaps and opportunities. It looked at existing infrastructure and required infrastructure. National, provincial and local maps were developed.

The Committee was given a very brief overview of 18 Strategic Integrated Projects (SIPs). These SIPs were categorised as either catalytic, as enabling socio-economic development or cross cutting.
The Committee was shown maps for illustrative purposes. For example there were maps which illustrated population densities. The trend in South Africa was a migration of people from rural to urban areas. This placed a strain on bulk infrastructure like water, sanitation and electricity in urban areas There were also maps which showed the future rail requirements for South Africa, what South Africa’s future power generation capabilities looked like and also the lifespan of roads in South Africa was.

Ms Salela elaborated further on the 18 SIPs. The SIPs were developed to integrate more than 150 of the individual infrastructure plans into a coherent package. The SIPs covered social and economic infrastructure across all nine provinces with emphasis on lagging regions. The eighteen SIPs comprised of five geographically focussed SIPs, three spatial SIPs, three energy SIPs, three social infrastructure SIPs, two knowledge SIPs, one regional integration SIP and one water and sanitation SIP. The Committee was provided with a comprehensive breakdown of each of the eighteen SIPs with specifics and detail on each. Special mention was made of SIP 11: Agri-logistics and Rural Infrastructure in that it could cater for tourism by way of rural development. Rural tourism infrastructure was covered in SIP 11. The NDT needed to feed information into SIP 11.

Ms Salela emphasised that in order to achieve what was outlined in the SIPs an enabling environment was needed. For example in construction the supply and competition bottlenecks in steel, cement, wood, coal, bitumen, as well as machinery and equipment had to be addressed.    

The aim was to improve performance on infrastructure. Some challenges identified were poor planning at institutional level, slow approval of projects, late start of projects, high costs, monopoly pricing and poor quality of execution. In response to some of the challenges identified actions were taken. There was a programme to coordinate improvement in project related skills, with project management and engineering skills within the state. National, provincial and local structures were aligned. Investment plans were also aligned with funding allocations. There was furthermore long-term support for long term projects, especially regional projects. Central to projects was job creation and industrialisation. The issue of shortage of skills also needed to be addressed. Training and development was taking place. Persons were being encouraged to study engineering. Monitoring of actual construction across South Africa was taking place.

The Infrastructure Plan was a bold effort to transform the economy by laying the basis for growth and jobs.

The Chairperson provided the NDT with an opportunity to make an input regarding the briefing given.

Ms Beulah Mosupye Chief Director: Domestic Tourism, NDT, said that the Department had interacted with the Department of Economic Development in terms of where tourism slotted in terms of the SIPs. Special focus was on those SIPs which could accommodate tourism. SIP 1 related to the unlocking of mineral resources with the Waterberg acting as a catalyst. The area was a key destination in the Limpopo Province and domestic tourism was an avenue which needed to be exploited further. SIP 2 which was the Durban-Free State-Gauteng logistics and industrial corridor was also a strong tourist destination. There was a road that needed infrastructural upgrade but work on it was on the books. On SIP 3 the building of a new dam at Mzimvubu included a section for recreational purposes. It was an opportunity for tourism given that lodges etc could be built. SIP 4 looked at unlocking economic opportunities in the North West Province. From a tourism point of view there was a planned upgrade of roads, rail and air to take place.  SIP 6 aimed to develop capacity of 23 district municipalities which was also part of the Rural Tourism Development Strategy. The Square Kilometre Array (SKA) and Meerkat telescopes had huge potential for tourism and infrastructure needed to be developed. The NDT was working towards alignment and integration with the PICC. There was a need to prioritise and identify which projects fitted in with SIPs.

The Chairperson stressed that when infrastructure was built the infrastructure should be revenue generating.

Discussion
Mr S Farrow (DA) referred to page 6 of the briefing document where it was stated that South Africa would continue to use coal as a source of energy even though there was support for a green economy. It seemed to be a contradiction. On page 7 a road network map was shown, he understood the portion in green to be saying that 90% of the roads in South Africa had a lifespan of less than ten years. The Eastern Cape was not shaded in green so did it mean that the province had roads that would last well over ten years. He begged to differ and complained that the roads in the Eastern Cape were in a shockingly bad condition. Why was the National Agriculture Marketing Council (NAMC) on the PICC Technical Task Team? How would the NAMC be looking out for the interests of tourism. A tourism body needed to be on the PICC Technical Task Team. In light of the bureaucracy of departments he asked to what extent the PICC had the authority to dictate its projects to municipalities. The PICC should not be stone walled. There should be a coordination process in place. What authority did the PICC have in this regard? As legislators the Committee could perhaps assist the PICC to be given the authority that it needed. 

Ms Bhana said that coal as a source of fuel for power would still to be used. One had to be realistic. It was a graded approach and phased approach. On the issue of road mapping, the PICC relied on data provided by Passenger Rail Agency of South Africa (PRASA). The map in question showed that roads in green had a lifespan of ten or more years. There were technical considerations on how assessments were reached. Furthermore, she explained that the NAMC had a coordinating function and coordinated the work of the entire SIP. The NAMCs work might be agriculture related but it did not stop it from doing other work. There were shared responsibilities and a broad approach was followed. 

Mr R Shah (DA) referred to page 5 of the briefing document which spoke about the exodus of people from rural areas to urban areas. Hence there was increased urbanisation. On page 12 the Spatial SIP No 11: Agri-logistics and Rural Infrastructure was taking mitigating action by way of improving investment in infrastructure that supported the expansion of agricultural production and employment, small scale farming and rural development. The NDT spoke about coordination on SIP 11. Did the PICC identify rural tourism infrastructure projects already? Why was no provision made for a manufacturing sector? What about Small Medium Micro-sized Enterprises (SMMEs). It would help to stem the flow of people from rural to urban areas. What were the timeframes for the rollout of programmes?

Ms Bhana explained that the migration of persons from rural areas to urban areas was even happening internationally. People were moving not only for jobs but also for a change in the quality of their lives. It was an international phenomenon. Rural development was nevertheless taking place.
The fact that there were no manufacturing plants and SMMEs did not preclude such activities from taking place. The answer to the question as to whether adequate technical skills were present was both yes and no. Technical capacity was harnessed from state owned enterprises. However skills that would be needed in the future were identified. Timeframes and targets were specific to projects.

Ms M Njobe (COPE) referred to SIP 11 and said that tourism cut across all areas and needed water, sanitation, power and roads etc. She asked why the emphasis on rail infrastructure related to the transport of goods. What about infrastructure for passenger rail? How was co-ordination between the PICC and provinces to take place? The budget votes for departments’ programmes had been approved already. How would the PICC to impact on those programmes? She asked whether the PICC’s programmes fit in with the NDT or was it vice versa. How much authority did the PICC have to dictate to a department to change its programmes? Even if the PICC had a 20 year programme experience showed that 20 years was a short time. She suggested that 50 year programmes were better. Lastly, she pointed out that the briefing spoke on skills development in a general way. The Committee needed specific information on what was done. There should be real practical planning for skills development.

Ms Bhana said that one current project delivered was the Integrated Bus Rapid Transport System in Cape Town. As far as giving the PICC more clout, she noted that the National Infrastructure Development Bill fast tracked integrated infrastructure development and provided more clout. The Bill had gone out for comment and was currently with the State Law Advisers Office. The PICC was not a funding conduit. Departments already had budgets. Where projects were of strategic importance to South Africa the PICC would support it and if necessary would support a request for National Treasury to provide additional funding.  In this was where the PICC had influence. For example in the Free State, the Department of Health had received additional funds with the help of the PICC. On the issue of implementation, the construction update provided to Cabinet on a quarterly basis was tracked by the PICC Technical Task Team. There were different levels of tracking different projects. Where the technical task team identified obstacles to infrastructure projects the PICC could act as political champions with influence to lessen delays. Finally, she addressed the question of passenger rail and said that the issue was not about the type of rail. It was about rail infrastructure which could include passenger rail.

Ms Mosupye answered that the NDT had taken the decision to approach the PICC in as far as the question as to who approached who. The Committee could rest assured that government used all government agencies to uplift tourism. On agri-tourism SIP11, it was regarded as a niche and was dealt with in that manner. The NDT had a framework to deal with niches.  There was a list of projects but the NDT was prioritising what should be done over the next 5-10 years.
Projects were incorporated from a PICC perspective.

Mr L Khorai (ANC) referred to the Durban-Free State infrastructure development taking place on the R74 road and asked what measures could be put in place to stimulate tourism. He emphasised that implementation was important. The Committee wished to see results. He asked what happened after the 2010 FIFA World Cup. All government departments were so well coordinated in preparation for that tournament. Why could there not be similar coordination now.

Mr F Bhengu (ANC) appreciated the coordination between the PICC and the NDT but implementation was of utmost importance. He was concerned where the budget for the infrastructure development was going to come from. He asked how monitoring and evaluation related to the PICC. Tourism encompassed farming activities. Port St Johns had two tea plantations which tourists liked to visit. The area of Port St Johns was a key area for tourism but the briefing had not mentioned it. Port St Johns should be the centre of tourism as it was part of the Wild Coast. If the N2 national road was to be developed how was it going to positively affect Port St Johns. Port St John had at one point in time had an active military base.
He was concerned about the airlift infrastructural development that was planned for the North West Province. The infrastructure in the North West had been in place and had been functional. What happened? He pointed out that in some instances Environmental Impact Assessments (EIA) tend to delay infrastructure developments.

Ms Bhana addressed the question on monitoring and evaluation and said that a report was sent to Cabinet on a quarterly basis. Cabinet would make suggestions which would be forwarded to the President’s Council.

Ms V Bam-Mugwanya (ANC) was also concerned about implementation. She asked which of the PICC’s offices identified problem areas. How did the PICC coordinate its functions with municipalities? Yes there were great plans and policies in place but no implementation was taking place. Umtata looked like a pig sty and nothing was happening in Port St Johns.

Ms Bhana said that different agencies were responsible for implementation.

The Chairperson said that the issues raised by members would be incorporated in the Committee Budget Review and Recommendation Report (BRRR).

Mr Shah pointed out that all the SIPs required special skills to implement. Was research and development on skills taking place in order to identify which skills were needed?

The Chairperson said that by 2014 there should be a financial plan for infrastructure projects. Where were the billions of rands needed going to come from.

Third Term Committee Programme
Mr Jerry Boltina Committee Secretary briefly took the Committee through a skeleton draft of the Third Term Committee Programme. He identified possible dates for meetings and other Committee activities.

Ms R Lesoma (ANC) said that those drafting the Committee Programme should take heed of members responsibilities attached to preparations for the upcoming elections. She added that the next meeting with the South African Local Government Association (SALGA) should not be with technocrats but with SALGA leadership.

Mr Khorai suggested that a debate on tourism should be held in the House.

Ms Njobe asked that at the Committee’s next tourism summit in September 2013, persons who had made submissions on the Tourism Bill should be invited. She asked when the Committee would be looking at the Annual Report of the NDT.

The Chairperson responded that the Annual Report of the NDT would be dealt with in September/October 2013.

Mr Bhengu proposed that pressure be put on Mr C Frolick (ANC), House Chairperson: Committee, Oversight & ICT, to approve the provincial oversight visits to the Free State and KwaZulu-Natal Provinces scheduled for July and August 2013 respectively.

Ms X Makasi (ANC) felt that the Western Cape was always overlooked for oversight visits. She suggested that an oversight to the Western Cape should be added to the Programme.

Ms Njobe agreed that the Western Cape should also be put on the Committee Programme for oversight.

Ms Lesoma formally proposed that the Western Cape be added to the Committee Programme for oversight.

The Chairperson was concerned as to where the Western Cape would be slotted in on the Committee Programme.

Mr Bhengu seconded Ms Lesoma’s suggestion.

The Committee agreed that oversight visits would be done in the Western Cape, Free State and Kwazulu-Natal.

The meeting was adjourned.
 

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