Hon Chair, Minister Gigaba, Deputy Minister Magwanishe, Members of Parliament, ladies and gentlemen, I greet you all.
Let me start by supporting Budget Vote No 11 for the Department of Public Enterprises. This year's Budget Vote has the advantage that it draws on the wisdom of ANC policy discussions and resolutions emerging from its successful policy conference in June 2012 and the 53rd National Conference in December 2012. The two areas of focus that I have been assigned to speak on, the SA Forestry Company Ltd, Safcol, and Alexkor, need to be contextualised in the light of both conferences.
May I take a minute of your time to remind us all of where we come from as this great nation? The majority of South Africans under the humiliating apartheid regime never enjoyed the benefits they do under the current government, led by the most trusted leadership of President Jacob Zuma. [Interjections.] The apartheid legacy still shows its ugly features, for example in the co-existence of dual economies, which is characterised by world-class development in one area and the lack of development in another. These are often found in cities such as Cape Town, where there is a world- class infrastructure in suburbs and a lack of services for people in townships such as Langa, Nyanga and Khayelitsha. [Applause.] [Interjections.]
Apartheid has defined and classified people in terms of their race and often stripped them of their human rights. What remains of its devastating impact is the triple challenge of inequality, poverty and unemployment faced by the majority of South Africans. The ever present lessons that apartheid taught us are that we can never sacrifice the majority of our people only to cater for the minority. The system was simply incorrect and dehumanising to society.
The Department of Public Enterprises has demonstrated leadership and expertise in discharging a broad mandate for economic development, economic growth, infrastructure development and, most importantly, community and people development. Under the capable and most innovative leadership of Minister Malusi Gigaba, we have seen the transformation of state-owned companies such as Alexkor and Safcol.
The deed of settlement for Alexkor has been completed, with all mining activities being performed in the Pooling and Sharing Joint Venture, PSJV. This was formerly named the Alexkor Richtersveld Mining Company, which was established on 7 April 2011 after the successful transfer and cession of the land mining rights to the Richtersveld Mining Company, RMC, on 6 April 2011. All the mining operations will still be performed by mining contractors in the foreseeable future. Alexkor and RMC hold a 51% and 49% interest respectively in the PSJV.
The commencement of the Alexkor-RMC operations on 7 April presented management with a new and challenging situation, requiring the continuous adaptation of the operations. These challenges included the formation of the joint venture with the Richtersveld Mining Company; the change in management; the addition of more production units and the change in the contractual relationship with various contractors; the nonperformance of certain contractors; and, lastly, the continuous demands forced on operations by changes in environmental conditions.
There are also achievements coupled with those challenges. Alexkor has continued to contribute towards job creation and employment. The head count on 31 March 2012 was 104 employees, 66 term contractor employees and a total of 611 outsourced contractors involved in diamond production. Salaries paid to employees in the previous financial year amounted to R20,6 million. Payments to outsourced contractors amounted to R110 million. This contributes directly towards the fight against poverty, unemployment and inequality.
Alexkor continues to contribute to human resources development and a total of 168 employees and contractors received training in the previous year. Of these, 98,8% were historically disadvantaged South Africans and, of course, 1,2% were women. Another achievement is the upgrade of the town of Alexander Bay. As at 31 March 2012 an estimated amount of about R106 million had been expended in projects to upgrade the town of Alexander Bay.
The next achievement is the hostel revamping. As at 31 March 2012 more than R700 000 had been expended on the purchasing of material to upgrade single- quarters facilities to family units. This marks an important step and visible example of how state-owned companies can contribute towards the developmental objectives of government by building sustainable human settlements.
Safcol's major assets are biological assets, which are plantations and forests. The biological asset has grown from R2 billion since 2007 to R3 billion in 2012. Safcol has reported an operating profit against the R14 million losses reported during the 2011-12 financial year. Safcol has a staff complement of 1 787 employees, while its Mozambican subsidiary, Industrias Florestais de Manica, Ifloma, has 624 employees.
In the 2012-13 financial year, it was part of Safcol's turnaround plan to implement a business process re-engineering project focusing on aligning business processes to be more efficient and productive. Despite a very challenging period of restructuring, Safcol and Komatiland Forest managed to retain a level 2 broad-based black economic empowerment grading.
During 2011-12 employees and external individuals benefited from the bursaries offered by the company. Safcol awarded 22 bursaries for the 2012- 13 financial year, a number that we feel can be increased significantly in line with the policy intentions of government, such as the New Growth Path, the Industrial Policy Action Plan and the National Development Plan.
The fields of study in which Safcol offers bursaries include finance, human resources, planning, environmental studies, corporate services, marketing, information and communications technology, engineering/artisans, processing, forestry and research.
Adult Basic Education and Training, Abet, is continuing at business units and new learners have registered. Some 240 employed learners are enrolled in this system. Safcol's community Abet programme, known as Thuto Adult Centre, caters for 85 learners and runs a programme at the Nelshoogte, Belfast and Ngome plantations. The company continues to make significant contributions to socio-economic and enterprise development initiatives in areas where the company conducts its business initiatives and operations. A budget of R8,1 million was spent in this regard since 2006, when 41 infrastructural projects were completed and handed over to the communities.
Umklamo lomuhle kakhulu ngumklamo lapho lenkampani yakhe khona lihholo lelikhulu kanye nelidladla, nome likhishi, Ekucathuzeni Primary School eBarberton. Ngulapho ngivela khona-ke mine, eMpumalanga. Ngulapho-ke lapho Indvuna Malusi Gigaba ivule khona, ngalokusemtsetfweni sikhungo lesikhulu lesiletse injabulu kubantfwana balowo mango, indzawo lekahle yekudla nekudlala. (Translation of Siswati paragraph follows.)
[A good project was the one where this company built a big hall and a kitchen at Ekuchathuzeni Primary School in Barberton. That is where I come from, in Mpumalanga. It is where Minister Malusi Gigaba officially opened a big institution that brings joy to the people of that area, a good place for dining and entertainment.]
I want to commend Safcol for the good work they do in ensuring that our people in rural areas are well catered for. Viva Safcol!
In conclusion, as the state-owned companies Alexkor and Safcol continue to contribute positively to the policy objectives of government, such as rural development, economic development, employment creation and human resources development, they demonstrate that through state intervention, the lives of ordinary South Africans can be changed for the better. Poverty and inequality will be a thing of the past. This can only be achieved under the resolute leadership of the ANC government. The ANC supports the Budget Vote.