Chair, to say that Public Enterprises is fraught with challenges is an understatement, I know. We just have to look at SAA, Alexkor and Denel, all singled out by Treasury for poor performance. Hon Minister, will court challenges and accusations that government bail-outs for SAA to the tune of R11 million, plus a further R5 billion guarantee - which are anticompetitive and have resulted in a number of commercial airlines shutting their doors - cause any drastic change in policy? Statements by Treasury that parastatals facing persistent financial difficulty will be urgently reviewed to establish sustainability would be reassuring, only no one believes that any tough decisions will actually be taken.
State-owned entities are set to spend R397 billion over the next three years on infrastructure - 43% of the money sourced from debt markets and the remainder generated internally. Now, the ACDP recognises that so much is riding on the success of our infrastructure development as South Africa attempts to aggressively create and take hold of opportunities for economic growth - as now we must.
Eskom and Transnet, the largest contributors to the borrowing requirement, account for 87% of capital expenditure by parastatals. The ongoing building of power-generation plants and new transmission lines, investment in rail, ports and pipelines, large new water transfer schemes and airport upgrades account for some of the spending. We are seeing some bold moves that carry huge risk, but we also understand that we simply must pull it off. Sentech and the SABC are also in line for large amounts to help pay for digital terrestrial television migration, some of this being preparation for the 2014 African Nations Championship.
The ACDP congratulates Safcol on the 22% improvement in sales, an operating profit of R51 million and plans to expand operations beyond South Africa and Mozambique - a great recovery from the previous year's R32 million loss. Safcol's world-class forestry stewardship and management skills, which can be shared with other African countries, also offer opportunities for entry into the forestry industry in these countries.
Eskom, we understand, is reviewing the implications of the National Energy Regulator of South Africa, Nersa, decision to grant it a lower-than- requested electricity tariff hike. The 16% increase asked for would have more than doubled the current price. The ACDP commends Nersa, who opted for an 8% increase, a decision which went some way to softening the immediate impact on users.
We note government's resolve in pursuing nuclear options, seen as a critical driver of much-needed industrialisation. This controversial energy source will, however, take time and a lot of money as safety and technology challenges rear their heads. [Time expired.]