Hon Chair, I threw enough stones in the 1980s. So, I do not have time for stones! [Interjections.]
Chairperson, hon Ministers Patel and Davies, hon Deputy Ministers present, members of this august House, comrades and friends, it is a great pleasure to be back and to talk to you once again.
I would like to say that in our Cabinet we have a standing item that deals with the payment of service providers within 30 days. MEC Nkomfe tables that report frequently. I know that the President expects Ministers to do the same at the national level. So, I am not sure if what the member is talking about is history or current practice.
The strategic role of the Gauteng economy in the economic landscape of South Africa cannot be overemphasised. We know very well that we carry a heavy responsibility on behalf of the country. So, if Gauteng does not pull its weight in ensuring that we grow the economy and create jobs, the rest of the country will not pull effectively.
For this reason the executive council has approved a number of strategies, such as the information and communications technology strategy, the green economy strategy, the freight and logistics strategy, and the youth and employment strategy. Because of time, I will not delve into these too deeply. I just want to say that for these strategies to be implemented, we need state capacity capable of ensuring that when we talk to private sector companies, abroad and locally, we have men and women who have the requisite skills to engage with them. Some of these companies are very big multinationals seeking investment opportunities and locations in South Africa. Therefore we are realigning the Gauteng Economic Development Agency, Geda, and Blue IQ Investment Holdings (Pty) Ltd so that they become one agency. That process has already started. From 1 June 2012, there will be one agency, called the Gauteng Growth and Development Agency, to ensure that the strategies I have referred to are implemented.
The ICT strategy is very important and at the economic centre of the province. We are working with the DTI in declaring the Gauteng Smart City an SEZ. We have done work with Dubai Holding to make sure that we crowd in the right investors. The estimated investment value from the Gauteng Smart City alone is about R20 billion. We are very excited that, once the SEZ status has been clarified, we should be in the position to make sure that the Smart City initiative is implemented.
The Smart City initiative is also linked to the Gauteng Innovation Hub, which is located next to the University of Pretoria and next to the Council for Scientific and Industrial Research. We are working with the national Minister of Science and Technology to make sure there is a science agenda and to ensure that young people participate in mobile technology by participating in the development of applications for it. So, the role of the Innovation Hub and working with the different science communities is embedded in the work we do. Both Smart City and the Innovation Hub are going to help us drive the agenda in this area.
The second area I want to talk about is the green economy. I was encouraged by President Obama who, when tabling his state of the union address in Washington at the beginning of the year, said that American companies with manufacturing capacity in the US would be incentivised. With the localisation of the Preferential Procurement Policy Framework Act, which has been amended, government is trying to do that. What will be central to this, I think, is that when hon members do their oversight work, they must ask those who are in government - government officials - whether they are buying locally manufactured goods or whether they are still supporting those who masquerade as manufacturers by simply assembling things from China and making sure that they get money.
We need to make every attempt to ensure that localisation is supported, not only going for solar geysers but also making sure that those solar geysers are manufactured here. We know there are companies in Springs - Kwikot and many others in the province - that have the capacity to produce solar geysers. I'm told that Kwikot can produce about five solar geysers every three minutes. We need to look into the kinds of companies that are operating here. Also from the renewable energy point of view, we need to make sure that we relieve the grid of the challenges. We need to ensure that those processes are streamlined and investors are not frustrated unnecessarily. Some of these issues were raised by the hon Winde when he spoke earlier.
It is also important to say that, in respect of the green economy and many other things, we procure in the province. The Gauteng budget is R67 billion or so. Close to R40 billion of that is spent on goods and services, apart from personnel. We went to the executive council and then tabled what we called a "strategic procurement strategy". This simply asks: When you buy school textbooks, where do you buy them? Where are they manufactured? If you buy iPads instead of buying textbooks, who made those iPads?
I am happy to announce to the House that last year we embarked on the very laborious process of talking to investors all over the world. Some of them are in the process of finding sites or premises for their manufacturing operations in Gauteng. So, the strategic procurement agenda that Gauteng has approved is indeed being given life by the investors we spoke to when we were travelling all over the world.
It is also important to note what the national government has announced in regard to the infrastructure programme. We hope those things will also be implemented according to the local procurement strategy. After all, we have bus manufacturing companies, for example. Some of them are located in Gauteng; some are elsewhere in the country. We want these ideas to be translated into reality. Regarding the recapitalisation of the railway industry's rolling stock, again, we have Union Carriage & Wagon and many others located in the province. We are hoping these companies will be given preference because they are operating locally. We have to give effect to our ideas.
Regarding foreign direct investment, we embark on a process of travelling overseas to talk to investors from time to time. We are very encouraged that investors and companies in many parts of the world, including Europe, want to be located in South Africa.
What is going to be key going forward is trying to identify niche markets. I think the national Ministers will be able to help us. A niche market must be identified for each province, because we all talk to more or less the same investors or the same sectors. I think we need to find a way of making sure that each province has a particular niche market. We all talk about ICT, we all talk about the green economy, we all talk about mineral beneficiation, but which province is strategically placed for which economic activity? On that basis we should be in a position to make sure that the country benefits. We compete constructively, but without necessarily achieving the objectives that the country has set for itself.
We also have the youth employment strategy, which has a number of pillars. One of them is a youth placement programme, for which the DTI has given us money. We place young people in a particular company. After three months the company is compensated for x and y and z and q, and after six months the same happens. National Treasury and the DTI are working on a pilot of that programme. We are hoping that, based on the lessons learnt, we will be in a position to roll it out throughout the province.
We are also focusing on young entrepreneurs. Not only have we been indentifying young entrepreneurs through a programme called Youth and Graduate Entrepreneurship, or Y-Age, but we have signed a memorandum of understanding with the Consumer Goods Council of South Africa. Companies like Pick 'n Pay, Shoprite and Edgars are members of those goods councils. So, these young entrepreneurs are linked directly to the market. This is good because one of the challenges that young entrepreneurs are faced with is a lack of access to the market. They may have products, the things they manufacture, but the market is still dominated by those who are part of the process.
Before I conclude - Chair, I know I have one minute and forty-nine seconds left - I want to talk about two issues. Regarding mineral beneficiation, the Ministers know that we are progressing well. We are about to appoint a company to construct the Jewellery Manufacturing Precinct, JMP, at the airport. However, at the centre of this is the gold loan scheme. We are currently busy playing around with the idea of what is best. There is a platinum loan scheme, which is led by the private sector. However, we still seem to have challenges with the gold loan scheme. I am really encouraged by the DTI officials we are working with. We are trying to look at a number of interventions, but we have got to decide because everything relating to the JMP depends on this gold loan scheme.
Freight and logistics are central to the Gauteng economy. Whether goods arrive in KwaZulu-Natal, the Western Cape or the Eastern Cape, they are largely destined for the Gauteng market. How do we make sure that the province is linked to the rest of the country? That is the work we are doing at a bilateral level with the other MECs, and with the support of Ministers at the national level this is going to work.
Lastly, concerning skills, no economy can grow without investment in skills. We have indentified particular skills: jewellery, ICT, foundry, tooling, aerospace and aviation. Concerning tooling, we have a programme which the DTI is supporting. As we speak, they and members of the private sector are travelling overseas to make sure that we improve in that regard. We are working with the FET colleges and the national Minister of Higher Education and Training to improve the work that we are doing with FET colleges and with implementing the approved Gauteng Master Skills Plan. [Applause.]