Hon Chairperson, Minister, Deputy Minister, members, officials, and members of the public, the strategic plan of the Department of Public Enterprises and Budget Vote 11 are aligned with the New Growth Path, the draft National Development Plan and the recent state of the nation address by the President. The challenge is implementing and executing the various programmes of the department and measuring the outcomes as planned, which must be an efficient, competitive and responsive economic infrastructure network.
The New Growth Path will require the creative and collective effort of all sections of the South African society, and strong governance will be essential. At present, the economy does not create sufficient employment opportunities. By creating such opportunities, we will fight poverty, reduce inequalities and address rural underdevelopment.
The DA welcomed the Budget Speech of 2012, by Minister Pravin Gordhan, specifically on the expansion of infrastructure investment to support job creation, with a particular focus on unemployed youth. The DA also supports 90% of the National Planning Commission's plan, headed by Minister Trevor Manuel, but we are all aware of several weaknesses in the state's infrastructure capacity.
So, what South Africa needs is for infrastructure to be delivered on time and within budget. South African engineering and construction firms have proven to possess the necessary expertise to successfully complete large infrastructure projects. Therefore, state enterprises and the Department of Public Enterprises need to improve their planning and management of capital projects. They need to spend their budgets, and no misspending or underspending will be allowed, or they will stand the risk of losing their allocations. We as members of the Portfolio Committee on Public Enterprises will fulfil our oversight role by proactively monitoring the spending of their budgets and the roll-out of infrastructure plans.
That brings me to Transnet and its budget of R300 billion for the capital investment programme, with the focus on expanding in rail, port and pipeline infrastructure. Transnet has a solid foundation and it aims to capture identified growth opportunities over the next seven years. Transnet has spent R118 billion as capital investment in the last seven years, but plans to increase it substantially to R300 billion over the next seven years. Seventy percent of capital investment will be funded from operating cash flows, and Transnet is confident that it can raise the balance externally. The majority of the investments will be in general freight and freight rail.
The impact of infrastructure development will be felt nationwide - the seven-year capital investment well-contributed infrastructure contribution of R28,6 billion to Saldanha; R3,9 billion to Cape Town; R25,9 million to East London, Port Elizabeth and Ngqura; R38,5 billion to Durban and R49,6 billion to Richards Bay.
Although expansion and investment focus on infrastructure and exports, job creation is the spin-off that ultimately addresses poverty, skills and capacity-building. The focus must be on improving employment equity. The DA supports this. As far as ports are concerned, the most exciting long-term project is developing the former Durban International Airport site into a dig-out port. Transnet must buy the Durban International Airport site and associated land needed in order to develop a deep water mega container port.
As far as the Port of Durban is concerned, the plan is to deepen the berths to handle larger vessels and the expansion of the Pier 1 Container Terminal into Salisbury Island to increase the number of container handling for export and import purposes. As far as the Ports of Cape Town and Ngqura are concerned, the focus is on container expansion. The DA welcomes the increase in iron ore exports through the Saldanha Bay port.
Port handling infrastructure, new loops and in-port rail track, as well as more berthing capacity, will stimulate local economic development on the West Coast of South Africa, as this is an economic growth point in the DA- led Western Cape province. Future development at the Port of Saldanha includes the construction of a liquefied petroleum gas terminal and storage site, and port infrastructure for the extension of the Mossgas quay dredging works to facilitate the quay extension and dry dock facilities. The increase in demand for manganese creates opportunities for the South African mining industry. It necessitates the construction of a new manganese handling plant at the Port of Ngqura and the associated rail investment in rolling stock and infrastructure, to facilitate the increase in capacity.
The provision for a new car terminal at Port Elizabeth is welcomed by the DA for increased export of new cars. Increasing demand for fuel in the Gauteng region, coupled with the age of the existing Durban to Johannesburg pipeline, necessitates the construction of a new pipeline. The scope of the project is to build a new 555 km, 24-inch diameter trunk line from Durban to Gauteng that addresses the increased demand for fuel in the heartland of South Africa's economic region, Gauteng. Overall, completion of this project is on schedule for December 2013.
Transnet has held a series of engagements with the National Planning Commission on its infrastructure development plans. The alignment is reflected in that all Transnet strategic infrastructure developments have been adopted as part of the National Development Plan. The DA supports this focus on infrastructure development as it will contribute to opportunities for all people in what we, as the DA, envisage as an open opportunity society for all.
While I am on the topic of ports, I want to stand still for a moment at my constituency, Saldanha Bay Municipality, which will shortly become an Industrial Development Zone. There is legislation for Industrial Development Zones and published draft legislation to provide for the creation of special economic zones. Tax relief is under consideration for businesses that invest in these zones, including a reduction in corporate income tax and support for employment and training expenses.
In the Budget Speech of 2012, by Minister Gordhan, an amount of R2,3 billion has been allocated for industrial development and special economic zones. As a Member of Parliament, I now publicly invite investors and business people to come and invest in Saldanha Bay Municipality. The DA- run municipality is also in line to invest majorly in infrastructure for the next four years, as the national and provincial governments are committed to doing, as all three spheres of government are focused on development and growth in Saldanha to stimulate the economy. I must actually invite the members of the public to come and invest there. You will have a very good return on your investment. I don't know if members in the House can afford it. [Laughter.]
As far as Alexkor is concerned, it is not a success and an amount of R350 million is earmarked for transfer to Alexkor for the finalisation of obligations to the Richtersveld community joint venture. There are major problems with community trust funds in the Northern Cape, which benefited from royalties received from Alexkor and other mining companies. These trust funds are being investigated. The new state-owned mining company can only be a success if it forms partnerships with experienced mining companies. The current shortfall in electricity supply equates to three times the electricity consumed by the City of Cape Town in one year.
Die ligte brand, maar teen watter onkoste? Eskom het op 14 Junie 2011 in die Parlement erken dat twee gasturbinekragopwekkers teen groot koste beurtkrag voorkom. Daar is 'n ernstige probleem met Eskom se energievoorsieningsprogram wat die moontlikheid van kragtekorte en kragonderbrekings weer na vore kan bring. Eskom se uitvoerende beampte het hierdie moontlikheid self uitgewys toe hy dit duidelik gemaak het dat Suid- Afrika se elektrisiteitsnetwerk onder groot druk sal funksioneer tot en met 2016, wanneer die laaste van Eskom se nuwe kragsentrales voltooi sal word. (Translation of Afrikaans paragraph follows.)
[The lights are burning, but at what cost? Eskom admitted in Parliament on 14 June 2011 that load shedding is being prevented at huge cost by two gas turbine generators. There is a serious problem with Eskom's energy supply programme, which could again result in the possibility of electricity shortages and power outages. This possibility was pointed out by Eskom's executive officer himself, when he explained that South Africa's electricity network will function under great pressure up to and including 2016, when the last of Eskom's new power stations will be completed.]
I must be fair and congratulate the department for obtaining a clean audit for seven consecutive years. Thank you. [Applause.]