Hon Speaker, hon President and Deputy President, hon members and members of the public, on Thursday, Mr President, you outlined an infrastructure plan that represents a bold, strategic and integrated platform to mobilise the state, private investors and the South African public behind a clearly articulated storyline of South Africa's opportunities. It is the first step towards creating a 10- to 20-year infrastructure project pipeline. Our job in government is to ensure focused, purposeful implementation.
Over the past four months, the Presidential Infrastructure Co-ordinating Commission, PICC, identified what the key challenges are to effective implementation, and what we can do about them. We drew on the infrastructure driver of the New Growth Path, the detailed work of the National Planning Commission, the import of all three spheres of government, and the needs of the private sector and communities. We took account of the lessons of the 2010 world cup infrastructure and of the growing experience in the build programmes of the Gautrain, the Medupi and Kusile power stations, the Freeway Improvement Programme, and the major airport revamps.
We identified what worked well, such as the 2010 World Cup special law to fast-track regulatory issues, and what did not work well, such as cost overruns. Above all, the lessons are to have a clear project scope, with binding timeframes and clearly identified responsibilities - who does what, by when, with what resources - and to solve problems expeditiously when they occur. We know we can do it. But we temper that confidence by acknowledging that it will be hard work, that there are challenges and that we must honestly and frankly address them.
Hon members, we recognise and will address the skills challenge. We completed an audit of scarce skills in public institutions. The challenge is particularly in engineering, project management, finance and procurement, and in technical skills such as artisans, technologists and technicians.
To address this, we developed responses such as a shared pool for utilising scarce skills across and between public entities; rapidly increasing apprenticeships and practical training, as Eskom and Transnet are doing now; in the private sector using the National Skills Accord; a skills plan setting out the human resource requirements for every infrastructure project; attracting back South Africans with high-level engineering and project management skills who are working on projects elsewhere in the world; easing immigration rules in infrastructure-linked scarce skills categories; and developing partnerships with universities and other institutions in the build environment to produce the short- and long-term skills needs of the infrastructure programme. For example, Minister Nzimande and the Department of Higher Education and Training, DHET, are launching a new R160 million programme to increase engineering capacity at the University of Johannesburg. The two new universities planned as part of the PICC infrastructure roll-out will further accelerate capacity.
We see infrastructure, however, not only as a consumer or user of skills but also as a training space, and so we will set skills and apprenticeship targets in the project specifications.
We will address the project management and regulatory delay challenges. The infrastructure programme requires co-ordinated issuing of permits and licences, environmental impact assessments and resolution of land servitudes. It requires tight co-ordination between the three spheres of government and with public entities. We will therefore place legislation before Parliament during 2012 to address this in the form of an Infrastructure Development Bill.
In addition, we seek to improve co-operative governance. The PICC includes the premiers, the metro mayors, the SA Local Government Association, Salga, and a number of Cabinet Ministers led by the President and the Deputy President. It is therefore a forum able to take decisions to unblock delays across the three spheres. We are developing focused project management systems and clear performance dashboards to identify the state of progress with build programmes to enable the three spheres to intervene early and decisively.
We acknowledge and will address the funding challenges. We need to think smarter as we plan our infrastructure programmes. Simply throwing money at a challenge will not do. At the same time as we increase spending on infrastructure as a percentage of GDP, we must get more value for money. A number of the components of the infrastructure plan have funding committed through the national Budget or the balance sheet of state-owned enterprises. The infrastructure plan, however, requires reprioritisation across government with a clear shift of spending from consumption to investment, so that we lay the basis for our long-term prosperity - a matter taken up by Minister Gordhan in the Medium-Term Budget Policy Statement, MTBPS.
The Industrial Development Corporation, IDC, and the Development Bank of Southern Africa, DBSA, working with the main state-owned enterprises and Minister Gigaba, will provide financial support within their mandate areas, creating a public-private partnership model to drive infrastructure development. The Presidential Infrastructure Summit will highlight opportunities open to the private sector. We will work with retirement funds on opportunities for long-term infrastructure investment that match their long-term pension liabilities to members. We will collaborate with international partners, including Brazil, Russia, India, China, and the Gulf Co-operation Council, GCC, countries to tap capital from sovereign wealth funds and private investors.
We acknowledge and will address the challenge of containing costs of the build programme and combating corruption. Our experience in past programmes showed high levels of collusion between contractors which drove up prices of supplies and services. We faced avoidable industrial action on some of the projects. We are therefore in discussion with the private sector and organised labour to conclude an integrity pact as part of a broader accord to address the need for competitive pricing, firm action against public and private sector corruption, and co-operative industrial relations. The competition authorities are ready to crack down on collusion and price fixing. Combating corruption will also ensure that the hard-earned monies that South Africans pay in taxes do, in fact, go to rebuilding infrastructure and supporting service delivery. And specific anticorruption measures will be identified and built into all processes.
We will ensure that the infrastructure plan spurs job creation, industrialisation and economic and social development. Jobs are our key economic goal, and infrastructure can contribute in a number of ways, such as using labour-based construction methods, creating permanent jobs in operating infrastructure, and maintaining existing and new infrastructure. Jobs are also created in the supply of components for infrastructure and, critically, jobs are created by this programme across the economy in mining, agriculture, manufacturing, the green economy, tourism and the creative sectors.
In this context, I am pleased to inform hon members that, working with Minister Oliphant, the Unemployment Insurance Fund, UIF, has committed R2 billion for a development bond issued by the IDC, which supplies funding at prime less 3% for projects with high employment absorption, bringing the total UIF commitments since 2010 to R4 billion. [Applause.] The IDC approved funding of R12,6 billion for the year as a whole, unlocking a total of R26 billion of local and foreign investment. Of the R10 billion IDC jobs programme announced in last year's state of the nation address, the projects approved to date will create 8 000 new jobs, mainly in manufacturing, agroprocessing, textiles, mining and the services sector. [Applause.]
At the start of last year, there were 13,13 million workers in South Africa. By the end of last year, there were 13,49 million workers in South Africa. However one interprets the statistics, the economy created 365 000 new jobs for the year, which is about 1 000 new jobs a day. [Applause.] A total of 179 000 jobs were created for the last three months of the year. However, our economy remains vulnerable to global economic performance and we need to increase domestic and regional demand, and infrastructure-led growth can assist to insulate us from global economic uncertainty.
We intend to include development targets in the project and tender specifications covering jobs, skills, industrialisation and local content and also small business development and greening the economy. With this infrastructure, we must get more than simply the outcomes of the build programme. Industry must invest to build a strong industrial presence in selected infrastructure supplies and use this as a platform to increase exports.
Mr President, yesterday morning the editor of the Cape Times welcomed the state of the nation address under the heading, "Local is lekker", but added that, and I quote -
The PICC has an even more important task to make sure that most, if not all, the tenders go to South African companies so that the billions of rand set aside do not leak out of the economy. Only then will the multiplier effect come into play, boosting jobs, consumption and investment and, thus, economic growth.
The selection of key projects must focus on rural development and strengthening the economic performance of the poorest provinces. As we roll out the revamped S'hamba Sonke road maintenance programmes in rural areas, we will look at ways to integrate them with nationally co-ordinated provision of water and sanitation, school-build programmes and health clinics. This will initially be done on a pilot basis in the 23 poorest rural districts.
By promoting development in the five economic nodes announced by the President in the state of the nation address, we intend to ensure that we do not rely only on growth in the two major metros. To support a dynamic small business sector and bring more South Africans into the economic mainstream, government will specify support for the small, medium and micro enterprise, SMME, role in infrastructure projects.
Mr President, you announced the new small business funding agency that will be set up this year that incorporates Khula, the SA Microfinance Apex Fund, Samaf, and the IDC's small business lending book. It will be a wholly owned subsidiary of the IDC with a distinct public identity. We plan to launch the agency in the first week of April 2012. Following an injection of funds from the IDC, as well as Treasury allocations, the entity will have over R2 billion available for lending over the next three years.
We will address the challenge to integrate what we do across government and with the private sector. President Zuma announced key strategic projects on Thursday - not a list of stand-alone activities, but a coherent integrated package. For example, the Limpopo infrastructure development project will be connected with urban planning to create the first postapartheid new city with potential for green technologies in housing, community facilities and workplaces. The Durban-Free State-Gauteng industrial and logistics corridor will not simply go through the Free State, but is planned to be a major stimulus for Free State industrial and agricultural development. The Umzimvubu Dam will be accompanied by the building of the N2 Wildcoast Highway to connect rural communities, to link farms to markets and to reduce transport times between East London and Durban by about two hours. The rail line from the Northern Cape is connected to a new private sector manganese sinter plant in the province, due to be completed by June this year.
Hon members, infrastructure can unlock Africa's consumer base of one billion people in terms of Africa's enormous reserves of oil, gas and minerals; the large pieces of agricultural land and major rivers; a climate that can drive solar energy; a very long coastline that can facilitate trade; and very high projected growth rates over the next decade.
Finally, we will address the need to build a common vision behind the infrastructure plan. Partnerships are at the centre of this programme. The President referred to four social accords concluded during 2011: on skills, basic education, local procurement and the green economy. They help with the successful implementation of the infrastructure plan. These are the real partnerships we need.
The hon Mazibuko calls for partnerships at the workplace on the one hand, but, on the other hand, lays out a programme that will simply invite us back to the age of industrial conflict and shop-floor tensions, diverting us from the real partnership-building that we need to do, a partnership around productivity, around skills, and around service delivery. [Applause.]
We have, therefore, commenced discussions with social partners on a broader accord that addresses both infrastructure and jobs, and hope to make progress during the first half of 2012. In short, we are seeking greater coherence, co-ordination and integration of our efforts, and the vision outlined in the state of the nation address provides the framework. Thank you. [Applause.]