Hon Speaker, hon President, hon Deputy President and hon members, I know that I'm literally standing between the hon members and their Valentines commitments. So, I shall waste no time.
The hon President has already outlined what was an extensive and very visionary state of the nation address, beckoning us to do more together and united in our diversity to advance our historic mission of total emancipation and construct a national democratic society with a high rate of growth and shared wealth.
Never has a vision been so eloquently articulated through concrete projects as in what the President outlined in such a comprehensive fashion and with such admirable thoroughness such that words alone, no matter how beautiful, would seem wholly inadequate.
The central theme of the President's message was that we need to act urgently and concretely to get South Africa working, growing and moving. The vision advanced by the President beckons us to pursue a growth- enhancing economic response path that places at its core infrastructure development and that deals directly with structurally entrenched industrial weaknesses, amongst which is investment in social and economic infrastructure.
The developmental state paradigm has no space for fatalism, but encourages pragmatic creative policy thinking which takes into account the strategic focus of the state, the institutional architecture, the organisation of the state, technical capacity and the political will to take hard decisions that powerful actors or interest lobby groups would otherwise evade.
The state of the nation address is predicated on the government's willingness to correct capital market failures through infrastructure investments as a mechanism to facilitate economic transactions.
As outlined by the President, the state-owned companies are but one of the vehicles for the achievement of the national objectives. The programme outlined in the state of the nation address could potentially position South Africa as a manufacturer of capital and intermediate goods through investment in localisation programmes.
The programme seeks to meet the global demand for our natural resources, exploit economic opportunities in various routes and present a new opportunity in particular for the manufacturing industry to create downstream linkages, whilst the electrification programme is responding to our growing economy and seeks to ensure security of supply, with a long- term objective of reducing the carbon footprint by 2030, and building technical expertise that can be converted into a national asset for a global south electrification programme.
Already, through the construction of the Medupi and Kusile power stations, the socioeconomic impact of Eskom in these communities is massive. The next step is to encourage provincial and local governments to use the technical capacity created by this investment to stimulate local economic development. By its nature, the developmental state is the manager of the strategic sectors of the economy and of the reallocation of resources to productive sectors.
Infrastructure is critical for South Africa to break free from the minerals complex economy and to diversify - to build a dynamic economy. We believe that through the public infrastructure programme, we are not only testing our ability to facilitate cross-pollination between the public and private sectors, but we will be writing a story on growth that is unique in the South African context.
In that regard, government is determined that it should provide the leadership requisite for infrastructure roll-out to take place, including through resolving all bureaucratic impediments to the speedy and successful implementation of projects. For example, we have acted swiftly to eradicate the obstacles that might impede the implementation of the coal corridor expansion from the Waterberg by engaging with our Swazi colleagues at ministerial level to ensure the commencement of the work towards the 146- kilometre Swazi rail link.
Ministers in the Cabinet understand that the successful implementation of these projects is not merely the responsibility of the relevant state- owned companies, so they are taking the lead. Furthermore, we understand that the Department of Public Enterprises must intensify its focus on its three functions as the shareholder, stakeholder and change manager. The issue of organisational capacity requires that we continue to pay attention to the strength of our state-owned companies, their internal leadership capabilities as well as financial viability.
Transnet has strong and solid leadership and has been enjoying positive results recently, which have strengthened its balance sheet and enabled it, as the President has stated, to review its capital expenditure plan from R110 billion in five years to R300 billion in seven years.
This emboldened capital expenditure plan is intended to satisfy validated demand and, more importantly, to shift the Transnet capex spend away from focusing on investment backlog, as is currently the case, towards expanding capacity to meet market demand by enabling volume growth, capturing operational efficiencies, expanding funding sources and expanding South Africa's economic transformation by supporting the New Growth Path.
The focus of this market demand strategy is on growth in order to reposition South Africa as a key global coal, iron ore and manganese supplier, as well as the leading logistics hub for sub-Saharan Africa and the global reference point for container and heavy-haul operations. This will make Transnet one of the largest employers in South Africa, one of the top five global freight railways and one of the top five South African companies in terms of revenue. Its overall headcount will grow by 25% by 2019, from 59 102 workers currently to 73 962, whilst indirect jobs are estimated to increase to 194 303. An amount of R7,7 billion will be spent on training in the next seven years to upskill the workforce, and the intake of apprentices will increase from 500 to 886 per annum by 2019.
The purpose of this market demand strategy is to reduce the cost of doing business and to facilitate job creation, localisation and regional integration. An amount of R31 billion will be spent on local suppliers for locomotive spend over seven years. The investment for the revitalisation of the rolling stock fleet is R125 billion over seven years. Of course, this strategy is financially sound and most of the growth will be internally funded, off Transnet's strong balance sheet, and only a third of this will require external funding.
In implementing this strategy, opportunities for private sector participation amounting to about R5 billion in various sectors, such as containers, dry bulk, break bulk, liquid bulk and automotive, will be pursued. Further private sector participation will also be pursued towards the construction of the dig-out port at the old Durban International Airport.
In addition to this, Transnet has been in extensive discussions with the Ports Regulator of South Africa on the issue of port tariffs to effect a R1 billion rebate - as the President indicated - for exporters of manufactured goods. Accordingly, we expect that the Ports Regulator will issue the record of decision or tariff decision, which will be effective from 1 April 2012.
The automotive sector is one of the key customer sectors that will benefit from the rebate. In this regard, Transnet has signed an agreement with Toyota on 14 December 2011 to rail all its cars from the Durban Harbour to Gauteng, and from their Prospecton manufacturing plant to the Durban Harbour for exports and to do other value-added services inland and in Durban.
Further to this, Transnet will create additional container handling capacity, particularly in Durban, in order to ensure that it is able to meet the demand. An amount of R12 billion will be invested to expand the Richards Bay Terminal and a coal terminal will be constructed at the East London Harbour to support coal mining in the Eastern Cape. In addition, Ngqura will finally be officially opened by the President on 16 March 2012 to be positioned as a trans-shipment hub. It is important to continue operating the container terminals as a complementary system in order to optimise the volumes that can be handled through the South African port system.
At the same time, after engaging the National Energy Regulator of South Africa, Nersa, Eskom should be able to report to the President, government and the public within four weeks about the electricity pricing path favourable to economic growth and job creation. This has been made possible by Eskom's strong financial and operational position, which has enabled some flexibility in how it funds and spends its capital and allowed it to introduce internal efficiency measures not previously possible.
Because of this, the company has refined its capital expenditure numbers, re-evaluated its debt-funding approach and performed a detailed interrogation of the future energy demand forecast to enhance its accuracy. However, for this to happen, we must manage the electricity demand, and all South Africans must work together to reduce their electricity consumption by 10% through more efficient usage.
In this regard, we will need a pact, especially with big business, not only to use electricity more efficiently to reduce consumption, but also, it is hoped, to maintain current production levels. We will also need to gain more certainty around Eskom's input costs, especially coal price increases over the next five years. A pact will be needed with the suppliers of coal to limit price increases to the absolute minimum, preferably to single- digit percentages year on year.
Eskom will also need to engage with rating agencies to ensure that its investment outlook remains stable. In this light, and to provide more certainty to the investor community, Eskom might have to revise its price path going forward without jeopardising its commitments. The Medium-Term Risk Mitigation Plan shows that the electricity supply-demand balance will remain tight until both the Medupi and the Kusile power plants begin operating.
In the interim, we need efforts to be made from all sectors of society to ensure that the balance is maintained and that load shedding does not happen. We are determined that load shedding can be prevented if businesses, households and government work together to implement supply and demand measures, thus creating a safety net that can see the country and the economy through this period. Additional capacity of 3 000 megawatts is needed to ensure a comfortable reserve margin.
South Africa aims to "keep the lights on" and prevent rotational load shedding. These goals are non-negotiable. The current instability in operating the power system is not acceptable. We need to move from crisis management to reliably providing electricity with scheduled window periods for maintenance. This moment calls for responsible citizenship on the part of individual and corporate citizens of South Africa.
To this effect, we are implementing the 49M energy-saving campaign aimed at mobilising individual South Africans to save electricity in their households. To achieve these objectives, an emergency plan has been developed between the Department of Public Enterprises and Eskom for consideration and approval by government. We are co-operating with the Department of Energy and other stakeholders on these plans.
Mr President, your state of the nation address has elicited an overwhelmingly positive response and communicated a message of profound hope, vision and leadership to the rest of the country. So thorough were you, sir, that others used the occasion of this debate to present their own gimmick state of the nation addresses. [Laughter.]
As expected, today we have been treated to the yearly refrain from the opposition, rehearsed and rehashed with the same short-sighted enthusiasm each year, that the President's address did not address this or that, selected by those who lost the general election and therefore the popular mandate. Frankly, we should now be spared such hollow and tired rhetoric and simply be referred to previous years' archives; maybe then we could have finished early enough to be able to attend to our Valentine's commitments. [Laughter.]
Aristotle once said that criticism is something we can avoid easily by saying nothing, doing nothing and being nothing. On the contrary, since the ANC insists on saying something, doing something and being something, we should accordingly expect criticism. Failing to curb her inexplicable eagerness, the camera-prone hon Mazibuko had to please her constituency eager for doomsday news and criticise the state of the nation address a week before it was delivered.
On the contrary the DA leader, the hon Helen Zille, applauded the President's focus on infrastructure and correctly challenged the government to cut red tape in order to create jobs. Quite clearly, you have the starkest contrast between the DA leader, whose stint as premier has exposed her to the challenges and intricacies of running a government, and the hon Mazibuko whose only experience is as an opponent who has never had to lift a finger to do anything. [Applause.] Of course, they say the devil finds work for idle minds.
The hon Leader of the Opposition is not only grossly inexperienced, she is also hopelessly clueless. [Applause.] Today she amended her ill-informed remarks made on Thursday night in haste. Her speech in this House earlier was a mere pipe dream and incoherent wish list that reminded me of where we were in 1994, and how far we have progressed since then, when we still stood at the dawn of our freedom. On the contrary, the President's speech built on the proud edifice of 1994 and took South Africa into a future where the economy grows, people work, and the youth are skilled; a South Africa that is growing, working and moving.
The opposition should not limit their understanding of being in this House purely for the sake of opposing. If this were the case, I can assure them that they do not need so many seats just to perpetually say "No". The hon Lekota's speech had a pitfall. He spoke so eloquently about job losses and people taking other people's jobs that I nearly believed him, until I was reminded of Mr Shilowa and wondered why his job was taken and who has taken it. [Applause.]
The hon Steenhuisen was quite opinionated for a newcomer. He told us about the beautiful Western Cape model. But what does this model tell us? It tells us of R1 billion in corruption in the communications advert tender; it tells us of no transformation; it tells us that women must stay out of government and probably remain in the kitchen. [Interjections.] He says that the President must side with the poor. The President did this long ago when he joined the struggle to defeat the system that the hon Steenhuisen continues to benefit from, and which he defends so vociferously. The President chose the poor long before Mr Steenhuisen was even an idea in the minds of his parents. [Applause.]
The late US President Mr Theodore Roosevelt once said:
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, and comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. [Applause.]
Those amongst us whose constituencies exist beyond the boundaries of suburban comfort understand that we are obligated to create a country that allows all its citizens access to opportunities and a dignified standard of living.
We face a stubborn set of structural challenges, which the President accurately and most comprehensively addressed in his state of the nation address. We must muster the foresight collectively to galvanise our people towards a future of prosperity for all.
If this dispensation - our mandate - is to be successfully fulfilled, it is towards this end that we must act collectively as this august House, rather than allow ourselves to be prisoners of a calamitous ideology and a paralysing despair towards which our opposition constantly strives to drag us. The realities that face our country need serious people who understand that we are here to work. Merely criticising is not enough. Hon members, "Happy Valentine's". [Applause.]
Debate interrupted.