... guests and hon members, no one has done so in this debate, so may I, firstly, congratulate Kaiser Chiefs, sorry, Orlando Pirates ... [Laughter.] ... for winning their third piece of silverware this season. Well done, Pirates! [Interjections.] Your neighbours and brothers in sport, the Blue Bulls, are proud of you.
Congratulations also to the Blitsbokke. This weekend they won with the biggest comeback in the Sevens rugby world history by beating Australia in the cup final. The winning try scored by S'bu Sithole was absolutely brilliant. Such sporting achievements make us proud to be South Africans.
While I am mentioning exceptional achievements, allow me to also congratulate the Department of Public Enterprises for having just received the seventh consecutive unqualified audit report since 2003. [Applause.] It is a good performance and we hope that you will maintain the high standard in future. I also congratulate the Minister and Deputy Minister of Public Enterprises for their first Budget Vote in Parliament. [Applause.] Before reacting to some statements made by members, I want to address three issues very briefly, namely the role of SOEs in a developmental state; the challenges confronting one of the business units of Denel, namely Denel Saab Aerostructures, DSA; and some thoughts on corporate governance of SOEs.
The chairperson has already referred to the primary resolution of the ANC's Polokwane conference that relates to SOEs. That is the policy of the ANC; that's a starting point. State-owned enterprises should have a long-term, national-interest perspective, looking ahead to the next 20 years and beyond. The focus should be on infrastructure investment.
One of the highlights of the 2011 Budget is that the total public sector infrastructure investment will amount to R808 billion over the next three years. Capital investment expenditure by the public sector will average 8,4% of gross domestic product, GDP, over this period. It will be a brilliant achievement. We should be confident of the role that SOEs will play in this regard.
In a recent publication by the Department of Economic Development, entitled The New Growth Path: Framework, the following is stated on the developmental state:
A developmental state is not simply hostage to market forces and vested interests. Through careful alliances, clear purpose and by leveraging its resource and regulatory capacity, it can align market outcomes with developmental needs.
A key challenge will be to improve the state's efficiency, effectiveness and responsiveness in the face of opportunities and risks. Our new outcomes- based performance monitoring and evaluation system provides a base from where to address such challenges.
The New Growth Path therefore requires a reorientation from all state-owned agencies, including SOEs. In essence it will be a new partnership between the state, business, organised labour and civil society actors. For an SOE to play a role in the developmental state, a paradigm shift is required towards addressing infrastructure backlogs and bold future investment programmes. This will require a new thinking with regard to planning, funding, procuring, productivity, job creation and skills development, only to mention a few key initiatives. I am glad that in his introduction the Minister also referred to this new paradigm shift that we need.
One of the important job drivers identified to grow employment by 5 million jobs in 2020, while at the same time stimulating the GDP growth closer to 7% per annum, is infrastructure investment. This includes a near doubling of electricity capacity by 2030, including new generation capacity coming from renewable sources and nuclear power.
Also included in this infrastructure investment will be the expansion of rail transport, with more railway tracks and rolling stock for both commuters and freight transport. Another important job driver will be to improve our port efficiencies and costs. This includes key ports on the continent and an integrated road and rail system across the continent.
Given the above-mentioned scenarios and policy positions, calls for the privatisation of SOEs ignore recent history and are blind to the consequences of the global recession, which started nearly three years ago. In the period between 1994 and 2004, when government policy then focused on the privatisation of SOEs, investment in infrastructure was very low - less than 5% of the GDP. There was no investment in neither infrastructure refurbishment nor in the rolling out of new and modern infrastructure. It was only when the ANC government stated that it would retain ownership of SOEs that Eskom and Transnet announced their massive investment programmes. It is through government ownership that the momentum of these investment programmes can be sustained and matters of national interest prioritised.
Similarly, there are instances in manufacturing where state ownership is critical for national sovereignty, such as in the defence industry. It is therefore crucial that SOEs play an important part in driving investment, creating jobs and developing scarce skills, and thereby assisting in accelerating economic growth in our country. For this to happen, we need a national partnership and compact to drive such investment and job creation in the economy. SOEs should be key drivers of this process, in partnership with private stakeholders.
Let me turn briefly to Denel. I am not going to refer to Denel's mandate and aims. Denel Saab Aerostructures, DSA, is currently the only loss-making entity in Denel. It is important that attention be given to the following. Firstly, we need to await the report of the Presidential Review Committee on SOEs, which will most likely make a recommendation on the future and position of DSA. Secondly, strategic partnerships for DSA should be considered for a turnaround strategy and to give access to international markets.
Thirdly, the Department of Defence and Military Veterans should express itself on what defence capabilities are needed, and what their strategic requirements are. The updated defence review is eagerly awaited because once that is known it can be aligned to what Denel and DSA can offer. There is an urgent need to define the future role of Denel in the economy to ensure the strengthening of advanced manufacturing technologies in support of our government's industrial policy objectives, as contained in the Industrial Policy Action Plan 2, Ipap2.
I want to make a concluding remark on the governance of SOEs. I am not going to read what I have put down here, save to say that it is interesting to read what the Organisation for Economic Co-operation and Development has said about the state acting as an owner of SOEs. I want to say it seems that best international practice for the state acting as an owner of SOEs shows that the function of policy and regulation can indeed be separated from the function of operations. It is better not to be player and referee at the same time. Let us hope that the Presidential Review Committee on SOEs will investigate and report on this matter of the state acting as owner of SOEs.
Let me turn to the fun part and react to some of the comments that were made in this debate. The DA started out with a criticism on Eskom. We, as the ANC, have a totally different view. Eskom is a national asset. Eskom has - if you look at the leadership and listen to the presentations recently made to the portfolio committee - excellent, top-quality leadership. Eskom keeps the lights on. Eskom has embarked on a massive infrastructure roll-out programme that this country has never seen in its history. [Applause.] Yesterday, Eskom told the committee about the status of the electricity system. They said that there will be no load shedding, despite the risks, and they spelled out the risks. I sometimes get the impression that some parties and some people want the load shedding to happen, only to be able to say, "I told you so." [Laughter.]
The DA also calls for a new vision in electricity supply, not to rely on Eskom, and not to have the government as the only shareholder. I have copies here - I will give them to you free of charge - of the New Growth Path, the Ipap2, the strategic plan of the Department of Public Enterprises and the annual report of Eskom. They all address the issue of a new vision for electricity. So I really don't know where this other "new vision" will come from.
Mr Nhanha - I think he has left to sort out the "huismoles" [domestic strife] in his own party because he is not here - talked about the Department of Public Enterprises as a problem child. My goodness! Maybe he is talking from experience about the problems in his own party and then comes here and says: "Listen, you have a problem child in your own midst."
I think Dr Ambrosini has left to address another Extended Public Committee because the IFP is thin on the ground. [Laughter.] He talks about privatising arms manufacturing. I want to ask hon Ambrosini to give me examples of countries that have privatised all their arms manufacturers. You know, he reminds me of a quote about government that says, "If it moves, tax it. If it still moves, regulate it. If it stops moving, subsidise it." [Laughter.] And I think that is probably what the IFP will do when they get into government. [Interjections.]
Mr Greyling, you talked about Duvha. I fully agree with you; that was an unfortunate incident. I think the best logical way to handle this will be to wait for the investigation report. Yesterday, the department said it would make the report available - and then we can engage with the report to see what exactly happened.
Mr Van Dalen, you made so many points and I couldn't hear any positive input. But maybe I should leave it and spare the 30 seconds for the Minister to wrap up and make it clear to you. I thank you. [Applause.]