Cape Town – State-owned enterprises (SOEs) have embarked on a massive drive to train up engineers, artisans and technicians over the next three years, the Minister of Public Enterprises Malusi Gigaba said today.
Gigaba told a media briefing shortly before presenting his Budget Vote in Parliament this morning, that his department planned to increase the number of artisans trained by its eight SOEs by 60% – from the current 4 273, to 6 780 in the coming year.
There are currently 9 000 students at the eight SOEs, which also include 2 242 trainee engineers and 1 064 technician students.
Transnet and Eskom, which together employ about 90 000 people, would play a central role.
While Transnet would increase their artisans threefold – from 500 to 1 500, Eskom plans to more than double the number of apprenticeships it offers, from the current 4 500 to 10 000 by 2015.
Gigaba said he was engaging with the Minister of Higher Education and Training, Blade Nzimande, to get access to National Skills Fund to finance learners placed at the department’s parastatals.
The department also intends to engage with engineers in Eskom who are about to retire, to provide mentorship in FET colleges.
Turning to infrastructure spending, Gigaba said South Africa still had a serious infrastructure backlog, much of it owing to the sharp decline in investment in this area between 1976 and 2004.
“Had we been consistently investing at 10% of GDP in infrastructure between 1994 and 2009, we would have invested a further, R1.5 trillion in today’s currency,” Gigaba revealed.
He said SOEs were running at 75% or less of their capacity largely because of a shortage of funds.
To tackle this, Gigaba said the department would also begin engaging more actively with the private sector to fill the funding gap which exists in financing infrastructure projects.
The department had also implemented a Competitive Supplier Development Programme, which requires SOEs to have a more focused approach to procurement when planning.
This would be complemented by a drive to support localisation of production.
The department would soon begin holding bi-monthly meetings with chairpersons and chief executives of SOEs that fall under the department.
“These meetings will systematically identify areas requiring productivity improvements and define interventions in these areas,” said Gigaba.
The presidential review committee report looking at the landscape, governance and direction of all the country’s more than 300 SOEs is expected to be released in September, he said, adding that “intensive work” was under way on the review by expert teams.
Gigaba, in consultation with Cabinet, was also reviewing the remuneration of SOE executives and board members.
During the current financial year, the eight parastatals under the department would invest over R105 billion, with the bulk to be spent on infrastructure.
Most of this would go to Eskom (R76 billion), Transnet (R25.8 billion, of which R15 billion will be on rail) and Broadband Infraco (R500 million).
The R105 billion investment is expected to create about 13 000 direct jobs and a further 40 000 jobs in supply chains jobs, said Gigaba.
Eskom is expected to spend R540 billion on infrastructure until 2017.
The parastatal contributes about three percent to GDP.
Eskom has since April last year signed contracts, worth 373MW in capacity, with five independent power producers.
The electricity utility has also signed up about 200MW of municipal regeneration for this winter.
Gigaba also announced that the African Development Bank had approved a $365 million for Eskom to fund a 100MW wind and a 100MW concentrated solar power plant.
Eskom is expected to hear later this year about a $250 million loan it had applied for from the World Bank for funding clean energy.
Transnet, meanwhile, would spend R110.6 billion on infrastructure over the next five years, which includes updating ports by investing in new equipment and a drive to fund the local production of locomotives.
“Given the scale of our national demand over the next 15 years, we will be a significant market globally for locomotives and we will use this as an opportunity to ensure that South Africa becomes a global manufacturing hub for electrical and diesel locomotives, in partnership with leading original equipment manufacturers and their home countries,” said Gigaba.
He said his department was in talks with the Department of Transport on the planned Prasa fleet renewal programme.
Added to this, his department was also talking to the Industrial Development Corporation (IDC) to help fund investment in procurement and supply chain initiatives.
The new multi-purpose pipeline connecting Durban to Johannesburg would be commissioned in the last quarter of this year and is expected to be fully operational by December 2013, said Gigaba.
He said the department wanted South African Airways (SAA) to enter the African market more rigorously to take South Africans into Africa and bring tourists to South Africa.
SAA should compete more strongly against airlines such as Air France and Emirates Airlines, which dominate the continent’s skies, he said. SA Express, which currently flies to five countries, also needed to fly to more destinations in the region.
In the meantime, SAA would modernise its existing fleet by procuring 25 new planes over the next two years to cover long-range as well as short-to-medium range flights, said Gigaba.
He said a new turnaround strategy was being developed for military equipment parastatal, Denel, to bring the organisation into a healthy balance sheet following the unsuccessful implementation of a 2005 turnaround strategy.
Gigaba said Denel needed to rethink its strategic direction and explore non-defence capabilities.
He said state-owned enterprises could contribute to the New Growth Path – which aims to create five million jobs by 2020 – by providing infrastructure that can add more jobs, expanding procurement of locally-manufactured components and by keeping tariffs for services at a competitive level, and thus helping keep costs down in economy.
He singled out five areas in which SOEs could improve their governance, namely: planning, funding, procurement, productivity improvement and integrating SOE initiatives more in line with government programmes. – BuaNews
