Planes, trains and broadband in SA
Minister of public enterprise, Malusi Gigaba says that power utility Eskom will be investing over R500 billion in the next five years, whilst Transnet will be investing over R300 billion over seven years.
He said that 13,125 km of fibre optic cable will also be refurbished and strengthened by 2020 for improved and enhanced broadband.
The minister was speaking at the The New Age – SABC business briefing on Monday (3 February).
The South African economy is projected to grow at 2.8% in 2014 and more than 3% in 2015/16, the minister said.
The key driver of that growth is capital gross formation from both public corporations, private enterprises including the general government, he said.
“To-date, our State-Owned Companies (SOC) have acted as catalysts for additional investment in the economy boosting our economic gross capital formation to 4.4% of the GDP.”
Gigaba noted that three years ago, the department’s portfolio of SOC invested R53 billion; but in the current financial year, it will invest over R113 billion, an increase of over 100%, he said of Eskom and Transnet.
“It is important to get a tangible understanding of what this money will buy, Gigaba said.
Based on the department’s existing plans, by 2020:
- An additional 11,719 MW will have been added into the electricity system and 6,596 km of transmission network installed to support security of supply;
- Existing logistics corridors will be expanded upon and new corridors will have been established, and 1,317 new locomotives and 25,000 new wagons will have been procured, and procured in a manner that puts in place a world-class, export-oriented, rail manufacturing sector;
- 6,405 km of rail will have been replaced for the general freight, coal and ore lines, increasing the rail network capacity by 149.7 million tons; and
- 13,125 km of fibre optic cable would have been refurbished and strengthened to ensure carrier grade status and our broadband network would have been expanded to include metros and under-serviced areas.
“Access to affordable broadband is critical for the integration of informal and mainstream economy improvements in access to quality education and health care,” Gigaba said.
He noted that the dramatic increase in rail infrastructure and rolling stock will have a positive effect on the country’s roads and reduce the burden currently carried by many roads as a result of heavy cargo transported by road instead of rail.
This would lead to fewer accidents caused by poor and degraded roads, the minister said.
And with additional infrastructure capacity would also come additional jobs, Gigaba said.
- Transnet’s operational and capital expenditure activities were associated directly and indirectly with the employment of 205,000 people;
- By 2017, Transnet’s activities will support the direct and indirect employment of 330,000 people;
- In 2013, Eskom accounted for the direct and indirect employment of 290,000 people;
- By 2015, Eskom will support the direct and indirect employment of 430,000 people.
Malusi Gigaba
Small business
Gigaba said that Eskom and Transnet have both identified specific areas of recurring and consistent operational expenditure which they will leverage to create opportunities for small businesses.
Eskom, he said, has set itself the target of spending over R24 billion a year on black youth-owned businesses by 2017.
“In addition, Eskom will be using different contracting methodologies to ensure that small
business get partnered with and receive practical support from established businesses.”
SAA
Loss making national carrier SA Airways will return to profitability, Gigaba.
“Last year, we said we expected that the airline will continue to make losses over the next three to five years…but we will turn the corner as we move to improve and ensure that the turnaround strategy is implemented.”
SAA suffered a loss of R900 million in 2012/13, it was announced on Thursday. Government made a guarantee to SAA to enable it to operate.
The airline reported a loss of R1.25 billion in 2012.
Total revenue rose to R27.1 billion in the year under review from R23.9 billion in the previous financial year.
This was due to increases in airfares, passenger revenue and capacity.
Reporting with Sapa
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