Daily News Articles for the Transport Sector, 2012
Remarks by the Minister of Public Enterprises, Mr. Malusi Gigaba MP, on the launch of the Transnet Market Demand Strategy, Johannesburg
Today’s launch of the Market Demand Strategy (MDS) marks another milestone, demonstrating our commitment as government through Transnet of building an economic infrastructure that will facilitate the movement of goods and reduce the cost of doing business in South Africa.
From the outset, I wish to thank the Board and EXCO for this bold decision and prompt response to government call to raise public investment in infrastructure development. This will go a long way to changing the confidence of private investors in our economy and country. Investment in rail infrastructure, which the Transnet Group Chief Executive will later present to you, underpins the strategic position of the South African economy, because it supports the exports of goods and injects in our economy the most needed resources.
Since the advent of the current global economic downturn, vibrant economic activity is shifting towards the South, effectively establishing emerging markets as the new economic centre of gravity, driving global recovery and growth. South Africa intends not to be left behind in that global shift and for that to happen, bold decisions and plans must be taken and implemented. The MDS that will launch today is one plan.
As is now known, the MDS is at the centre of our economic recovery efforts as well as the further efforts to stimulate a vibrant economy that achieves high growth rates through creating jobs, facilitating industrialisation as well as regional integration. Furthermore, it is at the centre of the infrastructure roll-out plans and skills revolution announced by the President during the State of the Nation Address where President Zuma made a public call inviting other key economic actors to partner with government in pursuit of the national cause of stimulating sustained economic growth and building a competitive economy.
There is a shift of focus in our economic trajectory towards facilitating the export of value-added goods and thus supporting our economy to industrialise. To achieve these goals, we have adopted and are implementing bold infrastructure roll-out plans that connect all of South Africa’s provinces through the rail, electricity and broadband network in order to address uneven development both between and within our provinces and cities, develop and diversify our skills base and stimulate investment in the economy.
The rail investment is a contribution to government’s objectives of decentralising industrial activities to other provinces. This infrastructure must assist to connect South Africa to Africa and connect Africa to world markets, particularly the emerging markets in the South, if we must free our economies from their reliance on the markets of the North that currently are fraught with so much uncertainty and instability.
This Market Demand Strategy that we launch to you today constitutes the democratic dispensation’s major public investment in freight logistics infrastructure to date! It puts paid to the previous era of infrastructure disinvestment which spanned between 25 – 30 years, creating a massive infrastructure, jobs and skills backlog that has continued to this day to dog our country and economy.
The MDS will consolidate South Africa’s position as a critical entry point for Africa, it will enhance our ability to get our commodities to fast growing markets, it will create jobs and it will contribute significantly to rebuilding manufacturing capacity. Transnet, as a State-Owned Company in the network industries, should play a central role in the growth and diversification of our economy to advance government’s economic priorities. Through this investment, Transnet will boost growth, improve productivity and position South Africa as a destination of choice to investors.
While we believe that Transnet must play a leadership role because of its ability to take a long-term view on funding freight infrastructure, the MDS is a national initiative that requires collaboration with customers and suppliers and other stakeholders. Given the global economic climate which has affected every economic agent, government is calling for a different model of partnership which is not based on transactional partnerships, but on seeking to correct both market and government failures.
The Department of Public Enterprises does not see the investment drive of State-Owned Companies as crowding out other players but rather as providing leadership in driving investment in network industries so that we can lower the cost of doing business and enhance the competitiveness of South Africa companies. The MDS is aligned with the vision of the New Growth Path, which seeks to boost not just the economy but to promote the manufacturing capacity.
Transnet’s Market Demand Strategy will prioritise localisation and maximise the multiplier impact of the investment programme. The strategy starts a new economic chapter for South Africa because it will build a strong social consciousness in it in that Transnet will no longer undertake investment where communities do not accumulate economic opportunities. We believe that we will not succeed without both your financial and intellectual support in this national initiative and that is why it is important to call for your active and passionate support for this major initiative.
As can be witnessed from this Market Demand Strategy, the main challenge to implementing this strategy will emerge, not from the lack of funding or commitment on our part, but mainly from the lack of project management, financial, engineering and artisanal skills as well as our ability speedily to resolve all pre-implementation or pre-construction phases so that implementation can commence quickly for us to avoid cost-overruns and other associated risks.
In conclusion, I would like to thank you all for attending this and hope you will find this information session productive.
I thank you.