During the State of the Nation Address last year, President Jacob Zuma unveiled a new vision for job creation and poverty eradication anchored on state-led infrastructure development around five major geographically-focussed programmes. The projects will focus on energy, transportation, health and basic education infrastructure, information and communication technologies and regional integration.
The Department of Public Enterprises through its State Owned Companies (SOC) was identified to play a critical role in the implementation of the State-led infrastructure roll-out programme.
One of the most significant features of the President’s infrastructure announcement last year was on Transnet’s capital expenditure programme being radically revised through the Market Demand Strategy, by which the capex programme would expand from R110 bn over five years to a staggering R300 bn over 7 years, two-thirds of which would be invested on rail and 55% of which would be invested in new capacity. Transnet’s infrastructure roll-out programme will have a significant impact on the lives of South Africans through its regional integration nature.
A major region that stands to benefit from Transnet’s infrastructure roll-out programme is Saldanha Bay in the Western Cape. President Zuma recently launched the establishment of an Industrial Development Zone (IDZ) in Saldanha Bay, which will result in job creation through the creation of the new Oil and Gas Services Complex focussed on the off-shore and oil and gas sector.
Through the IDZ, the proposed legislation pertaining to a Customs Cleared Area (CCA) can also be applied to land owned by Transnet (similar to a bonded area) which will create an enabling environment (facilitating the ease of doing business) for the establishment of the Complex focussed on the off-shore oil and gas sector. The complex will comprise of a supply base, maintenance and repairs facilities and a liquid bulk terminal to accommodate bunkering, storage, blending, and transhipments.
The IDZ will facilitate the establishment of back of port logistics aimed at servicing the oil and gas industry in respect of light to medium industry to support the supply base and repairs and maintenance facilities.
Through concerted joint and integrated planning efforts, the port and the IDZ will be able to establish an Offshore Oil and Gas Services Complex (similar to the Australian marine repair complex) focusing on the supply facilities, maintenance and bulk liquid petroleum facilities. The port has re-prioritised its capital programme to meet the demand for critical port infrastructure to be in a position to accommodate off-shore vessels (including rigs and drill ships) in need of maintenance and repairs, supply base services and bulk petroleum liquid facilities. The port had to hold back on some projects to ensure integration and alignment with the Saldanha Bay IDZ, which has now received its Operator Licence.
The benefits of the Transnet infrastructure roll-out programme in Saldanha Bay with regard to job creation is due to its strategic location and deep water berth in relation to the West African Offshore Oil and Gas exploration activities. Vessels call at the port for repair and maintenance activities and require extensive engineering skills (welders, electricians, boilermakers, millwrights, fitters and turners, mechanics (diesel and petrol), riggers, auto-electricians, sheet metal workers etc).
The number of jobs created per rig range from between 100 – 700 direct jobs depending on the extent of the maintenance and repairs required. The ship repair activities also create indirect jobs within the hospitality, catering, laundry services, transport, security, entertainment, health and safety sectors.
This is an opportunity to uplift and improve skills development and competence levels of local people and thereby improving the quality of life of the local community and alleviate poverty in the region.
By targeting the off-shore oil and gas industry, South Africa will be gaining a market share in the global oil and gas sector, which will contribute to the economic growth of not only the area, but also at national level. Being a targeted sector, this industry can boost the GDP and positively impact the trade balance of the SA economy.
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