Address by His Excellency President Jacob Zuma on the occasion of the official launch of the Port of Ngqura, Nelson Mandela Bay

16 Mar 2012

Honourable Premier Kiviet
Honourable Ministers, MECs and MPLs
CEO of Transnet
Members of the business community
Fellow South Africans.

Thank you for hosting us in this beautiful province.

Today we take another step forward in our journey of economic development and transformation, as we officially launch the Port of Ngqura. The port is a key strategic infrastructure project for our country, the continent and the world given its location and potential. This launch is therefore an important event in the country's economic calendar.

The launch of the Port of Ngqura underlines our firm commitment to put economic development, and more specifically infrastructure development, at the centre of our work, as we fight poverty, unemployment and inequality. Last week we officially opened the Dube Tradeport in Durban, in which King Shaka International airport is housed.

These key projects are launched against the background of the 2012 State of the Nation Address, in which I outlined the implementation plan for infrastructure development, which is a key aspect of our economic development blueprint, the new growth path.

Our new growth path outlines six areas of focus. These are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism. These are areas in which we believe we can achieve economic transformation and inclusive economic growth, in this second phase of our transition.

The first 100 years in our history of struggle were about defeating colonialism and apartheid and the democratisation of the country. We have done exceptionally well in that regard. We gained our freedom in 1994 and achieved political stability and peace that were unthinkable 20 years ago.

We have established a solid democratic framework. The new democratic state functions effectively through three arms, the executive, legislature and the judiciary, with institutions that support democracy, such as the Chapter 9 institutions. Having liberated ourselves politically, we must now become our own economic liberators, in this second phase of our transition, that of economic development and transformation.
 
Economic transformation means that we must achieve high rates of economic growth and wealth that can be shared by all our people. The transformation must include expanding ownership, control and management of the economy to black people, women, the youth and persons with disability. Since infrastructure development is one of the key drivers of the new growth path, Transnet has an important role to play in this new journey.

Transnet has to develop, maintain and enhance our key rail, port and pipeline infrastructure capacity so that we achieve our objective to get South Africa working, growing and moving.  Infrastructure-related state-owned entreprises such as Transnet must also help us facilitate trade and make doing business easier.

They can do this by reducing the cost of doing business. They should also promote industrialisation by localising their procurement thus helping to develop local suppliers on a meaningful scale. Therefore, State Owned Enterprises (SOEs) must be viewed in relation to their broader impact on the economy.

Compatriots, in the State of the Nation Address we moved firmly into practical implementation mode. We unveiled five geographically focused infrastructure projects cutting across all provinces. The infrastructure plan will be driven and overseen by the Presidential Infrastructure Coordinating Commission (PICC) which I chair, assisted by the Deputy President of the Republic.
 
The coordination role of the PICC is critical in ensuring that these national developmental plans are not delayed by technical glitches, lack of coordination, turf wars or long decision making processes. We learned invaluable lessons from the organisation of the 2010 World Cup, the development of the Gautrain and the Gauteng Highway projects. We intend to use those lessons meaningfully when we implement our infrastructure roll-out.

The PICC will also ensure the correct allocation of infrastructure resources. It will divert capital from investing in the tertiary sector of the economy and focus on growing both the primary and secondary sector of the economy to facilitate inclusivity.

I am mentioning this context because the development of this port is not just a once off localised event. It reflects the long-term vision of government to develop Ngqura as one of the biggest trans-shipment hubs in Sub-Saharan Africa. This port must be located and understood within the broader government economic development plan.

To date, government through Transnet has invested over eight billion rand in the basic port infrastructure, creating over fifteen thousand jobs during construction. We are pleased that the planning of the Ngqura Port has been integrated with that of the COEGA Industrial Development Zone (IDZ).  

This provides for efficiency and increased economic benefit to businesses that wish to locate within the IDZ. Recently, the COEGA IDZ gained a major new investment by First Automobile Works of China, which confirms the potential of this zone in attracting foreign direct investment to boost employment creation.

The Port of Ngqura has also made it possible for the Eastern Cape economy to participate in the minerals industry as well. To this effect, two ferro-manganese smelters have been announced by the Eastern Cape government. The beneficiated product is destined for the export market using this facility for that purpose.

Compatriots, a more critical factor about the Port of Ngqura, is that it serves as a major conduit to the movement of goods both into South Africa and to other parts of the globe, making the port a major facilitator of trade. The port's role in promoting free trade in the continent will also come into sharp focus as Africa cements its goal of establishing a continental free trade area.

South Africa's economic prospects are inextricably linked to the region. As such, South Africa cannot focus on improving the competitiveness of its own freight transport system without adopting a regional perspective. In addition, the port has the potential of enhancing south-south trade.

It is forecasted that in the medium to longer term, the south-south shipping trade route, for example between China and Brazil will emerge as a significant global trade route, thereby changing the dynamics of the international trading system. This development indicates that in the longer term, South Africa and the region will be well positioned to lead the establishment of a key trade corridor linking South-East Asia with South America.

More importantly, over time, the new strategic position of our port will lead to a reduction in shipping costs and improved maritime connectivity for the country and region.  

Compatriots, ladies and gentlemen, our infrastructure build programme will require skills. We are pleased therefore, that the implementation of the Ngqura build programme led to concerted efforts to create a larger pool of people with rare vocational or artisan skills.

It is impressive that the Coega IDZ trains 8 000 unemployable people per year and is a facilitator of scarce skills development programmes.

Distinguished guests, compatriots, in the State of the Nation Address, I announced the market demand strategy of Transnet, which entails an investment, over the next seven years, of three hundred billion rand in capital projects. I said that of this amount, R200 billion would be allocated to rail projects and the majority of the balance, to projects in the ports.

This massive capital expenditure programme will enhance port operations and efficiencies by investing in new and modern equipment. We are pleased that major expansion projects have already begun, with the various sectors such as the expansion of the Ngqura Port, Cape Town and Durban container terminals as well as the expansion of the iron ore and coal lines.

I had also raised concerns about port charges, as many sectors including the automotive sector here in the Eastern Cape, had complained about prohibitive costs. I announced that the Port Regulator and Transnet had agreed on a one billion rand rebate, which would result in exporters of manufactured goods receiving a significant decrease in port charges. I am pleased to announce that the rebate will come into effect on 1 April 2012.  

The Department of Public Enterprises and Transnet are going to work with the automotive sector to provide infrastructure support to the sector, following the issues they raised at their last meeting with the President here in Nelson Mandela last year.

Compatriots and friends, the transformation of the South African economic landscape, the alleviation of poverty, the provision and development of skills across the maritime industry are key cornerstones of government's developmental agenda.
 
The development of the port of Ngqura is yet an indication that government is prepared to play an active role in guiding economic development, and to use economic resources to tackle poverty, inequality and unemployment. It is an attempt by all means to balance the country’s economic growth and social development.

We believe our role as government is to play an active role in the economy, guiding the developmental state towards investment in neglected areas in order to achieve an improved quality of life for all. We do this best through our state owned enterprises such as Transnet.

Honoured guests, compatriots and friends, it is my honour and privilege to declare the Port of Ngqura officially open!

I thank you.