Stellenbosch Wine Festival
3 August 2006
Building up to 2010
There are some advantages to the coincidence of playing golf and being the
Minister in government responsible for South African Airways (SAA), it gets you
invited to wonderful events such as this. During a recent golf tournament I met
Ken Forrester, an old friend and we got talking. He told me that SAA were
involved in the Stellenbosch Wine Festival, so here we are all.
I am sure that many of you have been watching our endeavour to strengthen
SAA as the national carrier. This is a challenging task in the highly
competitive world of airlines, but it is one that we are succeeding in.
However, the next four years are especially challenging for all of us involved
in travel, tourism, hospitality and key attraction industries like wine. This
challenge is the preparation for and the hosting of the World Cup. Germany has
lifted the bar of performance and we will have to be finely honed to clear that
bar.
Let me deal with some of the matters at issue here.
The wine industry forms a very important part of the South African economy,
contributing almost R16,3 billion to the annual national Gross Domestic Product
(GDP) and an estimated 257 000 job opportunities (2004). However the
significance of the industry is very much wider as it places South Africa in
that relatively small group of economies that are renowned for their wines.
Around this we can build a whole set of industries and enticing experiences. We
are entering an intense phase of marketing of South Africa, but it is
absolutely essential that we market a reality of quality, service excellence,
affordability and personal safety. This is the challenge we face.
It was for this reason that I was delighted to be able to come to the
Stellenbosch wine festival as it is just such an occasion to market wine and
the area. I can safely say that SAA shares your aspiration and the challenges
we all need to work together on for success in 2010. Of course good wines and
good airlines are an inseparable requirement of travel and tourism.
The German Chamber of Commerce estimated that the 2006 World Cup would
create 60 000 new jobs and bring an additional 0,3 percent growth to the
economy. Although the actual impact still has to be assessed, what is certain
is that the positive impact on Germany's wine and beverage industry was
immediately visible. It is reported that a bar manager in Limerick found the
boost in business to be "huge" and "really big", having hosted as much as 15
000 people at one occasion.
Being nominated as the first African nation to host the FIFA World Cup is
indeed an honour. An estimated three million spectators and billions of viewers
across the world will be watching 32 of the world's best national teams
competing in 64 matches. The widespread exposure and focus on South Africa will
provide the opportunity to significantly raise global awareness of South
African wines and the beauty of our country. This will broaden our wine market
base and improve South Africa's tourism performance relative to our main
competitors in the world.
A plan incorporating wine tourism and its contribution to and benefits from
2010 has to be developed. The comprehensive 2010 Tourism Organising Plan
developed by the Department of Environmental Affairs and Tourism to ensure that
the event builds on our plans for accelerated, shared economic growth and to
enhance South Africa's brand as a world class tourism destination can serve as
a base for an industry specific document.
Infrastructure investment through the Accelerated and Shared Growth
Initiative for South Africa (AsgiSA)
Comprehensive legacy planning will ensure that this mega event contributes
to the broader developmental objectives of government. Government will be
investing more than R320 billion in infrastructure developments of which 40%
will be driven by State-Owned Enterprises (SOE).
The capital expenditure spend by SOE will primarily be directed towards
upgrading existing infrastructure in the areas of energy and transport
logistics and accelerating a build plan to meet future demand. The problems
that occurred in respect of the electricity outages in the Western Cape are
indeed regrettable and I once again want to thank you all for the cooperation
and support given during that period.
While preparations for the World Cup has given us a sense of urgency to
address our infrastructure backlogs and accelerate the upgrading of our
telecommunications and broadcasting networks, specific funds have been directed
for 2010.
The Airports Company South Africa (ACSA) will be spending R5,2 billion on
facility upgrades and to ensure that world-class standards in aviation and
tourism are maintained after 2010. R3,5 billion will be directed towards
improvements to the country's road and rail network.
Five new stadiums will be built and five stadiums will be upgraded. More
convenient, modern stadiums are likely to attract higher numbers of spectators
and possibly stimulate the demand for future events of a similar nature. Social
services such as the reduction of crime levels, the overall improvement of
safety and security, better immigration services and improved public health
services will also benefit from the hosting of the 2010 FIFA World Cup.
Furthermore, customs facilities at the country's points of entry and exit
are undergoing a major upgrading for quicker identification of high-risk goods
and reduction of customs delays. The customs upgrade is in line with the
framework of international standards set by the World Customs Organisation. As
part of the capacity expansion plan, government will spend R1,5 billion on
installing new non-intrusive scanning equipment that will detect smuggled goods
effectively.
Additional money has been set aside by South African Revenue Service (SARS)
for operational costs and training customs officials. These interventions will
of course not only benefit the influx of people expected from the World Cup, it
will also ensure that our ports and harbours are efficiently run for the
benefit of our exporters and importers.
A cost-benefit analysis completed by Grant Thornton (2003) for the South
African Bid Committee projected that the event will add approximately R21,3
billion to the Gross Domestic Product (GDP) of our economy and that more than
159 000 new employment opportunities will be created by the event.
The role of South African Airways and air travel
An event of this magnitude will also require affordable, reliable, and
efficient air services. We will be expecting our national carrier, South
African Airways to be playing a leading role in ensuring that the players and
their supporters arrive at their destinations on time. As the bearer of our
country's flag, the keeper of its reputation and the first point of interaction
with what South Africa has to offer, SAA will be focusing on ensuring
high-levels of customer satisfaction.
SAA's acceptance as a member of Star Alliance in April this year will also
assist in enhancing South Africa's accessibility by spectators. Membership to
Star Alliance places the airline amongst the best in the world. It provides
access to over 800 destinations and an estimated 425 million passengers and
assists the airline with common information technology platforms and a wider
selection of services.
To increase the number of tourists to Southern Africa, SAA in collaboration
with key tourism authorities, will be launching âThe visit Southern Africa
Campaignâ on 1 October 2006. All 18 member airlines of the Star Alliance will
run this promotion on board their aircraft. SAA is willing to allow you to
capitalise on this opportunity to promote your own products. A marketing
strategy presenting the uniqueness and splendour of South African wines and the
beauty of our wine lands will serve as a tremendous boost to the industry.
Conclusion
As Francis Bacon, the English philosopher says, âA wise man will make more
opportunities than he finds.â
âThe visit Southern Africa Campaignâ offers compelling global outreach.
Ladies and gentlemen, let us turn the opportunity to showcase the southern
region of our continent to the world into an even stronger positive focus in
anticipation of the grand finale, when we show the world in 2010 just how a
World Cup should be run, and hopefully, just how a World Cup should be won.
I thank you.
Issued by: Department of Public Enterprises
3 August 2006
Source: Department of Public Enterprises (http://www.dpe.gov.za)
