Programme Director,
MEC’s present,
Heads of Departments,
Members of the media,
Ladies and gentlemen.
Welcome to the Economic Development Cluster media briefing. We have called you here today so that we may use this opportunity to communicate with the public and to interface with the media on progress made by the province in the areas of the Provincial Programme of Action which have been assigned to this cluster. Accordingly, during the period under review the cluster mainly focused on the following issues:
a) Economic growth and Job Creation
b) Infrastructure and Assets
c) Improved Transport System
d) Poverty Eradication
The Economic Development Cluster wishes to report that the following progress has been made in the implementation of the above issues:
1. Economic growth and Job Creation
1.1 Guided by the Premier and Members of the Executive Council, stakeholders are being engaged with regards to the Wild Cost Development Programme. As part of these engagements, the Integrated Wild Coast Development Programme (IWCDP) Summit will be held in the OR Tambo Region from 14‐15 November 2013, after extensive and incisive stakeholder consultations within the affected regions were held.
1.2 The Integrated Wild Coast Development Programme is linked to the catalyst programmes driven by government which amongst others include:
a) The planned Special Economic Zone (SEZ) to be promulgated in the area for creating sustainable and descent jobs and also to stimulate industrial action
b) The proclamation of new towns and infrastructure projects as a means of reviving the local economy linked to the Environmental Management Framework (EMF); and ultimately
c) The Strategic Infrastructure Projects (SIP) driven by the Presidential Infrastructure Coordination Committee (PICC) with Umzimvubu Water Basin Project and the Wild Coast N2 Highway as the prioritised initiatives.
1.3 The Wild Coast region is among the poorest in South Africa, with levels of poverty close to 70% and human development index of around 0.38 (compared to 46% and 0.53 for the Eastern Cape as a whole). The short to medium term target for the improvement of the conditions of the region is that by 2020 the region’s levels of poverty and human development index should be on par with the province as a whole.
1.4 The Wild Coast programme presents a new era for socioeconomic planning and the department is working hard in mobilising stakeholders to be abreast about the planned developments for the betterment of lives of people in the affected areas.
1.5 Good progress has been recorded regarding creation of employment during the first quarter of 2013/14:
a) The Expanded Public Works Programme alone exceeded its job creation targets as 94 000 jobs were created against a target of 55 000.
b) The Hlumisa Development Fund introduced by the provincial government in 2009 as an integral part of the EPWP household contractors programme to empower and support household contractors to find better alternative employment and livelihood opportunities that would provide them with increased or alternative earning capacity is yielding results. R35 million for the Household Contractors to set up cooperatives on selected niche areas.
c) We have targeted to create 4 625, in general, the Eastern Cape Development Corporation (ECDC) and Coega reported 2 193 and 314 jobs created respectively, and 4 892 was external jobs. This exceeds the first quarter target by 115%.
1.6 Through the Imvaba Cooperative Fund, the ECDC disbursed R18.5million (in both loans and incentive grants) to 21 cooperatives. R15.6 million was disbursed through the Jobs Stimulus Fund over 3 window periods in 2012/13, saving 1 560 jobs which would have been lost without this intervention.
1.7 For the current financial year a total of R18.46 million of the R30 million annual targets has already disbursed between 1 April and 30 September 2013 to a total of 44 companies approved under the Jobs Stimulus Fund.
The Jobs Stimulus Fund continues to link high profile clients to investment and loan department for further loan funding, thus adding quality applications to the ECDC pipeline. The largest approval to date was R15 million facility to TrelleborgVibracoustic Ikhwezi, a global automotive component manufacturing joint venture in the ELIDZ.
1.8 The signing of the Tripartite Agreement by the Development Bank of Southern African’s Jobs Fund, heralded the start in the implementation of the long awaited agro‐processing industrial initiative funded through the DBSA Jobs fund. Certain milestones have been achieved namely:
a) The signing of the Community Agreement with the broader Ncorha Communities within Intsika Yethu Local Municipality in support of the implementation of the “Trading Post”.
b) ECDC committed R24 million for the implementation of the Trading Post and Maize Milling project in Mqanduli, near Mthatha. This financial injection attracted an additional R91 million from the DBSA’s Jobs Fund. The venture has a potential to stimulate primary agriculture, processing, logistics, transport and industrialisation opportunities.
1.9 Since 2009, government created 14 525 jobs across the province through land care, agricultural infrastructure, cropping programme and irrigation schemes across the province.
1.10 The Coega Development Corporation ensured that a total of 13 569 jobs were created during the course of 2012/13, a substantial figure that exceeding a target of 10 056 jobs. This figure has significant implications for families across the Eastern Cape and has had a major and far‐reaching contribution to socio‐economic development in the province. The CDC is proving that it, through both IDZ and external activities, is a leading catalyst and a champion for socioeconomic growth.
1.11 In line with the vision of the Provincial Sustainable Energy Strategy, the province has secured 10 wind farms and 1 solar farm in the first and second bidding rounds of the National Renewable Energy Independent Power Producer Programme. The estimated value of the wind farms is R18 Billion.
The energy facilities are currently under construction, with the first tranche of five farms due for completion and operation in 2014. Once operating, the wind and solar farms will generate enough electricity to power half of the requirements of the province when the wind is blowing and the sun is shining.
Such generation of electricity reduces dependency on imported electricity from other provinces, while at the same time creating local jobs. Furthermore, the procurement rules for the wind and solar farms ensure that a portion of the revenue from the facilities flow to the local community.
The allocations of the renewable energy facilities are as follows:
a) MetroWind Van Stadens Wind Farm, Nelson Mandela Bay
b) Red Cap Kouga Wind Farm, Kouga ‐ Oyster Bay
c) Dorper Wind Farm, Stormberg
d) Jeffreys Bay Wind Farm, Jeffreys Bay
e) Cookhouse Wind Farm, Cookhouse
f) Waainek Wind Farm, Grahamstown
g) Chaba Wind Farm, Qumra
h) Amakhala Emoyeni, Cookhouse and Bedford
i) Tsitsikamma Community Wind Farm, Humansdorp
j) Grassridge Wind Farm, Coega
k) Dreunberg Solar, Burgersdorp
1.12. The ELIDZ has been successful in its mandate of attracting investment; during the 2012/13 financial year alone ELIDZ signed 8 new investments worth R1.02 billion with a bulk of these being in the automotive sector as part of the opportunities linked to the W205 opportunities. This is the highest number of investors we have ever signed on in a 12 month period since inception. The total number of secured investors has moved from 24 to 32 investors year on year.
As at the end of the financial year, 64% of these investors were already operating from their premises in the zone while 23% were busy with the construction of their manufacturing facilities in the zone.
1.13. The ELIDZ continues to implement a number of firsts for the region:
a) The ELIDZ has also successfully developed other clusters beyond the automotive cluster which was its initial anchor cluster. The zone now boasts investments in agroprocessing,
aqua‐culture, renewable energy and ICT and BPO sectors.
b) We have developed of the country’s most technologically advanced surface treatment plant to extend the region’s automotive capabilities.
c) We have the Eastern Cape’s first diamond polishing facility which has polished over 7000 diamonds for exports in the last three years.
d) First IDZ in South Africa to pilot the IDZ Customs Controlled Area incentive – currently 8 CCA enterprises have been declared by SARS.
1.14. The biggest impact has been in changing lives:
a) In the last twelve months direct manufacturing and services jobs have grown by 36% year on year with 2720 direct manufacturing jobs as of end October 2013.
b) 962 direct construction employment opportunities were created in the last year taking total construction opportunities to 21 262 since inception.
c) Over 419 million worth of contracts were awarded to local businesses in the last 10 years, R71 million of which went to SMMEs.
d) We continue touching young lives – 332 young people have gone through the ELIDZ’s training programmes including internships and learnerships, the latest of which is our Renewable Energy Experts training programme which will see us produce the first group of qualified solateurs.
1.15 With regards to production of innovative prototypes government has developed a Provincial Innovation Strategy and initiation of various innovation projects such as Hemp, Natural Fibres; Nguni Cows and Biogas has started.
1.16 In ensuring that both emerging and commercial farmers do not lose their livestock to diseases, various types of vaccines were administered to livestock in the province as well as to pets such as dogs and cats for the control of diseases such as rabies, black quarter and anthrax. More than 1.1 million animals were vaccinated against controlled animal diseases. Government remains committed to the implementation of animal identification which assists in minimising stock theft. To this end 136 branding demonstrations have been conducted.
1.17 The annual sheep scab treatment campaign continues to be an important programme for all sheep producers especially for wool sheep producers; through this exercise 66 208 treatments have been applied to sheep for the control of sheep scab in order to improve the quality and quantity of the wool clip. This has added value to the quality of wool clip produced and sold to wool markets for export to other countries and upliftment of the rural community.
2. Infrastructure and Assets
2.1 Within the first quarter of this financial year, our performance with regards to the delivery of basic services has been notable as 1 091 new households received tap water, while sanitation was extended to 5 468 new household; and 350 new households received electricity. It should be noted that currently 97.1% of households in the Eastern Cape receives tap water while electricity connections have increased from 66% in 2001 to 75% in 2011.
2.2 In more efforts to improve infrastructure delivery and expenditure, the Department of Local Government and Traditional Affairs is assisting the Department of Water Affairs in coordinating the support on 14 Water Services Authority (WSA) municipalities that are receiving Regional Bulk Infrastructure Grant (RBIG).
2.3 Government continues on improving East London as an investment destination of choice through the work of the East London IDZ. Infrastructure program is valued at R1.8 billion in the last 10 years – this includes close to R200 million worth of infrastructure to improve the electricity supply (Leeches Bay) and road networks in Buffalo City. The ELIDZ investment has also led to an improved view of the potential of the city by Transnet leading to investment in the EL Port and the upgrade of the EL/Gauteng rail to improve the logistic linkage between East London and Gauteng.
2.4 Enclosing arable land and grazing areas is one of the key projects that government has undertaken and as such 1 915km of fencing was completed. Government continues to give support to communities in their farming initiatives through the building of agriculture infrastructure. Since 2009, 14 new dipping tanks were built to reduce the occurrence of tick borne diseases and animal mortality in the province.
A total of 1 504 dipping tanks are spread throughout the rural communities as well as in the commonages or peri‐urban farming areas. We have constructed 21 shearing sheds for wool production to improve marketing and value of wool in order to increase income for farmers. 13 stock water supply systems were provided and three lives stock handling facilities were provided to communities.
2.5 The provincial government is continuing to show its commitment to the eradication of mud schools in our province and building state of the art schools across the province. For the first quarter of this financial year 20 new work projects was reached and exceeded by 1 as progress reported is 21. With regards to the Accelerated School Infrastructure Development Initiative the following progress has been achieved:
a) 50 completed by Development Bank of South Africa
b) 30 by Independent Development Trust
c) 62 schools under construction by CDC
d) 44 by Department of Roads and Public Works
2.6 ECDC disbursed loans amounting R60 million to 28 enterprises in the construction industry by the end of 2012/13 financial year, thus contributing to infrastructure development, The majority of the loan funding in this sector was allocated to construction businesses commissioned for the school building programme, the Accelerated Schools Integrated Development Initiative (ASIDI) which is linked to the National Infrastructure Development Programme.
2.7 In addition, ECDC, together with the Industrial Development Corporation, has co‐funded a private hospital currently under construction in Mthatha to benefit the health sector. CDC’s investment in the Mthatha Private Hospital totalled R3.8 million, with 22% equity.
2.8 In the current financial year, the ECDC confirmed that 60% of approved loan funding has gone to funding the construction and infrastructure development of the OR Tambo Region. A sign for further support and participation by the corporation in the multimillion ASIDI and the multibillion Presidential Infrastructure Coordination Commission (PICC) program focusing in the infrastructure development in this area.
2.9 The provincial government also prioritises resolving the challenge of office space across the departments. Great progress has been made in relocation of government departments from Kokstad to Mount Ayliff; Mount Frere and Matatiele/Maluti. Only 2 departments are remaining in Kokstad of which space is being sought.
Land has also been procured for the construction of the Bhisho Precinct for office more accommodation. Government has also made a decision to convert underutilised government buildings such as hospitals, old colleges to one stop office parks for example; Tower Hospital and Cape College in Fort Beaufort.
2.10 Regarding Small Towns Revitalisation, seven towns received funding to the value of R2,4 million. For most of these towns, the funding will be utilised for the implementation of Phase 2 of the revitalisation project. This programme involves beautification of the identified towns and completion of this is reported for Butterworth, Alice, Port St Johns and Cala.
Furthermore, DLGTA has requested assistance from Municipal Infrastructure Support Agent, MISA with regards to the implementation of MIG.
2.11 The roads construction that have been handed over to SANRAL has brought much needed relief into the Roads Infrastructure budget thus allowing us to direct the funds to other roads projects. However we have incurred major setbacks due to unprecedented incidents of flood‐rains which eroded our roads further depleting the little budget the department had.
3. Improved Transport System
3.1. Fifty five thousand (55 000) learners qualifying to benefit from the scholar transport program have been transported to 640 schools.
3.2 The Provincial Integrated Public Transport Master Plan was adopted by Cabinet last week and it was officially unveiled on Saturday by MEC Marawu during the National Closing event of the 2013 October Transport Month Campaign. The implementation of the plan has started with the reintroduction of the Metro‐Rail bus passenger service between East London, Bhisho and King William’s Town.
4. Poverty Eradication
4.1. The alleviation of food insecurity is tackled through the support for both household food gardens and for production of field crops such as maize, beans and vegetables. The household food production scheme entails the provision of gardening inputs and supplies to schools, community projects and homestead gardens.
The development of crop production remains an on‐going intervention across the province and 94 740 hectares have been planted in the province over time, with 59 278 beneficiaries.
4.2 Government has targeted to increase the number of households that are food secure by 1335 in the first quarter and a total of 840 has been achieved.
4.3 The Department of Social Development and Special Programmes has implemented food security projects amounting to over R1,7m in Mbizana; Port St Johns; Mnquma and at Intsika Yethu targeting 162 households. While the Department of Rural Development and Agrarian Reform ensured that 528 households receive seed potatoes in Mbizana and 7 households benefited with hydroponic vegetable production inputs to the value of R200 000.
4.4 Fourty (40) households in Rietbron were supported with drought relief feed costing R300 000; stock watering infrastructure costing R200 000; vegetable production inputs costing R30 000; 10 water tanks (5000 L) costing R30 000, boundary fence costing R500 000, dip and stock remedies costing R10 000.
Thank you!
For more information:
Ncedo Kumbaca, Chairperson of Economic Development Communications Cluster
Cell: 082 562 6023
