Archive | Education

Lack of skills hampering broadband rollout

Broadband for SA needs local tech….

computerSchoolThe lack of IT skills in broadband development in government, especially those responsible for implementation of the new broadband policy in SA as well as technicians in the field, has become a major issue of debate in Parliament recently.

The department of telecommunications and postal services (DTPS) has increased it spend in consultancy services by nearly 400% in the last year according to its presentation documents to the relevant parliamentary portfolio committee.

Also, once again the rationale behind the splitting of the department of telecommunications and postal services (DTPS) away from the department of communications (DOC) was queried in Parliament as “not being in line with world trends” causing delays in implementation plans.

DTPS in long terms will benefit

Both these issues were responded to by the responsible minister, Dr Siyabonga Cwele, who was in attendance when DTPS presented their strategic and annual performance plans to the relevant portfolio committee.

Dr Cwele said that he was far happier to leave DOC concentrating on matters surrounding the SABC and migration to digital TV, leaving his department (DTPS) to pursue the objective of uplifting South Africa into the world of broadband.

Broadband will help all

This objective also fitted into the plan to re-model and reassess what was expected from the South African Post Office (SAPO) and for government to decide, like many other countries had done, where postal services fitted in and how to consolidate on the valuable rural outreach of SAPO in respect of other services required by poorer sections of the community.

What was clearly missing during the meeting was, according to parliamentarians, exact timelines for broadband introduction to schools, health services, government departments and state owned utilities, Dr Cwele being quite clear that DTPS had been mandated to ensure that affordable broadband was available.

Staff needed to do the job

Dr Cwele acknowledged, however, that DTPS was greatly under qualified to achieve this due to lack of technical skills and the department did not have enough capacity to deliver on its mandate, as this was a very technical sector of public services. It was too early to commit to timelines but at this stage they had to build the staff complement to do the job, he noted.

He said that DTPS had to bring highly skilled young people into the organisation considering the internet revolution and the growing need for national broadband services. “We need skills not expensive managers”, he added.

Technicians not paper creators

It was explained, in general, broadband refers to telecommunication in which a wide band of frequencies is available to transmit information at greatly increased speed, the installation of which should bring costs down, South Africa having some of the highest communication cost factors in the world.

Ms Rosey Sekese, DG, DTPS, in presenting her strategic plan, said her immediate  priorities were:

• broadband connectivity focused on radio frequency spectrum
• cyber security
• the cost to communicate
• an Information Communication Technology (ICT) policy review
• a national e-strategy
• a turnaround plan for SAPO

The total budget allocation for the Department was R1.4 billion, a reduction from R2 billion in the previous financial year.

Opposition members wanted to know the criteria that DTPS had used to choose Telkom as the leading agency in the rollout of broadband and whether this was fair competition.

Also, they asked why DTPS had emphasised the roll-out of e-governance in the public service to meet NDP targets as first objective. Rather, they said, the focus should have been on business and industry, the ICT sector in the commerce and industry sectors needing this and who played a far greater role in economic development and job creation.

Telkom has to lead in this..

TelkomMinister Cwele responded that the selection of Telkom as the leading agency in the rollout of broadband was as a result of Telkom having the largest terrestrial fibre network and was also based on cost, as this was a state owned entity.

On business and industry needs, he also said DTPS needed to find a way to work with the private sector that could improve economic growth and he, the deputy minister and the DG had been in constant engagement with the private sector as it was realised that this was essential.

The department would also work together with the department of trade and industry and the department of small business development to create incentives for investment in SMMEs, as they realised that many small companies had been marginalised by slow internet services and limited access to the many international IT developments taking place and additional sea cable services.

Creating certainty

He added that he was perfectly aware of the challenges in the finalisation of a spectrum policy to internetcreate a smooth path for the regulators and he was also aware of the need to create certainty in the telecommunications industry. He acknowledged that DTPS was following closely the experiences of the Western Cape and Gauteng broadband rollout plans.

The minister promised that all critical posts within DTPS would be filled within the next three months. However, opposition members continued to draw attention to the question of the general IT skills shortage and said it was yet another “crisis about to happen”.

DA’s Gordon Mackenzie noted “a dramatic increase in outsourced services from R52.5m in 2014 to R230m in 2015” and said this route only added to the high cost of communications in South Africa.

Other articles in this category or as background
Overhaul of broadband policy underway – ParlyReportSA
Parliament gets final dates for digital TV – ParlyReportSA
More state powers for ICASA proposed – ParlyReportSA

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SA needs 3 languages not 13, CSIR says

New minimal language policy proposed by CSIR

signpostThe Council for Scientific and Industrial Research (CSIR) says that 77% of South Africans can understand each other in three of the main languages. They have, as a result, proposed that a language policy which recommends English, isiZulu and Sepedi as official languages, be adopted. A draft new language policy has been published in the government gazette for public comment which minimalizes ten of South Africa’s current official languages.

The proposal, however, makes it clear that it also recommends that a policy should be adopted for use of information in additional languages in areas where there is “a regional footprint” and “as far as is practical and reasonable” to respond to requests and communications sent in languages other than the official three.

Sepedi

The organisation says the selection of its three official languages was based on “maximum reach through the principle of mutually intelligible languages”. Sepedi is one of many dialects of the Sotho people, known as Northern Sotho or Sesotho sa Leboa, from whence the homeland name of Lebowa was drawn, and is mostly spoken in the Northern Province of South Africa.     Around  3.7 million people in South Africa use it as their home language, it is reported, and Sepedi is the most common language spoken in the heart of the industrial South Africa, which also has largest residential area.

English

Meanwhile, English is the most common language in schoolbooks. It also the most common “lingua franca” of  trading partners in North America, the Australasias, India, and to a great extent in Africa and Europe, all of which are major trading partners of South Africa. All government correspondence in South Africa has now switched to English as first choice, as does business and commerce by default, which fact is probably related to the fact that this is first choice of the JSE and the IT industry worldwide.

Zulu

IsiZulu, also known as Zulu, is understood by people from the Cape to Zimbabwe and reported to be understood by some 10 million persons.   Zulus are part of the Nguni group of people, taking their name from the chief who founded the royal line in the 16th century.   King Shaka raised the tribe to prominence in the early 19th century, from whom the current dynasty is founded. Over 95% of those who speak isiZulu live in South Africa, meaning that 24% of the population can speak this language, dwarfing other languages except English.

Zulu is the most widely spoken home language in South Africa, rated as understood by 24% of the population, with about 10 million speakers – the vast majority of whom live in South Africa.

Not included

Notable is the fact that both Afrikaans (the language of the political base prior to 1994 and the cause of outbreaks of violence when the language was named as first choice for schools throughout South Africa) and Xhosa (the language of the political base after 1994), are not included.

Neither is Tswana mentioned, one of current eleven official languages in South Africa, which is spoken by a larger number of people actually living in South Africa and not in Botswana, the home of the language. Other articles in this category or as background http://parlyreportsa.co.za/trade-industry/nema-waste-ask-parliamentarians/

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PRC report out on SA’s public service..

Lack of liaison throughout….

The presidential review committee’s (PRC) report on state-owned enterprises (SOEs) is now in the public domain.

The report clearly lays out in writing what has suspected by many for a long time; that in the opinion of the PRC there is major disconnect between government departments in form of liaison over national objectives; a total lack of common  data to work with and that there is a similar disconnect between SOEs and the different tiers of government service – national, provincial and local.

The recommendations precede a Bill which to be tabled by the minster for performance monitoring and evaluation, Collins Chabane, called the State Owned Entities Bill, which will relate to all SOEs, their planning and decision-making processes, as well as their relationships with government departments in general.

All this is to be in an effort to overcome the problems enumerated in the report.

Governance issues

In a statement issued at the time, the minister stated that cabinet had approved the final report at the end of April 2013, the original committee to make such a report, having set this up in 2010 with the objective of auditing all SOE’s to “review the current governance arrangements”.

It was also expected of the process to review government’s development objectives, particularly in so far as the New Growth Plan was concerned and comment on possible improvements in SOE contributions.

Auditing 700 units

The committee was given 21 terms of reference covered in the general topics of development and transformation; governance and ownership; their business viability and their strategic management and operational effectiveness. A total of 715 SOE units were listed for audit.

“Crucial weaknesses within SOEs were that whilst SOEs have an indispensable role to play in service delivery and also have crucial performance and transformation potential, there are grave impediments to their optimum contribution”, the minister said.  It is now proposed to set a SOE inter-ministerial committee to guide implementation of the recommendations.

One of the crucial issues to emerge from the report was whether SOEs were responding to the South Africa’s developmental agenda and assisting in a meaningful way towards the need for government departments to deliver. The report also recommends, aside from the fact that government should enact a single overarching law (State Owned Entities Act), it should also establish a central remuneration authority (CRA).

Mixed objectives

It was clearly established that there are “no commonly agreed strategic sectors and priorities across the three spheres of government as well as a common database on the SOEs.”  “There are also challenges”, the report says, “and an endemic tension with balancing the trade-offs between commercial and non-commercial objectives of SOEs including the funding those mandates and as well capitalisation model for the SOEs.”

After enunciating on eight pages of reforms needed, the PRC report concludes that “government must ensure the requisite capacities to implement these SOEs reforms are in place, including visioning and strategy-setting, appropriate human capital and structures, as well as an effective electronic oversight systems to enabling monitoring and evaluation of SOEs.”

It calls for the establishment of an SOE Council of Ministers to drive implementation of the recommendations of the PRC to achieve effective state oversight  by cluster grouping but specifically states that any “commercial” SOE should be overseen by two distinct cluster authorities.

Thirty one specific issues that need immediate attention are identified and certain “critical challenges” isolated, which included “an endemic tension with balancing the trade-offs between commercial and non-commercial objectives of SOEs including the funding those mandates and as well capitalisation model for the SOEs.”

Tiers disconnected

It also noted that there were “no commonly agreed strategic sectors and priorities across the three spheres of government.”

The authors had studied similar structures in New Zealand, Canada and Sweden “where SOE reforms have proved to be reasonably successful. They were amongst the first to focus on formulating a clear overarching legislative framework for SOEs and setting out objective for the management of SOEs”, the PRC reports says.

“In many SOEs”, the report concludes, “there is a current need for massive injection of capital and the finance policies of many SOEs require close re-examination. Ownership policy and funding models for social and economic development mandates of SOEs are in some instances are blurred and bewildering, at times leading to undercapitalisation; a factor which completely impedes the SOE’s ability to meeting national challenges it has been set.”

Refer previous articles in this category
http://parlyreportsa.co.za//cabinetpresidential/presidential-review-committee-calls-for-overhaul-of-soes/
http://parlyreportsa.co.za//cabinetpresidential/public-enterprises-reports-on-a-rocky-and-controversial-year/

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Employment Services Bill to promote jobs, free employment services

Labour broking debate continues

A new Bill has been tabled in Parliament called the Employment Services Bill which aims to regulate in the area of employment services, regulating and providing for registration of private employment agencies. One of the aims of the Bill is to provide “comprehensive and integrated free public employment services” and to “establish schemes to promote the employment of young job seekers and other vulnerable persons”.

The government gazette, in describing the Bill’s purpose, says the legislation has been designed to regulate for and facilitate the employment of foreign nationals into areas “where they are needed ….and does not impact adversely on existing labour standards or the rights and expectations of South African workers”.  The Bill has been tabled by the minister of labour.

An “employment services board” is to be established to “promote employment, growth and workplace productivity” and “give effect to the right to fair labour practices contemplated in section 23 of the Constitution.”

Constitutional concerns

In terms of the Bill, schemes to assist employees in enterprises in distress and therefore to retain employment, will be undertaken and efforts made to “improve the employment and re-employment prospects of employees facing retrenchments.”

The Bill comes at a time when the furore over “labour broking”, whatever that might mean to different parties, is slowly subsiding and a more pragmatic approach appears to be the route rather than outright banning of short term work opportunities through agencies or “brokers”.

Nevertheless, the proposed legislation covers many more aspects than simply that issue. Hearings will take place once Parliament re-assembles in the New Year.

The new proposed legislation states that private employment agencies will be prohibited from “charging work seekers any fees for services rendered, unless the minister permits such fees for specific categories or specialised services” and they will be prohibited from “making deductions from employees’ remuneration”.

Private employment agencies must keep and safeguard the confidentiality of information relating to work seekers, the Bill warns, and “the labour court will be empowered to impose fines for breaches of the act”.

In the preamble, the Bill states that its purpose is to improve access to the labour market for work seekers and “facilitate access to training for work seekers, in particular, vulnerable work seekers.”

Posted in Education, Finance, economic, Labour, Trade & Industry0 Comments

Womens constitutional rights to be followed up at law

Public hearings scheduled

Cabinet has approved the release of the Womens Empowerment and Gender Equality Bill for comment, a Bill which was drafted by ministry of women, children and people with disabilities in terms of Section 9 (2) of the Constitution.

According to the statement, the draft bill seeks to provide the department with the necessary authority to monitor, review and oversee gender mainstreaming into government processes and to promote the protection and advancement of women as per the Constitution in the private sector.

During her 2012/13 budget address, Lulu Xingwana, the minister involved, said that such a new law as then envisaged would amplify the Constitution on the subject and assist in the de-marginalisation of women and discrimination in terms of economic and labour opportunities and access credit and finance.

In her speech she also referred to women having more rights insofar as access to land was concerned.

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New drink and drive limits proposed from 0,05 to 0,02

It is proposed that new limits on blood and breath alcohol concentration levels when driving should not exceed 0,02 gram per 100 millilitres in the case of blood alcohol (as opposed the current 0,05); and  0,10 gram per 100 millilitres of breath (as opposed to the current 0,24). For professional drivers the proposed limits are even stricter.

Comments have been  invited on the draft National Road Traffic Amendment Bill, 2012 with a view to amending National Road Traffic Act 93 of 1996.

The deadline for written submissions is 18 August 2012. In addition to the drink and drive limits, the gazette proposes, amongst other things, provisions in the amendments for:

•    registering and licensing motor vehicle manufacturers, builders and importers
•    registering and licensing number plate manufacturers
•    empowering the minister to prescribe training procedures for licence inspectors
vehicle examiners, driving licence examiners, traffic officers and traffic wardens
•    imposing a duty on drivers to be in physical possession of driving licences
•    regulating the driving school industry

The draft amendment bill also seeks to set 1 May 2003 retrospectively as the date after which, in terms of section 18(6)(a) of the act, any driving licence officially included in an identity document will not be accepted as proof of being in possession of a valid driving licence.

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Township mortality rates from electricity theft on the increase

In a presentation to Parliament on safety measures being adopted by the suppliers of bottled gas cylinders and paraffin stove manufacturers and Eskom, as suppliers of energy to lower income homes,it was confirmed that mortality incidents in informal townships as a result of electricity theft and illegal connections were very much on the increase.

It emerged that much of the community risk that was involved mainly in South African townships occurred as a result of pirate trading and illegal tapping into power infrastructure systems. Pictures were shown of amateur connections being made in small electricity sub-stations.

Eskom reported that community safety education, the building of proper homes and more regulatory checks by the relevant departments were the only chance of reducing deaths and accidents in all three energy spheres, those reporting to Parliament stated. Eskom said that they were stepping up such programmes.

The para statal told parliamentarians that the number of public injuries arising from misuse of electricity had risen steadily over three years reaching 179 in 2012, as yet an incomplete year, as compared with 136 for the whole year last year.     74 deaths had been recorded already this year, as compared with 82 for the whole of 2011.

Illegal connections in informal settlements remained the main cause of death and the main direction taking by Eskom in combating this problem lay in education at schools, the only contact point that could be established on a regular institutional basis.

In the case of the Liquified Petroleum Gas Assoc. of SA (LPGSA), Denis Herold, told the parliamentary committee on energy that the major problem facing them in countering accidents  and injuries, sometimes fatal, was that some LPG gas suppliers were unregistered and as unqualified gas bottle fillers they risked the lives of those around them with illegal filling and gas cylinder distribution. It was difficult to find and identify these people.

He said the main risk with LPG gas bottles was the filling aspect and providing this was done in the correct manner by a registered supplier who both understood the processes, was registered and abided by the regulations and SABS standards, there was no problem.

One of the problems was a cross border migration of cylinders problem resulting in old and dangerous cylinders infiltrating into the marketplace, he said. Herold called for legal and proper use and distribution of gas bottles only by owners; more control by the national regulator regarding LPG gas bottle usage and the enforcement of the Petroleum Products Act by the state authority in respect of gas bottle filling.

Patrick Kulati of the Paraffin Safety Association (PSA) indicated that whilst burn injuries from paraffin use were about half that of burn injuries from electrical accidents, poisonous ingestion to children was a problem with children, particularly in the first and second year of life, and this could only be solved by parental education. There were involved deeply is such education programmes.

He pointed to the underlying social problems facing South Africa such as cramped living conditions in illegal townships and improperly built living quarters; a lack of safe, affordable appliances and the combustible materials making up many homes at present. However, he said that PSA’s main effort had to be in the direction of joining with other energy suppliers in the education programmes available.

Again it was stressed that most of the problems arose out of poor housing situations and informal settlements.

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State acknowledges responsibility to increase health staff

Minister of health, Aaron Motsoaledi, was reported by Sapa as stating that health is a public good and could not be just left cannot be left to the dictates of the market. He was speaking at a health conference where he announced that his department was about to improve public services in certain area and increase health staff.

The state, he said, knew that the public service was short of professional doctors and was to do something about it. His department planned to pay private sector doctors to work a certain number of hours at state clinics.

A thousand South African school leavers with the right passes were also being sent to Cuba to train as medical doctors which represented a massive increase from the present allocation currently sent.

Motsoaledi said the state would spend R1.4bn on refurbishing approximately one hundred nursing colleges across the country and said earlier decisions to close a number of such colleges had been the wrong decision.

On preventative medicine, minister Motsoaledi said his department “would try and improve hygiene, infection control, long queues in hospitals, drug shortages and the safety of staff.”    A health ombudsman was to be appointed to create a platform for the public to lodge complaints.

He concluded that there were plans to introduce a school health system which would deal with immunisation, the use of drugs and alcohol, and teenage pregnancy.

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New anti-smoking legislation generates queries

In a story which goes back to 2008, when the previous minister of health introduced the second round of major changes to the Tobacco Products Act, saying at that time that tobacco was the second leading preventable cause of death in South Africa and that 40% of smokers would die before reaching retirement age, a new and further set of smoking prohibitions have now been devised.

Earlier than 2008, legislation had already been extended to include a comprehensive ban on advertising, promotion and sponsorship by tobacco products manufacturers and a smoking ban in public places was instituted, with  penalties for offences.

 The 2008 amendment Bill extended the advertising ban to include a further ban on all commercial communications of any kind designed to promote sales; the age restriction was increased to 18 years of age for buying and selling tobacco products and sales were banned through the post or by internet.   In addition, any donations made by manufacturers had to be made anonymously.

“Cigarette parties” were stopped through banning the distribution of free products and no non-tobacco products allowed in tandem for sale on cigarette vending machines, already restricted by earlier legislation where they were to be placed.

The new prohibitions gazetted by Minister Aaron Motsoaledi virtually ban all indoor smoking, even in previously designated smoking areas, it would seem, and even extends to smokers having to distance themselves from all others on a beach.     However, once again the anti-smoking prohibitions have drawn a line between public and private places.

 

The new proposals read:-

  • No person may smoke any tobacco product in any public place.
  • No person may smoke any tobacco product in the following outdoor public places:

(a) stadiums, arenas, sports facilities, playgrounds, zoos;

(b) premises of schools, or child care facilities;

(c) health facilities;

(d) outdoor eating or drinking areas;

(e) venues when outdoor events take place;

(f) covered walkways and covered parking areas;

(g) service areas and service lines; and

(h) beaches where public bathing is permitted, not less than 50 metres away

from the closest person near the demarcated swimming area.

As far as restaurants and bars are concerned, aside from creating separate designated “outdoor” smoking areas, it is not clear whether all existing “internal” smoking areas must be closed down with the new provision of disallowing smoking in all public places.

The proposals are that no food or refreshments can be served to the designated outdoor area; ashtrays must be installed and regularly cleaned; no entertainment can be provided (presumably meaning a TV set or monitor) and a call is made that smokers are to be “discouraged from remaining in the area longer than is necessary to smoke a cigarette”.

Warning notices on fines if smoking rules are not followed have to be installed.

On the subject of signage, all owners of buildings that are used by the public without exception must install or erect “no smoking” signage and in all workplaces, the signage being the internationally accepted red circle with a cigarette and line across the circle.

The new proposals have generated considerable comment, primarily regarding their enforceability by owners and from some parties, on their constitutionality.

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New veterinarian Bill to allow “drafting” for community service

A new veterinary bill,  the Veterinary and Para-Veterinary Professions Amendment Bill, attempts to identify a number of serious challenges facing the veterinary profession in South Africa but at the same time the Bill calls for newly qualified veterinarians to undertake community service.

The Bill was tabled by agriculture, forestry and fisheries minister, Tina Joemat-Pettersson.

In Parliament last year, the minister talked of new legislation in the light of the serious outbreaks of animal sicknesses in the country and the new Bill, as now tabled, specifically changes a number of features surrounding present practices, including a definition to be included on physiological conditions when referring to veterinary services.

In the light of the fact that South Africa is extremely short of veterinarians, provision has been made for registration of a graduated person to whom a degree has not yet been conferred; the use of the word “para-vetinarian”; specific provisions made for facilitating continuing professional development amongst the profession; provision for suspension of registered persons and an appeals committee.

Continued registration of “foreign” vets who have received citizenship or permanent residency status is to be made easier but on the subject of community service for younger qualifying veterinarians the minister said “it was likely that the veterinary profession will support the proposed changes”, this providing a minimum of 100 jobs per annum. Some of the major problems faced by the veterinary professional in South Africa, the minister said, was a shortage of vets in the agricultural areas and the departure of newly qualified vets to other countries.

 

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UCT says state should buy national grid from Eskom

The state should own South Africa’s national electricity transmission grid as an independent unit, as is common in many other countries, thus separating the grid from the operations of Eskom to in order to improve the perception in an investor’s mind of how the electricity generation industry was structured in this country. This was proposed by UCT’s Graduate School of Business (UGSB).

In a submission before the parliamentary portfolio committee on energy on the Independent System and Market Operator (ISMO) Bill, Joseph Kapika, on behalf of Prof. Anton Eberhard of UGSB, presented the case for the separation of the two structures – South Africa’s national transmission grid currently owned by Eskom, and that of Eskom itself as an operational generating body.

In complete contrast to an earlier Eskom proposal, which had mitigated for a slowing down of the process of allowing independent generating bodies proposed by the ISMO in order to preserve Eskom financial credibility, Kapika said that the reverse was needed and that the process of establishing ISMO should be speeded up in view of the dismal track record of Eskom over the last few years to run the system.

Furthermore, UGSB suggested that the minister of energy and thus Department DOE through ISMO, be given full responsibility for energy and electricity planning in South Africa.

He added that in the view of UGSB, Eskom would find itself totally unable and unqualified to deal with independent power producers (IPPS) and the hybrid power market in general. Similarly they were not the right people to handle procurement for independent power structures, whatever the type and route taken for the ISMO process.

In a radical suggestion which resonated well with a number of MPs, Kapika said that the entire grid should be bought by the state from Eskom in a simple transfer.  Costs, say it was R50bn he said, should be simply transferred as cash to Eskom in return to re-enforce their balance sheet and creditworthiness for such matters as power stations.

This would ensure a level playing field for investors, Kapika said, independents therefore establishing that the grid was free of encumbrances from Eskom and its track record.

MPs asked Joseph Kapika whether USGB felt this move would bring prices down or would such a move better control licensing of IPPs and bring security of choice to the system.   Kapika replied that whatever was said and done with ISMO, the process of establishing a level playing field for investment was the most important issue and affected both subjects.

He added that the fact that Eskom controlled 90% of the power generation and controlled also the grid gave the perception of unfairness and uncompetitiveness and therefore the perception that Eskom completely controlled the entire electricity market from start to finish was a sorry state affairs for any investor to consider.

When asked why there was only a 2% IPP input at present in the form of investors to the system, mainly solar, and what was causing the blockage, Kapika replied that it had much to do with the dominance of Eskom but UGSB had also looked to other countries “to see what had happened with their IPPs and ISMOs”.

They had found that there were many issues involved but it was quite clear that it was not just high prices that attracted IPPs to make an investment. The answer had to be that in South Africa there had to be better definitions of powers and ownership between what the ISMO does and cannot do and what Eskom owns and should not own.

This was urgent, Kapika said, and thought should be given to the idea of separation of control over the segments of the industry as soon as possible.

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SA Budget – 2012/3

Having announced that South African finances were “in good health”, a silence echoed around the National Assembly debating chamber as finance minister Pravin Gordhan announced in this year’s budget statement a general fuel levy on petrol and diesel, which will go up on April 4 by 20 cents and the fact that the RAF levy would go to 88 cents, i.e. up by 8 cents.

A levy on generated electricity from non-renewable sources will increase by 1 cent per kWh from July and this will replace current energy efficiency initiatives.

Again, as per last year, Minister Gordhan has proposed personal income tax relief, this year amounting to R9.5bn. A further tax credit for contributions to medical schemes is to be introduced, with reform to tax treatment of contributions being planned.

The introduction of short and medium term savings exemption programmes is to be introduced and the capital gains tax for individuals goes to 33.3% from March 1 and for companies to 66.6%.

A number of measures are to be introduced to improve the corporate tax environment but ways to finance the forthcoming National Health Insurance programme have to be found, minister Gorhan said, and this could include an increase in VAT, a payroll tax or a surcharge on general tax.

However a grant would suffice in the meanwhile until 2014 when a workable system would have to be found  to provide” an equitable system of health coverage for all South Africans”.

Commentators, we see, have already discounted a possible VAT increase as politically dangerous for the ANC, pointing to a general payroll increase during the early stages at 0.5%, other government-watchers noting that such a welfare programme is likely to be introduced on a province-by-province basis in line with the hospitalisation infrastructure programme.

The minister clearly indicated that a carbon tax was to be introduced.

A budget deficit of 4.6% of GDP, with government debt reaching R1.5 trillion by 2014/5, was announced by the minister.

Considerable additional investments are to be put into health and education with, for example, a further R850m for additional university infrastructure and R426m for tertiary hospitals, plus R450m for nursing colleges.  R9.5bn is to be provided for investment incentives and the development of SEZ programmes, with R6.2bn to be spent on job creation.  R4bn is specially going to PRASA for passenger coaches (refer our post), with R4.7bn for solar water geysers; R1.8bn on water infrastructure and R3.9bn on informal settlement upgrading.

Total spending on infrastructure and similar developmental issues was expected to reach R1.05 trillion this coming year, rising to R1.15 trillion next year.

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Davies to re-introduce his ailing BEE

Following the gazetting of a draft Broad-Based Black Economic Empowerment Amendment Bill in December 2011 for comment (60 days), trade and industry minister, Rob Davies, has recently indicated his view that the planned  amendments to BBBEE legislation would “seek to strengthen access to procurement opportunities and to assist with black enterprise development.”

He also indicated in his statement that fronting was a practice that had to be eliminated and penalties for non-compliance as far as regulations were concerned would be introduced in the legislation, which included jail sentences. How this would relate to the Liquid Fuels Charter is not clear. . In terms of the draft BBBEE Act Amendment Bill, the cabinet statement set out the proposed amendments, some of which included amendments including the penalties mentioned for non-compliance in terms of enterprise development, or lack of it, fronting and procurement elements not complied with in terms of the BBBEE scorecard.

Definitions of what is termed as fronting are given in order that legislation may apply and the appropriate regulations enforced. On this issue, much was passed on by minister of energy, Dipuo Peters from the energy conference in November 2011.   Minister Davies said that more emphasis was to be placed on enterprise development and procurement within key sectors, in terms of both the IPAP and new growth path plans. Incentives were to be created for broad based black ownership and the use of such tools as employee share ownership, co-operatives and community ownership.

Relevance to the Employment Equity Act was an important factor, Minister Davies said, as was aligning skills requirements to current and new skills development strategies involved in the new growth path and elsewhere. Targets for this, for procurement matters and enterprise development had to be “adjusted” accordingly, he said.

Meanwhile, Minister Dipuo Peters also welcomed the BBBEE legislation as contributing towards the objectives of the liquid fuels charter. Challenges facing her department were irregular monitoring of compliance, pockets of poor performance within the value chain and lack of financially sound BEE deals, she said late last year.

She also added that her department was looking at ways to strengthen liquid fuels strategic stocks to cover any emergencies that might arise.

She advised the media in November the compliance report on the liquid fuels charter had been submitted to the cabinet for approval. At the time, she expressed her view that current shareholding was not spread uniformly across the value chain and total assets spread in line with demographics, noting that whilst technical issues such as access to storage facilities was a significant problem. In general, she complained that the participation of women, procurement and enterprise development lagged behind targets.

She also added that her department was looking at ways to strengthen liquid fuels strategic stocks to cover any emergencies that might arise. Her recent comments on the new BBBEE legislation were made in the light of Minister Davies announcement.

Reference to both BBBEE legislation and the Liquid Fuels Charter is expected to come up in President Zuma’s address to the nation.

Posted in Cabinet,Presidential, Education, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Health, Justice, constitutional, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Security,police,defence, Trade & Industry, Transport0 Comments

DTI to form multi-billion rand incentives fund

The Minister of Trade and Industry has released the Special Economic Zones (SEZ) Bill for public comment. The SEZ Bill is expected to be tabled in Parliament later this year and Minister of trade and Industry Rob Davies says that in his view it is one of the most important developments of 2012 in order to achieve the objectives of the country’s economic planning programme.

DTI has now briefed the parliamentary trade and industry committee on the concepts behind the proposed legislation. According to the minister, the main objectives of the SEZ bill are:

• for the designation, development, promotion, operation and management of SEZs

• for the establishment of the SEZ board

• to regulate the application and issuing of SEZ operator permits • for the establishment of the SEZ fund

• decentralisation in the economy-broaden location of industrial development

Whilst claiming, as did the minister, that “the country now has a really effective plan to offer the investment community”, Lionel October, DTI’s director general, admitted the exact amount of finance at his department’s disposal to fund new special economic zones (SEZs) in South Africa still remains to be negotiated, although the matter has been agreed to in principle at cabinet level.

Nevertheless, he countered questioning at a parliamentary trade and industry committee presentation on this subject ,by saying that “Whilst we still have to fight a significant battle with Treasury on the size of a multi-billion rand incentives fund, it was significant that the DTI now has a proposal along the lines offered in China, Brazil and India”. (BRICS)

This plan, he said, will be supported by a Bill shortly to be introduced to Parliament and which would provide “the necessary predictability to such financing.”

October said the main problem in the past was that the present IDZs were not driven by incentives.   Only one development had taken place at Richards Bay, for example, he noted.  “Although any business plan must make economic sense as a first priority, we have learnt that any growth plan, as in BRICs countries, must be attached to incentives. “In the past, we were de-incentivising many potential areas just because they did not have a port, for example”.

In the new proposals, said October, the country would move away from very long plans and do what the Chinese have done successfully and focus on five-year plans.  He added that the competitive factor, where IDZs competed with each other, had to be stopped and that a “joint marketing proposal approach” had to be adopted for the whole country.

“This was the purpose of dividing the country into SEZs”, he said, and to build a national team to market the country’s proposals.

In terms of the new Bill, there were to be different categories of SEZs, such as industrial development zones, industrial parks or estates, science and technology parks, spatial development corridors and sector development zones.   October quoted successful examples of SEZs in Shanghai, Oman and Malaysia.

Problems had been encountered, October said, with the previous concept of the smaller IDZs over the past few years and the idea had not worked particularly well. Main problems had been that previously designated areas favoured those with international airport or seaports and penalized other areas for not having such.

The DTI’s contribution into the four areas of Richards Bay, East London, Coega and OR Tambo and Saldanha for forty projects had been 5.3bn or an approximate 5.7% return.

Lionel October emphasised that the IDZ programme had not been incentive driven. There had also been too much emphasis on infrastructure, whilst other issues such as logistics, marketing and skills supply had been on the back-burner.

The IDZ programme had “lacked a unique value proposition”, he said, and too many messages were going out to the investment community. There needed to be a single strategy and message from one place, said October.

He noted that now, with the promise from Treasury in October’s medium term budget that R10bn would be put aside for investment purposes, the new plan, supported by legislation, had become an exciting prospect and the new national regulatory environment would not only give the host zone but the whole region total involvement and the added ability to put in place longer term planning for an entire area.

The new Bill also provided for five parties to be involved in the process; namely, the DTI, Treasury, all three tiers of government, Eskom and Transnet, all parties being involved on a SEZ board set up by the new Bill. Other important parastatals could be added if relevant, October said.

MPs commented that no such plan would work unless government parastatals were on board to help plan infrastructure needed.

When asked by an ANC MP why labour was not represented in the planning structures, Lionel October responded frankly by saying that such a planning process could not be subjected to the issue of collective labour bargaining at that stage of the investment process, although the supply of skilled labour was a major issue.

He detailed the financing instruments as a fund to be established by the minister of trade and industry in consultation with the ministry of finance and development finance institutions (DFIs), which would play a major role in the development of a particular SEZ, liaising on marketing, capacity development, skills strategies, infrastructure, business incubation, environmental protection, technology and R&D and, finally, quality and productivity.

He would not talk on the subject of specific incentive numbers, saying that incentives had always been granted in the past but that in the future any incentives and incentive programmes would be the subject of far more focus with proper funding to make more things possible.

Posted in Cabinet,Presidential, Communications, Education, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Health, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Transport0 Comments

Parliament Awaits Tabling of New Education Bill

Period of Comment Still Open

The period of public comment on the department of education’s proposals contained in the draft Basic Education Laws Amendment Bill has not yet ended, comment being possible for 60 days from the date of the gazette publishing the draft, i.e. 9 December 2009.

Essentially the bill allows for the minister to amend a number of anchor education laws such as the National Education Policy Act, the South African Schools Act, the SA Council for Educators Act and other education and quality assurance legislation to form of separate ministry and department of basic education and to separate functions from a department of higher education and training.

Such will enable government to activate its stated policy of separating basic education from higher education in South Africa.

In a separate move, Parliament’s portfolio committee on basic education has called for separate submissions by 28 February on the subject of “quality outcomes in primary and high schools.”

The committee calls for such submissions to specifically study a number of issues including curriculum content; teacher development; class size; managerial capacity at schools in SA; the orientation at schools towards specialisation and expected “values” set by schools.

 In its last session in 2009, the committee chairperson, Ms Fatima Chohan, said that the committee was shifting its focus towards the delivery of, and challenges facing, quality education in South Africa and she noted with concern that certain areas, particularly with regard to equal access to quality education, existed for many categories of learners.

She also noted particularly, she said, “the questionable levels of learning outcomes”.

Posted in Education0 Comments


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