Tag Archive | Ebrahim Patel

Special cabinet statement might correct damage to SA

Editorial…..

At last, a sensible special cabinet statement……

Sent to clients 15 Jan…On 13 January, a Special Cabinet Statement was issued and, as compared to previous irregular missives, the word “special” indicated some hope.   Instead of just containing the usual reasons for having to rejoice on certain public holidays, details of the passing of MK operatives and certain Bills approved, the latest document was full of economic facts and financial fiscal information placing a positive spin on the current economic gloom. At last, an acknowledgement that there is a hand on the tiller.

Clearly there has been a palace revolution, if only in this sphere alone.

As the Cabinet Lekgotla is planned, Parliament also prepares to receive it’s parliamentarians all fresh from the respective political party get-to-gethers. A lot has changed since they all parted company and quite likely a lot more is to change before MPs gather for their first meetings.

No doubt the EFF will try to make a circus out of things but nevertheless the show will go on.    However, EFF or not, it is becoming more and more difficult to sort out between political comment, which is not our focus, and the mechanics of State policy and its direction, oversight on financial issues and legislative alerts that affect business and industry.

Bad four days

Rob-DaviesRed lights are flashing in all camps, not least of which is the fact that it is difficult to tell who did the most damage to South African markets – China or President Zuma. In parliamentary terms, the Portfolio Committee on Trade and Industry seems determined to stand by SACP Minister of Trade Industry, Dr Rob Davies, in all matters dealing with BEE and trade agreements- as does DTI itself – and the Public Works Portfolio Committee seems unable to wear down SACP Minister, Jeremy Cronin, on issues regarding the Expropriation Bill.

Similarly, Lumka Yengeni’s Portfolio Committee on Labour Committee has no hope of a good outcome when it ordered, in the last session, an end to the shambles and confusion in Minister Mildred Oliphant’s Department of Labour, another Kwa-Zulu appointee of President Jacob Zuma.

Always a problem

Finally, despite some excellent MPs from all parties sitting in the Portfolio Committee on Energy, the vague report backs made to them by Department of Energy is leading to a sense of frustration in that particular Portfolio Committee which is not effective either as a result. In the area of good communications, Minister of Energy, Tina Joemat-Pettersson can only be described as a menace.

The good news is that stalwart ANC Joanmariae Fubbs remains Chairperson of the Trade and Industry Portfolio Committee  and holds the ship steady with her disciplines. SACP executive Yunus Carrim stays as Chairperson of the Standing Committee on Finance and one wonders if he will see eye to eye in view of his ideologies with Minister Pravin Gordhan.

Overlooked as well

A Jacob Zuma appointee, Ebrahim Patel of COSATU fame but a hard worker and very leftist, remains Minister ofebrahim patel Economic Affairs but even he was overlooked for Minister of Finance when the President came up with name of David van Rooyen, who, to be quite frank, we had great difficulty in recalling his presence in Parliament over the last few months. A close shave but costly.

Back onto legislation. Whatever happened to the Private Security Industry Bill nobody knows but one hopes that the President was not using it to play silly games with the Obama administration on the AGOA issue. Maybe it gets discussed at the Lekgotla. Maybe not.

Politics ahead of economics 

In the meanwhile, one hopes that the message is got through at the Cabinet Lekgotla that what the President says vitally affects each one of his citizens and that that the private and personal politics being played out at the moment are particularly damaging to the business of Parliament and its relationship with commerce and industry.

Just as importantly, there has to be a better understanding in government departments when reporting to Parliament why business institutions need clarity of policy to gain investment confidence.

opening parliamentParliament is an important and independent tool of democracy in the fight against autocracy but so many departments seem more in awe of the auditor general than they are of the need for answers to parliamentary questioning and attempts to get the truth.

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Competition Commission zeroes in on retailing

Minister on new Competition Commission focus…

large retailerThe Competition Commission is to announce the terms of the market enquiry into “parts” of the retail industry within the next few weeks, said Minister of Economic Development, Ebrahim Patel, in his budget vote speech to Parliament.

What “parts” exactly were not clear from his speech, Minister Patel only saying itebrahim patel would involve large supermarket chains, grocery stores and small retail outlets like spaza shops.

At present the Competition Commission has launched a market enquiry into both the private medical industry and liquefied natural gas distribution process and was now in discussion with the construction industry on a similar restitution package as “redress for their collusion and price-fixing.”

Property ownership focus

Unusually, Minister Patel’s speech was short and to the point but he did say on the Competition Commission would be looking into the retailing industry and property ownership area.

He said the inquiry would involve “The structure of the industry including retail outlets in townships, the tenancy arrangements in shopping malls that seem to squeeze smaller players out and the impact of the growth of large retail chains on competition, jobs and small business development.”

Announcement appears in vacuum

large retailer 2Nothing was said on Minister Patel’s plans for the Competition Commission in the budget vote speech from Minister of Small Business, Lindiwe Zulu, nor in Minister of Trade and Industry, Rob Davies’ speech, DTI having been split the Competition Commission but still interested in entrepreneurship and job creation.

Deputy Minister of Economic Development, Madala Masuku, said nothing at all on the subject the Competition Commission in her speech but did advise Parliament that the department had been on a series of provincial business studies over six months on how to create more jobs and build small businesses and better service to the provinces. That possibly is the basis of what is now happening as a result of what they saw.

Small business seems stifled

The structure of small business and the relationship to retail chain outlets, competitive pricing and rentals must have been part of such observations.spazza

Also minister, Lindiwe Sisulu, before being transferred to the post of minister of human settlements had told the select committee on economic development that “SMMEs contributed 57% of South Africa’s GDP and accounted for 56% of employment.  The National Development Plan (NDP) envisaged that 90% of jobs created would be coming from small and medium enterprises.”

Partnerships in retailing and distribution

She told parliamentarians that economies around the world had shown that jobs were not created by large corporations, but by SMMEs.    However, large corporations and big businesses should seek partnerships in South Africa so that they could assist the department in building small and medium enterprises and thus contribute to economic development, she said.

Manufacturing distribution was also an area discussed at length  in government small business workshopsdistribution recently attended by parliamentarians where it was seen that the large retailers have also control of country wide market distribution at retail level, only dealing with areas providing suitable economic return and more sophisticated road and rail infrastructure.

This market inquiry by Minister Patel therefore has an investigative ring to it rather than any direct attack on certain sectors in the retail industry.

Other articles in this category or as background
http://parlyreportsa.co.za/energy/competition-commission-turns-lp-gas-market/
http://parlyreportsa.co.za/uncategorized/competition-commission-promises-health-care-inquiry/

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Infrastructure Development Bill now law

 Reducing bottlenecks

The Infrastructure Development Bill has now been signed into law by President Zuma, but controversy still surrounds the aims and objectives of Minister Ebrahim Patel he stated when originally introducing the Bill.

When presented by Minister Patel in Parliament, the idea of the Bill was ostensibly to reduce the number of problems caused by administration bottlenecks delaying the implementation of infrastructure projects. Now there is an extensive body of criticism surrounding the proposals, indicating that the very nature of the Bill will undermine what the Minister wants to achieve.

The main purpose of the new law seeks to empower the Presidential Infrastructure Coordinating Committee (PICC) to designate the Strategic Integrated Projects (Sips) and ensure their implementation. The purpose of the Bill is to direct the PICC to identify Sips of economic or social importance and ensure that infrastructure development is given priority in planning.

Enabling legislation

Government says the Act will “facilitate” legislative structures that affect government’s goal of focusing on infrastructure development and of providing the necessary facilities to prevent conflicting projects being pursued.

“The idea is to create steering committees to provide technical support and oversight and institute procedures to ensure that infrastructure development is not undertaken in a transactional manner, but in an integrated and consistent manner”, said Fulbright director, Andrew Robinson at the stage of parliamentary debate on the Bill when it was tabled..

“This Bill not only acknowledges the many weaknesses and challenges we face in implementation but provides the legal tools to overcome them so that we can do more to achieve our national goals”, he added.

Busa worried

Business Unity South Africa (Busa) stated its doubts about this.

Busa said such legislation will introduce too many additional layers of bureaucracy.    The South African Chamber of Commerce added that the legislation would simply make the smooth implementation and development of Sips difficult, leading to projects becoming increasingly expensive.

Busa pointed to the confusion between private-sector projects existing in the areas where Sips will take place and the fact that the explanatory memorandum of the Bill confirmed the intention to restrict the Bill’s application to the implementation of public projects only in the Sips.

Accordingly, said Busa in a statement, “At this stage, the perception of the Bill is that government aims to intervene in or regulate private-sector infrastructure projects. This causes uncertainty for investors and may reduce investment.”

Three tiers

The regulations will enable the President to nominate members of cabinet, premiers and local-government representatives for the coordinating structures within the PICC to ensure that all three spheres of government are part of the commission, said Minister Patel.

The new law contains clear mechanisms to avoid conflicts of interest between decision-makers and the underlying projects, all part of government’s anti-corruption drive.   It provides for tough penalties for corruption, including imprisonment for up to five years, says Patel, thus introducing criminalisation.

Petition to President

The opposition in the form of the Democratic Alliance petitioned President Jacob Zuma, under section 79 of the Constitution, to include this legislation, amongst four other Bills rushed through Parliament before it closed, to review the Infrastructure Development Bill.

“The broad and largely unfettered discretionary powers afforded to the Minister in section 21 create much uncertainty,” James Selfe of the DA said.   “There are problematic clauses that remove the powers of all organs of state responsible for planning in their area and the Bill ignores the constitutionally mandated functions of provinces and local authorities.”

Once the new government is formed one has to assume that clearer action plans will be established if the Bill is translated into becoming an Act with regulations to drive its purpose but controversy still remains amongst the private sector community regarding clarity of purpose and the posture of the state towards private projects underway or planned.

Other articles in this category or as background
http://parlyreportsa.co.za//cabinetpresidential/land-expropriation-modified-infrastructure-development-bill/
http://parlyreportsa.co.za//finance-economic/infrastructure-development-bill-possibly-altered/
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-to-cut-red-tape-2/

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Infrastructure Development Bill modified and passed

Minister responds on land issue….

ebrahim patelThe Infrastructure Development Bill recently tabled by Ebrahim Patel, minister of economic development, appears to have avoided major confrontation as a result of re-wording of the provisions it contained regarding expropriation of land for major projects, the Bill having originally granted the state the right to expropriate land where a development project, declared as a Special Infrastructure Project (SIP), was concerned.

The Bill was passed by the National assembly and recently went to the NCOP for concurrence. Recent reports indicate it was passed.

Most submissions criticising the Bill said that the new proposals completely overstepped the mark on the question of expropriation but minister Patel has now assured all parties that such expropriation, if it took place because of a SIP, would be in terms of existing legislation when it came to the acquisition of land needed.

PICC oversight will cost project

In terms of the Bill, each SIP is to have a steering committee which will put in place time frames; attempt to deal with regulatory delay challenges; address project management and ensure the coordinated issuing of permits and licences but the PICC budget for the particular SIP would have to be funded out of the departmental budgets or those of the state-owned companies responsible for managing a project.

The Bill also gives the stamp of approval to PICC, the body which has adopted the National Infrastructure Plan of 2012 that intends to “transform the SA economic landscape while simultaneously creating significant numbers of new jobs, and to strengthen the delivery of basic services by planning and developing enabling infrastructure that fosters economic growth.”

Expropriation to be as presently defined

But the Bill as introduced into Parliament overstepped the mark on the question of expropriation when it came to ensuring that a SIP became a national priority and the minister has indicated that a new cause has been drafted to make it clear that any expropriation required in terms of the strategic integrated projects will be carried out in accordance with the provisions of current legislation.

Minister Patel told parliamentarians that all thirty written submissions had been received and noted and the Infrastructure Development Bill had, as a result of these public hearings, strengthened the constitutionality of the work of PICC, reduced ambiguity on the subject of SIPs whilst ensuring that public consultation had led to transparency.

He said the Bill was important as it involved some R1-trillion on infrastructure since 2009 and the Bill in giving legal standing to the work of PICC was a “milestone in South Africa’s economic development”.

Environmental impact overlooked by Bill

Another complaint was that despite the fact that, if passed, the Bill would co-ordinate some of the biggest infrastructure projects in South Africa’s history, the provisions  make no reference to the need for infrastructure development to be environmentally sustainable other than a clause acknowledging that the SIPs will still need environmental authorisation under the National Environmental Management Act (NEMA).

South Africa has a comprehensive environmental impact assessment (EIA) regime and the department of water and environmental affairs, over the past five years, had spent time and parliamentary effort to improve, streamline and speed up EIA processes, the minimum period for such clearances going no faster than 300 days for clearance on EIAs as far as NEMA is concerned, under any circumstances, in the national interest.

The idea of PICC being allowed to reduce this environmental clearance to 250 days, or even shorter time frames for mega-projects, has the environmental world in a stir it seems, the shortening process, they say being impossible to manage to and which renders EIAs meaningless.

Environmentalists say that decisions about big projects that will affect the whole nation for generations to come must be made using comprehensive information about social and environmental impacts in compliance with NEMA and this takes time, the minimum possible being 300 days as envisaged by NEMA.

It seems that minster Patel has solved the land expropriation issue but has not satisfied the environmentalists who still complain that in its present form the Infrastructure Development Bill will not achieve its aim as far as fully integrated development in the national interest is concerned.

The Bill is headed for promulgation sometime in the mid year, and was passed before the end of the present session in an extended session of the NCOP.
Earlier articles on this subject:
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-legislates-growth-path/
http://parlyreportsa.co.za//cabinetpresidential/gigaba-answers-critics-infrastructure-build/
http://parlyreportsa.co.za//cabinetpresidential/gigaba-answers-critics-infrastructure-build/

Posted in Cabinet,Presidential, Earlier Stories, Enviro,Water, Facebook and Twitter, LinkedIn, Trade & Industry0 Comments

Infrastructure Development Bill possibly to be altered

Infrastructure Development Bill gets SALGA, BUSA criticism….

The Infrastructure Development Bill, tabled in Parliament during November 2013 just before Parliament closed, has had three days of public hearings, the Bill being an empowerment document for the presidential office to realise the New Build programme for South Africa.

The Bill was published for comment and the hearings over three days represented by an early opening of parliamentary portfolio committee activity. The Bill was tabled by minister of economic development, Ebrahim Patel.

The majority of those presenting before Parliament with submissions regarding the Bill, mainly state utilities and entities such as the Institute of Municipal Engineers, pointed to what many realise is the actual crisis facing South Africa – that of lack of skills at local government level and a lacking of will to get projects even underway, let alone completed, being the main hurdles.

Objectives of Bill

According to the cabinet statement released at the time, the Bill aims to:

•    Implement integrated projects of significance for South Africa and the region
•    Promote public-private partnership making use of private sector skills
•    Set up steering committees for each project
•    Put in place time frames for implementation of strategic integrated projects (SIP)
•    Address project management and regulatory delays challenges
•    Ensure coordinated issuing of permits and licences

The Bill pledges support for the Presidential Coordinating commission (PICC) set up by cabinet in July 2011 to bring together the three spheres of government to drive increased levels of infrastructure development. A number of bodies presenting gave examples of the complete lacking of any knowledge of the maintenance of national assets, particularly an infrastructure project was completed and handed over.

SIPS are to be driven by PICC

PICC interventions will be carried out, it is planned and a number of the presentations to Parliament will go to the PICC as examples of where cross-cutting and mobilisation across all levels of government is badly needed with specific regard to the 18 Strategic Infrastructure Projects (SIPs) identified by the Commission.

Each SIP comprises a large number of specific infrastructure components and programmes. Such infrastructure development is seen as a key jobs driver in the new growth path planned for the country. The new Infrastructure Development Bill is thus the anchor document behind the presidential process, even as far as allowing for the acquisition of land where an SIP may require this option.

Environmental issues “ignored”

In contrast, the constitutionality of, and the need for the Infrastructure Development Bill was questioned in a presentation by the South African Local Government Association (SALGA) who clearly felt “toes were being trodden upon”. University of KwaZulu Natal warned that a clause in the new Bill imposing that any delay process that goes over 250 days will be over-ridden was totally discounted on the basis that an environmental impact assessment cannot be completed within 300 days.

Also Business Unity South Africa (Busa) whilst agreeing with the whole idea of the need to get projects going expressed the view that rather than trying to ‘cut through’ through bureaucratic problems that might be causing delays, the new Bill may add yet another layer of red tape on government project managers and confuse the roles and responsibilities of the three spheres of government.

They cautioned that the department of economic development, with all the goodwill in the world, may add confusion and further congestion and that no amount of legislation could add value to the actual problem; lack of skills at local government level and an inability of one department to talk to another.

Bill driven by ANC to empower PICC

Lack of consultation in the preparation of the Bill was also cited as having been insufficient on the bill but the Bill is known to have the support of the ANC, service delivery and infrastructure build projects that create jobs being their manifesto promise.

COSATU, Telkom and Transnet were all in favour of the Bill in broad principle but most expressed concern that the Bill might add rather than detract from bureaucratic delays and great care that this did not happen, they said.

Telkom also raised queries with regard to the granting of rights to PICC to expropriate land but minister Ebrahim Patel, minister of economic development who was present for most of the submissions, chose not to debate the issue presumably because such matters were separately under debate with other legislation.

There was little disagreement amongst opposition members that minister Patel would have to make considerable revisions to the Bill as presented, particularly on the issue of land acquisition in terms of existing law.

Further reports on this Bill in later meetings have been published for clients and will be posted on this website in due course
Previous articles on this subject
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-legislates-growth-path/
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-to-cut-red-tape-2/
http://parlyreportsa.co.za//energy/global-shockwaves-must-not-stop-infrastructure-programme/
http://parlyreportsa.co.za//uncategorized/president-zuma-calls-for-2012-as-year-of-infrastructure/

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China gets into the act with Economic Planning

Economic Development Minister Ebrahim Patel said, during his department’s Budget vote speech in Parliament, that the China Development Bank and the IDC had signed an agreement to access US100 million for small business lending based on a 10-year tenure.

The recently formed Small Enterprise Finance Agency (Sefa) is also to received R2bn to be made available over the next three years to “strengthen its direct lending capability, increase the disbursement to small business and work to lower the costs of bureaucracy and overheads”, minister Patel said.

He was giving details on how his department would divide up its R672m budget on funding exercises, much of which will go to small business development and towards the competition authorities – minister Patel stating that R169m would go to Sefa for the current year and R173m to the competition board.

Funds for Sefa would be made available from both “fiscal transfers” and a direct R921m loan from the Industrial Development Corporation (IDC), Patel said.  IDC is to separately issue a R4bn “jobs bond” with the purpose in mind of promoting lending that had strong emphasis on job creation.

Sefa, which was formally launched this month, was the result of the old Khula Finance fund run by the department of trade and industry (DTI) consolidated with the DTI’s Apex fund for small business microfinance and the IDC small business “lending book”.

The agreement with the China Development Bank would allow the IDC to access about R800-million from China for small business lending at favourable terms.

Minister Patel said in his address to parliamentarians, “By reducing the number of agencies, we estimate annual savings in excess of R20-million through cutting duplication of costs and services. That money can flow into more lending to small businesses, rather than the bureaucracy. The idea of all such funds under one umbrella organisation was mooted a number of years ago by DTI in proposals before Parliament.

Sefa, which would be an entity of the IIDC, would offer loans initially of up to R3-million to small businesses.

Minister Patel said of the department’s R673m budget allocated for the 2012/13 financial year, R60m was for administration and capex, R29m for economic policy development, R42m economic planning and coordination, and R18m for economic development and dialogue.

The remainder of the budget was the amount going to Sefa for small business funding, the competition authorities with R173m, the International Trade Administration for South Africa which would get R74m and IDC, again, for their agro-processing fund which would receive R108m.

Posted in BEE, Cabinet,Presidential, Finance, economic, Land,Agriculture, Public utilities, Trade & Industry, Uncategorized0 Comments

Private sector needed for recovery, says Patel

According to the minister of economic development Ebrahim Patel, the infrastructure development, described by President Zuma in his state of nation address (SONA),  has to be driven by public-private partnerships.

During this speech, President Zuma promised to make 2012 “the year of infrastructure development”.   Minister Patel has followed this up in his response to the presidential  speech by stating that during this year he will table before Parliament legislation to be known as the Infrastructure Development Bill. What stage this draft has reached is not known.

Minister Patel said it was the task now of his department to assist in project management by reducing regulatory delays and the resolution of land servitude issues and the new legislation would pick up such “challenges” and address them. , Speaking in response to SONA, minister Patel told parliamentarians that the draft Bill would also help co-ordinate the issuing of permits and licences and contribute to better “co-operative governance” between state and private sector bodies.

Minister Patel said a small business funding agency was about to be launched in a few days with some  R2bn available for business development loans.

Returning to the new legislation, he said he hoped that the measures introduced by an Infrastructure Development Bill would contribute further to the ability of the department of economic development to monitor development taking place in the country.

He further pointed, as did President Zuma, towards an economic development summit to be held shortly in South Africa.

Posted in Cabinet,Presidential, Finance, economic, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Transport, Uncategorized0 Comments


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