Address during ACSA year end results by Mr Sibusiso Ndebele MP Minister of Transport, OR Tambo International Airport
16 Aug 2010
Programme Director Mr Solomon Makgale
Chairperson of the Board Ms Sindi Zilwa
Managing Director Ms Monhla Hlahla
Executive Director of Finance Ms Priscilla Mabelane
Representatives of the aviation industry
Members of the media
Ladies and gentlemen
The history of aviation is a record of humankind's attempt to scale the highest mountains, to traverse the oceans and to find the shortest distances between two points.
Aviation therefore is ultimately the pursuit of the goal of one world and one global village in which geographical and political spaces disappear and boundaries matter very little. We will only reach this new ideal world once all our people cannot just be what they want to be, but can achieve their true potential and be the best they can be. This is the role that the Airports Company South Africa (ACSA) plays in our lives.
We meet today over a month since the end of the FIFA World Cup. We always maintained that the FIFA World Cup was not just about the wonderful sport of football. Its success, we said, depended to a large extent on the success of transport.
Figures from the World Cup tell a magnificent success story and place all our challenges in proper perspective. FIFA has indicated that more than 3.1 million spectators paid to watch the 64 matches of the 2010 tournament. This was the third highest aggregate attendance behind the United States in 1994 and Germany in 2006. Whether they were walking, driving or flying, every single one of those fans used our transport system.
Here are further interesting highlights: By mid-afternoon on 11 June 2010, before the start of the World Cup, OR Tambo International Airport had facilitated over 300 flights and 35 000 international and domestic passengers. Today unaudited figures indicate that we processed 4.5 million passengers and over 52 000 flights between 1 June and 19 July 2010. For most Sunday mornings throughout the World Cup an aircraft was touching down every two minutes!
Ladies and gentlemen the FIFA World Cup was a massive operation! Air Traffic and Navigation Services (ATNS) also played a critical role in facilitating aircraft movements in and out of each airport.
The South African Civil Aviation Authority (SACAA) had 33 aviation security inspectors deployed over three cycles to 13 host airports around the country during the World Cup.
DIA site disposal process
To cater for additional traffic in Durban, the drill was simple. Since May 2010 ACSA had moved operations to the new King Shaka International Airport in La Mercy. We kept the old Durban International Airport (DIA) open during the World Cup to serve as overflow parking site. Both private and commercial aircraft were processed efficiently. Where necessary all aircraft dropped passengers at King Shaka International Airport and then flew to DIA for parking.
Except for a few, all aircraft co-operated. Except for just a few!
We must therefore take this opportunity to express the gratitude of the country and of Africa on the continent and the Diaspora, for the contribution of the transport family in delivering a memorable FIFA World Cup and changing perceptions of Africa. Congratulations to you all!
Ladies and gentlemen in this regard please allow us to take this opportunity to comment on the future of the old Durban International Airport site. We have formed a steering committee which is made up of the Department of Transport, the province of KwaZulu-Natal, ACSA, City of EThekwini among others to advise on the best use-options for the land and to determine the process to be followed in disposing of this land.
The Department of Transport remains responsible for the land. We will ensure however that due process is followed to obtain the best proposal on the table. A request for expressions of interest will ensure that all interested parties bar none, are given the opportunity to submit proposals on the land. It is our intention that this process is completed in the shortest time possible in the interest of all bidders and the country as a whole. We will make further announcements in the coming weeks.
Ladies and gentlemen ACSA's results would become meaningless unless this success is shared by the users of our aviation infrastructure and services in South Africa, the region and the world. ACSA's financial results come as global air travel has come under strain but are otherwise on an upward growth trend over the next 20 years.
Role of aviation in economy
Now that the world knows what we are capable of, what are we going to do next? Now that the world knows who we are who are we going to be next?
In economic terms, aviation contributes to a country´s growth in two ways. First, the growth of the aviation industry itself generates employment, production, exports, value add, investment and contributions to the Gross Domestic Product (GDP). Secondly, air transport facilitates trade in goods, industrial development, tourism and economic services.
As early as July this year, the International Civil Aviation Organisation(ICAO) said that scheduled traffic of airlines of ICAO member states should grow by 6.4 percent in terms of passenger-kilometers performed. This compares to a decline of 2 percent in 2009, according to consolidated figures collected by ICAO. The International Air Transport Association (IATA) projected that international air travel would grow at an annual rate of 5.6 percent between 2005 and 2009. In the Middle East, Africa and Latin America regions growth will also enjoy higher traffic growth as economic conditions improve.
We make the point here that there is a direct correlation between growth in transport infrastructure investment and economic growth. In recent years the World Bank has stressed "the poverty reduction potential of transport infrastructure in Africa and other developing regions (Leautier, 2001). Transport infrastructure remains a necessary condition for economic growth and that, although in itself it cannot reduce poverty, it has a key role to play as a facilitator of and complement to policies that improve living standards.
Furthermore the development of infrastructure in general and air services in particular, is paramount for the future of Africa as we embark on closer integration with the world economy and increase efforts to improve living standards. The air service industry is particularly important for countries such as many in Africa that adopt an outward-oriented development strategy, including the promotion of international tourism.
Secondly our view is that transport in Africa or anywhere else cannot be developed in isolation from other regions. We are called upon to provide and maintain world-class aviation standards at every turn. In this regard in September we will attend the 37th Assembly of ICAO to be held in Canada where we will promote Africa's role and as an integral part of the governance of aviation.
We are therefore pleased ACSA has successfully focused on this key infrastructure to make our airports formidable global competitors by introducing efficiencies and higher customer service standards. Beyond 2010, our airport infrastructures meet our projected economic growth and the socio economic goals of our country. This is the legacy of the World Cup.
Our country continues to share experiences with the world. In preparation for UEFA 2012 the Ukrainian aviation authorities have visited South Africa to learn about how we managed the FIFA 2010 World Cup operations. In preparation for 2014 Brazilian aviation authorities have also visited ACSA and will return in the near future to learn from our experiences of managing the 2010 FIFA World Cup operations. The Beijing Airport Authority is pursuing discussions with us on more frequencies for flights between China and South Africa.
ACSA currently handles more than 32million passengers annually. The number was expected to grow to 43 million in 2010 and beyond. This means airports in South Africa may have to double capacity every nine years to keep up with demands from airlines, passengers and supporting services. In line with this a certain regulatory environment is a key necessity of a successful aviation sector.
We have appointed an independent task team to advise us regarding the impasse between ACSA and its regulatory committee. This matter has occupied the public space for quite a while and there is an expectation that it is speedily resolved. Considering the fact that, as Minister of Transport, I was expected to grant approval to the proposed permission, we decided to subject this process to an independent task team.
The team will, among others, consider and analyse all information tabled as part of the application for the permission by all parties. It will also interact with stakeholders and provide advice to the minister on whether the proposed permission and suggested tariffs are appropriate, considering all the circumstances. This does not in any way undermine the independence of the regulator, but rather aims to complement their work.
The task team is appointed from August 2010 and must submit their report to the minister by the end of September 2010. The members of the team are:
Sango Ntsaluba, a Chartered Accountant and previous regulator of the energy sector
Busi Mabuza, a specialist in infrastructure investments and economic regulation
Khumo Morolo, an engineer with experience in infrastructure planning
Mandla Maleka, currently a chief economist at Eskom
Roshan Morar, a Chartered Accountant
This is an independent task team to look at economic regulation in the aviation sector we must make it clear that we have no intention to decide for the regulator on what percentage tariff increases or decrease to declare. However, our obligation is to clarify the policy framework upon which any tariff decision is to be made.
Our policy must maintain an effective balance between ensuring the viability and ongoing upgrading of our airports and air traffic control infrastructure, on one hand. It must also ensure that our airport charges do not undermine airline viability and therefore passenger numbers on the other hand.
We remain committed to a more stable regulatory environment. In this regard, we are looking at establishing a full-time Transport Economic Regulator to move away from our current ad hoc approach. This will allow for improved planning, coordination and efficiency.
Ladies and gentlemen in the medium-term, we would like the management and board of ACSA to consider focusing on the following important issues underpinning the company's ability to deliver infrastructure sustainably:
Continued Investment in people and technology
Benchmarking against global development trends and where possible leading these
Broad based Black Economic Empowerment including the continued empowerment of women to ensure increased participation by the previously disadvantaged in the sector
Building on the success of the World Cup a solid ground for world-class infrastructure and services.
To conclude, we emphasise our central point this morning. Air transport changes lives and creates new horizons. Aviation has a significant growth impact on Africa's economies. Aviation creates jobs. Aviation fulfils dreams.
Our successes such as the World Cup and these financial results are part of the fulfillment of our vision and the dreams of many. Going forward we can only do better. We cannot shirk from that responsibility.
To end let us quote from Marianne Williamson's a return to love: reflections on the principles of A Course in Miracles and I quote: "Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. Our playing small does not serve the world. There is nothing enlightened about shrinking so that other people won't feel insecure around you. We were born to make manifest the glory of God that is within us. It's not just in some of us; it's in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” end quote
I thank the Managing Director Ms Monhla Hlahla and your dedicated team. Let me thank Ms Sindi Zilwa and the Board of Directors. Again our deepest fear is not that we are inadequate, our deepest fear is that we are powerful beyond measure. We wish you a great future ahead.
Issued by: Department of Transport
16 Aug 2010
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