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18 February 2005

INTRODUCTION

In his State of the Nation Address, the President pointed out that our programme for this year would be premised on the broad objectives to increase investment in the economy, lower the cost of doing business, improve economic inclusion and provide the skills required by the economy.

Presentations made to the media by the Social Sector under the Minister of Provincial and Local Government and by the Economic Sector I, under the Minister of Public Enterprises, which focused on higher, sustained and shared growth are being complemented and built on by this presentation which focuses on ICT’s; Minerals and Energy; and Science and Technology.

INCREASING INVESTMENT AND IMPROVING ECONOMIC INCLUSION

In striving to eradicate poverty and underdevelopment within the context of a thriving and growing first economy and the successful transformation of the second economy, the cluster has embarked on the following:

A lot has been said and done about the Mining Charter. While we continue monitoring compliance on that front, the focus this year will be on value addition to our minerals. The Department of Minerals and Energy will table the Precious Metals and Diamonds General Amendment Bill to Parliament with the aim of strengthening the implementation of Sections 26 and 100 of the Mineral and Petroleum Resources Development Act and the Mining Charter,

The Bill will assist in providing access to precious metals and diamonds with a view to promoting the culture of local value addition/beneficiation. This will also go a long way in creating jobs, promoting skills development, increase foreign direct investment and increase export earnings

Last year, the President announced in his state of the nation address that a new tender for the new generation capacity will be issued December 2004 to meet our growing energy needs. I am pleased to announce that the deadline was met. We have received an overwhelming response, both internationally and locally, which confirmed the robustness of our economic policies.

In terms of our long term planning, it has been established that there is a need for over 2500MW of new peaking capacity between 2006 and 2010. Eskom will be responsible for addressing the supply requirement up to the end of 2007, while the DME will ensure that an additional 1000MW of peaking power plant, in the form of Open Cycle Gas Turbines will be introduced by the end of 2008. We are now engaged in various upfront activities that include site acquisition and where after an environmental impact analysis will be done.

The Department of Minerals and Energy will continue supporting BEE suppliers in pursuance of the Liquid and Petroleum Charter. On the 30th of November 2004, the Department and individual members of SAPIA signed a memorandum of understanding aimed at the creation of a Supplier Development Agency. The Agency will open its doors for trading from the 1 of April 2005.

The primary objectives of the Agency are to source potential BEE suppliers to the industry; accredit the suppliers to combat fronting; develop suppliers to meet the performance levels of the industry and source opportunities for the BEE suppliers from industry.

In terms of our programme of action (POA), we intend to establish the first RED by June 2005. As you will recall, the objective of the restructuring the electricity distribution industry is to improve quality of supply and increase the efficiency of the electricity industry. Considerable work has been done in this regard, and it is our intention to meet the set target.

This year will also see the launch of the new National Energy Regulator of South Africa. The new regulator seeks to consolidate the economic regulators within the energy sector, to derive maximum efficiency in regulation to the benefit of the end consumer.

As you are well aware, implementation of the Kyoto Protocol came into effect on Wednesday 16 February 2005. In preparation for participation in this, Government has established a Designated National Authority (DNA) office in the Department of Minerals and Energy to handle Clean Development Mechanism transactions. It opened its doors for business on 01 December 2004. To date the DNA office has received a number of project proposals for review from the private sector. These projects, when implemented, will reduce South Africa’s CO2 emissions by 21 million tonnes by the year 2012 and generate revenue of R618 million by the year 2012 from sales of Certified Emission Reductions (CERs).

The Department of Communications remains at the forefront of government initiatives to bridge the digital divide and provide universal access to information and communications technology for all our people, irrespective of where they live. This is done through the leveraging of ICTs for socio-economic development and a better life for all.

The start of the 2005 school year saw the introduction of lower rates for access to the internet, for public schools. This will expose youth to the information society at a very early stage of their lives.

Over the past years, we have witnessed a tremendous growth in the cellular industry, with over 20 million subscribers. Through the ICT policy announcements made in September last year, we have removed restrictions that entrenched Telkom’s monopoly and began the process of facilitating the reduction in cost of telecommunications by giving service providers and consumers more choice and increasing competition in the sector.

The ICT BEE Charter is being finalised. Its implementation will certainly revolutionise the ICT industry. However, the shortage of resources for SMME’s remains one of the biggest challenges for us.

The first six under-serviced area licences have been issued. The provision of telecommunications services to under-serviced areas in our country will improve with the licensing of an additional 14 to the six already licensed. In order to assist these under-serviced area licences, which are SMMEs, the Universal Service Fund provided each with R5 million per annum for a period of three years, towards infrastructure development. The evaluation and monitoring of their infrastructure roll-out will be done by the Universal Service Agency and ICASA on an ongoing basis. The government is confident that this will provide a stimulus for economic growth in the second economy sector and its integration into the first economy, while making possible delivery of government services.

The Convergence Bill, which seeks to further modernise the ICT sector thus contributing to increasing investment in, and competitiveness of, our economy, is now in the parliamentary process and will be made available for public comment next week.

In the State of the Nation Address Debate, a recurring theme was South Africa Belongs to All Who Live in It. In the next few months, together with the South African Post Office and Statistics South Africa, the Department of Communications will be launching the National Address Database and Registry, whose aim is to ensure that all South Africans have addresses. This will help our people to overcome exclusion from participating in the country’s economy and ensure that every South African are indeed part of this beautiful country.

Restructuring of the Post Bank and repositioning it to deliver services for the Apex Fund and Mafisa is already embarked upon. Public Information Terminals (PITs) form an integral part of access to information on government services. The DoC in partnership with the Post Office will continue to roll-out the PITs. The current roll-out plan prioritises the ISRDP nodes. This allows ordinary citizens in the rural areas to access services through new technologies such as the internet and includes a free SMS service.

The President also said that the critical element in assisting those in the second economy is the provision of information, particularly how they can access economic opportunities. He singled the public broadcaster as the key player in this regard.

During this year Government will build partnerships with broadcasting stations, including the public broadcaster to resource the development of information programmes which will help ordinary South Africans take advantage of opportunities in different government programmes and projects.

A few days ago, the DoC handed over to the Government Communications and Information Systems (GCIS) the satellite network that will make it possible for community radio stations to have direct access to parliamentary and government information live or recorded, including phone-in interviews. The fact that these stations will also be using Indigenous languages will contribute to participatory democracy by all our people.

Community radio stations have a huge potential for the support of cultural and educational information exchange. We will make certain that programming is based on community access and that it reflects their special needs and interests. These radio stations use all indigenous languages, including Afrikaans, as a medium of communication, thus ensuring that people receive information in languages they understand. This is in keeping with our Constitutional mandate.

Already 92 licences have been issued. ICASA has called for applications for a further 18 in the nodal points, in KZN (4), Limpopo and Mpumalanga (3), Eastern Cape (7), Western Cape (1), Northern Cape and North West (2), Gauteng (1). These are underdeveloped and rural areas that need this communications infrastructure. We hope municipalities will use these to interact with communities in order to strengthen democracy.

The process of developing and implementing a digitisation strategy remain one of our major challenges. This strategy will help us define the path to replace the present analogue transmissions with digital infrastructure. This will enable us to offer more diversity of channels and programmes as well as enable the broadcasting system to offer converged services. This requires huge financial resources to be made available by Government to Sentech and the SABC.

Government, under the leadership of the DoC, will develop a strategy for the adoption and use of broadband technologies for the first and second economy throughout the country, by the end of the year.

In terms of Science and Technology, increased investment in Biotechnology is paying off, for example, scientists have sequenced the heart-water genome, biological rehabilitation of water from mines is now a reality and an increasingly vibrant biotechnology SMME sector is emerging.

The Department has also recommitted itself to the 2002 Research and Development Strategy target of 1% of GDP to be invested in R&D by both the public and private sectors by 2008. This implies an annual increase of approximately R1 billion in government expenditure on R&D for the next three years. The R25 million grant to six Centres of Excellence over the next ten years in engineering, biotechnology, biodiversity and disease research continues, to support R&D.

LOWERING COSTS

This year will also see the launch of the new National Energy Regulator of South Africa. The new regulator seeks to consolidate the economic regulators within the energy sector, to derive maximum efficiency in regulation to the benefit of the end consumer.

We are happy to announce that the licensing process of the Second National Operator is now drawing to a close. Government has allotted the 26% equity stake in the Second Network Operator to VSNL, a part of the TATA Group and represented in South Africa by TATA Africa Holdings (SA) (Pty) Limited. Parties have agreed to a Memorandum of Understanding (MOU) and all legal challenges are in the process of being withdrawn. The parties in the SNO are now in the process of integrating into one entity and finalising the shareholders agreements and business plan in preparation for ICASA to consider issuing the licence to the SNO. ICASA has indicated its readiness to address this matter speedily as soon as it is properly brought before it.

A South African high-speed research network - the SANReN - will be established to connect all South African institutions with international ones for Research and Development. This will enable South African research initiatives to remain at the cutting edge and compete with world’s best and stimulate new ways of applying science and technology.

NEPAD

In pursuance of NEPAD objectives, the DME last week hosted the African Mining Partnership (AMP), a partnership initiated to identify and implement joint projects for poverty alleviation and economic development in African countries. Projects identified are on beneficiation, small scale/Artisinal mining, environment/sustainable development, attracting investment and promoting participation of the indigenous in mining ventures and human resource development. The Department of Minerals and Energy plays a secretariat role and will be responsible for follow-ups and monitoring of these projects.

Last year also saw a significant landmark in the achievement of NEPAD objectives. The signing of the WESTCO Intergovernmental MOU seeks to facilitate the development of a power project that will involve five SADC countries Angola, Botswana, DRC, Namibia and South Africa. The benefits for these countries will be economic development, while enhancing South Africa’s diversification in primary energy sources.

The Department of Communications continues to play a key role in the New Partnership for Africa’s Development, through our participation in the NEPAD e-Commission. The NEPAD e-Schools Project has been launched for the first fifteen countries of which South Africa is one. Six schools from each country have been selected for the demonstration project. Our Department of Education has already selected six schools from the different regions of South Africa on the basis of the challenges that will be experienced in connecting them.

Next week, South Africa will be hosting a Regional Conference of the Pan African Postal Union (PAPU). This conference, to be attended by Government Representatives and Senior Managers in the Postal Sector in the region will look at how best to implement the objectives of the World Postal Conference. The South African Post Office is assisting with the organisation of the event.

In the area of Science and Technology, the strategy to use Southern Africa’s local (geographical) advantages and efforts to attract large international science based investments are paying off. Key examples include the construction of the High Energy Stereoscopic System (HESS) observatory in neighbouring Namibia, the Southern African Large Telescope (SALT) in Sutherland (due for inauguration in November 2005) as well as winning of the bid to host the European Developing Countries Clinical Trials Partnership. Added to this are bold efforts to bolster our bid to site the Square Kilometre Array radio telescope ($1.5bn) in SA with huge economic and scientific as well as SET Human Capital benefits. A decision on the SKA will be taken during 2006. We are in the process of building a 1% SKA demonstrator called Pathfinder which will enable the South African industry and academia to participate in the technology development process.

We are confident that these projects will contribute to the victory of the African Renaissance and the achievement of the goal of a better life for all.

Issued by: Ministry of Minerals and Energy
18 February 2005