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National Industrial Participation Programme: Driving Investment and Market Access

The National Industrial Participation Programme (NIPP) aims to increase investment levels and international market access for South African value-added goods and services. This presentation discusses the program's background, current and future obligations, and the performance of various obligors. It also addresses problems encountered and achievements made. The presentation concludes with a discussion of the way forward, including policy revisions and incorporating the objectives of the Department of Public Enterprises (DPE) with those of the NIPP.

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National Industrial Participation Programme: Driving Investment and Market Access

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  1. THE NATIONAL INDUSTRIALPARTICIPATION PROGRAMMEPRESENTATION TO PORTFOLIO COMMITTTEE ON TRADE AND INDUSTRY17 November 2006

  2. Background • NIPP is 10 years old this year • First years dominated by the Telkom rollout • Thereafter the SDP’s accounted for +/- 95 % of the total programme • Currently the purchases by SAA, ESKOM and the PBMR are responsible for new obligations • Future obligations are those from the infrastructure plans of DPE

  3. Main Purpose • To raise investment levels • and to increase international market access for South African value-added goods and services • by leveraging off government procurement.

  4. Value of the NIPP • Currently the total obligation accumulates to over US$ 15 billion, of which US$4 billion is for investments • Added to this is pro-active, non obligated performance equating to almost US$ 1 billion

  5. Current Obligations • SDP • Other Defence Obligations • GBADS awarded to Denel/Thales • Non Defence Obligations • Tenders awarded by SAA, Eskom, Transnet and various Government Departments

  6. New Obligations • Defence • Hoefyster - Supply/delivery of new generation infantary combat vehicle products system • Vistula - Logistic support vehicles • Cytoon – Tactical Intelligence System (battlefield information) • Kingfisher - Upgrade of MILAN missile system (anti tank) • Non Defence • PBMR related tenders • ESKOM Power Stations • Motor Vehicle Tenders • Gautrain • SITA related tenders

  7. Performance of Obligors • Since inception over 150 projects approved and implemented • Projects in various sectors and different regions • Including bio tech, aerospace, tourism and BPO • These projects have generated • Investment Credits in excess of US$2.2bn • Exports and Local Sales Credits of US$4.5bn • +/-12000 direct jobs

  8. BAES/SAAB Performance • 44 Active projects • More recent projects include the Ferrochrome Smelter, Gemco and the SAAB/Denel Aerostructures deal. • BAE/SAAB’s performance exceeds US$2.8 billion, of which +/- US$1 billion is for investments.

  9. GSC (Ferrostaal) • More than 11 Active projects • Most recent projects include SAMES and Fabrication and Repair and Maintenance in the Oil and Gas Industry • Ferrostaal’s performance exceeds €817 million, over €600 million of this for investments

  10. GFC (ThyssenKrupp) • 6 Active Projects • Most recent projects include Manufacture of Wood Pellets for the energy sector, Alltube Expansion and the Mechatronics project • Thyssenkrupp’s performance exceeds US$217 million

  11. Thales • 9 Active Projects • Most recent projects include the SMME fund, Geratech Zirconium Beneficiation and Laroche South Africa • Thales’s performance exceeds US$506 million (US$140 of this for investments)

  12. Agusta • 6 Active Projects • Most recent projects include Flexider SA and Cenere 1948 • Agusta’s performance exceeds US$246 million

  13. AgustaWestland • 7 Active Projects • Most recent projects include Bio fuels project, Adept Airmotive and Worldfish SA • AgustaWestland performance exceeds GBP 30 million (GBP 4.5 million for investments)

  14. Denel • Awarded the GBADS tender • Thales assisting with this obligation • Projects initiated include Qmuzik, Pre-Stressed Bars and Greenhouse Farming.

  15. Non Defence Related Obligations • SAA • PBMR • DEAT, SAPS, DOH, DHA and DoT • Petro SA, NPA, SAPO and Spoornet • Telkom • SITA

  16. Problems Encountered Not all projects have a happy ending – some have encountered severe problems: • BAES/SAAB – Diesel Economizer • BAES/SAAB – SARM • Ferrostaal - Atlantis Training Centre

  17. Obligations Achieved Marpless • Obligation of US$31,82 • Won bid for an identification system (HANIS) to the Department of Home Affairs • IP projects related to a number of export promotion projects • To date they have excess credits amounting to +/-US$56,79 million

  18. Obligations Achieved • Boeing • Obligation arose out out of 737-800 airplanes sold to SAA and the VIP Intercontinental transport Boeing Business Jet. • Obligation amounted to US$237.5 Million. • Boeing came with work packages for various SA companies. • Boeing has earned credits in excess of the required obligation.

  19. THE WAY FORWARD • The SDP coming to a close • R370 Billion of infrastructure development that may result in offset obligations; how are the objectives of DPE to be incorporated with those of the NIPP • Denel, etc • Policy revision and amended NIP guidelines

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