Enhancing Rural Development through State-Owned Enterprises Strategies

1. BRIEFING TO PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES: BY PUBLIC ENTERPRISES INTERNATIONAL RELATIONS AND RURAL DEVELOPMENT UNIT Venue: Cape Town Date :05 June 2002 Speaker : Ms T N Msibi

2. RURAL DEVELOPMENT STRATEGY • The Unit charged with SOE’S role in rural development within the Department of Public Enterprises is the International Relations and Rural Development Unit. • For purposes of this presentation we will focus only on Rural Development initiatives. • The Unit was established in 2001.

3. DPE ORGANOGRAM

4. RURAL DEVELOPMENT • The department’s rational behind the inclusion of SOEs in Rural Development is based on the following: • SOEs financial resources; • The inherent capacity that resides in the SOEs; and • The developmental potential of SOEs. • DPE’s central mandate is primarily on the restructuring of SOEs, there are other activities and functions undertaken by the Department which are aimed at the realisation of governments social and economic objectives. • This functions of this Unit focus on the latter objectives.

5. RURAL DEVELOPMENT • This presentation will look at rural development projects within the SOEs in three parts: • Firstly their day to day functions; • Secondly the coordination of SOEs for delivery on the Integrated Rural Development Strategy; and • Thirdly their Social Responsibility initiatives which have an impact on rural development;

6. RURAL DEVELOPMENT • PART 1 • There are initiatives that have been undertaken by the SOEs as part of their day to day responsibilities and functions.

7. ESKOM • There are initiatives that have been undertaken by the SOEs as part of their day to day responsibilities and functions.

8. ESKOM • The challenge has been identified as the electrification of rural areas in a sustainable manner: • Firstly looking at backlog: • In 1994 approximately 10.8 million households. • In 1994 approximately 35% of households electrified. • Between 1994 and end of-2001 3.65 million households had been electrified.

9. ESKOM • At this point, it was realized that the programme could not be sustained through funding by Eskom. • Agreement within government that universal access to electricity is the responsibility of government. • Eskom has an important role to play the realisation of this objective.

10. ESKOM • Goal – electrification by 2010. • Agreed that from 2001 national government would fund the programme through DME (Department of Minerals & Energy) • Funding held by in the National Electricity Fund • Disbursed by the National Electricity Regulator

11. ESKOM • TARGETS IN 2001/2 • Targets were 190,000 households. • Eskom achieved 206,000 households and 190 at schools • (70% rural electrification). • The electrification of rural areas has had a major impact on the quality of line of rural people, especially women and children. • For rural women, provision of electricity has resulted in the reduction of time spent collecting fire wood, which time is today directed at other productive activities. • For school children, there is light for study and recreation which opens other opportunities in life.

12. ESKOM • Funding both from National government and Eskom (transitional stage)

13. ESKOM • CURRENT TARGETS: • The current target is 200,000 households, 1142 schools and 10 clinics • (70% of electrification at rural areas)

14. ESKOM • MUNICIPALITIES: • 95,000 households and 10 clinics. • (20% at rural electrification) • BUDGET: • 950 MILLION per year for the next three years (2002-2005) • 37% of electrification allocations and targets are for the 13 nodal zones

15. TRANSNET • Ports: • COEGA project in the Eastern Cape that is aimed at unleashing the industrial and related capacity ( employment, development through increased economic activity) of the Eastern Cape

16. TRANSNET • RAIL • The Department has agreed with labour that restructuring of rural rail network will not only look at the core business of Spoornet but lines will be considered on a line to line basis to ensure that issues of employment and development are also considered and form part of the decision that is reached on the future of these lines. • In some instances, these lines are key to rural development such as access to markets and other economic activities by emerging farmers, rural women as well as facilitating social development.

17. TRANSNET • (Example) The rail line to Port Alfred (Grahamstown-Port Alfred)was closed. Spoornet then granted a lease to a community cultural organization, Ndlambe Academy of music, arts and culture, whereby the group runs the line and brings in tourists from Grahamstown into Port Alfred, a 69 kilometre rail line.

18. TRANSNET • The Department is currently busy investigating alternative operating modes for the rural rail network to ensure that every possible method of retaining and increasing current traffic flow in the rural areas is brought to bear in the considerations of the rail restructuring in the rural areas. (Umtata rail line is an example)

19. PART 2: IRDS • OBJECTIVE: • To ensure that SOEs are involved in the integrated rural development strategy in a coordinated manner. • To ensure that projects in the Free State Rural Node are undertaken and completed timeously. • DISCUSSION: • The formation of the Coalition began in December 2001 and its terms of reference was finalised in April 2002. • The Coalition has agreed to work with the Maluti-A- Phofung Municipality in the Thabo Mofutsanyana District in the Free State. • Maluti-A-Phofung is therefore considered a pilot project and the same programme will be rolled out to other municipalities at a later stage.

20. NODAL POINTS MAP

21. Coalition Structure

22. Municipality Structure

23. SOEs • NATIONAL COALITION OF MUNICIPAL SERVICE DELIVERY: • CONSISTS OF AMONGST OTHERS THE FOLLOWING SOEs: • Eskom Enterprises; (DPE) • Eskom College; (DPE) • DBSA – Development Bank of Southern Africa (DTI) • Arivia.kom; (DPE) • SABS – South African Bureau of Standards (DTI) • INCA – Private bank focused on municipal infrastructure • CSIR - Council for Scientific and Industrial Research (DTI) • LAND BANK; (DoA) • ARC – Agricultural Research Council (DoA) • MIIU – Municipal Infrastructure Investment Unit (DPLG) • SALGA – South African Local Government Association) • SANCO – South African National Civic Organisation) • NDA – National Development Agency (DPLG) • LGTP – Local Government Transformation Program (DPLG) and • IDC – Industrial Development Corporation (DTI)

24. ARIVIA.KOM • Facilitating information technology training • Vocational and career guidance • Community and NGO support • Donating state-of-the-art information technology to schools • Sponsoring Sport development • Sponsoring Health Care

25. PART 3: TRANSNET FOUNDATION • CORPORATE SOCIAL INVESTMENT • BUDGET ALLOCATION FOR THE YEAR 2001 R14,250 MILLION • INFRASTRUCTURE : R10 million • Construction of five schools: • Rethusitswe Primary School in the Northern West Province, • Rantobeng Secondary School in the Northern Province, • Daliwonga in the Eastern Cape, • Benjamin in Mpumalanga • Billiton and Libode Community College in the Eastern Cape.

26. TRANSNET FOUNDATION • CAPACITY ENHANCEMENT: R2,25 million • Building capacity to teach maths, science and technology: • Funding of Maths and Science training workshop in QwaQwa for 120 teachers, potentially impacting on 20 000 learners. • Provision of 21 computers and two printers at five school computer laboratories.

27. TRANSNET FOUNDATION • HIGHER EDUCATION: R1 million • Helping Tertiary Institutions implementing outreach programmes: • Completion of the University of Zululand library in Kwa-Zulu Natal. • Funding of the University of the Free State in the Free State Province to retain teachers in the IT programme.

28. TRANSNET FOUNDATION • EARLY CHILDHOOD EDUCATION: R250 000.00 • Providing toys to 38 crèches and schools. • SKILLS DEVELOPMENT: R750 000.00 • Training of teachers in the Free State in Science and Maths programmes.

29. TRANSNET FOUNDATION • HIGHLIGTED ACHIEVEMENTS: • Health: Phelophepa Train • Primary Health Care; • Dental Care; • Medicine; and • Eye care.

30. ESKOM FOUNDATION • ECONOMIC DEVELOPMENT PROGRAMMES: • To create opportunity for historical disadvantaged SMMEs. • SOCIAL DEVELOPMENT PROGRAMMES: • Job creation • Skills development • Economic Empowerment of the disabled

31. Public Enterprises Community Development Coordinating Committee • This committee comprises of different SOEs. • On the 13th of May 2002 they officially opened the disabled unit of the University of the North. • The project has been running for five years, allocated budget for the projects was R6 million. The unit has the following features: • Production room • Braille facility • Library • Four offices for staff members

32. Public Enterprises Community Development Coordinating Committee • The next project for the committee will focus at the Free State Province as the Minister is the Nodal Champion. • CONCLUSION: • This information illustrates that rural developments forms an integral part of the overall development role of SOEs. • It is not an add on function to the activities undertaken by SOEs and the DPE. • Our task as a Department is to harness the massive financial, labour, technological and capital resources to contribute towards the goals of rural development, especially infrastructure delivery.