SOEs contribute to poverty alleviation: Mabuza

Friday, November 23, 2018

Deputy President David Mabuza says State-owned entities (SOEs) are applying several strategies and interventions to alleviate poverty in South Africa.

The Deputy President said this when he responded to oral questions in the National Assembly on Thursday.

“The SOEs have made a significant contribution to the economy, social development and poverty reduction in South Africa since 1994. A range of SOEs continue to provide essential economic and socio-economic infrastructure and services in this regard. 
“They are also playing a key role in enhancing skills, promoting entrepreneurship and opening up opportunities for job creation. We can only reduce poverty by generating income through sustainable jobs and business opportunities,” he said.

EFF Chief Whip Floyd Shivambu had asked how government achieved the elimination of poverty by ensuring that SOEs drive the development of critical socio-economic infrastructure.

The Deputy President said commercial SOEs like Transnet, Eskom, SA National Roads Agency Limited (SANRAL), Telkom and Broadband-Infraco are being directed by their respective shareholders to deliver on developmental outcomes, often in areas where market or institutional failures would make such outcomes unlikely, if left to private enterprises who tend to be wholly focused on profits.
“Procurement policies, processes and related systems are being revised to ensure that local supplier development is integrated into procurement practices.

“Supplier development related Key Performance Indicators are now embedded in the shareholder compacts of most SOEs.

“Through supplier development programs, implementation is driven towards maximising localisation and making an impact on both the economy and in the critical socio-economic infrastructure,” he said.



He also said Eskom placed a particular emphasis on supplier development and localisation to transform the supplier base, whilst developing supply sectors that are important to the industry.

He said Eskom-wide, a total of 1 373 new contracts worth R70.4 billion were awarded and commenced during the financial year 2017/18 alone, of which 87% or R61.3 billion of the contract value was committed to local content.

“Of those, 85 contracts worth R1.8 billion were awarded within the new-build programme. The local content committed to in the new-build programme amounted to R1.6 billion, representing around 86%.
“Eskom continues to connect previously disadvantaged households in licensed areas of supply through the Department of Energy funded electrification programme. During the financial year 2017/18, Eskom connected 215 519 households to electricity, thereby exceeding the target for the year in all provinces.

“Universal access to electricity has been reached for clinics thus eliminating the backlog that was there,” he said. 
He said on 31 March this year, 38 111 people were employed by the capacity expansion programme at the Medupi, Kusile and Ingula new-build sites and on large transmission projects.

The Deputy President also said that corporate social investment (CSI) initiatives are focused on developing small and medium enterprises, education, health, food security, community development, energy and the environment.

In 2018, Eskom’s CSI activities have already impacted more than 1.1 million beneficiaries, with a total spend of R192 million. 
“It is also critical that we drive our information technology network through companies such as Telkom and Broadband-Infraco.

“These companies implement the required communications infrastructure - not only for the formal business sector, but also for small micro business sector thus leading to much needed socio-economic upliftment of the poor.
“Telkom is implementing strategic transformational projects, which include delivering an integrated broadband plan and becoming South Africa’s leading provider of Wi-Fi services. The provision of Wi-Fi services goes hand in hand with Government’s household electrification policy,” he said.


He said in terms of road infrastructure, SANRAL is also making a meaningful contribution to the reduction of poverty through the delivery of socio-economic infrastructure that opens opportunities for SMMEs to participate as well as in the creation of job opportunities and skills development. 
“The improvement and expansion of key economic corridors, have substantially improved mobility and in the process, stimulating economic growth in the key production centres and areas with depressed economic potential. 
“This enables job creation and income generation. A few examples are the Gauteng Freeway Improvement Project (GFIP), the Gateway and Umngeni Interchanges in KZN, the Gauteng-Durban Corridor and the N2 Wild Coast which have been a good training ground for the development of SMMEs from Grades 1 or 2 to Grades 3 to 5. 
“The SMMEs are put through an intense 24-month training program and trained in road construction trades in order to equip and enable them to pursue opportunities in SANRAL’s mainstream national projects or other projects in provinces and municipalities.
“SANRAL also has a skills development program that capacitates people across various levels. In high schools, it focuses on providing scholarships in Maths and Science, and in universities and TVET colleges SANRAL gives higher education bursaries in engineering and technical careers. Support is also provided to Universities in post-graduate research,” he said. –