South African Business 2016 edition

SPECIAL FEATURE late in

SPECIAL FEATURE late in 2014. The health sector laboratory will be undertaken in collaboration with provinces, districts and clinic managers with the aim of producing a detailed plan for improving service delivery in public sector clinics in all provinces, including indicators, targets and timeframes, in addition to a guideline for clinic managers to develop and sustain these improvements. Success of Operation Phakisa “The key step in Operation Phakisa’s approach,” said the President, “will be the intensive work sessions necessary to deliver complete and signedoff action plans for presentation to Cabinet. These work sessions will help create transparency and help to remove bottlenecks and resolve the most critical challenges facing a sector.” Once the detailed delivery plans have been completed, President Zuma said government will then move into the implementation phase of Operation Phakisa—with him taking a personal interest in monitoring the progress and implementing the project. “The people of South Africa deserve much better from all of us. Through Operation Phakisa and all our other key strategic interventions to achieve the goals of the National Development Plan, we must work tirelessly to move our country forward and build a better life for all, especially the poor and the working class,” he said, urging key role players to commit fully to the success of this programme. SOUTH AFRICAN BUSINESS 2016 20

Meeting targets Highlights of the Operation include the cabinet approved issuing to Transnet Port Terminals (TPT) of a permanent operating licence to operate the manganese container terminal at the Port of Ngqura. Significant economic opportunities arising out of this development include the upgrading of the rail network (R2.3-billion) from Northern Cape to Port of Ngqura in order to support axle loads of 26t. Knock-on effects occur along the rail infrastructure value chain, with significant opportunities for localisation, such as signalling systems. The relocation of manganese operations from the Port of Saldanha would open opportunities for offshore oil and gas activities such as rig repair and maintenance. There is an opportunity to capture the lucrative repair market by extending and expanding our port capabilities to service current and future vessels in East and West Africa. Opportunities for local shipbuilding industry have arisen as a result of tenders issued by Armscor for a new hydrographic vessel under Project Hotel and six new offshore and inshore patrol vessels under Project Biro. The acquisition of the six IPVs/OPVs by the Navy is a major boost to the local shipbuilding industry as 60% local content is required. Projected spend over the next three to four years is approximately R6.6-billion, providing the opportunity to deepen component manufacturing and rebuild domestic capabilities. Transnet National Ports Authority (TNPA) and Transnet SOC Limited have adopted a Public- Private-Partnership (PPP) model to finance new Operation Phakisa infrastructure. TNPA has committed R7-billion for public sector investment in domestic ports to support industrial opportunities in the ports. Saldanha Bay port has been established as an oil and gas hub, the total scope of the initiative amounting to a R9.2-billion investment (public and private). TNPA has appointed transactional advisors for the refurbishment and maintenance of port SPECIAL FEATURE facilities. The scope and maintenance refurbishment requirements have been completed and The dti has designated working vessels for local procurement (60% local content). A R1.4-billion tender by TNPA for the procurement of tug boats was awarded to a South African company in support of local procurement. The dti is in the process of developing a strategic marketing campaign and value proposition for investors into the MTM sector. In addition to the Marine sector, progress has occurred within the oil and gas and aquaculture sectors, a Delivery Unit and Steering Committee was established at DMR and is fully functional. The financial analysis of South African offshore oil and gas sector procurement has been completed ahead of schedule. This work included the determination of product and service categories and spend (values); compilation of suppliers’ database and classification of procurement (with measurement and standards criteria) in terms of domestic vs foreign value addition in final goods and services. Setting of minimum targets for local production and supply awaits the finalisation of Mineral Petroleum and Resources Development Amendment Bill (MPRDA) legislative process. A total of 10 catalyst projects are in progress with funding secured from the Aquaculture Development Enhancement Programme (ADEP), the private sector investment at R305- million, and Government investment at R105- million. The National Regulator for Compulsory Specifications (NRCS) has been co-opted for sampling and food safety standards. Public Works has signed off leases on four projects. South Africa is ideally positioned to serve the East-West cargo traffic lane and the booming African offshore oil and gas industry through marine manufacturing, which includes ship and rig repair, refurbishment and boatbuilding. Despite this competitive advantage, we currently capture only 1% of the global market of ship repair and refurbishment. Efforts are underway to ensure that all of Operation Phakisa’s Oceans Economy initiatives are prioritised and resourced accordingly. 21 SOUTH AFRICAN BUSINESS 2016