Treasury nod for R1.4bn Nelson Mandela Bay projects

The National Treasury has given the green light for seven infrastructure projects, worth a combined R1.4bn, to be implemented by the Coega Development Corporation (CDC) in Nelson Mandela Bay.

The projects, which are aimed at ensuring a secure supply of water and  electricity as well as infrastructure for the Coega special economic zone (SEZ), would help lure investors to the Bay, the CDC said.

It was responding to the announcement made by Eastern Cape premier Oscar Mabuyane in his state of the province address on Tuesday.

The seven catalytic projects were approved by the budget facility for infrastructure — a process that facilitates  funding for national priority projects.

They were approved and signed off by the National Treasury last week, Mabuyane  said in an interview later.

The projects to be funded are:

• Desalination project;
• Water infrastructure at various zones in the Coega SEZ;
• Electrical infrastructure for various zones in the Coega SEZ;
• Bulk sewer infrastructure at various zones in the Coega SEZ;
• A pipeline connection for the Motherwell sewer line;
• Wastewater treatment works; and
• Tank farm infrastructure.

Mabuyane said the special economic zones in Port Elizabeth and East London would play instrumental roles in stemming the unemployment crisis gripping the province.

The Eastern Cape’s unemployment rate climbed three percentage points to 39.5% between October and December.

Over that period, there were 18,000 more unemployed people in the province — adding to the 45,000 who lost their jobs in the previous quarter.  

But while 18 new investors pledged new investments in the Coega SEZ to the tune of R2.6bn in the 2018/2019 financial year, only four had signed lease agreements — worth R110m — with the CDC to date.

“We have also concluded a significant land deal with Transnet for the Ngqura manganese export terminal,” the premier said.

“This deal will pave the way for the development of the Port Elizabeth waterfront. We are moving with speed now.

“Pursuant to our efforts, the department of mineral resources and energy has pronounced that the liquefied natural gas (LNG) project will be implemented in Coega to unlock the potential of the gas industry in our province.

“Transnet has committed to co-operate with the public and private sectors on this LNG gas project.

“We are also pleased to indicate that in this term Transnet will invest an additional R4.6bn for 17 key projects, such as the manganese multichannel strategy, phase 1 of the Port Elizabeth waterfront and tank farm project.”

He said they wanted to use Coega’s expertise for the development of the entire provincial economic infrastructure.

“In this financial year, we will consolidate technical capacity at Coega to assist the province on conceptualisation and preparation of all submissions for economic infrastructure projects.

“While some SOEs are experiencing challenges, our two special economic zones continue to demonstrate capacity of providing cutting-edge solutions for the development trajectory of this province.

“The performance of the special economic zones illustrates that when SOEs are properly managed by the right people with the right skills, they can accelerate the development agenda of the country,” Mabuyane said.

“This is against the narrative that privatisation is the only effective and capable instrument to drive development and deliver services.

“We must continue to support our two special economic zones.” 

Coega spokesperson Ayanda Vilakazi said the seven catalytic projects would unlock huge economic benefits for the province as they expanded beyond the Bay.

“This has further shown the capacity that the CDC has in being able to deliver projects and ensure that it can produce compelling business cases,” he said.

“It should also be appreciated that the National Treasury team, after the review of the submission, visits the entities that submitted to assess their capability to implement projects.

“The National Treasury, in its visit to the CDC, was satisfied that the CDC has the capacity and capability to deliver on the infrastructure that it has applied for, and hence the CDC was successful to the value of R1.4bn, including projects that will assist the special economic zone and the region in its water provision.

“The East Cape  government is thus seeking to use its entity, the CDC, to increase its probability of success in sourcing funds for infrastructure, but even more importantly, to use a capable institution in the delivery of that infrastructure.

“This is the reason that CDC is being chosen as the implementing agent for the BFI applications in the Eastern Cape.”

During his address, Mabuyane said they were in talks with Transnet to increase the capacity of the Johannesburg to Port Elizabeth railway line so that the Ford Motor Company could export its vehicles through the Port of Port Elizabeth.

Questions sent to Transnet spokesperson Olwethu Mdabula went unanswered.

Though Mabuyane said very little about the crippling drought that has ravaged the province and concrete plans to mitigate it, he said in the interview: “We’re trying to turn things around, looking at water harvesting in the province, trying to address the issue of bulk water supply.

“We’re also working closely with human settlements and water and sanitation minister Lindiwe Sisulu to address these issues.

“We’re the only province with eight big rivers that flow from the mountain straight to the ocean.

“These are all things we’re looking into.”  

Meanwhile, Mabuyane said he wanted small business owners to be the beneficiaries of the government’s plans as they were a fountain for job creation.

“The application processes of government development finance institutions are too cumbersome, hindering their growth and productivity.

“We are fixing the red tape and in the 2020/2021 financial year, we will develop a system that will fast-track the allocation of funds to deserving businesses,” he said.

“The procurement bill is on our side on this and we must use it to create new industries and sustain existing ones in our province.

“We implement all these reforms to affirm our SMMEs, but our efforts will be futile if we do not pay SMMEs on time.”

Last year, the provincial government launched an invoice tracking system to ensure that suppliers are paid within 30 days.

“It gives me a great pleasure to announce that since we launched the Have I Been Paid system, turnaround times for the payment of service providers within 30 days have significantly improved.

“We will now roll out this system to eight more departments,” he said.

DA provincial leader Nqaba Bhanga said it was clear the ANC was set on doing more of the same, when what was needed were extraordinary measures.

“Several of the initiatives mentioned by the premier today [Tuesday] are not new, they are initiatives that were launched with much fanfare during previous terms and then silently fell by the wayside, such as the biofuel project in Cradock, the Bhisho Precinct and others.

“These initiatives have now been revived by the premier, with millions more being allocated and no guarantees that anything is going to change,” he said.

“Mabuyane glossed over the drought, the single biggest threat to the province.

“Day zero has arrived and [he] offered zero solutions. Without water there is nothing.

“Towns are collapsing as their taps run dry.

“He [also] did not address the bloated state and the public sector wage bill.”

ANC chief whip Loyiso Magqashela welcomed Mabuyane’s speech and said it provided concrete plans.

“Everything that we discussed in the ANC provincial lekgotla found expression in the premier’s speech because it was what the people need.

“The time has come now for action.

“The premier gave concrete plans and touched on all key sectors, including municipalities being attended to and curbing fruitless and wasteful expenditure,” Magqashela said.