Economic Development Minister Ebrahim Patel outlined details of government's infrastructure development plans for the Eastern Cape at business breakfast in Nelson Mandela Bay on Thursday.
He told business leaders that he would be back soon to flesh out specific details of the massive infrastructure programme announced by president Jacob Zuma earlier, with provincial officials.
Below is an abridged transcript of his address.
"You know so well that the Eastern Cape economy is characterised by what we can call dualism. One the one hand you have some of the most advanced industry in the country centred on the auto sector."
"It takes considerable skill, know-how and technology to make a Mercedez Benz. That car is still a standard of quality globally in the auto sector. The Eastern Cape, your managers, your workforce, make those vehicles and they make it to the most demanding standards that German workers make it at."
"On the other hand you also have some of the most depressed rural regions in the former bantustans, characterised by high levels of joblessness, deep poverty and lack of basic services sitting side-by-side in the province."
"The Eastern Cape economy has historically been a vital production and industrial centre. You've been one of the core factory bases of this economy. In fact, if you take Eastern Cape industrial output it would make you one of the largest industrial regions on the African continent."
"But, what has happened nationally is that our GDP has grown principally off the back of a rise in services, finance services, business services, which have tended to cluster in Gauteng and the Western Cape. Couple that with a decline in agriculture and the Eastern Cape's share of GDP has dropped from 8.3% in 1995 to 7.7% by 2010."
"But, while that's the bad news, the good news is, is that your basic industrial profile is more in line with the new growth path opportunities that have been identified. In other words you have a traditional base in some, not all, in some of the sectors that we expect will be growing faster and will be getting more public policy support to grow."
"You know your competitive advantages, you've got four universities so you've got a disproportionate number of the educational institutions of the country and the question you need to ask is, is the Eastern Cape playing enough to that strength."
"You've got two of the country's three IDZ's (Industrial Development Zones), you've got two ports, three airports, half of South Africa's auto-making capability, home of four of the OEM's and about 80 of the major component manufacturers."
"You've got a vast hinterland of people who want to contribute but where the land productivity is low as a result of among others, of a shortage of investment in agricultural infrastructure."
"So, the opportunities for the Eastern Cape will arise among others, from government's infrastructure plan, from the revitalisation of agriculture, including the production of bio-fuels, something that is going to change the trajectory of agriculture in the medium to long term. And, opportunities will arise from your focus and your strengths in manufacturing, now in particular with the fact that you have a ready-made industrial facility in the form of Coega, which while it's not performed in the past is set to take off now."
"Let me start with infrastructure. We've developed as government an infrastructure plan that integrates for the first time national, provincial and local government. One plan. That infrastructure plan is very detailed. It has 17 what we call strategic integrated projects (SIPS) covering the entire country and is aimed at boosting investment, jobs and development. It focuses on road, rail and ports, on water irrigation and sanitation, on energy, both traditional and green energy, on communications, on social infrastructure."
"Many of these SIP's as we call them will affect the Eastern Cape but there is one that is designed specifically with the Eastern Cape in mind. Its got two economic focus areas.
On the eastern part of the Eastern Cape we looked at the opportunity of unblocking the agricultural opportunity. That requires about all that we must move beyond talk in to action on the provision of water. And so the Umzimvubu Dam is the centre-piece that can transform that can transform that part of the province, leading to a significant expansion of agricultural production."
"So, we are looking at moving agricultural production from the eastern part of the Eastern Cape via the N-2 up to Johannesburg. So, there are two major transport corridors that we are developing now."
"On the western side of the Eastern Cape, we see the opportunity in industry and logistics. Its not at the expense of the many other good ideas but we think these two need to be regenerated."
"So much of the work is focused on trying to expand and trying to unlock the opportunities in the Ngqura transshipment hub and the port as a whole. But, there's something else that we've recognised. South Africa has got enormous resources of manganese, the highest reserves anywhere in the world, stuck in the Northern Cape."
"And for years there has been this debate, should we move manganese to Saldanha or should we move it down to the Nqgura area. We've taken a decision now, that debate has ended. It will come via the Eastern Cape. So, it means the first step is a manganese terminal and Transnet has now been instructed to begin moving on it."
"But, the Eastern Cape must position itself to be move than simply a port. Your strength is industry. So, the next phase that we are working now, via the Industrial Development Corporation, is a ferro-manganese smelter. The question is can we move beyond manganese smelting to downstream industrial opportunities. And, there are some exciting opportunities. Manganese is one of the principle feed-stocks in the manufacture of steel."
"The Presidential Infrastructure Coordinating Commission is strongly touting the prospects for Mthombo (refinery). It needs some technical work, we've looked at the project proposal. We said to the team that they've got to scale down the 36 000 barrels a day to probably 200 000 a day based on market forecasts. We've said that they have got to re-look at the components and do it in modular fashion. At least get some things done instead of waiting for the grand plan because we need fuel security."
"What I've argued in those meetings is that it is not good for a country to be completely dependent on one fuel pipeline running from Durban to Gauteng. So, we need to think strategically for an Eastern Cape pump-up and one from Mozambique to Gauteng."
"So, we are trying to develop a more integrated energy plan. But, don't forget bio-fuels because the Eastern Cape could well become an instant generator of the feedstock for bio-fuels. The secret is that is where the jobs are."
