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Gigaba: State companies keep SA going

Aug 06 2012 19:02
Johannesburg - Investments by state-owned companies into South Africa's economy are keeping the country going, Public Enterprises Minister Malusi Gigaba said on Monday.

"The fact is that state-owned companies’ investments are what is keeping the South African economy going at the present moment as private sector investments have shrunk," he said in a speech prepared for delivery at the inaugural South Africa-United States business summit in Johannesburg.

Gigaba said state-owned companies, including Eskom and Transnet, had started to implement new plans to develop the country's infrastructure.

"We have begun to witness state-owned companies embarking on long-term-planning and moving beyond their balance sheets to invest in game-changing projects.

"Should we implement the capital investment we have identified and approved, I believe South Africa’s economic landscape will have been significantly transformed in the (next) eight years."

He said Transnet had expanded its capital expenditure budget from R110bn over five years to over R300bn over seven years.

Eskom was projected to spend over R330bn in the next five years.

"We are doing a lot more than just stimulating demand... (we) are driving programmes that will put in place the infrastructure, skills and the industrial and technological capacity to drive our future economy."

The implementation of the projects would require co-ordination between the different state-owned companies, government departments, and the private sector.

The projects, which were spearheaded by President Jacob Zuma through the presidential infrastructure co-ordinating commission, would focus on the country's roads, railways, electricity supply, information and communication technology, and dams.

"The strategic, integrated projects identified by the commission will change South Africa's apartheid spatial patterns and redirect capital investments to areas hitherto neglected... (and create) the possibility for domestic and regional trade by, among others, promoting regional economic integration," Gigaba said.

He said his department would establish a dedicated office to monitor and provide support to the roll-out of the infrastructure projects.

He called on the US to invest in the South Africa.

"We would like to work with you to make direct investments into the South African economy and to develop South African companies to become part of your global supply chains," Gigaba said.

"We do not want you only to buy from South African companies for the South African market, we want to see these companies exporting into the regional and global market through your supply chain."

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