Build programme boosts employment in South Africa


19 March 2015

Thousands of jobs had already been created through the New Build Programme, which is led by state-owned enterprises.

And parastatals Transnet and Eskom were expected to invest billions of rand in infrastructure programmes in an attempt to create an enabling environment for private sector investment. It was anticipated this would bolster localisation and support small- and medium-sized enterprises.

This was the upshot of a progress report from the Department of Public Enterprises, which was briefing Parliament on the impact of the build programme as far as support to small businesses, skills development, job creation and beneficiation was concerned.

Matsietsi Mokholo, the department’s acting director-general, said the programme had also helped the government to address infrastructure backlogs that had hindered investment in the economy.

“The state of our electricity, ports and rail infrastructure is a clear sign that there has not been enough investment in our infrastructure and we have had to play catch up. The [New] Build Programme has been helping us do just that.”

Eskom to create jobs

Since 2005, Eskom has been expanding its electricity generation and transmission capacity to meet the country’s growing demand for energy. In his State of the Nation Address in February, President Jacob Zuma said the security of the electricity supply was a catalyst for growth and job creation.

Makgola Makololo, the department’s chief director responsible for energy, said Eskom had contributed to its developmental mandate through the creation of direct and indirect jobs. Direct jobs were created in the power utility’s business environment, while indirect jobs resulted from contractors servicing Eskom, especially through the build projects.

“Over the past three financial years, Eskom suppliers have committed to create 7 000 jobs and retain 700 jobs when they are awarded a contract,” she said. “As a direct result of Eskom business in the New Build projects, there were 24 251 jobs created by suppliers in Medupi, Kusile, Ingula and Power Deliver Project at the end of December 2014.”

Eskom had set a target to create more jobs through the New Build Programme in its corporate plan – 16 334 in the 2014/15 financial year, 8 317 in 2016, 4 750 in 2017 and 2 000 in 2018.

Makololo spoke to MPs about Eskom’s contribution to industrialisation. There had been a significant impact on local development as a result of the New Build Programme through the Competitive Supplier Development Programme [CSDP], which encompassed the supplier’s investment in manufacturing facilities.

“Three major New Build vendors – Hitachi, Alstom and Voith Siemens – have committed to a target value of R1.4-billion in terms of local development plans. These commitments are specific to the Boiler and Turbine as well as the Generator Packages.

“Since the inception of the [CSDP] in June 2008, the total actual investment in plant by Eskom’s supplier network has been R1.12-billion, which is 82% of the R1.37- billion committed value over the life of the respective contracts,” Makololo added.

Transnet on track to create half-a-million jobs

Transnet, in its strategy to contribute to skills development, job creation, localisation, empowerment and transformation, aims to roll-out a capital investment programme over a seven-year period.

Kgomotso Modise, the department’s deputy director-general responsible for transport, said that while investments would be made in ports and pipeline infrastructure, with the vision of moving freight from road to rail, the bulk of investment would be in rail.

Most of these projects would be fast-tracked as part of Operation Phakisa, the model introduced in June 2014 to fast-track the delivery of services. In its first two phases, it concentrates on the ocean’s economy and on building clinics.

Transnet aimed to create a million jobs by 2022, she said. “Transnet will create approximately 540 000 direct and indirect job opportunities over the next seven- year period. Through the build programme, procurement spend will be leveraged to increase localisation and therefore maximise job creation.

“In addition, it is also expected that another 480 000 job opportunities will be induced through Transnet spend.”

With an overall investment of R1-billion a year to be spent on training over the next seven years, Transnet would train 3 000 artisans and 1 600 engineers.