Chairperson, Minister, Deputy Minister, hon members, it is an honour and a pleasure to take part in this Budget Vote policy debate of the Department of Economic Development.
May I say, as we start to understand the roles that provinces need to play, that I welcome the Minister talking about all three spheres of government and how together we all need to make sure that we deliver on this economic New Growth Path and the need to grow the economy in order to deliver on the creation of jobs, and specifically the target that has been set for us by the President of five million jobs.
May I say, on behalf of the Western Cape, we commit not only to playing our part in helping the Minister in delivering on his contract with the President, but also doing our part in creating as many of those five million jobs as possible.
I must also, at this stage, welcome specifically the inclusion in the Industrial Policy Action Plan 2 of oil and gas and boat building, which, I think, relates specifically to this province and also to a number of other provinces as well. We really do welcome that.
In his address, the Minister spoke about the effect of growth, and about jobs within that growth. But at the end of the day, whatever happens, we cannot create jobs unless we have growth. If we have no growth, it is much, much harder. Obviously, from government's point of view, we need to make sure that we are steering that growth in the right direction.
As part of that policy, and as part of this debate, I just need to highlight some of the risk areas, not only within this department. I do think this department plays a key role in making sure not only that the three spheres of government deliver on what we need to deliver on, but also that there is co-ordination across different components of government. It is pertinent that the Budget Vote debate prior to this one was Transport because of the key role that transport plays in how we have to deliver. I'll talk to some of those issues and perhaps some of those blockages.
At the moment the key risk areas that I would like to outline, overall, are electricity and energy supply. We all know that there is a massive investment into this space. But, as the economy starts to grow, if we are not ready to take up that growth, that is a huge risk and must be highlighted. Water falls in exactly the same space, and I have spoken about transport.
We also need to speak far more about being competitive - being competitive in the market, being competitive within our own production levels in South Africa, and being competitive in a way of ease of doing business. Today the Minister spoke about the cholesterol that gets in the way. We need to make sure that we ease that flow, because it is about being productive, it's about being competitive and it's about being able to claim that space that we need to claim to really make it possible for us to create these jobs.
There are a couple of other areas that I would like to highlight, and I would like to start with the green economy. The Minister did speak about the green economy at length. There is one issue that I am picking up from potential investors and potential local businesses and I want to highlight that today. The green economy is something new for us. It is something that we need to grab with both hands and, I think, the green economy is a huge opportunity for us as a country, specifically with regard to where we are placed in the African context.
The one problem that we have is the communication with those investors and companies. So we have had the refit and the delays, and we have had the announcement of a reduction in that refit costing. That, in itself, is creating some confusion. I am picking something up now that is on top of that confusion, specifically coming out of the Treasury at the moment, and this is that the refit is actually not going to work. We have to have an open-bid process. I am not sure. I am only picking this up from industry players. I have actually spoken to the Minister of Finance's department about it. I have not received any feedback, but apparently it is what they are working on at the moment: looking at an open-bid process. It is all very well to become competitive in that space, but if we have a straight open-bid process without steering that growth, without steering that investment - whether it be local or international - I see huge risks there. I see risks first of all from the communication process in which we are now putting something else on the table. And, second of all, if we push this too hard we must learn from other countries that have been in the same space. What happens is that the big international investors then eventually own that green space, and our smaller companies get sidelined and primarily our component of the manufacture of that industry also gets sidelined.
It's very, very important that we really understand, if this threat is coming - from this department's space and, Minister, I think we also have to take this discussion further in the Minmec tomorrow - how we are going to steer this process so that we do retain manufacturing and our space that we need to retain in steering that economy. We also don't want to become a dumping site for old technology, when the rest of the world is purchasing new technology at a far higher rate while we get left with the old. So, I think, it is a risk and something that we really need to look at very seriously.
With regard to green technology, I also want to say that natural gas, specifically on the west coast of our country, gets used. I started my speech by speaking about the risk of electricity supply, which could be an inhibiting factor for economic growth in the longer term. At the moment, the Ankerlig Plant which produces peaking power in the Western Cape at Atlantis uses R780 million worth of diesel a week. It is not peaking any more; it is starting to pick up much more of the load, and that is at R7,80 per kilowatt hour.
If we could get gas into that system the price comes down to 90 cents per kilowatt hour. That really starts to make more sense, and I think in the space between now and the Medupi and Kusile Power Plants coming on-line, we do have a risk. We need to make sure that we get those green energy turbines and solar panels up and running. But I think we also need to look seriously at how we can use natural gas, because that will also make sure that we minimise those risks.
I spoke about and said thank you very much for oil and gas being included in Ipap 2. The services of the oil and gas industry are expected to be in the region of US$200 billion over the next five years. That is the African component on the west and east coasts of Africa. We need to make sure that we are playing our part. I know that the national department is involved with us in the province and with the Municipality of Saldanha Bay, looking at the industrial development zone, the IDZ. I thank you so much for that support. I also think we need to become more energetic and make sure that we take the space far more seriously and act far quicker than we are at the moment, because we are seeing our competitors in Namibia and Walvis Bay starting to pull ahead of us and starting to pull some of those service jobs down into that space.
If we do really want to create the jobs, we need to be more on top of our game. I want to refer specifically to the risk around ports. It is a difficulty that we have in this province - I know it is not this Minister's responsibility but this also forms part of that economy. The delays that we are experiencing in the ports - not in the export space of getting our goods out through containerisation, which seems to be running far better and getting better and better all the time - are in the ship repair and in the oil and gas spaces as there seem to be blockages after blockages.
In the past I referred to a vessel coming into this harbour and being delayed by 12 days. It's here, booked in for one month exactly - there are US$32 million worth of jobs and 1 800 jobs on this vessel. We cannot afford to delay these jobs by 12 days. What happened in that specific case concerning Chevron, for whom we did the job - this was one vessel of 60 vessels that operate along the west coast of Africa - was that we got the first job last year, but we have not gotten another job. The work has now gone to Singapore or Europe. That is because of our inefficiencies. We need to make sure that we pick up on those inefficiencies so that when we go out and hunt for this work, it remains here, because when we get the job we are actually offering the right service. We have got the people to deliver on that job, but if we are delaying in our communication and getting those vessels into our ports, it gives the wrong message.
We have oil rigs on their way to our harbours, whether it be Saldanha Bay or the port of Cape Town. They are on their way, and the vessel is days out of port - workers standing on the dock waiting to work on these vessels - and we go and get permission from the ports authority to allow the vessel into the harbour. And then there is confusion about which harbour it is going to, and phone calls from America at 2 o'clock in the morning because they do not know where this vessel is getting harboured. That kind of communication is not helping us create the jobs that we need to create.
Minister, I must also welcome your point on red tape. That is something on which we really need to work a lot harder, in order to remove those blockages that are slowing down this growth. Minister, I look forward to working further on making sure that, through this productivity and communication, we actually start to remove these blockages and start to really push hard for that growth that is going to create jobs. Thank you. [Time expired.] [Applause.]