Speaking at the South Africa Local Content Summit for oil and gas in Cape Town‚ Karl Socikwa‚ Chief Executive of Transnet Port Terminals‚ said the state owned company had a significant role to play in driving economic growth and transformation in SA.
He said the historical under-investment in infrastructure and exclusion of disadvantaged individuals from the mainstream economy over the past three decades‚ had resulted in an un-transformed manufacturing base‚ a decline in manufacturing capabilities and monopoly structures within the local economy.
The state transport utility has recently given out contracts worth several billion‚ for the supply of 1‚064 diesel and electric locomotives‚ to international manufacturers. However‚ about 60% of the components that will be used to assemble the rolling stock will be bought locally‚ in line with Department of Trade and Industry guidelines.
Socikwa said government was using local content to leverage expenditure aimed at developing new industries and influence how much was locally manufactured‚ which would lead to job opportunities and the creation of black industrialists.
Importantly‚ he said the Department of Trade and Industry had taken a lead to designate industries‚ sectors and sub-sectors for local production at a specified level of local content.
He said chief among the designated sectors and minimum thresholds for local content was the designation of rail rolling stock.
"Transnet will be spending R312bn on infrastructure programmes over the next seven years‚ as well as over R300bn in operational expenditure. This significant spend will create a huge opportunity for local procurement through supplier development‚" Socikwa said.
He pointed out that Transnet had already localised the design and manufacture of rail‚ coach‚ and locomotive components. Gauteng-based Siyahamba Engineering‚ a 90% black-owned and controlled company‚ would design and manufacture rail coach and locomotive components for Transnet.
Major and core components include doors‚ door gears‚ windows‚ windscreens and interior pipe-work. Socikwa said there was a need to create an enabling environment which promoted the transfer of skills from international to local suppliers.
Recently‚ Public Enterprises Minister Lynne Brown said state owned companies and Transnet in particular‚ would have to take on an even more central role in driving government's agenda for economic development and transformation.
"I note the progress made in transforming Transnet's supplier base towards a B-BBEE (broad-based black economic empowerment) supplier base and spending a significant 94% of its total procurement on B-BBEE and 92% in local content procurement‚" Brown said following a Transnet annual general meeting in June.
Source: BDPro via I-Net Bridge
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