25 June 2013 IPAP 2013/14 - 2015/16 1 Industrial Policy Action Plan Economic Sectors & Employment Cluster IPAP 2013/14 – 2015/16
25 June 2013 IPAP 2013/14 - 2015/16 2 CORE OBJECTIVES OF THE IPAP South Africa’s long-term vision of an equitable society is provided by the National Development Plan. The IPAP is informed by this vision; and its interlocking transversal and sector- specific interventions constitute key pillars of the programmatic perspectives set out in a series of ‘drivers’ and ‘packages’ contained in the New Grow th Path (NGP). Government policy set out in these and other documents seeks to ensure a restructuring of the economy to set it on a more value-adding, labour-intensive and environmentally sustainable grow th path. Diversify the Long term Contribute towards economy: provide Promote a Industrialisation intensification of industrial strong support for labour-absorbing model focussed South Africa’s development in value added industrialisation on inclusion of industrialisation Africa, focussed on path with historically process and manufacturing, infrastructure, systematic disadvantaged movement especially in globally productive capacity employment- people and towards a competitive non- and regional creating linkages regions knowledge traditional tradable integration economy goods & services
25 June 2013 IPAP 2013/14 - 2015/16 3 IPAP in action The record for 2012/2013 Immediate & longer-term perspectives
25 June 2013 IPAP 2013/14 - 2015/16 4 IPAP ACHIEVEMENT HIGHLIGHTS We have selected a range of cross-cutting (transversal) and sector-specific highlights of the past year These highlights do not represent an exhaustive list of all the outcomes achieved - or of the progress platforms built over the course of previous years They serve as a snapshot of a much more substantive body of w ork w hich underpins these achievements, based on a set of critical and indispensable principles for industrial policy and industrial development. These are as follow s: The interventions rested Programmes and specific The programmes and on sound economic interventions have been interventions had the Appropriate funding and research and analysis, the subject of significant necessary intra- human resources existed identifying market failures stakeholder engagement governmental to take the interventions and designing the most and benefit from a critical co-ordination and forward appropriate measures mass of support from cooperation critical to required to address these stakeholders their success
25 June 2013 IPAP 2013/14 - 2015/16 5 IPAP TRANSVERSAL INTERVENTIONS 1
25 June 2013 IPAP 2013/14 - 2015/16 6 IPAP TRANSVERSAL INTERVENTIONS 2
27 February 2013 IPAP 2013/14 - 2015/16 7 Achievement Highlights: Transversal Public Procurement 1 • Progress on first round sector designations: • In Dec 2012 PRASA awarded a 10-year contract to build 3 600 coaches to Gibela Rail Consortium - committed to achieve 69% local content over the duration of the contract • Transnet Freight Rail issued an RFP for procurement of 1064 locomotives as part of its R300 billion, 7-year capital investment programme. The RFP incorporated 55% (diesel) and 60% (electric) local content requirement • Eskom amorphous transformers tender issued: contract awarded to local manufacturers with 80% local content requirement • The City of Cape Town has awarded the tender to provide vehicles for its extended MyCiti bus routes to Volvo SA. Volvo will provide 40 buses at a cost of R180m, plus ancillary services such as training and maintenance. The N2 Express routes are expected to start rolling out at the end of the year, linking Khayelitsha and Mitchells Plain with the Cape Town city centre • Mercedes-Benz SA’s Sandown Motor Holdings has won the tender to provide 134 buses for phase 1B of Johannesburg’s Rea Vaya BRT system • Local content requirements are a critical feature of both bus contracts
27 February 2013 IPAP 2013/14 - 2015/16 8 Achievement Highlights: Transversal Public Procurement 2 • Progress on second round sector designations: • R2.55 bn Oral Solids Tender awarded, with SA firms (Aspen Pharmacare & Adcock Ingram winning ± R1bn of the tender • School & office furniture designated for state procurement • 3rd wave" of designations to include: • Valves, manual and pneumatic actuators; electrical and telecommunications cables; solar water heater components • NIPP: National Industrial Participation Programme • Adopted by Cabinet and fully aligned with the Competitive Supplier Development Programme (CSDP), which governs localisation requirements in SOC procurement practices
27 February 2013 IPAP 2013/14 - 2015/16 9 Achievement Highlights: Transversal Public Procurement 3 • REIPPP: Renewable Energy Independent Power Producer Procurement Programme • 47 bids awarded, with minimum levels of local content ranging from 25%-45%; set to rise to max. 65% in solar, wind & solar CSP. 21, 214 jobs expected to be created in first 2 rounds • A hotline and email address have been set up at both at the dti and SABS to deal with reports on non-compliance with local content regulations • Set-top boxes : The soft launch for digital migration was undertaken by the DOC in September 2012 in the Northern Cape; manufacturing and digital migration to begin in 2013
27 February 2013 IPAP 2013/14 - 2015/16 10 Achievement Highlights: Transversal Industrial Financing 1 • Continuing re-orientation of the IDC to finance IPAP/NGP sectors: • 124 903 jobs were saved/created through IDC funding approvals 2009-2012 • R12.9bn worth of approvals, expected to create/save ± 14,500 jobs • R5.5bn committed for investment in the Green Economy • R1.1bn committed for investment in the agriculture & forestry value-chains • R501m approved for clothing & textiles sector – forecast to save 2,400 jobs • R5bn private ‘green bond’ concluded with the Public Investment Corporation to facilitate funding for businesses looking to invest in clean- energy infrastructure developments • IDC to further lower costs by sourcing R2bn from the UIF, specifically for labour-intensive industries • Government's Green Fund, administered by the DBSA, has processed 590 applications for sustainable development projects worth R10.9bn
27 February 2013 IPAP 2013/14 - 2015/16 11 Achievement Highlights: Transversal Industrial Financing 2 • Tax and rebate schemes: • R&D Tax Allowance: Since inception (2005/06- 2009/10) tax breaks under the scheme have totalled R2bn • The 12(i) Tax Incentive has supported large manufacturing investments worth R32bn since 2010; 3 326 jobs expected to be created • By June 2012, R632m of the available R1bn rebate for auto sector export support had been paid out
27 February 2013 IPAP 2013/14 - 2015/16 12 Achievement Highlights: Transversal Industrial Financing 3 • Manufacturing Competitiveness Enhancement Programme (MCEP) • As at end May 2013, out of the 455 applications received, 248 entities had been supported to the value of R1.484 billion . In the process, a total investment of R7.06 bn has been leveraged. • As a result of MCEP grants 58, 171 jobs will be retained in the following sectors: Agro processing, Metals, Chemicals, Plastics, Electro-technical, Printing, Pharmaceuticals and Film • As of 19 June 2013 claims to the value of R87.2 million have been paid out. • 90% of approved applications were for capital investments in the sectors above; but it is increasingly evident that many companies are beginning to apply for funding for investments in the Green Economy • The IDC has approved Projects to the value of R350 million via the MCEP loan facility ; approximately R70 million has already been disbursed
27 February 2013 IPAP 2013/14 - 2015/16 13 Achievement Highlights: Transversal Developmental Trade Policy • MANUFACTURED EXPORTS TARIFF REDUCTION • The Transnet National Ports Authority has committed to changing its pricing model in favour of the export of manufactured goods by lowering tariffs on tradable exports by 40% from 1 April 2013 • FRAUD, ILLEGAL IMPORTS, SUB-STANDARD GOODS • Roll out of the Customs Modernisation Programme and launch of the SARS- dti - Industry Forum to integrate anti-fraud measures • SARS/Customs-led technical capacity upgrading programme under implementation at ports of entry - including real-time electronic systems, risk engine and reference price monitor • An electronic case management & inspection process is being rolled out to the SACU region, superseding the current manual stop-and-inspect process • Illegal imports of clothing and textile sectors being tackled under the Reference Price System; SARS intends extending the system to other sectors • An additional 1,500 personnel have been added to Customs Operations • SARS has awarded “Preferred Trader Status” to strictly compliant importers, in order to reduce their regulatory burdens
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