THURSDAY, 30 MARCH 2006 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY

                                ____

The House met at 14:03.

The Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.

QUESTIONS FOR ORAL REPLY

                    THE PRESIDENT OF THE REPUBLIC

Consolidation of democracy and acceleration of integrated service delivery

1. Ms P Bhengu (ANC) asked the President of the Republic:

   (a) To what extent have the local government elections held on 1 March 2006 consolidated democracy and (b) what steps will the Government take to ensure the acceleration of integrated service delivery to ensure a better life for all? N254E The PRESIDENT OF THE REPUBLIC: Madam Speaker, perhaps I should start by extending our congratulations to the political parties, the organisations, our people as a whole and to the IEC for the very successful local government elections held earlier this month. [Applause.]

One of the founding values of our democracy, articulated in chapter 1, section 1(d) of the Constitution, is universal adult suffrage, a national common voters’ roll, regular elections and a multiparty system of democratic government.

Since we attained our freedom in 1994, we have held three successful national and provincial elections, and three successful local government elections, including the last one. Voter turnout has consistently gone up in each election, clearly demonstrating an irreversible process of the consolidation of our democracy.

As hon members are aware, in terms of our electoral systems and laws, any interested party may lodge with the Independent Electoral Commission any objection that is material to the determination of the final results. But, because of the smooth technical management of the elections, there were no material objections to the running of these past elections. As a result, these elections were declared free and fair, and credible in all respects.

However, democratic election management is more than an efficient and well- managed technical process, and also includes an enabling constitutional and political environment. Free and fair elections imply the presence of an environment that ensures civil and political rights such as freedom of expression, of movement, of association and of assembly; and participation by all citizens, the absence of intimidation, and compliance with the rule of law.

The fact that the March elections took place within this climate bears testimony to our deepening democracy. We, nevertheless, need to say that there was some violence, which resulted in the death of some people. So this problem hasn’t quite disappeared totally.

Before the last local government elections, government conducted izimbizo throughout the country to identify obstacles to the acceleration of integrated service delivery, as well as to assess the necessary capacity and readiness of municipalities in pursuit of a better life for all. We have completed that assessment and have identified priorities that are central to the consolidation of the system of local government that will improve the living conditions of all our people.

On the basis of that assessment, the focus of the new municipal councils will be around practical and critical technical and policy interventions in the priority areas of institutional and skills development; acceleration of basic service delivery and infrastructure investment; improving capacity for economic development at district and metropolitan levels; improving financial viability and financial management; and promoting good governance and meaningful community participation.

We have prioritised the important challenges of institutional development, because we have to give adequate support to municipalities to work out credible and workable integrated development plans that are linked to the provincial growth and development strategies, and the national spatial development perspective.

In this regard, we will ensure the thorough hands-on support for all municipalities by helping them to have in place the basic systems, resources and staff for their effective and proper functioning. Government, in partnership with Salga, will also embark on a training programme for councillors as part of our effort to improve the capacity, the efficiency and effectiveness of our municipalities.

Further, as we have announced in the past, in order to achieve universal integrated service delivery, government will continue to build on the progress made in broadening access to basic services and infrastructure; and this includes maximum and efficient utilisation of the R2 billion earmarked for the municipal infrastructure grant over the medium-term period ending in 2007. Indeed, priority actions to accelerate service delivery and infrastructure investment also include ensuring that service delivery targets, with respect to access to clean water, decent sanitation and electricity, and the eradication of the bucket system, are on track. Creating favourable conditions for accelerating service delivery and infrastructure is also bound to have a positive impact on economic development opportunities within the municipalities.

Over and above this, however, national government will work with municipalities and provinces to strengthen and help stimulate local economies. Shall I stop? This instrument before me says, “time”.

The SPEAKER: If, Mr President, you want to finish a sentence or two, the Chair will oblige you.

The PRESIDENT OF THE REPUBLIC: Well, Madam Speaker, as hon members know, local government derives most of its income from its own revenue sources such as property rates and service charges. Strengthening and supporting municipal financial viability and financial management is thus crucial to the proper functioning of local government. Specific measures have been put in place to ensure that this is achieved through the provision of hands-on support, capacity-building and financial support mechanisms, where necessary. Let me stop there, Madam Speaker; this machine is confusing me.

Ms P BHENGU: Hon Speaker and hon President, we in the ANC are aware that over the past period our government itself has embarked on Project Consolidate to strengthen the capacity of local government. Hon President, in your opinion, is it enough or will we have to look at and pursue other initiatives such as private-public partnerships? If yes, how far are we in this regard?

The PRESIDENT OF THE REPUBLIC: Project Consolidate has indeed made a very important contribution in terms of identifying the problems and the bottlenecks that exist within the system of local government. That intervention was specific to municipalities. We, at this moment, have a better sense of what is required in terms of, for instance, professional people, technical people and other interventions that might be necessary.

The Development Bank of Southern Africa has been working with the Minister of Finance and the Department of Provincial and Local Government to identify people who would be required, as identified through that process of Project Consolidate. I mentioned earlier in this House the proposals that had been made by various people, including the FF Plus, in terms of people that would be available for service.

As I was saying earlier, the work that has actually been done to assess the real needs of the municipalities, individually, through Project Consolidate and the various izimbizo that we held, has put us in a position where we can respond to this matter. That includes bringing into the country, where necessary, the people who can serve as mentors to our managers and our municipal managers, mentors to our young engineers and so on, so that we continue to build this capacity. That is the kind of intervention that will be made.

The CHIEF WHIP OF THE OPPOSITION: Madam Speaker, Mr President, the democratic expression of the will of the people means that some municipalities, like Cape Town and others, are governed by parties other than the ANC. [Interjections.] Will the President encourage the national and provincial governments to co-operate and work with whichever party is in power at local government level to ensure service delivery to our people?

The PRESIDENT OF THE REPUBLIC: The hon member raises a very important point. The outcome of the local government elections with its great variety of parties and organisations that got voted in by the people indeed demonstrates the strength of our democracy. It is critically important, indeed, as the hon Gibson has said, that the national, provincial and local governments, however they may be constituted politically, work together. The whole system of co-operative governance, which is even in the Constitution, requires that.

Indeed, I would hope that throughout the country, whoever happens to be in power in our municipalities, both the provincial and the national governments would work with them. That means that there must be a readiness on the part of the local governments to work with the provincial and national governments, regardless. [Applause.]

Mr B W DHLAMINI: Madam Speaker, President, in your answer you spoke about the municipal infrastructure grant. My question to you is in relation to the first question on service delivery by local government. Last year the executive took a decision to take the building for sports programme, which meant the building of facilities in poor communities, and make it part of the municipal infrastructure grant.

We asked the Minister for Provincial and Local Government about this matter and he gave us the assurance that it would be ring-fenced. Yesterday we got a briefing that the department will not be able to do that because Treasury would not allow them to do so. The worry is that while the programme was under Sports and Recreation, it was able to build 104 sports facilities throughout the country. Since it has been shifted, it has only been able to build four. My worry is that, now that the money is not being ring-fenced, we will not see any development in terms of providing sports facilities, given our 2010 bid and the excitement that was created by that, concerning our people.

The PRESIDENT OF THE REPUBLIC: Madam Speaker, let me thank the hon member for raising the question. This is the first time that I hear about it. Indeed, I think it would be a cause for worry if we should reduce the sports facilities that we build in the country. It cannot be correct.

Indeed, as government, we have been taking the position that it’s critically important in these local communities that the youth must have the possibility of participating in sport. That infrastructure is therefore critically important. Thank you, hon member, for raising the matter. I will follow up on it. Clearly, we cannot take a position that results in the reduction of the capacity to build those sports facilities. [Applause.]

Ms S RAJBALLY: Madam Speaker, hon President, greetings to you. Now that the election is over, how does the Presidency foresee relations between the executive sectors of the three spheres of government, in terms of engaging in more active working relationships with one another to ensure better delivery and nation-building at its best?

The PRESIDENT OF THE REPUBLIC: The hon member knows that, among other things, because of concern about, in some instances, weakness in terms of the co-operation between the three spheres of government, this House approved the intergovernmental framework legislation; precisely to ensure that, apart from the voluntary co-operation that might exist between the three spheres, there should be a legislative framework which requires those three spheres to co-operate. It is going to be very important that we make sure that it gets implemented.

I think the hon member would know that for some time already we have had an institution in government, which brings together national government, provinces and Salga - in the Presidential Consultative Forum - with those three spheres of government. I think it is a matter of ensuring that we do indeed implement legislation that has been approved and make sure that the institutions that have been established for that purpose do actually work.

Those institutions also include, apart from this national structure I have just spoken of, similar structures in the provinces for interaction between the provinces and the municipalities. I think we have to make sure that they do indeed work together. When that system does not work, it is the people who suffer. We really do need to make sure that that does not happen.

            Problems experienced at Koeberg power station

1. Adv H C Schmidt (DA) asked the President of the Republic:

   (1) Whether, in light of the statements made by the Minister for Public Enterprises on 28 February 2006 and 3 March 2006 with regard to the problems experienced at the Koeberg power station, he intends taking any steps against the Minister; if not, why not; if so, what steps;

   (2) whether he will set up an independent commission of inquiry to establish the causes of the failure of the Government to meet South Africa’s national electricity capacity needs and to recommend appropriate action; if not, why not; if so, what are the relevant details? N210E

The PRESIDENT OF THE REPUBLIC: Madam Speaker, of course this question relates to the matter of Eskom and the remarks that were made at some point by the Minister for Public Enterprises. Therefore we presume the question is in reference to the purported statements about sabotage.

The press conference on the eve of the election, where the alleged inferences were made, was occasioned by failures of the system the night before. A reference to the outage at Koeberg 1 arose due to the need to clarify inaccurate speculation on the cause of the problem. The CEO of Eskom and the Minister for Public Enterprises have at all times been consistent in stating that the cause of the shutdown at the Koeberg 1 unit is under investigation and, indeed, I’m receiving regular updates in this regard.

Minister Erwin also dealt with this matter in hearings of the portfolio committees on 14 March 2006 and he has made the commitment to make a statement in Parliament once the investigation has been completed.

Now, as to the matter of setting up an independent commission to assess our national electricity capacity needs and so on, the hon member is proceeding from the wrong assumption that the government has failed to meet South Africa’s electricity capacity needs.

On the same day, 14 March 2006, which I have just mentioned, Minister Erwin, accompanied by the Deputy Minister of Minerals and Energy Lulama Xingwana and the chairperson and CEO of Eskom, gave a comprehensive briefing to a joint meeting of the portfolio committees. And as they dealt with the situation comprehensively the hon members had a chance to ask questions. I believe the situation is well known and understood.

Accordingly, I do not believe that any purpose would be served by the appointment of a commission of inquiry. The parliamentary procedures provide adequate means for members to obtain any information relating to this matter.

As was made clear in that briefing, the situation in the Western Cape is specific to issues around Koeberg. The process to deal with this has been fully outlined and will require a full collaboration of all of those concerned. And in this regard I would like to thank Premier Rasool of this province for the hard work he and his team have undertaken to try to mitigate the situation. The Premier is co-ordinating all stakeholders in the Western Cape with the full co-operation of Eskom and the Minister for Public Enterprises and more than seven meetings have already taken place this year.

I am also pleased to announce that the SA Navy ship SAS Drakensberg is currently making its way to Cape Town with a replacement rotor for the rotor that was damaged at Koeberg. [Applause.] And I would like to thank the government of France, Electricité de France, our Ministry of Foreign Affairs, Ministry of Defence and the navy. We are fortunate in having the capacity to carry out such an exercise.

I would also like to thank the staff at Koeberg who are working tirelessly to try to deal with this very difficult situation. It is also my view that Mr Gcabashe, the CEO of Eskom, and his team, have responded to this crisis in the most expeditious and professional manner possible under the circumstances. [Applause.] However, these events only serve to confirm the urgency of investing in our infrastructure.

The increased pressure on the transmission lines to the Western Cape and on the Cape Town city infrastructure have shown up weaknesses that are being addressed with the necessary urgency. The position nationally is that we have about 37 000 MW available, with an additional 2 000 MW available to manage very high peaks. The projected demand is some 35 000 MW. As has been indicated in the above-mentioned briefing to the portfolio committees the situation is tighter than we would have preferred, this being the result of the higher-than-projected rates of economic growth. However, the Eskom built plan is already addressing the situation. Approved projects, including those under construction, will add another 7 260 MW in the next few years. Projects in the planning process will provide a further 10 382 MW, and the Minister for Public Enterprises has asked the Eskom Board to provide for plans to fast-track this latter category of projects.

It is therefore evident that there is no crisis and that, on the contrary, this very large built plan will have a major impact on the growth of the economy. Thank you very much. [Applause.]

Adv H C SCHMIDT: Thank you, Madam Speaker. Mr President, Eskom has been blamed for the current power problems but, as a 100%-government-owned parastatal, it was reigned in by this government years ago. This ANC government refused Eskom permission to build more power stations in the hope that it would increase the interest in funding of new power stations by the private sector.

Mr President, this policy failed dismally. And South Africa now pays the consequences of that failed policy. Will you apologise to South Africa for that failure? [Interjections.] And, tell us what steps government intends taking to ensure that Asgisa does not flounder as a result of recurring power outages. The PRESIDENT OF THE REPUBLIC: Madam Speaker, obviously the hon member prepared that question before he had heard me. [Laughter.][Applause.] Now, the problem is, being bound to ask the question he didn’t listen to what I was saying. [Laughter.] I have just indicated, for instance, that nationally we have about 37 000 MW of electrical power available, with an additional 2 000 MW available to manage very high peaks, and the projected demand is less than that; it is 35 000 MW.

So, the problem that has partly affected the Western Cape – again, there is a member who just asked a supplementary question here, Madam Speaker – also has to do with transmission lines. That’s why I mentioned the issue of the challenge of the infrastructure, because part of what has happened over the years is clearly that we haven’t paid sufficient attention to this particular issue.

It was not a shortage of electricity in other parts of the country, which could have been sent to the Western Cape after the accident, or whatever it was, at Koeberg, but it was the transmission infrastructure that needed maintenance. So, no, hon member, the supply is there in terms of present day demands and there is a very large building programme to add to that supply and I’m quite certain that we’ll be able to meet the Asgisa goals. Thank you. [Applause.]

Mr Y I CARRIM: Madam Speaker, Mr President, what’s your response to the view that whatever our political views and backgrounds, we should actually be working together to collectively deal with the challenges posed by the regrettable outages in the Western Cape? In other words, the subtext of my question is, don’t you think it is time the DA also saw the light? Thank you. [Laughter.]

The PRESIDENT OF THE REPUBLIC: They will no doubt plead that they can’t see the light when Eskom has switched off the lights. [Laughter.]

Certainly, hon member, we will come back to this question. There is another question here, as you know, about particularly the Western Cape and, indeed, you are quite correct. Fortunately, the province is responding in the manner that we are indicating - the city, province, business, Eskom, and the department are all working together to address this. But, indeed, it is a correct approach to this matter.

Mrs C DUDLEY: Mr President, as stated by the Minister of Minerals and Energy Lindiwe Hendricks, many of Koeberg’s senior staff have left in the past two years: eight out of the 60 senior professional engineers; 46 technical managers and five of the 30 non-technical managers. What impact has this had on the overall efficiency of Koeberg and is the President satisfied that measures have been put in place to ensure that junior professional engineers replacing them receive adequate skills training to improve their knowledge and efficiency? At the same time, media reports also highlight that Eskom’s emergency plan caters only for people living in the 16km radius of Koeberg. Furthermore, these emergency plans are reportedly nearly identical to those that existed 24 years ago. How will the President ensure that Eskom has best possible emergency plans that are fitting for the current conditions? Thank you.

The SPEAKER: Hon member, you do realise of course that there is a line- function Minister to deal with some of those details? However, I will allow the hon the President to deal with whatever he wants to deal with.

The PRESIDENT OF THE REPUBLIC: Madam Speaker, great minds think alike. [Laughter.] That’s what I was going to say, but apart from that, obviously an important point of production of electricity like Koeberg has to be properly staffed, with all of the people that it needs in terms of skill.

We have discussed the matter, even in the context of the installation of the rotor that is on its way. We discussed it even in that context - looking at what capacity we have to do that installation, given that the power station is as old as it is. Therefore the matter of proper staffing of the power station would be a priority matter, as would be all other elements that have got to do with ensuring that the station operates properly in a manner that is safe for all our people. Thank you. Adv H C SCHMIDT: Madam Speaker, Mr President, I am not sure, but I don’t think I’ve heard your apology, Mr President … [Interjections.] … and secondly, I’m not sure whether you are aware of the constant power outages in Johannesburg, in particular, which they have been suffering for the past few years. Might I also, with due respect, remind you of Gear that was introduced about 10 years ago, which indicated it’s 6% growth policy for the economy.

Despite that, it seems that everyone seems to be very surprised that the growth, after 10 years, has reached 4%, leading to a shortage in electricity supply. Did government just believe its own figures in that planning regard?

The PRESIDENT OF THE REPUBLIC: We are back where we were, Madam Speaker. [Laughter.] I’d said that it is clear that the projections about the rate of growth in the economy were inaccurate. The economy grew faster than we thought it would.

I do not know whether we should apologise for the fast rate of the rate of growth of the economy, but that is what happened. This is what put pressure on the electricity system and that would include Johannesburg. You would have heard the Johannesburg metro and the city power talking about issues that have to do with the maintenance of the infrastructure in Johannesburg, which has been a central part of the problem of the outages that has occurred in Johannesburg.

So, that’s what I had said. I said that we underestimated the rate at which the economy would grow and cause particular pressures. The way to respond to it is to make sure that if we say, let’s grow at 6% and above, we must then make sure that the necessary power is there to be able to meet those particular targets; which is precisely why I spoke about the built programme that is now taking place. Thank you.

              Impact of Asgisa on nonaffluent societies

1. Prince N E Zulu (IFP) asked the President of the Republic:

   (1) Whether the Government is on course to halve poverty by 2015; if not, why not; if so, what are the relevant details;

   (2) whether the Accelerated and Shared Growth Initiative for South Africa, Asgisa, will have an impact on nonaffluent societies; if not, why not; if so, what are the relevant details;

   (3) whether he will make a statement on the matter? N213E

The PRESIDENT OF THE REPUBLIC: Madam Speaker, with regard to this business of halving poverty by 2015, Asgisa and so on, let me start by saying yes. Yes, we are quite confident that we are on course to halve poverty by 2015 and, as members are aware, there are several ways of measuring poverty, the three key components of poverty being income poverty, asset poverty and human capital poverty. By all measures we can say with confidence that poverty levels in South Africa are on the decline. Certainly, income poverty is the most conventional measure. It is a measure of income by household or by individual.

Target 1 of the Millennium Development Goals requires us –

… to halve between 1990 and 2015 the proportion of people whose income is less than a dollar a day.

By this measure, in 2000, 11% of our people were living on less than a dollar a day and one-third of households and 34% of individuals were living on less than US$2 a day. Using the measure of US$2 a day with respect to income poverty, our task is to reduce levels of poverty to less than one sixth of individuals or households by 2015.

Asset poverty relates to the distribution of economic assets, particularly land and housing. The hon members have access to the considerable progress that we have made since 1994, and we expect to make even greater progress by 2015 in this regard. The third element of poverty is human capital poverty and we have already made major strides in reversing the damage that apartheid did to the human capital through Bantu education. This progress is continuing, even accelerating, and we expect to meet our targets by 2015.

A recent study, utilising a variety of techniques to measure poverty, in this case incomes below R250, found that in recent years the proportion of poor people has declined substantially from 18,5 billion in 2000 to 15,4 million in 2004. Over the same period the number of the nonpoor rose from 26,2 million in 2000 to 31 million in 2004.

The study also shows that per capita real incomes of individuals comprising the poorest two population quintiles rose by more than 30% during the period 2000-04. It is quite clear that our pro-poor socioeconomic policies are meeting with success. This study I am referring to was done by Servaas van der Berg, Ronelle Burger, Rulof Burger, Megan Louw and Derek Yu, and was assisted by a Professor Haroon Borat.

As we have reported to this House, the main impact of the Accelerated and Shared Growth Initiative for South Africa, Asgisa, on nonaffluent communities in South Africa is through job creation, which is not only important in helping us defeat unemployment but also in ensuring that we are better able to increase household income. Indeed, this is the central focus of Asgisa.

In addition to the direct impact of Asgisa through job creation the fact that Asgisa supports the growth rate, rising to 6% and above, means that the economy will generate additional resources some of which can be redistributed through the fiscus in the form of, for example, better schooling and health care access to water and roads, social grants including pensions and the child support grant.

Further, there are numerous elements of Asgisa specifically designed to address the challenges of poverty and unemployment. These include the further extension of the Expanded Public Works Programme; further impetus to providing access to credit and savings facilities for the poor; and a range of skills interventions and industrial strategies designed to create jobs, even for low-skilled workers.

A key mechanism is to use the leverage of the first economy to address the challenges of the second. There are two key examples in Asgisa that I can give in this regard. The first is to leverage the increased levels of public expenditure, especially investment expenditure; to develop small businesses and broad-based empowerment to address issues such as access to finance, preferential procurement, sectors that are labour-intensive; and to review of the impact of regulations on the sector.

As part of ensuring that the poor, the majority of whom are black, do benefit from the growing economy we have, among other things, decided on a procedure through which 10 products that are regularly sourced by government would be set aside for procurement from smaller businesses, including black-owned businesses.

Another form of leverage will be that all the sector strategies, such as the strategy for tourism or business process outsourcing, will have elements addressing developmental goals in the second economy; for example, the economic cluster of government is committed to ensuring that at least five of these business process outsourcing operations are established in poor areas with relatively little economic activity and that the targeted beneficiaries are youth and women. This clock is going in the other direction, Madam Speaker!

Prince N E ZULU: Thank you, Mr President, for your response, especially to the first part of the question. But, the second part still leaves us with some questions. Asgisa seems not to provide a package for the rural poor where poverty is greatest.

Under that heading, hon President, are we not going to see more and more rural poor flocking to metropolitan areas in search of what Asgisa would be offering?

The PRESIDENT OF THE REPUBLIC: No. We perhaps need to find a way of passing on more information to the hon member about this, because rural development is actually central to what we are trying to do with regard to addressing these issues of poverty and underdevelopment.

The hon member will remember, for instance, that we have established a particular fund in order to fund small farmers. This was precisely because it was our view that the Development Bank of Southern Africa was not necessarily the appropriate financing institution for your small farmers in those rural areas.

There is a different fund that was established in order to address this particular matter and I am sure the hon member is aware of the work that has been done to make sure that that fund is actually accessible to those people in the rural areas.

The hon member, I am sure, would also be aware of the programmes that we are carrying out and will carry out in the Expanded Public Works Programme, which have to do with development of infrastructure in the rural areas. So, it was not merely a matter of saying let us have an Expanded Public Works Programme to create jobs, but also to say we need that Expanded Public Works Programme in order to create infrastructure in these areas of our country that are underdeveloped - roads, water, schools, health facilities, all of these.

Hon member, I am saying perhaps what we need to do is to prepare a small package to show you what the interventions are that are being done and you will see that this particular matter of addressing the rural poor that you raise, which is very important, is indeed a critically important part of what has to be achieved as we work to achieve this higher level of accelerated and shared growth. The rural poor must share in this growth. Thank you, Madam Speaker.

Dr S M VAN DYK: Madam Speaker, hon Mr President, the ANC in its economic document, Development and Underdevelopment, identified as one of the constraints to the growth of our economy the lack of flexibility in respect of our labour market policies. The document states:

South Africa’s strategy has to be to raise the level of investment and economic activity while at the same time reforming the labour market, so that more labour is absorbed.

In this context the document speaks of allowing labour demand to be expanded through more appropriate labour market policies. Here the option of a dual labour market model is put forward as a means of raising employment prospects. Is it the President’s intention to address the question of labour market flexibility as part of Asgisa and, more particularly, will the dual labour market model be considered as an option?

The PRESIDENT OF THE REPUBLIC: The hon member, Madam Speaker, I am quite certain - I am absolutely sure - knows that we asked the Minister of Labour to look at these various questions and indeed he is doing that. I know, for instance, that he is holding a multi-stakeholder conference on 6 April to address all of this. [Laughter.] Yes indeed, hon member, these matters are being addressed and I am quite certain that out of that multi-stakeholder process, will come the kind of answers that we need to address this particular issue. Thank you, Madam Speaker.

Ms L L MABE: Thank you, hon President. I have heard you clearly about the multi-stakeholder forum that is going to be held, but I want to indicate that the ANC agrees fully that the factors of production, that is, labour and capital, are crucial for the achievement of the objectives of Asgisa.

The private sector needs to be competitive. We fully agree that it needs to be competitive to retain and increase the current level of growth that we are experiencing as a country. But we are quite aware that the private sector has been opting for capital intensity for various reasons. So, what I want to understand is whether the private sector will go for more labour intensity and increase its contribution to the expansion of scarce skills to increase the sharing of benefits of the economic growth that we are experiencing and that we might still continue to experience in future. Thank you, Mr President.

The PRESIDENT OF THE REPUBLIC: Hon member, you are asking a difficult question. It is difficult because it is too large to deal with. The various sectors of the economy will differ with regard to their capacity to absorb labour. Certainly, we have said we should, as part of the Asgisa process, centrally focus on the matter of unemployment, and that means therefore encouraging those sectors of the economy that would be labour intensive. We have to do that. But there would be certain sectors of the economy that would be capital intensive.

Indeed, if you talk about competitiveness, part of that competitiveness relates precisely to this matter - the level of absorption of technology and other things, capital intensity, and so on. So, I think what we really need is to make sure that we achieve the proper balance with regard to all of these things. With regard to the industries that are at a particular technological level, we have to make sure that they keep up with the rest of the world and outstrip the rest of the world. All these discussions we are having, and the actions we are taking with regard to research and development, have to do with those matters about technology, and we cannot say that in order to build a motor car let us remove the machines and capital intensity and let the workers carry these cars. We cannot do that.

But, I am saying that you need a proper balance between the two and most certainly it is important that you draw attention to the matter, and, most sadly, we have to make sure that we do not go merely in support of the capital-intensive sectors of the economy, but also focus on the labour- intensive ones. Thank you, Madam Speaker.

Report by International Atomic Energy Agency on Islamic Republic of Iran

1. Ms F Hajaig (ANC) asked the President of the Republic:

   In view of the latest report by the International Atomic Energy Agency to the United Nations Security Council on the matter of the Islamic Republic of Iran, what steps does the Government believe should be taken to resolve this matter? N255E

The PRESIDENT OF THE REPUBLIC: Madam Speaker, the position that our government has adopted in relation to the matter of Iran’s implementation of agreements concluded with the International Atomic Energy Agency, is primarily informed by a principle contained in the Treaty on the Non- Proliferation of Nuclear Weapons, and that is that – … the benefits of peaceful applications of nuclear technology, including any technological by-products which may be derived by nuclear- weapon states from the development of nuclear explosive devices, should be available for peaceful purposes to all parties to the treaty, whether nuclear-weapon or non-nuclear-weapon states.

This exploitation of nuclear technology offers humanity the possibility to achieve its socioeconomic development goals in activities such as electricity generation. And access to the benefits of nuclear technology must be accompanied by a reciprocal pledge by all parties to the treaty to prevent the diversion of nuclear materials from peaceful uses to nuclear weapons or other nuclear explosive devices.

We are fully conscious of the devastation articulated in the preamble to the treaty that would be visited upon all humanity by a nuclear war. We are consequently duty-bound, acting in concert with the rest of the international community inclusive of the Islamic Republic of Iran, to make every effort to avert the danger of such a war and to take measures to safeguard the security of the world’s population.

We believe that the verification of compliance or otherwise by Iran with its commitments made under the NPT, as well as with the nuclear safety standards developed by the International Atomic Energy Agency, should be performed under the auspices of the board of the IAEA.

The hon member would, no doubt, be aware that the IAEA is internationally regarded as the sole authority with the competence to verify and ensure compliance with established safeguards. The Director-General of the International Atomic Energy Agency, Mohamed ElBaradei, noted in his last introductory statement to the board of governors that as far as the Iranian nuclear programme was concerned, the agency had not seen indications of diversion of nuclear material to nuclear weapons or other nuclear explosive devices.

He, however, expressed the concern that despite the rigorous verification exercise conducted over a period of three years, the nature and extent of Iran’s nuclear programme remained uncertain.

We are convinced that in order to remove these uncertainties, Iran should be urged to co-operate fully with the IAEA, provide the maximum transparency and instil confidence in the international community and the IAEA about the manner in which they use their nuclear technology.

In our view, in order to resolve the tensions surrounding the issue of Iran’s nuclear programme, it is of the utmost importance that all parties work towards an all-inclusive, negotiated accord that respects the legitimate interests of all countries, taking into account the principle contained in the preamble to the Treaty on the Non-Proliferation of Nuclear Weapons - that the benefits of peaceful applications of nuclear technology, including any technological by-products which may be derived by nuclear- weapon states, should be available for peaceful purposes to all parties to the treaty, whether nuclear-weapon or non-nuclear-weapon states. The correctness of the approach we have adopted is confirmed by Director- General ElBaradei in remarks he made on 2 March this year, when welcoming the high-level meeting between three Foreign Ministers of the EU, the high representative of the EU and the Secretary-General of the Supreme National Security Council of Iran, wherein he implored all parties to use this opportunity to create the necessary conditions to return to negotiations. He went on to call on Iran to take all the necessary confidence-building measures required to assure the international community of the peaceful nature of its nuclear programme.

In the remarks we are citing, Mohamed ElBaradei reminds us that only through these two tracks, full transparency on the part of Iran and negotiations with all concerned parties can confidence be established regarding the nature of Iran’s nuclear programme and a durable solution found.

We believe that the director-general is right, and we agree with the course of action he proposes. The steps we must take should ensure that there is indeed full transparency on the part of Iran and negotiations with all concerned parties. Of course, as the hon members are aware, yesterday the United Nations Security Council issued a statement on the matter we are discussing, which called on Iran to stop its uranium-enrichment programme.

We will continue to engage Iran and all other role-players on this and the related issues. Thank you very much, Madam Speaker. [Applause.]

Ms F HAJAIG: Thank you, hon President. Our goal is to promote a nuclear- weapons-free zone in all regions of the world. Sir, after analysing information on this issue, it appears very clear that there exists a wider political agenda in some countries. No nuclear weapons technology has been found in Iran by the International Atomic Energy Agency’s investigation thus far.

We, in South Africa, want to continue to produce nuclear energy for our needs - so does any other country, including Iran – and have the right to do so. Allow the IAEA, which has been set up precisely to monitor nuclear- technology-producing countries, to complete its investigations before taking matters to the UN Security Council.

Comrade President, what would the implications be for Iran, and other countries that wish to develop nuclear capacity for developmental purposes, if the IAEA is not allowed to complete its investigation and produce comprehensive reports?

Sir, this whole episode smacks of the pre-Iraqi-war sensationalist build-up for the invasion of Iraq …

The SPEAKER: Hon member, your time for asking the question has expired.

The PRESIDENT OF THE REPUBLIC: Madam Speaker, the point that the hon member is raising is very important, which is why we quoted from the treaty itself when it says that all states that are party to the treaty – and Iran is one of those states that is party to the treaty – should have access to nuclear technology for peaceful purposes. This is a critically important principle to respect. We would not agree with a situation in which interventions are made which seek to undermine respect for that principle because, indeed, as the hon member says, it would also affect us.

You cannot have a situation in which all of us, countries of the world, enter into a solemn treaty like this, subject ourselves to regular inspection by the IAEA to ensure that there is no proliferation of nuclear weapons and then, arbitrarily, are told that we cannot use this technology for medical purposes, for electricity generation, and all sorts of other purposes. That, obviously, would not be correct.

That is why, as permanent members of the board of the IAEA, we have been dealing with this Iran matter for a number of years now. That is why we have always insisted, as I have just indicated, that the rights of all states that are party to the treaty should be respected and that includes openness, the transparency, which Director-General ElBaradei is talking about. This is the transparency that would ensure that all countries, including Iran, that are using this nuclear technology, respect their obligations with regard to the matter of nonproliferation.

I should say, finally, in response to this particular question, that as government we are very concerned generally about the situation in the Middle East. As everybody in the House knows, there is a lot of instability. There is the Palestine-Israel problem; the Iraq problem; tensions arising about Syria and Lebanon; and the situation in Afghanistan.

It would seem to us that the most sensible thing to do is not to increase the trouble spots in the region, but to reduce them. In that context, we believe that it would be important to find a proper resolution with Iran with regard to this to ensure that everybody is reassured with regard to this matter of proliferation, and not to advance to a situation in which there is a confrontation between some countries and Iran, which would bode very ill in terms of the prospect of peace, not only in the Middle East, but, I think, in the world. Thanks, Madam Speaker. [Applause.]

Mr B H HOLOMISA: Mr President, the IAEA and the UN Security Council are constantly under pressure from the United States when it comes to the issue of the nuclear technology pursuits of other countries.

What we see in practice, however, is that Iran is held to one set of principles, India to another, and North Korea to yet another. It does appear that the USA makes and breaks the rules as it goes along, and that the UN and the rest of the world merely bend to its will.

In non-nuclear matters, the behaviour of the USA towards the rest of the world is much the same. Our concern is not so much how they behave, but rather the complicity of others in the USA’s pursuits of its own narrow interests. For instance, wasn’t South Africa among the nations that brokered peace in Liberia and promised Charles Taylor refuge in Nigeria, a deal, however despicable it may have been, that was made and then broken at the drop of a hat in Washington yesterday?

Umbuzo ke, Mkhuluwa, uthi: [The question is, my big brother:]

What is South Africa doing to ensure that the international regulation of nuclear technology is done in terms of accepted principles, and not according to self-serving interests of a single nation? Thank you.

USOMLOMO: Mhlekazi, ndiza kucela ukuba kwixa elizayo umbuzo uwubuze kumzuzu wokuqala wexesha lakho. Ukubangaba usenexesha ungaqhubeka nentetho yakho; ungaqali ngentetho, ubuze umbuzo kamva. [Kwaqhwatywa.] (Translation of isiXhosa paragraph follows.) [The SPEAKER: Sir, next time, please ask the question in the first minute of the time allocated to you. If you still have time left you could continue with your speech. Do not begin with a speech and conclude with the question. [Applause.]]

You don’t have the floor, hon Holomisa.

Mr B H HOLOMISA: Ndakwenza njalo, Mama. Ndiyaphendula kuba kaloku ububhekise kum ngqo. Kutheni ungafuni ukuphendulwa nje wena? [I will do so, Madam. I am responding as you referred the question to me. Why do you reject the reply?] [Laughter.]

The PRESIDENT OF THE REPUBLIC: No, let me agree fully, Madam Speaker, with the hon member. Again, as I was indicating, as members of the board of the IAEA, we have been insisting on the need to respect the provisions of the treaty, and indeed including the need for this matter of Iran to continue to be handled by the IAEA. That is the right place to deal with this issue.

We have to continue to insist on this, and I’m quite certain that as government we will not depart from this. This doesn’t mean that we would necessarily always win the votes on the board. We may very well lose in some instances. But, certainly, I think it is critically important that we should insist on this.

This is an important part also of addressing the more general question of the international multilateral system of governance. I agree with the hon member that it would be incorrect if there were to be any country that kind of serves as a dictator towards others.

But since you mentioned this particular matter of Charles Taylor, hon member, President Obasanjo informed me that he had received a request from the President of Liberia that Charles Taylor should be returned to Liberia. And, indeed, the point had been made much earlier that Charles Taylor would only be handed over to a proper, democratically elected government of Liberia. So, the request, as I was informed, came from the President of Liberia to do that transfer.

This had nothing to do with President Obasanjo being in Washington yesterday. He told me this when I saw him at least two Sundays ago: that he had received this letter and would be obliged in that he couldn’t say to the government of Liberia that they couldn’t have their citizen. So, I think, those are the facts about that particular issue. Thanks, Madam Speaker.

The DEPUTY SPEAKER: Hon President, the guards have changed. It’s now the Deputy Speaker.

The PRESIDENT OF THE REPUBLIC: I must apologise for elevating you, Madam Deputy Speaker. [Laughter.] The DEPUTY SPEAKER: Well, I occasionally enjoy that. [Laughter.]

Mr J H VAN DER MERWE: Mr President, the UN Security Council has now put Iran to terms in that it must terminate its nuclear programme. Now the question is: If Iran refuses to do that, what happens then? It appears that the UN may then consider imposing sanctions on Iran.

My question to you, sir, is: If sanctions are imposed on Iran, will South Africa support them?

The PRESIDENT OF THE REPUBLIC: As I indicated earlier, Madam Speaker, indeed the hon Koos van der Merwe is correct about this Security Council decision that was taken yesterday. I had said that we were going to engage Iran and other interested parties with regard to that. We have to. This is a matter that we will discuss with Iranians and other people to assess where we are with regard to this matter. I would rather leave it at that than take 10 steps forward before we resolve this particular issue.

I think that we will have to engage the Iranians and everybody else. And, as I was trying to indicate earlier, we have been trying to insist that this matter be solved in a way that addresses everybody’s concerns and interests without any confrontation. It is quite clear that if this matter were to escalate – which is part of the reason we were insisting it should stay with the IAEA – you could have a situation in which the matter gets to the Security Council and the problem escalates, with consequences that are very difficult to foresee, but which would be negative. So I think, hon member, let’s take step number one: engage Iranians and everybody else on the basis of the Security Council resolution and see what happens next. Thanks, Madam Deputy Speaker.

The DEPUTY SPEAKER: Thank you, hon President. We have a slot for the last supplementary question.

The CHIEF WHIP OF THE OPPOSITION: Madam, I pressed the button right at the beginning and I haven’t been seen. [Interjections.] May I proceed?

The DEPUTY SPEAKER: Yes, please.

The CHIEF WHIP OF THE OPPOSITION: Thank you, Deputy Speaker. Mr President, if I may say so, there was a perceptible difference between your very measured response and the rather overheated question asked by the hon Ms Hajaig.

Perhaps we should clear up what the situation is and the perception which people have, and this is that the ANC government chooses to disbelieve President Ahmadinejad when he says Iran wants one of its neighbouring countries to be wiped off the map and then chooses to believe him when the president of Iran says he wants nuclear power for peaceful purposes. The PRESIDENT OF THE REPUBLIC: Madam Speaker, we were discussing nuclear weapons and this particular issue, which has now gone to the Security Council. I’m sure if the hon member had been following the discussions … There is nobody, absolutely nobody - and that includes the United States – who has been saying “sanctions”. Absolutely everybody has been saying that it is important that this matter is resolved without resorting to sanctions. Let’s avoid that. The phrase that is used is: Let’s find a diplomatic solution to this matter. Everybody says that.

I would presume that the reason people are saying that is because nobody feels that we are faced with a situation in which there is a nuclear bomb there which is likely to be dropped on somebody’s head. People may indeed have suspicions that there are plans to get to that point in the future. So let’s respond in a way that we find these diplomatic solutions because of the nature of the problem as it is perceived.

So I do not believe that South Africa is taking any position that is different from that of everybody else with regard to this particular matter. Naturally we would be against - it’s very fundamental to our policy, as I’m sure the hon member knows – any attempt to destroy the state of Israel. That is an established policy of our government.

We have been talking very regularly about a two-stage solution with regard to that challenge. This question is coming up just now. I can assure the hon member that the South African government is not about to join people who are after the destruction of the state of Israel, and that’s a well- known position. Thanks, Madam Speaker. [Applause.]

       Right of Israel to exist within safe and secure borders

1. Rev K R J Meshoe (ACDP) asked the President of the Republic:

   (1) Whether the Government will put pressure on Hamas to accept the right of Israel to exist within safe and secure borders, in line with similar calls from the international community; if not, why not; if so,

   (2) whether the issue of suicide bombers will be discussed; if not, why not; if so, what are the relevant details? N207E

The PRESIDENT OF THE REPUBLIC: Madam Deputy Speaker, any intended engagement with Hamas must, in the first place, be premised on the recognition and unconditional acceptance of the reality that the people of Palestine have freely and democratically elected Hamas to represent their interests.

In the second instance, it is vitally important to bear in mind that our efforts to lend whatever assistance we are called upon to provide the people of Palestine to attain their long-cherished dream of an independent and sovereign state must not be based on a false and ill-conceived notion of our ability to place demands on the Palestinians and their leadership on how to pursue their goals.

On the contrary, we are likely to make a meaningful contribution to the peace process through constructive engagement with all the people of Palestine, including Hamas. In this regard, we have taken note of and are indeed encouraged by the post-election assurances given by one of the leaders of Hamas, the current Prime Minister of the Palestinian National Authority, Ismail Haniya, that his organisation is an aware and mature movement that is, among other things, open to the international arena.

We accordingly seek to use that opening by conveying to Hamas that we hold a firm view that the road to an independent Palestinian homeland is through the prescripts of the Oslo Agreement, as well as the principles contained in the road map for peace. Key among these principles is a two-state solution to the Palestinian-Israeli conflict, the outcome of which must be the creation of an independent, democratic and viable Palestinian state, coexisting side by side and in peace and security with an independent Israel.

The recent statement by the Hamas political leader, Khaled Mishal, during his visit to the Russian Federation, to the effect that they will deal with existing agreements according to the interests of the Palestinian people, is worth noting.

In our view, the recognition of the right of Israel to exist is not inimical to the interests of the Palestinian people. On the contrary, we believe that the cause of the Palestinians will be immensely enhanced if they acknowledge the legitimate rights of the Israelis to their own sovereign state.

It is obvious that the goals of the road map for peace that we have just alluded to can only come to fruition in conditions in which the guns and bombs that regularly echo in that troubled region are silenced.

Consequently, we deem as vitally important the demonstration of continued commitment by both the Palestinian and Israeli leadership to the termination of all acts of violence, as well as incitement against each other’s peoples. In this context, we welcome the renewed undertaking by Hamas to extend the ceasefire declared in March 2005, provided that Israel reciprocates by refraining from launching attacks against the Palestinians.

These are some of the messages that we hope to convey to the Hamas leadership, as and when we meet them, in accordance with the agreements we reached prior to the Palestinian legislative elections. We remain convinced that the approach stipulated in the three-phased road map is likely to lead to the achievement of a just, lasting and comprehensive peace settlement and historic reconciliation in the Middle East.

This week witnesses another milestone in the history of our country, which will be the historic address to the joint sitting of the Houses of Parliament by the president of the Palestinian National Authority, President Mahmoud Abbas. The visit signifies another phase in the deepening of relations between the peoples of Palestine and South Africa. We would expect that when he addresses us, President Abbas will, amongst other things, provide us with insights into the journey thus far traversed by the Palestinian people towards the vision that we have already spoken about, as well as the challenges that they are yet to overcome.

We should accordingly be at the ready to respond positively to whatever appeals may be made to us to assist and support the citizens of the region to find a lasting solution to the conflict. In this regard, we welcome the appeal to the Palestinians made by Ehud Olmert, the new Prime Minister of Israel, in which he said, and I quote:

We are prepared to compromise, to give up parts of our beloved land of Israel, to uproot painfully Jews who live there to allow you the conditions to achieve your dreams as well, and live in a state beside us, in harmony.

Thank you very much, Madam Deputy Speaker. [Applause.]

Rev K R J MESHOE: Thank you, hon President, for that answer. The international community put pressure that included economic sanctions on the apartheid government in order to force that regime to do two important things: firstly, to recognise the right of liberation movements to operate freely within the law; and secondly, to negotiate with them for a peaceful transition to a democratic order. Will the hon President share with the Hamas leadership, when they meet, how the South African liberation movements managed to renounce political violence, including the planting of bombs, and chose to negotiate with what was perceived to be an enemy?

Secondly, will the President offer this government’s willingness and readiness to help Hamas transform itself into a political party that will stop using suicide bombers to further its political objectives, and rather use the power to negotiate? Thank you. [Interjections.]

The DEPUTY SPEAKER: Order, hon members! Order, hon members!

The PRESIDENT OF THE REPUBLIC: Madam Deputy Speaker, fortunately, Hamas is very well educated about our history. [Laughter.] So, there shan’t be any need for us to educate them about it. It is important, first of all, to respect the will of the Palestinian people. They elected Hamas. Historically, even the organisation that I come from has never worked with Hamas. Nevertheless, we are saying that we need to respect the will of the people of Palestine.

Secondly, as the hon member knows, we have been in regular engagement, both with the Palestinian National Authority and the Israeli government over a long period of time about this particular challenge. It is an interaction that we will sustain.

Our task, as we talk to this new government of the Palestinian National Authority, and the new government of Israel, must remain to offer such assistance as we can give to find a solution, based on what I’ve just said on the two-state solution, with two viable states living in peace and harmony with each other. That is what we have got to do.

Whatever is necessary to communicate in that context, surely we will communicate. Thank you very much, Madam Deputy Speaker.

Dr A N LUTHULI: Thank you, Madam Deputy Speaker. Mr President, I would like to bring another angle to this discussion … [Interjections.] Sorry.

I would like to bring another angle to this discussion of the Palestinians, following the democratic election held recently. How do we get the democratic world, especially the powerful nations, to respect the democratic choice of the people of Palestine, following a free and fair election, so as to assist the Palestinians to deepen their democracy and overcome the huge developmental challenges they face? Thank you.

The PRESIDENT OF THE REPUBLIC: I wish we had the necessary influence to persuade these powerful countries in the direction that the hon member indicates.

I think that from the point of view of what we have to do, in as practical a way as is possible, we have to engage the Palestinian National Authority, which is led by Hamas, and to engage the Israeli government that is currently being formed.

We need to remain with the positions that we have taken over many years. I know that, as has happened, for instance, when the Hamas delegation visited the Russian Federation, that there were people who were not happy about that. It may very well be that there would be people who would be unhappy with our engagement of Hamas also. I think that our experience says it is not possible to find negotiated solutions unless you engage everybody. You are not going to get to a negotiated agreement if you boycott some.

That is what we have got to do. Whether that would serve as an example and inspiration to other countries, I don’t know, but I think our time would be better spent engaging the Palestinians and the Israelis, and to let the rest do what they believe is right. Thanks, Madam Deputy Speaker.

Mr W J SEREMANE: Thank you, Mr President, for your enlightening responses. These are very serious matters.

Perhaps, for more clarification and in pursuit of a common ground on such matters, could you agree that the DA’s approach to the Middle East crisis is a sensible one, which I will explain? [Interjections.]

Our position is this: We support a peaceful solution to the continued Israeli-Palestinian conflict. We believe that this can only be achieved through dialogue and negotiation. That solution also entails both a Palestinian state and an Israeli state, which has already been mentioned by you, sir.

It requires Hamas also to stop suicide bombings, and equally requires Israel to desist from violence, whether pre-emptive or in retaliation.

The DA states that the South African government, including us, the opposition parties, must use every bit of our collective power to try and influence the conflict in that area towards a negotiated settlement. We also have to observe the fact that it is of critical importance, this principle, that credible peace-brokers should avoid taking sides with either of the parties in conflict. Thank you.

The PRESIDENT OF THE REPUBLIC: I am very, very glad that the hon member has at least educated me about DA policy on this issue. It is the first time I hear about it. [Laughter.] [Applause.] Thank you. I do appreciate it.

Mr W J SEREMANE: [Inaudible.]

The PRESIDENT OF THE REPUBLIC: Yes, thank you, hon member. I would agree with the points that the DA makes. Indeed, there should be a peaceful solution and a two-state situation; peace; a stopping of violence on both sides; and the use of our collective strength as a country to encourage peace. I agree. Thanks, hon Deputy Speaker. [Applause.]

Mr B H HOLOMISA: Mr President, we agree that South Africa, to the extent that it is amongst the honest brokers in the matter, must do everything in its power to convince all involved to pursue a peaceful co-existence.

This means that Hamas shares an equal burden and duty with all other parties to honour the agreements entered into by its predecessors in government. In fact, it must also be noted that the Hamas victory had a lot to do with the Palestinian electorate’s frustration with regional negotiations that dragged on without result and unilateral offensive actions against them and their elected government.

For a people under siege, the unimplemented agreements and constant unilateral amendments to those agreements must make the entire negotiation process resemble a Trojan horse. The question is: What is the South African government’s position with regard to ensuring that all parties to the Middle Eastern negotiation process stick to agreements and resolutions that have been made? Thank you.

The PRESIDENT OF THE REPUBLIC: The best we can do, which is the best we have been trying, is to encourage the parties to this conflict to behave in the way that the hon member indicates.

If you just take the matter of the Palestinian National Authority, now led by Hamas, it is itself a product of negotiations. It is a product of the Oslo Agreement. So, there is the Oslo Agreement, and it provided for the creation of the Palestinian National Authority, and both sides kept to that. The Palestinian Authority is still there. It is on this basis that Hamas, today, is the government of Palestine. It is as a result of this agreement.

I am citing that to say that you are indeed quite correct that to build towards addressing these final status issues, with regard to these negotiations, it is clear that it is important that what has been agreed upon must be respected. That would include non-expansion of the settlements on Palestinian territory by the Israelis and other matters of this kind.

But, as I say, the best we can do is to encourage both sides to say that you cannot avoid this incremental progression towards a solution that, in the end, is a two-state solution. So, it is important that previous agreements must indeed be honoured, and we have to say that to both Hamas and the Israeli government. Thank you, Madam Deputy Speaker.

         Consequences of electricity outages in Western Cape

1. Mr L W Greyling (ID) asked the President of the Republic:

   (1) How have the recent electricity outages in the Western Cape affected South Africa’s (a) growth rate and (b) objectives of the Accelerated and Shared Growth Initiative of South Africa, Asgisa, to obtain the target of 6% economic growth;

   (2) whether these outages have affected investor confidence in South Africa; if so, what plans does the Government have in place to (a) restore this confidence and (b) ensure a reliable long-term supply of electricity; (3) whether the Government has put aside any funds for this unforeseen economic disaster in order to offer compensation to businesses that have lost substantial income through these electricity outages; if not, what is the position in this regard; if so, what are the relevant details? N214E

The PRESIDENT OF THE REPUBLIC: Madam Deputy Speaker, we do not expect the outages experienced in the Western Cape to derail the growth projections outlined in Asgisa. As I have said earlier, the faster than expected economic growth has required that we accelerate our built plan but expect that Eskom’s capital expenditure of R84 billion will have a massive positive impact on the economy and should sustain and drive a 6% growth rate. And that built programme, Madam Deputy Speaker, is already under way.

I have indicated the amounts of additional electricity that we expect from this new phase in an earlier answer. It is important to note that Eskom is currently in the process of adding 1 050 MW of peaking capacity in the Western Cape in the form of two gas turbine plants – one at Mossel Bay and the other at Atlantis.

With regard to the matter about investor confidence in South Africa, we have no evidence of any adverse impact on investment. Accordingly, the notion that there has been a rush away from investment in South Africa is not correct. Large users of electricity approach Eskom well in advance in order to secure their supply. In the modern world where energy is in short supply, we are, as government, aware of any major users in our country.

In regard to what was said about the purported aluminium smelter company, that is looking elsewhere, we need to point out that that company has not approached Eskom. In any event, the government is currently only negotiating with one potential aluminium smelter investor. This is with Alkahn. Regarding the establishment of an aluminium smelter at Coega, these negotiations are very much on track.

Eskom is a flagship entity that has a solid track record internationally, and there are very few countries in the world that could host a smelter of such capacity. The fact that South Africa has been seriously considered indicates a degree of confidence that international investors have in our ability to provide sustainable, cost-effective electricity.

As to whether the government has put aside any funds for these unforeseen economic problems in the province: The losses incurred by the Western Cape businesses are indeed tragic and regrettable. It is imperative that businesses are insured for national disasters, and we trust that the insurance industry will provide the affected businesses with appropriate compensation. But a joint task team under the leadership of Premier Ebrahim Rasool is also considering mechanisms of support in this regard. And to that extent we will respond to the work of that team, led by Ebrahim Rasool, to give the necessary support to businesses. Thank you very much, Madam Speaker. [Applause.]

Mr L W GREYLING: Thank you, Madam Deputy Speaker. Hon President, it is reported today that the cost to businesses in the Western Cape due to the electricity outages was in the region of R5,5 billion. Many of the businesses are small businesses that simply cannot afford to take the financial knock that this imposed on them.

The ID has been inundated with calls from businesses whose food stock has perished as a result of these outages or whose equipment has been damaged and needs to be replaced. These businesses are in fact on the verge of bankruptcy as a result. And if the government is committed to protecting the small businesses in South Africa action needs to be taken.

The ID has already signalled its intent to bring a class action suit against Eskom to compensate business for these losses. We would, however, like to avoid such an action but we will only do so if government agrees to provide adequate compensation. The ID believes that these outages should be treated as a disaster, and disaster relief funds be put in place to compensate these businesses. This will also restore the confidence of investors who will then see that government is committed to taking responsibility and rectifying its own mistakes.

Hon President, you mentioned the task team. Can the ID assist you in terms of ensuring that adequate compensation is provided to these businesses so that we can find an amicable solution to this problem that confronts us?

The PRESIDENT OF THE REPUBLIC: I was going to suggest, Madam Deputy Speaker, that I speak to Premier Rasool today and ask him to contact the hon member. I’m quite certain that the ideas the hon member might have would be very useful in that task force. So, I think he could make a contribution to this in order to find a solution to the problem. Thanks, Madam Deputy Speaker. [Applause.]

Dr R RABINOWITZ: Thank you, Madam Deputy Speaker. Hon President, are we not making too little use of our capacity to produce renewable energy to provide power in an integrated fashion to relieve peak power burdens on Eskom? At present, most of our focus in the use of renewables is for deep rural areas, and there is a perception amongst advocates of renewables that government’s commitment to renewable energy is largely token, because Eskom must be protected.

Renewables now produce 100 gigawatts of energy. By 2012 government aims to produce a hundred times more – that’s 10 000, a multiplication of 100 times in six years. But it’s still only 4% of the total electricity demand and only 8% of our total electricity supply. However, if government gave the same support to research and development in such power sources as solar and wave - of which we have huge capacity in South Africa - as it does to coal and nuclear, it is claimed that those could provide up 50% of our energy supply.

The PRESIDENT OF THE REPUBLIC: What should I say, Madam Deputy Speaker? There is a project looking at solar power that was financed by the government at the University of Johannesburg. As I remember, for that particular project, the government put R50 million towards dealing specifically with this matter of solar power. I have seen the work that the scientists and the engineers have done there, and indeed it is very, very good and would, from the way they explain it, help us to expand the use of solar power in the country. I wouldn’t describe that as lack of attention by government with regard to solar power.

I am not sure that I would agree with these people who observe in the manner that you have indicated, and I was giving this particular example at the University of Johannesburg, because that example does not indicate that we are in any way not paying sufficient attention to the matter of renewable sources of energy. Indeed, what has been said in terms of Asgisa, other liquid fuels that we would produce; not from hydrocarbons, but from sugar or whatever, is a very big part. And again, you are talking about renewable sources of energy.

So, I wouldn’t know, practically, what the notion is based upon – that we are not paying sufficient attention to this matter - because the practical examples that I know point in the opposite direction.

Prof B TUROK: Hon President, may I take this opportunity to bring a bit of reassurance to the slightly hysterical outburst we had from the ID a few minutes ago. This House has been debating the budget in the last period and we have learnt that growth in South Africa is very broad-based, that it’s actually located in primary commodity prices and a consumer boom and that a temporary outage of electricity here and there cannot affect the national growth rate, which the question implies.

Certainly, I do also want to say that the ANC government has released the springs of growth on a national basis and on a very sustainable basis and it is far broader - our growth - than the question implies.

My question is, however, about a long view on further growth and whether we are going to depend primarily on a single main source of energy or whether we are planning for a diversity of energy sources which will indeed tap a whole range of possibilities. I wonder if you would comment on that?

The PRESIDENT OF THE REPUBLIC: Thank you, Madam Speaker. Yes, we have to, hon Ben Turok. Indeed, we have to go for this diversity of energy sources, quite clearly. The issue that was raised by the hon Rabinowitz is part of this, and it was an important question. So, we’ve got to continue to focus on that matter of renewable sources of energy, in all their forms, clearly.

You will see, in the response that I gave earlier with regard to the Eskom plants - talking about gas-fired power stations rather than the majority of coal-fired power stations we have - that that’s another form of energy. We’ve got to develop the energy that would be generated as a result of the usage of sugar and all of these things to produce other things.

The work that is being done with regard to the pebble bed modular reactor is very important because it’s quite clear now that many people around the world have again recognised the importance of nuclear power and the work that is being done with regard to the pebble bed would make an important contribution in this regard. So, yes, indeed, we have to.

The agreement that has been reached in the region with regard to the generation of hydro-electricity from the Congo and getting it here and to other countries is another intervention that would be important with regard to our sources of energy.

Yes, indeed, we have to diversify in the context of which we have to address the problem that is generated from the point of view of the Kyoto Protocol. The matter of the problem generated by the fact that so many of our power stations are coal-fired must also be addressed.

So, I’m saying, yes, the hon member is correct. We have to diversify our sources of energy, and indeed that is what is happening. Thank you, Madam Deputy Speaker.

Mr M STEPHENS: Thank you, Madam Deputy Speaker. Regarding investor confidence, does the President agree that local and foreign investors’ confidence in a sufficient and uninterrupted power supply is vital? And, given the recent power failures, it’s also vital that transparent contingency plans and fail-safe mechanisms be introduced that could deal with failures of the size and scope of these latter ones.

We have already been informed by the line Minister that such plans as were in place did not foresee and could not deal with the size and scope of the failures that actually occurred and that the expense of putting them in place is going to be such that we would not be able to deal with it at provincial level but it will have be dealt with on national level.

The question is thus whether such contingency plans and mechanisms are there presently in process; and if not, does the President realise that one more screw-up in the works like the last one will let all investors bolt for the exits? The PRESIDENT OF THE REPUBLIC: Madam Speaker, I think this is ordinary common sense. Indeed it is vital and obvious that all investors must have some assurance about the supply of energy, as is the matter of what the hon member refers to as contingency plans and mechanisms to deal with whatever situations. Yes, we agree very much with this, hon member.

But I would, like the hon Ben Turok, who spoke just now, also urge that we shouldn’t frighten ourselves too much. I had indicated earlier the quantities of electricity supplies that are available in the country, and the work that is being done further to expand the availability of electricity in the country.

We shouldn’t be holding out a threat to these local and foreign investors that something disastrous is going to happen with regard to energy and therefore, as it were, they must be on their toes. I think the message we ought to be communicating is that there is indeed a sufficient supply of electricity in the country. There are particular challenges that arose at Koeberg. There are particular challenges that have arisen with regard to maintenance, like the transmission lines, like all manner of facilities in a city like Johannesburg, and like the modernisation of the equipment in the hands of the City of Cape Town, with regard to electricity distribution.

There are challenges like these which are being worked on and which will be solved. And I think we ought to be communicating this to local and foreign investors; to say, yes, indeed, there was a problem and there were regrettable losses suffered by many businesses, but there is no crisis. Whatever needs to be done to make sure that the economy grows and the new investors come into the economy is being done on energy and other issues. Thank you very much, Madam Deputy Speaker. [Applause.]

See also QUESTIONS AND REPLIES.

                      DIVISION OF REVENUE BILL

            (Consideration of Bill and of Report thereon)

There was no debate.

The Chief Whip of the Majority Party moved:

That the Bill be passed.

Motion agreed to.

Bill accordingly passed.

                     ELECTRICITY REGULATION BILL
            (Consideration of Bill and of Report thereon)

There was no debate.

The Chief Whip of the Majority Party moved:

That the Bill, as amended, be passed.

Motion agreed to.

Bill, as amended, accordingly passed.

                  REMARKS MADE BY MR R JANKIELSOHN


                              (Ruling)

The DEPUTY SPEAKER: Order! Hon members, please take your seats.

Before we conclude the business of the day, I wish to give a ruling on a point of order raised by Adv Masutha on Tuesday, 28 March 2006, about a remark made by Mr Jankielsohn in his member’s statement on that day. Adv Masutha asked whether it was parliamentary for the hon member to accuse government of being a network of syndicates of crime.

I indicated at the time that the remark was a broad one in the way it was given. I nevertheless undertook to go back to the statement and check if there was any element of it that was unparliamentary and to then come back to the House on the issue.

Having now had the opportunity to study the unrevised Hansard, I wish to rule, as follows: Government is a broad concept, and reflections on it are generally acceptable - just as in practice reflections on political parties have been accepted. I therefore stand by my earlier ruling that the contested remark was in order.

However, in studying the statement I found that the remark by Mr Jankielsohn that “the ANC uses its majority in legislatures to sweep allegations of wrong-doing under the carpet”, could be interpreted either to be a reference to a party, in this case the ANC, or it could be interpreted to reflect on the integrity of members of the House. Given the ambiguity of this remark, I have decided to grant Mr Jankielsohn the benefit of the doubt, and will therefore not ask him to withdraw the remark. However, I do want to appeal to members, as public representatives, to moderate their language and to refrain from using expressions that detract from the dignity and decorum of this House. Even, given the leeway that exists already with regard to references to parties, we do not want to encourage such remarks because they are invariably disruptive in their effect and do not contribute meaningfully to the debate. Let us maintain the standing in which this House would always seek to be held.

The House adjourned at 15:50. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Assent by President in respect of Bills

   1) National Credit Bill [B 18D – 2005] – Act No 34 of 2005 (assented to and signed by President on 10 March 2006).

2. Bills passed by Houses – to be submitted to President for assent (1) Bills passed by National Assembly on 30 March 2006:

   a) Division of Revenue Bill [B 3B – 2006] (National Assembly –
      sec 76)
   b) Electricity Regulation Bill [B 29D – 2005] (National Assembly
      – sec 75).
   

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Safety and Security

 a) Strategic Plan of the Independent Complaints Directorate (ICD) for
    2006-2009 [RP 28-2006].

National Assembly

1. The Speaker

   a) Reply from the Minister for Justice and Constitutional Development to a recommendation in the report of the Portfolio Committee on Justice and Constitutional Development on the Provisional Suspension from Office of Magistrate I W O M Morake, as adopted by the House on 16 November 2005.

   Referred to the Portfolio Committee on Justice and Constitutional Development.

   b) Report of the Public Service Commission on Citizen Satisfaction Survey: Overview Report of the Criminal Justice Sector for October 2005 [RP 70-2005].