A meeting I had with industry stakeholders, including hotels and tour operators, has revealed that the number of tourists to South Africa has decreased as a direct result of the recently introduced Visa regulations.
I will write to the Minister of Finance, Nhlanhla Nene, to request that an economic impact assessment be conducted for each province to reveal the full economic impact of these ill-conceived regulations on the tourism industry, which is a job-creating industry.
It is the DA’s belief that these economic impact assessments will prove these regulations are directly responsible for losses in income and job opportunities for our country; losses which we can ill-afford.
The first quarter of this year saw a 38% drop in arrivals of tourists from China, one of our country’s biggest sources of tourism, compared to the same period last year. This is a decrease of 11 663 tourists from one country alone.
It is estimated that the first two quarters of this year will see a drop of 70% in tourist arrivals.
One of the main reasons given for this decline by the stakeholders I met with are the Visa regulations that came into effect in June this year.
According to the Tourism and Business Council of South Africa, every 12 tourists coming to our country creates 1 job. That means that roughly 971 job opportunities were lost to South Africa based only on the decrease in tourists from the first quarter of this year alone.
This means that the Visa regulations have potentially killed almost 1000 job opportunities.
Just last night I received an email from an irate director of a tour operator company, specialising in school sports tours to South Africa from the United Kingdom who have 2 400 students traveling to our country in the next few months.
After 11 of their number were denied boarding a flight to South Africa last night, due to a lack of communication from the South African embassy on visa requirements which they therefore could not comply with, “they will not be considering South Africa as a destination in the future as a result of the current implementation of the Visa regulations and Immigration Act in South Africa”
It is clear that these regulations have a direct and devastating impact on tourism and the ability of our economy to create jobs.
The DA has consistently called for an e-Visa system and biometrics on arrival to facilitate easier access for tourists to South Africa. Countries that have implemented this system, such as Turkey, have seen an impressive increase in tourists since implementing an e-Visa system.
With real alternatives on the table, these unjustifiable and job killing Visa regulations must be immediately suspended and withdrawn.
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The government still has to negotiate the price for the procurement of nuclear power in South Africa, according to the Department of Energy.
It had completed various technical studies, including in depth studies into the cost of nuclear power, funding and financing models and economic impact of localisation, among others, deputy director-general for nuclear energy Zizamele Mbambo said yesterday.
“It is important to note that government is still to negotiate the price tag in the procurement process which is why exact figures for the study cannot be made available to the public at this stage. These studies were done to ensure that South Africa is a knowledgeable customer,” Mbambo said at a press briefing in Ballito, KwaZulu-Natal on the status of the country’s new build nuclear energy programme.
The procurement process would start in the second quarter and be completed by the end of the 2015 financial year with the selection of either a single or a group of strategic partners, he added.
Six to eight nuclear power plants
The first new nuclear power station would come on line in 2023. The government intended to build between six and eight nuclear power plants, and the bid invitation specification and related evaluation criteria would be finalised by the end of July, Mbambo said.
“It is important to note that government is still to negotiate the price tag in the procurement process which is why exact figures… cannot be made available to the public at this stage.”
Mbambo gave examples of the current world experience, saying the current world experience for quoted numbers for real export would indicate an overnight cost of about $5-billion per 1 200 megawatts, which is equivalent to $4 200 per kilowatt per reactor in new comer states.
“In countries with established domestic construction programmes, such as China, South Korea and India, the prices in order of $2 500 per kilowatts are being quoted. Among the 70-plus reactors in the world, there are a number of projects where because of the local market and political conditions the project costs are higher than these figures.”
The government was expected to complete its financing arrangements for the new build programme shortly.
Mixed energy plan
In March 2011, the Cabinet approved and promulgated a 20-year Integrated Resource Plan (IRP 2010-30), which is the government’s electricity plan. It has a mixed energy agenda that puts nuclear at 23% (9 600 MW) of energy source by 2030.
The briefing followed the submission of the Inter-Government Framework Agreements on nuclear co-operation to Parliament.
These agreements laid a foundation for co-operation, trade and exchange of nuclear technology as well as procurement, according to the department.
Going forward, Mbambo said, the government planned to follow the approved procurement process that would include a competitive, transparent bidding process that was cost effective and in line with legislation.
Work already done towards the nuclear build programme was extensive. Over and above the inter-governmental agreements, the International Atomic Energy Agency has conducted an Integrated Nuclear Infrastructure Review (INIR) mission, which is an assessment of the country’s infrastructure as it relates to readiness to start purchasing, constructing, and operating nuclear power plants.
Of the 10 recommendations made by the panel, several have been completed; others are being reviewed. Strategies have been drawn up in line with the recommendations.
The department has also undertaken study tours to various nuclear vendor countries to learn about the technologies they use and the lessons they have learned in using nuclear energy.
Vendor parades have been held, with South Africa professionals from government departments, state-owned entities and universities interrogating the vendors’ technological offerings.
“The vendor parade workshops provided a platform for South Africa professionals to exchange views with their peers on the nuclear new build programme.”
In addition, in preparing for the nuclear new build programme, national skills development is being undertaken.
Mbambo said 50 trainees from the government, entities and industry were sent to China for Phase 1 nuclear training in April. “Plans are under way to send an additional 250 trainees to China this year. Additionally, a memorandum of agreement on skills development was entered into between Necsa [South African Nuclear Energy Corporation] and State Nuclear Power Technology Co-operation of China.”
Russia had offered 10 scholarships for Master’s degrees in nuclear technology. A memorandum of understanding had also been signed covering the training and development of 200 South Africans at Russian universities and educational organisations.
South Korea had an existing programme to train South African students for Master’s degrees in nuclear engineering; already three students had graduated.
Finally, France had put in place 14 bursaries for young people from previously disadvantaged groups to study a four-year engineering programme at various universities.
“The negotiations on Nuclear Skills Development with the French government are at an advance stage that could see an establishment of a nuclear campus in South Africa,” Mbambo added.
“Government remains committed to ensure energy security for the country, through the roll out of the nuclear new build programme as an integral part of the energy mix. Government remains committed to ensuring the provision of reliable and sustainable electricity supply, as part of mitigating the risk of carbon emissions,” he said.
The nuclear new build programme would enable the country “to create jobs, develop skills, create industries, and catapult the country into a knowledge economy”.
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There is growing evidence that China is now encouraging its companies as they invest in Africa and elsewhere to follow better environmental practices.
In 2013, China’s ministries of commerce and environmental protection issued voluntary guidelines for the first time that encourage companies investing overseas to follow local environmental laws, assess the environmental risks of their projects, minimize the impact on local heritage, manage waste, comply with international standards, and draft plans for handling emergencies. But if companies choose to ignore the guidelines, there is no penalty.
Chinese companies most reluctant to improve their environmental practices are small private ones and medium-sized ones affiliated with Chinese provincial and municipal administrations.
Chinese enterprises appear to be 15 to 20 years behind their Western counterparts when it comes to the adoption of modern social and environmental approaches to their outward foreign direct investment.
The environmental issue for which China has attracted the most criticism is the importation of products taken from African endangered species, especially elephant ivory and rhino horn. Most of this activity falls, however, in the category of illegal trade and not foreign direct investment.
There is a new concern that China will address its domestic industrial pollution by relocating some of its highest polluting facilities such as steel, cement, and tanneries to places like Africa.
In 2014, Hebei Iron and Steel announced that it is building a plant in South Africa capable of making 5 million tons annually. This is good for South African jobs, but potentially bad for the environment.
China has become a major investor in the leather industry in Ethiopia and owns numerous tanneries, which are well known for their pollution potential. Some of their practices have been criticized. Of course, Western companies also increasingly export high pollution manufacturing activities.
African environmental law and practice, to the extent you can generalize about 54 different countries, leave much to be desired. In most African countries, the environmental laws and standards are much lower than accepted international norms.
When evaluating the impact of Chinese foreign direct investment on the environment in Africa, it is important to put it in the context of global FDI entering Africa.
China provides a relatively modest amount of the global FDI that has gone to Africa so far. According to Chinese official figures, the cumulative FDI figure at the end of 2012 was just over $21 billion. The actual amount may be twice that figure. By comparison, however, at the end of 2012, American companies had cumulative FDI in Africa of more than $61 billion.
Like most global FDI in Africa, Chinese FDI is concentrated in sectors of the economy that are especially vulnerable to environmental concerns such as energy, mining, fishing, and forestry. Chinese companies have invested in mines that are sometimes located in ecologically fragile areas where there is a higher risk of environmental degradation. They also often generate greenhouse gases, solid and liquid waste, including hazardous products such as cyanide and mercury.
Chinese fishing vessels have been criticized for worsening food insecurity among Africans because they catch small species that are the main source of food and income for small-scale African fishermen.
China is the largest importer of Africa’s tropical wood. While much of this activity constitutes only trade, some of it involves FDI by Chinese logging and timber trading companies. Chinese companies have a tendency to violate local forestry laws together with African counterparts. The illegal practices include abuse of permits and concession licenses, bribery, operating without management plans, under-reporting export volume, smuggling raw logs, and harvesting and transporting undesignated species.
The government of China is sensitive to criticism of its companies in the forestry sector. In 2009, the State Forestry Administration and Ministry of Commerce issued voluntary guidelines which encourage Chinese companies to manage, utilize, and protect overseas forests in order to play a positive role in sustainable development of global forest resources.
Source: AFK Insider
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From May this year, there will be no more direct flights to China by South African Airways, Finance Minister Nhlanhla Nene said on Friday.
This is part of a strategy to turn around the finances of SAA and part of the cost-saving measures that include cancelling loss making routes with China being one of them.
“Indeed we have approved the cancelation of the China route as government because we have a certain obligation. Part of the implementation of the strategy was the closure of loss making routes,” said the Minister.
He was responding to a question at a South African Airways (SAA) media briefing on its 2013/14 financial results. This after the airline held its Annual General Meeting (AGM).
Acting SAA chief executive officer Nico Bezuidenhout revealed that close to R1 billion has been lost on the Beijing route in a three year period since SAA introduced the route in 2012.
Bezuidenhout said SAA will stop operating flights to China in April.
Air China will take over the route in May with SAA placing a code on flights to China.
This comes as the National Treasury announced this week that the airline is to receive R6.488 billion guarantee.
The guarantees to SAA amount to R14.4 billion against which SAA has thus far utilised R8.345 billion.
“We had to put SAA on a business rescue but with the Long Term Turnaround Strategy (LTTS) on the table together with the 90 Day action plan we had to be convinced that we would now be able to see an improvement in SAA’s financial situation,” Minister Nene said.
He explained that some of the drastic steps that had to be taken included the route closures, adding that was what other airlines were doing to save costs.
The move comes as part of the airline’s 90 Day Action Plan which was launched in December.
Bezuidenhout described the strategy as a living document.
“We had to continuously amend, adjust not radically change,” he said.
Treasury is also working with the national carrier in revising and refining the existing LTTS which will have the primary mandate of returning the airline to financial sustainability.
Minister Nene said that the focus will be on the 90 Day action plan which is based on the LTTS but with an emphasis on executing quick wins including route closures.
He emphasised that it will take time for the benefits to show on SAA’s bottom line adding that the guarantee was issued on the basis that the 90 Day Action Plan is robust and provides firm deliverables.
“The work for SAA will not be over and there will still be other tough measures that they will have to take in order to get the airline back on track,” said the Minister.
The airline had to be self-sustaining as no recapitalisation will be forthcoming from the shareholder, Minister Nene said. The National Treasury recently took over SAA after the airline was transferred from the Public Enterprises Department.
The financial results on Friday showed that operating loss before interest, taxes, depreciation and amortization narrowed to R374 million for the year from R425 million reported 12 months earlier.
Cost containment during the 2013/14 financial year yielded savings of R453 million. The SAA group achieved growth in revenues by 12% (from R27.1 billion to R30.3 billion).
Source: All Africa
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The South African construction market is to be boosted by a new 10-15 year project funded by Chinese company, Shanghai Zendai, to build a new city in Modderfontein in eastern Johannesburg. Once compete, the city will include 35,000 new houses, an education centre, a hospital, and a sports stadium and will house around 100,000 residents.
Chinese firm Shanghai Zendai bought the 1,600 hectare plot of land back in November 2013 for R1.06 billion from South African chemical and explosive company AECI and has plans to develop the site into a world financial centre to rival New York City and Hong Kong. The project is forecast to take around 15 years to complete and will provide jobs for local contractors, engineers and other workers in its construction, as well as 100,000 jobs in the new services available upon completion. The new city site is located on the Gautrain route between the OR Tambo International Airport and the central business district of Sandton in eastern Johannesburg, and will soon include a new Modderfontein station to enable easy access.
The transaction to purchase the property was one of the single largest foreign investments ever in South Africa. Shanghai Zendai is a Hong Kong listed investment company that develops and manages property projects in northern China, Shanghai City and Hainan province and hopes that the Modderfontein project will create a new hub for Chinese firms looking to invest in sub-Saharan Africa.
South Africa is the second largest economy on the African continent and the construction sector is set for a boost due to the South African government’s National Infrastructure Plan which focuses investment in energy, transportation, telecommunication and housing sectors. The construction sector experienced a major boost in 2010 when South Africa hosted the Fifa World Cup, but the economic downturn caused a slow down of growth. Recent government focus on infrastructure development has seen a rapid urbanisation in the country and the project at Modderfontein illustrates the significant influence of foreign investment. Foreign investment is one way by which the South African construction industry is overcoming the challenge of cost overruns that many domestic companies face due to the unavailability of funds, the time-consuming roll out of labour, labour unrest, and major project delays.
Key players in the South African construction market should be aware of the upcoming trend towards ‘green’ buildings. In an effort to promote sustainable development, construction companies are increasingly focusing on developing energy-efficient buildings and sustainable construction solutions.
Source: Companies and Markets.com
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The South African government has been holding vendor workshops with countries it could potentially partner with for its nuclear build programme, the Presidency said in a statement on Wednesday. This marks “significant progress” for the government in its engagements with various prospective nuclear vendor countries as part of the process towards the implementation of the expansion in the nuclear new build programme, the statement said. Intergovernmental framework agreements have been signed with Russia, France, China, South Korea and the US, marking the “initiation of the preparatory stage for the procurement process”, the Presidency said. Delegations from these countries have presented technology they believe would best suit local conditions at these workshops, held during October and November. The vendor workshops form part of the government’s technical investigation “in preparation for a procurement decision”, the Presidency said.
Future energy mix
Potential vendors have had to show how they would best meet the 9 600MW (9,6 GW) threshold that the South African government has set for the country’s future energy mix.The countries all have pressurized water reactor nuclear technology, which is similar to that used at the Koeberg nuclear power plant in the Western Cape.”South Africa has been safely using this technology for the past 30 years,” Mac Maharaj, the President’s spokesperson, said. Senior technical government officials, representatives from state-owned entities in the energy field, as well as academics involved in nuclear and engineering programmes attended the workshops, leading to “robust and open discussions” with vendors, Maharaj said. Guidelines for the expansion of nuclear power to ensure energy security based on a sustainable energy mix have been set out in the National Development Plan, the Nuclear Energy Policy, the Nuclear Energy Act and the Integrated Resource Plan (IRP) adopted in 2011. Under the NDP, the government is required to do a thorough technical investigation before making a procurement decision.The Presidency said its commitment to nuclear energy would be accompanied by the commitment to a “procurement process that is in line with the country’s legislation and policies”. “The nuclear new build programme will create a massive infrastructure development, thus stimulating the economy and enabling the country to create thousands of high- quality jobs for engineers, scientists, artisans, technicians and various other professions, develop skills and create sustainable industries, and catapult the country into a knowledge economy,” said Maharaj.
Source: South Africa.info