THE NATIONAL INDUSTRIAL PARTICIPATION PROGRAMME PRESENTATION TO PORTFOLIO COMMITTTEE ON TRADE AND INDUSTRY 17 November 2006

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THE NATIONAL INDUSTRIALPARTICIPATION
PROGRAMMEPRESENTATION TO PORTFOLIO COMMITTTEE
ON TRADE AND INDUSTRY17 November 2006
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Background

• NIPP is 10 years old this year
• First years dominated by the Telkom rollout
• Thereafter the SDPs accounted for /- 95 of
  the total programme
• Currently the purchases by SAA, ESKOM and the
  PBMR are responsible for new obligations
• Future obligations are those from the
  infrastructure plans of DPE

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Main Purpose

• To raise investment levels
• and to increase international market access for
  South African value-added goods and services
• by leveraging off government procurement.

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Value of the NIPP

• Currently the total obligation accumulates to
  over US 15 billion, of which US4 billion is for
  investments
• Added to this is pro-active, non obligated
  performance equating to almost US 1 billion

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Current Obligations

• SDP
• Other Defence Obligations
• GBADS awarded to Denel/Thales
• Non Defence Obligations
• Tenders awarded by SAA, Eskom, Transnet and
  various Government Departments

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New Obligations

• Defence
• Hoefyster - Supply/delivery of new generation
  infantary combat vehicle products system
• Vistula - Logistic support vehicles
• Cytoon Tactical Intelligence System
  (battlefield information)
• Kingfisher - Upgrade of MILAN missile system
  (anti tank)
• Non Defence
• PBMR related tenders
• ESKOM Power Stations
• Motor Vehicle Tenders
• Gautrain
• SITA related tenders

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Performance of Obligors

• Since inception over 150 projects approved and
  implemented
• Projects in various sectors and different regions
• Including bio tech, aerospace, tourism and BPO
• These projects have generated
• Investment Credits in excess of US2.2bn
• Exports and Local Sales Credits of US4.5bn
• /-12000 direct jobs

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BAES/SAAB Performance

• 44 Active projects
• More recent projects include the Ferrochrome
  Smelter, Gemco and the SAAB/Denel Aerostructures
  deal.
• BAE/SAABs performance exceeds US2.8 billion, of
  which /- US1 billion is for investments.

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GSC (Ferrostaal)

• More than 11 Active projects
• Most recent projects include SAMES and
  Fabrication and Repair and Maintenance in the Oil
  and Gas Industry
• Ferrostaals performance exceeds 817 million,
  over 600 million of this for investments

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GFC (ThyssenKrupp)

• 6 Active Projects
• Most recent projects include Manufacture of Wood
  Pellets for the energy sector, Alltube Expansion
  and the Mechatronics project
• Thyssenkrupps performance exceeds US217 million

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Thales

• 9 Active Projects
• Most recent projects include the SMME fund,
  Geratech Zirconium Beneficiation and Laroche
  South Africa
• Thaless performance exceeds US506 million
  (US140 of this for investments)

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Agusta

• 6 Active Projects
• Most recent projects include Flexider SA and
  Cenere 1948
• Agustas performance exceeds US246 million

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AgustaWestland

• 7 Active Projects
• Most recent projects include Bio fuels project,
  Adept Airmotive and Worldfish SA
• AgustaWestland performance exceeds GBP 30 million
  (GBP 4.5 million for investments)

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Denel

• Awarded the GBADS tender
• Thales assisting with this obligation
• Projects initiated include Qmuzik, Pre-Stressed
  Bars and Greenhouse Farming.

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Non Defence Related Obligations

• SAA
• PBMR
• DEAT, SAPS, DOH, DHA and DoT
• Petro SA, NPA, SAPO and Spoornet
• Telkom
• SITA

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Problems Encountered

• Not all projects have a happy ending some have
  encountered severe problems
• BAES/SAAB Diesel Economizer
• BAES/SAAB SARM
• Ferrostaal - Atlantis Training Centre

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Obligations Achieved

• Marpless
• Obligation of US31,82
• Won bid for an identification system (HANIS) to
  the Department of Home Affairs
• IP projects related to a number of export
  promotion projects
• To date they have excess credits amounting to
  /-US56,79 million

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Obligations Achieved

• Boeing
• Obligation arose out out of 737-800 airplanes
  sold to SAA and the VIP Intercontinental
  transport Boeing Business Jet.
• Obligation amounted to US237.5 Million.
• Boeing came with work packages for various SA
  companies.
• Boeing has earned credits in excess of the
  required obligation.

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THE WAY FORWARD

• The SDP coming to a close
• R370 Billion of infrastructure development that
  may result in offset obligations how are the
  objectives of DPE to be incorporated with those
  of the NIPP
• Denel, etc
• Policy revision and amended NIP guidelines