Date: 31/03/2004
Source: Department of Public Enterprises
Title: J Radebe: MTO and Komatiland forestry media briefing
REMARKS BY MR JT RADEBE, MP, MINISTER OF PUBLIC ENTERPRISES, AT THE MTO/KOMATILAND FORESTRY MEDIA BRIEFING, 31 March 2004
Today marks a very important day for the forestry sector because it brings to an end the Department of Public Enterprises' long and difficult task of restructuring our assets.
It is indeed a very proud moment for all of us here at the Department of Public Enterprises (DPE).
In 1999, Government set out to restructure its forests offering state-owned plantations to private investors. The packages comprised SAFCOL forests, combined in some instances with Department of Water Affairs and Forestry (DWAF) forests in the former Homeland areas.
Today we can proudly say that the commercial transactions of all five packages have been successfully concluded. These include the Amatola Restructuring Project, Singisi in the Eastern Cape North, Siyaqhubeka in KwaZulu-Natal and - the reason for us being here today - MTO and Komatiland Forests - totalling 343,400 hectares, raising R542 million in proceeds. The largest being Komatiland in Mpumalanga at R396 million with about 187 000 hectares.
In restructuring these assets, Government was careful not to be driven only by commercial interests, but was guided by its vision to create wider participation by historically disadvantaged individuals in the broader South African economy. Our priority was to facilitate black economic empowerment (BEE) through jobs, training and skills development, involvement in management, and entrepreneurial opportunities through outsourcing and procurement.
As the ANC Government we remain convinced that the decision we took in 1998 was the correct one. If we take the example of Singisi in the Eastern Cape, there is evidence that there is a major improvement in economic activity with small businesses mushrooming with a whole range of opportunities beginning to open up.
The 1128 employees have been retained for the mandatory three-year period. Singisi engaged in a replanting programme on harvested but unplanted forest stands. Since the transaction, a significant new HDI labour was taken on for replanting and training has been provided to all staff. The number of HDI managers increased and a policy of BEE outsourcing and procurement is now in place.
Having purchased the asset for R34 million, a further R8 million investment has already been made in forests and R16million further investment in sawmilling.
However, the transfer of state-owned forests to the private sector has not always been smooth sailing and sometimes proved troublesome and protracted. You will recall that the restructuring transaction for the largest and most important forest package, Komatiland, was suspended in July 2002 while allegations of irregularities were being investigated. Many lessons were learnt in the process. However, we are confident that Bid Evaluation Committee and all parties have carried out their duties in a credible manner.
At this point, I would also like to say that we are pleased with progress being made in the disposal of the Longmore Flower projects in the Eastern Cape to employees who have made an offer.
SAFCOL has made a commitment to contribute R1,2 million - this is inclusive of the approximate R230 000 the bidders will receive from the company by way of compulsory severance packages.
Having visited the project myself, I have seen that this empowerment initiative has great potential and will have major spin-offs for the communities in that area.
While great strides have been made in promoting black economic empowerment, the ANC believes a lot more can still be achieved and has therefore made a commitment to vigorously pursue its objective of ensuring broad based empowerment.
We believe that transactions, such as the ones we have just witnessed, will assist us in our fight in pushing back the frontiers of poverty for a better life for all our people.
As Government therefore, we expect the new owners of the forests to stick to the agreements and remain mindful and committed to their social development obligations.
Let me conclude by thanking the Department officials, transaction advisers, the Bid Evaluation Committee, SAFCOL and the bidders for a job well done and for successfully concluding this task which brings hope for a better life for many of our people.
With the election just 14 days away, I trust that you will do an equally fine job by voting wisely.
I thank you.
For more details contact: Ms Miranda Strydom
Cell: 082 908 8976
Issued by: Department of Public Enterprises
31 March 2004
Source: Department of Public Enterprises
Title: J Radebe: MTO and Komatiland forestry media briefing
REMARKS BY MR JT RADEBE, MP, MINISTER OF PUBLIC ENTERPRISES, AT THE MTO/KOMATILAND FORESTRY MEDIA BRIEFING, 31 March 2004
Today marks a very important day for the forestry sector because it brings to an end the Department of Public Enterprises' long and difficult task of restructuring our assets.
It is indeed a very proud moment for all of us here at the Department of Public Enterprises (DPE).
In 1999, Government set out to restructure its forests offering state-owned plantations to private investors. The packages comprised SAFCOL forests, combined in some instances with Department of Water Affairs and Forestry (DWAF) forests in the former Homeland areas.
Today we can proudly say that the commercial transactions of all five packages have been successfully concluded. These include the Amatola Restructuring Project, Singisi in the Eastern Cape North, Siyaqhubeka in KwaZulu-Natal and - the reason for us being here today - MTO and Komatiland Forests - totalling 343,400 hectares, raising R542 million in proceeds. The largest being Komatiland in Mpumalanga at R396 million with about 187 000 hectares.
In restructuring these assets, Government was careful not to be driven only by commercial interests, but was guided by its vision to create wider participation by historically disadvantaged individuals in the broader South African economy. Our priority was to facilitate black economic empowerment (BEE) through jobs, training and skills development, involvement in management, and entrepreneurial opportunities through outsourcing and procurement.
As the ANC Government we remain convinced that the decision we took in 1998 was the correct one. If we take the example of Singisi in the Eastern Cape, there is evidence that there is a major improvement in economic activity with small businesses mushrooming with a whole range of opportunities beginning to open up.
The 1128 employees have been retained for the mandatory three-year period. Singisi engaged in a replanting programme on harvested but unplanted forest stands. Since the transaction, a significant new HDI labour was taken on for replanting and training has been provided to all staff. The number of HDI managers increased and a policy of BEE outsourcing and procurement is now in place.
Having purchased the asset for R34 million, a further R8 million investment has already been made in forests and R16million further investment in sawmilling.
However, the transfer of state-owned forests to the private sector has not always been smooth sailing and sometimes proved troublesome and protracted. You will recall that the restructuring transaction for the largest and most important forest package, Komatiland, was suspended in July 2002 while allegations of irregularities were being investigated. Many lessons were learnt in the process. However, we are confident that Bid Evaluation Committee and all parties have carried out their duties in a credible manner.
At this point, I would also like to say that we are pleased with progress being made in the disposal of the Longmore Flower projects in the Eastern Cape to employees who have made an offer.
SAFCOL has made a commitment to contribute R1,2 million - this is inclusive of the approximate R230 000 the bidders will receive from the company by way of compulsory severance packages.
Having visited the project myself, I have seen that this empowerment initiative has great potential and will have major spin-offs for the communities in that area.
While great strides have been made in promoting black economic empowerment, the ANC believes a lot more can still be achieved and has therefore made a commitment to vigorously pursue its objective of ensuring broad based empowerment.
We believe that transactions, such as the ones we have just witnessed, will assist us in our fight in pushing back the frontiers of poverty for a better life for all our people.
As Government therefore, we expect the new owners of the forests to stick to the agreements and remain mindful and committed to their social development obligations.
Let me conclude by thanking the Department officials, transaction advisers, the Bid Evaluation Committee, SAFCOL and the bidders for a job well done and for successfully concluding this task which brings hope for a better life for many of our people.
With the election just 14 days away, I trust that you will do an equally fine job by voting wisely.
I thank you.
For more details contact: Ms Miranda Strydom
Cell: 082 908 8976
Issued by: Department of Public Enterprises
31 March 2004
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