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

2. Background NIPP is 10 years old this year
First years dominated by the Telkom rollout
Thereafter the SDP’s 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

3. 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.

4. Value of the NIPP
Currently the total obligation accumulates to over US$ 15 billion, of which US$4 billion is for investments
Added to this is pro-active, non obligated performance equating to almost US$ 1 billion

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

6. 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

7. 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 US$2.2bn
Exports and Local Sales Credits of US$4.5bn
+/ direct jobs

8. BAES/SAAB Performance
44 Active projects
More recent projects include the Ferrochrome Smelter, Gemco and the SAAB/Denel Aerostructures deal.
BAE/SAAB’s performance exceeds US$2.8 billion, of which +/- US$1 billion is for investments.

9. GSC (Ferrostaal) More than 11 Active projects
Most recent projects include SAMES and Fabrication and Repair and Maintenance in the Oil and Gas Industry
Ferrostaal’s performance exceeds €817 million, over €600 million of this for investments

10. GFC (ThyssenKrupp) 6 Active Projects
Most recent projects include Manufacture of Wood Pellets for the energy sector, Alltube Expansion and the Mechatronics project
Thyssenkrupp’s performance exceeds US$217 million

11. Thales 9 Active Projects
Most recent projects include the SMME fund, Geratech Zirconium Beneficiation and Laroche South Africa
Thales’s performance exceeds US$506 million (US$140 of this for investments)

12. Agusta 6 Active Projects
Most recent projects include Flexider SA and Cenere 1948
Agusta’s performance exceeds US$246 million

13. 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)

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

15. Non Defence Related Obligations
SAA
PBMR
DEAT, SAPS, DOH, DHA and DoT
Petro SA, NPA, SAPO and Spoornet
Telkom
SITA

16. Problems Encountered BAES/SAAB – Diesel Economizer BAES/SAAB – SARM
Not all projects have a happy ending – some have encountered severe problems:
BAES/SAAB – Diesel Economizer
BAES/SAAB – SARM
Ferrostaal - Atlantis Training Centre

17. Obligations Achieved Marpless Obligation of US$31,82
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 +/-US$56,79 million

18. Obligations Achieved Boeing
Obligation arose out out of airplanes sold to SAA and the VIP Intercontinental transport Boeing Business Jet.
Obligation amounted to US$237.5 Million.
Boeing came with work packages for various SA companies.
Boeing has earned credits in excess of the required obligation.

19. 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