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Apr 26, 2007

On-The-Air (27/04/2007)

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It’s that time again on a Friday when AMLive presents another Update From The Coal-Face with Terence Creamer, Editor of Engineering News and Contributing Editor of Mining Weekly.

Maggs: A serious study is reportedly under way for a new West Coast submarine fibre-optic cable linking Africa with Europe.

Terence Creamer:
Yes, this study is being undertaken by the yet to be established broadband infrastructure company, Infraco, which currently operates as a subsidiary of Eskom.

Department of Public Enterprises director-general Portia Molefe has shared with us that it has given the go-ahead for the study, with Cabinet having approved, last week, the Broadband Infrastructure Company Bill.

The business case being interrogated is whether Infraco, probably in consortium with others, should pursue a high-capacity submarine cable project.

Currently, the continent is connected to the rest of the world via the telco-owned and operated SAT3-SAFE submarine system, linking Europe with South Africa on the West Coast and South Africa with Malaysia via Reunion on the East. The system’s capacity is around 120 Gigabits-a-second.

The cable under study could raise capacity to over one terabits-a-second, or 1000-Gigs-a-second. This is also the capacity that would be needed should South Africa be successful in beating Australia in a bid to host the core of the $1-billion square-kilometre-array (SKA) telescope project.

But another key driver is the desire to reduce the price of bandwidth.
Molefe believes the cable should be ‘open access’ rather than telco owned. She says it could be operated on a cost-plus model, which is in line with the model that will be used for the terrestrial bandwidth that Infraco will sell on to Neotel, South Africa’s second network operator.

Maggs: Progress is being made on the finalisation of an action plan for the new industrial policy for South Africa.

Terence Creamer:
The context for this is a view that, while South Africa’s economic growth is accelerating towards the 6% target, there is still concern about the shared aspect of that growth under Asgisa, or the Accelerated and Share Growth Initiative for South Africa.

One way to facilitate this sharing is through sector strategies, underpinned by an industrial policy. Of course, there are also many other more direct share-growth initiatives, but most of these fall under the so-called second-economy programmes.

This ‘first economy’ programme is being driven by various departments, but comes together under the Department of Trade and Industry (DTI) and its Minister Mandisi Mpahlwa. He will unveil an action plan for the National Industrial Policy Framework in the last week of May, followed by a national launch on May 31 and roll-out to all nine provinces in June.

The policy is likely to single out five sectors for special attention at any one time, but the DTI stresses that it will still be supporting more than that with its generic incentives.

The initial sectors are likely to be closely aligned with Asgisa, which has earmarked call-centre industry, tourism and biofuels. Tailored programmes and incentives are being developed for these sectors. The automotive sector is also likely to receive continue tailored support through the extension of Motor Industry Development Programme (MIDP) beyond 2012.

But also a priority for government is to build a capital-goods manufacturing sector around the R400bn-plus infrastructure drive currently under way.

Maggs: Good news for the Eastern Cape, as a luxury vehicle manufacturer gears up for the production of its latest export platform.

Terence Creamer:
Yes, some time back, DaimlerChrysler South Africa (DCSA) was given the go-ahead to produce the new Mercedes-Benz C-Class at its factory in East London, for South Africa and certain export markets. The other two C-Class plants are based in Germany.

Trial production has started and large-scale production is set to follow in July. The model’s introduction to the local market is planned for August.

The new C-Class will take over from the current model, which the plant currently exports to the UK, Japan, Australia and other Pacific Rim countries.

The new one will be exported to the US, but the requirements of other markets could also be serviced from East London at a later stage.

The local content in this new C-Class is also expected to rise to 35% as compared with 18% on the current model, which is good news for South African component manufacturers.

In gearing up for this development, R2-billion has been invested, mainly into a new body shop and assembly line.

The factory will produce both left-hand and right-hand-drive derivatives.

At full tilt, the East London plant expects 230 units a day to be rolling off the production line.

Edited by: Creamer Media Reporter
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