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Department of Transport

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  1. Department of Transport Department of Transport “STRATEGY/POLICY FOR SMMEs & CO-OPERATIVES” 11 MARCH 2015 PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT 1

  2. Department of Transport Structure of presentation • Policy & Legislation Landscape • Problem Statement: Key Challenges • BEE Audit Preliminary Results • DOT Programmes & Interventions • General Government Programmes • Interventions by Small Business Development Department 2

  3. POLICY & LEGISLATION LANDSCAPE The Department of Transport derives its mandate to develop and support SMMEs & Co-operatives from the following government policies and legislative framework: Resolutions of the 53rd ANC National Conference on development of SMMEs & Co-operatives – SMMEs & BEE policies should build cooperatives & other social ownership National Development Plan, 2030 Vision – to address triple challenges & aims to promote radical economic transformation Broad-Based Black Economic Empowerment Act (B-BBEE) – BEE Framework DTI Codes of Good Practice – Guidelines for BEE charters Co-operatives Act – Promote sustainable development of co-operatives & provides framework of co-operatives Preferential Procurement Policy Framework Act (PPPFA) – transparent, fair, cost competitive buying of government goods and services Women’s Charter for Effective Equality of 1994 – Outlines eight aims of gender equality Women Empowerment and Gender Equality Act - Promotes women empowerment and gender mainstreaming in social, political and economic structures of society A Strategic Framework for Gender Equality within Public Service - Seeks to promote transformation and ensure that there is full participation of women within the South African economy Local Content Framework – Promotion of local procurement 3

  4. General: Lack of transformation across the transport sector particularly within Aviation, Maritime & Aviation sub-sectors – still white and male dominated B-BBEE Contribution Level – BEE Company without Black Ownership PPPFA: 90/10 & 80/20 – Limits participation of SMMEs/Women-owned Companies towards government tenders Lack of long-term contracts Access to funding by SMMEs, co-operatives & women-owned companies No economic and business opportunities set-aside for SMMEs No transport related fund to assist transport related businesses Unfair BEE Practices especially in the freight industry Problem Statement (1) 4

  5. Women related: Victimisation & discrimination of women – nature of operations is against women Low literacy levels & skills as well as lack of gender institutional support Lack of external resources to start a business – e.g. funding, access to sector information, business plan & knowledge of places offering assistance Lack of skills and capabilities to effectively run a transport business Lack of advocacy platforms Problem Statement (2) 5

  6. Survey Coverage: Provincial Spread • The survey covered organisations in all provinces, with highest representivity in Gauteng • There is a significant number of respondents operating in all provinces

  7. Use of Scorecards • 58% of the respondents are using generic scorecards in their B-BBEE verifications. • This is of concern as it implies that the organisations are achieving better contribution levels without working achieving any of the transport sector priorities • Some organisations indicated that they were not aware of transport sector specific scorecards while others indicated that their BEE consultants didn’t inform them of the need to use transport sector scorecards

  8. B-BBEE levels • Only 6% of respondents are achieving level 1 • Level 3 and 4 have the highest representivity amongst respondents • Organisations with level 1 to level 4 constitute about 78% of all respondents

  9. Priority Elements • Skills development was considered a priority element mainly because it had direct impact on employee productivity • Although important, respondents indicated difficulties with implementing equity ownership • Skills development was considered the most costly element to implement

  10. AVIATION: B-BBEE Levels • Only 3% of respondents are achieving level 1 • Level 3 and 4 have the highest representivity amongst respondents • Out of every 10 organisations, 6 are achieving at least level 4 B-BBEE level

  11. BUS COMMUTER & COACH: B-BBEE Levels • 8% of respondents are achieving level 1 • Level 3 have the highest representivity amongst respondents • Out of every 10 organisations, 7 are achieving at least level 4 B-BBEE level • Over 70% of the organisations are large enterprises • High usage of generic scorecard (67%)

  12. Forwarding and Clearing: B-BBEE Levels • 18% of the respondents have achieved level 1 • Over 63% are using generic scorecard • 72% respondents are receiving some of their revenue from the public sector whilst 91% are pressurised by their customers to implement B-BBEE

  13. Maritime: B-BBEE Levels • 14% of the respondents have achieved level 1 • Highest representivity at level 4 with 36% of the organisations • Over 57% are using transport sector scorecard • Over 85% of respondents are receiving some of their revenue from the public sector whilst the 64% are pressurised by their customers to implement B-BBEE

  14. Rail: B-BBEE Levels • None of the respondents have achieved level 1 • Over 70% are using generic scorecard • 64% respondents are receiving some of their revenue from the public sector whilst the same percentage are pressurised by their customers to implement B-BBEE

  15. Road freight transport: B-BBEE Levels • Only 3% of respondents are achieving level 1 • Out of every 10 organisations, 8 are achieving at least level 4 B-BBEE level • 71% of organisations are pressurised by their customers to comply with B-BBEE

  16. DOT Programmes & Interventions 16

  17. DOT Programmes & Interventions 17

  18. DOT Programmes & Interventions 18

  19. DOT Programmes & Interventions 19

  20. DOT Programmes & Interventions 20

  21. DOT Programmes & Interventions 21

  22. DOT Programmes & Interventions 22

  23. General Government Programmes Funding Mechanisms DTI grants & co-operatives NEF, IDC & DBSA funding Fronting DTI is setting-up BEE Commission fronting Labour Brokers issues will be reported here for investigation and appropriate action taken Skills Development SEDA business planning and mentoring programmes 23

  24. Interventions by Small Business Development Department Engage DTI & National Treasury to fastrack PPPFA regulations Assist with creation of transport related fund through NEF, IDC, DBSA, etc. Assist with Skilling SMMES, Co-operatives & Women-owned businesses Banks to ease requirements for SMMEs Help create Black/SMMEs Industrialists 24

  25. Department of Transport Thank you 25 25