4. Functional service delivery reporting 1. Introduction
4.4. Economic development
4.4.1 Summary of overall performance BPO Precinct
The BPO sector has been identified by national government as an industry with the greatest potential to create employment. The CoJ has made good progress in implementing this national goal. A site for the BPO precinct (Wemmer Complex) was approved by Mayoral Committee and a feasibility study is ongoing. To support the sector, the BPO Skills Hub, temporary suspended due to lack of funds, has so far secured employment for 855 out of its previous 1 400 learners, representing over 50% of placement, despite the economic downturn.
Johannesburg Broadband Network project
The Department signed a contract with Ericsson SA in 2009 to Build Operate and Transfer (BOT) affordable broadband. The completion of approximately 55km of infrastructure was recorded in the areas of Martindale- Proton House, Roodepoort-Soweto Civic, Roodepoort -Proton House, Civic-Town hall and Soweto-Martindale. The roll-out is envisaged to last three years.
Dirang Ba Bohle Finance Institution (DBB)
The period marked significant progress towards launching the DBB. The Implementation Manager appointed has overseen the work to identify the Micro-Finance Institution that will run the DBB. Engagement with Old Mutual resulted in an MOU for R20 million (2010/11) to operationalise the DBB. It is, therefore, important that the City releases the grant to guarantee counterpart
“Jozi” SME Equity Fund (JEF)
The Department is driving the programme to secure funding for SME to participate in City owned and City driven projects which are not readily accessible to SME due to the large capital requirements.
To-date, the Department has embarked on an extensive fund raising drive, both locally and abroad, to create a R1 billion Fund. The City approved a R100 million grant over three years. Due to the economic crisis, and also varying investor requirements that they need to fulfil before they can invest in the Fund, there have been delays in its launch. This fund will also be utilised to support City initiated Green Economy programmes.
Skills Hub
The setting of the Jozi Skills Hub is complete and now remains to be ‘operationalised’. The proposed implementation will be carried out over in three phases and operate within specific regions of the CoJ in the first 24 months of operation. It will later expand to cover the rest of the COJ regions by month 60. The Hub will initially address the labour market needs of specific economic sectors, and expand to other sectors as private sector demands for labour supply in different sectors increase.
Enterprise development
The City through The Business Place is assisting in excess of 1 000 SMMEs per month start, formalise or access business opportunities.
The total number of SMMEs assisted to date is 35 182 and a customer satisfaction survey carried out by an independent entity shows that 70% of respondents said TBP's services had an impact on their business.
Informal trading
Over 2 000 informal traders were accredited by DED together with the LOC/FIFA to sell and cater during the 2010 FIFA World Cup at Johannesburg Stadia.
The Informal Trading Forum has been initiated and established by the City through the Department of Economic Development where issues of trading environment, common business constraints, and day to day (commercial graduation) and business opportunities are discussed. A total number of 98 members attend the Informal Trading Forum. The ITF meets on a monthly basis, this has substantially improved the relationships with traders and has also achieved substantial improvements on trading conditions on the ground.
Linear markets
To-date, 13 Linear Markets throughout the City have been constructed at a capital cost in excess of R37 million.
A further R45 million was spent by MTC on the revamping and refurbishing of existing Linear Markets including the Bree Street Taxi Rank/Market.
Soweto Empowerment Zone (SEZ)
Significant progress has been made on the Soweto Empowerment Zone launched this year in May. A cluster champion, TRACOZA was appointed and so far has secured contracts with furniture retailers, Ellerines, which will be a significant boost for the SMMEs that will be partnered with them. The Wall to secure the zone is almost complete. This was an EPWP project. A feasibility study on the on/off ramp and overhead pedestrian bridge from Diepkloof into the Zone is currently underway.
Decking of the Railway Gulch from Fordsburg to Doornfortein (Decking)
A business and financial model of the project funded by the DBSA, was submitted to Mayoral Committee in June 2009. Market analysis studies conducted since have provided input into the charrette process which took place on the 15-18 February 2010.
The charrette process facilitated input for the design of renderings to develop a business plan that will be circulated to potential developers and private investors. The project will be implemented over a thirty year period, and is aimed at freeing up land in the inner city by decking the rail way and creating mixed use development that will create income stream for the City, and modern, green open spaces for city inhabitants to live, work and play.
Inner City Property Scheme (ICPS)
The project seeks to maximise the economic opportunity for BEE firms through creative use of the City's property portfolio.
Significant progress has been achieved including the appointment of the Implementation Manager who is now reviewing the Asset Register Audit that was conducted by Deloitte to produce the initial property portfolio that will used in the first phase of the scheme.
The Transitional Housing Trust (THT) has also established and capacitated by specialist in the sector and industry. A Panel of service providers has been established to support the regeneration of derelict buildings in the Inner City.
The RFP for Investors of the scheme was issued in July 2010. The scheme should be established during the first quarter of the new fiscal year.
Extended Public Works Programme (EPWP)
The City has exceeded both its internal and externally set targets in job creation via EPWP based on its CAPEX budget as part of Phase 1 between 2004/2005 and 2008/2009 financial years as follows: The target employment creation through EPWP for 2005/06 was 23 500, with only 10 964 actual jobs created. This was below the target set. By the 2008/09 financial year, the City had 50 193 jobs out of the targeted 30 000. For the 2009/10 financial year, 41 183 jobs have been created.
It is worth noting that for the past four years of the EPWP, the construction sector is the only sector that created these jobs largely due to the 2010 FIFA World Cup preparations. More importantly the City of Joburg continues to perform well and has been allocated an incentive grant of about R179 million.
Targeted Beneficiaries Unit (TBU)
The Targeted Beneficiaries Programme now enjoys national prominence, falling under the Defence Ministry since 2009. Long before this, the City, through it’s the Executive Mayor, initiated the creation of the TBU unit to address the pressing socio-economic issues that affect targeted beneficiaries, with particular focus on addressing the needs of ex-combatants. The Department continues to promote initiatives to empower ex-combatants which include the launch of the book writing programme hosted by the Mayor in September 2009, over 500 ex-combatants were RPL’d in 13 trades, provision of 17 RDP houses, and creation of cooperatives to produce bricks and coffins, as well securing ex-combatants procurement opportunities in the City.
The Department has gone further to incorporate other targeted groups (women, youth, and people with disabilities) and engage with other stakeholders to promote their participation in the economy of the City.
Profile of Johannesburg – investment destination
Whilst Johannesburg improved its ranking by 33 places to 120 during the previous year, its ranking dropped to 128 this financial year. The negative economic climate is the chief contributor to the drop in rank. The ranking is conducted on an annual basis by the International Congress and Conventions Association (ICCA) and is based on the number of convention and conferences hosted by a city and but may not include all the events that may have taken place in that City.
Export Programme and investment promotion
The Trade and Investment Unit has trained 200 SMMEs under its Export Programme jointly with Johannesburg Chamber of Commerce and Industry (JCCI) in the past year and also participated in local and foreign trade missions.
Amongst its work’s achievement was the clinching of a deal by Lesimelo Precious Metals, to export Gold to Cuba worth R10 million.
In the current financial year, the Department also organised a Trade Mission led by the Executive Mayor to Mumbai, St. Petersburg, Ho-Shi-Minh-City and Shanghai to explore potential and mutually beneficial trade and investment opportunities.
Performance highlights for Municipal Entities Joburg Market
Despite difficult agricultural production and marketing conditions the Joburg Market (“JM”) was able to record at the conclusion of 2010 a surplus after tax to the value of R27.9 million. In comparison with 2009 when a surplus of R21.8 million was recorded it represents an improvement of 28%.
The accumulated surplus at the end of 2010 is R56.1 million. Total net assets improved from R48.1 million to R76.1 million. The latter represents an improvement or R35.6 million.
Whilst main cost items in the books of the entity represent fixed costs, the company was able to curb expenditure and to optimise both its main and secondary income streams. Recovery of Market dues, rentals and utility charges was improved through a number of initiatives.
The performance of the Market for 2010 is significant when the low level of food inflation is considered. It is anticipated that
MetroTrading Company (MTC)
Metro Trading Company is the manager of the trading and transport facility. A further R45 million was spent by MTC on the revamping and refurbishing of existing Linear Markets including the Bree Street Taxi/Rank/Market.
Joburg Property Company (JPC)
Overall JPC has performed fairly well and has provisionally reflected a surplus of R3.5 million for the year ending 30 June 2010.
The company has attained a clean audit for the 2008/09 financial year and has taken strides within this financial year to continue in this manner.
JPC has continued to attract investment through its Property Development unit, with a particular focus being in the inner city and the southern part of Johannesburg. In total over R1.5 billion has been leveraged from private sector through facilitation of the awarding developments, double the target set at the beginning of the year. JPC created 1 805 jobs on the various construction sites wherein development is taking place as well as over 170 training opportunities within the sector.
In addressing the disparities within the construction industry, JPC has leveraged 59% BBBEE participation in its developments, which exceeds the 55% target set. JPC had a phenomenal response to the Land Regularisation programme throughout the financial year.
150 Vacant residential properties were released on public tender, over 4000 documents were bought with a staggering 3925 tenders being received. JPC will ensure that the efforts of the 2009/10 financial year are bettered in the upcoming financial year, so that the transgression of the past are addressed, for the economic benefit of the citizens of Johannesburg.
From a human resource point of view, 18 policies have been approved by the Board and a salary grading system has been finalised, resulting in a number of disparities being addressed.
The company looks forward to the 2010/11 financial wherein the focus will be on managing approved developments through to a construction and/or completion phase, continuing to run the company in accordance to good governance principles, managing pertinent risks which have been highlighted through a vigorous process with the staff and continuing to turn the company into a profit making organisation by leveraging as much value of out the property asset as possible, without losing sight of the objectives of the City.
Joburg Tourism Company (JTC)
The Convention and Events Bureau undertook a number of successful campaigns and activations throughout the year, which included the official countdown celebrations and the powerful Joburg Rocks campaign during the 2010 FIFA World Cup.
The aggressive marketing of Johannesburg as a destination by the JTC over the past 18 months ensured that we dispelled the myths and perceptions of Johannesburg as a destination. The aggressive marketing campaigns undertaken by JTC in the UK including the World Travel Market, dedicated media briefings and the Miss World activations proved their success when Johannesburg was named as a new entry in Skyscanner’s Top 50 destinations for UK travellers. (Johannesburg was placed at 21st position, while Cape Town came in at 33rd). As an international business tourism destination, Johannesburg also climbed in the ICCA (International Congress and Convention Association) rankings from 153rd to 120th position.
During the World Cup, Johannesburg dominated the majority of international market share. Johannesburg’s Soccer City stadium lead the attendance race with visitors, reporting the highest figure of 84 490 spectators for the opening match between South Africa and Mexico, played on 11 June. According to figures released by FIFA, spectator numbers at Africa’s first World Cup were slightly higher than those of Germany in 2006.
The fourth quarter was dominated by the launch and rollout of the “From Full Time to Party Time Joburg Rocks” campaign in order to position and entrench Johannesburg as a leading global, business, sporting and lifestyle destination, during the window of opportunity presented by the 2010 FIFA World Cup, where Johannesburg hosted the lion’s share of activities and matches.
The campaign included a comprehensive programme of above and below the line activities comprising advertising, branding, promotions and public relations activities. It was refreshing to see positive coverage across all media sectors for Johannesburg during this time. The overall coverage from April to May increased by 256% in terms of clip count. In terms of AVE (Advertising Value Equivalent) ratings, there was a 286% increase.
The JTC successfully secured a sponsorship of R620 000 from the Kenya Tourist Board. Strategic alliances have and will always prove to be beneficial especially as South Africa hosted the FWC. Since the FWC was branded as an African event, it was on that premise that JTC invited partners with an aim of promoting strategic destinations for post-event tourism.
Bids Secured include:
Architecture ZA20 and the World Information Technology and Services Alliance (WITSA) Board Meeting. The total potential economic generation to the City of Johannesburg by securing these prestigious conferences is R10.8 million.
Visitor Services Bureau:
JTC committed that the historic World Cup must leave a lasting legacy for ordinary citizens. It is important to note that most of JTC’s activities were executed in line with the principles of Responsible Tourism. The VSB Highlights during this period included Training
200 Safety and Security Tourist Cadets were trained in Tourism Awareness /Know Your City
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650 World Cup volunteers, along with approximately 30 information officers from different shopping centres were trained in
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Tourism Awareness/Know Your City
JTC Partnered with SASOL to train 200 petrol attendants
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10 Students from Kwa-Bhekilanga and Merniva High Schools in Alexandra Township were trained as tour guides, to provide
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tours during the Football for Hope Tournament, which took place in Alex from 3 – 10 July
A three year contract (ending 30 December 2012) was concluded with PROMCO/MOJA for the production of the Ultimate
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Visitors Guide and Johannesburg Maps
A service has been secured with the Brochure Management Company (with a distribution network covering 250 sites) to
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distribute information brochures, the Ultimate Visitors’ Guide and Joburg Maps
122 Directional Tourist Signs placed in the greater Johannesburg Area to highlight Tourism attractions.
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During the World Cup, tourists were able to access information from Information Centres, located at various tourist sites
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throughout the city, including the stadiums. Approximately 300 tourists per day visited the information centres, while 500 tourists per day visited the information kiosks at the stadiums, seeking information on attractions, transport, entertainment, etc.
Transformation and Redistribution:
A total of 16 SMMEs (tour operators and B&B owners) have been undergoing training in business skills since April and a total of 53 Soweto Tavern Owners have been trained in customer service and city by-laws.