SOUTH African parastatals were in the thick of things on the fringes of the Brics summit on Tuesday, signing deals with their counterparts from other member countries.
This came as the Black Management Forum welcomed the appointment of mining billionaire Patrice Motsepe as the first chairman of the Brics Business Council.
The China Development Bank was expected to provide state-owned freight and logistics company Transnet a loan believed to be about $5bn, while South African Airways was expected to announce a direct route to Russia.
The Transnet deal is for the financing of upgrades at rail and port networks. The arrangement provided for co-operation on localisation of equipment manufacturing.
It also provided for collaboration on research and development initiatives, manufacturing and marketing, and the construction of cross-border infrastructure throughout the continent. The agreement was endorsed at the Union Buildings in Pretoria, ahead of the Brics summit.
Transnet group CE Brian Molefe said: “This historic agreement between two state-owned entities within Brics illustrates the opportunities inherent in such diplomatic ties. The agreement will enable us to explore innovative funding options as we pursue our borrowing plan, focusing on cost-effective solutions and diversity.”
The agreement is one of various country-to-country collaboration deals intended to strengthen economic and trade relations among the Brics (Brazil, Russia, India, China and South Africa) countries. Such deals signed on the fringes of the conference could add to the substance of Brics, amid an upsurge of goodwill among the country delegations.
South Africa’s PetroSA and China’s state-owned Sinopec petroleum and petrochemicals conglomerate on Tuesday also signed a two-year agreement on future co-operation. The pact represented a move closer towards Project Mthombo, a potential new crude oil refinery in Port Elizabeth.
“The framework agreement enables the two companies to move forward this global-scale crude oil refinery project at Port Elizabeth’s Coega industrial development zone ,” the parties said in a joint statement.
Denel had also been in negotiations with Russia over a partnership for the maintenance and repair of helicopters. This had been among the key issues expected to be discussed in a meeting between South African and Russian ministers yesterday.
Commenting on Mr Motsepe’s appointment as the first chairman of the Brics Business Council, Black Management Forum MD Nicholas Maweni said that each member country would be represented on the council.
“The council will give us an opportunity to have a business body that will highlight economic opportunities and issues facing each country. Each member country will provide market access to its Brics partners.
“This means that because South Africa imports a lot of goods we will see a balancing of trade in which we will be given the opportunity to start exporting as well.”
With Edward West, Sapa and Bloomberg.