An efficient, competitive and responsive economic infrastructure network

NATIONAL DEVELOPMENT PLAN OUTCOME 6

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In 2030, South Africa’s network of robust infrastructure is the bedrock of growth and job creation. This infrastructure efficiently delivers electricity, water, sanitation, telecoms and transport services, powers the economy, and supports manufacturing, trade and exports. More than that, it gives citizens the means to improve their lives and boost their incomes.

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Infrastructure – Downloads

Find out more about the National Development Plan.

National Development Plan – full text
National Development Plan – Chapter 4: Economy infrastructure – the foundation of social and economic development
Medium-Term Strategic Framework 2014 to 2019 – Outcome 6: An efficient, competitive and responsive economic infrastructure network
The National Infrastructure Plan
Framework of the New Economic Growth Path
New Growth Path booklet
Infographic: Economic infrastructure

Infrastructure – The vision

The National Development Plan’s vision is that, in 2030, South Africa enjoys a strong network of economic infrastructure that supports the country’s economic and social objectives. Infrastructure efficiently delivers basic services such as electricity, water, sanitation, telecommunications and public transport, and is robust and extensive enough to meet industrial and commercial needs.

Building an inclusive and dynamic economy requires urgent investment in rail, water and energy infrastructure. The private sector should also commit more investments to supplier industries for the infrastructure programme, and in general economic capacity.

South Africa should also focus on diversifying its economic base. This should include building the capacities required to produce capital and intermediary goods for the infrastructure programme and sub-Saharan Africa.

It should include development for the mining industry, combining production of capital goods, provision of engineering services, and beneficiation of natural resources.

By 2030, South Africa should approach developed world status, with levels of inequality greatly reduced, including inequalities in infrastructure access, levels of service, and pricing of infrastructure-related goods and services.

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By 2030:

• The proportion of people with access to the electricity grid should rise to at least 90% by 2030, with non-grid options available for the rest.
• The country would need an additional 29 000MW of electricity by 2030. About 10 900MW of existing capacity is to be retired, implying new build of more than 40 000MW.
• At least 20 000MW of this capacity should come from renewable sources.
• Ensure that all people have access to clean, potable water and that there is enough water for agriculture and industry, recognising the trade-offs in the use of water.
• Reduce water demand in urban areas to 15% below the business-as-usual scenario by 2030.
• The proportion of people who use public transport for regular commutes will expand significantly. By 2030, public transport will be user-friendly, less environmentally damaging, cheaper and integrated or seamless.
• Durban port capacity should increase from 3-million containers a year to 20-million by 2040.
• Competitively priced and widely available broadband.

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Infrastructure – The challenges

Investment spending on infrastructure in South Africa fell from an average of almost 30% of GDP in the early 1980s to about 16% of GDP by the early 2000s. Public infrastructure spending is also at low levels by historic standards.

In effect, South Africa has missed a generation of capital investment in roads, rail, ports, electricity, water, sanitation, public transport and housing.

The country does have a relatively good core network of national economic infrastructure. But the challenge is to maintain and expand it to ensure inclusive economic growth.

The economy has already been constrained by inadequate investment and ineffective operation and maintenance of existing infrastructure. Productive investment in historically black communities also continues to face constraints from inadequate logistics, water, waste removal and electricity.

Current investment levels are insufficient and maintenance programmes lagging. Given the government’s limited finances, private funding will need to be sourced for some of these investments, and policy planning and decision-making will require trade-offs between competing national goals.

The Presidential Infrastructure Coordinating Commission (PICC) goes a long way towards achieving these goals – as does the broad PICC National Infrastructure Plan, a programme for coordinated and managed infrastructure delivery. The Infrastructure Development Act of 2014 lays the basis for further strengthening coordination of infrastructure provision as well as accelerating implementation.

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Infrastructure – Action required

The NDP’s recommendations on economic infrastructure cover financing, planning and maintenance. Both the public and private sectors can play important roles in building infrastructure, including bulk infrastructure.

Specific action includes:

Coal

• Ensure domestic security of coal supply for existing power stations through industry compact, more comprehensive coal field planning and opening up the Waterberg for coal mining.
• Invest in a new heavy-haul rail corridor to the Waterberg coal field, upgrade the central basin coal network and expand export capacity in the line to Richards Bay.

Gas

• Enable exploratory drilling to identify economically recoverable coal seam and shale gas reserves, while environmental investigations will continue to ascertain whether sustainable exploitation of these resources is possible. If gas reserves are proven and environmental concerns alleviated, then development of these resources and gas-to-power projects should be fast-tracked.
• Incorporate a greater share of gas in the energy mix, both through importing liquefied natural gas and if reserves prove commercial, using shale gas.
• Develop infrastructure for the import of liquefied natural gas, mainly for power production, over the short to medium term.

Electricity

• Move to less carbon-intensive electricity production through procuring at least 20 000MW of renewable energy, increased hydro-imports from the region and increased demand-side measures, including solar water heating.
• Move Eskom’s system operator, planning, power procurement, power purchasing and power contracting functions to the independent system and market operator and accelerated procurement of independent power producers.
• Ring-fence the electricity distribution businesses of the 12 largest municipalities (which account for 80% of supply), resolve maintenance and refurbishment backlogs and develop a financing plan, alongside investment in human capital.
• Revise national electrification plan and ensure 90% grid access by 2030 (with balance met through off-grid technologies).

Liquid fuels

• Upgrade fuel refineries to ensure they meet new fuel quality standards and insist on larger strategic fuel stocks to ensure security of supply.
• Continue to import refined fuels, ensuring that the growing deficit in petroleum products is met, and defer decision on a new refinery to 2017.

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Water resources

• A comprehensive management strategy including an investment programme for water resource development, bulk water supply and wastewater management for major centres by 2012, with reviews every five years.
• Complete phase 2 of the Lesotho Highlands water project by 2020.
• Timely development of several new water schemes to supply urban and industrial centres, new irrigation systems in the Umzimvubu river basin and Makhathini Flats, and a national water conservation programme to improve water use and efficiency.
• Create regional water and wastewater utilities, and expand mandates of the existing water boards.

Transport

• Consolidate and selectively expand transport and logistics infrastructure, with key focus areas being:
– Upgrading the Durban-Gauteng freight corridor, including a new port at the old Durban airport site.
– Expanding capacity of the coal, iron ore and manganese lines, with consideration given to concessioning parts of this network.
– Building the N2 road through the Eastern Cape.
– Public transport infrastructure and systems, including the renewal of the commuter rail fleet, supported by enhanced links with road-based services.

Information and communication technology

• Establishing a national, regional and municipal fibre-optic network to provide the backbone for broadband access; driven by private investment, complemented by public funds required to meet social objectives.
• Change the regulatory framework to ensure that Internet broadband capacity improves, prices fall significantly and access improves.

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Infrastructure – Key medium-term goals for 2019

South Africa’s Medium Term Strategic Framework (2014 to 2019) identifies the following sub-outcomes to achieve an efficient, competitive and responsive economic infrastructure network.

• Regulation of infrastructure improved
• Reliable generation, transmission and distribution of energy
• Maintenance, strategic expansion, operational efficiency, capacity and competitiveness of transport infrastructure
• Maintenance and supply availability of bulk water resources infrastructure
• Expansion, modernisation, access and affordability of information and communication infrastructure

Infrastructure – Key medium-term targets for 2019

South Africa’s Medium Term Strategic Framework (2014 to 2019) identifies the following targets to achieve an efficient, competitive and responsive economic infrastructure network.

06 infrastructure targetsGRAPHIC: MARY AEXANDER

 Researched, edited and compiled by Mary Alexander
Updated December 2015