29 February 2012
South Africa is hoping to sustain between 50 000 and 100 000 new jobs in its construction sector as the country rolls out the large-scale infrastructure plan announced by President Jacob Zuma during his State of the Nation address earlier this month.
Over the next three years, the government plans to invest billions of rands in infrastructure projects that include the building of dams, roads, schools and rail systems, with Finance Minister Pravin Gordhan last week listing 43 major projects adding up to R3.2-trillion in expenditure over the next three years.
A massive overhaul of the country’s public transport system is also on the cards as infrastructure is expected to double over the same period, in line with the country’s New Growth Path.
The government and state enterprises are expected to allocate funding estimated at R262-billion over the next three years to transport and logistics infrastructure, including Transnet’s spending on pipelines.
Role for the private sector
While a big chunk of the money is expected to come from the national fiscus, especially for public service facilities, Transport Minister Sibusiso Ndebele said on Tuesday that the private sector would be called on to ensure that various forms of financing were explored to fund the build process.
He said the government will soon meet with the private sector and social partners to map out alternative funding models through an infrastructure summit to be convened by President Jacob Zuma.
Speaking during an Infrastructure Development Cluster briefing in Cape Town, Ndebele said public entities such as Eskom and Transnet would finance their investments from internally generated surpluses and borrowing from capital markets. In some cases, a mix of tax finance and cost recovery measures would be imposed.
“We make budget contributions to the cost of commuter transport services and electricity and water service delivery to low-income communities, for example,” Ndebele said.
Rail sector overhaul
As part of the reforms in the rail sector, the acquisition of new passenger coaches will be prioritised in the next 20 years into two 10-year batches, with 3 600 vehicles expected to be purchased in each batch.
The government wants to replace the entire existing fleet over this period, with a feasibility study to explore the project scope already done last year. The Treasury has set aside R1-billion for the upgrade of signalling and the building of depots ahead of the arrival of the new fleet.
Ndebele said that at this stage it was anticipated that a minimum of five new depots would be required for the new trains at a total cost of R4.6-billion. Furthermore, infrastructure interventions amounting to R13.5-billion will be made on the existing networks to enhance the technological benefits of the new coaches.
It was envisaged that the establishment of local manufacturing industries will result in substantial number of jobs over the 20-year period, while the authorities also hope to recover rail skills that have been lost over the over decades.
Growth between provinces
To stimulate economic growth between South Africa’s provinces, the plans will include beefing up the Durban-Gauteng transport corridor, improving the industrial and agricultural development and export capacity of the Eastern Cape, and expand the Eastern Cape’s economic linkages with KwaZulu-Natal and the Northern Cape.
On the public transport strategy, introduced in 2009, Ndebele said that so far the bus rapid transit system has recorded 45 000 passenger trips in Johannesburg and 100 000 in Nelson Mandela Bay.
While the system has thus far been operating fully only in Gauteng province, the national Budget makes provisions for the development of integrated public transport networks in five cities by 2015.