R52bn for public works projects

17 February 2010

South Africa has budgeted about R52-billion over the next three years to fund public works projects across the country, with the aim of creating up to 1.2-million new job opportunities.

Tabling his Budget speech in Parliament, Cape Town on Wednesday, Finance Minister Pravin Gordhan said an additional R2.5-billion would be allocated to labour-intensive projects in the social, non-governmental and environmental sectors, mainly targeting people in the country’s rural areas.

The government’s Expanded Public Works programme created 1.6-million short-term jobs during its first phase from 2004 to 2009, exceeding its target of one million jobs. A projected 642 000 job opportunities will be created in 2010/11, rising to 1.2-million in 2012/13.

“Public sector investment is a crucial component of development as it provides the infrastructure through which we transport goods, power the economy and connect households and business to services and markets,” Gordhan said.

Infrastructure expansion programme

Over the next three years, the public sector aims to spend R846-billion on its infrastructure programme, with a significant portion of the work to be undertaken by state-owned entities.

The projection has been driven by a number of projects associated with the 2010 Fifa World Cup. The event is expected to contribute about 0.5% of GDP growth in 2010. To date, the government has spent about R33-billion on preparations for the tournament.

Many of the projects will continue beyond 2010 and are not linked to the tournament but are investments meant to contribute to the growth of the economy.

These include the new multi-product pipeline between Durban and Johannesburg, the construction of the container terminal at Ngqura in the Coega Development Zone, and the construction of Medupi and Kusile power stations as part of Eskom’s expansion programme.

Gordhan said most of the projects would not be directly financed from the fiscus.

Employment ‘linked to growth’

While a number of jobs are expected to be created, Gordhan cautioned that employment would be created in line with the growth of the economy – a lot of jobs were created in South Africa in the period between 2004 and 2008, the same period the country experienced enormous growth with surpluses recorded in the Budget.

Gordhan said this was an indication that the country’s employment was directly linked to economic growth.

Source: BuaNews