“It means we must give greater impetus to sectors and industries where we have competitive advantages. And it means being bold where there is need for structural change, innovation and doing things differently. We need agility and urgency in implementation,” stated Gordhan.
CESA has, for some time now, been aware that there are inefficiencies in the way public-sector infrastructure projects are implemented. These shortfalls include lack of planning, inappropriate procurement approaches, lack of project management capacity & capability and lack of other desired technical skills in the public sector.
In addition these inefficiencies rob South Africa of multiple billions of Rands annually, which could be effectively used to fund the much-needed increase in infrastructure investment
Gordhan explained that international experience has demonstrated that growth is ignited by strong and stable political and economic institutions, sound infrastructure that reduces the cost of doing business and facilitates trade, competition between firms and openness to trade and an environment where firms invest and undertake research and development.
CESA welcomes the need for multi-year appropriations for major capital projects of which reform is under consideration for the following projects:
- Energy investment amounts to R70 billion this year and will be over R180 billion over the next three years, as construction of the Medupi, Kusile and Ingula power plants is completed.
- Transport and logistics infrastructure accounts for nearly R292 billion over the next three years. Transnet is acquiring 232 diesel locomotives for its general freight business and 100 locomotives or its coal lines. There is R3.7 billion to upgrade the Moloto Road, R30 billion for provincial roads maintenance, R18 billion for bus rapid
transit projects in cities and refurbishment of over 1700 Metrorail and Shosholoza Meyl coaches.
- R62 billion is allocated for the housing subsidy programmes and R34 billion for bulk infrastructure and residential services in metropolitan municipalities.
- R28 billion will be spent over the MTEF on improving health facilities and
R54 billion on education infrastructure.
- The next phase of the Oliphant’s River water scheme is in progress, completion of the supply to Lukhanji Municipality in the Eastern Cape, completion of the Wolmaranstad wastewater treatment works and construction of the Polihali Dam as part of the Lesotho Highlands project.
These are some components of the R870 billion public sector infrastructure
programme over the next three years.
CESA with the backing of its member firms recommits itself to partner with Government and other key role players in finding lasting and practical solutions, especially in relation to infrastructure development.