The public sector is projected to spend R903 billion on infrastructure over the next three years, with R448bn set to be spent by state-owned companies and through public-private partnerships, Finance Minister Enoch Godongwana said yesterday.
The full amount is 11% higher than the figure announced in last year’s Budget. Sufficient investment in infrastructure lays the foundation for sustainable economic growth; it addresses supply-side constraints; and expands access to basic services, but infrastructure investment has seriously lagged in South Africa since 2015.
Consulting Engineers South Africa CEO Chris Campbell said the budgetary infrastructure process should not be a “continual roll-over” of plans without the “optimal spending on infrastructure that the country so desperately needs. We have got to get these projects going,” he said.
Agri SA said planned spending of more than R480bn on critical infrastructure including transport and logistics, and water and sanitation reflects Treasury’s understanding of the crucial contribution of these projects to the economy and food security.
Deal Leaders International Corporate and Advisory CEO Andrew Bahlman said it was heartening to see government propose to bring the fiscal deficit down, without resorting to tax increases or further cuts in the social wage and infrastructure.
Godongwana said transport and logistics would spend an estimated R351.1bn, including for Sanral to improve the road infrastructure network.
Water and sanitation is expecting to spend R132.5bn over the next three years, mainly by the water boards.
Provinces are expected to spend R209.8bn on infrastructure over the same period, while municipalities are forecast to spend R190.3bn, the Budget Review showed.
Godongwana said the government also needed to crack down on criminality in the construction sector. “The extortion and intimidation of lawfully appointed contractors and the workers they employ will not be tolerated,” he said.
He highlighted a few shovel-ready projects approved through the Budget facility for infrastructure:
∎ Construction of the 488-bed Limpopo Central Hospital is to commence in March this year.
∎ Phase 2 of the Welisizwe Rural Bridges programme is to break ground in April. It plans to install 96 bridges annually to enable rural communities in the Eastern Cape, KwaZulu Natal, Mpumalanga, Limpopo, Free State, and North West to safely access schools and workplaces. Some R3.8bn is allocated for the programme over three years.
∎ Sol Plaatje Municipality is to repair aspects of the Riverton Water Supply Scheme, the only water source and supply system to Kimberly.
∎ The construction of enabling bulk infrastructure, such as roads and water components for the Lufhereng Mixed-Use Development in Gauteng is set to begin in June, 2023. It will support the development of 31 000 mixed-housing units.
∎ Access roads for the Mzimvubu Water Project are nearing completion. The construction of the Ntabelanga Dam will begin later this year. Additional funding during the next financial year may be required to ramp up implementation.
∎ Site establishment for the Clanwilliam Dam project is completed. All surface works and 15% of all concrete works will be completed by the end of this year.
Godongwana said they were looking at initiatives to leverage private-sector resources in public infrastructure delivery. This is to strengthen state capacity to expand infrastructure delivery and to catalyse private finance.
The initiatives included: funding the development of a continuous, investable and transparent pipeline of projects and programmes; fast-tracking the implementation of the public private partnerships’ regulatory review framework recommendations and pilot conditional grant pledging that was enabled during the MTBPS to ensure the rollout of infrastructure was not constrained by the availability of funds in a particular year, if there is capacity to deliver more.
Treasury said it plans to start in-depth monitoring and analysis of capital expenditure for national government from April 1, 2023.
The government’s Infrastructure Fund blended-finance project pipeline worth R83.6bn includes building the Lanseria wastewater treatment works, building the Ngqura manganese export terminal, expanding Cape Town’s container terminal and building the student housing infrastructure programme.
Click here to view Business Report’s full coverage of the budget speech.
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