Government to accelerate infrastructure spend

Government spending on infrastructure is expected to reach some R903 billion over the next three years with state owned companies contributing the lion’s share to this investment.

This was announced by Finance Minister Enoch Godongwana when he delivered the Budget Speech at the Cape Town City Hall on Wednesday.

The Minister said at least R448 billion of this will be spent by state owned companies and entities through public partnerships.

“Infrastructure investments lay the foundation for inclusive and sustainable growth; they address supply-side constraints; and expand access to basic services.

“Overall, the public sector is projected to spend R903 billion on infrastructure over the medium term. The largest portion of this, around R448 billion, will be spent by state owned companies, public entities and through public-private partnerships,” he said.

The Minister said spending will mainly be focused on strategic projects in transport and logistics at some RR351.1 billion and water and sanitation coming in at R132.5 billion.

Some projects that are already in the pipeline include:

The 488 bed Limpopo Central Hospital which is expected to begin construction in March.

Phase 2 of the Welisizwe Rural Bridges Programme will break ground in April.

The repair of aspects of the Riverton Water Supply Scheme.

Construction of enabling bulk infrastructure, such as roads and water components for the Lufhereng Mixed-Use Development in Gauteng, begins in June 2023.

“Our focus is not only on building new infrastructure, but also on maintaining existing infrastructure. We do this to ensure that it lasts long and performs to the required standard,” he said.

The Minister added that simultaneously, government is “looking at initiatives to leverage private sector resources in public infrastructure delivery” in order to “strengthen state capacity to expand infrastructure delivery and to catalyse private finance”.

These initiatives include:

Funding the development of a continuous, investible and transparent pipeline of projects and programmes.

Fast tracking the implementation of the Public Private Partnerships (PPP) regulatory review framework recommendations.

Pilot the implementation of conditional grant pledging that we enabled during the MTBPS. Its aim is to ensure the rollout of infrastructure is not constrained by the availability of funds in a particular year, if there is capacity to deliver more.

Godongwana emphasised that the interventions to support growth are “critical to the health and sustainability of the economy”.

“The interventions … need to be complemented by a policy environment that promotes the performance of productive sectors in an integrated way. This will require difficult but necessary trade-offs to ensure that the appropriate support is properly targeted at the correct products and value chains,” he said.

Source: South African Government News Agency