INFRASTRUCTURE INVESTMENT PLAN
South Africa is on a path to unlock more than R1 trillion in infrastructure investment over the next four years. It is part of our massive infrastructure investment drive to revitalise the economy and create employment.
We have made infrastructure the cornerstone of our Economic Recovery and Reconstruction Plan because of its multiplier effect on restoring economic growth, creating new jobs and protecting livelihoods.
Our infrastructure investments are more than just bricks and mortar; it is targeted projects that will kick-start our economy, which has been heavily battered by COVID-19. We will use infrastructure to secure dignified work, an abundant energy supply, inclusive growth and social protection for those in need.
We have received widespread consensus among social partners that our recovery should be led by infrastructure development and maintenance. Moreover, international experience has proved that infrastructure development can foster sustainable economic growth and expand employment.
China is a prime example of how infrastructure investment has boosted its economy seven times more than it was two decades ago. It was between 1992 and 2011 that China spent an average of 8.5 per cent of GDP on the construction of public infrastructure.
Our infrastructure plan also aims to reverse the historical underspending that has placed infrastructure investment on a downward trajectory. According to Statistics South Africa’s report Capital Expenditure by the Public Sector, South Africa recorded its third straight consecutive year of decreasing capital expenditure as infrastructure spending fell 7.6 per cent from R250 billion in 2018 to R231 billion in 2019.
Work has begun in earnest to reverse this trend and build a credible project pipeline that will help us reach our targets. We have gone beyond the planning phase with an infrastructure pipeline of 276 catalytic projects that is ready to transform the landscape of our cities, towns and rural areas.
Already firm commitments have been received from funders for 50 strategic integrated projects and 12 special projects totalling R340 billion. These projects have been gazetted to speed up regulatory approval and to fast track implementation.
The projects include 15 transport projects valued at R47-billion, 11 water and sanitation projects valued at R106-billion and 18 human settlements developments valued at R138-billion that will produce more than 190 000 housing units.
There are also two agricultural and agro-processing projects valued at R7-billion, three energy projects at R58-billion, a digital infrastructure initiative valued at R4-billion and 15 transport projects valued at R47-billion.
Among the transport projects are the N1 Polokwane and N1 Musina with a total value of R1.3 billion and within the next few months we will embark on the modernisation and refurbishment of the commuter rail network, including the Mabopane Line in Tshwane and the Central Line in Cape Town.
Through the prioritisation of infrastructure development, the construction sector and its supporting industries are set to become one of the biggest employers in the country. Approximately 769 540 jobs will be created by immediate term projects and over the longer term we project more than 1,6 million employment opportunities.
We are addressing concerns of corruption and maladministration in infrastructure development through our anti-corruption strategy designed specifically for the sector. It sets out to detect and prevent corruption and we are working closely with the Special Investigating Unit to execute the strategy.
Government is also implementing an enhanced system to monitor infrastructure projects to ensure the necessary checks and balances. This will bring a greater level of transparency and give credibility to the implementation of the Infrastructure Investment Plan.
Moreover, to protect our valuable infrastructure investments, we have established dedicated capacity within the South African Police Service at the national and provincial level to secure the construction industry from violence and intimidation.
The financing of infrastructure projects at the scale we require means that government will mobilise private sector investment and provide catalytic funding for strategic projects through the R100 billion Infrastructure Fund. This will ensure that the fiscus is not unduly burdened.
Our infrastructure projects are being prepared and packaged for investors by the newly established Infrastructure South Africa (ISA). ISA is also driving project preparation to enhance transparency and eliminate key risks at the earliest possible time.
President Cyril Ramaphosa has described infrastructure as the flywheel of economic growth that will catapult our economy forward. We are confident that the foundation has been laid for infrastructure to start playing a broader role in our economic recovery and thrust us forward to a brighter future.