First post-pandemic-recovery infrastructure projects gazetted

Six sectors targeted in R360bn ‘first wave’.
One project will see documents currently in ‘old brown files’ at hospitals and police stations being digitised by 10 000 young people. Image: Chris Ratcliffe, Bloomberg

The government has unveiled 50 strategic infrastructure projects (Sips) and 12 special projects involving a total investment of R360 billion, as the first tranche of a massive infrastructure expenditure programme to drive the post Covid-19 economic recovery effort.

These initial Sip projects are expected to create an estimated 275 700 jobs in six sectors: water and sanitation, energy, transport, digital infrastructure, agriculture and agro-processing, and human settlements.

Dr Kgosientso Ramokgopa, head of the investment and infrastructure office in the Presidency, said on Monday these “are projects that are shovel-ready, so in the next three months we will be able to go into the ground … and ensure that we are able to stop the haemorrhaging of jobs in the economy.”

Ramokgopa said funding from the debt capital market accounts for R340 billion of the total investment in these projects and “these projects don’t draw money from the fiscus.”

‘Commercially viable’

“These are projects that are commercially viable through the Sips methodology. Some of them will require a bit of unlocking. It’s about non-financial instruments, such as guarantees, increasing borrowing limits and, where we have to invest in bulk infrastructure, it is allocations that already sit in the fiscus.

“We are just going to draw them early so that we are able to open up this economy going forward.”

Ramokgopa said the R340-billion investment came from multilateral development banks, commercial banks and development finance institutions that have made commitments to specific projects.

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To unlock these investments, Ramokgopa said the government, for instance, has to increase the borrowing limits of the Trans Caledon Tunnel Authority and provide sovereign guarantees to the SA National Road Agency (Sanral).

The bulk infrastructure investment for human settlement projects that will be drawn from the fiscus amounts to “about R1.7 billion or so”, which is a fraction of the total about R138 billion of the private sector project investment.

“But we are able to show what comes to the municipalities in the form of rates and taxes as a result of that – so we were able to show the commercial case,” he said.

Read: AG: How to improve the state of our municipalities

He added that all the student accommodation projects are private sector-funded but need offtake guarantees from the National Student Financial Aid Scheme, which government is facilitating.

Implementation to be prioritised

Minister of Public Works and Infrastructure Patricia de Lille said the projects have been gazetted in terms of the Infrastructure Development Act, which enables their development and implementation to be prioritised.

De Lille provided a breakdown of the projects in the six sectors, saying that:

  • Collectively the water and sanitation projects are worth R106 billion in investment, spanning all provinces, with the potential to create an estimated 25 000 direct jobs.
  • Three projects in the energy sector involve a total investment of R58 billion, with the potential for direct job creation estimated at 6 000.
  • A total of 15 projects in the transport sector involve R47 billion in investment value and have the potential to create an estimated 50 000 direct jobs.
  • Human settlement sector projects involving an investment of R138 billion have the potential to create an estimated 190 000 direct jobs.
  • The digital sector has a single project worth R4 billion with the potential to create an estimated 700 direct jobs.
  • Two agriculture and agro-processing sector projects with an investment value of R7 billion have the potential to create an estimated 4 000 jobs.

De Lille added that the 12 special projects also have a specific aim to create much-needed jobs and assist in skills development, because many of our most vulnerable communities have been the hardest hit by the economic impact of the Covid-19 pandemic.

The Rural Bridges ‘Welisizwe’ Programme will connect rural communities to the social amenities they need to access while the Rural Roads Upgrade Programme and Comprehensive Urban Management Programme will also greatly improve the living conditions of the poorest communities, she said.

Taking ‘government information’ digital

Ramokgopa said another special project involves the digitisation of government information.

He said it is looking at employing about 10 000 young people in the immediate future to help digitise this information across the country.

“If you visit a hospital today, your file is kept in those old brown files. If you go to a police station, the docket is still in those brown files. If you go to court that is still the case.

“Government has information at its disposal, but it can’t mine that information because it is not digitised,” said Ramokgopa.

“Going into the future we will be introducing the NHI [National Health Insurance], which is predicated on the existence of a very robust information system that is digitised, that allows government to be agile and be responsive,” he said.

Ramokgopa stressed that the projects gazetted are just the first generation of projects to be gazetted, adding “we will come with the next wave of projects.”

He said it has received about 276 projects and continues to evaluate these projects.

Corrupt construction co’s get a warning

De Lille said the construction industry is the most corrupt industry in the country and government is putting systems in place to detect and prevent corruption.

“Our country is littered with projects where the contractors have left with the money but the projects are not there. So I’m warning all those corrupt ones in the sector, we are going to make sure we reduce corruption in the construction industry,” she said.

Master Builders South Africa (MBSA) executive director Roy Mnisi welcomed the gazetting of the projects, adding it “will go a long way in terms of assisting our ailing industry.”

Mnisi said MBSA members are worried about the implementation of projects, because in the past they got excited by government announcements and only later realised not all of the projects were implemented.

However, he said they are “very positive” about this government announcement, because these projects are not fully dependent on funds coming directly from the fiscus.

Mnisi also expressed concern that municipalities may not be able to “play their part” because they have hindered projects in the past, adding: “We are ready and available to help government roll out these projects.”

News welcomed, implementation questioned

SA Forum of Civil Engineering Contractors CEO Webster Mfebe said the projects “are good news for the construction sector” after the significant loss of jobs and negative growth in the industry.

“It’s going to be a boost for industry provided these projects get to implementation stage, which has been a perennial problem with infrastructure delivery in South Africa, together with the failure to maintain existing infrastructure,” he said.

Mfebe said the projects are mostly public sector projects and his expectation is that more projects will have come from the private sector through the platform of the Public-Private Growth Initiative.

“The only involvement of the private sector that I see in these government projects is the funding institutions.

“That kind of participation is also welcome, without any doubt, but what about pure private sector-initiated projects where the major stumbling block is permitting and licensing issues that need to be sorted out? It is that which is missing.

“Government has a triple role [to play]. That of a regulator, an enabler and a facilitator, not only in relation to its own public sector-initiated projects – because of government’s role to create an environment within which the private sector can participate in the economy and create jobs,” he said.

Listen to Nompu Siziba’s interview with Busa CEO Cas Coovadia:

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This is great news for South Africa and our economy! This will stimulate all business.

What utter nonsense…just putting more lipstick onto the socialist pig…3m jobs evaporated due to useless handling of current situation, and now the government will ‘create’ 275 000 jobs…the only purpose of the government is to facilitate free market enterprise, thereby growing the tax base…when arrogant socialist governments such as those in South Africa think they are somehow responsible for creating jobs then the battle is already lost…but I guess they need cheerleaders, so why don’t you keep waving those green, yellow and black pom poms…

@Dadape. Good news I agree.

How about lobbying your Retirement Fund to become part of any one of these initiatives? Your fund first please. Let us know the returns, to set an enticing example, and then we can all jump in and invest for great social returns.

(…so now I can cancel my Income Tax?)

How Dadpe? How will 276k jobs stimulate the whole economy when 3m jobs have been lost?

Many of the projects list have tenderpreneur written all over them. So the stimulus will be short lived.

A lot of embedded ANCcorruption.

More money for looting.

The Post-Pandemic BEE Bailout Plan to fund the lockdown-justified Cadre Support Scheme. Sounds like something from GOSPLAN – a solution straight from the Central Planning communist handbook.

I am really angry at myself that I did not fully appreciate the level of ignorance, arrogance and the downright criminal mindset of the ANC, masquerading as a government. For this oversight ourselves, our children and grandkids are about to pay dearly. Those young enough: get on the first plane when you can, don’t second guess yourself. It is worse than you think.

No communalist society has ever had a modern economy. You are right.

Profit margins expand for those businesses who are able to adapt to the decline in infrastructure and service delivery. The people with a reasonable level of intelectual capacity will experience growing opportunities. Companies from first world countries want to do business is Africa because profit margins are bigger.

While I agree with your analysis, I am also mindful of the fact that the communalist African mindset offers profitable opportunities to entreperneurial Europeans.

Socialism is a mechanism that steals from the poor to enrich the wealthy who have offshore investment exposure.

The article reads far more accurately when substituting ‘projects’ with ‘thefts’, ‘investments’ with ‘frauds’ and ‘jobs’ with ‘votes’ or similar synonyms.

Is there a government in the world that has included the history/warning of the Soviet Union as part of their education syllabus, together with Solzhenitsyn’s Gulag as reading material? Based on global trends, I assume not or atleast not enough to make the slightest impression.

Griet.yes its very bad.the tax payer will be punished more and more.fuel and municipality bills is gonna rise like crazy.

Quote ‘De Lille said the construction industry is the most corrupt industry in the country and government is putting systems in place to detect and prevent corruption.’

This is not entirely accurate, Government is the most corrupt and the local government officials have been known to benefit from infrastructure projects occasionally.

Any chance you have actually seen what these projects are? Love to know the 2 energy projects description and get more detail around the water projects?

….these projects will be as transparent as tar on a crystal ball.

This is another legalised kite-flying scheme from the collectivist government.

The BEE construction company pretends to build something, the government pretends to finance it, both pretend to act against corruption, until the prosecuting authorities pretend to do their job, by bringing the case before the judge, who pretends to enforce the law.

When investors are sceptical, the government pretends to issue a government guarantee and the lenders pretend to trust it.

This is the story of the communalist mindset in a former capitalist country. Everyone pretends to play according to the rules of capitalism. They pretend to uphold the law for as long as they can abuse the legal process. They pretend to use the capitalist framework and legal channels, while they intend to plunder ignorant and naive investors. Eventually, the government pretends to repay the loans while they print fake currency.

When the system implodes and famine eventually strikes, they pretend to pay a social grant and the people pretend to be able to buy food with it.

We’re so screwed in Sa!

At some stage, when good, civilised, well-educated, god-fearing citizens become gatvol enough to stage nation-wide protests and refuse to pay any contributions in any form of tax that they are able to withhold, then we will create our own solutions.

OUTA, Afriforum, Solidariteit, FF+, Cope, DA, Farmers Unions, Business Councils, Church communities and civil organisations that support economic growth, UNITE! The power is in our hands! We have got a Constitution on our side! Our apathy disempowers us! Unite!

Seriously, now we are borrowing money for the Government to squander. Its not enough you cannot keep your hands out of the taxpayers pockets and soon pension funds from what I can see you have the audacity to borrow Money which you will steal.

INSANE!!!!!!!!!

How much more money do these corrupt thieving scum of the earth want??

We had no reserves to help ourselves through Covid yet you dimwits still want to drive NHI on a collapsed corrupt inept bunch of criminal leaders…………

And the masses just keep on losing…………….
And the tax base just keeps shrinking………………

A winning formula in the race to catch Zimbabwe

I hope the IMF crawls so far up every Government officials rear end when they open their mouths I want to see the IMF Logo.

And the looting continues.
The collective middle finger shown to the public by the Anc in using the degenerate Zuma for Mlangeni’s funeral address, should be used to replace the national flag.

Another great opportunity for fraud.

Like a cadre on payday…

”student accommodation projects are private sector-funded but need offtake guarantees from the National Student Financial Aid Scheme, which government is facilitating.”
In other words like SAA, they are actually taxpayer funded – not private sector.

Have they considered that tertiary education should move online and the need for student accommodation will shrink drastically.

While I agree with much of the content in the article and most comments I must disagree for once with H Zille. To say the Construction sector is corrupt is the same as saying all men are evil or all whites are racist. Please dont generalise. Yes there have been corrupt deals especially when having to work with the Govt or SOE’s as that was the way they issued contracts. There have been fly by night contractors but there are many genuine contractors out there trying to eek out a living in these terrible market conditions. So the Govt is putting in place a system to check the contractors !!! Really and who is going to check the Govt where the corruption originates. ???

End of comments.

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