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SA’s infrastructure drive ‘is gaining momentum’

Government to take the second round of projects to market for funding.
Government is creating the ‘crowding-in effect’ in infrastructure investment by the private sector. Image: Rodger Bosch/AFP via Getty Images

South Africa’s infrastructure drive to revitalise the economy and create employment is gaining momentum, maintains Minister of Public Works and Infrastructure Patricia de Lille.

“A number of projects introduced as part of our Economic Reconstruction and Recovery Plan [ERRP] have kicked off and are in construction, providing much-needed jobs for our people,” De Lille told the National Council of Provinces (NCOP) on Tuesday.

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The Infrastructure Investment Plan is the cornerstone of the ERRP announced by President Cyril Ramaphosa in October 2020.

Read: Infrastructure a key part of economic recovery plan – Ramaphosa

However, the slow awarding of tenders for the projects, with the exception of awards by the SA National Roads Agency (Sanral), has been criticised by a number of industry organisations, including the SA Forum of Civil Engineering Contractors (Safcec) and Master Builders South Africa (MBSA), as well as analysts and other industry stakeholders.

The government in July 2020 unveiled and subsequently gazetted the first tranche of 50 Strategic Integrated Projects (SIPs) and 12 special projects that have been fast-tracked to stimulate the economy post Covid-19.

Read:

It also announced that it was able to raise R340 billion from the market, including international and local finance institutions, for some of these projects to reduce the reliance on the fiscus.

De Lille said on Tuesday that in four weeks the government will be taking the second round of infrastructure projects to the market for funding, with the Sustainable Infrastructure Development Symposium (Sidssa) taking place in October 2021.

Details to be announced at Sidssa

Zara Nicholson, media liaison officer to De Lille, said after the presentation that the list of projects and their value is still being finalised and will only be announced by Ramaphosa and De Lille at Sidssa next month.

De Lille told the NCOP that as more projects come on stream and the government gathers pace on its infrastructure development, “we are sure to see the benefits in our economy and on jobs”.

“Through the development of infrastructure, the foundation has been set to thrust us forward to a brighter future.

“Infrastructure development by government is an important signal to the market that we are creating a conducive environment for investment and job creation by the private sector,” said De Lille.

“By leading the way with infrastructure investment we are creating the crowding in effect by the private sector and together we will revive our economy and build it back up, better.”

Other projects

De Lille said other infrastructure projects that are part of the government’s National Infrastructure Investment Plan include:

  • A digital infrastructure initiative valued at R4 billion.
  • Two agricultural and agro-processing projects valued at R7 billion.
  • 15 transport projects valued at R47 billion.
  • Three energy projects at R58 billion.
  • 11 water and sanitation projects valued at R106 billion.
  • 18 human settlement developments valued at R138 billion that will produce more than 190 000 housing units.

First-tranche project update

De Lille provided the NCOP with an update on some of the 62 first-tranche projects from all three spheres of government, state-owned entities and the private sector that were gazetted last year as part of the government’s SIPs in line with the Infrastructure Development Act of 2014.

“This means these projects are being prioritised for implementation and can follow an expedited path to delivery with set and shorter time frames for regulatory processes,” she said.

Among the projects she highlighted:

  • SIP 25: Rural Bridges. Three completed bridges in Ekhamanzi were handed over in March, six bridges have also been completed in the Mangwenya, Amanzimtoti and Mthoqotho areas, with five more bridges in KwaZulu-Natal nearing completion.

  • SIP 21: Small Harbours Development. The Saldanha Bay harbour upgrade project is being implemented by the Department of Public Works and Infrastructure at 13 proclaimed fishing harbours in the Western Cape. About R96 million has been allocated for the infrastructure upgrade work at the Saldanha Bay and Pepper Bay harbours, with R36.6 million spent to date on the projects. Completion is contemplated in March 2022.

  • SIP 21: Transport Projects. The R20 billion investment in the N3 National Road upgrade is currently being implemented by the Department of Transport and Sanral in KwaZulu-Natal. The project of widening a section of the N3 for the construction of the Camperdown Interchange in KwaZulu-Natal commenced earlier this year, with about R82.5 million already spent on this project and to date 237 jobs created. The N3 road upgrade project between Dardanelles and Lynnfield Park in KwaZulu-Natal has also commenced, with R126 million invested and 248 people employed to date.

  • SIP 21: Transport. The overall investment potential of transport projects in this SIP is estimated at about R47 billion, with about 42 500 job opportunities to be created. Four projects have already been completed with the two N3 projects and the N1 Musina Ring Road project in Limpopo in the construction phase.

  • SIP 24: Human Settlement Projects. The R22 billion Lufhereng mega housing project is being implemented by the Gauteng Human Settlements Department and the City of Johannesburg and its contractors. It is being implemented in 10 phases to develop more than 30 000 houses and is expected to be completed in 2029. To date 1 319 housing units have been completed and 2 093 houses are under construction.

  • SIP 24: Private Sector Housing Projects. The Infrastructure Investment Plan also includes various private sector projects, such as the Mooikloof and Green Creek housing developments in Tshwane, which have both commenced. The first phase of the Mooikloof Mega Residential City consists of about 14 500 sectional title units, which will increase to 50 000 units and lead to the creation of about 41 000 jobs.

  • SIP 19: Water and Sanitation: Clanwilliam Dam. The project, which has not yet started, involves the raising of the Clanwilliam dam wall by 13 metres. The project is part of the R4 billion Olifants-Doorn River Water Resources Project in the Western Cape.

  • SIP 28: Photovoltaic (PV) and Water Savings on Government Buildings Programme. A Request for Information is on track to be issued on September 20, a transaction Advisor appointed for Phase 2, and service level agreements concluded. Savings of more than R401 billion are projected over a 30-year period from the programme.

  • SIP 20: Energy. The Embedded Generation Investment Programme (EGIP) entails a R2.6 billion investment with an estimated R6 billion of additional private sector investment to be crowded-in. The programme involves the development, installation and operation of a total aggregate of up to 469 megawatt of solar PV and wind embedded generation projects in South Africa. The call for proposal for the EGIP programme opened on August 4 and will close on September 30.

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Excuse my cynicism, but given the ANC governments track record, it safe to say the main aim of these schemes are to divert more taxpayer resources to crooked politicians and their families. You can bet your bottom dollar that all of these schemes will be net negative to the SA economy.

I occasionally see some of the prices for the smaller projects mentioned; the bridges in KZN for example. They are horrendously high with only KZN DoT bidders getting through.

and you – no doubt – are an expert in bridge pricing. Thnks

When they serve you lemons … invest in PPC

The cadres must be licking their lips..

End of comments.

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