Infrastructure Growth

Unlocking Growth

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The government’s proposed Infrastructure Development Cluster drive is set to have a huge impact on economic activity levels through increased private sector production capacity, smart manufacturing, job creation and investment. 

Finance Minister Pravin Gordhan announced earlier this year that 43 major infrastructure projects summate to R3.2-trillion in expenditure, with an excess of R860-billion already allocated for the next three years. President Jacob Zuma announced in his 2012 State of Nation Address in Parliament in Cape Town in February, that he would convene a presidential infrastructure summit to discuss with potential investors and social partners the implementation of the proposed infrastructure projects. 

To address development projects that are poorly co-ordinated and not always strategic, integrated or aligned with national priorities, the government has set up the Presidential Infrastructure Co-ordinating Commission (PICC). The commission is developing a 20-year framework that will be centrally administered and monitored to avoid stop-start patterns.

The five main economic infrastructure developments in five regions focus on rail and road projects, power stations, water resources, telecommunications, and new universities, refurbished hospitals and nurses’ homes. Seventeen strategic integrated projects are due to start this year, with five-year road maps being formulated for each project.

These projects include: integration of rail, road and water infrastructures in Waterberg and Steelpoort in Limpopo; the rollout of expanded water, road, rail and electricity infrastructures in the North West; improvement in the movement of goods through a Durban–Free State–Gauteng logistics and industrial corridor; improvement in industrial and agricultural development and export capacity of the Eastern Cape with links to the Northern Cape and KwaZulu-Natal; and the improvement of infrastructure and rail on the Cape West Coast. 

In Limpopo and in the eastern parts of the North West, the improved infrastructures will unlock the enormous mineral belts of coal, platinum, palladium, chrome and other minerals to increase mining and mineral beneficiation.

The development of the Durban–Free State–Gauteng logistics and industrial corridor will connect the major economic centres of Gauteng, Durban and Pinetown, with enhanced export capacity through improved rail passages and seaports. 

Among the planned projects within this corridor are increased iron ore exports from 60-million tonnes to 82-million tonnes per annum, and a new 16-million tonne per annum manganese export channel through the Port of Ngqura in Nelson Mandela Bay. 

On the West Coast, an iron-ore rail line between Sishen in the Northern Cape and Saldanha Bay in the Western Cape will be expanded, which will increase iron-ore capacity to 100-million tonnes per annum. 

Industrial and agricultural developments in the Eastern Cape region will expand economic and logistics linkages with the Northern Cape and KZN. The government is committed to building a dam using the Umzimvubu River as the source, to expand agricultural production within these regions. 

A total of R300-million has been allocated for building new universities in Mpumalanga and the Northern Cape. 

South Africa will champion the North-South Road and Rail Corridor on the African continent, which is part of the Presidential Infrastructure Championing initiative by the African Union/New Partnership for Africa’s Development African Action Plan. 

Five new expanded water schemes are scheduled for the Olifants River Water Resource in Steelpoort in Limpopo Province, the Vaal River Eastern Sub-System in Secunda in Mpumalanga, Komati Water Augmentation Scheme in Nkangala in Mpumalanga, the raising of Hazelmere Dam in KZN and the Clanwilliam Dam in the Western Cape. 

Government talking business

To boost energy capacity, the government will continue searching for renewable energy sources, particularly solar electricity and biofuels as implemented in the Green Economy Accord with economic stakeholders. More than 220 000 solar geysers have already been installed nationwide, with plans to install one million by 2014.

In late March this year, at a BRICS business breakfast ahead of the meeting of BRICS (Brazil, Russia, India, China, South Africa) leaders in New Delhi, President Zuma invited business representatives of the BRICS countries to explore the myriad investment opportunities created by this massive Infrastructure Development Cluster drive.

He told business representatives that the projects were key to new growth and development on the African continent and would provide housing, sanitation, public transport and running water for millions of citizens. Intense focus would be placed on education and skills development, with a specialised skills plan running in tandem with each major project. Zuma expressed optimism about a proposed BRICS-led South-South Development Bank, which would be funded and managed by the BRICS and other developing countries. This could act as a counterweight to other multilateral lenders such as the World Bank and the Asian Development Bank. 

The leaders of the five BRICS countries directed their finance ministers to examine the proposal for such a bank and to report their findings at the next summit in South Africa in 2013. 

Zuma said the proposed bank would reinforce the BRICS grouping by utilising surplus reserves, which would encourage investment in a more sustainable and productive manner for the financing of the proposed infrastructures.

Rizel Delano
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