Over the next three years, the government plans to spend R802 billion on infrastructure development

According to Minister of Finance Pravin Gordhan on 25 October 2011, the government is to place more emphasis on funding the development of long-term infrastructure.

Presenting the Medium-Term Budget Policy Statement in Parliament, the minister said that public sector investment in infrastructure – which has increased from 4.3% of the gross domestic product in 2005 to 7.5% in the first half of 2011 – remained central to the government’s plans for economic development.

“Infrastructure projects in energy, roads, rail, telecommunications and water will ease bottlenecks and reduce costs in the rest of the economy, crowding in private investment and improving access to export markets,” Gordhan noted.

Over the next three years, the government plans to spend R802 billion on infrastructure: the lion’s share will go into the areas of energy, transport and logistics, as well as water and sanitation.

Included in these investments are Eskom’s capital expenditure programme, which is expected to double electricity generation by 2025; and the expansion of bulk freight rail, which will help raise transport volumes from 47 million tonnes to 60 millions tonnes.

Of the R185.3bn spent on public sector infrastructure in the last financial year, over a third – or R69.1bn – was invested in transport and logistics; R52.5bn in energy; while water and sanitation made up R14.4bn.

Included in these investments was R6.7bn in hospitals and clinics, R6bn in schools and R3.8bn in courts.

Gordhan said that reforms to improve the quality of regulation and encourage increased private sector participation would improve efficiency and lower costs in these sectors.

Speaking at a media briefing shortly before delivering the Statement in Parliament, he said South Africa had the capability to develop world-class infrastructure. “We say we don’t have capability – that’s not true. South Africa delivered the (2010 Fifa Soccer) World Cup; South Africa delivered the stadia on time.

“Look at Brazil today and the challenges they are having in getting their infrastructure right,” he added.

Gordhan added that the Presidential Infrastructure Co-ordinating Commission would help to develop a 10-year pipeline on infrastructure developments, put in the capabilities from the private and public sectors, and source the funding.

Source: BuaNews

www.buanews.gov.za