South Africa will spend billions of rands on new infrastructure in the coming years, focusing on rail and road projects, economic links in five regions in the country, new universities and refurbished hospitals, President Jacob Zuma said in his 2012 State of the Nation address.
Addressing Parliament in Cape Town on Thursday evening, Zuma announced that he would convene a presidential infrastructure summit to discuss the implementation of the government's plan with potential investors and social partners.
The government's massive infrastructure plan would be driven and overseen by the Presidential Infrastructure Coordinating Commission which was set up in September last year.
The plan brings together ministers, premiers and mayors of the country's metropolitan areas under the leadership of Zuma and Deputy President Kgalema Motlanthe.
"We will use the project management expertise gained during the 2010 Fifa Soccer World Cup to make this project a success," he said, adding that the commission had identified and developed projects from state-owned enterprises as well as government departments.
"These have been clustered, sequenced and prioritised into a pipeline of strategic integrated projects," he said.
Projects in five regions
The projects in the five regions are:
- The development and integration of rail, road and water infrastructure in the Waterberg and Steelpoort in Limpopo.
- Improving the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.
- A new south-eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape region, and links with the Northern Cape and KwaZulu-Natal.
- The expansion in the North West of the roll-out of water, road, rail and electricity infrastructure.
- The improvement of infrastructure, including rail, on the West Coast.
In Limpopo, Zuma said the improved infrastructure would help unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals, in order to facilitate increased mining as well as stepped-up beneficiation of minerals.
"Using the developments in Limpopo as a base, we will expand rail transport in Mpumalanga, connecting coalfields to power stations," Zuma said.
"This will enable us to decisively shift from road to rail in the transportation of coal, which has caused a deterioration of the roads in Mpumalanga."
He said the eastern parts of the North West would also benefit from the greater focus on infrastructure connected to mining and mineral beneficiation.
Zuma said the development of the Durban-Free State-Gauteng logistics and industrial corridor would help connect the major economic centres of Gauteng and Durban and Pinetown, and connect these centres with improved export capacity through our sea-ports.
"In this regard, I am pleased to announce the Market Demand Strategy of Transnet, which entails an investment, over the next seven years, of R300-billion rand in capital projects," said Zuma, adding that R200-billion had been allocated to rail projects and the majority of the balance, to projects in the ports.
He said among the list of planned projects, the expansion of the iron ore export channel from 60-million tons per annum to 82-million tons per annum.
"It also includes various improvements to the Durban-Gauteng Rail corridor and the phased development of a new 16-million tons per annum manganese export channel through the Port of Ngqura in Nelson Mandela Bay," he said.
He said the Market Demand Strategy would result in the creation of more jobs in the SA economy, as well as increased localisation and black economic empowerment (BEE).
"It will also position South Africa as a regional trans-shipment hub for Sub-Saharan Africa and deliver on Nepad's regional integration agenda," he said.
He added that the government had also been looking at reducing port charges, as part of reducing the costs of doing business.
"The issue of high port charges was one of those raised sharply by the automotive sector in Port Elizabeth and Uitenhage during my performance monitoring visit to the sector last year," he said.
"In this regard, I am pleased to announce that the Port Regulator and Transnet have agreed to an arrangement which will result in exporters of manufactured goods, receiving a significant decrease in port charges, during the coming year, equal to about R1-billion in total.
Zuma said the development of the south-eastern node in industrial and agricultural development and export capacity of the Eastern Cape region and expand the province's economic and logistics linkages with the Northern Cape and KwaZulu-Natal.
"In the former Transkei part of the Eastern Cape, we are committed to building a dam using the Umzimvubu River as the source, in order to expand agricultural production," he said.
Added to this, he said the Mthatha revitalisation project, which is a presidential special project, is proceeding very well.
"Work is at an advanced stage to improve water, sanitation, electricity, roads, human settlements, airport development and institutional and governance issues."
Zuma said the expansion infrastructure in the North West would include the upgrading of 10 priority roads.
On the West Coast, the government would focus on expanding the iron-ore rail line between Sishen in Northern Cape and Saldanha Bay in the Western Cape, which he added would create large numbers of jobs in both provinces.
"The iron-ore capacity on the transport-side will increase capacity to 100-million tons per annum," he said, adding that this would help to feed the developing world's demand for iron ore.
Hospitals, universities
The government had also identified infrastructure projects which would help to lay the basis for the National Health Insurance system such as the refurbishment of hospitals and nurses' homes.
Zuma said R300-million had been allocated for the preparatory work towards building new universities in Mpumalanga and Northern Cape.
Another infrastructure project with great potential is South Africa's bid to host the Square Kilometre Array radio telescope in partnership with eight other African countries.
Zuma urged South Africans to support the country's bid, with the winning bid expected to be announced next month.
The country would also champion the North-South Road and Rail Corridor on the continent, which is part of the African Unions's Nepad Presidential Infrastructure Championing initiative.
"The massive investment in infrastructure must leave more than just power stations, rail-lines, dams and roads. It must industrialise the country, generate skills and boost much needed job creation," said Zuma.
Zuma said water infrastructure is also being attended to, with five new water augmentation schemes are on schedule.
Zuma listed these as 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 KwaZulu-Natal and the Clan William Dam in Clan William in the Western Cape.
Added to this nine out of the country's 25 dams have been rehabilitated.
He said to boost energy capacity, the government would continue searching for renewable energy sources, especially solar electricity and biofuels as we implement the Green Economy Accord with economic stakeholders.
The government wants to install one million solar geysers by the 2014 financial year, and had so far installed more than 220 000 solar geysers nationwide, said Zuma.
"We have outlined a busy infrastructure implementation programme for now until 2014 and beyond," Zuma said.
"I would like to appeal to all our people to join hands as they always do, as we deal decisively with the triple challenges of unemployment, poverty and inequality. Nobody will do this for us, it is in our hands. And we are all equal to the task."
Funding
Speaking on the night, the leader of the opposition Lindiwe Mazibuko, although welcoming the announcement by Zuma of the infrastructure projects, said it was not clear from where the funding for the infrastructure projects outlined by Zuma would be sourced.
"In fact a quick look actually shows that we are about R300 billion short, so I'm curious to see how that will be dealt with in the budget," said Mazibuko.
Her concern on where the funding would come from for the infrastructure projects was echoed by Cope leader Mosiuoa Lekota, who added that corruption in the procurement system also risked raising the cost of these projects.
Minister of Finance Pravin Gordhan announced that South Africa has the money to spend on the infrastructure projects in the five regions outlined by President Jacob Zuma. "We already know that for the past five or six years that for every three-year period we have had something around R800 billion to R900 billion being spent, largely by our state-owned enterprises (on infrastructure).
"So we've demonstrated the ability to bring resources in which is what will be required to get these projects going," Gordhan told BuaNews, stressing that these key infrastructure projects would be developed over a number of years.
Among other things, the projects would help develop better economic links between outlying areas and the main urban centre and to make it easier for companies to export and do business locally, he said.
"If we get this right it means that many areas of the country will have a heightened level of economic opportunity and there will be all sorts of job opportunities and there will be opportunities for people to manufacture the things that go into the investment in the infrastructure development that has been outlined," he said.
