More focus on infrastructure development

Cape Town – Government is to place more emphasis on funding the development of long-term infrastructure the Minister of Finance Pravin Gordhan said today.

Presenting the Medium Term Budget Policy Statement in Parliament, Gordhan said public-sector investment in infrastructure – which has increased from 4.3% of the Gross Domestic Product (GDP) in 2005 to 7.5% in the first half of 2011 – remained central to the government’s economic development plans.

“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,” said Gordhan.

Over the next three years the government plans to spend R802 billion on infrastructure – the lion’s share in the areas of energy, transport and logistics and 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 tons to 60 millions tons.

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

Also included in these investments was R6.7 billion in hospitals and clinics, R6 billion in schools and R3.8 billion in courts.

Gordhan said 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, Gordhan 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 World Cup, South Africa delivered the stadia on time. Look at Brazil today and the challenges they are having in getting their infrastructure right,” said Gordhan.

He said the presidential commission on infrastructure 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. – BuaNews

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