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SA's project pipeline needs urgent replenishment, Manuel asserts

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SA's project pipeline needs urgent replenishment, Manuel asserts

Minister in The Presidency Trevor Manuel talks about the need to replenish South Africa's infrastructure-project pipeline. (14/7/2009) Cameraperson: Nicholas Boyd. Editing: Darlene Creamer.

14th July 2009

By: Terence Creamer
Creamer Media Editor

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The South African government, which had placed infrastructure expenditure at the heart of its response to the global economic crisis, warned on Tuesday that the country was at risk of running into a "a procyclical trough" within the next year unless new projects were identified to replenish the current pipeline, still dominated by World Cup-related projects.

Speaking at the release of the Medium Term Strategic Framework (MTSF), Minister in The Presidency responsible for planning Trevor Manuel indicated that it was becoming urgent for new projects to be unearthed, particularly as the tournament-related projects were nearing completion.

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"Clearly, what we need to be thinking about now, and we are, is, when the whistle blows to start the first game of FIFA 2010, what is the next phase of infrastructure that we do. This presents us with a challenge," Manuel said at a briefing held at the Union Buildings, in Pretoria.

He said that while other constraints, such as the pricing of new infrastructure, should be interrogated, he was particularly concerned that there were not more ideas arising, appealing for "continual waves" of new projects.

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"We need to talk about this now . . . and it's what we do in the next 100 days that will determine what happens to all of these workers employed in infrastructure delivery for 2010," Manuel averred.

The 46-page MTSF document itself, which sets the framework for expenditure priorities and resource allocation for the next five years, positioned the country R787-billion infrastructure programmes at the centre of an aspiration to "defy the economic forecasts on the upside".

It highlights, for instance, the role that the expansion in gross fixed capital formation from 15% of gross domestic product (GDP) in 2004 to 22% in 2008 has played in helping to raise growth to above 5% over the same period.

"The aim is to ensure sustained investment growth over the medium term so as to achieve the target of a fixed investment ratio above 25% of GDP by 2014," the MTSF states, adding that an integrated infrastructure development strategy would be finalised within 12 months.

The plan would seek: to draw in additional resources from South Africa's development finance institutions; expand the country's electricity infrastructure; encourage private and public investment into liquid fuel and logistics infrastructure; expand the country's access to information technology; improve public transport infrastructure; build and maintain water infrastructure; develop affordable housing and human settlements; upgrade the physical infrastructure of rural towns; institute maintenance programmes; and build and maintain social infrastructure, such as clinics, schools and sporting facilities.

Manuel also saw potential to developing manufacturing capacity around South Africa's affordable housing push, which had a low import content.

He was particularly keen to stimulate the creation of an industrial base able to produce and install sustainable energy technologies, such as solar water heaters, at new human settlements, as well as retrofits for existing houses.

He lamented the fact that the solar water heater opportunity had not yet been fully grasped by industry. "I think the way in which we bring industrial policy together with those opportunities . . . can ensure that we not only don't import, but we also ensure sustainable resource utilisation," Manuel concluded.

 

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