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Signs of Life?

14th December 2012

By: Terence Creamer
Creamer Media Editor

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Two significant announcements made last week have the optimists among us wondering whether there are signs that South Africa’s infrastructure promises are, finally, becoming tangible.

Firstly, the State-owned Passenger Rail Agency of South Africa (Prasa) confirmed that Gibela Rail Transportation – a consortium comprising French multinational Alstom and local engineering company Actom – had been chosen to supply 3 600 passenger trains over a ten-year period, from 2015 to 2025.

The R51-billion project will be funded primarily from fiscal resources and the first metro coaches are expected to begin entering the aged Metrorail system from around 2015.

The Gibela consortium has indicated that it will create 8 088 direct jobs and has promised to achieve local-content levels of 69% by the second year of the contract. Prasa is insisting that a local factory be fully operational by June 2016.

Secondly, State-owned freight logistics group Transnet announced progress on the proposed R75-billion Durban dig-out port (DDOP), which is earmarked for development at the city’s old international airport site.

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The project is not included in the group’s current R300-billion capital budget and it is, therefore, being prepared as a public–private partnership (PPP).

In fact, Public Enterprises Minister Malusi Gigaba says the massive development will only be possible if “real and meaningful partnerships” are forged between the public and private sectors.

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In the meantime, Transnet is taking the lead in preparing the way (through various studies and a community engagement process) to package the project as a possible build-operate-and-transfer scheme – although the final PPP model has not yet been finalised.

Currently envisaged is the creation, in four phases, of Africa’s largest deep-water container terminal, capable of handling 9.6-million twenty-foot-equivalent units through 16 berths by 2037. The DDOP could also incorporate an automotive terminal and a liquid-bulk handling facility by 2050.

The port would complement the existing container handling facilities at the Durban harbour, whose growth is constrained owing to the encroachment of the city, as well as by water depth.

What is somewhat promising about both initiatives is the integrated approach that has been taken to the planning and, hopefully, to implementation. Similar diligence was shown in the preparation of the Renewable Energy Independent Power Producer Programme earlier, which is also moving ahead in a way that seeks to integrate South Africa’s various policy objectives.

This ‘whole-of-government’ approach is designed to mitigate the risks by ensuring credible consultation processes, funding plans, engineering designs and implementation schedules.

Should the DDOP proceed on such a basis, it could also rebuild much- needed credibility in South Africa as a PPP-friendly destination.

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