Johnathan Paoli
President Cyril Ramaphosa and his Deputy President Paul Mashatile have praised the Sustainable Infrastructure Development Symposium as an essential part of the growth of infrastructure investment in the country, but said more still needed to be done and through the symposium, the foundation to achieve more was being laid.
The 2024 SIDSSA symposium, is hosted by the Department of Public Works and Infrastructure this week in Century City, Cape Town.
The event brought together key stakeholders, experts and decision-makers in the field of infrastructure development, including various ministers and deputy ministers in order to anchor certain panel chats and discussions throughout the three day event.
According to the Public Works Minister Sihle Zikalala the event was created to facilitate the objectives of the Sustainable Development Goals (SDG’s) and South Africa’s National Development Plan (NDP) and to ensure access to greater and economical sources of sustainable funding.
“Further, it aims to highlight the digital sectors, agriculture and housing sectors which align with 10 of the 17 SDG’s (Infrastructure). The symposium serves as a platform to explore partnerships between the public and private sectors, as well as pivot investment opportunities in infrastructure in South Africa,” it said.
The department said that the symposium shaped the conversations about regulatory and policy reforms, innovative funding models for infrastructure, and investing in infrastructure for a shared prosperity for all.
Some of the fundamental topics covered by the event included; the launch of the construction book – a repository of infrastructure projects going into procurement/construction in the 2024/2025 financial year; a leaders forum consisting of South African Ministers with other Ministers invited from the continent; as well as a presentation on the top 12 infrastructure project priorities which will receive project preparation funding from Infrastructure South Africa.
In addition, the symposium provided updates on gazetted Strategic Integrated Projects, and the Infrastructure Fund Project Pipeline
Mashatile said that the three central themes that anchor the Infrastructure Investment Plan have remained consistent throughout the sixth administration, namely equality infrastructure for development, recovery, and inclusive growth, all spearheaded by the government through policy development and implementation.
“When we say development, we mean both the development and delivery of infrastructure and the development of our people through infrastructure delivery. When we say recovery, we mean the recovery of our economy through a large-scale infrastructure programme led and championed by the government.
“When we say inclusive, we mean the redressing of spatial imbalances between urban and rural areas through infrastructure delivery programmes, which we believe will also address gender, racial and other inequalities. The entire population should be included in the benefits associated with infrastructure investment and subsequent gross fixed capital formation,” DP Mashatile said.
The DP said that the government was proud to say that of the pipeline gazetted both in 2020 and 2022, almost R10 Billion worth of projects have completed construction, R233 Billion worth of projects are currently in construction and R170 Billion worth of projects are currently in procurement.
Mashatile said some of the completed projects include strategic water projects like Vaal Gamagara Phase 1, the raising of the Hazelmere Dam wall, student accommodation across different universities, transport projects like the Musina Ring Road, national routes as well as Human Settlements projects that would include social housing projects.
“Of much significance is the work done within the energy portfolio of projects. The energy project pipeline comprises more than 100 projects amounting to R240 billion, some of these programs have a value of over R100 billion, and these projects span transmission, gas, renewables, and green hydrogen,” he said.
The deputy president said that last year, Infrastructure South Africa received its first tranche of funding to support projects with project preparation, which has proven itself a game changer as some projects show great potential but do not always have the fiscal allocation for technical support, legal support, or even capacity building.
He said that the project preparation funding allowed Infrastructure South Africa to support projects that otherwise would stay dormant for many years and it was important to note that of the first R200 million rand tranche received, 37 projects will already be receiving project preparation support.
“This sixth administration has paid specific attention to unlocking regulatory impediments that hinder projects from going into construction sooner. Through the coordination and support of various departments and government stakeholders, Infrastructure South Africa has unblocked 195 permits for 47 projects,” Mashatile said.
The DP gave a special mention to the Department of Forest, Fisheries and Environment, which he said has consistently issued permits and licensing within the specified time-frames of the Infrastructure Development Act and that this stellar collaboration in government to aid private sector investment in infrastructure has built confidence in the South African government.
Mashatile expressed his confidence that this symposium established more strategic collaborations across the continent and that the African Continental Free Trade Area agreement remains an important platform to strengthen regional integration at both an economic and cultural level.
In addition, he highlighted how transport infrastructure specifically constituted the cornerstone for economic expansion in the region, and hoped that discussions and deliberations of the Symposium would bring tangible collaboration on bi-national projects that strengthen the continent and its economy.
President Ramaphosa gave the keynote address on Tuesday and said it was estimated that to achieve infrastructure goals, the government required an additional R1.6 trillion in public sector infrastructure investment and a further R3.2 trillion from the private sector by 2030.
“Investment in infrastructure is central to the achievement of our development goals. Infrastructure is an enormous economic multiplier, providing dividends for an economy long after the infrastructure has been built,” Ramaphosa said.
Ramaphosa said the government was working on reforms to develop sustainable infrastructure, lift business confidence and encourage investment, including an amendment of the Division of Revenue Act to enable provincial governments to use their infrastructure grants and budget allocations to crowd-in private sector finance for large social infrastructure programmes.
He said that amendments to the Public Private Partnership regulations, as well as the operationalisation of the Infrastructure Fund was part of broader reforms to mobilise and pool public and private sector resources for infrastructure and has seen a steady growth in the portfolio of blended finance projects that use relatively small fiscal allocations to de-risk public infrastructure projects and raise finance in debt capital markets.
Ramaphosa said that through the work that has been done in transforming the infrastructure landscape, the total value of the country’s Strategic Integrated Projects has grown from R340 billion in July 2020 to R540 billion now.
In addition, eighteen projects, valued at around R10 billion, have been completed, covering human settlements, roads, water and sanitation.
He said the value of projects currently in construction is over R230 billion, and that projects worth nearly R170 billion are currently in procurement.
“It is significant that blended finance projects, which leverage private sector financing, are also growing steadily,” Ramaphosa said.
In the current year, eleven such projects, with a total investment value of R45 billion, are expected to reach financial close, and to date, Infrastructure SA has unlocked a total of R25 billion worth of projects in the renewable energy space using the Infrastructure Development Act to fast-track government authorisations.
Ramaphosa said that the country is positioning itself to be a leader in green hydrogen, working towards a sustainable future driven by innovation, with a green hydrogen programme, estimated at R300 billion and comprising 14 projects, being an important part of the country’s just transition.
Major water infrastructure projects are under construction in several parts of the country, expanding the capacity of our dams and bulk water infrastructure, and that the transport sector is one the best performing portfolios in the SIP pipeline, with six projects worth R25 billion completed to date, and a further five projects currently in construction, Ramaphosa said.
He confirmed that the human settlements portfolio has to date created over 38,000 direct jobs and nearly 9,000 housing units have been constructed and said the key to developing a bankable and viable project pipeline is project preparation.
“We have made bold and decisive interventions to provide a predictable funding regime for project preparation and consolidate expertise in developing bankable projects through our own infrastructure development agency, Infrastructure South Africa,” the president said.
Ramaphosa said that Infrastructure SA has identified 12 priority infrastructure projects, with a cumulative project value of more than R180 billion, and is anticipated that more than 400,000 jobs, both direct and indirect, will be created during the construction and operation of these projects.
The priority projects include the Fetakgomo Tubatse, Namakwa and Nkomazi Special Economic Zones, which are earmarked for project preparation support.
Ramaphosa said that Infrastructure SA is today publishing the first edition of a Construction Book that showcases 153 infrastructure projects across five major state-owned enterprises, including Transnet Freight Rail, Transnet National Ports Authority, Airports Company South Africa, Eskom and SANRAL.
“The projects showcased in this Construction Book will contribute to greater economic growth, while at the same time supporting the provision of public services and laying the foundation for long-term growth,” the president said.
The Construction Book, a first of its kind in the country, has been praised by the president as demonstrating the government’s ambition to drive economic development through the construction sector and deliver high quality infrastructure projects that create value in the economy and society.
Whilst praising the achievements, Ramaphosa said that the development and integration of the African continent required a massive investment in infrastructure, including regional infrastructure.
“We have built broad political consensus on the need for infrastructure integration, but despite this, progress on implementing regional and continent-wide infrastructure has been slow,” he said.
The President concluded by saying that he was grateful for the contribution and achievements of this symposium as well as other key stakeholders in ensuring increased investment in infrastructure.
“We have done much over the last few years. Through this Symposium we are laying a foundation to do much more”.
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