R52bn for public works projects

Wednesday, February 17, 2010

Cape Town - Around R52 billion will be made available in the next three years to roll out various Expanded Public Works projects over the next three years.

Finance Minister Pravin Gordhan, tabling his Budget Speech today, said an additional R2.5 billion will be used to support labour intensive projects in the social, non-governmental and environmental sectors, largely targeted at rural areas.

The second phase of the EPWP aims at creating 4.5 million short-term job opportunities. The programme created 1.6 million short-term jobs during its first phase from 2004 to 2009, exceeding its target of one million. A projected 642 000 job opportunities will be created in 2010/11, rising to 1.2 million in 2012/13.

"Public sector investment is a crucial component of development as it provides the infrastructure through which we transport goods, power the economy and connect households and business to services and markets," said Gordhan.

Over the next three years, the public sector aims to spend R846 billion on its infrastructure programme with a significant portion of the work to be undertaken by state-owned entities.

The projection has been driven by a number of projects associated with the 2010 FIFA World Cup. The event is expected to contribute about 0.5 percent of GDP growth in 2010. To date, government has spent about R33 billion in preparations for the tournament.

Many of the projects will continue beyond 2010 and are not linked to the tournament but are investments meant to contribute to the growth of the economy.

These include the new multi-product pipeline between Durban and Johannesburg, the construction of the container terminal at Ngqura in the Coega Development Zone and the construction of Medupi and Kusile power stations as part of Eskom's expansion programme.

Gordhan said most of the projects will not be directly financed from the fiscus.

While a number of jobs are expected to be created, he cautioned that employment would be created in line with the growth of the economy.

A lot of jobs were created in South Africa in the period between 2004 and 2008, the same period the country experienced enormous growth with surpluses recorded in the budget. Gordhan said this was an indication that the country's employment was directly linked to economic growth.