Investment in infrastructure a necessity

Friday, May 5, 2017

Midrand – Gauteng Premier David Makhura says investment in state-of-the-art infrastructure is not a luxury, but a necessity that offers citizens to enjoy good quality of life and enables industries to be globally competitive and continuously modernise.

“More specifically, infrastructure investment contributes directly to economic growth in general and job creation in specific communities where the infrastructure is being built,” said Premier Makhura.

The Premier was speaking at the Infrastructure Funding Summit held in Midrand, on Thursday, which aimed at attracting investments towards social infrastructure development and maintenance for the Gauteng City Region (GCR) and Gauteng Province as a whole.

The Premier announced that the provincial government will over the next three years spend R46 billion on infrastructure, which will contribute significantly to economic empowerment, radical economic transformation, improving the quality of life of citizens and enhancing the global competitiveness of the Gauteng City Region.

The Premier noted that increasing infrastructure funding is not only for human settlements, but is also for other infrastructure including infrastructure for public transport and industrial infrastructure for new industrial nodes.

“We also look at raising funding for water and energy infrastructure, because without adequate provision for water and energy, we can’t regard ourselves as a province at the cutting edge of development in the continent.”

He added that through the ten-pillar programme for Transformation, Modernisation and Re-industrialization (TMR), the provincial government is striving to build Gauteng into an integrated, economically inclusive, social cohesive and globally competitive City Region; a leading economic hub with world class infrastructure.

R30 billion spent on infrastructure developments

He said the provincial government has between 2013 and 2016 spent R30 billion on infrastructure developments, this excludes the municipalities.

The infrastructure spend contributed to:

  • The creation of 92 000 direct jobs;
  • R15 billion went directly to household incomes;
  • Stimulated additional economic activity in the Gauteng economy worth R26 billion;
  • Added R6 billion to government revenue;
  • Every R1 spent on infrastructure, adds 92 cents to the Gauteng economy; and
  • 91% of infrastructure spend is on empowering historically disadvantaged individuals (HDIs).

The Premier noted that the Gauteng Infrastructure Master Plan estimates that the province needs R1.8 trillion investments in order to meet its infrastructure needs over the next decade and half.

“The government fiscus will never be enough in helping us to meet the growing infrastructure needs of this dynamic province. It is for this reason that we look to the private sector and state owned companies to help us reshape the spatial economy of the Gauteng City Region. Private sector is 80% of South African economy, and we value private sector partnership.”

Move from smaller numbers

Meanwhile, the Premier called the province to move from building housing units less than 10 000, but build between 10 000 to 30 000.

He said while the province has the best record of delivering 1.2 million houses since 1994, it has a stubborn and persistent backlog of about 600 000 houses, due to the high rate of urbanisation and in-migration.

“We can’t address this moving and shifting backlog through the delivery of smaller numbers. We need mega developments that will deliver larger numbers. Scale is an important imperative: anything less than 10 000 units should not qualify as a mega human settlement project,” said Premier Makhura.

Gauteng takes 30% of Human Settlements’ national budget

Director-General for the National Department of Human Settlements, Mbulelo Tshangana, said cities have become the repositories of knowledge and agencies of social radical economic change.

“We are not there yet and we are not far from realising that goal. The key message is how we adopt and forward plan in our cities,” said Tshangana.

He noted that the budget for Human Settlements in Gauteng is over R5.5 billion and the National Human Settlements budget is R18 billion, meaning that Gauteng is taking almost 30% of the national human settlements’ budget.

“The Urban Human Settlements Development Grant is R12 billion country wide and R5.5 billion of that goes to the three metros in Gauteng, which is more than 40%. This grant has to perform. If you combine the two, we have on an annual basis more than R10 billion earmarked for Gauteng.

“It has to perform to help us to crowd in private sector investments, it has to perform to buy bulk infrastructure, buy bulk land requisition, and buy and commit subsidies. If you partner with the private sector, you need to create certainty, you need to tell them what you are going to do over the next five to 20 years,” said Tshangana.

Gauteng Human Settlements MEC Paul Mashatile said the province must be able to invest in a smart way and create opportunities to stimulate local economic development and support Small, Medium and Micro Enterprise Businesses (SMMEs).

“There’s growing business activity in the townships. Beyond this summit, we will start holding capital bilateral roadshows which will focus on investment and domestic markets. Although there are resources, we need to leverage private sector funding in what we want to achieve,” said MEC Mashatile. – SAnews.gov.za

 

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