Pretoria – State-owned companies continue to roll out infrastructure, National Treasury’s 2015 Medium Term Budget Policy Statement (MTBPS) has shown.
According to the MTBPS tabled by Finance Minister Nhlanhla Nene, investments in water and telecommunications infrastructure are taking place.
The document states that projected capital investment by Eskom to expand electricity generating capacity totals R157 billion over the medium term. This includes the Medupi and Kusile power stations to augment generation capacity, and strengthening of the transmission and distribution grids.
Meanwhile, Transnet’s R336 billion investment programme continues to expand rail infrastructure and renew rolling stock.
Transnet recently secured R2.8 billion from development bank KfW to finance construction of 240 electric locomotives, and R30 billion over 15 years from the China Development Bank to finance a joint locomotive build project.
Also large cities are building modern rapid transit systems and upgrading commuter rail services.
In order to promote inclusive economic growth, government is working with cities. The R20 billion Cornubia project in eThekwini will include 25 000 residential units and 1.4 million square metres of commercial space. A 12 ha commercial hub is under construction and has already been sold.
Operation Phakisa
Government launched this in mid-2014.
The oceans economy Phakisa focused on expanding trade in oil and gas, servicing maritime equipment, and oil and gas exploration off the South African coast.
Its projects include the following:
- Construction began on Saldanha Bay’s liquefied petroleum gas terminal in February 2014, and civil works to support the 13.2 million barrel commercial crude oil blending and storage terminal began in 2015. In Cape Town, construction of the R660 million Burgan fuel storage facility should get under way soon.
- Port infrastructure upgrades of R9.7 billion have been announced to support trade and large-rig repair. Public-private partnerships were invited and projects should be commissioned by December 2017.
- A R30 million programme to rehabilitate ship-repair facilities in the Port of Durban is underway.
The health Phakisa identified interventions to raise standards of primary health care clinics. Progress to date includes the use of cellphone technology in 1 200 clinics to improve supply of antiretroviral medication.
The education Phakisa to enhance basic education with technology has also begun. A mining Phakisa to take place in late October 2015 will examine next-generation mining techniques that build on South Africa’s expertise and allow for upstream opportunities for domestic producers, as well as other topics.
When coming to the national carrier, South African Airways government guarantees to SAA amount to R14.4 billion, of which R11.4 billion has been used.
With support from the National Treasury, SAA executed a 90-day action plan, which included closing unprofitable routes, reducing the cost of its fleet, and reviewing onerous agreements and procurement contracts.
According to the mini-budget a successful turnaround will require continued diligent implementation of a long-term strategy to boost revenues, contain costs, strengthen governance, improve accountability and manage performance.
“Even if these measures are well executed, the airline is only expected to generate sustainable profits in five years’ time. Continued government support will be required over this period to allow SAA to operate,” noted the document. –SAnews.gov.za
