SA working to ensure investment for infrastructure plan

Wednesday, April 25, 2012

Pretoria - South Africa stands ready to work at bringing in necessary investment that will ensure the success of the massive infrastructure roll-out plan, says Public Enterprises Minister Malusi Gigaba.

Speaking at an investor conference in Port Alfred in the Eastern Cape on Wednesday, Gigaba said the value of infrastructure investment was that it promoted economic activity by creating intermediary industries as well as creating economic activity. However, the success of industrial development depended on matters such as the provision of quality and efficiency of the social and economic infrastructure.

The infrastructure plan lists 17 strategic integrated projects that cut across rail, road, schools and hospital construction. The projects cover a range of economic and social infrastructure across all nine provinces with emphasis on poorer regions.

"It will be necessary to attract strategic anchor industrial investors through offering appropriate infrastructure at special prices in the hope that more investors will follow and push for the establishment of production centres outside the cities to rural towns to stimulate economic transactions and revive rural economies.

"At times, it will be necessary to provide additional incentives to the investors to make up for the absence of a supporting cluster and to accept losses on the infrastructure until economies of scale are built. Surviving this hard slog will require a high level of vision, commitment and determination. Let me state unequivocally that we have the will to drive this hard slog and are willing to incur the economic cost," explained Gigaba.

The minister added that the Eastern Cape was ideally located as a container trans-shipment hub between the Americas.

Additionally, the province has sophisticated manufacturing capabilities especially in automotives. He added that it "needs to expand its economic base" if high unemployment levels are to be reduced.

"It is only through bold new infrastructure investments, together with skilling our people, that we can create the conditions for investments in qualitatively new anchor industries," he said, adding that it was necessary to prioritise strategic anchor investments and as well as what kinds of infrastructure will be required.

Last month President Jacob Zuma officially opened the new multi-billion Rand Port of Ngqura, which forms part of the Coega Industrial Development Zone, situated outside Port Elizabeth.

"We need to unlock Ngqura's potential as a major trans-shipment hub as a matter of urgency. Major shipping lines have invested in feeder ports in both the West and the East coast of Africa which will create efficient logistics chains between Ngqura and growing African middle class consumer and industrial markets. This will give South Africa a unique competitive advantage in accessing these economies," he said.

The automotive industry, he said, needs to build "a critical mass to become globally competitive". He added that it was necessary to ensure that state owned enterprises prioritise the provision of infrastructure to this sector.