Founder: Turnaround Talk
The announcement of South Africa as the host nation of the 2010 FIFA World Cup was not only seen by many as a just action (after losing the rights to host the 2006 edition of the showpiece), but it also turned the eyes of the world on South Africa and sparked a Golden Age of foreign investment that rivaled the release of Nelson Mandela from jail in 1992 and the subsequent dropping of economic sanctions. Our economy experienced a significant boom period in 2010. Rebuilding infrastructure was necessary
South Africa embarked on a significant infrastructure build programme which subsequently waned as the sporting showpiece ended and some measure of normality returned to the country’s economy.
Since then, we have read and heard of the challenges that the construction industry faces on a daily basis. Not only were we introduced to the so-called construction mafia, but we have also seen how constructions projects are used as cash cows to fund the development of other projects where payments were significantly overdue. Companies such as Murray and Roberts and Basil Read (once prominent players in a booming industry) faced significant financial distress.
The construction industry has been in limbo since 2010. However, South Africa is acutely aware of the dangers of ignoring infrastructure projects lest we go the route of Zimbabwe which has not seen any noticeable infrastructure development over the past 30 years.
An article by News24 points out that South Africa is on the verge of another infrastructure build programme. Will this resurrect the growth that our economy experienced in 2010? The first subheading was included by Turnaround Talk.
Infrastructure regulatory hurdles
The article points out that several key road and housing constructions have been completed, but there is a tranche of strategic infrastructure projects that still need to get over regulatory hurdles and secure funding.
Infrastructure South Africa (ISA) this week briefed Parliament’s Select Committee on Transport, Public Service and Administration, Public Works and Infrastructure on the progress of the Infrastructure Investment Plan.
ISA is a programme within the Department of Public Works and Infrastructure (DPWI) and supports the planning, management, and delivery of projects. Its work has been critical in getting projects ready to go to the market to raise funding from the private sector.
The article adds that Government has established an infrastructure fund – committing R100 billion over 10 years to support projects – but with the purpose of de-risking them to crowd in further private investment.
In its update to the committee, ISA head Dr Kgosientsho Ramokgopa and other officials unpacked efforts to secure funding for some projects, while also highlighting those which have been successfully completed, and those yet to get off the ground.
Here’s the plan for upcoming projects:
Photo By: Canva
Welisizwe rural bridges programme
The News24 article points out that the programme will deliver 96 bridges to tackle mobility challenges in rural areas, especially those experiencing flooding, explained ISA’s Tshepo Chuene. The bridges should provide access to schools, hospitals, and economic opportunities and connect communities, Chuene said.
In the current financial year, 18 bridges are to be delivered in each of the provinces, Eastern Cape, Mpumalanga and Limpopo, and 12 each in the Free State and North West. In KwaZulu-Natal, 18 bridges were earmarked for delivery, but the recent flooding warrants six additional bridges to be constructed in the province.
“Twenty-four bridges are under construction in KZN province and these will be completed by the end of the year,” the DPWI said in response to questions to Fin24. These bridges have received funding.
The article adds that once funding for the remaining 72 bridges in the other provinces is finalised, their construction can start. “The plan is to start before the end of the year,” the DPWI said.
Public Works and Infrastructure Minister Patricia de Lille explained that the South African National Defence Force is implementing the programme, and there are 24 teams working concurrently in different provinces to deliver the bridges in time.
Improving the infrastructure of rural roads
At President Cyril Ramaphosa’s State of the Nation Address this year, he announced that 685km of rural roads would be upgraded and constructed. The upgrades will ensure mobility and market access for people living in rural areas.
The article points out that ISA had been working with different provinces to “strengthen” the business case for these developments in order to attract funding, Chuene explained. The Limpopo Roads Agency, in particular, had reached a point where the project it leads was ready for financing and implementation. ISA was also working with the Office of the Premier of the North West to prepare 39 rural road projects for submission to the Budget Facility for Infrastructure to get funding through the fiscus.
Chuene said most projects in the programme had been designed and had Environmental Impact Assessments – they lack funding for implementation.
Water security projects
There are nine water security projects with a budget of about R107 billion.
The News24 article adds that the Lesotho Highlands Water Project Phase 2, which will transfer water from Lesotho to Gauteng and surrounding areas in South Africa, already has construction work underway for roads and transmission lines for electricity. Procurement processes for the construction of a transfer tunnel and a dam will wrap up soon, and contract awards will be announced. A loan agreement needs to be finalised before the main contract can be awarded, Chuene explained.
Appeals against the environmental impact assessments of another project – the Mokolo and Crocodile River Water Augmentation Project – were recently dismissed by the Department of Forestry, Fisheries and Environment (DFFE). The project will supply water industries in the Lephalale area, and Chuene added that water would also be used for the exploration of mineral resources in the Waterberg area.
The remaining projects are at various stages of development – such as having to secure water supply agreements and locking down funding.
Emergency energy projects
The article points out that the risk mitigation independent power producer procurement programme targets investments of R45 billion. ISA has been assisting projects “unblock” a number of regulatory issues such as water licences, environmental impact assessments and servitudes, explained Chuene. “We are continuously engaging with the relevant authorities to make sure that we try to unblock this…” he said.
So far, only three out of the 11 projects have reached financial close and can start construction.
The DFFE recently rejected an appeal on its decision not to grant environmental authorisation for floating gas-fired power plant developer Karpowership. Its projects are set to contribute 1220 MW to the grid. Karpowership and Mulilo Energy need a gas licence to be granted by the National Energy Regulator of South Africa. Water use licences are also outstanding for developers Oya Energy, EDF and Acwa Power.
Improving the infrastructure of road developments
The article adds that these transport projects have a budget of more than R34 billion. Several projects on the N1 have been completed. This is the Windberg Interchange in the Free State and the route between Ventersburg to Kroonstad, also in the Free State.
Phase 2 of the Polokwane Eastern Ring Road in Limpopo has also been completed. On the N2, the Mtunzini Toll Plaza to Empangeni T-junction in KwaZulu- Natal has been completed, as is the Small Harbours Development in the Western Cape.
Tenders will be issued for four road projects in KwaZulu-Natal in October. Five others are under construction, and three road projects are still in preparation.
Photo By: Canva
Social housing
The article points out that, out of 10 housing projects, three in Gauteng have been completed and one is still on hold. Two projects are in the procurement phase, another two are in the planning phase and two others in the construction phase.
Solar PV project and water saving project
The first request for proposals will be issued at the end of August for renewable energy projects and water-saving interventions at government buildings.
A bankable feasibility study has shown that a large renewable energy and resource efficiency project – targeting water and energy efficiency and waste management – is viable across the DPWI’s national portfolio.
Slavokop precinct
The News24 article adds that the precinct is part of the Tshwane Inner City Regeneration Programme. Five national government departments will be located in the precinct, such as the Department of Home Affairs, the Department of Correctional Services, the Department of Higher Education and Training, the Department of Social Development and its agencies – Sassa and the National Development Agency, and StatsSA.
The precinct also ensures access to a mix of activities – such as housing, school and work opportunities and recreation.
Construction is being carried out in three phases and expected to wrap up in 2030.
World’s largest radio telescope
The article points out that this strategic integrated project involves the construction of world’s largest radio telescope – the Square Kilometre Array (SKA). South Africa’s MeerKAT radio telescope is going to be integrated into the SKA. The whole project involves the construction of social infrastructure such as roads and broadband. South African Radio Astronomy
South Africa’s contribution to the global project (which costs about R35 billion) falls short by R3.2 billion. Chuene said that a request has been sent for budget approval.
The Space Infrastructure Hub
The article adds that this project is part of efforts to develop the domestic space industry and had previously secured R4.47 billion.
It will support the development of satellite infrastructure for Earth observation, as well as a space weather centre. A business case has been developed for the project, and it is under consideration for funding through the Budget Facility for Infrastructure.
