http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.85Change: 0.07
R/$ = 12.73Change: -0.04
Au 1087.45 $/ozChange: -4.00
Pt 953.00 $/ozChange: -13.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 29, 2012

Infrastructure development will create strong economic future

Back
Port|Africa|Export|KPMG|Projects|rail|Resources|Road|Roads|Rolling Stock|rolling-stock|Safety|Scott|South African National Roads Agency Limited|Sustainable|System|Systems|Transnet|transport|Water|Africa|South Africa|Energy|Freight Rail Infrastructure|Logistics|Maintenance|Passenger Rail Infrastructure|Rail Infrastructure|Road Infrastructure|Road Networks|Rural Road Infrastructure|Secondary Road Networks|Systems|Telecommunications|Train Control Systems|Infrastructure|Water
Port|Africa|Export|Projects|rail|Resources|Road|Roads|Rolling Stock|rolling-stock|Safety|Sustainable|System|Systems|Transnet|transport|Water|Africa||Energy|Logistics|Maintenance|Systems||Infrastructure|Water
port|africa-company|export|kpmg|projects|rail|resources|road|roads|rolling-stock|rolling stock|safety|scott-company|south-african-national-roads-agency-limited|sustainable|system|systems-company|transnet|transport|water-company|africa|south-africa|energy|freight-rail-infrastructure|logistics|maintenance|passenger-rail-infrastructure|rail-infrastructure|road-infrastructure|road-networks|rural-road-infrastructure|secondary-road-networks|systems|telecommunications|train-control-systems|infrastructure|water
© Reuse this



Road and rail infrastructure improvement projects by entities such as the Passenger Rail Agency of South Africa (Prasa), State-owned logistics group Transnet and the South African National Roads Agency Limited (Sanral) are highly advantageous for the future of the domestic economy.

“One can go so far as to say that they represent a recreation of the South African transport industry,” says audit, tax and advisory firm KPMG head of infrastructure advisory and financing De Buys Scott.

The enormous amounts being invested in the transport sector in the short term may be a burden on the economy, but the much-needed investment is paramount to the future growth and success of all sectors, including the energy and water sectors, he notes.

“Infrastructure investment must be viewed from a long-term perspective, as the long-term benefits drive the short-term burdens. The country is currently playing catch-up in terms of infrastructure investment and we are only now tackling the huge backlog of problems,” says Scott.

He adds that, over the next 5 to 15 years, current investment will significantly change the country.

The current state of road infrastructure, specifically primary road networks, is quite advanced owing to the many upgrades implemented by the Department of Trans- port, Sanral and public–private partnerships (PPPs). Secondary road networks and rural road infrastructure, however, leave much to be desired, with poor maintenance of these roads posing the biggest challenge.

Passenger Rail
Prasa is embarking on its Rolling Stock Fleet Renewal Programme to improve passenger rail infrastructure over the next 20 years.

The programme will focus on upgrading and expanding its current fleet; increasing the number of routes in the country; and modernising signalling systems, train control systems, telecommunications, signage and speed gates.

Once complete, the new fleet will enable the agency to transport double the number of passengers in a safer, more reliable and more efficient way.

Further, the programme will have a ripple effect on the economy, says Scott.

“Rail is said to be the primary means of transport for the lower-income earner. The new infrastructure will be efficient enough to transport more workers from the outskirts of town to the central business district to seek employment, thereby boosting the economy.”

Freight Rail
Freight rail infrastructure has also seen significant capital expenditure (capex) of late, says Scott.

“This capex investment is important for growing the economy, as port infrastructure relies on rail infrastructure to create one efficient network through which a country’s natural resources can be transported for export.”

The focus on improving rail infrastructure will also ease the burden placed on the country’s roads. South Africa’s road networks are heavily burdened and congested, partly owing to the number of vehicles transporting freight by road, says Scott.

He adds that, if freight rail efficiency is improved, logistics companies may find it advantageous to use rail rather than road transport, which may improve road safety.

Challenges
South Africa is one of a few countries to go through an entire infrastructure overhaul in all sectors simultaneously, says Scott.

He maintains that investment is the most significant challenge facing the many infrastructure upgrades.

Government and the private sector fund new infrastructure programmes; however, government funding is already thinly spread across the sectors, making private-sector involvement crucial to the success and sustainability of the upgrades.

Scott says each transport system needs to be assessed on its respective funding model.

Passenger rail follows a subsidised model as it is a low-cost means of transport. Govern- ment has an obligation to fund passenger rail to ensure its proper functioning but there is more private-sector involvement in freight rail. This enables the sector to follow a more self-sustainable and self-sufficient funding model, he adds.

Careful planning and budgeting by government and the private sector are also required, as specific sums of money are budgeted for each financial year.

Time and deadlines also prove challenging, which are noted in Prasa’s 20-year Rolling Stock Fleet Renewal Programme. The infra- structure programmes entail serious planning and meticulous execution, says Scott.

The country’s implementation capacity is also in question and further pressurised by the PPP formation process, he notes.

“There needs to be a fluent process by which PPPs are formed and agreed on for the country to grow its capacity.”

Scott adds that government has shown leadership and initiative in the transport sector based on its knowledge of the sector and the need for efficiency; however, for the programmes to remain sustainable, government must involve the private sector as much as possible.

The programmes are, however, viable insofar as the funding models and feasibility processes are thought through more meticulously than before, he says.

“Prasa’s upgrade programme is as an example of the rigorous and thorough feasibility process used to determine the viability of the upgrade programme. I believe that other projects of the same calibre, such as those undertaken by Transnet and Sanral, are quite similar,” enthuses Scott.

He emphasises the importance of proper analysis of the given situation before embarking on any upgrade programme.

Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Transport & Logistics News
Trade and Industry Minister Dr Rob Davies
Updated 4 hours ago South Africa planned to offer five reasons as to why it should retain its status as an African Growth and Opportunity Act (Agoa) beneficiary during public hearings scheduled for Friday in Washington DC. The US House of Representatives passed a ten-year extension to...
Updated 4 hours ago Vacationing was the main reason for tourists to visit South Africa in 2014, with a significant majority of 95.7% of tourists on holiday, while business travel and students made up less than 4% of tourists.
Updated 5 hours ago Kenya Airways, which reported a record loss in its year ended March, may require a $500-million to $600-million bailout, the Kenyan finance minister said on Tuesday. Profit at the carrier, which is part-owned by AirFrance-KLM, lost 29.71-billion shillings...
More
 
 
Latest News
Updated 4 hours ago South Africa has been shortlisted by The European Outsourcing Association (EOA) for the Offshoring Destination of the Year 2015 award, competing against Bulgaria and Latvia. Now in its sixth year, the EOA Awards recognised and celebrated the efforts of companies who...
Trade and Industry Minister Dr Rob Davies
Updated 4 hours ago South Africa planned to offer five reasons as to why it should retain its status as an African Growth and Opportunity Act (Agoa) beneficiary during public hearings scheduled for Friday in Washington DC. The US House of Representatives passed a ten-year extension to...
Updated 4 hours ago The Competition Commission on Tuesday approved telecommunications giant Telkom’s buy-out of Business Connexion (BCX) with conditions. The conditions included a price freeze on affected products in the upstream by Telkom, a limit on the number of job losses arising...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Daimler truck test engineer Dirk Stranz pushes one button, and then retracts his hands from the steering wheel of the Mercedes-Benz Future Truck 2025. “And now the truck is driving itself.”
The statutory body responsible for skills development and support in the banking sector, BANKSETA, was investing R68-million in the capacity building project of the University of Venda (UniVen), announced Bankseta company secretary Caroline King at a media event in...
LIONEL MOYAL Cloud services providers must compete against other cloud services providers for business by providing up-to-date systems and services
Legacy information technology (IT) systems are becoming increasingly obsolete because of the maturity, efficiencies and cost effectiveness of cloud-based IT services, says information and communication technology major T-Systems subsidiary Intervate head Lionel...
ARMANDÉ KRUGER Balancing the collection and processing of data must be aligned to strategy
Many complementary services enable companies to derive broad value from data inside and outside them. The complexity of data management means that companies’ strategies determine the various data systems and functions they will use, says PBT Group regional sales...
The South African Civil Aviation Authority (SACAA) has announced that it had awarded the country’s first remotely piloted aircraft systems (RPAS) pilot’s licence. It was issued on Friday, July 10, to SACAA employee and qualified commercial pilot Nicole Swart,...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96