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Infrastructure still Budget priority with R870bn allocation

24th February 2016

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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South Africa’s government plans to inject R865.4-billion into infrastructure projects such as housing, roads, rail, public transport, water and electricity, maintaining its public infrastructure investment commitments over the next three years.

The 2016 Budget, tabled on Wednesday, showed transport and logistics infrastructure taking up the largest share of the 2016 medium-term expenditure framework (MTEF) for infrastructure, with R292-billion allocated to Department of Transport-led projects over a three-year period, while energy infrastructure accounted for R180.7-billion – or 21% of total public-sector infrastructure spending – over three years.

More than R95-billion had been allocated by the National Treasury for human settlements initiatives, with R28-billion and R54-billion to be spent improving health facilities and education infrastructure respectively and around R30-billion on water and sanitation projects in the medium term.

This year, around R70-billion of the R180-billion energy infrastructure MTEF would be spent, the Budget Review, unpacked by Finance Minister Pravin Gordhan, showed.

State-owned power utility Eskom, with a three-year MTEF of R155.3-billion, accounted for the bulk of the funding as it moved to bring on line the remaining units of the Medupi, Kusile and Ingula power stations over the next six years.

About R17.6-billion would be spent on the Integrated National Electrification Programme between 2016/17 and 2018/19 to provide 840 000 households with access to on-grid electricity, while spending on nongrid solar electrification programmes countrywide – with a target of 70 000 connections over the medium term – would increase from R166.4-million in 2016/17 to R201.6-million in 2018/19.

Further, government’s Clean Energy Programme would see R1.2-billion spent on 131 146 solar water heating units, while R603.9-million had been allocated over the medium term for subsidies for the installation of energy efficient public lighting and retrofitting energy efficient technology in municipal buildings to save municipalities about 500 GWh of energy a  year.

Meanwhile, R77-billion of the R292-billion allocated to transport and logistics infrastructure over the medium term would contribute to Transnet’s acquisition of 232 diesel locomotives for its general freight business and 100 locomotives for its coal lines.

The National Treasury would also provide the Passenger Rail Agency of South Africa R46.6-billion in capital transfers for new trainsets for Metrorail and to upgrade and refurbish infrastructure for both Metrorail and Shosholoza Meyl.

A total of R13.5-billion had been allocated to subsidise over 500-million rail passenger trips a year and 700 000 long-distance passengers, with an additional R700-million transferred via the public transport operations grant to ensure the subsidy for provincially contracted bus services remained in line with cost escalations in bus contracts.

Some R6-billion would be allocated in 2016/17 financial year for extensions to the bus-rapid transit systems across Ekurhuleni, eThekwini, Johannesburg, Tshwane, Cape Town and George.

Further, R3.7-billion would go towards the upgrade of the Moloto road and R30-billion for provincial roads maintenance.

Over the medium term, R61.6-billion was allocated to provincial human settlements departments for low-income subsidy housing programmes and R34.4-billion to metropolitan municipalities for bulk infrastructure, land and basic services, as well as the upgrading of informal settlements.

With many health facilities in need of major refurbishments or replacement, the National Treasury said it would provide R28.1-billion, with a portion set aside to be used exclusively for infrastructure improvements in the 11 national health insurance pilot districts, which comprised 872 primary healthcare facilities, and the construction of 216 new primary healthcare facilities.

The Department of Water and Sanitation would continue to develop and rehabilitate water infrastructure, including dams, canals, water treatment works, reservoirs and pipelines to connect households, securing a total of R15-billion for regional bulk infrastructure and R12-billion for water services infrastructure for the medium term.

Acid mine drainage initiatives would be funded by R5.5-billion allocated to the Water Trading Entity for capital projects.

Edited by Creamer Media Reporter

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