http://www.businessday.co.za/Articles/C ... ?id=134438
Ministers outline bold R1-trillion spending plan
Ministers say modernising and upgrading the country’s infrastructure will be costly but can no longer be delayed
LINDA ENSOR
Published: 2011/02/16 06:35:11 AM
CAPE TOWN — Modernising and upgrading SA’s creaking infrastructure would cost up to R1-trillion over the next four years, but could no longer be delayed.
That was the stark message from ministers in the Cabinet’s infrastructure development cluster to a media briefing in Parliament yesterday.
For a start, SA needed to invest a "staggering" R470bn in road and rail infrastructure, Transport Minister Sbu Ndebele said.
This is in addition to billions needed to address the backlogs in water, electricity, sanitation and other infrastructure.
Economic Development Minister Ebrahim Patel put the total annual expenditure on infrastructure over the next four years at R250bn a year, translating into R1-trillion for the period — an 18% increase on the state’s previous infrastructure spending estimate of about R846bn for the three years to 2013.
The government is relying on the R470bn to be spent on road and rail to stimulate sustained economic growth and generate many of the 5-million jobs it has committed to create by 2020 by implementing its New Growth Path.
Mr Ndebele said the government’s initial estimate for road maintenance was R75bn.
It would spend R93bn for commuter rail services and R260bn- R300bn for long-distance rail service Shosholoza Meyl.
He estimated that the cluster would create 120000 jobs in the medium term, 70000 of them in road maintenance.
Financing options would be thrashed out over the next six months and would include a combination of state, private sector and user funding.
An international investors’ conference would take place in June to discuss options.
"The modernisation and upgrade of our infrastructure is an urgent matter which cannot be delayed any longer," Mr Ndebele noted. "Countries like France, Germany, China, US, Canada and South Korea are ready to finance our rail expansion."
Also on the agenda would be whether SA could afford to extend its rapid rail service throughout the country, with Mr Ndebele expressing a strong preference for more projects like the Gautrain.
Passenger Rail Agency of SA (Prasa) CEO Lucky Montana said 8600 new coaches were needed for commuter rail and 2000-plus coaches for long-distance travel.
There was an 18-year programme, with the first coaches scheduled for delivery in 2014-15. Prasa was in discussions with the departments of transport, trade and industry, public enterprises and the Treasury about the programme. Mr Montana said the envisaged strategy was to buy the technology from abroad and produce coaches locally once the production capacity had been developed — which would probably take about three years.
The average age of Shosholoza Meyl’s fleet of 124 locomotives is about 33 years. About 80 locomotives (65%) should have been replaced by 2010 and about 25 (20%) by 2024. Of the passenger coach fleet, 8% ( 103) of coaches would have to be replaced in 10 years’ time and a further 14% ( 182) in 15 years’ time.
Prasa has 4638 coaches for its Metrorail commuter operations, 97,5% dating to the late 1950s.
The average age of the coaches is more than 40 years, with 33% of the fleet being over 36 years and therefore uneconomical to upgrade and unsafe to operate.
Mr Ndebele conceded the state of the roads was "quite bad".
He said R6,4bn had been set aside in the 2011-12 fiscal year for maintenance of secondary road infrastructure, R7,5bn in 2012-13 and R8,2bn for 2013-14 — a total of R22,3bn in the medium term.
At least 70000 jobs would be created this year through the maintenance programme.
The S’hamba Sonka (Walking Together) road maintenance campaign included a "massive" pothole patching programme that Mr Ndebele said would be rolled out nationally with immediate effect. A pothole hotline would be launched so road users could report potholes; engineers and superintendents would be deployed to fix them and procurement processes streamlined.
A conference would take place in March to debate funding. "We will look at options such as public partnership; user-pays principle; and other potential sources of funding so we avoid overburdening the user," Mr Ndebele said.