New stats demonstrate urgency of road infrastructure upgrades

Lack of investment stifles GDP growth KEVIN MAYHEW GOVERNMENT RELUCTANCE to accord road construction the priority it deserves is a major drag on national and regional Gross Domestic Product (GDP) growth necessary in the next 20 years. That’s according to new figures released by Germany’s GOPA Group, an international development consultancy that specialises in developing economies and economies in transition. The Group, headed by economist of the year Roelof Botha, was tasked with projecting the economic growth expected in Gauteng should the necessary transport infrastructure not be in place. Outlining the figures for the first time, the MD of Transportation and Traffic Technology Africa, Dr John Sampson, said they clearly reflected the multiple advantages to road construction in the short term and long term. Sampson called on the industry to begin using the figures to educate parties empowered to make decisions regarding road construction and to alert them to the perilous outcome of not granting infrastructure the priority status it deserves – second behind education. “A lot has been said about the degeneration of South Africa’s existing roads and the impact on the economy. These figures clearly put into perspective the potential of road construction to meet all the goals of poverty reduction through growing the economy while providing the treasury with increased funds to meet the costs of other priorities such as health and housing,” he told transport industry representatives at a meeting of The Chartered Institute of Logistics and Transport: South Africa (CILTSA) last week. His topic was ‘Transport Infrastructure’s Contribution to Growth Development and Job Creation’. Based on established international values to the economy for time saved, reduction of accidents, and kilometers saved, he said construction of the long delayed PWV9 highway between Johannesburg and Pretoria would pay for itself in three years. The project, originally mooted in 1975 and ready for construction in the mid-eighties, is estimated to cost R1,5bn. Referring to the short term impact, he said each billion rand used for road construction had a multiplier effect, with each R1 allocated adding R1.27 to the GDP. Each billion creates 9 184 formal jobs and 14 694 informal employment opportunities and there is a fiscal backflow in taxes received by the government of R298m. In the longer term, a billion rand investment in a completed road leads to greater economic activity which translates into formal and informal sector employment of 143 000 people who will generate R1,8bn in taxation revenue. He said the negatives of environmental impact, noise, severance and expropriation could be mitigated. Indications are that government is planning for annual infrastructure development that is three times its present level, he added, and this is a healthy sign which can only lead to increased national prosperity.