Phase two of Operation Vulindlela will focus on three key reforms: tackling the legacy of spatial inequality, enhancing local government performance, and accelerating digital transformation, while also deepening the existing reforms in the energy and logistics sectors.
Launching the next phase of the initiative at the Union Buildings this week, President Cyril Ramaphosa said that phase two aimed to drive rapid and inclusive economic growth.
“We need growth that improves people’s daily lives by fixing the infrastructure that is broken,” the president said.
He added that if the reforms were implemented swiftly and boldly, they would put the country on the path to economic recovery.
Ramaphosa said the second phase would start by addressing the apartheid legacy of spatial inequality, which has forced millions of citizens to live far from economic opportunities.
“The poorest South Africans spend as much as 40% of their income on transport to get to work, more than almost any other country in the world. Imagine you earn R10 000 and R4 000 of it is spent on transport.”
He said the structure of cities had to change to enable people to access work.
Changing housing policies
To address this, the government will change housing policies to introduce demand-side subsidies for homeownership and affordable rental options, empowering people to choose where they want to live.
Publicly-owned land and buildings, particularly in inner cities, will be released for affordable housing, and the backlog of title deeds for affordable housing will be cleared.
The second area of reform will be to improve the performance of local government.
“Operation Vulindlela has set out a clear agenda for local government reform, which starts with improving the delivery of water and electricity services through professional utilities.
“Utilities should have the right technical skills, strong regulation and oversight, and full control of their billing and revenue functions to allow them to invest in infrastructure and maintenance,” he said.
Another key step was strengthening local government administration.
“We will work to ensure that capable, qualified people are appointed to senior positions in municipalities, such as municipal managers and CFOs.”
Ramaphosa said the third area of focus was digital transformation.
Last month, Cabinet approved a Digital Transformation Roadmap to drive the adoption of digital technologies in government and to build digital public infrastructure that can be used by all South Africans.
This will include a digital identity system, rapid payments to expand financial inclusion, and enabling people to access services like applying for an ID or passport online.
Ramaphosa noted that in its first phase, Operation Vulindlela had focused on reforms in energy, logistics, telecommunications, water, and the visa system.
Through far-reaching reforms in the electricity sector, the government has reduced load-shedding, relieving a constraint on growth which has strangled the economy for years, and enabling private investment in renewable energy generation.
Freight Logistics Roadmap
The country has also embarked on a major reform of its ports and rail system through the Freight Logistics Roadmap, including opening the rail network to competition and the invitation of private sector participation in port terminals.
The completion of the spectrum auction has enabled significant investment in telecommunications infrastructure while improving network quality and reducing data costs for every South African.
The water use licence system, which once served as a barrier to investment, now works efficiently and has allowed projects in forestry, mining and other sectors to proceed.
Last year, the country implemented a new framework for skilled visas to attract investment and encourage businesses to establish themselves in the country and create jobs.
Ramaphosa said the second phase of Operation Vulindlela would not only prioritise new areas for implementation but also deepen the implementation of these current reforms.
On water reform, Ramaphosa said the government would establish the National Water Resources Infrastructure Agency as a dedicated entity to own, manage and invest in the country’s water resources.
“To address the root causes of service delivery failures, we will amend the Water Services Act to separate the role of municipalities as water service authorities and water service providers,” he said.
“The days of standing by and watching while taps run dry or raw sewage runs into our rivers are over. We will take action to make sure that the right of every South African to quality drinking water is protected.”
On the visa system, the president said the government would ensure recommendations of the work visa review were fully implemented and introduce an Electronic Travel Authorisation System to support growth in tourism.
He said while phase one had achieved meaningful progress, the economy continued to be held back by structural inefficiencies.
“Our economy needs to grow much faster to create the jobs that we need and to achieve prosperity for all. We need more rapid growth to enable government to spend more on healthcare, education, social grants, infrastructure and other key areas.”
He said this was why the government had committed to sustaining the momentum for economic reform achieved by Operation Vulindlela.
Competitive electricity market
In the energy sector, the government will establish a competitive electricity market governed by the Electricity Regulation Amendment Act, which came into effect earlier this year.
“This will enable multiple generators to compete to produce electricity at the lowest cost and with the greatest efficiency. To support this, we will complete the restructuring of Eskom and establish an independent Transmission System Operator to create a level playing field for market competition,” he said.
To address the lack of grid capacity, the Minister of Electricity and Energy, Kgosientsho Ramokgopa, has already launched the first round of Independent Transmission Projects to procure more than 1 000 km of new transmission lines.
In the logistics sector, private rail companies will soon be able to operate on the freight rail network, following the publication of the Network Statement by Transnet in December last year.
This will enable investment in rolling stock and more goods to be transported by rail, helping the country's export industries to grow.
“These reforms will generate significant capital and new revenue streams for Transnet to help stabilise its operations and enable it to invest.
“The implementation of the Freight Logistics Roadmap will continue in phase two, including the vertical separation of infrastructure and operations for both rail and ports, which will enable competition in operations and encourage private sector participation,” Ramaphosa said. – SAnews.gov.za
