Worldwide shortage challenges SA’s infrastructure investment aspirations

SOUTH AFRICA will have
to stand in line with the rest
of the world in its bid to
secure capital equipment as
it embarks on its biggest ever
public sector spending spree to
gear up for expected sustained
global economic growth.
“World demand for capital
goods is outstripping supply,”
public enterprises minister Alec
Erwin told delegates at last
week’s Intermodal Africa 2007
conference and exhibition
in Durban. “There has been
worldwide under-investment
in energy and transportation
and with orders also being
placed in the US and Europe,
finding locomotives, turbines
and gantry cranes is a
challenge we face."
For Africa infrastructure
is critical, says Erwin, who
stressed that partnership
with the private sector
was essential to ensure the
efficiency of ports and railway
systems and to build an
efficient logistics chain.
“Two years ago South
Africa embarked on one of
the biggest public sector
infrastructure programmes this
country has ever seen.
“We will be spending
R420 bn over the next five
years and just under half of
that will be expended by
state-owned enterprises.”
The largest investment
– R150bn – will go to Eskom
while R64bn has been
allocated to Transnet over
the next five years involving
port facilities, rail and the
construction of a pipeline from
Durban to Gauteng.
It’s all based on the
expectation that world
economies are headed for
sustainable economic growth
which will be driven by China,
India and Brazil.
“In order to take advantage
of this we need more
efficient ports and railways
and a supply chain that is
internationally competitive.”
This is particularly
relevant in the light of SA's
significant development in
manufacturing capacity. “In
the last 3-4 years South
Africa’s automotive and
components exports have
achieved enormous success,
and to provide for this we
need to ensure that our
freight and transport system
is world class.”