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.”