/ 13 June 2011

Ndebele: Billions needed for SA’s transport infrastructure

Ndebele: Billions Needed For Sa's Transport Infrastructure

South Africa’s ageing rail, road and maritime infrastructure requires massive investment for the country to successfully compete in international markets, Transport Minister Sibusiso Ndebele said on Monday.

Speaking in Cape Town at the opening of an international investors’ conference, he told delegates his department had identified 11 “key strategic” investment areas, with a total estimated capital cost of almost R200-billion.

“We understand that the country’s fiscus cannot be in a position to fund the entire needs of the transport sector.

“It is important to find a new impetus in investments into our sector in order to completely modernise our transport system so that our economy is able to be internationally competitive.

“In order to address this challenge, it is necessary to attract new investments into our sector,” Ndebele said.

Historical under-investment
The 11 investment areas focus mainly on rail and road infrastructure, including plans by the Passenger Rail Agency of South Africa to acquire new commuter coaches at an estimated capital cost of R86-billion.

The list also includes five projects by the South African National Roads Agency, including work on various national-route toll roads and the upgrading of other roads around the country, at a total cost of about R85-billion.

Ndebele said historical under-investment, coupled with poor maintenance, outdated systems and a lack of integration had negatively affected the country’s transport network.

He said the conference — hosted by his department — was aimed at showcasing various transport projects.

“Of critical importance is that these projects will attract potential investors that will play a key role alongside government.

“This conference must ultimately become a platform for investors to come into the transport space in South Africa,” he said.

About 700 investors and delegates are attending the conference, being held over two days.

Speaking at the event, Public Enterprises Minister Malusi Gigaba said new ways had to be found “if South Africa is to achieve the levels of investment in infrastructure we hope to achieve”.

He said partnerships between state-owned enterprises and the private sector were essential to unlock the level of investment required.

“It is therefore important that we engage with you in forums such as these in order to explore possibilities to unlock the balance sheets, in particular, of the mining, financial and industrial sectors.”

‘We need to be clear what we want’
Gigaba said it needed to be made clear that whatever investment partnerships were entered into between the government and the private sector, “state control of strategic assets must be maintained”.

He said state-owned enterprises needed to carefully examine any proposals would-be suppliers placed before them “so that we are able to decide whether here we are being taken for a ride, and check which are going to be beneficial for our country”.

“The fact of the matter is we need to be clear what we want — we need to have long-term planning; and we need to play hardball, because ultimately this is our money,” he said.

According to a department of transport magazine handed to delegates at the conference, demand for road and rail transport in South Africa “far outstrips the capacity of government to fund these needs”.

It says the major transport challenge facing the country is that the bulk of its rail infrastructure had reached the end of its economic life.

“Continuing with a refurbishment programme alone has become counter-productive,” it states. — Sapa