Capital expenditure by major state-owned companies is expected to reach R381.9-billion over the next three years and investments by Eskom, Transnet and the South African National Roads Agency Limited (Sanral) will account for 90% of it, the national treasury said in its budget review.
In delivering on their infrastructure commitments, state-owned companies have improved their performance, spending 79.9% of a budgeted R137.6-billion, up from 70% of R131.7-billion, the budget review said.
"Underspending was mainly the result of contractors not meeting targeted delivery schedules, labour unrest, poor weather, material shortages and engineering delays. Eskom and Transnet spent a combined R88-billion during this period, bringing state-owned companies' total spending over the past three years to R284.3-billion."
Eskom's infrastructure figures have been revised downwards over the medium term due to lower projected revenue and its budget for the 2013/14 year is now R56.4-billion as opposed to the previous budget of R61.9-billion."
Infrastructure investments have led to a steady increase in the asset base of state-owned companies, from R450.1-billion in 2008/09 to R793.9-billion at the end of 2012/13, the review said.
Meanwhile, the net asset value of state-owned companies has increased to R252.2-billion in 2012/13, with Eskom and Transnet accounting for 77% of this. In 2012/13, state-owned companies' average return on equity slowed to 4%, from 7.6% in the previous year, mainly due to lower earnings and higher operational costs at Eskom.
"Over the next three years, 61.6% or R235.3-billion of funding required for infrastructure development by state-owned companies is expected to be raised in debt markets, with the remainder coming from internally generated cash. Eskom and Transnet will account for the bulk of these borrowings," the review said.
"Revised borrowing in 2013/14 relate to Eskom's higher borrowing in response to revised revenue estimates. In 2014/15, an estimated 67.3% of borrowing by state-owned companies will be sourced in the local market.
"To reduce borrowing costs and ease pressure on the domestic market, state-owned companies are encouraged to pursue funding opportunities with multilateral agencies that offer them favourable funding terms and conditions."