Transcript Public Sector Infrastructure in South Africa Roads Pavement Forum 10 May 2006

Public Sector Infrastructure
in South Africa
Presentation to
Roads Pavement Forum
10 May 2006
Introduction: SA infrastructure
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Extensive network of 752000 km of national, provincial,municipal and
access roads and 19700 km of rail, together moving about 700
million tons a year domestically,
7 of 16 Southern African major commercial ports - handling 161
million tons annually.
3 major international airports and 7 regional airports handling
500 000 flights, 21 million passengers and 0,5 million tons of freight a
year.
About 250 large dams with a capacity of 30 billion cubic metres
478 passenger railway stations, and 2,2 million passenger trips/
day
29 400 schools accommodating about 12,3 million learners
Electricity generation capacity of over 40 000 MW continuous power
156 million circuit kilometers of telephone line with 5,5 million
installed phones
3000 km of petroleum and gas pipelines.
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Why focus on infrastructure?
Although SA is relatively well endowed with a relatively good
infrastructure stock in many sectors, there are wide disparities and
growing demands, and so we still face many challenges:
Apartheid legacy of unequal infrastructure distribution (backlogs)
– Infrastructure in townships - lacking, of poor quality and in general disrepair
– roads, pavements, streetlighting, clinics, schools, etc
– Lack access to water, electricity and communications infrastructure
– Housing provision did not meet demand…could not own land in urban
areas
New Demand
– With democratic change and economic growth came changes in social and
economic patterns – increasing urbanisation etc, placing pressures on
various infrastructure sectors, resulting in higher infrastructure demands,
and increased maintenance and rehabilitation needs
– Increased pressure on economic infrastructure eg. ports, increased traffic
at border posts and urban and provincial roads, aging railway rolling stock,
lines and signalling, airplanes etc.
– Increased pressure on social infrastructure – schools, health infrastructure,
justice, safety and security infrastructure, government facilities etc
Spatial Inequalities
– Urban-rural divide, migration and social movement, densities and
economies of scale
3
Broad economic impacts of
infrastructure
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Expenditure on infrastructure and the built environment are regarded as
‘investments’, which imply welfare benefits to individuals and groups in
society and ‘returns’ to the economy as a whole in the form of multipliers of
economic growth.
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Being durable in nature, the capital investments have an inter-temporal effect
in that the savings of the present generation are harnessed for the benefit of
present and future generations as well. For the present generation the
additional benefits, besides utility and future returns, are the immediate jobs
created in the building of infrastructure, and so there is a direct poverty
reduction/ pro-poor element to infrastructure investment.
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The roads, pipelines, cables, transmitters etc, facilitate the access of inputs
into our factories and production facilities, which produce goods and
services, and facilitate the access to goods and services, distribution
facilities, product and societal information dissemination, etc. In short, it has
been written that investments in infrastructure support development by:
– Creating favourable conditions for production and consumption
– Facilitating economic diversification
– Providing access for people to both government and private sector
services and opportunities
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Infrastructure delivery in the
10 years of democracy
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1,6 million subsidised houses constructed.
56000 classrooms constructed, 2700 schools connected to water, 4000 to
electricity.
700 new clinics constructed, 2300 clinics re-equipped. 141 hospitals
rehabilitated and 3 new tertiary hospitals constructed (2000 beds added)
Water supply to 9 million more people and sanitation to 6,4 million more. 6
more dams constructed including the Lesotho Highland project.
Over 4 million more electricity connections.
3000 projects building or improving police stations
Prison expansion to accommodate 15000 more prisoners
Renovation and extension of 129 court buildings
Construction, rehabilitation and maintenance of 6000km of national roads and
15000km of provincial roads.
About R10 billion private sector investment in toll road PPP’s.
Remodelling and refurbishment of 150 main commuter rail stations and 7 new
stations, with 264 engines and coaches rebuilt.
R38 billion spent by Transnet on freight rolling stock, port upgrades and
aircraft purchases.
5
Infrastructure Institutional
Arrangements
National departments: 22 of 34 national departments perform
infrastructure functions such as government buildings, bulk water
resources, police stations, courts and prisons, electrification etc, as
well as make infrastructure transfers to agencies and public entities.
Provincial departments: mainly schools, health infrastructure,
agricultural infrastructure, provincial roads and public works.
Infrastructure budgets derived from own revenues, provincial equitable
share, as well as infrastructure grants allocated by NT and national
departments.
Local government: municipal roads and stormwater, water distribution
and wastewater collection and treatment, electricity distribution,
streetlighting, bus and taxi ranks, community halls, refuse sites etc.
Budgets derived from own revenue and supported by Municipal
infrastructure grant from national
Large number of extra budgetary institutions/agencies and public
entities that are publicly owned but operate on business principles and
deliver infrastructure eg. 17 water boards, SA Roads Agency, TCTA,
SARCC, Transnet, Eskom, Telkom, Sentech etc. Funding is obtained
from user charge retained earnings, borrowing, transfers from
oversight government departments, ppp’s and concessioning, sale of
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assets etc.
Infrastructure Budgeting & Reporting
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Independent budgeting by different spheres of government and
entities based on their needs and priorities however, reporting to NT is
a requirement.
National department infrastructure budgeting is integrated within the
main budgeting process – 3 year MTEF
Requirements specific to infrastructure are published in the Treasury
guidelines to departments annually and departments present
motivations at MTEC hearings – ensures capex alignment with
operational capability and budget, feasibility etc.
National policy departments make requests/representations on behalf
of agencies and spheres that they fund.
Reporting on infrastructure is currently done per dept in the Estimates
of National Expenditure (ENE). Currently only ‘mega’ and large
projects are reported individually with small projects aggregated. Also
reported are transfers to agencies and other spheres, transfers to
households, and maintenance.
NT also publishes aggregate public sector estimates in the Budget
Review.
National and Provincial Infrastructure Project Registers – requires
individual project detail and tracks project delivery quarterly.
7
Budgeting Framework
(source: Afrec)
POLICY
PRIORITY
INPUTS
PLANNING
RESOURCE
INPUTS
BUDGETING
MONITORING &
EVALUATION
SERVICE
DELIVERY
OUTPUTS
Outcomes
IMPLEMENTATION
Constitutional, Political, Legislative and Macroeconomic
environment
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Broad Treasury capital budgeting role
MONITORING AND EVALUATION ROLE
-spending and output performance feedback
-evaluation wrt efficiency, economy, effectiveness
-Infrastructure Project Registers – delivery and expenditure
POLICY, PLANNING AND DECISION SUPPORT ROLE
-strategic ‘big picture’ on infrastructure delivery & sectoral profiles,
GDP multipliers etc, and better targeting of infrastructure portfolio
-Development of appraisal guidelines suited to SA, and refinement of decision
processes, capacity building in departments for appraisal
-buy/lease, dispose/maintain/reinvest trade-offs and decisions
-backlogs/demand assessment, macro GFCF targets
RESOURCE INPUT/ BUDGETING ROLE
-strategic level – are we making the right capital decisions as a country
-portfolio level – do we have the correct mix and spread of projects in any one
year, given capital constraints etc
-project level – appraisal – benefit to cost
-institutional/industry issues- delivery/spending capacity etc
COORDINATION, COLLABORATION, INTERVENTION ROLE
-potential proactive role in delivery, stakeholders, implementers, research etc.
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Capital Budgets Committee
ROLE
• Initiated within the 2005 MTEC process
• MTEC sub-committee - Interdepartmental in nature, Treasury lead
• Act as a filter to the main budget process
• Undertake the review of individual capital/infrastructure project and
programme bids made by departments to Treasury for funding
• Prioritisation and Selection of projects -capital rationing situation
• Make recommendations to MTEC, Mincombud
• Further role; develop and improve appraisal process in future
COMPOSITION
• Major infrastructure ‘oversight’ departments, and the ‘development’
and grant distribution departments + the Presidency:
• Transport, DWAF, Housing, DPLG, Public Works, DTI, DME,
Presidency, National Treasury (various sections)
10
National and Provincial Infrastructure
Project Registers
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Over 15000 projects valued at R111,7 billion currently on the National Project Register,
6 500 of which are currently under construction
• Over 10000 projects currently on the Provincial Project Register
PROJECT REGISTER OBJECTIVES
• Enable the departments as well as Treasury to give full account of progress made with
spending on a regular basis
• Track infrastructure delivery progress with the utilisation of budgeted funds and
physical implementation of projects
• Track spending on both capital and maintenance projects
• Track project progress from project identification to completion
• Support Treasury’s budget allocation process for infrastructure projects
• Communicate progress and achievement to relevant stakeholders and the public
PROJECT REGISTER INFORMATION
• Project information from department as well as entities submitted on quarterly basis
• Financial Data – budget, cash flow and expenditure with expenditure measured against
budget and cash flow;
• Non-Financial Data - project details, type of project, name, nature of investment,
location of the project etc.
• Physical progress – quarterly progress measured (this include outputs achieved,
project stage etc.)
• Data on Expanded Public Works Programme
(in case where the project is labour
intensive)
• Auditable information - payment certificate number, responsible official for the 11
project
Budget Review
Infrastructure related estimates
2006 MTEF
2006 MTEF infrastructure related expenditure estimates
2002/03
2003/04
2004/05
2005/06
Revised
estimate
7,262
7,835
21,586
24,412
17,053
24,759
1,106
1,594
3,470
3,650
22,145
27,566
72,622
89,816
5.1%
5.8%
1,419,991 1,559,580
2006/07
2007/08
2008/09
Medium-term estimates
R million
5,952
6,022
8,884
10,578
12,381
National departments 1,2
2
15,491
19,642
31,989
36,201
40,669
Provincial departments
Municipalities
13,100
16,687
26,046
27,296
28,524
849
1,552
3,776
4,776
3,672
Public private partnerships 3
Extra-budgetary public entities
2,854
3,053
4,116
4,521
4,927
Non-financial public enterprises
26,803
21,375
37,694
42,092
43,662
Total
65,049
68,331
112,505
125,464
133,835
percentage of GDP
5.4%
5.3%
6.6%
6.7%
6.4%
GDP
1,198,344
1,281,438
1,714,528 1,884,866
2,095,911
1. Transfers between spheres have been netted out.
2. Includes maintanance of infrastructure assets.
3. Capital expenditure on PPPs overseen by the Treasury PPP Unit, S A National Roads Agency,
Department of Public Works, and at municipal level, with MIIU assistance.
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2006 ENE – departmental infrastructure summary
Summary of Infrastructure for 2006 ENE
Votes
R thousands
CENTRAL GOVERNMENT ADMINISTRATION
3 Foreign Affairs
4 Home Affairs
5 Provinicial and Local Government
6 Public Works
2,127,468
87,700
19,542
1,865,199
155,027
2,710,188
77,602
28,992
2,286,762
316,832
4,875,446
56,703
35,952
4,439,942
342,849
2005/06
Adjusted
appropriation
6,027,702
132,000
20,376
5,436,161
439,165
FINANCIAL AND ADMINISTRATIVE SERVICES
8 National Treasury
1,984,920
1,984,920
2,546,488
2,546,488
3,354,699
3,354,699
261,751
90,449
12,822
158,480
642,169
216,544
42,805
382,820
1,344,927
676,213
140,736
271,138
256,840
7,530,274
33,115
36,710
237,000
3,800,674
2,745
225,000
0
58,200
1,112,072
2,024,758
13,249,340
SOCIAL SERVICES
14 Arts and Culture
15 Education
16 Health
JUSTICE AND PROTECTION SERVICES
20 Correctional Services
21 Defence
23 Justice and Constitutional Development
24 Safety and Security
ECONOMIC SERVICES AND INFRASTRUCTURE
25 Agriculture
26 Communications
27 Environmental Affairs and Tourism
28 Housing
29 Land Affairs
30 Minerals and Energy
31 Science and Technology
32 Trade and Industry
33 Transport
34 Water Affairs and Forestry
TOTAL
2002/03
2003/04
Outcome
2004/05
2006/07
2007/08
2008/09
Medium-term expenditure estimate
MTEF
Total
7,179,510
253,000
104,913
6,265,300
556,297
8,332,614
316,000
53,500
7,148,564
814,550
9,336,584
223,000
55,994
8,053,090
1,004,500
24,848,708
792,000
214,407
21,466,954
2,375,347
3,750,773
3,750,773
4,168,119
4,168,119
6,274,025
6,274,025
7,196,707
7,196,707
17,638,851
17,638,851
1,124,574
286,569
0
838,005
1,263,304
216,086
0
1,047,218
1,585,292
305,008
0
1,280,284
1,783,360
244,064
0
1,539,296
2,252,786
451,522
0
1,801,264
5,621,438
1,000,594
0
4,620,844
1,195,879
493,371
130,012
258,017
314,479
1,672,800
879,805
154,143
270,483
368,369
1,945,016
982,950
197,522
317,975
446,569
1,984,170
1,007,570
210,281
268,134
498,185
2,542,635
1,057,886
482,633
293,622
708,494
3,275,841
1,137,227
644,472
305,977
1,188,165
7,802,646
3,202,683
1,337,386
867,733
2,394,844
8,407,376
36,614
0
269,326
4,246,239
8,391
245,000
0
164,482
1,129,694
2,307,630
15,502,100
6,857,564
40,088
0
237,364
4,473,597
2,624
251,000
0
93,043
1,159,276
600,572
17,885,083
7,875,334
60,736
100,000
158,002
4,843,480
8,461
313,000
0
268,640
1,495,343
627,672
20,862,129
15,399,638
47,970
150,000
169,776
6,349,949
9,129
1,368,000
243,000
491,942
5,767,550
802,322
30,316,729
17,547,247
48,183
150,000
325,556
7,937,946
9,524
1,423,000
265,000
701,540
5,746,428
940,070
36,479,881
19,895,784
50,107
0
395,090
8,721,382
10,162
1,600,000
385,000
911,361
6,834,627
988,055
41,957,702
52,842,669
146,260
300,000
890,422
23,009,277
28,815
4,391,000
893,000
2,104,843
18,348,605
2,730,447
108,754,312
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Provincial Government Capex-2006 MTEF
Provincia l Pa yme nts for Ca pita l Asse ts ove r the MTEF, 2002/03 to 2007/08
Pr oje cte d
outcom e
Acuals
R thous and
Eas te r n Cape
2002/03
2003/04
M e dium -te r m e s tim ate s
2004/05
2005/06
2006/07
2007/08
2008/09
4.66%
104.7
1,629,003
5.07%
110.0
2,242,729
4.76%
115.2
2,741,107
4.48%
120.4
3,490,467
839,702
1,699,210
2,069,253
Education
123,955
114,574
316,339
353,620
761,746
924,025
Health
105,735
525,666
367,443
491,245
568,898
661,404
697,426
Public Works, Roads and Transport
558,696
896,981
1,345,217
660,297
764,433
1,014,877
1,091,114
Other
1,513,506
51,316
161,989
40,254
123,841
147,652
140,801
188,422
454,602
520,958
531,454
636,744
588,256
995,475
1,302,003
124,604
150,194
109,879
85,386
54,430
56,482
58,499
35,688
139,154
176,798
212,308
162,950
162,360
175,615
252,241
156,011
169,171
215,499
272,988
671,359
958,368
42,069
75,599
75,606
123,551
97,888
105,274
109,521
1,671,103
1,196,480
1,885,380
2,082,289
2,496,627
2,602,459
3,117,769
Education
323,332
551,643
685,088
585,590
725,679
733,350
844,936
Health
470,285
488,587
367,998
847,096
925,198
905,572
1,172,571
Public Works, Roads and Transport
649,924
46,752
726,728
407,179
568,051
681,056
920,633
Other
227,562
109,498
105,566
242,424
277,699
282,481
179,629
1,846,299
2,318,646
2,360,157
3,602,512
3,615,902
4,193,426
4,667,734
Education
390,427
563,499
485,145
886,433
893,428
966,717
997,179
Health
459,002
512,201
587,492
1,031,952
1,039,618
1,181,617
1,393,945
Public Works, Roads and Transport
793,335
1,090,469
1,135,909
1,422,235
1,477,459
1,821,864
2,053,393
Other
203,535
152,477
151,611
261,892
205,397
223,228
223,217
Lim popo
649,577
897,303
1,313,269
1,590,317
1,599,202
1,720,792
1,872,588
Education
207,409
326,456
457,672
491,845
437,008
442,583
467,725
Health
288,252
319,219
395,408
503,483
541,775
625,383
657,199
51,635
81,687
96,795
179,804
134,482
131,242
147,243
102,281
169,941
363,394
415,185
485,937
521,584
600,421
M pum alanga
634,423
617,458
758,619
1,139,477
1,092,694
1,432,016
1,415,764
Education
118,882
236,556
135,062
252,974
277,539
358,406
366,022
Health
124,818
54,887
183,443
265,398
204,443
251,501
266,485
Public Works, Roads and Transport
351,490
258,220
370,336
453,128
394,968
657,522
600,649
39,233
67,795
69,778
167,977
215,744
164,588
182,607
250,061
200,295
220,504
296,801
482,699
591,088
497,263
Education
19,553
44,488
16,889
28,824
42,452
40,925
42,190
Health
35,944
42,387
83,729
110,080
267,691
300,912
201,737
150,455
93,327
101,361
109,863
135,216
199,810
200,867
44,109
20,093
18,525
48,034
37,340
49,441
52,469
590,993
608,952
610,945
1,215,488
1,119,398
1,402,745
1,702,343
Education
135,613
139,684
142,598
269,886
205,025
244,624
426,114
Health
197,656
127,251
192,719
207,090
259,140
323,379
368,285
Public Works, Roads and Transport
179,551
265,613
205,013
522,297
417,600
499,321
601,545
78,173
76,404
70,615
216,215
237,634
335,420
306,399
823,487
942,135
1,059,599
1,541,818
1,662,689
1,667,601
1,798,207
Education
104,005
138,090
151,533
335,703
237,437
192,257
181,339
Health
119,347
217,010
327,853
352,748
383,461
411,992
399,292
Public Works, Roads and Transport
445,305
488,189
484,786
753,560
987,623
993,438
1,143,458
Fr e e State
Education
Health
Public Works, Roads and Transport
Other
Gaute ng
Kw aZulu-Natal
Public Works, Roads and Transport
Other
Other
Nor the r n Cape
Public Works, Roads and Transport
Other
Nor th We s t
Other
We s te r n Cape
Other
154,830
98,846
95,427
99,807
54,168
69,914
74,118
7,760,248
9,001,437
10,809,180
13,734,449
14,900,196
17,346,709
19,864,138
Education
1,547,780
2,265,184
2,500,205
3,290,261
3,634,744
3,959,369
4,897,510
Health
1,836,727
2,426,362
2,682,883
4,021,400
4,353,174
4,824,120
5,332,555
Public Works, Roads and Transport
3,432,632
3,377,249
4,635,316
4,723,862
5,152,820
6,670,489
7,717,270
943,109
932,642
990,776
1,698,926
1,759,459
1,892,731
1,916,803
TOTAL
7,760,248
9,001,437
Source: Provincial 2nd Draft 2006/07 Budget Statements Datab ase.
10,809,180
13,734,449
14,900,196
17,346,709
19,864,138
Sum m ar y
Other
14
Municipal Grants
(Budget Review 2006)
National transfers to Local Government, 1998/99 – 2008/09
1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
R million
Medium Term estimates
CMIP
703
696
851
996 1 723 2 285
Water Services Project
520
626
725
757
999 1 022
217
139
Community Based Public Works
152
356
374
357
260
262
Local Economic Development Fund
10
78
87
143
117
Sport and Recreation Facilities
36
84
122
134
National Electrification Programme
225
245
251
313 1 368 1 423
1 600
Urban Transport Fund
30
22
38
40
9
Municipal Infrastructure Grant
41 4 481 5 436 6 265 7 149
8 053
Public Transport Infrastructure &
Systems Fund
242
519
624
1 790
Neighbourhood Development
Partnership Grant
50
950
1 500
Other
6
33
280
311
Total
1 375 1 718 2 056 2 304 3 474 4 103 5 363 6 441 8 203 10 145 12 943
15
ESKOM Capex
•
•
•
•
•
•
5 year plan revised to R98 bn, nominal.
Return to service of Camden (R1,5bn), Grootvlei (R3bn), Komati (R3,6bn) &
refurbishment of Kriel (R1,1bn)
OCGT plants in Atlantis and Mossel Bay, (R2bn) completion in 2007 & 2010
CCGT plants at Saldanha and Coega (R4bn)
Hydro pumped storage schemes – Braamhoek (R5bn) and Steelpoort (R1,5bn)
Partner on Inga hydro project (R1,6bn) in DRC
Transmission capacity strengthening (incl. Cape lines)
Eskom Holdings Capex
R million
2005/06
Generation
Transmission
Distribution
Corporate
Other
Total funded by Eskom
5 582
1 093
3 589
437
10 701
2006/07
10 228
1 630
3 056
405
35
15 354
2007/08
9 089
2 876
3 557
348
57
15 927
2008/09
11 026
3 143
3 506
354
364
18 393
2009/10
14 320
3 271
3 657
349
1 282
22 879
2010/11
5 yr plan
17 009
1 653
3 957
348
2 678
25 645
61 672
12 573
17 733
1 804
4 416
98 198
16
Transnet Capex
•
•
•
•
•
MTBPS estimates – Transnet revising its capital programme
All major projects have commenced
Capacity expansion on Orex and Coalink lines
Multi-purpose terminal at RB, Durban Pier 1 conversion for containers, Island
View reconstruction, Cape Town container expansion, port superstructure
Multi-products petroleum pipeline - coast to reef
Transnet capex (MTBPS 2005)
2005/06
2006/07
2007/08
2008/09
MTEF
Spoornet
3 777
3 880
4 429
4 352
12 660
NPA
1 727
3 671
4 152
3 571
11 394
SAPO
1 116
1 573
1 020
697
3 290
-
132
161
1 338
1 631
6 620
9 256
9 762
9 958
28 975
SAA
853
506
2 307
507
3 320
Other non core
692
180
134
134
448
Total Transnet
8 164
9 942
12 202
10 598
32 743
R million
Petronet
Total core business
17
Focus on key infrastructure sectors
(table under construction – not a complete breakdown)
Capital/Infrastructure Expenditure Estimates in key sectors
Sector
2002/03
2003/04
Water (DWAF, Water Boards, TCTA & Municipal)
Sanitation (Municipal & DWAF)
Electricity (Eskom & Municipal)
Housing (National, Provincial & Municipal)
Education infrastructure (Provincial)
Health (Provincial)
Roads (SANRAL, Provincial & Municipal)
Rail (SARCC & Spoornet)
Ports (NPA & SAPO)
Courts
Police infrastructure
Prisons
Total
4,966
782
6,427
5,828
1,046
4,501
9,079
1,891
1,659
271
257
164
36,871
5,038
1,565
7,294
5,206
1,610
4,901
11,175
2,245
1,589
244
314
204
41,385
2004/05
4,531
1,368
8,981
5,185
2,277
5,030
10,810
2,147
2,221
245
368
100
43,263
2005/06
6,039
2,297
13,233
8,398
2,481
6,381
13,851
4,465
2,843
253
447
235
60,923
2006/07
7,422
2,422
18,018
9,594
3,022
6,744
16,310
5,090
5,244
980
498
398
75,742
2007/08
6,176
2,494
18,719
11,075
3,351
7,425
22,079
6,321
5,172
851
708
451
84,822
2008/09
5,706
2,606
21,310
11,746
3,894
8,087
24,791
6,380
4,268
831
1,188
570
91,377
18
MTEF
19,304
7,522
58,047
32,415
10,267
22,255
63,180
17,791
14,684
2,662
2,394
1,419
251,941
Breakdown of Road Sector
Expenditure Estimates
Roads infrastructure expenditure estimates
Sector
2002/03
2003/04
National Roads
1,846
2,374
Provincial Roads
5,333
Municipal Roads
Total Roads
2004/05
2005/06
2006/07
2007/08
2008/09
Total MTEF
1,657
2,399
3,894
7,943
10,083
21,920
5,878
6,353
7,265
8,012
9,520
9,885
27,417
1,900
2,923
2,800
4,187
4,404
4,616
4,823
13,843
9,079
11,175
10,810
13,851
16,310
22,079
24,791
63,180
19
Gross Fixed Capital Formation
– Public Sector (Reserve Bank)
Gross Fixed Capital Formation (Current prices)
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
General Govt
Public Enterprises
20
Gross Fixed Capital Formation
– Public and Private Sector (% GDP) (Reserve Bank)
Gross Fixed Capital Formation (% GDP)
20.0%
18.0%
Percentage
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Years
Govt
Public Enterprises
Private Enterprises
GFCF
21
Broad indicators of success
A broad measure of success in the general direction, is that government
(across departments and spheres):
•
•
•
Is now prioritising infrastructure and capital investment
Beginning to re-build capacity after shedding many built environment
professionals over the years
Starting to plan earlier and more effectively in many cases
Indicators that lead us to conclude that we are moving forward in the right
direction are:
•
•
•
•
•
•
increases in gross fixed capital formation trend in the government and public
sector as a whole, and more importantly, private sector GFCF.
increases in government capital expenditure and number of projects appearing
on our project registers
improved confidence and outlook assessments in construction industry reviews
increased demand for engineers and other built environment professionals
More PPP’s and mega-projects identified and pursued
Overall upward trend in GDP
22
Issues needing attention
The planning, generation and management of projects
• Since democracy much skills have been shed - these need to be renewed
through targeted efforts ensuring transformation
• Restructuring resulted not only in skill loss, but loss of systems, process and
organizational knowledge resulting in confusion at planning and delivery level
Too many projects of all sizes are not managed and monitored by suitably
qualified people.
• project appraisals and approval pathways even on large projects needs
attention.
• Re-engineering the business processes of project planning, approval and
management
The construction/delivery environment
• - constraints and shortcomings both in workmanship and material shortages.
• - some contractors taking on bigger jobs they can handle and abandoning jobs
resulting in expensive project delays, at the same time we need to nurture small
contractors to get bigger, better and more in number in order to prepare for
greater infrastructure expenditure in future
• - material shortages and the booming tender environment in many cases result
in higher tender prices, rendering original estimates and budgets too low.
• - rationalisation of contract docs and specs so as not to burden small
contactors
• -profiteering
23
Issues needing attention (cont)
Quality, standards, and maintenance
- With increasing work in the industry, coupled with skills/learning curve constraints,
and lower monitoring/quality control capability from authorities, the quality of
construction is in many sectors in decline.
- same applies in the planning and development approvals/town planning environment
in especially the smaller muni’s, where development proceeds regardless of whether
the existing infrastructure has the capacity to cater for additional loads
• - far more thinking should be done by the built environment research and development
community on better though cheaper /quicker housing and other infrastructure
•
- much attention needs to given to the prioritisation of maintenance of assets,
especially systems that schedule planned maintenance and the budgeting for this.
Coordination, cooperation and collaboration
-Misaligned, unbridled and uncoordinated investment in infrastructure results in
weakened benefits relative to costs, diminished multiplier effects on growth, and
reduced returns on investment. There is therefore a need to:
• Target investments towards needs and areas of higher growth potential
• Coordinate efforts of different agencies/authorities and their respective infrastructure
types towards these targeted developments and large multidisciplinary projects
• Cooperation between approval authorities in different spheres to remove red-tape
approval bottlenecks is essential to accelerating delivery on investments
• Collaboration between the planning sections of departments and even the private
sector in order to create sustainable living spaces and a viable built environment.
• The plethora of high level plans need to be aggregated, and assimilated at national
level and inform and align consolidated national planning.
24
Thanks!
Questions?
25