Finance Minister Enoch Godongwana believes the planned R1tn public infrastructure expenditure demonstrated their commitment to leveraging infrastructure as the bedrock of economic development, a key source of jobs, and an avenue to scale up service delivery. Picture: Phando Jikelo/ Parliament of SA
Cape Town - The government is planning to spend R1.03 trillion over the medium term expenditure framework on infrastructure projects by state-owned enterprises and government departments.
This is contained in the proposed 2025 budget that was deferred for tabling in Parliament on Wednesday until March 12 after parties in the GNU disagreed on proposals made by the National Treasury.
The documents shared by the National Treasury, at the media lock up before the presentation of the budget was postponed, indicated that the government will significantly upscale its infrastructure delivery programme.
“There are major opportunities to reduce the backlog in public infrastructure while creating jobs and bolstering economic activity,” reads the document.
It said the 2025 budget was proposing strategic investments to achieve faster economic growth, focusing on electricity, rail, water and transportation infrastructure projects.
“Over the next three years, an estimated R1.03 trillion will be spent on public infrastructure projects by state-owned companies and other public entities, and national, provincial and local government.
“This includes R402 billion for road infrastructure, with R100 billion of investments by the South African National Roads Agency Limited.”
The national Treasury said R219.2bn will be spent on energy infrastructure, and R156.3bn will flow to water and sanitation infrastructure.
“The 2025 budget adds R46.7bn in funding for infrastructure projects over the next three years.”
Minister Enoch Godongwana said in his speech that he did not deliver, the planned R1tn public infrastructure expenditure demonstrated their commitment to leveraging infrastructure as the bedrock of economic development, a key source of jobs, and an avenue to scale up service delivery.
The National Treasury said the regulations for public-private partnerships have been simplified to attract greater private sector participation.
“Multiple windows of the budget facility for infrastructure (BIF) are being introduced; and reforms are being made to municipal-owned trading services to ensure they are financially sustainable and efficiently provide water, electricity and refuse collection.”
It projected capital allocations will increase by 8.1 % over the next three years, including funding for passenger rail and disaster reconstruction.
The documents said several reforms under way were designed to help the state deliver infrastructure and encourage private-sector investment.
“During 2025/26, a single structure overseen by the National Treasury will be established to coordinate state participation in project preparation and planning, public-private partnerships (PPPs), funding and credit guarantees.
“It will include the three spheres of government and public entities, and will merge two units currently in the Government Technical Advisory Centre that coordinate PPPs and capital appraisals with the Infrastructure Fund in the Development Bank of Southern Africa.”
According to the budget document, R748.5 billion will be funded from the budgets of state-owned companies and public entities, as well as municipalities.
The budget Facility for Infrastructure (BFI) was deemed to play a central role in the capital budgeting system by recommending funding for projects that are jointly funded from other sources.
“For the 2025 budget cycle, the facility has approved nine projects with a total value of R55.5 billion, of which R15.3 billion will be funded by the Facility. The approved projects address a wide range of service delivery and economic growth needs, such as hospital infrastructure, transport and logistics, and water,” reads the document.
The National Treasury stated that the government is tackling regulatory concerns to encourage private investment in public infrastructure.
“Amendments to the public-private partnership framework simplify processes and reduce delays. Efforts focus on improving investment in transport, communication, water and energy to reduce costs, boost efficiency and raise productivity.”
Godongwana said their efforts to diversify the financing strategy to support infrastructure were taking shape.
“A credit guarantee vehicle will be launched in the first half of 2026, with an initial focus on transmission pilot projects. Once the vehicle has demonstrated its efficacy, it is expected to broaden its operation to other sectors.”
Cape Argus
Related Topics: