CAPITAL EXPENDITURE PROJECT LISTING 1 January 1993 to 31 December 2019 NEDBANK GROUP ECONOMIC UNIT 11 February 2020 NOTES: Definition: The schedule is a listing of capital projects announced in the Republic of South Africa. It includes: • Only projects valued at R20 million or more. • Projects of an expansionary nature, i.e. capex which allows for an increase in the level of output, rather than pure replacement investment which involves the replacement of worn-out or outdated capital goods necessary for the continued operation and the maintenance of current output levels. The exceptions are: • investment in equipment or machinery which reduces the harmful effects of pollution, and • technological upgrading of equipment and machinery. • Projects funded by both the private and public sectors. • Projects reflecting direct foreign involvement. The listing is compiled on a sectoral basis, conforming to the Standard Industrial Classification. Limitations: Any analysis of the data needs to take account of the limitations outlined below: • The schedule highlights significant areas of investment expenditure and not the absolute total value of all capital investment undertaken in the country. It serves as a rough guide to the general direction in which investment is moving and as an indication of the level of confidence in the economy. • The full extent of replacement capital expenditure is not captured as mainly expansionary capital expenditure are published and recorded. • In certain sectors a reliable indication of investment activity is not possible as typical investments are not large enough to be included in the schedule, even though the total capital expenditure in the sector may be substantial. For example, in the construction and finance sectors typical investments are generally in vehicles, machinery, computer and other technical equipment which individually fall below the R20 million minimum. • The value of each project refers to the total original announced value at current prices. • It is not always possible to allocate projects to the appropriate sector due to their diverse nature. Projects are generally allocated to specific sectors according to the core business of the company or institution undertaking the investment. However, in cases where the company is unknown the nature of investment serves as a guide for classification. This principal is also applied to diverse projects where no rand value can be related to a specific economic activity within the project. • For example, a waterfront development is typically undertaken by a property company or developer. Although it consists of retail and office developments, hotels, restaurants and other entertainment and recreational facilities, it is classified under "real estate activities with own or leased property". In cases where a government entity undertakes an investment of a diverse nature which involves, for example, infrastructure development, site preparation, low-cost housing as well as water, electricity and sanitation such a project will be classified under "central government or regional services council or local authorities". However, if a local authority, for example, undertakes a specific project such as developing community sport facilities it will be allocated to "sporting and other recreational activities". i Sources: Although a wide range of publications are used to compile the listing, we would specifically like to thank Engineering News for their on-going contribution to this publication. While every care is taken to ensure that the information in this document is as correct and up-to-date as possible, there are more than likely some exclusions and inaccuracies. In the interest of providing a faithful indication of capital expenditure undertaken, it would be greatly appreciated if you would contact us should you come across any exclusions or inaccuracies. Johannes Khosa (+27)10 234 8359 – email [email protected] Nicky Weimar (+27)10 234 8357 – email [email protected] Busisiwe Radebe (+27)10 234 8360 – email [email protected] Candice Reddy (+27)10 221 5407 – email [email protected] ii Comment as well as the first phase of the OR Tambo International Airport expansion for R4,5 billion, both The economic environment remained challenging in 2019. Various factors were responsible by Airports Company South Africa (ACSA). Lanseria International Airport will also be extended at for the difficult conditions, including power load shedding, indecisive policy makers and a poor a cost of R1,5 billion. Transnet will build a new R2,5 billion inland container terminal on a 607- policy framework, subdued local and global demand conditions as well as trade tensions hectare space near Vosloorus, Johannesburg. The facility will have the capacity of 225 000 between the US and China which dominated for most of the year. The combination of these twenty-foot-equivalent-units-a-year. In support of this project, the Gauteng Provincial Government factors kept business confidence at record lows and investors wary of committing to large will invest over R6,5 billion in road infrastructure, which will include the construction of an expansion plans. The Nedbank's Capital Expenditure Project Listing showed that the interchange to link part of the N3 and other surrounding locations. Transnet will also spend value of announced projects for 2019 amounted to R123 billion, down from R128 billion in R3,1 billion expanding its Port of Saldanha as part of its plan to sustain iron-ore export volumes 2018, but the number of projects was almost unchanged at 58. The private sector announced at 60-million tons a year. The project will include a host of new infrastructure changes to the 43 projects worth R77,7 billion, which accounted for 63% of the total value, while the public existing operational set-up, construction of new buildings, service roads, three bridges, railway corporations announced eight projects worth R36,3 billion, the highest in six years, which lines, conveyors, lighting and bulk electrical supply. accounted for 29% of the total value. General government announced seven projects worth R9 billion from R6,9 billion in 2018. There were more general government announcements, The second biggest contributor was the finance, real estate and business services sector, but these were not included given the lack of detail. It is also unclear whether some which announced 16 new projects worth R36,2 billion, the highest since 2013 and from announcements have been made due to pressures arising from President Ramaphosa’s 11 projects worth R13 billion in 2018. Most of the projects comprise mixed use developments and investment conference or whether those would otherwise have happened but remained shopping malls. The big ones include Amdec’s new mixed-use development precinct in Cape unannounced. Town, worth R14 billion and comprising six individual towers and 198,000 m² of usable space, followed by the first phase of the Atterbury mix-use development worth R6 billion in Pretoria as Nedbank* schedule: R billion (constant 2016 prices) Actual growth in capital formation % well as the second phase of the Steyn City Lifestyle Resort worth R5,5 billion. The Atterbury mix- 1350 20 use development will have 100 000 m² of office space, specialist medical facilities, a hotel, 1 100 Public sector residential units and a convenience retail centre, while the second phase of the Steyn City 1200 Private sector Lifestyle Resort will offer a total area of 5 077 m² of commercial space and 315 parking bays Actual growth gross fixed capital formation 15 among other facilities. Barloworld’s Corporate office in Sandton will be redeveloped into a mixed- 1050 Nedbank use precinct for R3 billion, while McCornmick Property Development will build a new 60 000 m² forecast shopping mall (the Capital Mall) in Atteridgeville for R1,2 billion. 900 10 Activity in the mining and manufacturing sectors continued to suffer from subdued demand and 750 domestic operating challenges such as rising input costs and policy uncertainty. The 5 manufacturing industry announced ten projects worth R14,7 billion, down from R41,9 billion in 600 2018. The value for 2018 was boosted by some of the projects announced at President 450 0 Ramaphosa’s investment summit which are starting to come on stream. They include Mercedes Benz South Africa plant to spend R10 billion to expand the capacity of its East London plant, 300 Sappi’s R5 billion investment on various improvement initiatives as well as McDonald’s SA’s -5 commitment to invest R3 billion in 120 new restaurants in South Africa over the next five years. 150 This year’s value was driven mainly by Shell and BP’s joint venture plan to upgrade their Sapref refinery for R3,5 billion to enable the plant to produce lower-sulphur diesel. Nissan will invest 0 -10 R3 billion on its Rosslyn plant, which will expand the assembly line to produce the Navara model 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 and increase the volume of the NP300 and the NP200 bakkie models. The expansion will increase the total output from 40 000 to 70 000 units per year. Eight auto components The breakdown shows that activity across the sectors was mixed. The transport, storage manufacturers will invest a total of R2,4 billion in their operation in South Africa. The companies and communication sector announced more large projects in 2019. A total of 12 new include VM Automotive, Faurecia, ZF Lemforder, Ebor Automotive Systems, Atlantis Foundries projects worth a combined value of R44,5 billion, the highest since 2012, were recorded. The (AF), MA Automotive, KLT and Motherson. Toyota South Africa Motors (TSAM) plans to invest value was pushed up by the second phase of the Dube Trade Port Special Economic Zone R2,4 billion in its Prospection plant in Durban to produce a new passenger car model.