The State of South Africa's Economic Infrastructure

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The State of South Africa's Economic Infrastructure The State of South Africa’s Economic Infrastructure: Opportunities and challenges 2012 South Africa: State of Economic Infrastructure 2012 A Published by Development Planning Division Development Bank of Southern Africa PO Box 1234 Halfway House 1685 South Africa Telephone: +27 11 313 3911 Telefax: +27 11 313 3086 Email: [email protected] ISBN 978-1-920227-14-2 Intellectual Property and Copyright © Development Bank of Southern Africa Limited This document is part of the knowledge products and services of the Development Bank of Southern Africa Limited and is therefore the intellectual property of the Development Bank of Southern Africa and the Presidency: DPME. All rights are reserved. This document may be reproduced for non-profi t and teaching purposes. Whether this document is used or cited in part or in its entirety, users are requested to acknowledge this source. Legal Disclaimer The fi ndings, interpretations and conclusions expressed in this report are those of the authors. They do not necessarily refl ect the views or policies of the Development Bank of Southern Africa. Nor do they indicate that the DBSA endorses the views of the authors. In quoting from this document, users are advised to attribute the source of this information to the author(s) concerned and not to the DBSA. In the preparation of this document, every effort was made to offer the most current, correct and clearly expressed information possible. Nonetheless, inadvertent errors can occur, and applicable laws, rules and regulations may change. The Development Bank of Southern Africa makes its documentation available without warranty of any kind and accepts no responsibility for its accuracy or for any consequences of its use. Table of contents Foreword 2 Acknowledgements 4 1 Infrastructure as an enabler of development 5 2 Rail infrastructure 10 3 Ports infrastructure 25 4 Roads infrastructure 46 5 Electricity sector infrastructure 59 6 Water sector 71 7 Telecommunications: Fibre projects 87 8 Conclusions: A consolidated governance 100 framework for infrastructure development References 105 Annexure: Outcome 6 Delivery Agreement (as at October 2010) 108 South Africa: State of Economic Infrastructure 2012 1 Foreword: Minister in the Presidency: Performance Monitoring and Evaluation as well as Administration Bold steps have been taken by President Zuma and his administration in placing infrastructure at the forefront of government’s agenda to transform the economy and stimulate economic growth and job creation. In September 2011, the Presidential Infrastructure Coordinating Commission (PICC) was inaugurated, bringing key ministers, premiers and metro mayors for the fi rst time into a joint forum to promote infrastructure coordination and decision making, headed by the President and assisted by the Deputy President. Resulting from PICC work, plans for future projects and infrastructure initiatives from a large number of authorities such as state-owned enterprises, national, provincial and local government departments, have been clustered, sequenced and prioritised into 17 strategic integrated projects (SIPs). Together these SIPs unlock the economic development of South Africa and maximise the returns on our infrastructure investment in the form of increased jobs, growth and economic potential. This will be a continuous process, creating a ‘pipeline’ of projects into the future that gives substance to the long-term National Development Plan and certainty to South Africa’s infrastructure development. South Africa now has a coordinated national infrastructure plan which was launched by President Zuma in his State of the Nation Address in February 2012. Individual SIPs will be launched, organisational structures and systems put in place, and project content further developed, tested and refi ned in consultation with stakeholders. Other important areas of work will include a focus on infrastructure skills, supply of materials, localisation, governance, project management, creating enabling legislative and regulatory conditions, implementation monitoring, and institutional structures and arrangements. This State of Infrastructure Report is an important step in taking stock of how far we have come in developing our country, what the trends and challenges are, and what we still need to do going forward. This review of our key economic infrastructure by independent experts has been commissioned by the Presidency: Department of Performance Monitoring and Evaluation (DPME) to critically analyse the various sectors in order that observations and recommendations are available for the PICC, the DPME, and sector departments and public entities to take into account in their important decision and delivery work going forward. Whilst the views and recommendations of independent experts are not necessarily those of the various parts of government, a fresh view from a different perspective is always welcome in our democracy, and assists us in thinking outside our existing paradigm. Our congratulations and appreciation goes to the organisers, the sponsors, the experts and the editors in putting together this publication, the fi rst of its kind, and hopefully not the last. Collins Chabane Minister in the Presidency: Performance Monitoring and Evaluation as well as Administration 2 Development Bank of Southern Africa Foreword: DPME: Outcome 6 On 29 October 2010, the Delivery Agreement for Outcome 6 on Economic infrastructure was signed by the relevant sector Ministers. It heralded for the fi rst time in South Africa, a written promise of a government to deliver to its people a defi ned set of deliverables in the economic infrastructure sectors within the term of offi ce of this administration. Indeed the signing of the 12 outcomes had given effect to a “whole of government” approach to planning and substance to the “working together we will do more” campaign slogan of the elections of 2009. Months before the signing, offi cials of the departments of Transport, Public Enterprises, Energy, Communications, Water Affairs and the Presidency: DPME had worked tirelessly to pin down the baselines, outputs, activities, indicators, targets, responsibilities and resources that formed the crux of the delivery agreement and its appendices, which are included in this report. The delivery agreement process is not static... it continues. Regular improvements to the delivery agreement are built into the outcomes approach, and the next iteration of the Outcome 6 delivery agreement is due. It will take into account the NPC’s National Development Plan recommendations on infrastructure, as well as the PICC national infrastructure plan. It will further analyse the existing delivery agreement, looking critically at what worked and what didn’t and incorporate necessary changes into the new delivery agreement. This State of Economic Infrastructure Report, consisting of analyses by independent experts was commissioned by the Presidency: DPME to serve as food for thought for Outcome 6 cluster departments in crafting the next iteration of the delivery agreement, in our quest to take infrastructure forward. Let me take this opportunity in thanking the DBSA for sponsoring and partnering this work, the independent experts for their fearless criticism, the editors for their thankless hard work, and departmental and entity offi cials who cooperated with useful information and guidance. Mahesh Fakir Deputy Director General: Outcomes Facilitation – Infrastructure Department of Performance Monitoring and Evaluation, Presidency Foreword: DBSA This report is a product of the collaboration between the Development Bank of Southern Africa (DBSA) and the Department of Performance Monitoring and Evaluation (DPME). The DBSA believes that knowledge, in combination with fi nancial and human capital, can lead to high-impact interventions and sustainable development. Improved infrastructure, in turn, contributes to economic growth and to raising the quality of life of our people. This report reviews the current state and related challenges in six of South Africa’s economic infrastructure sectors. It highlights the renewed focus that is being placed on infrastructure development in South Africa. The government has committed substantial resources to infrastructure development and has established several integrated planning initiatives to provide direction. Furthermore, mechanisms are being designed to improve oversight of public institutions responsible for implementing infrastructure development. All these intentions will be rendered useless unless South Africa successfully implements the improvement plans. The DBSA values the synergy that was created through this partnership for improving infrastructure delivery. The DBSA remains committed to work with government and other stakeholders to implement the national development agenda and related infrastructure programmes. We hope that this report will contribute towards accelerated and focused delivery of infrastructure in support of a competitive and inclusive economy. The DBSA would like to thank the DPME for the opportunity to work together on the preparation of this report. Furthermore, a special word of thanks is extended to everybody who contributed to making it a reality; development is co-created through collective efforts. Ravi Naidoo Group Executive: Development Planning Division South Africa: State of Economic Infrastructure 2012 3 Acknowledgements The implementation of the project has been under the joint management of the DBSA and the Presidency: DPME; and overall
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