Media statement by Minister of Public Works and Infrastructure, Patricia de Lille and Head of Infrastructure South Africa, Dr Kgosientsho Ramokgopa on gazetting of the National Infrastructure Plan 2050
In May 2020, Cabinet approved the Infrastructure Investment Plan, a credible pipeline of projects from all three spheres of government, state-owned entities and the private sector.
Sixty two (62) of these projects were gazetted as Strategic Integrated Projects (SIPS) in terms of the Infrastructure Development Act which ensures that these projects follow an expedited path to ensure implementation.
Many of these projects are already under construction, providing much needed jobs for our people and helping to revive the struggling construction sector.
In approving the Infrastructure Investment Plan in May 2020, Cabinet also approved the establishment of Infrastructure South Africa (ISA) who is responsible for raising additional funding for the projects and driving efforts to ensure that implementation is expedited and projects are completed.
ISA, which is headed by Dr Kgosientsho Ramokgopa has over the past few months diligently worked on a long term plan for infrastructure development across the country - the National Infrastructure Plan (NIP) 2050.
The NIP 2050 aims to ensure that there is the necessary long-term view regarding infrastructure to drive economic and social transformation to achieve NDP goals and beyond.
There is a pressing need for a shared long-term vision and a robust institutional platform to enable sustained and continuous improvement in public infrastructure delivery.
On 4 August 2021, Cabinet approved the gazetting of the National Infrastructure Plan2050 for public comment. The NIP2050 was subsequently gazetted for public comment on 10 August 2021, with the closing date for submission of written comments set for 17 September 2021.
To complement the process of written comments, Infrastructure South Africa (ISA) held a series of public consultation sessions with various stakeholders in the infrastructure sector. Following these engagements, there was a need to consult more broadly with additional stakeholders.
Subsequently, the Minister extended the period of public consultation by two weeks. ISA consulted additional stakeholders, including umbrella bodies and associations, and regional and continental bodies such as the Southern African Development Community (SADC) and the African Union Commission for Infrastructure.
A total of 85 written comments were received from departments, State-Owned Enterprises, implementing agents, advisory bodies and civil society organisations, institutes of higher learning, research organisations and professional bodies that gave written comments on NIP2050. Some of these organisations include Business Unity South Africa (BUSA), the Black Business Council (BBC), Business Leadership South Africa (BLSA) and the World Wildlife Organisation SA (WWF).
There is huge support in terms of the development of a long-term infrastructure planning framework. Inputs made to NIP2050 were aimed to strengthen and enhance the plan.
Key changes that have been incorporated into the updated NIP 2050 includes cross-cutting elements that have been strengthened, such as:
a) Commitment to addressing crime and corruption, focusing on vandalism and theft of assets, corruption in procurement, extortion and political unrest that hinders progress in public infrastructure delivery
b) Industrial development and localisation in the design and approach to implementation
c) Alignment to National Spatial Development Framework and District Development Model approach
d) The need for the construction of infrastructure to generate employment and broad-based black economic empowerment opportunities
e) Performance-based support to municipalities in maintenance and billing systems
f) Specific areas have been strengthened in response to departmental and other stakeholder inputs. Some of the incorporated inputs for the sector- specific sections are highlighted in bold blue font in their respective sections in the NIP 2050 narrative report.
Strategic focus of the NIP2050
The fundamental purpose of the NIP 2050 is to develop a coherent plan for the development of the country's infrastructure networks and the interrelationship of these networks to achieve sustainability over the medium to long term.
It is aligned with the vision of the National Development Plan (NDP) 2030. The plan is also aligned to the work of the Presidential Infrastructure Coordinating Commission, the Infrastructure Development Act, South Africa’s Infrastructure Investment Plan and National Spatial Development Framework.
This strategic intervention will address the overall government's objective of improving and investing in core network infrastructures such as water, energy, freight transport and digital communications infrastructure.
The NIP 2050 offers a strategic vision and plan to deliver high priority network infrastructure to 2050. It focuses on foundational network infrastructure in energy, freight transport, water and digital communications.
The NIP's top priority is to ensure the foundations are in place to achieve the transformation needed for inclusive growth. Infrastructure investment addresses spatial integration, expansion of urban economies and rural development and revitalisation.
The NIP 2050 offers a strategic vision and plan that links NDP objectives to actionable steps and intermediate outcomes.
Its purpose is to promote dynamism in infrastructure delivery, address institutional blockages and weaknesses that hinder success over the longer term, and guide the way toward building more vital institutions that can deliver the NDP aspirations.
The NIP 2050 guides the critical shift to dynamic infrastructure delivery mechanisms and capabilities that take advantage and respond to technological change and climate change.
The infrastructure delivery model in South Africa depends significantly on state entities. Still, South Africa is not benefiting from this model because the institutional framework does not support performance and adaptation.
In all four sectors, this adaptation and continuous response and improvement are increasingly critical to success in a context of significant uncertainty caused by accelerating technological and climate change.
The NIP 2050 advises that the NDP targets on energy, water, transport and digital communications may be achieved through the following ways:
Energy infrastructure
The NDP sets a target that more than 90% of the population should enjoy access to grid- connected or off-grid electricity by 2030. To realise this vision, South Africa's energy system will be supported by effective policies, institutions, governance systems, regulation and, where appropriate, competitive markets
The NIP 2050 recommends that the NDP target as it relates to energy can be achieved through the following interventions:
- Defining the energy mix will become technically strong. Expanded capacity in a context of accelerated technological change and a changing energy mix requires that the institutional planning and delivery mechanisms become more adaptive, responsive and dynamic.
- A market structure that facilitates more responsive and sustainable supply. This will require stabilisation and separation of Eskom, the introduction of greater private participation and greater decentralisation of electricity supply.
- State capacity that is strengthened to effectively regulate and oversee energy delivery.
- Electricity that is delivered in a financially sustainable way.
- A transition away from fossil fuels that progresses in a measurable, just and sustained manner. New installed capacity will consist primarily of wind, solar and nuclear, where South Africa has a competitive and comparative advantage.
- Industrial diversification that is promoted through energy infrastructure delivery.
- A centralised database that is maintained, with the requisite confidentiality protection, for the reporting of existing and expected generation capacity investments by market players to enable informed power system planning and investments for all stakeholders.
- Research infrastructure for using nuclear technology that is sustained through the replacement of SAFARI-1 research reactor with a Multi-Purpose Reactor (MPR) by 2030.
- Effective management of waste emanating from energy generation to support environmental sustainability.
Freight transport infrastructure
The NDP envisages a freight transport sector that facilitates domestic and cross-border movement across supply chains to enable industrialisation, diversification and trade and development. To be able to achieve this, the sector will need to be efficient, reliable, resilient, financially sustainable and consistent with a low-carbon future.
The NIP 2050 recommends that the NDP target as it relates to freight transport can be achieved through the following interventions:
- Integrated Transport policy that is oriented around supply chain needs and the mix will drive efficiency.
- Transport services aligned with best practice, ensuring globally competitive economic growth.
- The reform of the freight transport sector done in a way that is sustainable and progressive. The market structure will become competitive.
- Capable State institutions that will drive transport sector reform and delivery.
- Sustainable Funding and finance that will aid optimal use of opportunities to attract private finance.
- Africa regional transport networks that support interregional trade and better connectivity to global supply chains.
- Transport hubs that stimulate industrial diversification and clustering.
Water infrastructure
The vision for the water sector, set out in the NDP, is for universal and reliable access to water of an acceptable quality and quantity in support of a strong inclusive economy and a healthy environment.
The draft National Water and Sanitation Master Plan identifies key elements necessary to achieve this vision: resilient and fit-for-use water supply; universal water and sanitation provision; equitable sharing and allocation of water resources; effective infrastructure management, operation and maintenance; and a reduction in future water demand, protecting and restoring ecological infrastructure and addressing declining water quality
The NIP 2050 recommends that the NDP target as it relates to water infrastructure can be achieved through the following interventions:
- Decision-making that will be accountable and effective institutions that manage water
- Proactive, robust and responsive water resource planning
- Coherent water sector policy and support for implementation at the municipal level.
- Strengthened capacity to finance and deliver water projects and effective use of private sector
- Rehabilitation and maintenance of existing water infrastructure and improvement in water use efficiencies
- Protection of ecological infrastructure
- Regulatory oversight and licensing regimes will become more robust, addressing both water quantity and quality, as well as pricing and the technical performance and financial sustainability institutions.
- Roles and responsibilities will be aligned and consultation will be meaningful.
Cross-sectoral cooperation for planning and managing water efficiently will be put in place. For example, a transition to renewables in the energy sector will make significant volumes of potable water available for other uses.
Digital communications
The NDP envisages that, by 2030, a seamless information infrastructure that is universally available and accessible, at a cost and quality at least equal to South Africa’s peers and competitors.
More specifically, by 2030, at least 100% of the population should have easy access to affordable broadband of at least 10 Mbps. All government buildings should have high-speed broadband of at least 100 Mbps, and where relevant participate in leveraging this to underserved areas and communities.
The NIP 2050 recommends that the NDP target as it relates to digital communications can be achieved through the following interventions:
- High-speed broadband that is universally accessible.
- Regulation that enable competitive and universally accessible broadband.
- Public sector capacity that is strong and able to drive the required policy agenda.
- Strong partnerships and centres of digital excellence promoting a growing knowledge base of delivery and innovation.
- A robust information and communications technology (ICT) skills base
- Government services and buildings will be digitally enabled.
- Prevalant private sector participation that will help achieving universal broadband access
Financing the NIP2050
The South African government has an explicit ambition to expand infrastructure investment, in support of economic and social objectives. This move is also meant to act as an economic stimulus. Since 2019, several initiatives have been launched to improve infrastructure investment, in support of economic and social objectives, and to stimulate the economy.
About R6,224 trillion is estimated to be needed in infrastructure finance between 2016 and 2040. The gap that will need to be closed is estimated at R2,15 trillion where electricity and transport may account for about 72% of the investment required, In a context of constrained public finances, the funding gap will have to be filled by new sources of funding, including new instruments that access domestic and foreign private sector capital, and global development funding.
Ultimately, infrastructure can be funded only by two sources: government and the private sector with government’s contribution from taxes and user payments. While finance can be raised from multiple sources, its availability and cost depend on the reliability of funding plans to service and ultimately repay any finance.
Government’s progress on driving NIP2050 implementation
Stimulating momentum in public infrastructure delivery is a commitment taken seriously.
Concrete movement has been driven by Infrastructure South Africa and through Project Vulindlela, amongst others. Some of the most important requirements of the NIP 2050 are already being implemented. Examples are as follows:
- Eskom has made good progress in splitting up into generation, transmission and distribution divisions and is on track to establish an independent transmission entity in this financial year.
Eskom has now made a commitment to transition into clean generation and to roll out transmission infrastructure in support of new generation.
The Department of Mineral Resources and Energy (DMRE) has lifted the licence limit for embedded generation from 1 MW to 100 MW. These two reforms will have a dramatic effect on available electricity.
- Transnet Freight Rail (TFR) is introducing third-party operators into its branch network and is preparing for the introduction of third-party operators in its main lines.
To do so, TFR is commercially separating rail infrastructure from operations, with a target date of 2022/3. TFR is further developing a hook-and-haul service to promote private wagons.
The reform in port services has begun with the commitment to establish the Transnet National Ports Authority as an independent subsidiary. These reforms will dramatically improve the freight transport services in rail and ports, with the added value of reducing pressure on the roads.
SANRAL has made significant progress in its road projects around the country with nine construction projects valued at R18 billion in progress, and a further eight major projects valued at R 20 billion being awarded in 2021.
- There has been significant improvement in water use efficiency over the past decade. The Presidential Infrastructure Coordinating Commission (PICC) and Department of Water and Sanitation (DWS) are already taking steps towards the implementation of many NIP 2050 requirements.
- There has been good performance in digital infrastructure rollout over the past decade; by 2019, 93% of the population was covered with 4G/LTE, up from 53% in 2015.
Over 85% of the population live within 10 km of a fibre access point. This coverage bodes well for NIP 2050 efforts to improve digital access for low-income communities.
- There are signs of emerging appetite and capability in South African capital markets to innovate in financing infrastructure.
For example, South Africa has issued the most green bonds in Africa, with a cumulative issuance of US$2,4 billion. A growing commitment by the South African state to public- private partnerships is demonstrated in the establishment of the Infrastructure Fund.
This has been structured through the Development Bank of Southern Africa (DBSA) with aim to use R100 billion of public funding over the next 10 years to crowd in private sector investment through blended finance models.
A copy of the gazetted NIP2050 can be found here:
https://www.greengazette.co.za/notices/infrastructure-development-act-2…- of-2014-south-africas-national-infrastructure-plan-2050_20220311-GGN-46033-01874
Enquiries:
Nombulelo Nyathela
Cell: 060 503 4933
E-mail: nombulelo@presidency.gov.za
Zara Nicholson
Cell: 079 416 5996
E-mail: Zara.Nicholson@dpw.gov.za
