Role of Infrastructure South Africa in the Economic Reconstruction and Recovery Plan and the National Development Plan; with Deputy Minister

The Portfolio Committee was briefed about the role of Infrastructure South Africa (ISA) in the Economic Reconstruction and Recovery Plan and the National Development Plan. The Committee heard that ISA was a central government agency responsible for coordinating and driving the infrastructure investment programme. Funding of R1.7 trillion was required to reach the National Development Plan’s target of gross fixed capital formation of 30 percent of GDP by 2030. That meant an additional R140 billion annually for the next seven years. Sixteen to 20 megaprojects would have to get to market every year. Both the private and public sectors were lagging behind the NDP target. ISA reported a decline in the number of new buildings completed in the first quarter of 2024. There had also been a decline in employment. A confidence index reflected uncertainty in the construction sector. The sector was likely to recover in the short term from a relatively low base after a poor performance in the previous few quarters. A stable energy supply in the second quarter of 2024 was likely to have a positive impact. Economic growth in the transport sector increased by 3.1 percent in the fourth quarter of 2023 and declined by 0.5 percent in the first quarter of 2024. Employment in the sector increased by 5.9 percent during quarter four of 2023 and by 3.8 percent in quarter 1 of 2024. On average, the transport sector added about 8 percent to the overall economy. Transport sector employment contributed 6 percent to total South African employment. Economic growth in the transport sector in 2023 was 4.1 percent and employment growth was 4.7 percent. In the energy sector, there had been a decline in both gross value added and employment in the first quarter of 2024. This poor performance had severe consequences for the general economy. Capital investment in the energy sector and in Eskom would continue to be made, although low capital productivity undermined the investment commitments made. The Committee was also briefed on the process for setting up ISA as a public entity. The draft business case had been developed. A draft Infrastructure Development Amendment Bill has also been developed and should be presented to Cabinet in the fourth quarter of the year. Committee Members raised concerns about delays in implementing ambitious projects. They asked what plans were in place to overcome delays and for an update on strategic infrastructure projects.