The draft of the new “National Infrastructure Plan 2050” (NIP) was published on August 10, 2021 by the Department for Public Works and Infrastructure (DPWI) for public comment. Written comments can be submitted to the DPWI by September 17, 2021.
The NIP provides an initial focus on delivering critical energy, transportation, water and digital communications infrastructures in South Africa by 2050 through a plan linked to the National Development Plan (NDP), which is designed for the long-term economic and social goals of is crucial. The goals of the NDP focus on eradicating poverty and reducing inequality through various sectors, including infrastructure, to achieve, among other things, an inclusive economy, skills-building and capacity-building of the state.
While the NIP is not intended to list all infrastructure projects and plans, or to provide a mechanism for centralized decision-making, it aims to identify critical actions and provide guidance on how to improve and implement public infrastructure delivery in both the short and long term. According to the plan, this will be achieved, among other things, by improving the performance of government institutions, government capacities, regulations and the provision and management of private-public infrastructure.
It is estimated that a total of ZAR 6.224 trillion ($ 410 billion) will be spent on infrastructure funding between 2016 and 2040 to meet the NDP’s goals. In addition, it is estimated that the financial gap to be closed will be in the order of magnitude of ZAR 2.15 trillion from 2021.
The NIP identifies four “critical grid sectors”: energy; Freight transport; Water and digital communication. For each critical sector, the NIP provides “cross-sectional sections” that focus on the regional agenda for infrastructure, finance, institutional strengthening, rebuilding the building and subcontracting sectors, and the approach to monitoring and reporting on progress.
The four sectors are the focus of infrastructure development in the first phase of the NIP. A second phase of the NIP will focus on the distributed infrastructure and associated municipal services. It is currently unknown when the second phase of the NIP will be published, but it is likely that it will be when the first phase is completed or is about to be completed.
The four critical network sectors
The plan for infrastructure development in the energy sector focuses on energy supply with the aim of ensuring that South Africa’s energy supply is beneficial, diverse, sustainable and at least cost by 2050.
To achieve these results, South Africa must reduce its primary reliance on coal-fired power plants as an energy source and increase reliance on renewable energy in response to the need for energy security and lower energy spending, according to the NIP. This desired recalibration will be challenging as South Africa’s energy needs are expected to increase by 30% by 2050, as well as in the context of various concerns about Eskom, South Africa’s main and largest electricity supplier, coal-fired power plants, to meet demand and its precarious financial situation . The NIP recommendations suggest that there are opportunities in this sector and that industry in particular should expect an increase in renewable energy projects and independent power generation.
Freight transport sector
The plan for the freight transport sector aims to facilitate domestic and cross-border movement of goods across supply chains by 2050. modal transport system. This is to be achieved, among other things, by expanding and modernizing infrastructure networks in freight transport.
The plan for the water sector is in line with that of the NDP, which provides “universal and reliable access to water of acceptable quality and quantity in support of a strong inclusive economy and a healthy environment”. There are concerns about meeting South Africa’s water needs, climate change, droughts, low levels of renewable water resources used and declining water quality. To make matters worse, South Africa is largely considered an arid country. As a result, this required proper management of water resources and infrastructure.
To meet the goals related to water infrastructure development in South Africa, the NIP aims to implement robust and responsive water resource planning, improve capacity to fund and deliver water projects, and rehabilitate existing water infrastructure, among other proposed recommendations.
Digital communications sector
The NIP describes digital communication as central to a market economy. His vision for the development of infrastructure in this sector is in line with that of the NDP, which aims to expand “easy access to affordable broadband” from at least 10 Mbit / s to 100% of the population by 2030.
While recognizing the difficulty in achieving these goals, the NIP sees private-public collaboration as a mechanism through which this vision can be successfully coordinated and implemented.
South Africa’s approach to the NIP can be compared to similar initiatives in other parts of the world, such as the United States, where the Senate recently approved the $ 1 trillion infrastructure bill. The US bill contains goals similar to the NIP in terms of promoting infrastructure development and a thriving economy. Coincidentally, the US bill was approved for public comment on the same day as the NIP was published.
The NIP is to be welcomed as a step in a positive direction for South Africa, not only from a socio-economic point of view, but also from the point of view of revitalizing the South African construction and supply industry.
Co-written by Natalie Keetsi and Aliyah Ince of Pinsent Masons. To contact Natalie and Aliyah please send an email [email protected] and [email protected]