South Africa: Infrastructure Development Bill - Introductory Article

Last Updated: 3 April 2013
Article by Nikita Lalla, Mbali Lembede, Zama Ngcobo and Kate Swart

Most Read Contributor in South Africa, September 2018

Background of the Bill

1. The South African government has stated that it plans to inject approximately R845-billion into public infrastructure projects over the next three years, with a further R4-trillion to follow over the next 15 years. In light of this policy, the Draft Infrastructure Development Bill ("the Bill") was introduced to complement and continue the work done by President Zuma's Presidential Infrastructure Coordinating Commission (PICC). The PICC was inaugurated in September 2011,1 and is tasked with developing a twenty year infrastructure pipeline.

2. The Bill was introduced by the Department of Economic Development (headed by Minister Ebrahim Patel) in February 2012. It aims to enhance the coordination of the country's Planned Strategic Infrastructure Projects (SIPS) which have been compiled by the PICC, and to govern their implementation. The PICC currently monitors 44% of all state infrastructure projects and is focused on the 18 SIPS listed below. It has positively influenced infrastructure development with R24 billion spent to date and the creation of 145 000 jobs.

3. The 18 SIPs already put forward can be summarised as follows:

3.1. SIP 1: unlocking of the northern mineral belt, with Waterberg as the catalyst in Limpopo. This entails investment in rail, water pipelines, energy generation and transmission to tap Limpopo's rich mineral reserves. This will be co-ordinated by Eskom.

3.2. SIP 2: Government to build a Durban-Free State-Gauteng logistics and industrial corridor to strengthen the logistics and transport corridor between South Africa's main industrial hubs. This will be co-ordinated by Transnet.

3.3. SIP 3: South-eastern node and corridor development, which entails upgrading of port and rail capacity, construction of a new dam in Umzibumvu in the Eastern Cape, construction of rail infrastructure to transport manganese from the Northern Cape to PE, construction of a manganese sinter in the Northern Cape and the Eastern Cape. This will be co-ordinated by Trans-Caledon Tunnel Authority.

3.4. SIP 4: unlocking economic opportunities in the North West. This entails acceleration of identified investments in roads, rail, bulk water and water treatment and transmission infrastructure, as well as further development of the mining, agricultural and tourism sectors in the province. This will be co-ordinated by SANRAL.

3.5. SIP 5: Saldanha-Northern Cape development corridor. This entails expansion of rail and port infrastructure in the Saldanha area, construction of industrial capacity at the back of these ports (including a possible industrial development zone), strengthening maritime support for the gas and oil activities along the West Coast, expansion of iron ore mining production. This will be co-ordinated by the Industrial Development Corporation. 

3.6. SIP 6: integrated municipal infrastructure, which entails addressing all maintenance backlogs and upgrades required in water, electricity and sanitation bulk infrastructure in the 23 least-resourced municipalities, covering 1.7 million people. This will be co-ordinated by the Development Bank of Southern Africa.

3.7. SIP 7: integrated urban space and public transport, which entails construction/expansion of public transport, housing, economic and social infrastructure in 12 urban areas. This will be co-ordinated by the Passenger Rail Agency of South Africa.

3.8 SIP 8: supporting sustainable green energy initiatives nationally using options envisaged in the Integrated Resource Plan and supporting bio fuel production.

3.9. SIP 9: accelerating construction of power plants to meet energy needs identified in the IRP.

3.10. SIP 10: expansion of the electricity transmission and distribution network.

3.11. SIP 11: agri-logistics and rural infrastructure. Investing in infrastructure such as storage facilities, transport links to main networks, fencing of farms, irrigation schemes to poor areas, agricultural colleges, processing facilities (including abattoirs) and rural tourism.

3.12. SIP 12: revitalisation of public hospitals and health care facilities. A total of 122 nursing colleges to be built nationally and six hospitals to be built to improve the public health system. Extensive capital expenditure to prepare healthcare systems to meet the requirements of the National Health Insurance scheme.

3.13. SIP 13: national school build programme.

3.14. SIP 14: higher education infrastructure. Two new universities would be built in Mpumalanga and Northern Cape.

3.15. SIP 15: expansion to communication technology to enable the Department of Communications' target of 100% broadband penetration by 2020. Private sector to focus on urban areas and government to focus on rural and township areas.

3.16. SIP 16: the Square Kilometre Array and Meerkat radio-telescope installation.

3.17. SIP 17: regional integration for African co-operation and development.

3.18. The national water and sanitation master plan.

Progress of Bill

4. The Bill was introduced in February 2012, and was approved by Cabinet in December 2012. It will be tabled in parliament during 2013. Written comments on the Bill are invited until 27 March 2013, and can be sent to NMinyuku@economic.gov.za.

What it will do

5. The Bill is aimed at:

6. 5.1 fast-tracking strategic infrastructure delivery by extending state powers for the expropriation of land and shortening the approval time for projects by government authorities;

The Bill, in its

5.2 boosting infrastructure development by promoting public private partnerships;

5.3 providing for the continued existence of the PICC which must perform the functions provided for in the Bill, including the identification and development of infrastructure priorities and the designation of SIPs;

5.4 the development of a steering committee comprising all stakeholders in the implementation of each project.

current form, empowers the PICC to designate SIPs, determine whether the State or the organ of state has the capacity to implement the project, or whether such project should be put out to tender. Where a SIP has been designated for implementation, or is provided for in any national infrastructure development plan, any state owned entity or other organ of state must ensure that its planning or implementation of infrastructure or its spatial planning and land use is not in conflict with any SIPs. This provision will have wide reaching impacts on local authorities and state owned entities, as their plans will have to be brought into line with the SIPs.

7. Each project will fall under a designated Minister, who will appoint a steering committee. This committee will be made up of the Director-General in that Minister's Department, other representatives of the department and other organs of state affected by the SIP. The committee may also include persons appointed to implement and facilitate the project, officials representing the Departments in the three spheres of government responsible for environment, water, public works, finance, planning, land use management or any other relevant portfolio or representing a person required to grant an approval, authorisation, exemption, licence, permission or exemption necessary for implementation. Finally, a member of the Construction Industry Development Board, and any other person appointed by the Secretariat, may be appointed.

Who it will affect and what the effect will be

8. This Bill, which clearly has political will behind it, will have wide-reaching impacts on both government and business. It will bring together numerous departments and spheres of government, and will affect, among others, the construction industry, mining industry, banks, state-owned enterprises and transport industries (including rail and road).

What the rest of our articles will look at

9. A series of articles will follow this introductory one, focusing more closely on the various aspects of the Bill, its strengths and weaknesses, and the effects of its implementation.

Footnotes

1.The Presidency 'The State of South Africa's Infrastructure 2012' http://www.thepresidency-dpme.gov.za/pebble.asp?relid=542

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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