South Africa plans massive rise in construction

South Africa plans massive rise in construction
Published: 14 June 2006

South Africa will spend about 27 billion rand (US$3.96bn) in construction over five years in a bid to help hasten economic growth in Africa’s biggest economy, Public Enterprises Minister Alec Erwin said on Tuesday. South Africa has said it wants to inject some 200 billion rand over the next five years to build or upgrade infrastructure in its bid to boost economic growth to about 6 per cent a year -- compared with growth of 4.9 per cent in 2005.

"In the private sector the supplier industries, where investment lead times are longer, business leaders must have the confidence and foresight to invest now," Erwin said. "Hesitancy and timidity is an obstacle to the growth that we can achieve," Erwin told parliament, saying most of the 27 billion rand would go into civil engineering. A further 9 billion rand will go towards electrical machinery, 8 billion rand to non-electrical machinery and 11 billion will be spent on transport equipment.

Electricity utility Eskom would need about 60,000 tonnes of steel and 1 million tons of cement a year to lift the country’s power capacity through refurbished and new power plants. State-owned logistics group Transnet needed some 75,000-90,000 tonnes of steel to build its proposed oil pipeline from the port city of Durban to industrial centre Johannesburg, he added.

"The positive impact that the investment spend will have on the economy cannot be understated," Erwin said, adding that his department was developing a "local content procurement framework" to focus on local supplier development and help them meet the state’s requirements. "It will not only seek to strengthen local industries so that they may optimally benefit from the capex spend, but it will also serve to move them up the value chain," he said.