Finance Minister Enoch Godongwana
Finance Minister Enoch Godongwana reports that the National Treasury is working on signing memoranda of agreement in the transport and water sectors with the goal of fast-tracking private sector participation.
Delivering his Budget Vote, the Minister said that the agreements would be similar to the one that governs the Independent Power Producers Office (IPPO).
Through the IPPO, more than 13 400 MW of electricity capacity has been procured from 141 projects since 2011, attracting about R360-billion in investment. As of the end of March, 95 of those IPP projects, with a combined capacity of more than 7 300 MW, were operational.
The agreements in the transport and water sectors would be implemented while reforms were made to the regulations governing public-private partnerships (PPP), the Minister said.
The National Treasury published revised PPP regulations for public comment in February and the comments were currently being considered.
“I will be Gazetting new regulations aimed at streamlining the administrative process, reducing the timelines and providing for a systematic approach to unsolicited proposals.”
Through a special budget facility for infrastructure window, Godongwana also reported that two other infrastructure-related reforms would be piloted.
These included project evaluations outside of the Budget process, and unencumbering infrastructure financing from the traditional mechanisms used to fund the operational aspects of the Budget.
“Reforms associated with the latter will be included in the Medium-Term Budget Policy Statement,” he announced.
Infrastructure projects in South Africa’s cities and metros were also being prioritised for support, with Deputy Minister Ashor Sarupen stating in his speech that the Catalytic Infrastructure and Development Support Programme subprogramme had been allocated R2.9-billion over the coming three years, while conditional grants of R6.1-billion had been set aside to support urban network plans and infrastructure projects.
NEW OPERATION VULINDELA PRIORITIES
Sarupen also confirmed that Operation Vulindlela, a reform implementation platform set up under the aegis of the Presidency and the National Treasury, would continue to prioritise reforms in energy and logistics, while expanding its focus to include critical areas such as water provision and local government.
“Ensuring functional ports and efficient municipal services are key components of this strategy, aimed at creating a more conducive environment for economic activity and growth,” Sarupen said.
An initiative to support the roll-out of smart electricity meters through a grant was also highlighted by Godongwana, who said that the grant aimed to support local government to deploy smart meter technology to improve efficiency, billing accuracy and service delivery.
“This grant complements the Municipal Debt to Eskom relief measures and will target municipalities that are already part of the programme.”
The Minister argued that the smart meters would help municipalities protect existing revenue and optimise overall revenue collection from their existing bases.
“This is expected to enhance revenue generation and cost recovery and underscores the department’s commitment to sustainable development and the prioritisation of investing in energy infrastructure at the local government level.
“To support this new initiative, the department has allocated a budget of R500-million in 2024/25 in the Catalytic Infrastructure and Development Support subprogramme in the Public Finance and Budget Management programme.”