Status: Confidential

Economic Development Departmentto Select Committee

MTEF allocations to Infrastructure

PRESIDENTIAL INFRASTRUCTURE COORDINATING COMMISSION

28 May 2013

Status: Confidential

PRESIDENTIAL INFRASTRUCTURE COORDINATING COMMISSION

1. PICC Process

2. EDD Budget to support the PICC

3. MTEF Allocations to Infrastructure

4. PICC objectives

5. Way forward

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1. PICC Process

• The 18 Strategic Integrated Projects include more than 200 projects in construction at the moment across the state

• Projects were selected across the state, from SOCs and private sector based on their catalytic effect to unlocking economic development and giving effect to government’s policy (job creation, greening the economy, regional integration etc.)

• National, Provincial, Municipal department, SOCs and private sector remain fully responsible for the projects and the governance of the projects. The PICC facilitate integration, coordination and alignment.

• EDD takes responsibility for the technical work to support the PICC Secretariat (monitoring, reporting, unblocking issues, tracking and giving effect to decision taken by the PICC etc.)

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2. EDD Budget to support the PICC

EDD budget

MTEF 2013/14 to 2015/16 allocation for EDD:An amount of R15.178 million (R4.779 million for 2013/14; R5.082 million in 2014/15 and R5.316 million in 2015/16) is approved for reprioritisation for the Presidential Infrastructure Coordinating Commission

Comment

The budget in EDD to support the work of the PICC is sufficient to achieve the terms of reference of the PICC

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3. MTEF Allocation to Infrastructure

Source: Table 7.2 Chapter 7 National Treasury 2013 Budget Review

R million Budget Budget Budget TOTALNational Departments 11,225 14,046 14,329 39,600 Provincial Departments 46,202 49,385 52,098 147,685 Local Government 46,940 50,506 53,161 150,607 Extra-budgetary Institutions (1) 21,493 21,909 23,176 66,578 Public Private Partnerships (2) 7,145 4,504 13,713 25,362 State Owned Companies (4) 129,806 130,730 136,710 397,246 Transnet 37,320 38,815 48,026 124,161 Eskom 72,107 68,016 64,934 205,057 CEF 3,719 2,061 398 6,178 TCTA 1,230 3,068 1,871 6,169 Other SOEs 11,537 15,184 16,992 43,713 Rand Water 2,108 1,966 1,820 5,894 SANRAL (4) 1,785 1620 2669 6,074 Total 262,811 271,080 293,187 827,078

(1) Includes SANRAL non -toll 10206 10433 10960 31,599 (2) PPPs include project development funds, capital contributions & unitary pmts(3) Excludes SANRAL capex funded through budget allocations from fiscus(4) Estimates provided by management from these companies

2014/15 2015/162013/14

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Example: Assessment of infrastructure spending monitored by the PICC

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4. PICC OBJECTIVES

OBJECTIVES

1. Increase the rate of expenditure on infrastructure across the three spheres and the SOCs

2. Redirect savings from efficiencies and reprioritisations into infrastructure projects

3. Contain costs and improve efficiencies

4. Eliminate anti-corruption practices

5. Increase oversight and monitoring to delivery

PERFORMANCE

1. It is anticipated that by March 2014, this administration would have spend R1 trillion on infrastructure. This is double the amount spent by the last administration. Under spent by Provinces, municipalities and SOCs is regularly monitored to ensure that the rate and quality of infrastructure spend improves

2. At the request of PICC, National Treasury has redirected an additional R19bn into infrastructure projects over this MTEF period

3. Support standardised designs, assess alternative building technical/methodologies, policy framework

4. Increase monitoring, social accord, policy framework

5. Quarterly update on construction project, unblock issues and accelerate project in development

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4. PICC OBJECTIVES - continued

OBJECTIVES

6. Integrate projects to support economies of scale, industrialisation, skills developments, job creations and timely alignment of services to projects

7. Explore funding mechanisms which reflect a better sharing of risk between private and public sector to attract funding from pension funds

PERFORMANCE

6. Increased programmes such as SWH, INEP, distribution backlogs, IDC are supporting the PICC with a localisation project unit to support the industrialisation, DHET are supporting the PICC in developing a long term skills plan, monitor jobs on all projects, review and monitor access to services on all projects (water, electricity, authorisations, etc.)

7. In collaboration with NT and ASISA assess which projects can be packaged to get access to long term favourable bond funding

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5. Way forward

• Continue placing infrastructure at the top of the agenda

• Focus on supporting industrialisation, integrated planning, skills mapping and job creation

• Improve government’s capacity to implement and monitor infrastructure

• Support government’s policies on youth employment, local procurement, regional integration and greening the economy through the infrastructure plan;

• Use the infrastructure plan to tangibly improve the lives of the citizens of the country.

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