PRETORIA - Finance minister Tito Mboweni said on Wednesday that government was ready to call on the private sector to increase its role in assisting government with better implementation of its existing infrastructure plans.
This as Mboweni announced that public infrastructure expenditure is estimated to be R855.2 billion over the next three years, of which state-owned companies account for R370.2 billion while the remaining R485 billion will come from conditional infrastructure grants.
Delivering his maiden medium-term budget policy statement in Parliament, Mboweni said that a central policy objective was to promote an increase in capital investment by the private sector as growth in gross fixed-capital formation had declined significantly in recent years.
Mboweni said an increased investment in social and economic infrastructure will be a focus of government's economic recovery over the medium term.
"Too many projects are poorly prepared. Too often, government spends money on infrastructure when it could be better and more effectively done by the private sector," Mboweni said.
"Development finance institutions, multilateral development banks and private banks have committed technical resources to help finance, plan and implement projects. Government will develop a framework to help investors assess potential long-term returns on public infrastructure."
In the current year, R1.7 billion has been added to infrastructure spending, including funding for fast-spending school building programmes, while R3.4 billion has been allocated to drought relief, mostly to upgrade water infrastructure.
Interventions to increase the efficiency of existing public infrastructure spending include, among others, addressing weaknesses in infrastructure planning, strengthening accountability and transparency.
He said that government will publish a list of projects suitable for private-sector and development finance support, and also publish online expenditure reports of current infrastructure projects.
Government has also established a project preparation facility, with funding set aside over the medium term, to deploy technical experts to sponsoring departments to support development of investment-ready projects.
Mboweni said government also wanted to stimulate the economy by investing in municipal social infrastructure, such as fixing potholes, broken street lights, flooded roads, and electricity.
Last month, President Cyril Ramaphosa announced a R400 billion Infrastructure Fund as part of the country's economic stimulus and recovery is intended to encourage capital investment by the private sector and development finance institutions in public infrastructure.
African News Agency (ANA)