Construction World April 2022

COMMENT

The first version of the updated National Infrastructure Plan 2050 (NIP 2050) has a finance gap of some R2-trillion. To fill this gap it will rely heavily on the private sector. This gap will have to be closed for the country to build the economic infrastructure that is needed to deliver on the growth and objectives

construction sector and is compiled by economist, Dr Roelof Botha on behalf of Afrimat. The ACI for the fourth quarter of 2021 was released on 15 March and shows that there was a year-on-year improvement of 0,8% in the fourth quarter of 2021 and the improvement over the fourth quarter of 2019 (pre-COVID) is 1,3%. According to the ACI, most indicators that are used to compile it recorded positive growth rates on both a quarter-on-quarter and year-on-year basis. The indicators that stood out in the fourth quarter were construction sector salaries, hardware retail sales, employment and the value of building plans passed in the country’s larger municipalities. Dr. Botha, one of SA’s more positive economists, says that the construction sector’s activity during 2022 may achieve even higher levels as the effects of COVID’s fourth wave are receding. Unfortunately the war in the Ukraine has caused a spike in the oil price and will continue to put pressure on domestic inflation and this is highly likely to result in further interest rate hikes. Stay safe Wilhelm du Plessis Editor

De Lille said that the NIP 2050 aims at ensuring the necessary long-term view of infrastructure so as to align this with the economic and social objectives of the NDP. The NIP 2050 is a detailed plan that outlines the infrastructure goals as set out in the NDP. These goals were originally going to cost R6,2-trillion between 2016 and 2040. However, as of 2021, the finance gap that needs to be closed is R2,15-trillion. This is primarily due to the ‘undermining’ of the capacity of government and state-owned companies to secure the required finance. To realise this plan there will be a need to lean heavily on alternative funding models – and private funding is primary. Infrastructure will be funded by two sources: taxes and user payments. The plan also states that PPP regulations will be revised to simplify approval processes, standardise models for certain types of infrastructure, and speed up the time from initiation to procurement. Index recovers to pre-pandemic levels Afrimat’s Construction Index (ACI) is a quarterly composite index of the level of activity within the building and

that the National Development Plan (NDP) outlines.

T he NIP 2050 was gazetted by Public Works and Infrastructure Minister, Patricia de Lille, in March and has a focus on energy, water, freight transport and digital communications infrastructure The second version will focus on distributed infrastructure and related municipal services.

EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & GRAPHIC ARTIST

PUBLISHER Karen Grant

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2 CONSTRUCTION WORLD APRIL 2022