Nedbank has published its latest capital expenditure project listing report, detailing some of the major fixed investment projects that are in the pipeline for South Africa.
The project listing shows a significant increase in the number and value of new projects announced in the first half of 2022, with the value of projects amounting to R133.8 billion – which translates to R267.6 billion on an annualised basis.
This is a 24.6% rise from R214.7 billion recorded in 2021, Nedbank said. The rise in the number and value of projects was driven mainly by the private sector.
“While business confidence remains fragile, capital expenditure picked up as the economy recovered and global demand accelerated from the depths of lockdown in 2020. High global commodity prices also encouraged some mining companies to expand operations,” the bank said.
Russia’s invasion of Ukraine extended and amplified the upswing in commodity prices, while the sanctions on Russian exports of coal created new opportunities for local producers.
“Against this backdrop, private sector projects amounted to a robust R228.8 billion, accounting for 86% of the total. The biggest project captured is the Green hydrogen plant at the Coega Special Economic Zone, worth R75 billion, and the second phase of the Gamsberg’s zinc mine, worth R7 billion.”
While private investment dominated, Nedbank noted that the government also announced some new projects after presenting its Strategic Integrated Projects two years ago.
The value of government projects rose to R37 billion from R33.8 billion. The biggest project recorded is the 524,000 sqm mixed-use government district worth R18 billion in Salvokop, Pretoria.
“In contrast, public corporation plans declined sharply, following the announcement of large projects by Eskom, the South African National Road Agency Limited and Transnet last year,” it said.
By sector, the electricity, gas and water industries dominate, with projects worth R152 billion, boosted by the Green hydrogen plant valued at R75 billion.
Activity in the community, social and personal services industries, which includes the government, continues to be driven by some of the Strategic Integrated Projects. The value for the first half of 2022 was boosted by the government’s R18 billion Salvokop mixed-use district, which will cover 524,000 sqm in Pretoria.
Investment in the finance, real estate and business services industries remained relatively subdued, Nedbank said, while the Capex plans for the manufacturing sector remained depressed, undermined by the electricity shortage and possibly fading competitiveness.
The wholesale, retail and motor trade, hotels and catering industries also remained subdued. “However, Pick n Pay is investing R2 billion in a new distribution centre in Gauteng,” the bank noted.
Only a few new plans emerged from the transport, storage and communications industries, mostly centred on the upgrade of the highways in KwaZulu-Natal and Gauteng.
The table below outlines the big investment projects in the pipeline for South Africa:
|Salvokop mixed-use government district||Other community||R18 000 000 000|
|Vaal River City Interchange||Transport services||R200 000 000|
|K14 (P2/5) (R513) Cullinan (Rayton)||Land and pipeline transport||R179 000 000|
|Green hydrogen plant||Electricity, gas and steam||R75 000 000 000|
|Gamsberg Phase 2 expansion project||Metal ore mining||R7 000 000 000|
|Investec Property||Real estate||R6 000 000 000|
|Nkuna Smart City||Real estate||R5 500 000 000|
|Marula Phase II||Metal ore mining||R5 100 000 000|
|Mototolo/Der Brochen life extension project||Metal ore mining||R3 900 000 000|
|South32 aluminium plant||Other non-metallic mineral products||R3 000 000 000|
|Pick n Pay – Eastport distribution centre||Retail trade||R2 000 000 000|
|Mnambithi Terminals||Food, beverages and tobacco||R1 500 000 000|
|Dakota Precinct||Real estate||R1 300 000 000|
|Bidvest liquid petroleum gas facility||Electricity, gas and steam||R1 000 000 000|
|Virginia Gas Project||Petroleum, chemicals and plastics||R1 000 000 000|
|Montrose interchange project||Transport services||R248 000 000|
|N1: Pienaarsrivier and Bela Bela rehabilitation||Land and pipeline transport||R200 000 000|
|N4: Kameeldrift and Ga-Rankuwa interchanges rehabilitation projects||Land and pipeline transport||R200 000 000|
|R63 national road project||Land and pipeline transport||R150 000 000|
|Xhariep road infrastructure project||Land and pipeline transport||R90 000 000|
Of the 20 new projects announced in 2022, Nedbank categorised 13 of them as large capital projects, which it is tracking along with 23 such projects announced in 2021 – including the Lanseria Smart City, valued at R500 billion.