25 major projects planned for South Africa – including a smart city, new borders and highway upgrades

Nedbank has published its latest capital expenditure project listing report, detailing some of the major fixed investment projects planned for South Africa.

The bank’s listing shows that fixed investment activity is starting to show signs of life, following the pandemic-induced implosion and the prolonged slump from 2014.

Notably, a total of R208 billion in new projects were announced in 2021, up from R72 billion over 2020 and R138 billion over 2019.

“The private sector is leading the revival, planning R120 billion of new projects, accounting for 58% of all new projects announced in 2021,” the bank said.

“Capital projects by government and public corporations also picked up, driven the government’s ambitious plans to restore the country’s ageing and eroded economic infrastructure.”

Nedbank said that it expects capital spending to rise off a low base in 2022, but to still end the year below its pre-pandemic levels.

The upside will remain constrained by the electricity shortage, other infrastructure constraints, slow progress with structural reforms and persistent policy uncertainty in some industries, it said.

The below table shows some of the major public and private sector projects currently in the works for South Africa based on Nedbank’s data.

The government announced plans to embark on a massive infrastructure drive to revive the economy in 2020. The goal is to invest R2.3 trillion in 276 projects over the next ten years.

Of these, 50 projects were flagged as priority projects, with a total value of R352 billion. Table 3 shows the 50 priority Strategic Integrated Projects and the allocations per major sector.

Most of these projects were not included in Nedbank’s calculations for 2021 because critical details on the value, scope and timing are unavailable. The Nedbank schedule only captures about R57.9 billion of R352 billion or 17.8% of the government’s priority projects.

The projects included that fall under the umbrella of Strategic Integrated Projects are the N2 and N3 highway upgrade, phase 2 of the SA Connect project, the student housing programme, phase 2 of the Crocodile Mokolo water scheme, and the One-Stop Border Posts.

Project R million Infrastructure type
SA Connect Phase 2 20 000 Telecommunications
Strategic Integrated Projects – Student Housing Programme 3 400 Education
Crocodile Mokolo water augmentation project (CMWAP) – Phase 2 3 000 Water
One-Stop Border Posts 1 500 Public administration
MeerKAT extension project 900 Telecommunications

Public corporations

Project R million Infrastructure type
Eskom grid infrastructure investment plan 178 000 Electricity
South African National Roads Agency Limited (Sanral) N2 and N3 highway upgrade 30 000 Roads
Gauteng Department of Roads and Transport infrastructure projects 17 400 Roads
Saldanha Bay Industrial Development Zone (Phase 1) 3 200 Water
Prasa Cape Town commuter train service 3 000 Rail
Inxuba Yethemba local municipality road projects 1 200 Roads

Private sector

Project R million Infrastructure type
Lanseria Smart Mega City 500 000 Real estate
Renewable Energy Independent Power Producer Procurement Programme (REIPPP) – 5th round – 25 projects 50 000 Electricity
Ford SA Silverton factory upgrade 15 800 Transport equipment
Vantage Data Centres Johannesburg Campus 15 243 Computers
Two Rivers Merensky project 5 700 Gold &uranium mining
Gauteng Roads and Transport infrastructure – Private developer’s contribution 5 600 Roads
Zaaiplaats gold project 4 500 Gold & uranium mining
K4 platinum group metals (PGMs) project 3 900 Gold & uranium mining
Kareerand tailings facility 3 200 Gold & uranium mining
Toyota South Africa Motors (Corolla Cross) 3 000 Transport equipment
Sibanye-Stillwater platinum group metals solar photovoltaic (PV) projects 2 500 Metal ore mining
South African Breweries (SAB) investment plan 2 000 Beverages
Bekezela Colliery greenfield project 1 500 Coal & lignite mining
Transvaal Gold Minin g Estate Ltd (TGME) under ground project 1 009 Gold & uranium mining

The rise in the value of new projects announcements is encouraging, suggesting that the official fixed investment measure should improve after years of stagnation, Nedbank said.

“The most positive feature of last year’s announcements is the focus on essential economic infrastructure, notably electricity, road and telecommunications.

“If these public sector projects are completed, it will help to ease existing constraints on private activity and raise the country’s potential growth rate moderately.”

Such developments, in turn, could spark a virtuous cycle of rising business confidence, stronger economic growth, foster job creation and increased private sector fixed investment, the bank said.

“Although promising, the country’s electricity shortage and other infrastructure backlogs will not be lifted by these projects alone. Further large-scale investments in energy, road, rail, and port infrastructure are urgently needed to replace rapidly ageing existing infrastructure and expand infrastructure capacity in general.

“Some doubts remain over the public sector’s ability to implement and complete large capital projects on standard, on time and on budget, given the poor track record of the past decade.”

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25 major projects planned for South Africa – including a smart city, new borders and highway upgrades