HOLD­ING OUT

Finweek English Edition - - INVESTMENT -

I missed the State of the Na­tion ad­dress, but Chris Gil­mour of Absa made men­tion of a com­ment from the pres­i­dent that on the sur­face makes no sense. He said: “By the end of March this year, start­ing from 2009, Government will have spent about R860bn on in­fra­struc­ture.” He then went on to men­tion a few of the projects, but hold on – R860bn spent in the last four years? That’s about R215bn a year, yet the listed con­struc­tion com­pa­nies re­ported rev­enue for the last year of around R150bn be­tween them. But then, if one thinks about it, he’s likely in­cluded all projects started and their val­ues, not money spent. Hence the Medupi and Transnet spend would be in­cluded and that’s likely about half of that R860bn amount. So the sil­ver bul­let of in­fra­struc­ture spend that con­struc­tion CEOs and in­vestors are wait­ing for is al­ready hap­pen­ing and the in­dus­try needs to find an­other saviour.

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