Supporting Public Infrastructure Investment

The Minister of Finance Enoch Godongwana recently announced that government is introducing fundamental and far-reaching reforms to infrastructure financing and delivery.

During the 2024 Budget Speech, Minister Godogwana said the reforms are to optimise the infrastructure value chain to be effective and efficient.

“In this way, we will strengthen the public investment management and the associated value chain. We will also attract private sector participation,” the Minister said.

He said the National Treasury gazetted the amendments to the public-private partnership (PPP) regulatory framework for public comments in February.

The amendments seek to reduce the procedural complexity of undertaking PPPs, create capacity to support and manage PPPs, formulate clear rules for managing unsolicited bids, and strengthen the governance of fiscal risk.

“We are reviewing institutional arrangements and governance for catalytic infrastructure. The intention is to create clearer mechanisms for accountability, cooperation and coordination,” the Minister said.

“We are also consolidating similar functions to reduce duplication and inefficiencies. The intention is to fast-track delivery, particularly of blended finance arrangements,” he added.

In addition to that, he said the National Treasury is introducing several new financing instruments, such as infrastructure bonds and concessional loans.

As part of this, he said, a flow-through tax vehicle for specific infrastructure projects, similar to trusts and other investment vehicles, is being considered.

“A new funding window for proposals under the new dispensation of financing instruments will be opened to public institutions shortly,” said Minister Godogwana.

He said through these reforms, greater efficiency gains and infrastructure delivery will be fasttracked. This will benefit network sectors, social infrastructure, PPPs and blended finance projects.

Reflecting on 30 years of freedom and democracy, the Minister said South Africa has come a long way.

“The 30 years ahead of us, and whatever challenges and opportunities they may bring, are something we should look forward to. Given our difficult past, and some of the inevitable challenges we have faced as a young democracy trying to find its place in a world marked by a number of new and overlapping crises, it would be easy to indulge in extremes; either of blind optimism or crippling pessimism. We should resist both these extremes,” he said. v