Public Infrastructure
By Thabo Mosia
The South African government has announced a R1 trillion public infrastructure investment over the next three years, reinforcing its commitment to economic growth, job creation, and improved service delivery. The announcement was made by Finance Minister Enoch Godongwana during the 2025 Budget Speech in Parliament on Wednesday, 12 March 2025.
Godongwana described infrastructure development as a “key pillar” of South Africa’s growth strategy, highlighting its role in fostering economic development, creating jobs, and enhancing public services.
“This budget reflects that understanding. Allocations towards capital payments are the fastest-growing area of spending by economic classification. Public infrastructure spending over the next three years will amount to more than R1 trillion,” Godongwana stated.
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Infrastructure Investment Breakdown: Where the Money Will Go
The 2025 Budget Review outlines a detailed spending plan, with investments spread across transport, energy, water, and sanitation.
Key Allocations
• R402 billion – Road infrastructure
• R219.2 billion – Energy infrastructure
• R156.3 billion – Water and sanitation infrastructure
These funds will be channeled through state-owned entities (SOEs), municipal projects, and public-private partnerships (PPPs) to accelerate infrastructure upgrades.
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Major Infrastructure Projects and Their Impact
The government’s infrastructure spending will focus on critical sectors to ensure economic growth, improved services, and job creation.
- Transport Infrastructure
• SANRAL (South African National Roads Agency) will invest R100 billion over the medium term to maintain and expand the national road network.
• Provincial roads departments will reseal 16,000 lane-kilometres across various regions.
• Passenger Rail Agency of South Africa (PRASA) will continue rebuilding its rail infrastructure to provide affordable and reliable commuter services.
“The restoration of commuter rail services is crucial for working-class South Africans. PRASA is making steady progress in rebuilding infrastructure to improve public transport accessibility,” said Godongwana.
- Energy Infrastructure
• R219.2 billion will be allocated to strengthen and modernise South Africa’s energy sector.
• Eskom and independent power producers (IPPs) will receive funding for renewable energy projects, maintenance of existing power plants, and grid expansion.
• Infrastructure projects will focus on reducing load shedding and increasing the use of clean energy sources. - Water and Sanitation Infrastructure
• R156.3 billion will be allocated to water and sanitation improvements, focusing on large-scale dam construction and pipeline expansion.
• One of the key projects is the Mkhomazi Water Project, which will begin construction in November 2027 and aims to increase water supply to eThekwini and four district municipalities in KwaZulu-Natal.
• Additional funds will go toward expanding wastewater treatment plants and upgrading aging municipal water infrastructure.
“Clean and accessible water is a basic right. Our investment in large-scale water projects will ensure long-term water security for millions of South Africans,” said Godongwana.
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Public-Private Partnerships (PPPs): Encouraging Private Sector Investment
The National Treasury has stressed the importance of private sector participation in South Africa’s infrastructure development. To encourage faster project delivery and greater efficiency, several new measures and reforms will be introduced:
• From June 2025, projects valued under R2 billion will no longer require lengthy government approval processes before they begin.
• A new framework is being developed to streamline unsolicited PPP proposals from private investors and construction companies.
• Municipal PPP regulations will be revised to make it easier for local governments to partner with private developers.
• Updated PPP guidelines and manuals will be made publicly available to enhance transparency and accountability.
The National Treasury is also establishing a single coordination structure to oversee:
• Project preparation and planning
• Public-private partnerships (PPPs)
• Infrastructure funding and credit guarantees
“By improving the regulatory environment for public-private partnerships, we can unlock billions in additional investment from the private sector,” said a National Treasury spokesperson.
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Infrastructure Investment: Key to Economic Growth and Job Creation
The R1 trillion infrastructure investment is expected to stimulate economic growth and create thousands of jobs. Analysts believe that improving roads, transport, and energy will have far-reaching economic benefits, particularly for industries such as:
• Construction
• Manufacturing
• Logistics and transport
• Energy and utilities
Key benefits of this investment include:
✅ Reduced unemployment – Infrastructure projects will create jobs across various sectors.
✅ Boosted investor confidence – Enhanced infrastructure will attract local and international investment.
✅ Improved public services – Better roads, railways, and energy supply will improve daily life for South Africans.
✅ Stronger economic growth – Upgraded infrastructure will enhance productivity and economic competitiveness.
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Challenges and Concerns: Ensuring Effective Implementation
Despite the ambitious investment plan, some concerns remain regarding government execution, accountability, and corruption risks.
• Corruption and mismanagement: Some infrastructure projects have historically suffered from misuse of funds and delays.
• Slow implementation: Bureaucratic red tape could delay key projects unless fast-tracking measures are strictly enforced.
• Budget sustainability: With South Africa’s growing debt burden, some analysts worry about the long-term affordability of these projects.
To address these concerns, the government has committed to stricter oversight and transparency in infrastructure spending. The Office of the Auditor-General will conduct regular audits, and Parliamentary committees will monitor project implementation and progress reports.
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