Parastatals underspend on infrastructure

2013-02-27 16:01 - Sapa

Cape Town - State-owned companies are still failing to spend enough of their budgets on key infrastructure projects.

According to the 2013 Budget Review, tabled by Finance Minister Pravin Gordhan on Wednesday, SOEs (state-owned enterprises) spent 70% of the R131.7bn committed to infrastructure last year (2011/12).

This was an improvement on the previous year, where only 62% of that budget was spent.

"The shortfall against budget, however, was substantial, resulting largely from procurement and project implementation delays."

The document says that over the next three years, capital expenditure by SOEs is expected to reach R377.5bn.

The majority of these infrastructure projects are in the energy (Eskom), transport (Transnet) and water sectors.

"Over the next three years, 43% of the funding required for infrastructure development by state-owned companies is expected to be raised in the debt markets, with the remainder coming from internally generated cash."

The need for private companies to "co-invest and bring technical expertise" to massive infrastructure projects is emphasised.

"An example of this approach has been the renewable energy independent power producer programme, which attracted R46.6bn worth of investments from the private sector in 2012/13."

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