R110bn infrastructure plan for Johannesburg

Johannesburg CityThe City of Joburg’s (CoJ’s) plan to invest R110 billion to upgrade ageing infrastructure in the inner-city, has been embraced by economists who also warned that funds should be channelled to address challenges with the city’s water and electricity supply.

In an announcement last week, ahead of this week’s C40 Summit in Sandton, CoJ Executive Mayor Mpho Parks Tau said the city would spend more than R110 billion on the provision of infrastructure over the next ten years.

Johannesburg is characterised by its ageing infrastructure, capacity constraints and backlogs, which have negatively affected water usage, sewerage and electricity supply.

The city is also pigeonholed by its Achilles heel: the state of the roads and traffic.

“Over the next three years, more than R30 billion will be allocated to the replacement and upgrading of ageing infrastructure as well as new infrastructure,” he said.

In addition, Tau revealed that in the 2013/14 financial year alone, R7.3 billion will be spent on infrastructure – almost double that of the R4.6 billion in 2012/13.

The 2014/15 financial year is set to allocate a further R13.5 billion, he added.

Tau said Johannesburg had a mammoth task of providing housing, services and opportunities for its growing urban population.

“Infrastructure development is fundamental to many of the City’s priority programmes. In particular, the commitment to ensuring that all residents have access to higher levels of basic services while reducing the high levels of water and electricity losses with refurbished and smart infrastructure.”

The city also had the onus to develop new generation infrastructure that would supplement the supply of water, electricity and fuel supply within it.

This required “investment into more appropriate infrastructure services, and also into enabling infrastructure, as a catalyst for private investment and economic growth,” said Tau.

Experts said this investment was long overdue.

About 40% of the water in Joburg was lost due to old pipes, a lack of water meters and theft, according to information from Economists.co.za.

Secondly, electricity infrastructure was outdated.

According to Economists.co.za’s Mike Schüssler, these areas were important as people could not live without water, nor could industries and businesses work without it.

“We need other ways to put in better electricity and Joburg needs better smarter meters. This along with policy may allow for small scale electricity production such as gas, solar, wind etc and can be sold back to the city at a discount and provide an alternative to the city,” he explained.

“However the better and smarter grid would allow other things such as networks and give the city a new stream of income. But the main thing has to be to improve and upgrade the older failing infrastructure or no new firms will set up companies here.

Schüssler added that there was also a need to revamp roads and increase the capacity of current roads. “Public transport also needs to be brought into the main stream here but the first and most important part is that roads are upgraded and that we look at traffic light technology that lowers the cost of transport.”

Azar Jamine, the chief economist of Econometrix said the investment into the inner city would have a knock-on effect that would result in job creation elsewhere in surrounding areas of Joburg.

“This offers an opportunity for entrepreneurs and we hope that the roll-out goes to small businesses instead of the usual suspects. The project is believable and will benefit other areas instead of bankrolling more social spending initiatives where we do not see the money again. Rather spend it on infrastructure,” he said.


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