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Creamer Media published Projects in Progress 2014 research report

2nd April 2014

  

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Ticking over, but no fireworks

The growth outlook for South Africa remains weak, with even the National Treasury’s modest gross domestic product forecast of 2.7% for 2014 considered as optimistic by some observers.

This official growth estimate is also well below the 5.4% yearly growth aspiration outlined in the National Development Plan, which argues that higher levels of sustained economic expansion are required if South Africa is to make inroads into poverty, unemployment and inequality.

The upshot of South Africa’s ongoing struggle to recover from the global economic crisis is that the country’s project pipeline remains dominated by public-sector infrastructure projects in the energy, transport and water sectors.

The private sector, which traditionally contributes the lion’s share of fixed investment, remains wary, particularly in light of ongoing supply-side constraints, most notably associated with South Africa’s volatile labour climate and its electricity shortfalls.

However, there are also several demand-side uncertainties; the most important being the outlook for commodity demand and prices in light of the slowdown in China, as that country aims to shift from investment- to consumer-led growth.

Nevertheless, capital investment, while below potential, has not stopped – a reality reflected in this edition of Projects in Progress, which offers updates on some of the large infrastructure developments and private projects being undertaken across South Africa.

State-owned electricity utility Eskom, for example, is implementing some of the largest capital projects ever undertaken to alleviate South Africa’s electricity supply shortfalls.

This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and KwaZulu-Natal.

It also reflects on progress in the roll-out of greenfield renewable-energy projects by private producers and on the development of two new open-cycle gas turbines.

Some of the ‘big ticket’ freight and passenger transport projects also receive attention, as does the development of new dams and bulk water transfer schemes.

The resources sector continues to dominate the private-project pipeline, which includes expansion and replacement projects in the coal, diamond, gold, platinum, ferrous minerals and uranium sectors.

This edition of Projects in Progress shows that the domestic project economy continues to tick over, albeit with few signs of fireworks.

To purchase a copy of the report, click here.

Edited by Creamer Media Reporter

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