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Budget Speech 2017

South Africa's growth and transformation

Economic infrastructure and investment

 

Madam Speaker, the reform of state-owned companies is an especially important part of the restructuring and strengthening of our economy.

 

State-owned companies are governed by a strong legal framework, and Cabinet has endorsed a series of measures to reinforce governance and accountability and clarify their development mandates. This imposes substantial obligations and responsibilities on boards and senior managers. We expect the highest standards of ethical leadership and understanding.

 

With a combined asset base of R1.2 trillion, the SOCs are well-placed to partner with private sector investors in growing the productive capacity and infrastructure of our economy. But they must be financially strong, governance must be sound, and boards and executives must have the necessary competencies to run complex business enterprises.

 

• Eskom and Transnet have especially large responsibilities as dominant suppliers in major network industries. Their investment programmes are important foundations for more rapid economic growth.
• The South African Post Office is consolidating its mail services and expanding the role of the Postbank.
• PRASA is in the third year of its rolling stock fleet renewal programme.
• The Industrial Development Corporation, the Land Bank and the Development Bank of Southern Africa are financially sound and are steadily expanding their financing of industry, agriculture and municipal infrastructure.

 

Last week I met members of the board of South African Airways to discuss its turnaround plans. I am pleased to report that the challenges are well understood, and the advisory work that is in progress has clarified the way forward.

 

We have also held constructive discussions with the new leadership of the Post Office.

 

During the next few months, proposals for putting the capital structure of SAA and the Post Office on a sound footing will need to be agreed. I hope that this can be dealt with in the Adjustments Budget later this year.

 

Honourable Members, the budget continues to prioritise both national and provincial economic infrastructure requirements.

 

• The Provincial Roads Maintenance Grant is allocated R10.8 billion in 2017/18, taking into account the increase in road traffic volumes.
• SANRAL  receives  R15.4  billion  over  the  period  ahead  for  strengthening  and maintenance of the national road network, which now stands at 21 946 kilometres.
• The Department of Telecommunications and Postal Services receives R1.9 billion over the medium term to invest in high-speed internet connections in public buildings and schools in eight NHI pilot districts.
• The Passenger Rail Agency of South Africa continues to implement its modernisation and rolling stock renewal programme. Over the medium term, R16.7 billion is allocated for 70 new train-sets for Metrorail.
• The development and operation of  integrated public transport networks, funded through the Public Transport Network Grant receives R6.2 billion in 2017/18.
• To support higher density housing, subsidies for social housing have been rationalised and R600 million over the medium term is reprioritised to the Social Housing Regulatory Authority for investment in rental housing units.