(AsgiSA) Annual Report 2008 - South African Government Information

Accelerated and Shared Growth Initiative for South Africa
ANNUAL REPORT
2008
While progress has been recorded, further improving the competitiveness, efficiency and
capacity of the national logistics system is a key national infrastructure objective. In this
regard, the pricing of infrastructure services has emerged as an important issue to address.
Price regulation, based on the principle of institutionalised independent regulators, is the
policy choice adopted by government. The principle of independent regulation is well entrenched
and while good progress has been made in developing the institutional capacity to
implement this policy choice in some areas (energy infrastructure and telecommunications),
rapid improvement will be needed to further develop independent regulation of port, rail
and airport services. The Presidency-led initiative to develop a framework for regulators
should be accelerated during 2009.
5.3.3 Timeous completion of infrastructure capital projects
Because of the visibility, delays and cost overruns of many of the larger infrastructure
projects like stadiums, pipelines, power stations and railway lines, they receive public and
policy-maker attention. However, this is not the case with many of the smaller and mediumsized
infrastructure projects across government. Financial data at the national, provincial
and local government levels – what was budgeted and whether it was spent or not – is
drawn from the national budgeting and reporting system, managed by National Treasury.
In previous AsgiSA reports, more detail on infrastructure expenditure at project level was
gleaned from National Treasury’s National Project Register. Since the beginning of 2008,
National Treasury has ceased to maintain the register (although its IGR Unit does maintain a
smaller register of projects), but is able to track infrastructure expenditure at a macro level
using the reporting mechanisms built into the MTEF process. In 2009, it will be important to
weigh up the costs and benefits of resourcing and maintaining a national project registry and
tracking system, which provides regular information on the status of each of the estimated
24 000 government capital projects.
The 2010 project experience shows how massive cost escalation can result from poor project
planning, and contracting and management procedures, particularly when working against
non-negotiable FIFA deadlines. The global downturn has shifted attention away from similarly
critical economic infrastructure projects such as power generation, distribution and the
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