SA transport is limiting economic growth - Gordhan

MIDRAND - Finance Minister Pravin Gordhan on Wednesday told the ANC’s National Policy Conference that a skills shortage and inadequate transport infrastructure is limiting economic growth in South Africa. He said the structure of the economy had remained essentially the same since 1994. The minister was speaking at a business breakfast at the conference in Midrand, Johannesburg. In his opening address on Tuesday, President Jacob Zuma said the country needs radical economic change. Some 3, 500 delegates made up of ANC branches, its leagues, alliances and business people will spend the week discussing and debating policy. However, no immediate policy decisions will be made. Gordhan spoke to business and outlined some of the challenges in the global economy which he believes have a significant impact on South Africa and other countries on the continent. He said policy makers must ask themselves what needs to be done differently. “One of the challenges that the last few years, particularly the last 18 months or so, exposed, is the gap between policy makers and the business sector on the one hand – and ordinary citizens on the other hand". Gordhan said in the local context, a lack of skills and inadequate transport infrastructure are some of the challenges. (Edited by Thato Motaung) EWN Less than a month earlier.... Sanral support won’t result in deficit slippages, Gordhan avers |

By: Terence Creamer 31st May 2012 TEXT SIZE Finance Minister Pravin Gordhan has insisted that any additional financial support extended to stabilise the financial position of the South African National Roads Agency Limited (Sanral) will have no impact on South Africa’s Budget deficit position. It was confirmed on Thursday that government was considering the implementation of an additional Appropriation Bill to assist the embattled roads agency meet its short-term financial obligations. But Gordhan stressed that government would not pursue interventions that could result in an increase in the deficit. “Let me say very emphatically . . . nothing that we do is going to increase our deficit. Everything that we will do, and have to do, will be within the current fiscal envelope,” Gordhan said. He also indicated that it was possible that the resources would be sourced through reductions in the allocations to other national departments. In February, Gordhan announced revised deficit figures, which had been lowered when compared with the forecasts disclosed in the October mini-Budget. The deficit was currently expected to be 4.6% of gross domestic product (GDP) in 2012/13, and fall to 4% in 2013/14, before retreating to 3% in 2014/15. The Bill to support Sanral, which could be introduced once Parliament reassembles after its upcoming recess, was being considered in light of constraints that had arisen following a North Gauteng High Court interdict preventing the State-owned company from moving ahead with collecting toll fees to pay for the recently upgraded motorways in the country’s richest province. Sanral borrowed R20-billion to build the roads, which, together with interest payments and maintenance over the 24-year repayment period, would result in a total cost of around R58-billion. It intended implementing an electronic-toll (e-toll) collection system to recover the costs from motorists, which would enable it to pay off the debt (R20-billion), cover interest payments (about R38-billion), as well as conduct routine maintenance. However, the interdict prevented Sanral from moving ahead with its e-toll collection system. The National Treasury was, thus, currently working to assess whether an appropriation was necessary, as well as where the money could be sourced and for how long such support would need to endure. Gordhan indicated that the delay in tolling could cost Sanral between R270-million (a Moody’s estimate) and R600-million a month and that, while the timeframe for such support was uncertain, it was likely that the support would endure until year-end. It might also be necessary to assist Sanral with a key debt repayment that would come due in January 2013. However, government has also made an application to the Constitutional Court for leave to appeal the April 28 interdict and the associated legal process was unlikely to be settled by year-end. In fact, Deputy President Kgalema Motlanthe, who is heading up an Inter-Ministerial Committee overseeing the resolution to the dispute over the Gauteng Freeway Improvement Project (GFIP), offered an "educated guess" that the legal process would continue through until August next year. Should the R600-million figure prove correct, it implied support of R3.6-billion until year-end, which would be over-and-above the R5.75-billion bail-out already confirmed in the February Budget. USER-PAY PRINCIPLE But for government, the GFIP matter also offered a platform for government to defend the user-pay principle more generally. In his statement Motlanthe reaffirmed that the user-pay option “was the most viable, fair and equitable” way to fund the GFIP and that open-road tolling was the “most appropriate mechanism for collection of toll fees”. But he also restated government’s argument that it should be able to include user charges in its arsenal of infrastructure funding options. He was supported by Gordhan, who called for the emotion to be set aside and for South Africans to understand that “there are limited sources of funding from which we can pay for the things we desire” and that user charges had to sustained as one of those funding options. “The element of user charges is a crucial element anywhere in the world. We pay for electricity, we pay for telephones, we pay for water, we pay for sanitation, we pay for refuse removal – those are user charges,” Gordhan said, while acknowledging that these were not always cost reflective. South Africa, he added, required a combination of resources from direct fiscal allocations, to user charges, debt raising and public–private partnerships to deliver on the R845-billion public infrastructure plan outlined for the coming three years. “It is very important that the principle of user-pay and of user chargers is not undermined through this process and through the emotion, and that we are able to sustain our ambition to provide the kind of infrastructure that will both impact positively on our economic potential, but also the environmental in which our people live.” Edited by: Creamer Media Reporter Comments by Sonny You don't have to be a Rocket Scientist to see that Gordhan is trying to smuggle with our minds. Is he the one who authorised the use of GEPF funds for SANRAL? Is he the one responsible for wanting to use GEPF funds for future development? Does he not know that it 'might just impede on his own pension?' Or is he the untouchable at the top of the Pyramid? Who loaded the dice?