Infrastructure in South Africa: Who is to finance and who is to pay?

Abstract

Against the backdrop of shifting views on the role of government in the provision of infrastructure, this paper distinguishes between the payment for and financing of the South African Government's infrastructure investment programme. The paper argues for a clear distinction between loan financing by the government for macroeconomic considerations and the benchmark approach to the financing of infrastructural projects. It presents a classification system that enables a systematic mapping of all prospective projects, with reference to considerations of efficiency and equity, and uses this system to question the government's financing strategy and identify alternatives. The Gautrain Rapid Rail project is used as a case study to demonstrate these alternatives. © 2010 Development Bank of Southern Africa.