Investment in projects by State-owned companies, including the Passenger Rail Agency of South Africa’s (PRASA’s) R123-billion fleet renewal programme, would account for the largest investments in economic infrastructure by the public sector over the medium-term expenditure framework period, Finance Minister Pravin Gordhan said in his Medium-Term Budget Policy Statement (MTBPS) on Wednesday.

Government expenditure on economic infrastructure, which includes transport, energy and communications, was increased to R84.3-billion for 2013/14, from R78.6-billion in 2012/13. Expenditure on transport infrastructure would amount to R73-billion of the revised figure.

Increased investment in economic infrastructure, including rail, water, roads, ports and broadband communication, of which the baseline was expected to grow by an average rate of 7.9% a year to R105.8-billion in 2016/17, would support South Africa’s transition to more rapid growth over the medium term, Gordhan said.

“The National Development Plan calls for the maintenance of the road network, renewal of the commuter rail fleet and unblocking constraints to spectrum allocation in the information technology sector,” the Minister stated.

He added that R2.5-billion had been reprioritised through the fiscus to support infrastructure modernisation projects.

In addition, Gordhan noted that PRASA’s fleet renewal programme would be supported through additional funding.

The rail agency was working to replace its ageing fleet of commuter trains with 1 200 electrical trains over the course of the next 20 years to meet the growing demand of commuters in the country’s major cities.

The organisation last week signed a R51-billion contract with Gibela Rail Transportation, of which multinational Alstom is the majority shareholder, for the delivery of 600 passenger trains, comprising 3 600 coaches, between 2015 and 2025.

Further, R20-million in unspent funds had been declared on the Department of Transport’s taxi recapitalisation programme as fewer than expected taxis had been scrapped. The department was reviewing the impact of its taxi recapitalisation programme and a portion of the programme’s funding would be delayed until the end of the spending period.

Meanwhile, Gordhan also stated that the Nuclear Energy Corporation of South Africa would receive additional funding for research and development, as well as to refurbish existing research facilities.