Construction of affordable housing will ultimately grind to a halt without infrastructure. For instance, the cost to eradicate South Africa’s road maintenance backlog alone has more than doubled to R416-billion since 2013.
This is one of the conclusions reached in research conducted by Matthew Townshend, a transport economist and economics PhD student at the University of Cape Town. He presented his findings at the Southern African Transport Conference in Pretoria in July.
Townshend says the magnitude of the backlog means it will be immensely difficult to eradicate. “At best, we can perhaps address [the backlog] over the long term, especially given South Africa’s current low growth trajectory and the National Treasury’s commitment to fiscal consolidation.”
He adds that a high degree of prioritisation is required within the road network maintenance space and that possible alternative funding sources to finance the backlog within a five-year period have been explored. The maintenance backlog would take up the entire R400-billion budget for the new economic stimulus plan presented by President Cyril Ramaphosa, says Townshend. It equates to an extra four percentage points on the VAT rate, or an extra R3 a litre to the national fuel levy.
Townshend says R61.2-billion is required to eradicate the functional paved road backlog. The functional backlog is the performance indicator set by the Department of Transport that no more than 10% of the road network should be in a poor or very poor condition. The majority of this backlog is concentrated in provincial roads networks. “Although provinces are only responsible for 29.9% of the total paved road network, they actually account for 78.1% of the functional backlog, and are a very large driver of the paved roads maintenance backlog,” says Townshend.
Acknowledgement: Moneyweb, 11 July 2019