1. SA National Infrastructure Plan OFFICE OF THE ACCOUNTANT-GENERAL Presenter: Jonas Shai | Director, National Treasury | August 2014

2. Agenda Background Global Risks Strategic Infrastructure Projects Risks Opportunities Conclusion 2

3. “IT IS CLEAR THAT WE NEED TO CHANGE GEAR. ALL SOUTH AFRICANS NEED TO WORK TOGETHER IN A CONCERTED EFFORT TO IMPROVE SERVICE DELIVERY, BOLSTER JOB CREATION AND EXPEDITE ECONOMIC TRANSFORMATION.” »President J. Zuma 3

4. Background NDP and New Growth Path PICC >>>National Infrastructure Plan –Poor Coordination –Weak Integration –Plans that go beyond 5 year terms 645 projects 18 Strategic Integrated Plans (SIP’s) 4

5. Global Risk 2014 Financial Crises in Key Economies Structurally High Unemployment Water Crises Severe Income Disparity Greater incidents of Extreme Weather Events Global Governance Failure Food Crises Failure of Major Financial Mechanisms/Institutions Profound Political and Social Instability 5 Source: World Economic Forum Global Risks Perception Survey 2013-2014

6. Strategic Integrated Projects 5 Geographically-focused SIPs 3 Spatial SIPs 3 Energy SIPs 3 Social Infrastructure SIPs 2 Knowledge SIPs 1 Regional Integration SIP 1 Water and Sanitation SIP 6 Source: A Summary of the South African National Infrastructure Plan

7. The 18 Strategic Infrastructure Projects SIP 1: Unlocking the northern mineral belt with Primary Mineral Reserves Waterberg as the catalyst SIP 2: Durban-Free State-Gauteng logistics and industrial corridor SIP 3: South-Eastern node & corridor development SIP 4: Unlocking the economic opportunities in North West Province SIP 5: Saldanha-Northern Cape development corridor SIP 6: Integrated municipal infrastructure project SIP 7: Integrated urban space and public transport programme 7

8. The 18 Strategic Infrastructure Projects - Contd SIP 8: Green energy in support of the South African economy SIP 9: Electricity generation to support socioeconomic development SIP 10: Electricity transmission and distribution for all SIP 11: Agri-logistics and rural infrastructure SIP 12: Revitalisation of public hospitals and other health facilities SIP 13: National school build programme SIP 14: Higher education infrastructure 8

9. The 18 Strategic Infrastructure Projects - Contd SIP 15: Expanding access to communication technology SIP 16: SKA & Meerkat SIP 17: Regional integration for African cooperation and development SIP 18: Water and sanitation infrastructure 9

10. Project Management Place Mat 10

11. Inherent Risks and the CRO Poor planning: Well-defined specifications and project scope Poor quality of execution Poor project controls (schedule, cost, quality, safety, health and environment) Fraud and corruption Scope Creep Poor management of industrial relations Late authorizations and approvals Key dependencies 11 Problem of Induction

12. Inherent Risks and the CRO Assumptions made are significantly misstated Ambiguous communication http://management.simplicable.com/management/new/130-project-risks 12

13. Opportunities Reporting efficiencies: Risk Monitoring activities Predictive nature: Emerging risks to projects e.g. overruns Insurance :2011-2014 13

14. Conclusion 14

15. Questions and Answers Technical Consultations Jeets Hargovan GTAC Jeets.hargovan@treasury.gov.za 15