1. THE ROLE OF INFRASTRUCTURE IN THE ECONOMY OF EC PROVINCE
Presented by Nomhle Chinese Tys

2. Infrastructure is the prerequisite for the development of any economy
Infrastructure is the prerequisite for the development of any economy. Transport, telecommunications, energy, water, health, housing, and educational facilities have become part and parcel of human existence.
It is difficult to imagine a modern world without these facilities.
These are vital to the household life as well as to the economic activity.
Infrastructure plays a crucial role in promoting economic growth and thereby contributes to the reduction of economic disparity, poverty and deprivations in a country.
Greater access of the poor to education and health services, water and sanitation, road network and electricity is needed to bring equitable development and social empowerment.
It is an important pre-condition for sustainable economic and social development.

3. Infrastructural investments in transport (roads, railways, ports and civil aviation), power, irrigation, watersheds, hydroelectric works, scientific research and training, markets and warehousing, communications , education, health and family welfare play a strategic but indirect role in the development process, but makes a significant contribution towards growth by increasing the factor productivity of land, labour and capital in the production process, especially safe drinking water and sanitation, basic educational facilities strongly influence to the quality of life of the people.

4. INTRODUCTION
There is a precise link between infrastructure and development.
Infrastructure investment directly affects the economic development.
Therefore, the only way to build up a country’s productive potential and raise per capita income is to expand the capacity for producing goods, this need not refer simply to the provision of plant and machinery, but also to roads, railways, power lines, water pipes, schools, hospitals, houses and even “incentive” consumer goods such as consumer durables, all of which can contribute to increased productivity and higher living standards.

5. Regions need to have good basic facilities like health, education, transport, communication, water, sanitation, energy, housing, etc.
This will attract more investments especially the small and marginal entrepreneur starts their production activities.
Good transportation, low cost of electricity, availability of skilled labour facilities always have negative effects on the cost of production, positive effects on production as well as profit levels.
Inadequate infrastructure and services become the burden for infrastructure suppliers, and led to the low efficiency of output.

6. INFRASTRUCTURE DEVELOPMENT AND ECONOMIC GROWTH: LINKAGES
Provision and maintenance of adequate infrastructure facilities are absolutely necessary if rapid economic growth is to be achieved and sustained.
The availability of infrastructure like power, telecommunication and transport is absolutely vital for accelerated development and modernization of a country.
“The link between infrastructure and development is not a once for all affair, it is a continuous process and progress in development

7. Has to be preceded, accompanied and followed by progress in infrastructure, if are to fulfil our declared objectives of self accelerating process of economic development.”
An infrastructural facility both economic and social constitutes the core of development strategy and efforts.
Efficient and affordable infrastructural services are key bone to the higher productivity and output growth.

8. Energy, transportation, electricity, telecommunication, availability of skilled workforce, technical and general education, health facilities, agricultural and rural infrastructure like rural roads, irrigation facilities, fertilizers and pesticides, credit facilities, availability markets all the social and economic infrastructure services are made positive and strong impacts on output growth of as well as eliminates the poor performance the different sectors of the economy.
The linkage between infrastructure and economic growth is multiple and complex, because not only does it affect production and consumption directly, but it also creates many direct and indirect externalities, and involves large flows of expenditure thereby creating additional employment.

9. The poor suffer not only from low incomes but also from inadequate access to public services essential to their health and productivity.
As many of these services, such as sanitation and water supply, cannot be privately purchased, an expanded public program for wider distribution of services must be an important element of strategies to alleviate poverty.

10. The linkage between infrastructure and economic growth is multiple and complex, because not only does it affect production and consumption directly, but it also creates many direct and indirect externalities, and involves large flows of expenditure thereby creating additional employment.
The poor suffer not only from low incomes but also from inadequate access to public services essential to their health and productivity.
As many of these services, such as sanitation and water supply, cannot be privately purchased, an expanded public program for wider distribution of services must be an important element of strategies to alleviate poverty.

11. Channels through which investment in infrastructure can contribute to growth
Reducing transaction costs and facilitating trade flows within and across borders;
Enabling economic actors individuals, firms, governments to respond to new types of demand in different places;
Lowering the costs of inputs for entrepreneurs, or making existing businesses more profitable;
Creating employment, including in public works (both as social protection and as a counter-cyclical policy in times of recession);

12. Enhancing human capital, for example by improving access to schools and health centers; and
Improving environmental conditions, which link to improved livelihood
Better health and reduced vulnerability of the poor
Therefore, infrastructure development contributes to investment and growth through increase in productivity and efficiency as it links between resources to factories, people to jobs and products to markets.

13. Figure 1 – How Infrastructure Contributes to Growth

14. Government has adopted the 9 point plan to implement the economic targets of the MTSF
Resolving the energy challenge.
Revitalizing agriculture and the agro-processing value chain.
Advancing beneficiation or adding value to our mineral wealth.
More effective implementation of a higher impact Industrial Policy Action Plan.
Encouraging private sector investment.
Moderating workplace conflict.
Unlocking the potential of SMMEs, cooperatives, township and rural enterprises.

15. Government has adopted the 9 point plan to implement the economic targets of the MTSF
State reform and boosting the role of state owned companies, ICT infrastructure or broadband roll out, water, sanitation and transport infrastructure
Operation Phakisa aimed growing the ocean economy and other sectors.

16. Xonxa Dam Transfer Scheme & Bulk Water Supply
Changing the lives of the people of Lukhanji LM through infrastructure development.
A Client committed to delivering on a promise of economic and socio-economic development.

17. “Real” Investment Estimated Construction Cost : R320 million
Estimated Project Investment in local SMME Contractors & suppliers : R 41 million (24%, excl. pipes & M&E equipment)
Investment in local labour to date : R8.640 million
Accommodation
Food
New investment and businesses
Transport

18. “Real” Project Scope Lukhanji LM (EC134) – STATS SA Census 2011
190,724 people directly impacted through the project
54,029 households
Xonxa Village = 1870 households impacted through this project
Xonxa hinterland covered through various other smaller projects
91% previously disadvantaged
75.4% of households – indigent / poor
57% unemployed
The successful implementation of this bulk infrastructure project will have an immediate impact on the Lukhanji LM, the indigent demographic, service delivery and backlog eradication.

19. “Real” Project Scope
Alleviation of housing and basic service delivery backlogs urgently needed
Emergency and Health Services affected.
Schools and Clinics affected
Deteriorating borehole water quality affecting health and social structures in Lesseyton, Maccubeni basin and hinterland driving demand for bulk potable water supply to poor/indigent communities facing = health risks and social challenges
Economic growth and employment targets need to be met. NO / poor infrastructure development and economic investment within CHDM due to water supply shortfall. Augmentation of the water supply and mitigation of the current and future water supply shortfall urgently required to revive sustainable growth.

20. SIPs and Project Pipeline
Mega Projects: 5 to 10 years
Planning and preparation
Local economy
Local suppliers
E.g. Setting up plants
Downstream opportunities

21. THANK YOU!