|The threat posed to South Africaâ€™s R600-billion infrastructure programme from construction-material shortages had all but vanished along with slowing demand and prices, the head of the Infrastructure Inputs Monitoring Project Seeraj Mohammed confirmed on Thursday.
He, therefore, urged government to turn its attention to projects that had the potential to endure beyond 2010, especially those associated with the poorly capitalised and under-resourced affordable housing programme, as part of a counter-cyclical growth stimulus package for the economy.
Speaking at the annual conference of the Support Programme for Accelerated Infrastructure Development, a joint initiative between The Presidency and the Business Trust, Mohammed argued that a series of social and economic benefits could flow from a focus on the demand-side of the infrastructure equation.
â€œToday, the main threat to infrastructure projects is not supply, but the global economic slowdown and the domestic economic contraction,â€ Mohammed stated.
Infrastructure could play an undoubted role in stimulating growth during the downturn and he was satisfied that government was not only aware of that potential, but also of the fact that fiscal policy would be important in dealing with the effects of the decline.
Government should, therefore, apply its mind to longer-term projects in energy, transport and housing, particularly given that most of the existing projects appeared well set for delivery on schedule by 2010 or 2011.
â€œThis [stimulus] would provide relatively stable demand for key inputs that are produced domestically, as well as for the construction industry and associated industries,â€ he averred.
Referring specifically to the affordable housing sector, Mohammed said that more effort was required to ensure actual delivery against governmentâ€™s stated aspiration of building 500 000 units yearly.
â€œThere is huge scepticism about that target,â€ Mohammed acknowledged, while urging government, business and labour to get behind efforts to build capacity in the housing milieu.
â€œItâ€™s time to focus on housing not only because it has huge socioeconomic advantages for the country, but because, if you look at demand for infrastructure inputs after 2011, housing potentially makes up a large component for steel, cement, plastic pipes and glass demand,â€ he said.
In addition, the main beneficiaries of the programme were currently the least indebted members of South African society.
â€œSo we may actually be able to get some economic stimulus from the kind of people in South Africa who should be increasing consumption â€“ not those who have increased debt to embark on luxury consumption,â€ Mohammed concluded.