More than R8 billion has been allocated to the rehabilitation of the rail infrastructure of the iron ore corridor between the Northern Cape and the Port of Saldanha, and another of Transnet’s rail corridors. National Treasury Director-General Duncan Pieterse confirmed this during a briefing on Wednesday ahead of his Medium-Term Budget Policy Statement (MTBPS) speech in parliament. Watch and/or read the full speech here. The government’s contribution to this allocation will come from the contingency reserve fund, with the private sector expected to also invest in the projects. The MTBPS stated that the government will expand the contingency reserve to R13.5 billion in the current year, utilising part of the revenue overrun. “These funds will be used mainly for infrastructure-related spending and the 2026 municipal elections,” it said. The MTBPS stated that the rehabilitation of the rail infrastructure on the iron ore corridor between the Northern Cape and the Port of Saldanha aims to restore the design capacity to 60 million tonnes per year. Read: South Africa takes key step on rail, ports fix with private help Rail reform milestone puts SA economy back on track It stated that the government also aims to raise funds to support the execution of Transnet’s rehabilitation of the north corridor reinstatement project, which will rehabilitate rail infrastructure linking inland terminals in Gauteng and the Port of Durban, thereby restoring the design capacity of 77 million tonnes per year. The rehabilitation of the rail infrastructure on these two corridors follows proposals submitted to the Budget for Infrastructure (BFI) facility at the National Treasury, and the projects are undergoing detailed technical analysis against the BFI’s screening criteria. The MTBPS confirmed that these two projects have been added to the pipeline, for which the government will raise finance to support their execution. The reconfigured BFI pipeline also includes: The Square Kilometre Array, which entails the construction of mid-frequency telescopes comprising 137 large dishes connected to high-speed computers to collect and process data from space as part of the global endeavour to build the largest and most sensitive radio telescope. The Polokwane regional wastewater treatment works aim to address critical sanitation challenges by constructing a new regional wastewater facility. The MTBPS said funding will be disbursed through the Infrastructure Fund in the Development Bank of Southern Africa (DBSA) to ensure outlays are made in line with delivery milestones. Godongwana said in his MTBPS speech that the BFI has been reconfigured to run four bid windows annually instead of just one. Read: Transnet to issue request for proposals for private rail partners soon Creecy announces breakthrough in SA rail reform: 11 TOCs approved He added that since the reconfiguration, the BFI has received 28 submissions, with nine projects accepted for detailed analysis. It stated that these include introducing private partners and adhering to sound project management and governance principles. Godongwana told parliament that the amendments to the public-private partnership (PPP) regulations took effect on 1 June 2025, unlocking potential across various spheres of government and streamlining approvals for smaller projects. He said new guidelines on unsolicited bids, fiscal commitments, and contingent liabilities were issued three weeks ago, and these took effect immediately. “The unsolicited bid guideline provides a clear, structured pathway for the private sector to submit project ideas to the government. “It also provides a framework for reporting and managing fiscal commitments and contingent liabilities arising from PPP projects. “Municipal PPP regulations will be amended by 2026,” he said. Godongwana said a new infrastructure bond will be launched soon to raise a minimum of R15 billion to fund the BFI projects. He said the bond forms part of the government’s efforts to introduce dedicated financing instruments that can mobilise cheaper financing to support our infrastructure agenda. Godongwana said the government will also contribute R2 billion to capitalise the Credit Guarantee Vehicle, which will initially support electricity transmission expansion and directly contribute to the government’s efforts at energy security, while also driving decarbonisation. Read: Creecy punts private sector investment for five rail and port corridors “This heralds a new era in PPPs, where private investment in high-voltage transmission lines is enabled. “This is real progress in our move away from merely fixing the power utility to securing power to the grid from a range of sources. “This is a key and innovative part of infrastructure reforms developed with international partners to de-risk private investment without state guarantees. “We are also committed to simplifying the institutional arrangements across the infrastructure ecosystem,” he said. Godongwana said the new Infrastructure Finance and Implementation Support Agency will be operational by March 2026 and will provide project preparation support to supply the BFI pipeline. He said it will centralise infrastructure finance functions to systematically crowd-in private capital and promote the use of alternative delivery mechanisms.
