Budget Speech 2026 Infrastructure

 

Madam Speaker, infrastructure investment remains the foundation upon which long-term economic growth, improved service delivery and job creation are built.

 

Government is shifting the composition of spending towards growth-enhancing public infrastructure.

 

Over the medium-term, public-sector spending on infrastructure will exceed R1 trillion.

 

Of this:

 

 

 

 

By sector, transport and logistics make up the largest share.

 

Transport, Water and Energy

 

SANRAL will focus on strengthening long-term network resilience. This includes the annual maintenance of approximately 27,000 kilometers and the resurfacing of 2,000 kilometers of road.

 

The Passenger Rail Agency of South Africa (PRASA) will continue implementing its corridors recovery programme and modernising core infrastructure to rebuild a reliable, affordable rail service for commuters.

 

This will enable the increase in annual passenger trips from 77 million in 2024/25 to between 250 and 450 million over the medium term.

 

In energy, investment will focus on improving security of supply and mobilise private investment.

 

Since the MTBPS, I am pleased to announce that National Treasury together with the World Bank are making significant progress with the Credit Guarantee Vehicle.

 

The CGV, which will support massive investments in transmission infrastructure, will be incorporated as a company in the coming months. Next, we expect development partners to confirm their capital participation.

 

Thereafter, the CGV will apply for a license from the Prudential Authority. We are targeting the CGV to be operational later this year.

 

In water, investments are directed towards high-impact bulk water augmentation schemes, refurbishment of ageing infrastructure and the completion of strategic projects that support economic nodes, agriculture and household supply.

 

Honourable Members, we continue to implement reforms to unlock greater private sector participation, enhance spending efficiency and shorten delivery timelines.

 

Public-Private Partnerships

 

The amendment of the PPP regulations has enabled greater private sector participation by streamlining procedural requirements, closing regulatory gaps and clarifying institutional roles.

 

The pipeline is projects is growing. Currently, 63 projects are at different stages of development.

 

Among the most advanced are the six border posts project which will ease congestion, lift regional trade flows and upgrade key inland border posts.

 

We expect them to reach financial closure later this year.

 

Similarly, the process of procuring a new vendor for the Gautrain rapid rail link system is advanced.

 

Conclusion of these projects will mark the first closure of major PPP transactions in more than five years.

 

Public institutions should increasingly see PPPs as a viable alternative method for delivery, particularly in cases where funding limitations or capacity constraints hinder effective implementation.

 

To further unlock PPP opportunities across government, work is underway to finalise the new PPP regulations for municipalities.

The final regulations will be published by 30 June 2026.

 

Budget Facility for Infrastructure

 

The budget facility for infrastructure continues to play a pivotal role in enabling funding of strategic infrastructure projects.

 

Since shifting from annual to quarterly windows last year, the BFI has approved R21.9 billion for five major projects.

 

These include Transnet’s coal and iron ore corridor projects, which will restore rail capacity to 77 million tonnes for the coal line and 60 million tonnes for the ore line, and the Polokwane regional wastewater programme.

 

As part of the efforts to position infrastructure as an investable asset class, government issued an infrastructure bond in 2025 raising R11.8 billion to support its contribution in BFI approved projects.

 

The BFI call for proposals for the 2026/27 cycle opens today. The detailed circular has been published on the National Treasury website.

 

We call on public institutions in key sectors of the economy to submit proposals with funding gaps and strategic value, for consideration.

 

This includes critical social infrastructure such as courts, correctional facilities, police stations and even the development of new tertiary institutions like the proposed Ekurhuleni University and student accommodation, as well as health care facilities such as the Dr George Mukhari Academic and the Inkosi Albert Luthuli Hospital.