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South Africa: Phase 1 of National Infrastructure Plan 2050 published for implementation

24 May 2022
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The National Infrastructure Plan 2050 (NIP 2050) Phase I, published on 11 March 2022 for implementation and available here, details the South African Government’s broad vision for infrastructure development in the country. 

It seeks to create a foundation to give effect to the National Development Plan, setting out actionable steps and intermediate outcomes intended to lead to inclusive growth and promote job-creation and transformation in South Africa.

This first phase of NIP 2050 focuses on four strategic sectors: energy, water, digital infrastructure and freight transport. Whilst NIP 2050 is not comprehensive and does not prescribe specific projects or measures to be taken, it provides some insight into the Government’s short- to medium-term priorities for strengthening these four critical sectors and their contribution to the South African economy.

In relation to freight transport, the NIP 2050 highlights the need for improvements to rail and ports infrastructure in particular, detailing a vision in which:

  • more freight is moved from road to rail, encouraged by reforms to Transnet Freight Rail to allow third party operators;
  • an independent National Ports Authority is established by 2022/2023, recognising that this requires ending ‘cross-subsidies between rail and port operations’ and is necessary to ensure ‘ring-fencing of port charges for reinvestment in the port system’;
  • existing logistics corridors in South Africa are strengthened to support and facilitate the movement of freight, particularly between Durban and Gauteng and between Saldanha Bay and the Northern Cape;
  • regional shipping is promoted and seaports are integrated with regional multimodal transport networks, particularly between Durban and Dar es Salaam;
  • six one-stop border posts are established by 2025, reducing delays and associated cross-border transport costs;
  • the Port Master Plan, the National Rail Policy and the Road Funding Policy are finalised; and
  • a single Transport Economic Regulator is established by 2022/2023, for road, rail, sea and air transport.

To achieve its vision, the NIP 2050 puts significant emphasis on blended project finance and public-private cooperation in the delivery of public infrastructure, and the stimulation of competition.

This will provide an opportunity to those who understand the existing challenges in the logistics industry to play a meaningful role in its long-term overhaul, in exchange for potentially high rewards, provided that they have an appetite for risk.

Liberalisation of logistics infrastructure is currently being tested by Transnet as part of its port and rail reforms, as evidenced by its recent requests for bids to obtain private funding and expertise in exchange for rail slots and private container terminals. The outcome of these public-private endeavours will be a good indicator of the likelihood of the successful implementation of the NIP 2050.

Efficient, cost-effective logistics corridors linking South Africa’s commercial ports to multimodal transport hubs throughout the hinterland will benefit South Africa, her nearest neighbours and the rest of Africa.

The path to achieving this ideal may not run smoothly and will require effective oversight, but the NIP 2050 represents, at least, another step forward in aligning South Africa’s logistical infrastructure with modern global needs and standards.