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Eskom leads spending on capital expenditure in 2016

While the South African economy is facing challenges‚ capital expenditure spending by public sector institutions has been growing steadily‚ Statistician General Pali Lehohla said on Wednesday.

“In terms of what the vision for South Africa is‚ we have the National Development Plan (NDP) and what we need to do is test our spending against the goals of the NDP. While the economy has not been doing terribly well and is in recession‚ the capex has been increasing steadily over a period of time‚” Lehohla told a briefing in Tshwane‚ according to a government statement.

He was speaking at the Statistics South Africa release on its Capital Expenditure by the Public Sector 2016 report‚ which showed that total capital expenditure by public sector institutions increased by R18 billion from R265 billion in 2015 to R284 billion in 2016.

Capital expenditure increased on new construction works‚ land and existing buildings‚ transport equipment and “other” fixed assets.

Capital expenditure decreased on plant‚ machinery and equipment as well as leased assets and investment property.

The 2016 report showed that the largest share of the R284 billion capex was spent by public corporations at R138 billion (or 49%).

 Eskom and Transnet were major contributors to public corporations capex in 2015 at R73 billion and R34 billion‚ respectively.

Eskom spent R70 billion on the power generation projects at Kusile‚ Medupi and Ingula power stations.

Transnet spent R11.1 billion capex on the expansion of infrastructure and equipment. Another R18.5 billion capex was spent on maintaining capacity in the rail and ports divisions.

The second largest share in capex expended by public institutions was municipalities at R66 billion (or 23%). Municipal capex for new construction works was R57 256 million.

Municipalities were followed by provincial governments at R36 billion‚ national government at R18 billion‚ and extra-budgetary accounts at R17 billion.

Higher education institutions had the smallest share of the total capex by public institutions at R7 billion (or 2%).

The University of Mpumalanga capex was spent on the completion of four new buildings as part of the phase two for the 2017 academic year‚ and five new buildings for the 2018 academic year. Stellenbosch University spent its capex on the construction and renovation of non-residential buildings on campus.

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