A Move To Public Funding Provides Some Security For Rail Projects

CFW View: The decision by the government to move away from private funding and utilise fiscal funds for Prasa's multibillion dollar capital investment plan will provide some relief to construction companies and our industry value forecasts. The reliance on private investment to fund the various capital investment programmes of South Africa's infrastructure operators has seen delays and cancellations as funding falls short. However, as fiscal presures persist, this decision to take on even more public expenditure, certainly raises concerns regarding the ability of the public purse to support all the planned spending. Therefore, while we note this as an upside risk to BMI's railway infrastructure industry value forecasts for South Africa, we remain cautious as regarding its realisation.

To read the full article, please choose one of the following options: