South Africa’s infrastructure expansion hinges on strategic procurement reforms to boost local industry

South Africa’s push to rebuild its industrial base may stand or fall on a detail often treated as technical rather than strategic: how public procurement is designed. As the government prepares for a vast expansion of transmission infrastructure, the choices made in tender structures, qualification rules and local-content requirements could determine whether domestic manufacturers win a meaningful share of the work or watch the opportunity slip away.

The scale of the task is ...

striking. The National Treasury said in June 2025 that the Independent Transmission Programme is intended to add more than 14,000km of new lines over the next decade at an estimated cost of R440 billion. The Development Bank of Southern Africa has put the wider Transmission Development Plan at about 14,500km of new lines and 133,000MVA of transformer capacity, also requiring roughly R440 billion. Energy Minister Kgosientsho Ramokgopa has said the state and Eskom cannot fund the build-out alone, making private capital essential.

That creates a rare opening for local industry. In an op-ed, Mervyn Naidoo, chief executive of ACTOM Group, argued that South African firms which have spent decades building and maintaining the grid should not be pushed to the margins just as the next phase begins. ACTOM, a majority black-owned electrotechnical manufacturer with more than a century of history in the country, says it is investing R250 million to support grid expansion.

The broader policy case for localisation is well established. The Department of Small Business Development has framed it as part of a recovery strategy aimed at jobs, capacity-building and a more inclusive ownership base, while the Department of Trade, Industry and Competition has tied localisation to industrial incentives and manufacturing development. But the Trade and Industrial Policy Strategies group has warned that the benefits are not automatic, pointing to fragmented procurement planning, cheap imports and disagreements over the economic logic of localisation.

For manufacturers, the issue is less about rhetoric than certainty. Investment in factories, tooling, training and supply chains only makes sense when there is predictable demand. That is particularly true in the metals and engineering sector, which underpins much of transmission equipment production and has shed more than 212,000 jobs over the past 15 years, according to Naidoo’s article.

The implication is that procurement cannot be treated as a neutral administrative exercise. It is one of the main levers available to policy-makers if they want infrastructure spending to do more than add assets to the balance sheet. Properly structured, it can support domestic fabrication, retain technical skills and deepen industrial capacity at the same time as it helps modernise the grid.

That will require careful attention to the mechanics of tenders. Qualification thresholds, scoring systems, local-content rules and contract design all shape who can participate and who can scale. If those rules are aligned with industrial policy, South African firms could secure work not only in transmission expansion but also in the wider ecosystem of engineering, manufacturing and maintenance that follows.

There is also a regional dimension. Electro-mechanical suppliers do not just build equipment; they help create the infrastructure that enables power access, industrial activity and manufacturing growth across the continent. For that reason, the current transmission programme is more than an energy project. It is a test of whether South Africa can use large-scale public investment to rebuild productive capacity at home rather than simply import it.

President Cyril Ramaphosa has said domestic investors are showing renewed confidence, highlighting fresh commitments at the 2026 South Africa Investment Conference. Turning that confidence into lasting industrial growth will depend on whether government can match ambition with implementation. In the transmission sector, that means procurement rules that are transparent, consistent and designed to give local firms a fair route into major projects.

The opportunity is substantial. So is the risk of getting it wrong. If South Africa wants its infrastructure drive to strengthen the manufacturing base, create jobs and support long-term industrial resilience, procurement will need to do more than buy equipment. It will need to build an economy.

Source: Noah Wire Services