Infrastructure projects: Less talk, more action

A small office in the Presidency, the Infrastructure and Investment Office, overseen by the Ministry of Public Works and Investment, has in the past five months overseen the development and subsequent evaluation of more than 276 infrastructure projects, of which 55 are considered viable and ready for presentation to funders.

From there it could take as little as six months – depending on the government department or SOE concerned – for implementation to begin.

The projects have deliberately not been identified; this will happen when the first shovel hits the ground, said President Cyril Ramaphosa, speaking at the Sustainable Infrastructure Development Symposium SA, which was held on Tuesday 23 June and attended by more than 600 virtual attendees, including government ministers and 200 members of the financial community.

The projects fall within SA’s network industries which are considered economic multipliers – water, energy, ports and rail, roads and internet connectivity. Agriculture and human settlements are also areas of focus.

“Covid-19 has not diminished our determination to drive an ambitious infrastructure programme,” Ramaphosa told delegates. “It has made infrastructure investment more compelling and urgent. Infrastructure is at the centre, at the heart of the stimulus of what our country needs to achieve sustainable recovery.”

There was never a more crucial time for the president to utter those words, given that South Africa’s unemployment rate will jump to well over 40% once Q2 data is released, and on Wednesday 24 June Finance Minister Tito Mboweni will present an amended Budget to Parliament. 

This will outline in graphic detail the enormity of the hole that South Africa is currently in.

Infrastructure is viewed as one of the levers to kick-start investment in the economy and to revive investor, business and consumer confidence. 

However, if you think you have seen this movie before, you have. Since 2003 the government has made several attempts to address its poor infrastructure record, with varying degrees of success, as detailed in this Business Maverick article.

The reasons are well known. The state lacks financial and technical skills, which results in weak project preparation, planning and execution. This leads to delays, overspending and underspending and problems with quality, best exemplified by the multibillion-rand Kusile and Medupi mess, but also evidenced by pit latrines at public schools and the lack of access to clean water in many rural towns.

South Africa’s legislation governing infrastructure management compounds these problems. It is some of the most elaborate and complex in the world (the Public Finance Management Act is just one example) and as a result, critical decisions are delayed – often indefinitely.

However, the establishment of the Investment and Infrastructure Office within the Presidency last November signalled Ramaphosa’s intention to break with the past.

The message from the financial institutions was unequivocal: Bring us good, solid, bankable projects and we will show you the money.

Cabinet approved revisions to the Infrastructure Bill on 27 May. These revisions will ensure that the bill supports, rather than hinders government’s plans – specifically as they relate to public-private partnerships and the involvement of the private sector.