Public Works and Infrastructure minister Dean Macpherson recently conducted an oversight visit to Umngeni-Uthukela Water's lower uMkhomazi Bulk Water Supply Scheme President Cyril Ramaphosa has promised that the government will spend considerably more on infrastructure than it has previously, over the next three years. Picture: DOCTOR NGCOBO/Independent Newspapers
The private sector has sounded alarm for years about the breakdown of municipal services and infrastructure, and it has the capability to provide expertise and resources, but the government needs to move beyond selective engagement to meaningful partnership.
This was according to Chris Campbell, CEO of Consulting Engineers South Africa, who commented after the State of the Nation Address (Sona), where President Cyril Ramaphosa said the government would spend over R940 billion on infrastructure over the next three years, with R375bn of this to be spent by state-owned enterprises (SOEs) to build roads, bridges, dams, waterways, and ports.
“It reminds me of a 'bird perched on a wire' – aware of its surroundings but not yet taking flight. Years have passed, and despite numerous policy frameworks and statements of intent, we have not spread our wings to achieve the development our nation desperately needs,” Campbell said.
“The proposed R940bn infrastructure spend… represents significant potential. However, unless we address the systemic challenges in project planning, procurement, inadequate contract management, and governance, we risk facing the same roadblocks that hamper the delivery of much-needed infrastructure across our country,” he said.
He said a more integrated approach is required for the water challenges that addresses chronic maintenance backlogs, strengthens technical and operational management capabilities, and tackles the issue of revenue collection.
“An analysis of South Africa's water sector reveals a deeply concerning pattern of financial governance failures. The magnitude of irregular expenditure has reached unprecedented levels, with billions in public funds being compromised. This financial haemorrhage is further compounded by the stagnation of vital water infrastructure,” he said.
“Without these fundamental improvements, even the most ambitious infrastructure projects will fail to ensure sustainable and quality water security,” he said.
“While the speech did not introduce many new ideas, it served an important purpose by reassuring that successful government programmes will continue under the new administration. It was also useful to remind the country that a huge amount of change is being effected, even if there is frustration at the pace,” Business Unity South Africa (Busa) said.
The business representative organisation said the changes outlined in the Sona highlighted an urgent need to prioritise the water crisis, address the dysfunctionality of municipalities, and facilitate private sector investment in infrastructure.
“All of these are needed to raise economic growth above the – necessarily – ambitious target of 3%. With all the global uncertainty at present, we must ensure our economy is resilient and well-structured at home,” Busa said.
The Steel and Engineering Industries Federation of South Africa (Seifsa) said while the Sona address was “filled with big and ambitious plans; however, the country has too often been left trading on hope and promise rather than action.”
“It was noteworthy that the Sona referred to the parallel approach of repairing existing infrastructure while keeping equal attention on new infrastructure. This is a point Seifsa has repeatedly been calling for in working towards re-industrialising the economy.”
“Seifsa’s concern is these plans are not new but rather plans that have been repeated in previous Sona’s without the necessary follow-through,” the organisation said.
On the deferral to the Medium Term Development Plan of a lot of details of initiatives referred to in the Sona, Seifsa said plans were often developed by different ministries and ad-hoc structures, which confuse and complicate the operating environment for the business community.
The Banking Association of South Africa (BASA) said its members looked forward to more detail on the revised regulations for public-private partnerships, which would unlock private sector expertise and funds.
“South African banks and businesses have long made it clear that policy certainty and pragmatic regulations will unlock the investment needed to finance productive economic infrastructure, such as roads, ports, and water infrastructure. Businesses need commercially viable, sustainable projects to invest,” BASA said.
The organisation that has the major banks as its members said also that the establishment of professionally managed, ring-fenced utilities for water and electricity services would assist in ensuring that there can be adequate investment and maintenance of these public services.
The National Automobile Dealers Association said increased infrastructure investment and greater private sector involvement in rail and port operations would be vital for long-term economic stability.
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