Concrete examples of the long-promised alignment between the infrastructure development plans of South Africa’s State-owned enterprises (SoEs) and government’s job- and industry-creation aspirations were provided on Tuesday by Infrastructure Development Cluster chairperson and Transport Minister Sibusiso Ndebele and Economic Development Minister Ebrahim Patel.

Government has stated previously that it will seek to maximise the job-creation and industrialisation opportunities from the R846-billion infrastructure investment programme into electricity, transport and water infrastructure.

However, the manner in which some SoEs have pursued their procurement programmes has been criticised for failing to fully capture these spin-offs.

Even the once palpable construction derivatives have all but stalled, owing to an unplanned hiatus that has occurred in the transition from the 2010 FIFA World Cup projects to the large infrastructure programmes – this, mainly as a consequence of planning and funding deficiencies at some of the SoEs and government departments.

The Competitive Supplier Development Programme (CSDP), which governs the procurement practices of large utilities such as Eskom and Transnet, has also been challenged.

Designed during the overheated suppliers market that prevailed ahead of the global financial crisis, the CSDP arguably does not place enough pressure on international suppliers to manufacture key components in the domestic market.

However, on Tuesday, Ndebele and Patel announced some concrete job and skills development targets for Eskom between now and 2015.

Patel said that, by 2015, Eskom will have enrolled 8 000 apprentices and expects to have 6 800 new qualified artisans.

Ndebele, meanwhile, reported that the utility would undertake a programme that will support about 5 000 young people to find their way into employment.

“Eskom will provide apprenticeships to 10 000 young people in its pipeline (up from 4 500). Furthermore, it is estimated that 100 000 people will be employed, or find employment, through direct and indirect jobs in the new build programme,” Ndebele said.

Patel also offered an assurance that national departments, the SoEs and development finance institutions were beginning to work “in a much more strategically coordinated way”.

R1,4TR-A-YEAR OPPORTUNITY

He added that the core mandates of the SoEs would remain that of building roads and railway lines, constructing power stations, providing flights that link key economic zones and reducing the cost of broadband.

“But it also involves building a South African supply base that can manufacture the turbines, boiler components, locomotives and train carriages for the infrastructure programme and so deepen the level of localisation.

“The industry that emerges from this initiative will be able to supply the massive infrastructure programmes on the African continent as a whole, worth an estimated R1,4-trillion annually by 2020,” Patel asserted.

Unlike President’s Jacob Zuma’s earlier assertion that the private sector was failing to rise to the job-creation challenge, Patel acknowledged that private investment was being held back in a number of cases by constraints and bottlenecks in energy, transport, water and communication infrastructure.

“Many South Africans are kept out of the economic mainstream because of gaps in infrastructure, lack of roads linking rural areas to markets, energy grids that do not service all areas. We need to fix this.”

Over the four years to 2014, South Africa would, therefore, spend more than R250-billion a year in public infrastructure.
“But money is not all that we need – it also requires careful planning and execution to ensure we achieve the largest number of jobs and promote economic sustainability,” Patel added.