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Mind the Gap

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Mind the Gap

14th August 2020

By: Terence Creamer
Creamer Media Editor

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A maddening mismatch between big infrastructure promises and small delivery has been a constant and trust-destroying feature of South Africa for decades. Apart from a short period in the run up to the 2010 FIFA World Cup, the pipeline of shovel-ready projects has been insufficient to address both the country’s infrastructure backlogs and to sustained the domestic construction industry.

It is now quite ironic to recall that, in 2006, South Africa was so concerned that the project pipeline would overwhelm the domestic industry and its suppliers that the Support Programme for Accelerated Infrastructure Delivery was set up to deal with the anticipated shortages of cement, steel and skills.

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Serious economic mismanagement, corrupt governance at the infrastructure-focused State-owned companies (SoCs) and a diversion of fiscal resources from capital to consumptive expenditure can all be cited as reasons for the country’s chronic service-delivery crisis and the near collapse of the local construction industry. Likewise, the erosion of technical capacity at government departments and municipalities has undermined maintenance practices and the ability to plan for and procure bankable new projects. In many cases, this technical void has been filled by expensive consultants, or corrupt actors.

For this reason, there is naturally much scepticism about whether government will be able to deliver an infrastructure-led economic recovery from the Covid-19 pandemic. Having failed so dismally in the past to honour infrastructure commitments, why would it be any different this time round?

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There are a few reasons to be cautiously optimistic.

For one, financial necessity has made government and the SoCs more accepting of their project delivery limitations. There is, thus, a growing appetite to forge partnerships with the private sector to deliver much-needed public infrastructure. This is important because, until the technical capacity has been rebuilt within the public sector (which should indeed be a priority), the private sector’s role in financing, building, operating and maintaining infrastructure will be critical.

Secondly, government is at last conscious that even projects not funded by the fiscus, or off SoC balance sheets are being stymied by government inefficiency. As The Presidency’s Investment and Infrastructure Office head Dr Kgosientso Ramokgopa admitted recently, it is not uncommon to find projects being hamstrung by outstanding government approvals or licences. On average, projects were waiting 36 months for an environmental record of decision, 24 months for rezoning permission and 18 months for a water-use licence.

To address the problem, an initial list of projects, valued at about R360-billion, has been published in the Government Gazette, with the objective of triggering an Infrastructure Development Act stipulation that all permits and licences be delivered within 56 days of such a notice.

Finally, it is worth noting that all the recovery packages proposed to date see an important role for infrastructure in reigniting the economy. With some diligence, cooperation and with transparent processes, perhaps this time South Africa will ‘mind the gap’ and make a decisive break from its dismal recent record of broken infrastructure promises.

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