22 November 2012

South Africa: Getting Nation to Work

Pretoria — Turning South Africa into a construction site - that is the new message President Jacob Zuma has been widely communicating since government first announced its massive infrastructure build programme earlier this year.

Expected to cost an estimated R4 trillion over the next 15 years, it's seen as the biggest spend on infrastructure in democratic South Africa and officials have insisted that the project would unlock hundreds of thousands of jobs.

There is a further benefit for economic development as any public investment requires huge amounts of inputs such as equipment and building materials.

National Treasury says over the next three years, government would spend R844 billion on projects whose roll-out will be co-ordinated by the Presidential Infrastructure Co-ordinating Commission (PICC).

This is a huge figure, considering the current tough economic climate, which is expected to last for a few more years. Perhaps this is the reason why government is keen on bringing on board as many investors as possible to boost funding for the plan.

But not all the funds would come from the fiscus, officials say they also plan to utilise funds from fees and charges levied by state-owned entities such as Eskom and Transnet with Public Enterprise Minister Malusi Gigaba confirming some parastatals already had plans to this effect.

Gigaba, who described the infrastructure plan as a "well-considered" long term industrialisation plan by government, gave an assurance to investors and business about his department's capacity to support the plan.

" From here, we will be able to tell you how many kilometers of transmission lines would have been constructed by 2020, how many megawatts of electricity capacity would be available by 2020 and we can tell you how many locomotives either in freight or passenger rail, and that goes across the various areas of infrastructure spend."

But it will not be an easy task, admits the Presidency's Director General Cassius Lubisi. As the accounting officer and the most senior public servant in the President's office, Lubisi's role will be crucial - overseeing the implementation of most of the projects.

In an interview with SAnews, Lubisi highlighted the importance of accountability to prevent the squandering of tax payers' money through fraud and corrupt practices. Dubbed the 'DG of DGs', we asked Lubisi about the role of public sector managers in ensuring the plan got off the ground.

"Clearly the DGs are the accounting officers and the key implementing agents...at the end of the day roads are built by the national roads agency which is a structure of the department of transport, similarly municipal roads are built by municipalities and municipal managers are in charge of those and heads of departments of provinces are in charge for some of those."

Lubisi is cautious about implementation time and calls for rapidity in decision making.

"Clearly you [are required] to fast track the way in which decision making occurs with regard to infrastructure building otherwise if we do it in the old slow sense, we won't go as fast as we wish to do. Clearly then it does require a reorientation of the manner in which we think about the implementation of our programmes, it requires a reorientation in the speed at which we do things but it also requires a serious orientation in regard with how we deal with the issue of procurement, " says Lubisi.

Zuma has told potential investors that as the lead investor for the National Infrastructure Plan, government wants to do things differently. Government will use the experience of the 2010 FIFA World Cup to deliver projects on time.

"We have paid very special attention to the lessons we have learnt from building infrastructure in the past. We must use that project management experience to change our country's landscape and improve living conditions while growing the economy. We have developed an integrated, aligned and coordinated 20 year infrastructure pipeline," Zuma said.

But observers are not necessarily only worried about the government's ability to deliver the projects on time. Some have cautioned that the contracts associated with the programme might be open to corruption because of the large amounts of rands and the many players involved.

The three energy Sips, which are part of the 18 Strategic Integrated Projects (Sips), alone will cost more than R300 billion. They include the development of new power generation facilities, support for green energy initiatives and electricity transmission and distribution projects. Transnet has also unveiled its R300 billion seven-year investment programme.

Also in the plan is potential for unlocking South Africa's coal and platinum-rich northern mineral belt in Mpumalanga and Limpopo through transport, water and energy interventions.

But Economic Development Minister Ibrahim Patel suggested that measures were in place to minimise potential tender graft by telling concerned parties last month that the PICC had developed a framework to deal with corruption. This would be made public once it's finalised.

Also clearly visible from government this time around is commitment to achieve better value for money and procuring services at best possible prices.

"What will be critical for us is that we get structures, roads, dams and everything we want to build we must get them at a good value therefore costs you have to ensure you get value for money. You do that by ensuring that you encourage competition and you deal with issues of corruption such that people don't inflate prices because if we inflate prices we won't be able to achieve this.

"We need to take the real costs of this so that we are able to build as many roads, dams railway lines as possible otherwise we won't be able to do it, a change in the manner we have done things thus far. I call on all DGs to be part of this, take this and make it their own project because at the end of the day the various projects of infrastructure are as good as the administration. They depend on us to succeed, therefore I'm saying DGs, CFO's and COOs should use their technical capacity to ensure the success of this project," says Lubisi.

However, ensuring timeous delivery of the projects is not the only priority for Lubisi. He wants coordination between different spheres of government in ensuring that each one spends their respective allocations.

Fortunately the PICC has a representation of all nine provincial Premiers and representatives from all metro municipalities.

"Already in its functioning, the PICC has catered for this coordination. Similarly the management committee of the PICC has two premiers sitting there. So already in its design its going that way, so these things are done and decided in one committee and one venue so cooperation across all spheres is built into the plan."

Officials say getting these heads together is critical for government because the responsibility for infrastructure construction and maintenance often falls to a host of agencies- enterprises, regulatory bodies, departments and municipalities.

A central aim of the PICC is to improve co-ordination between and within the different spheres and agencies of government, says Lubisi.

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