Invest, don’t spend, Cyril

The Infrastructure Fund announced by President Cyril Ramaphosa should be used as an investment, rather than expenditure, and the country needed to use infrastructure projects to generate revenue, the Infrastructure Research Development Centre (IRDC) said yesterday.

Ramaphosa announced last month government would set up a SA Infrastructure Fund in a bid to transform its approach to the rollout, building and implementation of infrastructure projects, with a contribution in excess of R400 billion from the fiscus over the medium-term expenditure framework period.

Bongani Mankewu, executive director of IRDC and a strong advocate for rail infrastructure development, said the fund would do well for new project level funding but had to ensure that value-chain businesses, especially in manufacturing, generate a return on the investment.

Mankewu said the domestic railway engineering and manufacturing industry had all but collapsed because hundreds of millions of rands in investment injected into entities like Transnet and Prasa were used to import components and skills, rather than using existing local infrastructure.

“The Infrastructure Fund is a good idea. Whenever an infrastructure fund is established, it needs to look at assets as revenue-generating assets. We need not look at it as an expenditure. There is going to be a social aspect to it because we have two paradigms of infrastructure, schools and clinics, that you cannot put a return on investment on,” Mankewu said.

“But the commercial infrastructure must offset what has been lost on the social infrastructure without it being extremely expensive. The commercial infrastructure must generate revenue.

“Over time, they must have an impact on the economy. So that R400 billion must be viewed as an investment and ensure it impacts on the ecosystem of the economy,” said Mankewu.

The IRDC focuses on rail and ports infrastructure in sub-Saharan Africa. – ANA