Move to improve government project outcomes

Government has published a full list of its infrastructure projects and has promised greater transparency in this regard.

The Medium Term Budget Policy Statement (MTBPS) acknowledges that weak project preparation, planning and execution has resulted in lengthy delays, overand under-spending and quality problems.

A case in point is the several-year delays in completing Eskom’s Medupi and Kusile power stations and the associated huge overspending.

In the MTBPS, government ascribes the planning problems to a lack of technical expertise and institutional capacity.

It announces the establishment of a project preparation facility, with representation from Treasury, Government Technical Advisory Centre, the Presidential Infrastructure Coordinating Commission, the Development Bank of Southern Africa, the Association for Savings and Investment SA, the Banking Association of SA, the SA Venture Capital and Private Equity Association and the New Development Bank.

This facility will be situated in the National Treasury budget office and R625 million has been allocated over the next three years to support its operations.

It will deploy technical experts to sponsoring departments to support development of investment-ready projects, government says.

It emphasises that infrastructure spend is a key element of its plans for economic recovery and that apart from plans to improve the efficiency of government’s own infrastructure spend, it hopes to unlock private sector investment in such projects.

Over the next three years, government plans to spend on infrastructure, with state-owned companies accounting for R370.2 billion of that.

A list of all government projects has been published with the MTBPS documents; government says it’ll publish online expenditure reports of current infrastructure projects to improve transparency and accountability.

The MTBPS says government is negotiating access to infrastructure funding from development finance institutions, multilateral development banks and private banks, as well as their assistance with technical skills to help plan, manage and implement projects.

Work is under way with assistance from the private sector and multilateral development banks to design the infrastructure fund announced by President Cyril Ramaphosa as part of his economic stimulus package.

Government states that under-spending on infrastructure projects could amount to R30 billion over the medium term.