Mission to get the money moving
Presidency unit has its eye on investment and infrastructure billions
● With the creation of the investment & infrastructure unit in the presidency, money will soon be flowing into desperately needed infrastructure projects, says Kgosientso Ramokgopa, the new head of the unit.
The former Tshwane mayor and Gauteng MEC for economic development says billions of rands’ worth of foreign investment commitments for infrastructure development have not been followed up on, but vows this will change.
“There is no follow-up and no followthrough. So the investment doesn’t find traction, when in fact there is real appetite on the part of the investor.”
There was great rejoicing when President Cyril Ramaphosa secured $10bn (R147bn) worth of commitments each from the United Arab Emirates and Saudi Arabia 18 months ago, but since then “there has been no substantive follow-through”, says Ramokgopa.
“We’ll be moving with some degree of speed to make sure this happens, so we present to the sponsors a boutique of projects for their consideration.”
He says he can’t explain the failure to follow up on these and other commitments.
“I wouldn’t know. I guess part of the motivation for the creation of the investment and infrastructure office is to ensure that the necessary follow-through and follow-up happens. To drive that process.”
The unit will ensure alignment between investment commitments and projects.
“Investors are looking for returns, so projects must be packaged in a way that makes sense for them so they can record these returns for shareholders.”
One of the unit’s immediate priorities will be to ensure there are projects that can “make a claim” for funding from the R100bn moved to the Development Bank of Southern Africa (DBSA) by the National Treasury for infrastructure funding.
Once projects, in housing, energy and water, are “properly packaged”, the president will make an announcement, he says. “We’re confident that before the end of the calendar year disbursements from the fund for projects will start.”
It is hoped this will “resuscitate” the construction industry. “Once we become more aggressive with disbursements we’ll need a construction industry that is ready to take on major projects. With the construction industry having been decimated, there has to be a rebuilding exercise.”
The construction industry has been warning for years that by the time the government starts delivering on its promises of infrastructure projects there will be no construction industry left to build them.
“I guess it will take a bit of time for us to regain the confidence of the construction industry,” says Ramokgopa.
A major issue the unit will address, he says, is the so-called “business forum”, mafia-type syndicate that has been hijacking construction projects worth billions.
“We have to get crime intelligence and law enforcement agencies to move against the criminal network that has been terrorising construction firms. We have flagged it as a risk and are asking law enforcement to address it with greater urgency.”
Appeals for effective police action by the construction industry have been ignored.
“We’re raising this with the president and I’m sure through that channel the national police commissioner and minister will be directed to address that matter with the urgency it deserves.”
He says the unit will also be engaging with “genuine players, SMMEs [small, medium and micro-sized enterprises] who want a stake in these projects”.
“The construction industry must share the cake, so that’s a conversation we’ll have to have. Obviously the SMMEs are going to have to meet the criteria of skills. They shouldn’t undermine the ability of the main contractor to meet their contractual obligations.”
A key role of the unit will be to unblock bureaucratic obstacles to project implementation.
“We will identify where the regulatory hurdles are and go to the relevant government departments at national, provincial and municipal level.”
The absence of co-ordination and alignment between different role players has been identified as a reason so many infrastructure projects have failed to take off, he says. “There’s been no co-ordination at a central level. Priorities between different arms of government are different.”
He says the unit will hold project sponsors to the deadlines they’ve committed to.
The unit will work with the department of planning, monitoring & evaluation, which is also within the presidency. But he says there won’t be any duplication.
“We’re sitting with a R100bn infrastructure fund in the DBSA that is waiting for projects. They’ve been identified but there are regulatory bottlenecks.”
Water-use licences take forever to be granted, as do permits and other approvals.
“We unblock the bottlenecks for the project owner.”
Once construction starts, the department of monitoring & evaluation tracks the performance of the project, he says.
“We’ll be the enablers. There are issues around ease of doing business. We’ll interrogate the processes at different government levels, why these things take so long. We’ll ensure that processes that take 12 months take three months.”
He concedes this may be easier said than done because lack of capacity “is a public sector problem”.
He says there are far too many regulatory hurdles for efficient project implementation.
“The kind of steps that need to be followed for someone to get a clearance certificate at municipal level is just too much.”
Businesses have been screaming about this for years to no avail.
“That’s why this unit is within the presidency. We’ll be sitting at the highest office, right at the centre.”
He hopes this will give it the necessary clout to “make the process of easing business exceptionally efficient”. The unit will advise the president to “cut the red tape” because it’s an impediment to investment, infrastructure development and job creation.
“It needs to be cut as soon as possible because we don’t have time. We must treat unemployment as a national emergency, an economy that is truncating as a national emergency,” he says.
Ramokgopa, 44, who has a BSc in civil engineering from the University of KwaZuluNatal, a master’s in public administration and a PhD in public affairs, was appointed to the unit after resigning from the Gauteng executive committee in October in compliance with the ANC’s gender quota.
We’ll interrogate the processes, why these things take so long. We’ll ensure that processes that take 12 months take three months