Sunday Times

Mission to get the money moving

Presidency unit has its eye on investment and infrastruc­ture billions

- By CHRIS BARRON

● 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

 ?? Picture: Masi Losi ?? Kgosientso Ramokgopa was recently appointed head of the investment & infrastruc­ture unit in the presidency.
Picture: Masi Losi Kgosientso Ramokgopa was recently appointed head of the investment & infrastruc­ture unit in the presidency.

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