Small harbours, smoke, mirrors and privatisation
The worst part of trying to be an optimist in SA is the amount of time you have to spend finding out what is going on. I thoroughly approve of President Cyril
Ramaphosa’s plan to drive a huge infrastructure build as a way of getting people back to work, improving the speed of doing business and stuff, but it’s impossible to pin down.
On July 24 this year the department of public works & infrastructure, acting for the
Presidential Infrastructure Coordinating Commission Council, published a list of 62 key infrastructure projects in the Government Gazette under the heading “Strategic Integrated Projects”. Reports valued the list at R340bn, which is a lot of money.
But when you try to find out more about these projects, or how they’ll be financed, or whether they are public or private or both, there’s no telling. Its all up in the air. And if these were only worth R340bn at their gazetting, Bloomberg had earlier reported that the “government has told asset managers and banks that it needs R1.5-trillion of infrastructure investment over the next decade”.
Huh? Why is it that every single South African doesn’t already have the list of the top 10 infrastructure projects, their financing and their construction details, at their fingertips? It’s because the president is playing a game of infrastructure smoke and mirrors. He can’t afford to be transparent. Nation-building will have to wait.
He is trying to persuade the private sector to fund the projects because the government doesn’t have the money to. But for private investment to make any sense if the client can’t pay, the builder of whatever dam or road or waterway is going to have to own and operate the infrastructure until they get a decent return on their money.
In other words, new roads and water supplies and harbours are going to be privatised under this scheme. That’s fantastic, of course, but not if you’re an
ANC die-hard with your political head in the mid
’60s and a Maserati in your cousin’s garage.
It must also partly explain why Ramaphosa has indulged public enterprises minister Pravin Gordhan’s extra R10.5bn for SA Airways. It’s a small price with which to pay off the party, which only in January insisted the airline be rescued.
Ramaphosa is there to implement ANC resolutions. “SAA should be retained as a national airline,” ANC secretarygeneral Ace Magashule said after an ANC lekgotla in January. “The cabinet should take the operational decisions needed to achieve this.” The cabinet did just that recently.
There was an outcry about SAA after Mboweni confirmed the R10.5bn allocation in his mini-budget on Wednesday. Gordhan’s department put out a statement in return, saying he was “shocked and disappointed with the DA and some analysts’ lack of insight, financial literacy and understanding of governance processes”. That may be, but no-one, I promise, was more shocked by the R10.5bn than the finance minister himself, who completely forgot to mention it in his 2020 national budget in February.
Still, anything goes. While the presidency plays hide and seek over infrastructure, it appears that even the new garage you’re thinking about might suffice. So keen is the president to include your garage in his infrastructure programme, and, so to ramp up the numbers, that he has just sent questionnaires to firms, ahead of another investors conference in November, asking what their plans are.
“SA Investment Conference Project Announcements 2020,” it says under a fancy logo. And then you fill in the form. “I [name], the [title] of [company] give permission for Invest SA to include my project to invest R[amount] as part of the 2020 SA Investment Conference Announcements.” In return for which you may get some assistance with water, electricity and other permits for one helluva carport.
That would seem to be the model that draws in private investors, and it’s not at all bad, but I was puzzled by the finance minister’s budget announcement, after thanking Ramaphosa for his “wise leadership”, that “there are exciting new proposals for the development of more than 12 harbours in the Eastern Cape, KwaZulu-Natal, Northern
Cape and Western Cape”. Pull the other one.
There’s a line in the gazetted July announcement under “Strategic Integrated Project No 21: Transport” — between N2 EB Cloete Interchange: KwaZulu-Natal and N3 New alignment via De Beers Pass: Free State — which reads
“Small Harbours Development: National”. So “more than 12” new harbours, minister? That’s news of a kind but what does it mean? Thirteen? Thirty? Does Port St John’s finally get a harbour again? Good luck with that.
One of the gazetted projects is a dam on the Mzimvubu, the river that spews its upstream mud into the sea at Port St Johns. That dam has been on the books for more than 50 years. Lord help the pension fund that has to fund it.
It partly explains why Ramaphosa has indulged Gordhan’s R10.5bn for SAA — a small price with which to pay off the party