South Africa: R395 Billion Infrastructure Pipeline Enters Procurement

You can also listen to this podcast on iono.fm here . JEREMY MAGGS: South Africa has no shortage of infrastructure promises. The real question, though, is whether they finally become cranes, concrete and jobs. Infrastructure South Africa has released a new construction pipeline, covering, I think, around 110 projects worth something in the region of R395 billion, spanning rail, energy, water, hospitals, municipal infrastructure and digital projects. Mameetse Masemola is head of Infrastructure SA. Its an entity, by the way, established in May 2020 as the single point of entry for accelerated infrastructure investment. Mameetse, welcome to you. South Africans have heard enormous infrastructure numbers before. How much, then, of this R395 billion is actually going to reach construction sites? MAMEETSE MASEMOLA: The context to the construction book, Jeremy, this third edition of the construction book, is that these are projects that have already been allocated funding, so they are not projects that are still in theory. They are not projects that are in planning. They are not projects that have been announced but do not have the requisite funding. So the allocation comes from National Treasury, in the main, from the R1.1 trillion that the Minister of Finance (Enoch Godongwana) has made available over the next three years. What we do as Infrastructure South Africa is that we harvest this information from the signed off annual procurement plans of certain state-owned entities, public entities and certain municipalities. This year, weve added more municipalities in this book, as well as provincial government departments. So weve harvested this information from those signed-off annual procurement plans, and this is the information that we then make into a book called the construction book. Remember that there are many, many other construction projects that are taking place and that are being allocated funding. What weve done is weve simply highlighted some of the more strategic ones, if you can call it that, some of the ones that we believe that will move the economic dial when implemented. So those are the 110 projects worth around R395 billion that are expected to go into procurement in the next 12 to 18 months. So thats what we’ve put together so that the construction industry, the building sector, people engaged in the space, they can have some line of sight of whats coming through from a public sector perspective. JEREMY MAGGS: So 12 to 18 months is key. How many are genuinely ready to go today, do you think? MAMEETSE MASEMOLA: We are expecting by the end of October that 28 of these projects will be out to market. At the moment, we know for sure that three of them from the Eskom side are already in the market. They are already in the procurement space, so people who want to bid for that work can do so or take advantage of the opportunities that are coming through from the Eskom side. Were expecting an additional 25 of these projects to go out to market by the end of October. Now, remember, thats just the publishing of the tender. So what we are going to be able to track, at least with this third edition, is the extent to which the procurement event is finalised, that there is a service provider that is then appointed and were going to work together with National Treasury on monitoring the construction of the particular asset, whether it is a bridge, whether its a road, whether it is an undersea cable, whatever project that is contained in the construction book. JEREMY MAGGS: Let me ask you a little bit about risk. President Ramaphosa says poor project preparation, as I understand it, was historically a major problem. I dont think theres any argument around that. Has anything materially changed, do you think, to stop projects getting stuck again? MAMEETSE MASEMOLA: Yeah, its a good question, Jeremy. Ultimately, we dont have, at least in the public sector, theres a dearth of financial and technical engineering skills. Weve lost thos