How to unlock R50bn – CesaComment on this story
Clearer project pipelines, policy stability and public private partnerships to entice private sector investors are among the issues that need to be addressed to unlock the R50 billion that business is saving and not investing in the economy.
This is the view of Consulting Engineers SA (Cesa) president Abe Thela, who said the major institutional challenge related to infrastructure investment was low investor confidence.
This would be changed by clearer project pipelines, standardisation of deal structures, policy stability, information on project performance and public-private partnerships to entice private sector investors, Thela said at a Cesa Gauteng branch function last week.
In an address with the theme “Sustaining Consulting Engineering is Key to Growing the Economy”, Thela said another institutional challenge was underspending on infrastructure investment.
Thela said this resulted from poor planning and a lack of planning, as well as a lack of capacity and engineering skills, and corruption.
He said this had a negative effect on the objectives of the National Development Plan (NDP) and resource planning, but Cesa members had the skills and capacity to assist.
Thela’s comments were echoed earlier this month by Murray & Roberts chief executive Henry Laas, who lamented the lack of progress on the government’s infrastructure expenditure programme.
Laas stressed that the country had the capacity to deliver this infrastructure and it had been prioritised by the government as a major part of its plan for South Africa, but it was not happening.
He believed part of the reason was companies that had colluded historically would benefit again through this programme.
Laas said enormous barriers needed to be broken down between the government and industry.
Industry was engaging with the government through the SA Forum of Civil Engineering Contractors but as yet there had not been any outcome from these engagements.
He added that the Medupi power station project had started on a virtual design and the design changes at Medupi and Kusile were coming through in their hundreds each day, resulting in changes to the normal contractual commercial arrangements.
“For Eskom to have decided to project manage it themselves was a brave decision. That implementation model is little bit flawed where government wants to take responsibility for managing the project.
“It’s much more efficiently managed by the private sector. I’d employ a consulting engineer,” he said.
Thela said the NDP and its objectives would not materialise without the expertise of the consulting engineering sector.
But he said this sector needed to be supported and developed by implementing the NDP, which meant increasing infrastructure expenditure to 10 percent of gross domestic product. The procurement and regulatory environment also had to be improved.
The sector needed to be supported and developed by creating technical capacity and capability in the government to procure services, and improving the quality of education, particularly maths and science.