His Excellency, Honourable President, Cyril Ramaphosa
Deputy Minister of Public Works and Infrastructure, Noxolo Kiviet
Head of the Infrastructure Investment Office in the Presidency, Dr Kgosientsho Ramokgopa
CEO of the Development Bank of Southern Africa, Patrick Dlamini
Zuki Sithole from the DBSA
CEO of the Industrial Development Corporation, Tshokolo Nchocho
Representatives from the various pension funds, African and international development finance institutions and multi-lateral development banks
Representatives from the commercial banking sector
Ladies and gentlemen
Good morning, goeie more, dumelang, molweni, as-salaamu ailakum, shalom,
It is my great honour to welcome you all to the Project Preparation Roundtable plenary session aimed at fostering greater collaboration between government and the private sector as we look to take infrastructure delivery in South Africa to the next level.
The Infrastructure Investment Plan as part of the Economic Reconstruction and Recovery Plan focuses on how we can all, public and private sector, government, labour, communities, and the investment sector can work together.
The Infrastructure Investment Plan as part of the Economic Reconstruction and Recovery Plan focuses on how we can all, public and private sector, government, labour, communities, and the investment sector can work together.
As government we met with all financing institutions in February this year, we heard you and we agreed on the following:
- The need for a credible project pipeline of infrastructure projects that are ready and bankable for investment and implementation.
- The need for a comprehensive, focused, long term infrastructure plan.
- The need to address the fragmentation of infrastructure delivery
One of the clear messages that came from that engagement was that South Africa needs to have a plan and we need to stick to it. We heard you and we agree.
In terms of my performance agreement, investment is to reach 23% of GDP by 2024 with the public sector contributing 8% and the private sector contributing 15% to the GDP.
Another performance target of mine is that the R100billion Infrastructure Fund is to be established and operationalised by 2024.
Mr President, this has been done now in 2020.
Also in my performance agreement is the very exciting task to lead the process for the establishment of a New City as announced by the President in his SONA address.
This is going to take an enormous amount of work but it can be done and serious work on the project preparation for the New City initiative will commence soon.
We are also far from National Development Plan target for public sector infrastructure investment.
In terms of the targets set by the National Planning Commission, by 2030 government has to spend 10% of our GDP on infrastructure and currently we are sitting on 5.9% spend.
We are have started working towards this in earnest because leading up to the Recovery Plan was Cabinet’s approval of South Africa’s Infrastructure Investment Plan in May 2020. The Infrastructure Investment Plan relates to a new methodology of project planning, preparation and packaging infrastructure projects to ensure their bankability.
How we got to the Infrastructure Investment Plan was through working together with the private sector partners such as yourselves to tap into the invaluable experience within the private sector because we are clear that government cannot do it alone.
This planning certainty, especially when it comes to infrastructure, brings with it investor confidence and also channels our resources.
This Plan also lays the foundation to project preparation.
The Infrastructure Investment Plan not only speaks to new infrastructure projects but also maintenance and repairs of existing infrastructure as well as urban management or the clean-up of our cities and towns.
This project pipeline also very importantly addresses the social, economic and spatial injustices of our past.
The first phase of the Infrastructure Investment Plan includes projects from all three spheres of government, State-owned Enterprises and the private sector.
All 62 were then gazetted as Strategic Integrated Projects (SIPs) in July 2020.
We have already started with the development of the National Infrastructure Plan 2045, which will be in line with the NDP and National Spatial Development Framework.
The National Infrastructure Plan 2045 is to be based on a solid foundation of the infrastructure development indices in order to ensure integrated infrastructure investment and implementation.
Today and tomorrow we are together unpacking project preparation.
One of the components of creating an enabling environment for project preparation is the establishment and consolidation of a well-governed public institutions.
In this regard, Cabinet approved the establishment of Infrastructure South Africa or ISA as the single-entry point for all infrastructure projects.
ISA has been tasked to drive the implementation of the Infrastructure Investment Plan.
One component of ISA is that it is the administrative arm of the Presidential Infrastructure Coordinating Commission Council, which is chaired by our President, to assist with blockages, unlocking funding and create a conducive environment for infrastructure investment.
ISA was established to allow the state to develop its own internal capacity to bring the requisite skills into government.
ISA’s structure is made up of branches, namely:
- The Infrastructure Investment Planning, National Infrastructure Plan and Oversight
- The Infrastructure Delivery Management: this includes the comprehensive infrastructure project pipeline, project preparation and packaging
- Infrastructure Investment Funding inclusive of financing, oversight of the Infrastructure Fund, green financing and investment strategy
- And the Property, land and building portfolio management, inclusive of public land maximisation and revenue generation which will for example look at how we can sweat the state’s assets.
This branch in ISA needs to explore how government can utilise our substantial immovable asset register as an instrument to leverage public economic and social value outcomes.
Public land and public buildings must be used for the public good.
ISA is also in the process of adapting the infrastructure procurement framework to enable public-private partnerships and unlocking new funding mechanisms for major infrastructure investment.
There is, however, a need to advance these processes further in these round table discussions.
I want to thank the private sector for your contribution that brought us to where we are today and thank you in advance for what you are still going to contribute.
ISA is now also building capacity to prepare and package projects and to ensure oversight in the implementation of South Africa’s Infrastructure Investment Plan. Today is one example of this.
The objective today is to facilitate an interactive project preparation roundtable with all relevant stakeholders.
We all have an understanding that project preparation includes the work necessary to ensure that a projects are de-risked, feasible, appropriate and can be successfully implemented.
The project preparation process done well ensures the identification and elimination of key risks at the earliest possible time and maximises development opportunities by ensuring that projects are well conceptualised and ready for implementation.
We also know that project preparation can cost anywhere between 2% and 15% of the project value depending on the function of complexity and size of the project.
There are three elements of the project preparation cycle that are critical for success, namely:
- an enabling environment conducive for project preparation;
- the long-term strategic planning and project prioritisation framework;
- and lastly the alternative financial and funding models and sources for project preparation.
I have unpacked how we have put the elements above in place through collating an infrastructure project pipeline and establishing ISA and the work which ISA will be doing.
The last key element to project planning is ensuring that we together explore and use alternative financial and funding models and sources for project preparation.
There are numerous other financial models and funding sources, especially for project preparation which will be explored. This is one of the main reasons that we are here today and tomorrow.
On the issue of corruption, to regain confidence of society and investors, we must show that government is capable of turning the tide.
As government we are showing that we are capable of turning the situation around by holding the corrupt and delinquent visibly accountable.
We are putting in all possible measures to mitigate against this as we implement the Plan, starting with the 62 Strategic Integrated Projects.
All projects will all be subjected to an independent due diligence process as well.
We are working on a more effective system to monitor projects more effectively and put systems in place to detect and prevent corruption.
This will bring a greater level of transparency and will give credibility to the implementation of the Infrastructure Investment Plan.
Transparency is the best deterrent to root out corruption.
The Infrastructure Plan will be underpinned by an anti-corruption strategy and together with the Special Investigating Unit, we are in the process of setting up an anti-corruption forum with representatives from the public and private sector based on the same principles of the anti-corruption forum set up within the Health Department.
In conclusion, as I welcome everyone to the Roundtable on Project Preparation, I would like to end off by saying that we must honour our past but this is now an opportunity to design our own future.
A future that is inclusive and transformative.
We spend too much time finding out what went wrong afterwards with commissions and inquiries when we should be investing those scarce resources into project preparation now to prevent mistakes.
Thank you all for being here. Let us engage with the mindset to collaborate and implement so that we may together rise from the blow that COVID 19 has dealt to our path.
And let us forge a new path as partners committed to progress, implementation and growth for the economy and jobs.
Thank you, enkosi, baie dankie and God Bless.
