Interventions for fostering growth

Suggestions to enhance investor confidence

Build leadership and management skills Leadership and management failures are arguably the greatest single stumbling block to effective service delivery and development. It is stated that it is often not the lack of capital that stops service delivery, but the inability by senior officials to activate and manage the process.

Enhance private-sector involvement

Fix municipalities - Move away from a public-sector driven economy to a PPP-driven economy, in which the private sector is more involved in driving infrastructure investments. The private sector will fund infrastructure if there is a return on investment and if corruption can be rooted out.

- The private sector must be treated as an equal partner to the public sector to foster real partnerships. Consult contractors and the construction industry early on in a project to save government money by mitigating risks during the implementation phase.

- Embrace PPPs where they deliver better value for money. PPPs will reduce demands on the fiscus and can be used to fill finance gaps for infrastructure development. Streamline PPPs to reduce complexity.

A new way of thinking is required regarding municipalities, particularly district and rural municipalities, where competency is lacking. Some of the suggestions to get municipalities working again are:

- Establish a model to allow for the private sector to partner with local government. This will speed up development. The private sector must be involved throughout the entire cycle, from budgeting, financial management, maintenance and supplementing professional skills.

- Professionalise local government to maximise its development impact.

Municipalities need to conduct proper planning and improve the management of budgets and cash flow.

- Enforce accountability for qualified audits and take people to task for failures. Equally, promote clean audits and prioritise the eradication of corruption.

- Consider bonus-driven targets that incentivise better performance.

- Simplify management systems. Officials set themselves up for failure because of unwieldy procedures.

Interventions for fostering growth

Suggestions to enhance investor confidence – continued

Local participation and skills transfer Ensure skills are transferred to local communities surrounding big infrastructure projects. Increased local participation could assist, to some extent, with the problems that the industry faces regarding the so-called construction mafia and the disruption of project sites.

Maintain infrastructure Abandon the ‘run-to-failure’ approach where maintenance is conducted only when infrastructure fails. Budget for the full life cycle of a project, including operations and maintenance, rather than considering only the cost of planning and construction. A focus on proactive, as opposed to reactive or emergency, maintenance will save costs and prolong the infrastructure’s life span.

Remove bottlenecks to development - Red tape and bureaucracy are slowing down development. Regulatory timeframes for approvals must be expedited. A suggestion is to establish a council overseeing the approval processes and to deal with any appeals.

For example, should an application fail to be processed in the specified timeframe, the overarching body should determine the reasons for it – whether it be an apathetic official or an issue with bulk services.

- More land must be made available for development. A rapid land release for housing is needed and government has tracts of land that can be used for this purpose.

- Accelerate the planning for bulk services and invest in the provision and maintenance of services, such as electrical installations, water reservoirs and distribution networks, sewerage treatment works and roads.

Dedicated spending is needed to get maximum delivery traction.

Interventions for fostering growth

Rework the tender

process

Sharpen focus on sustainable developments

The tender process is cumbersome, expensive and an inhibitor for development. While the tender system should not be done away with, there is a need for government tenders to be more specific, streamlined and simplified. Tender submissions tend to contain a lot of duplicated information, which adds time and costs to the process.

Bids out for tender must be awarded timeously. Industry participants are concerned that too many government tenders are issued for purely speculative or budgeting reasons with no intention or ability to follow through.

A greater emphasis must be placed on planning and building sustainable developments – cities that are planned with job opportunities in mind, with fit-for-purpose infrastructure and that are built with materials that have sustainability in mind.