A marine cable connecting Brazil, Russia, India and China with 21 countries in Africa, valued at an estimated $800 000 to $1.5-billion, is a viable project that would position the Brics countries strategically from a connectivity point of view, telecommunications company i3 Africa chairperson Andrew Mthembu said.

The Brics Cable project would also go a long way to addressing the fact that, without robust information and communication technology infrastructure, an investment in a developing economy could not be successful.

Speaking during a breakaway session on infrastructure development at the Brics Business Forum, a supporting event leading up to the fith yearly Brics Summit, held in Durban in 2013, Mthembu said the marine cable project had moved beyond the conception stage and he was confident that it would go ahead.

He said his company had embarked on a detailed feasibility study last year. There had been a significant amount of interest from companies in the Brics bloc. He pointed out that sound communications infrastructure was particularly important for large infrastructure projects and the creation of a Brics development bank, the creation of which was under discussion at the summit.

At present, all Brics countries communicated through hubs, which were often located in Europe. A marine cable would enable the Brics countries to communicate directly on a “south-south basis”.

Mthembu said there were opportunities to connect this marine cable with other big cables outside Africa. “We will create opportunities for data centres to be built in our Brics countries and for clouds to be hubbed in Brics countries, thereby creating opportunities for employment and high-tech skills development,” he added. 

Infrastructure Deficit Saps Growth

The marine cable was just one of a number of initiatives highlighted during a debate on both the challenges posed by the lack of infrastructure in many of the Brics countries and the opportunities that these provided for private sector investors.

The breakaway session, chaired by Transnet chairperson Mafika Mkhwanazi, centred on the fact that a lack of infrastructure affected productivity and increased production and transaction costs, which reduced competitiveness and hampered government’s ability to pursue economic and social development policies.

In Africa, for example, deficient infrastructure has been found to sap growth by up to 2% a year.

Vladimir Kremer, head of Russia’s Renova Group, said his company’s experiences with United Manganese Kalahari, in South Africa’s Northern Cape, highlighted the impact of problems associated with poor infrastructure. He pointed out that between 10% and 15% of manganese ore was processed at the company’s Transalloys operation, 90 km from Pretoria, with the remainder exported through the distant ports of Durban and Port Elizabeth.

He said production at the mine had risen from 600 000 t in 2009 to close to 2.5-million tons in 2012. The operation had the potential to increase this to three-million tons but this was hampered by severe logistical bottlenecks.

Capacity at the Port of Port Elizabeth was insufficient and additional ore had to be exported through the Port of Durban. Rail capacity constraints meant that the ore had to be transported by road, which doubled costs. “This has had a serious impact on the economics of our business,” he said.

Kremer said the obvious answer would be the beneficiation of manganese on home ground. However, this presented another infrastructural dilemma, as this would require a great deal of electricity. South Africa’s electricity price had increased 3.5 times since 2007, and with further increases a certainty, this meant that this was not feasible.  

Mkhwanazi acknowledged the problems but pointed out that significant steps were being taken to upgrade rail infrastructure in the region. This was part of the R4-trillion to be spent on infrastructure in South Africa over the next 20 years.

He said public–private partnerships would play an important role in realising the development of infrastructure in South Africa but that various State-owned enterprises had some way to go before unlocking the potential value in these.