/ MEDIA STATEMENT / This content is not written by Creamer Media, but is a supplied media statement.
By Raymond Obermeyer, Managing Director, SEW-Eurodrive
Johannesburg, 10 September: South Africa is starting to experience the real cost of decades of inadequate infrastructure maintenance as the latest round of load shedding batters an already fragile economy.
Loadshedding costs the country significantly in terms of loss of revenue. According to the CSIR, in 2019 the South African economy lost between R59 billion and R118 billion due to 530 hours of planned power cuts. Estimations are that stage 2 load shedding costs the country approximately R2 billion a day. That’s a cost the country can ill-afford in the wake of the devastating economic impact resulting from the lockdown implemented in an effort to contain the spread of the Covid-19 virus.
Compounding the economic cost is the fact that persistent load shedding impacts investor confidence and poses a significant risk to already struggling small businesses.
Inadequate maintenance, however, has not only occurred at the country’s power utility but also within the water, waste management, sanitation and road sectors, amongst others.
President of the South African Road Federation (SARF) and CEO of the Southern African Bitumen Association (SABITA), Saied Solomons, has been quoted as saying that roads that are not properly and timeously maintained are costing South Africa billions of rands and negatively affecting both the economy and society.
In the same vein, a failure to maintain water infrastructure at a municipal level over the course of several decades is having an impact and resulting in reports of sewage leaking into water sources, poorly maintained water purification plants and frequent water cuts in some areas of the country. Recent reports indicate that 35% of the country’s safe drinking water is lost due to leakages and aging infrastructure.
Efficiently functioning infrastructure is critical if South Africa is to achieve any kind of economic recovery. Functioning infrastructure provides economic opportunities, acts as a catalyst for generating economic growth and ultimately allows for much needed job creation.
Having the requisite budget in place to construct the required infrastructure, however, is only the start. Once construction has been completed, regular maintenance has to be factored in. By their very nature infrastructure are expensive assets, which, once developed, require ongoing investment and maintenance to ensure they are optimally functional for as long as possible.
A country’s economic health is closely linked to well-functioning infrastructure, a trend which is confirmed by those countries which tend to do well in global competitiveness rankings. Cause for concern, therefore, is the fact that this year South Africa’s global competitiveness ranking dipped yet again, falling three places to be ranked 59 out of 63 countries, according to the latest World Competitiveness Yearbook, (WCY). The ranking, an annual report that ranks the competitiveness of 63 selected counties and is regarded as the leading survey of competitiveness, is compiled by Swiss-based Institute of Management Development (IMD).
Raising the alarm in terms of the dire state of the country’s public infrastructure, the South African Institute of Civil Engineering (SAICE) 2017 Infrastructure Report Card for South Africa (the most recent survey), awarded the country’s public infrastructure an overall grade of D+. A D rating indicates that overall the country’s infrastructure is at risk of failure, is not coping with demand and is poorly maintained.
This poor state of affairs is the result of a combination of several factors including limited resources, public sector restructuring, inefficiency, skills shortages, less than optimum governance and inadequate maintenance.
South Africa cannot afford for its public infrastructure to fail. In order to provide the right conditions for economic growth we need to ensure that our infrastructure is fit for purpose and functioning efficiently. However, without a proactive maintenance programme in place infrastructure failures will continue to hamper the country’s ability to recover economically.