A representative from the Public Investment Corporation (PIC) on October 7 said a strong pipeline of projects was needed to encourage further investment in infrastructure in South Africa, particularly from private and international investors.
This was desirable, she said,owing to infrastructure providing both financial and social returns for the country.
At the Sustainable Infrastructure Development Symposium (Sidssa), a panel of speakers discussed the objectives that would be needed to encourage further investment, while simultaneously addressing the availability of funds for future projects.
While there was funding available, the PIC representative suggested that government and private investors would first need to consider what any given project would achieve, not only for investors, but also how predictable it would be in terms of cash flows and sustainability.
The financial and social returns and requirements, however, make it clear that “infrastructure is to be the backbone of development” in South Africa.
Infrastructure South Africa’s Peter Gent echoed similar sentiments during his presentation, though he questioned whether the “correct projects” were being identified for investment.
“There are exceptions, but in terms of generalities, there are concerns,” he said, noting that long-term planning was of particular importance within government departments so that South Africa could"be taken forward” in terms of development.
The second step, once the correct projects hadbeen identified, wasto then consider whether these would be catalytic to delivering on long-term plans.
These projects are what South Africa “needs to focus its attention”, he stressed, considering that these would “be assessed and evaluated” and wouldattract international and private sector funding.
“Whether it's funding from the fiscus, or whether it's funding from the private sector, the same level of project evaluation is required, but we're seeing weaknesses in all three of these areas,” Gent asserted.
Therefore, he was of the opinion that while there was no shortage of funding, there was a shortage of well-prepared projects with the right prospects able to deliver the right outcomes.
This is where government’s focus “really needs to be”, Gent urged, noting that, while government was facing fiscal constraints, the private sector would need to “come forward and invest”.
“Equally, we must seek the private sector’s involvement in terms of those capacity constraints to assist government in terms of these very challenging issues.”
In terms of expectations, Gent suggested that government could contribute through encouraging participation from its involved departments, and to “actually consider public-private partnerships” when developing projects.
“If a project can attract private sector funding, we can attract even more private sector participation. It should be mandatory that that happens,” he elaborated.
Policy regulations and requirements also often caused complications when projects were being developed, which Gent stressed government would “need to address as a matter of urgency” so that it couldprovide clarity and certainty around processes.