Macpherson unveils ‘first of its kind’ bid window to support infrastructure projects

Speaking at a press briefing in Sandton on Tuesday morning, where he was joined by the acting head of the ISA Mameetse Masemola, Macpherson said the initiative was set to improve the pace and quality of infrastructure project delivery in the country and unlock investment. 

Projects in energy, water and sanitation, transport, social and municipal infrastructure, and human settlement were listed among the sectors to be prioritised for consideration.

Macpherson invited national and provincial government departments, state-owned entities, public entities, and municipalities to apply for project preparation support before the December cutoff. 

“This initiative is a crucial step towards expanding infrastructure investment in the country. Today’s announcement represents an important moment in South Africa and an evolution in the work of Infrastructure South Africa (ISA). No longer are we talking about the pipeline of infrastructure, but we’re now actively building it.”

The minister said the project preparation would accelerate the pace and quality of infrastructure delivery, with the aim that infrastructure investment contribute up to 1.5% economic growth in the medium term.

The new bid window builds on the 12 infrastructure initiatives announced by President Cyril Ramaphosa at the Sustainable Infrastructure Development Symposium South Africa (SIDSSA) in March, which already benefits from the first R179 million in project prep funding allocated to ISA by Treasury.

The support offered by ISA includes financial structuring, technical, legal and governance arrangements.

ISA’s Masemola outlined the criteria for the projects that may submit their application between now and 7 December, such as having a capital value of more than R1 billion.

“The projects submitted ought to align with ISA’s mandate, which is to bridge the infrastructure investment gap outlined in the National Development Plan and National Infrastructure Plan 2050. The second category will be those projects that are potentially commercially viable; the third category will be those social infrastructure programs that have the potential to leverage or crowd in private sector financing.”

“We’re looking to support major catalytic infrastructure projects and programs in the country. Our focus will be on projects that will significantly contribute to GDP growth, job creation, support South Africa’s global competitiveness, localisation and must ensure that they transfer fiscal risk away from the public sector to the public sector.

“Excluded from this project preparation support would be those projects that will be 100% reliant on the fiscus. We are giving effect to the directives that both our minister and the minister of finance have given, which is to promote effective participation of the private sector in both the financing and delivery of catalytic infrastructure projects in the country,” Masemola said.

Private sector projects do not qualify for the support.

The successful submissions will be announced at the next SIDSSA.

CONSTRUCTION MAFIA

Macpherson said he woulD MEET with various stakeholders, including the minister of police, the national police commissioner, and industry players, in eThekwini to discuss how best to tackle the problem of construction mafias.

“I say it’s a difficult problem because it creates uncertainty in governments ability to develop or deliver projects on time and on budget. If you’re going to have stoppages and violence, it’s a concern for investors.

“When I went to China and the UK, it was brought up repeatedly. So, we’re going to work closer with the police department in seeing how we’re going to secure government-led infrastructure projects.”

The minister said the problem was manageable. He referenced the alleged cases of sabotage at Eskom, where the South African Defense Force was roped in to protect critical infrastructure.

“We’ve got to do better work at crime intelligence, and we’ve got to do better work.”

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