Infrastructure Fund chief investment officer Mohale Rakgate has reported that various strategic projects identified through government, and in previous Sustainable Infrastructure Development Symposium South Africa (Sidssa) fora, are reaching an advanced stage, stating, “we have a pipeline of advanced projects to the value of R70-billion that are ready for market”.

He was speaking at a March 7 pre-symposium media breakfast hosted by Infrastructure South Africa (ISA) and the Industrial Development Corporation (IDC), held in partnership with the Business Day Dialogues, ahead of the third iteration of Sidssa that will be held in Cape Town on March 17 to 19.

Rakgate stressed that these projects did not comprise the “total” Sidssa pipeline, merely those projects that had already secured government funding and had reached a stage where the implementing authorities were “in position where we’re going out to the market through request for proposals (RFPs) for the market to either build the infrastructure or finance it or both”.  

The Infrastructure Fund, which was operationalised in 2020, is a blended finance platform, hosted at the Development Bank of Southern Africa (DBSA), and formed through a memorandum of agreement between the DBSA, ISA and National Treasury.

It acts as a single point of entry for large infrastructure projects and comprises a team of 20 professionals from various finance, government and private sector institutions, and is “dedicated to addressing the issues around infrastructure”.

“One of the key things that we encountered was that there wasn’t a credible pipeline of projects,” Rakgate explained, noting that in the years since its inception, the fund and its partners, specifically ISA, had helped progress feasibility work to create a structured pipeline of projects, to a sufficient degree to entice private sector investment.  

He cited the six Ports of Entry projects, which were launched in September 2023. The Department of Home Affairs had earmarked six of the largest and busiest ports of entry for redevelopment, including Beitbridge, Maseru Bridge and Ficksburg. Rakgate added that bidding process, which had been extended earlier this year, would be closing “soon”.  

“We launched social housing programmes as well, in December last year, including a social housing project in Cape Town for 1 056 housing units right in the center of Cape Town. Then we have a number of projects in the water sector, one of the most advanced is in Limpopo –  where there are a number platinum mines as anchor offtakers – to the tune of R10-billion.

“The project is mobilising R4-billion from government, so that the community can benefit, and the rest is being sourced from the private sector. Already three banks have been identified and they have received approval, so that's another tangible development that is going into financial close within the next few months.”

Commenting on private-public partnerships (PPPs), ISA Centre of Excellence programme manager Dr Hubert Joynt noted that at present 2% of all public infrastructure projects were progressed through PPPs, noting the “major untapped potential” of that particular development option.

Responding to a question from Engineering News Online, Joynt explained that issues around PPPs had been constraints for “quite a long time”, and that many of the project sponsors in the private sector had pointed to the complex approval processes.

“We are engaging with National Treasury very frequently, and you might have noted that Treasury recently published some regulations on PPPs, just to fast-track specific local government PPP-related projects, and also to establish the actual institution that will take forward PPPs within the National Treasury.”

He believes that many of the challenges have been addressed, but there are still uncertainties. He cited the challenges around road tolls and urban tolling, which had formed the majority of PPPs in the past, adding that ISA and its partners cannot advocate for PPPs if there are key questions that have not been addressed through policy.

“I know in terms of the transport legislation, one of those elements is to actually have clear-cut guidance in terms of how to fund a project, and whether the user-pays principle will still be applicable. By us having all these discussions we can also start to identify the potential stumbling blocks in the system. But sometimes it takes a while, with all the negotiations and discussions between various parties, to address that."

Joynt added that the upcoming symposium would provide more detail, but that one of the key learnings derived from engagements with the Infrastructure Projects Authority in the UK, was the importance of a ‘construction book’, which will focus on “all the big infrastructure projects planned for the 2024/25 financial year”, providing important information on market-ready priority projects, rather than the ‘wishlist’ pipeline of projects that is valued at R1-tillion.

TRANSNET PROJECTS

State-owned enterprise Transnet National Ports Authority (TNPA) special projects GM Luvuyo Mkontwana noted that, in addition to penalising underperforming operators, the TNPA has, over the last 12 months, helped get business cases approved for all the projects that it needs to implement within the next three years.

“So as we go through to the symposium, there's particularly key areas that we are really focusing on as TNPA. The first area is the deepening of our ports, to make sure that across the port system, we’re able to accommodate larger vessels. The second area of focus is liquid fuels. We've had various challenges, particularly in bringing in liquid fuels. Port Elizabeth, for example, has a very old liquid fuel plant. And that's one area that we will be putting a lot of focus on. The third one is the energy sector.”

He cited the liquefied natural gas (LNG) terminal in Richards Bay, adding that the TNPA was looking to add LNG terminals in both Coega and Saldanha Bay. 

He also mentioned desalination plants and solar panel installation across the entire port network to ensure that the TNPA can meet its tenants’ requirements from a utilities perspective.

On the issue of how the TNPA planned to address issues around constrained grid capacity in the Western, Northern and Eastern Cape provinces – given its plans to convert gas at the LNG terminals to feed electrons to the grid –  Mkontwana noted that the KwaZulu-Natal province still had “a lot of capacity”, and that some capacity had been freed-up in the Eastern Cape following the controversies around the Karpowership application.

IDC infrastructure head Nina Yose, meanwhile, noted that Cabinet published the Roadmap for Freight Logistics in December last year, which would help create the legislation required to unblock logistics, and facilitate the increased involvement of the private sector.  

She said the with roadmap, through Sidssa, it had been recognised that “the issue of infrastructure is such that it is so large, that no single kind of player can fund infrastructure”.

Therefore, the country has to get to a point where infrastructure is shared among the largest private and public sector players, to enable a competitive landscape that ensures an improvement in the operation and maintenance of South African infrastructure.