Infrastructure top of municipal agenda
Johannesburg Executive Mayor Councillor Parks Tau yesterday said municipalities were exploring new and innovative ways to recapitalise ageing infrastructure.
Mayor Tau, who is also the Gauteng chairman of the South African Local Government Association, was speaking during a plenary panel discussion at the inaugural Gauteng Infrastructure Investment Conference (GIIC) at Gallagher Estate in Midrand on raising capital and project financing.
Local government, he said, played a critical role in the development and maintenance of infrastructure and was the largest provider of sanitation, water services, roads and information technology and communications broadband. “The balance sheet of municipalities in Gauteng stands at R157-billion, total borrowing is at R32-billion and Johannesburg boasts the largest municipal bond. High-levels of migration to Gauteng call for innovative ways of investment to meet rising infrastructure needs. That’s why we are talking to, among others, the World Bank,” he said on the first day of the two-day conference.
Mayor Tau said in January the City of Johannesburg partnered with the Paris-based Global Fund for Cities’ Development to host a three-day Innovation in Financing South Africa’s Cities conference to seek innovative and sustainable ways of financing infrastructure development projects.
The mayor said the January conference explored how “pooled financing mechanisms” could help African cities create alternative funding sources for infrastructure development, which was central to unlocking the economic development of the country’s big cities. He said the GIIC was the right platform for the meeting of minds from the public and private sectors. Earlier, Minister in the Presidency Jeff Radebe told the conference that Gauteng needed to get its ducks in a row over its infrastructure investment to meet national development goals and enhance investor confidence.
“We must search for every bit of innovation and make all the necessary investments to enable the province to increase its productivity and produce more in every human endeavour. Gauteng has the potential not only to maintain its position as the economic engine of South Africa but also the ability to expand its economic and social contribution beyond our borders. This requires constant and targeted investment by both public and private sectors, especially in physical infrastructure,” Minister Radebe said.
Host and Gauteng Premier David Makhura said infrastructure had the ability to accelerate economic growth. Urging business to come to the party, Premier Makhura said: “The elephant in the room is raising business confidence to unlock private sector skills and resources. Building meaningful partnerships with the private sector is not a luxury. The private sector remains the mainstay of fixed investment in the Gauteng economy, accounting for 80% of gross fixed capital formation at the moment.”
Premier Makhura said Gauteng would require R1.67-trillion in infrastructure investment over the next 15 years and that the government could not raise it alone. It needed help from the private sector, he said. Over the next three years, Gauteng, together with its metros, would spend more than R94-billion on social and economic infrastructure projects. However, this was still not enough to meet the province's infrastructure needs.