The Africa Industrialisation Index 2022, an annual report jointly commissioned by the African Development Bank, the African Union and the United Nations Industrial Development Organisation makes the following pertinent observations:
- African governments need to promote industrial development more aggressively by putting in place enabling conditions for industrialisation and national development through strategic infrastructure investment, a skilled workforce, a favourable investment climate and identifying as well as nurturing infant industries.
- Inadequate infrastructure is the most pressing constraint on African industrialisation and development.
- The continent’s infrastructure needs currently stand at $130–170 billion per annum, with a financing gap of $68–108 billion.
- Governments must catalyse new and additional funding for strategic infrastructure projects.
Madam Speaker
The South African Institution for Civil Engineering Infrastructure Report Card 2022 highlights the fact that infrastructure is at the centre of public and economic well-being. It further states that, “from the advent of democracy in 1994, South Africa has made great strides in improving the quality and distribution of both economic and social infrastructure. However, these gains need to be effectively sustained and enhanced, given the fact that, from the national level through to provinces and down to the local level, good social infrastructure provides opportunities for social mobility while improving the length and quality of human life.” The provision of public infrastructure is a core function and responsibility of our developmental state, whilst its responsible use and protection is a corresponding duty of all citizens. The South African Constitution enshrines progressive socio-economic rights around access to infrastructure and basic services and within Gauteng City Region, it is our primary responsibility as a department to ensure that these socio-economic rights are indeed met for communities and citizens within our province.
The department has repositioned itself to deliver smart public infrastructure in an accelerated manner, in line with the five-year infrastructure pipeline and we have put in place service level agreements that will enable us to effectively and efficiently deliver infrastructure projects. We have assessed and categorised our project portfolio in accordance with readiness for completion and will be accelerating delivery of these projects. We want to use our infrastructure project pipeline to catalyse private sector investment and drive spatial as well as economic transformation.
Madam Speaker
We have put in place a number of interventions in order to address bottlenecks that negatively impact on our ability to deliver infrastructure timeously. Our project pipeline has been included in the District Development Model, meaning that it forms part of municipal Integrated Development Plans (IDPs). The project pipeline is also a standing item on both the Head of Departments Technical Committee and the MEC/MMC intergovernmental relations (IGR) meetings, with separate IGR meetings being convened with municipalities monthly in order to attend to any issues that may cause delays.
We have developed infrastructure standard operating procedures in order to improve accountability and service delivery between the department and its sister departments, which are its clients. We are making use of a Project Readiness Matrix and have identified specific projects that are to be ring-fenced and completed by 2024 with an intervention plan outlined for each specific project in this pipeline.
The department is the primary custodian of government immovable assets in the province, a portfolio which consists of various types of assets, including vacant land and facilities, which is valued at approximately R45 billion. Across the five development corridors that make up Gauteng City Region, we have 2280 vacant properties and 57 facilities. With this in mind, we have developed a Property Optimisation Strategy with leasing, land management and asset management standards. This will enable us to address the problem of the underutilisation of provincial government-owned immovable assets in addressing the socio-economic challenges that confront the province. We are busy working on the Commercialisation Strategy, which should be completed in the 2023/24 financial year.
These provincial government owned properties and facilities can create an added revenue stream for the provincial government as they can be leased to the private sector as well as being used to promote economic empowerment and transformation as part of our Rapid Land Release Programme. It is imperative that we find the correct balance between service delivery, economic transformation and revenue generation in how we utilise this portfolio.
Honourable Members
The asset portfolio mix should enable the provincial government to discharge service delivery functions in non-revenue generating areas with no cost recovery options, whilst at the same time leveraging the commercially viable asset classes of the portfolio, i.e commercialisation of land parcels in high return areas that can cross subsidise those areas that have no potential for cost recovery.
Significant resources will be required to package and profile these asset classes appropriately and one of the things we are exploring in order to leverage private sector resources, is to go to the market for Expressions of Interest (EOI) and Request for Proposals (RFPs), whereby the private sector can approach us with proposals on how these asset classes can be utilised, with those proposals that are most aligned to our developmental and transformative objectives as a provincial government being considered for implementation. The department will promote the integration of unused land, abandoned buildings and forgotten industrial estates into township value chains, empowering township SMMEs as part of the provincial government’s Township Economy Revitalisation Strategy.
Madam Speaker
As part of the Optimisation Strategy, 89 properties have already been identified and verified for disposal, 963 have been identified for transfer to the Department of Transport and Logistics and 246 for transfer to the Department of Human Settlements in terms of Section 42 of the Constitution. Nine hundred and eighty two have been identified as strategic assets for future use that can enhance revenue generation for the provincial government.