TRANSPORT

Addressing the infrastructure backlog

William Dachs, Chief Operating Officer at the Gautrain Management Agency
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The reality is that South Africa as a country, and southern Africa as a region, has massive infrastructure backlog that public budgets just cannot address from a financial perspective, particularly if these requirements are planned and funded in a similar fashion to previous projects.

This is according to William Dachs, a professional engineer and plenary speaker at this year’s Southern African Transport Conference (SATC 2015).

Dachs, who is Chief Operating Officer at the Gautrain Management Agency responsible for oversight of the multibillion rand Gautrain Rapid Rail Link, notes that the historic approach – of planning infrastructure and then relying on the national budget from treasuries to implement them – has three fundamental problems, viz:

 

  • There isn’t enough budget allocation to fund the capital required for the projects;
  • We don’t have the right tools to plan and select the projects that our country best needs from an economic and social perspective; and
  • Even if the capital budget is provided, we don’t have funding to cover the maintenance of these assets to make them sustainable.

 

It is with this trio of challenges in mind that Dachs will be addressing delegates at SATC 2015, which takes place at the CSIR International Convention Centre (CSIR ICC) in Pretoria, South Africa from July 6 – 9, 2015.

Under the working title of “Developing a sustainable funding model for public transport in Southern Africa”, Dachs aims to examine the missing link in public infrastructure and how to mobilise private capital into projects and programmes.

Up until the last few years the various public sources, like budget allocations, municipalities and state-owned enterprises borrowing against their balance sheets and often using Treasury guarantees. Dachs believes that this has resulted in the fact that they been used to the point where they cannot be increased anymore.

“Already the credit rating agencies are warning South Africa not to take on more debt or issue more guarantees. So what are the alternatives? In my view we haven’t begun to tap into the full potential of project finance, where investors are able to invest in project and get a return on that investment.”

Using the National Development Plan as an example of setting a solid foundation, Dachs says that in the last five years our planning framework has improved and the Eskom crisis has woken us up to the dangers of underinvesting in infrastructure. “The National Treasury is using the current fiscal crisis to take a firm stand on not investing in projects without solid economic and social returns.”

“Around the world the opportunities of public transport projects funded by user charges, property value increases and commercial advertising revenue are being utilised,” Dachs highlighted.

But can it work in South Africa and the Southern African Development Community (SADC) region?

Dachs’ professional view is that it can – and at his plenary address at SATC 2015 he will highlight requirements and opportunities to raise finance for transport projects in a far more innovative manner than before.

More about the SATC

Now in its 34th year, the Southern African Transport Conference (SATC) is Africa's longest running and premier transport conference. Taking place at the CSIR International Convention Centre in Pretoria from 6th to 9th July 2015, the theme of this year's SATC is Transport: Working together to deliver – Sakha Sonke.

SATC is officially supported by the South African Department of Transport and the US-based Transportation Research Board (TRB). South Africa’s Minister of Transport, Elizabeth Dipuo Peters is the event patron and will be delivering the opening address on Monday, 6 July.

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