Construction World September 2024

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Repair of critical infrastructure presents a good case FOR A LARGE-SCALE INDUSTRIALISATION PROGRAMME Fresh off the Infrastructure Africa (IA) Conference hosted in Cape Town on the 16 and 17 July 2024, one is enthusiastic about the character of the discussion and the appreciation of the fact that infrastructure development is paramount to unlocking growth in South Africa and on the African continent. By Tafadzwa Chibanguza, is the Chief Operations Officer of the Steel and Engineering Industries Federation of Southern Africa

I nsights about financing, regulatory reform, policy coordination and co-operation to achieve this end will be the topics of discussion for weeks to come. Particularly important is the role that infrastructure investment can play in unlocking demand for the Metals and Engineering (M&E) Sector which enjoys markets in the mining, agriculture, construction, automotive, logistics, water and the energy supply industry. However, what is critical to highlight is that while multi billion and long-term infrastructure investments are critical for industrialisation, there is an intermediate discussion that needs to be had. That is, the massive scale industrialisation project that can be achieved through repairing the existing infrastructure which has continued to deteriorate due to under-investment and maintenance backlogs. This is a reality across most critical infrastructure areas namely: rail, energy, municipal services and increasingly worrying,

water infrastructure. While it is obvious to mention that the country’s poor economic growth outcome can be attributed to the bottlenecks in these respective areas, some of the immediate challenges faced by companies as a result of the infrastructure decay are as shocking as they are horrifying. One recent example is of a multinational company operating in the East of Johannesburg that had to invest in a large-scale back-up fire suppression system at the staggering capital cost of R12 million. This ‘investment’ was necessitated by the company partially failing an ad hoc insurance inspection because there was no water coming out of the grid-based fire suppression system. This spend presents an opportunity cost for the company’s capital allocation and by the same token the end consumer will regrettably bear this cost. The South African Reserve Bank (SARB) has on numerous occasions highlighted its concern about the pace of

10 CONSTRUCTION WORLD SEPTEMBER 2024