InfrAstructure & Development - Trademax Publications

Infrastructure development
PPC CEO calls for
infrastructure CODESA
Ketso Gordhan, CEO of the leading supplier of cement in southern Africa, PPC Ltd.,
has called for the creation of an infrastructure negotiation body similar to that of
the Convention for a Democratic South Africa (CODESA) as a critical step to kickstart
implementation of much needed infrastructure development in South Africa.
“It is clear that infrastructure bottlenecks by both the
public and private sectors need to be addressed, not
through agreeing to generic accords but rather through
implementable plans with clear roles, responsibilities and
deadlines. The methodology is simple. Before 1994
people wanted a democratic South Africa. The National
Party and the ANC both raised issues that were preventing
them from moving forward in this regard. So, they put
together a working group on each of those issues and
came back with solutions. All the things that we see today
were compromises that emerged from discussions and
negotiations,” said Gordhan.
Speaking at an International Project Finance Association
(IPFA) event in Sandton, Mr Gordhan was adamant that
negotiations between the national government and the
private sector would substantially increase the number of
infrastructure developments completed.
“Moves like this are where we can make the most
significant impact on our global competitiveness as a
country. We continue to score poorly in the World
Economic Forum’s Global Competitive Index and we have
to come to terms with the fact that we cannot boost the
competitiveness of our economy, boost sustainable
infrastructure growth and boost job creation by doing
more than agreeing to the ideals of a plan,” he said.
By getting the national government and private sector
together in one room, Gordhan said that many problems
currently facing the industry would be solved. One of the
biggest issues government has is that they believed they
overpaid on previous public–private partnerships (PPP).
“Let’s use the prison example. Government had a
description of the sort of prison it wanted to have; if you
had a look at the description it looked like a 5-star hotel.
Instead of the private sector coming back and saying that
it is not very functional, now we have something that is
way too expensive. It costs us around R75,000 a year for
one prisoner per year; a pensioner gets R1,200 a month.
If you weigh up those two things; here is a guy who has
done something wrong so we lock him up.
Ketso Gordhan, CEO of PPC Ltd.
The reality is it is costing us that much money each year, it
just doesn’t sound right,” he said.
Regarding previous sectors in the PPP arena, Gordhan
believes there are three reasons why success has been
experienced in the last 15 years. Firstly, it was due to a
strong political will to get the job done.
“If there is a strong political will to get something done,
the chances of success are much higher. We saw that with
the Gautrain project; it was because the MEC, Premier and
the national government really wanted the project to get
done,” he explained.
Secondly, the existence of strong officials on projects was
crucial. “They knew how to get the decisions through the
various mechanisms in government, how to interact with
the private sector, and how to get the best advice to make
things to happen. A strong official makes a huge
difference.”
Gordhan believes that the third reason was the
combination of all of these and the existence of a very
simple transparent process with a clear allocation of risk.
“If all these things are present there will be no debates
about who should be doing what. Once you have a clearcut
mechanism for dealing with the project, the chances of
success improve immensely.”
28
august 2013