Poor infrastructure maintenance hurting SA

Posted On Friday, 24 February 2012 02:00 Published by eProp Commercial Property News
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Almost a third of the country’s municipalities are without municipal managers

Pravin-GordhanBACKLOGS in the maintenance of municipal water and electricity infrastructure maintenance threaten South Africa’s economy, and its social stability, experts say.

The government has announced a big infrastructure investment plan and a good part of this needs to be focused on dealing with a R33bn maintenance backlog in electricity infrastructure, as well as an annual R2,66bn water infrastructure maintenance logjam.

"The bottom line is we need to ensure adequate, and even optimal, electricity and water distribution, and we won’t do that without maintenance," says Engineering Council of South Africa CEO Ozzie Franks.

The backlogs are, in part, attributable to the government’s bid to correct apartheid-era inequalities, but Mr Franks says another big hurdle with electricity is lack of clarity over who will own, and be responsible for, electricity infrastructure in the future.

"The reason local authorities are not investing in electricity infrastructure maintenance is that they are not sure of the future ownership of those assets. There was a move to transfer ownership to 10 regional electricity distributors but the government needs to clarify asset ownership and responsibility," he says.

The Cabinet last year disbanded EDI Holdings, an entity created to drive the restructuring of the electricity distribution industry, and has yet to say which entity now has that responsibility.

Underspending on water infrastructure maintenance has been caused by not monitoring for problems, skills shortages and slim budget allocations, he says.
Mthobeli Kolisa, the municipal infrastructure services executive director at the South African Local Government Association, says the R33bn electricity maintenance backlog is not only a problem for municipalities, because some of the ageing infrastructure belongs to Eskom. But, while the power utility has funding for refurbishment, the municipalities have to come up with their own funding, from tariffs.

Municipalities inherited old water and electricity infrastructures 17 years ago, and the government had no choice but to expand services, Mr Kolisa says.
"But now the infrastructure is overloaded ... (and) overdue for refurbishment. It is not municipal negligence, but a historical issue (about which) a choice had to be made. For three to four years now, we have been telling the government refurbishment is unavoidable if we don’t want inadequate service to South Africa’s economic hubs," he says.

The association wants an "infrastructure refurbishment fund" to help it leverage private-sector investment.

Inadequate electrical power — and rail and port inefficiencies, in particular — are considered to have held back the expansion of mining production and its contribution to the economy.

South Africa also has mounting water problems, such as poor management of dams, sewerage works and treatment plants, reports African Economic Outlook.
A survey by the South African Chamber of Commerce and Industry, released earlier this year, found that service delivery problems were hurting business. Respondents placed road maintenance (39,7%) top of the list, electricity distribution (32,9%) second and water and sanitation (12,3%) third.

Corruption and ineptitude bedevil the situation. Auditor-general Terence Nombembe says the government’s 2010-11 accounts contain R20bn in unauthorised expenditure and a Treasury report says that municipal finances have deteriorated, with 66 municipalities in financial distress and 37 close to it.
Democratic Alliance (DA) water and environmental affairs spokesman Gareth Morgan says that municipalities owe the country’s water boards more than R2bn, of which R1,12bn is in arrears, but that the trend is edging towards improvement.

DA finance spokesman Tim Harris says infrastructure maintenance is crucial.

"We should be investing around 10% of our GDP (gross domestic product) in infrastructure. That would be R330bn this year. The current infrastructure commitment across government is R257bn for 2012, so we are left with a shortfall of around R73bn," he says.

Finance Minister Pravin Gordhan’s budget on Wednesday added several measures to strengthen municipal expertise and spending capacity.
But almost a third of municipalities are without municipal managers and 27% do not have a chief financial officer.

Last modified on Monday, 28 October 2013 16:12

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