The infrastructure chain of delivery involves many complex phases, starting from detailed planning, identification of the project, preparing the project for financing, the financing of the project, the building of the project, and to the operation and maintenance of the project itself. Each of these phases require careful thought and effective capacity to ensure success.
Often as a result of the overwhelming deficit of infrastructure in Africa, coupled with the urgent need to address this deficit, we adopt an aspirational approach (everything will go well) to the delivery of infrastructure. We adopt a mind-set that assumes that infrastructure projects in Africa are too important to fail. Accordingly, stakeholders seek at a high level broad agreement on these complex issues only to be confronted with disagreements as implementation deadlines approach.
We would serve Africa’s infrastructure delivery better if stakeholders adopted a more grounded reality based approach – identifying all the things that could go wrong in each of the phases and by applying resilient risk mitigation to each of these challenges. This would necessitate obtaining consensus among all players upfront and before the commencement of the project, on the business factors or credit aspects of the project, the political and regulatory decisions required and on the macroeconomic and other factors that could affect the project. It is accepted that finding such consensus is often time consuming and involves robust and difficult conversations. It is better that consensus around these issues are obtained first, rather than failure to complete a project on the basis of disagreements that occur during the implementation of the project.
Adopting a reality based approach to infrastructure delivery assumes that all role players are capacitated to manage the complex issues that arise during the different phases of an infrastructure project. Africa would serve itself well by ensuring that governments acquire these necessary skills housed in a central capacity playing a project management role throughout the entire value chain involved in the efficient and effective delivery of infrastructure projects.
Africa has started to adopt the reality based approach to infrastructure delivery. Take for example South Africa’s Renewable Energy Independent Power Producers Programme (REIPPP). It is a good example of bringing together various role players in both public and private sectors in a coordinated and efficient way to deliver the necessary energy infrastructure.
The Department of Energy (DOE) and the Development Bank of Southern Africa (DBSA) worked together from inception to create an enabling and resilient environment that facilitated the procurement of energy from independent power producers. In this way a total of 4,322MW has already been procured in less than four years from 79 approved projects that will deliver a total of 5,243MW across all renewable energy bid windows. This represents a massive investment of R168 billion in economic infrastructure in South Africa, contributing to economic growth, job creation and security of electricity supply.
In the context of the massive need and cost, the involvement of the private sector is critical to the success of sustainable infrastructure delivery. In this regard, mutual beneficial Public Private Partnerships (PPPs) play an importance role. A good example of this is the Pumtree-Mutara Road in Zimbabwe managed by Infralink Pty, a special purpose vehicle, jointly owned by the construction company Group 5 and the Zimbabwean Road Agency supported by South Africa’s Export Credit Insurance agency on the basis of ring-fenced toll-fees for the repayment of debt obligations. This road has made a huge difference to the lives of Zimbabweans, facilitating connectivity and trade.
Lastly, the Zambian Government, through its Road Development Agency (RDA) and the National Road Fund Agency (NRFA) has embarked on an accelerated rehabilitation of prioritised provincial road infrastructure. The road rehabilitation programme is expected to improve internal accessibility of established areas of economic activity and to connect Zambia to the SADC development corridors, which will open up regional markets.
In arriving at the proposed priority roads for funding, the Government of Zambia, through the RDA, engaged the services of experienced consultants to carry out feasibility studies to establish the economic rates of returns of the roads. The feasibility studies were funded jointly by the government, the Arab Bank of Economic Development in Africa and the Danish Government. The feasibility studies indicated that three of the roads formed part of the Trans African Highways (TAH) programme route running from Cape Town to the DRC’s Katanga Province and onwards to Kinshasa. These roads link up as part of the Western Corridor in Zambia connecting the new western Copperbelt area with the DRC, Namibia, Angola and Botswana. As such, the rehabilitation of the Western Corridor will fit into the wider corridor network programme for the SADC region and lend itself for wider cooperation between its international financing partners.
The Zambian Government in this project correctly emphasized regional integration as a basis for choosing national projects. Further, by the use of private sector expertise, they followed the necessary project preparation steps and principles. This in turn has made it easier for Zambia to obtain the necessary financing from international lenders to undergo rehabilitation.
All of these examples are grounded on the reality based approach to infrastructure delivery. Accordingly, they present excellent lessons for other African governments and for those who wish to play a role in ensuring that Africa overcomes its infrastructure deficit.
The report, Africa Strategic Infrastructure Initiative, is available here.
The World Economic Forum on Africa 2015 takes place in Cape Town, South Africa from 3-5 June.
Author: Moe Shaik, CEO, International Division, Development Bank of Southern Africa, South Africa
Image: Workers are seen at the construction site of Abidjan’s third bridge, in Cocody-Golf, Abidjan May 18, 2012. REUTERS/Thierry Gouegnon