CAPE TOWN (miningweekly.com) – South Africa has a significant implementation crisis. A number of government departments and parastatals were hollowed out. Capacity is a significant issue in almost every parastatal – water authorities, Eskom, Transnet and across the board.
“We’re not rushing in to take over activities because government doesn’t want us to. We’ve been working with government to open the space for greater private sector participation, particularly in energy and increasingly in rail,” Minerals Council South Africa CEO Roger Baxter stated during a media briefing at the Investing in African Mining Indaba on Monday.
“In our view private sector participation is going to be the thing that changes the game for South Africa going forward because we’re not convinced that the existing model is going to solve the issue,” said Baxter in response to Mining Weekly.
“Private sector participation is the way that we can get ourselves out of the mess that this economy’s in at the moment. I still believe that South Africa’s got a 2% potential growth rate, only 2%.
“If you look at a typical endogenous production function and growth model for South Africa, total factor productivity in the economy was negative for the last three years owing to network industries – rail, port, pipelines – and until we get much greater private sector participation in those areas, we’re not going to solve the issue.
“I can say very confidently from a business perspective that I was part of the six-business-leader team that met with President Cyril Ramaphosa in February to highlight what we are really looking for, and it’s no longer about identifying what the specific solutions are, it’s about implementing what’s been agreed.
“On the infrastructure side, I can say what’s been agreed is how we get much greater private sector participation on energy and then on the rail side, trying to get the existing core established and there is a process under way to allow private sector participation in rail.
“At this stage, we’re not convinced it’s going to change the game, but that’s a pressure point that we’re pushing on government.
“Unlocking private sector capability in municipalities. There is not a single municipality that is in a mining area that is not helped by the mining companies. We can’t take over the responsibility of the State but we help with water, engineering and financial services and others to make sure that those local authorities and municipalities are stabilized because it also affects the morale in communities and particularly our workforce,” Baxter added.
“We’re doing our bit and we’re doing it in a reach-out partnership way with government. What we’re doing is going with construction solutions to try and get practical outcomes but it takes time.
“We’ve been working on some of these issues for from three to five years and if we could have a little bit more expedited processes in various areas, we could get certain things a lot quicker.
“In certain areas we have seconded in people to assist local authorities, but when it gets to regulatory issues like licensing, it’s quite difficult for the Minerals Council or the mining companies to second people into government because there is a direct conflict of interest.
“But there are other ways that you can solve the challenges by getting Operation Vulindlela and government to make sure that in certain areas they are applying more capacity,” he said.