The Infrastructure Development and Engagement Unit (ID&EU) at the Nelson Mandela University’s Faculties of Engineering and Business Sciences will host its inaugural Infrastructure Project Preparation for Bankability Workshop on November 21 and 22.
The ID&EU aims to drive infrastructure development to enable the realization of industrialization to enhance Africa’s trade capacity and economic performance through infrastructure investment.
In line with its objectives, the ID&EU plans to, through the workshop, contribute to greater public–private cooperation for infrastructure development, as well as enhance the analysis and development that will augment industrialization, while simultaneously facilitating project preparation for bankability in the region.
Focusing on the latter, in particular, Nelson Mandela University professional associate Bongani Mankewu tells Engineering News Online that project preparation is the process through which a project is taken from “being dust” to becoming a building in a “shining environment”; in effect taking a project “from nowhere to being investable”.
However, considering that it is generally understood that infrastructure is financed by future cash flows, he avers that meticulous project preparation has to take place, but laments that “this is where we are going wrong across Africa”.
It is for this reason that the ID&EU aims to assist the infrastructure industry reduce transaction costs, which add to project risk and often serve as a barrier to entry for new industry participants. Keeping in mind that infrastructure will likely always be championed by State-owned entities (SOEs), Mankewu says that with South Africa’s largest SOEs, including power utility Eskom in crisis, infrastructure project spend has slowed down.
“We’re of the view that lessons that can be learned from projects implemented by institutions like Eskom, Transnet and the Passenger Rail Agency of South Africa, whether they are bad or good, and that these projects need to be explored so that any mistakes are not repeated,” he adds.
This, alongside studying models like Gautrain, should be viewed by the industry and government “with excitement”, Mankewu says, calling for SOEs, municipalities and development finance institutions “to come to the party”.
“A development bank is supposed to drive the revenue mechanisms that can be generated from infrastructure and we’re of the view that, if we refine a project preparation model, it will help Southern Africa achieve these objectives,” he avers.
He further points out that “a serious discussion” about infrastructure projects, the preparation thereof and the establishment of the Infrastructure Fund, needs to be had in South Africa.