by S.A.C.C.I

Infrastructure Development Bill

SACCI discusses challenges of EDD's plans to co-ordinate SA's infrastructure projects

SACCI commends the EDD for its efforts, but believes there are still major challenges to overcome
Network.jpg

There is a myriad of regulatory obstacles to the actual construction of an infrastructure network, for example environmental impact assessments, municipal and provincial competency differences, labour regulations and health and safety regulations. In this light, a centralised co-ordination institution should, in theory, be able to alleviate the regulatory congestion.

However, the primary requirement for such a co-ordinating body to function is that it is staffed by highly trained professionals from the construction industry, which does not seem to be the case. The risk of including such a body is that an already over-regulated area would incur yet another bureaucratic level.

While the SA Chamber of Commerce and Industry (SACCI) recognises the earnest intention of the EDD to facilitate infrastructure development in South Africa, there is a variety of background issues that require attention rather than merely relying on political power to resolve regulatory backlogs.

Similarly, the scope of the legislation is exceptionally wide and includes infrastructure programmes that fall within the domain of the private sector such as telecommunications as opposed to government-mandated networks such as road and rail.

This presents a unique challenge to the South African business community, as the suggestion is that government would now play a strategic role in managing the rollout of privately funded infrastructure, which in itself would impact on investor confidence.

Infrastructure development is a significant policy issue that has attracted sufficient political will to be placed at the top of government priorities for the short- to medium term.

Given this impetus to drastically expand South Africa’s infrastructure network, there is an acute appreciation of the regulatory hurdles that must be crossed in actual rollout. This bill epitomises a policy response from government to address the plethora of regulations that delay infrastructure expansion.

The underlying assumption of the bill is that co-ordination among government officials would help to overcome the regulatory burdens facing infrastructure expansion. In turn, this implies that the regulatory environment is the key culprit behind the delays, as opposed to a lack of funding or skills deficits. This is a point with which the South African business community concurs.

Given this set of circumstances, the optimal way forward is to understand what constitute the regulatory hurdles.

Consultation with the relevant stakeholders would assist in the identification of the specific regulations and laws that are causing problems.

The next step would be to address each of these problems as a policy amendment. The creation of a bureaucratic process to iron out problems on an ad hoc manner is purely a short-term solution that ignores the systemic problem. The systemic problem therefore requires a systemic solution.

A second significant assumption underlying the bill is that a number of bureaucrats would be able to influence the regulatory process through political power. SACCI concedes that political will is necessary in most cases to introduce or implement policy, but the complexity of most infrastructure projects means that even a colloquium of industry leaders would have difficulty in finding solutions in the time allowed for the processing of applications.

However, allowing the South African business community representation on the various bodies would ensure the work of the body would be eased due to an ensured technical capacity.

Because of the wide ambit and the specific wording of the bill, the possibility exists that wholly private sector infrastructure projects would now have to submit their applications to an additional bureaucratic level. This is anathema to the entire stated goal of the bill to facilitate infrastructure development, as it increases the administrative cost and delays.

However, the existence of a voluntary one-stop shop for infrastructure developers should provide some value.

In order to ensure policy translates to implementable law, the drafting of legislation must undergo sufficient rigour in order to ensure each provision is unambiguous and contributes to legal certainty rather than detract from it.

In this case, the EDD may consider redrafting the problematic areas in the bill. SACCI recognises that these are exclusively technical errors that frustrate objectives which may be sensible, but the discipline of legal drafting must be maintained.

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