Treasury Director General Dondo Mogajane says that good infrastructure projects, that create jobs, will not go unfunded.
- Treasury, the DBSA and others signed an MoA related to a R100 billion infrastructure fund to support the economy.
- Treasury Director General Dondo Mogajane says there are systems in place to ensure that there is no corruption in these projects.
- DBSA CEO Patrick Dlamini similarly says “transparency” will be key.
Responding to heightened criticism in recent weeks around corruption surrounding the state’s multi-billion rand medical response to the Covid-19 pandemic, Treasury Director General, Dondo Mogajane, said “corruptors” will not be accepted in the state’s R100 billion infrastructure fund initiative.
The fund, which is a partnership between government, the private sector and international financiers, was first announced by President Cyril Ramaphosa in September 2018. Due to the impact of the pandemic and the worsening the economic outlook for the country, the need for infrastructure development to revive activity and growth has become more pressing.
Before the coronavirus was declared a pandemic in the middle of March, South Africa was already in recession. As a result of the lockdown, the economy is now forecast to see a double digit contraction this year despite the earlier than expected move to Level 2 lockdown over the weekend.
“Our process should be transparent, should be fair, should be competitive and we should get the best value for government in this case,” Mogajane said at a briefing following the signing of an agreement between National Treasury, the Department of Public Works, Infrastructure South Africa and the Development Bank of Southern Africa (DBSA).
Mogajane emphasised that Treasury will “not in any way” accept corrupt parties.
Treasury has allocated R10 billion from the current medium-term expenditure framework, and R100 billion has been made available over 10 years. The programme is set to kick off with 55 projects, which have yet to be announced.
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Referring to the collusion by construction firms related to the infrastructure roll-out ahead of the Fifa World Cup in 2010, Mogajane said lessons had been learnt and the state was making sure not to have a repeat.
Mogajane said Treasury, as the custodians of public finances, would be keeping an eagle eye on funds earmarked for infrastructure.
Echoing Mogajane’s sentiments, DBSA CEO Patrick Dlamini said that procurement should not be compromised by corruption.
As the DBSA, he said the institution would ensure the infastructure fund is not in any “way, shape or form” compromised. “We want this thing to work for all South Africans.” In terms of any unsolicited proposals, Dlamini said they would have to be publicised to ensure transparency.
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Commenting on government’s ability to partner in the funding, Mogajane said that the original R10 billion had been set aside for the purpose of the fund in the budget. While the State has had difficulty in getting resources for Covid-19 specific challenges, government tried as much as it could not to “erode” funds for infrastructure.
“No good project is going to be left unfunded,” said Mogajane. A good project would be such that it creates jobs, and ensure tax revenues will be received.
Mogajane said there is potential to add more infrastructure projects and funding in future too. “It’s a start, if it means we have to add more, we will,” he said. At the same time – projects that do not add value will be stopped
