Infrastructure Development Bill B49-2013 Submission by Business Unity South Africa January 2014

Overarching business view About us: Confederation of business organisations including Chamber of Commerce and Industry. Official voice of business in South Africa Represent RSA businesses on macro economic issues at national and international levels. Main aim is to ensure that business plays a constructive role in the country’s economic growth, development and transformation. We want to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be more competitive.

Overarching business view Any intervention that expedites infrastructure development welcomed Institutionalisation of co-ordinating structures positive step in achieving objectives Recognition that Bill cannot address all co-ordination challenges

Overarching business view (2) Concerns: Lack of clarity on treatment of private sector projects Risk of diversion of scarce resources for approval processes to focus on public projects Risk of undermining existing approval processes Lack of provision for public consultation Lack of clarity on national infrastructure plan Risk of duplicate requirements Risk of preferential treatment being given to state owned infrastructure where there is competition with the private sector eg: energy, telecommunication

Scope of Bill: concerns Explanatory memorandum and discussions confirm intention of bill to be restricted to implementation of public projects However Bill does not sustain this position List of SIPs includes private sectors projects Schedule 1 of the Bill includes a wide range of potential private projects Bill also now appears to cover maintenance and use Text of Bill is not consistent in reference to ownership of projects Senior Counsel opinion reflects the constitutional challenges of not clarifying the scope No clear provision to exploit opportunities for synergies with private sector projects as is understood to be the case in SIP1 for example

Scope of Bill: proposals Senior Counsel proposed clarification by insertion of “public” before “infrastructure” throughout. May be more elegant ways of addressing this through Definition Removal of schedule 1 which is a significant cause of confusion Include clear process to develop the national plan and designate projects Make clear provision for exploitation of synergies with private sector projects

Approvals, authorisations etc:concerns Recognition of the significant delays in approvals and the consequent negative impact on investment is welcomed. Question is why this recognition cannot result in improving implementation of the current legislation; additional layers of bureaucracy are added From Business perspective: approval processes set out in Schedule 2 will increase the regulatory burden significantly as they require additional requirements for approvals Total scope of approvals covered by the Bill not clear All land use management and spatial planning instruments Environmental authorisations All licenses to operate

Approvals, authorisations etc; concerns (2) Bill assumes that all authorisation applications can be submitted simultaneously. Not practical as some are dependant on prior authorisations No provision for rejection of applications Section 15 and 17 contradictory in respect of concurrent processes Significant work has been done by the Department of Environmental Affairs on improving compliance with the prescribed timeframes under NEMA Strategic plan of the Department of Environmental Affairs for 2012 to 2017 includes numerous references to instruments to give effect to improved processes Specific reference is made to instruments to facilitate investment in SIPs Diversion of scarce resources to give preferential treatment to public projects

Diversion of scarce resources The Bill is clear that the intention is to prioritise approvals for infrastructure projects There is no reference in the memorandum to the need for additional resources Scarce resources will thus be diverted from private projects as exemplified by DEA Strategic Plan

Approvals, authorisations etc: proposals Use language in Section 17 rather than 15 in terms of timing of applications Remove schedule 1 and rely on section 17 Section 17 only deals with NEMA; clarify how other approvals will be dealt with by making section generic Include provision for rejection of applications Ensure that implementation does not result in diversion of resources to result in preferential treatment of public projects Particular care must be taken in sectors where there are both private and public investors Important to note approach in Bill on promotion and protection of investment which guarantees equal treatment for foreign and domestic investors; same approach to public and private should be adopted

National Planning:concerns Bill refers to the National Infrastructure Plan (s 7) and refers to inclusion of projects in the plan and designation of projects (s8) Current plan appears to be comprised of 18 SIPs, some of which include private sector projects National Infrastructure Plan was not subject to consultation No provision is made for future development of the plan or public consultation on it No reference to alignment with plans required in terms of Spatial Planing and Land Use Management Bill Provision for alignment focussed on project level (s8) Expedition is focussed on approvals when this is not the only challenge facing infrastructure project, others include: Poor project control, slow or non payment of contractors, need to redo work as a result of poor execution

National Planning: proposals Essential that national plan enjoys national support and is aligned with other national plans Provision for development and review of National Infrastructure Plan should be included Provision must be made for the National Infrastructure Plan to be subject to public consultation Inclusion of private sector projects in the National Plan should be subject to consultation with the project owner In the case where the use of the proposed infrastructure is being considered formal consultation mechanisms are required. Any discussion on use cannot avoid discussions on cost, should be subject to consultation with users.

Institutional arrangements Use of inconsistent terminology makes the relationship between existing and proposed structures confusing While the overarching structures are political in nature and thus cannot be expected to accommodate stakeholders, the implementing structure for each SIP cannot operate successfully without the participation of the private sector where private sector projects are part of the SIP as is the case in SIP 1. The current practice of inviting participation by project owners in SIP steering committees, to facilitate exploitation of synergies, should be formalised in the same way as the other existing structures are through the Bill

Potential duplication of requirements Bills makes provision for regulations to be promulgated on the following issues: Skills development Green economy Employment creation Youth employment Rural development BBBEE Many of these issues are covered by other legislation and compliance with relevant legislation should be made a condition of the tender Additional regulations in these areas are not supported No explicit provision for consultation on regulations is included

Elimination of potential for duplication Rely on existing legislation and tender specification to deal with issues listed in preference to making additional regulations Include explicit provision for consultation on regulations Consider other matters that may need regulations; for example how designation of new SIPs is to be handled

Conclusions In general BUSA welcomes the stated intention of the Bill but has some serious reservations about some aspects Therefore urges the Committee to consider proposals for revision to address the concerns BUSA is committed to working with the Department and the Committee to provide more detailed input on proposals for amendment if this would be helpful.

Thank you