It’s in the details

2013-02-17 10:00

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Economic Development Minister Ebrahim Patel is a details guy.

To illustrate his drive for value for money, he tells the story of his department assembling quotes for a meeting they were to host on mine strikes.

The quotes arrived and the event manager offered the hire of glasses at R120 each. Patel balked.

The company was negotiated down to a sensible amount.

“We need a value-for-money ethos in the public sector,” says Patel, who runs the trillion-rand infrastructure budget. “With that kind of money, value is crucial.”

As City Press’ exposés of cartel collusion in the construction industry have shown, massive collusion and anticompetitive behaviour exists.

Government’s response is to gather better information, put in place tougher penalties and get corporates to sign a voluntary integrity pact.

“We have to create an environment that’s unattractive for collusion and price-fixing,” says Patel. “Can we set a maximum price as a bulk procurer? Can we say no school may be built for more than X million rands? We can begin to push back on hidden and open measures individuals use to siphon off money.”

The state spent R850 billion since 2009 and employed 150 000 people who did not have jobs.

“The infrastructure programme has played a role in stabilising employment,” says the minister.

But most of the 16 000 workers at Medupi, the new power station in Limpopo, have been on strike for a month now because they want permanent jobs.

Infrastructure building is, by its nature, temporary.

“The state can’t guarantee permanent jobs,” says Patel, “but we should be able to make people more employable.”

The greatest gain of the past year, he says, is the turnaround in the perception that each state of the nation address is a series of great-sounding nothings, announcements of spending that rarely happens.

Yesterday, Business Day reported on a Nedbank report that found that levels of private and public investment are reducing, not increasing.

But Patel says the money is flowing to the laying of 63km of rail, the building of a 2.4 million-tons-a-year manganese plant near Hotazel in the Northern Cape, massive electrification and connection to solar energy, and the laying of 7 000km of fibreoptic cable to finally bring South Africa into the 21st-century communications economy.

“It’s a good start, but no more than that,” says Patel, adding that the next big idea is to link the stimulation of new industries to infrastructure spending.

The first attempt is to turn us into a nation of train builders and rail engineers, and capitalise on the sun by creating a much larger solar-water heating industry.

“We want to show we have moved from talk to action,” he says.

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