The Infrastructure Development Bill

Presentation to Select Committee, NCOP

04 March 2014

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Background

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• The PICC was established in 2011 and commenced work on infrastructure rollout immediately

• Based on the successful experience to date, the PICC identified the need to have a clear legal framework

• Bill published for comment early in 2013• Public hearings on new draft in January 2014 led to

amendments to improve the Bill• National Assembly passed it on 25 February 2014

Background

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• Core infrastructure challenges:– Overcoming backlogs left by apartheid in both municipal

and social infrastructure in black communities, especially in rural areas, as a result of decades of underinvestment

– Serving emerging enterprises in poor regions– Maintaining and expanding core economic infrastructure –

energy, telecommunications, rail, roads, water, waste management – as the basis for sustained development

– Ensuring all of it is affordable for South Africa, whether it is paid through taxes or user fees

• Experience since 2011 has shown the importance of the PICC in delivering infrastructure priorities by improving planning, coordination and monitoring

• It is a key tool for the developmental state

Context

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• A central problem: Many projects do not deliver on time or within budget or has limited development impact

• Reasons: – red tape – lack of coordination across the three spheres– silos between national departments– lack of integration between infrastructure systems– slow actions by bureaucrats and sitting on decisions for

long periods – litigation by lobbyists that slows down implementation– corruption in tenders that increases costs– limited focus on localisation and jobs– inability to identify and mobilise effectively to implement

strategic projects that can drive development and inclusive growth

What the Bill seeks to achieve

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Land : example of the challenge experienced in gaining access to land for infrastructure build today

EIA, appeals and expropriation can take up to 6,5 years

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• Every major kind of infrastructure depends in some way on more than one sphere of the state

• That is why the Constitution provides for a reasonable division of competence between the spheres, but calls for cooperation in all cases

• The Bill facilitates the cooperation that is fundamental to the Constitution

Supporting cooperative governance

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Some examples to show the interplay

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EXCLUSIVE POWERS• Provinces have exclusive powers over

provincial roads• But provincial roads must be aligned

with local and national roads to support efficient traffic flow and ultimately economic and social development

• And the construction process should align with spatial planning across all spheres and align with other network infrastructure (e.g. water pipelines and electricity transmission lines)

• Where SIPs foresee development corridors spurred by national transport lines, the link to provincial and local roads, other infrastructure and planning is crucial for success

CONCURRENT POWERS• National and provincial

governments have concurrent powers over education (excluding tertiary)

• But building a school requires a host of municipal services, from water to waste removal to local roads and electricity

• It must also be included in local spatial planning

• Efficient development requires collaboration between DBE, provinces and municipalities The structures of the PICC have made this kind of collaboration easier

• In February 2012, Cabinet adopted the first National Infrastructure Plan, which was developed by the PICC Council.

• The Plan identifies 18 Strategic Integrated Projects (SIPs) - clusters of projects required to achieve priority outcomes, including regional development, improved social services and enhanced logistics, energy security, water supply and access to broadband as well as social infrastructure such as schools, universities, sanitation systems, hospitals and clinics.

• The Council designated public agencies to coordinate each SIP and convened launches that brought together stakeholders across the state, ensuring clarity about their responsibilities.

• The share of public investment has risen from a post-2008 low of 6,7% of the GDP at the end of 2010 to 7,3% in the third quarter of 2013

Experience with the PICC

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• The PICC has established a system to ensure quarterly monitoring and evaluation of progress on SIPs, and intervenes to support progress as required

• PICC teams looked at the lessons of previous and current infrastructure build programmes, including for the 2010 World Cup, Gautrain, airport-development and more recently, Medupi and Kusile

• These lessons have been distilled in the Infrastructure Development Bill

• The Bill does not create new structures: it gives statutory form to structures that have now been stress-tested in practice over the past two years

Experience with the PICC

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• 180 000 direct jobs sustained • Built more than 320 new schools, in rural areas where they

are replacing mud schools. • Ten new hospitals completed. • 10 000 beds for university students completed. • Two new universities and 12 new campuses for FET colleges

under construction, marking the biggest new university and FET build in the past 30 years.

• 30 000 kilometres of fibre-optic cable for broadband laid, providing the basis for a massive expansion in the ICT sector

• Two new large dams built: near De Hoop in Limpopo and the Spring Grove Dam in KwaZulu Natal, bringing 126 million cubic meters of new water into our water systems.

• Two water pipelines that cover almost 200 kilometres have been completed to transport water from dams to power-stations and industrial sites.

Experience of the PICC (2)

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• New or expanded water works completed under this administration have provided an additional 176 million litres of drinkable water every day for our people - almost equal to a glass of water per day for every person in sub-Saharan Africa.

• Construction has started on the first large new rail lines since the 1980s, in Mpumalanga to help to shift transport of coal from roads to rail in order to protect the road network.

• A major programme of construction is under way to integrate urban centres through an integrated public transport system, with funding provided through national government to metros for implementation. Rea Vaya in Johannesburg and MyCiti in Cape Town have already completed parts of their network.

• A total of 3200 kilometres of new transmission power lines were laid to take energy to more parts of the country and ensure that rural communities increasingly have access to electricity.

Experience of the PICC (3)

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• Over past 5 years, over 1 million new households connected to electricity, with benefits to more than four million people. In the 104 years between 1892 and 1996, only 5,2 million households were connected to electricity. In the 20 years of democracy, we have reached 7 million more households.

• 420 000 solar water heaters installed on rooftops of South African homes, mainly for people who had no access to running hot water. This is one of the most ambitious programmes in the world.

• Refurbishment of five power stations – more than a new Koeberg nuclear power

• About 9000 new train coaches or wagons and more than 373 locomotives, many which are now being manufactured locally to create jobs and expand industrial capacity

• 330 new buses were manufactured locally for the new integrated transport system for Johannesburg and Cape Town

Experience of the PICC (4)

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What the Bill does

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The Infrastructure Development Bill is intended to speed up and improve the delivery and implementation of social and economic infrastructure and to maximise the developmental impact. It does so through provisions to that deal with structures, timeframes, processes and outcomes.

 • First, it establishes in law the coordination structures of the

PICC to provide for executive authorities in all three spheres of government to meet on a regular basis to drive implementation of infrastructure.

 • Second, it provides for Strategic Integrated Projects (SIPs)

that connect and align a number of catalytic projects that together make up the National Infrastructure Plan.

 

What do we seek to achieve with the Bill

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• Third, it sets timeframes for the approval of regulatory decisions affecting the implementation of infrastructure projects. Instead of sequential approval processes, it provide for processes to run concurrently wherever possible. This ensures that the state works to a common deadline. This timeframe provides for public consultation.

• Fourth, it sets out processes of coordination that require regulatory authorities and cross-cutting departments to work closely together through SIP steering committees that will coordinate efforts to speed up the implementation of infrastructure construction and completion.

 • Fifth, it provides for the PICC to expropriate land required for

infrastructure development but makes such power subject to the constitution and the Expropriation Act

What do we seek to achieve with the Bill

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• Sixth, it sets out the mechanism through which developmental targets can be set for each major infrastructure project, covering areas such as youth employment targets, greening the economy, skills development and broad-based empowerment.

 • The Bill does not change the responsibilities of accounting

officers or authorities or the route for fiscal flows: line departments and public entities will receive money for specific infrastructure projects (eg DWA or DoE) and these departments will continue to be accountable to parliament for the spending of money.

 • The PICC's role is to coordinate the implementation of projects

and enhance the connection between projects (eg ensure that when a school is built, it has roads, sewage systems, water, electricity and ICT connectivity and that employment creation and industrialisation are maximised in the construction phase and through procurement of locally-manufactured components).

What do we seek to achieve with the Bill

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• Empower the state to deliver to the needs of citizens• Strengthen coordination and alignment across the state• Speed up delivery• The Bill seeks to avoid:

– Creating unnecessary grounds for litigation and legal review

– Packing all our policy goals into one piece of legislation

– Imposing new obligations for consultation or standards where covered already by existing legislation or when dealing with implementation, not new decisions or policies

Core aims of legislation

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• A legal mandate for the PICC and its structures, and for maintenance of the National Infrastructure Plan.

• Specifically, the Bill aims:– To maintain the national structures of the PICC as

currently constituted– To mandate on-going updating and extension of the

National Infrastructure Plan– To identify key developmental elements of the

infrastructure programme– To clarify the role of departments and agencies in

managing SIPs– To establish procedures and structures to minimise

unnecessary delays in planning SIPs and in obtaining authorisations, permits and licences for the projects that they incorporate

– To set out timeframes for SIP planning processes

Objects of the Bill

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• The objects of the Act are:– Establishing the Presidential Infrastructure

Coordinating Commission and its structures in law– Identifying SIPs– Aligning resources across the state in support of SIPs– Providing for appointment of Ministers as

chairpersons of strategic integrated projects– Providing for steering committees to supply technical

support and oversight for strategic integrated projects – Establishing processes and timeframes for the

implementation of strategic integrated projects– Ensuring that infrastructure promotes developmental

aims

Part 1: Definitions and Objects

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•Does not set new substantive standards for infrastructure

•Does not dictate specific projects outside of the SIPs

•Does not permit unilateral national government decisions

•Does not change standards for environmental approvals

•Does not permit unfair expropriation

•Does not change responsibility for infrastructure delivery for a sphere or a functional department

•Does not establish a costly new bureaucracy

What the Bill does NOT do

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PICC CouncilLed by PresidentMinisters, Premiers, Metro Mayors, SALGA

PICC MancoMinisters, Premiers, Mayors, SalgaRegular meetings to oversee and lead process

SIP chair and Forum of Executive Authorities: MinisterChairs executive authorities (Ministers, MECs and mayors) in SIPOversees steering committee

SecretariatMinisters and Deputy Ministers

Steering committee•Chaired by SIP coordinator•Relevant departments and agencies•Prioritisation, strategic planning, coordination, unblocking

Accounting officers/authorities•Responsible for each project•No change in accounting responsibilities 22

The project pipeline and the PICC

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Schedule 2 addressed

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Specific provisions

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• Clauses 1 and 2 comprise the definition section and the objects of the Act

• Definitions ensure that SIPs can only encompass infrastructure that is publically owned, part of a public-private partnership, or concessioned

• Clause 2(2) reads that, “Any person exercising a power in terms of this Act must do so in a manner that is consistent with the Constitution and, in particular, with the functional competences of the different spheres of government.”– Recognition of distinct powers of each sphere– But fosters coordination and alignment

Definitions and objects

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• Clauses 3 provides for the structures of the PICC with the PICC Council as the lead structure

• The Council’s members comprise the President, Deputy President, Ministers nominated by the President, all Premiers and the executive mayors of the metropolitan councils and the chair of SALGA

• The President chairs the Council• The Council ensures all spheres have a voice in

infrastructure planning and prioritisation

Structures of the PICC

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• Clause 4 defines the functions of the PICC as – developing, maintaining, and coordinating the

implementation and monitoring of the National Infrastructure Plan;

– designating SIPs and ensuring co-operation across the state to implement them;

– evaluating the impact of infrastructure projects on economic and developmental goals;

– addressing obstacles to implementation of infrastructure plans; and

– maximising their developmental outcomes.

Council functions

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• Clause 4(4) strengthens the framework of cooperative governance around infrastructure planning

• It provides that,– “(a) Every organ of state must ensure that its future

planning or implementation of infrastructure or its future spatial planning and land use is not in conflict with any strategic integrated project implemented in terms of this Act.

– “(b) Paragraph (a) does not derogate from any power of a province or municipality to implement any infrastructure project which falls outside the ambit of a strategic integrated project.

– “(c) Any dispute which arises in the application of paragraph (a) must be resolved in terms of the Intergovernmental Relations Framework Act, 2005 (Act No. 13 of 2005), subject to any national legislation regulating spatial planning and land use management.”

Coordination of planning

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• Clause 5 gives the PICC, or a Minister whom it designates, the right to expropriate land in the public interest as well as for a public purpose, but otherwise applying the Expropriation Act, 1975 (Act No. 63 of 1975)

• The PICC can use the extensive regulatory framework and jurisprudence developed around the existing Act

• A revised Expropriation Amendment Bill is currently being developed to complement the Infrastructure Development Bill

Expropriation

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• Clause 6 empowers the President to establish a Management Committee for the PICC and determine its members from amongst the members of the PICC

• The Management Committee acts on behalf of the Council in between meetings of the Council

Manco

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• Clause 7 establishes the criteria for designating a SIP, depending essentially on – its national importance and/or scale, and – its inclusion in the National Infrastructure Plan

• The PICC can designate the relevant Minister as the SIP chair, with the responsibility in particular of chairing a forum of relevant executive authorities.

• The forum aims to ensure coordinated leadership and support across the state.

Designation of SIPs

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• Clause 8 provides that the PICC must determine if a SIP should be put out to tender and, in that case, empowers the PICC to identify a Minister to request that the relevant Accounting Officers call for such tenders.

• This section will ensure that tenders are undertaken in a timely and coordinated fashion, even if several agencies are involved

• It assists especially where several different functions are concerned – for instance, where building a school will also require the construction of water, sewage and transport facilities.

• The Minister does not pre-empt the accounting officer’s decision, as s/he only requests that a tender be initiated.

Tenders

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• Clause 9 establishes the Secretariat of the Commission. • The Secretariat is chaired by the Minister of Economic

Development and comprises relevant Ministers and Deputy Ministers as determined by the President.

• The Secretariat is responsible for – driving implementation of the SIPs, – appointing their coordinators and steering committees– monitoring and evaluating progress, and – issuing guidelines and frameworks for the

implementation of the SIPs.

PICC Secretariat

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• Under Clause 10, the Secretariat will designate a SIP steering committee for each SIP and oversee their functioning.

• Clause 11 provides that the steering committees develop plans for the SIP and manage their implementation, including helping address specific regulatory delays and other blockages, and securing developmental outcomes.

• Clause 12 establishes that the steering committees are chaired by SIP coordinators and their members represent – all relevant state entities – the Construction Industry Development Board (CIDB), and – where appropriate, experts appointed by the PICC

Secretariat. • For each individual project that make up a SIP, the relevant

Director General or head of a public entity remains as the Accounting Officer under the applicable legislation.

SIP structures

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• Clause 13 includes rigorous provisions to prevent conflict of interest on the part of steering committee members

• It defines a family member as parents, children, aunts or uncles, nieces or nephews, and first cousins

• Failure to declare a conflict of interest, including through a family member, is an offence that can lead to up to five years in jail

SIP Steering Committees and conflict of interest

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• Clauses 14 and 15 establish procedures to ensure that processes required to implement a SIP, including approvals, licences, authorisations and exemptions, be managed as expeditiously and effectively as possible.

• Clause 16 provides for SIP procedures and resourcing. • Clause 17 promotes more coordinated and efficient

applications for authorisations, licensing and exemptions by the SIPs, with a general timeframe provided in Schedule 2.

Processes to reduce delays

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• Clause 18 provides for SIPs to take advantage of the full range of environmental management instruments permitted under NEMA

• It allows for the use of Strategic Environmental Assessments introduced by DEA, which are designed to provide a framework for groups of projects

Environmental management

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• Clause 19 requires the Minister of Economic Development to report regularly to the Council and Management Committee on progress in each SIP.

• Clause 20 permits the Minister to delegate her or his powers as required, as well as permitting the delegation of powers by the relevant authority to members of Steering Committees.

• Under Clause 21, the Minister for Economic Development may regulate and set guidelines or targets for criteria on developmental outcomes such as skills development, local industrialisation, the Green Economy, and broad-based BEE.

• These regulations cannot override the main legislation but rather identify how it should be applied in the process of implementing the SIPs.

Monitoring and guidance of SIPs

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• Clause 22 includes transitional provisions, which specifically sustain the SIPs that are already under way.

• Clause 23 provides the short title and commencement date.

Transition and short title

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• The Bill has three schedules. • Schedule 1 defines the scope of the Act, essentially

comprising major kinds of infrastructure. • The SIPs represent subsets of these classes of

infrastructure. • Schedule 2 provides timeframes for SIP planning and

public consultation. • Schedule 3 lists the current SIPs to ensure they are

maintained when the Act comes into force.

Scope, timeframes and maintenance of current SIPs

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Some issues in public inputs

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• Doesn’t the Bill supersede the powers of provinces and municipalities?– The Bill specifically requires any powers exercised under

the Act to be consistent with the Constitution and, in particular, with the functional competences of the different spheres of government

– Provinces and municipalities are included in key structures– This helps to support alignment between national,

provincial and local plans to achieve sustained development

• Won’t the Bill weaken environmental protections?– The Bill does not change the requirements under NEMA– It seeks to ensure that they are met more efficiently,

without unnecessary delays– The bill helps ensure an appropriate balance between

environmental and socio-economic imperatives and rights

FAQs

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• Doesn’t the Bill just establish another layer of bureaucracy?– The structures of the PICC do not impose new

requirements for authorisations or licensing on the public

– Structures are task-based and can be reconstituted and closed down when their tasks are completed

– Above all, they aim to reduce the cost of coordination between state agencies – to make coordination easy and worthwhile

FAQs

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• The Bill will support better service delivery through provision of infrastructure

• The Bill provides for all Premiers to sit on the PICC key decision-making structure chaired by the President, ensuring that provinces have voice on matters affecting them and a forum to ensure national plans take provincial realities into account and the two are aligned

• MECs will sit on SIP executive authorities forums• The Bill will assist provinces to fast-track implementation where

their projects require other spheres of government to work with the province and big backlogs can be addressed

• The Bill will promote infrastructure development with a cross-provincial footprint

• The Bill will help to ensure developmental outcomes for skills, job creation, youth employment and women’s empowerment, all of which can benefit local communities

Why is it important for provinces

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Thank you!

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