Minister Dean Macpherson: Delayed infrastructure projects in South Africa

14 November 2024

Minister Macpherson addresses Parliament on delayed infrastructure projects in South Africa

Honourable Deputy Speaker,
Members of the National Assembly,

Over the last four months, many of you in this House and South Africans across the country have lamented the number and cost of delayed infrastructure projects. 

You have shared stories of how these delays have affected your constituents, who had hoped that these schools, clinics, police stations, and community centres would restore the dignity they seek.

Beyond this, these delays have hampered the growth and development of our nation’s infrastructure, currently costing us close to R3 billion in delayed construction projects over a number of financial years. 

These delays are not just figures in a report; they represent stalled progress, halted economic growth, and deferred services for millions of South Africans.

These are also crime scenes where individuals have been paid for work, they have not completed. 

They are crime scenes that have robbed people of hope and a better life.

The disruption to construction sites impacts our communities directly. 

It results in half-finished buildings, idle construction sites, and, most importantly, wasted public funds - funds which could have been used to improve the lives of our people.

Honourable Deputy Speaker,
Since my appointment as Minister of Public Works and Infrastructure in July, I have made it my mission to address these delays head-on. 

Today, I will use this opportunity to lay out the root causes of these delays, provide specific examples of affected projects, and share the concrete measures we are taking to address this situation.

The task before us is not for the faint-hearted; it requires decisive action, transparency, and accountability. 

Where others have failed, I intend to succeed because these projects are too important for the communities that have waited far too long for them to be completed.

To address this challenge effectively, it is important to understand the extent of the problem we are facing. 

In this financial year alone, out of the current 206 infrastructure projects overseen by the Department of Public Works and Infrastructure, 164 projects are experiencing delays for a number of reasons. 

This represents an alarming 79% delay rate across our portfolio for this financial year. 

These projects are critical to many communities across the country, yet they remain incomplete.

These delays impact essential services, public safety, and community well-being: from homes 
and police stations to correctional facilities and hospitals. 

The financial toll alone is substantial, with an estimated R1.3 billion already invested in projects
in this financial year that are yet to reach completion. 

Over several financial years, the number jumps to R2.9 billion in delayed construction projects. 
These incomplete projects don’t just stand as unfinished structures; they are monuments to 
inefficient management, corruption, lost opportunities, deferred dignity, and unfulfilled 
promises to the public.

One of the most striking examples of these delays is the Telkom Towers project in Tshwane, 
where approximately R1 billion was spent on upgrades over ten years with little to show for it. 
The complex, intended to become the SAPS headquarters, still has the Telkom sign in front 
of the building. Instead of serving the public, this project has become a financial burden, 
costing the state millions each year for security alone.

To avoid further waste of public finances, we are now exploring options to either repurpose this asset or remove it from our portfolio altogether, with an independent investigation underway. 

This project, among many others, highlights a pattern of stalled and mismanaged construction projects that we are determined to address.

Another glaring example is the Sarah Baartman Centre of Remembrance project in Hankey, in the Eastern Cape, launched nearly a decade ago in 2014. 

To date, R247 million has been spent on the project, yet it remains only 37% complete, with its budget inflated far beyond its initial scope. 

The project has been handed over to multiple contractors, each time resulting in additional costs without substantial progress. 

What is worse is that no one has been held accountable—neither officials in my department nor the contractors involved.

This reckless and careless approach is an insult to the legacy of an icon such as Sarah Baartman. 

Officials and contractors have used her name in vain to satisfy their own greed. 

There can be nothing more offensive than what has taken place here. 

This kind of mismanagement is precisely what we are committed to ending, one way or another.

Honourable Deputy Speaker,
To address these issues directly, we are implementing several drastic measures to overhaul the way our department manages, executes, and oversees projects.

First and foremost, we are establishing strict consequence management protocols for contractors who fail to deliver. 

Going forward, contractors who do not meet their obligations on time and within budget will face immediate repercussions, including blacklisting. 

And not just the businesses—the individuals themselves. They belong in jail, not on construction sites.

Our blacklisting policy is straightforward: contractors who underperform or engage in non[1]compliant practices will no longer have the privilege of working on public projects. 

This decisive action ensures that only competent, reliable contractors participate in our national infrastructure initiatives.

Furthermore, working through the Construction Industry Development Board, we will ensure that only contractors of the appropriate size and with an adequate level of expertise are awarded large construction projects.

In conjunction with this, we are enforcing new regulations for tender evaluation to ensure transparency and accountability. 

By adopting a public-facing system that records the tender process, we are committing to openness in contractor selection. 

Moving forward, audio and video recordings will provide a transparent view of how decisions are made which will prevent any bias or irregularity in the awarding of contracts. 

This step, modelled after the successful approach in KZN’s Public Works Department, will help us restore trust and ensure that contractors are chosen based on merit and capacity to deliver.

Another key contributor to delays has been the lack of enforceable oversight standards within our regulatory framework. 

We are addressing this by empowering the Council for the Built Environment, or CBE, to set mandatory standards across the sector. 

Legislation will require registration for all practitioners in the built environment. 

We believe this measure will ensure that only qualified, accountable professionals are entrusted with our nation’s infrastructure projects. 

This is not merely a bureaucratic requirement; it is a safeguard for public funds and a commitment to quality.

Furthermore, the creation of a Contract Management Unit within our department is another critical reform. 

This unit will be responsible for actively managing all contracts by monitoring contractor performance to ensure projects adhere to budgetary and time constraints. 

By centralising contract oversight, we will identify potential issues early, implementing corrective actions and holding contractors accountable at every phase of a project.

We are additionally developing a pre-approved panel of contractors who have demonstrated their capacity to complete projects on time and within budget. 

This panel of contractors will also serve as an intervention unit to finish incomplete projects. 

It will allow the department to select contractors with proven track records, reducing the risk of project delays and budget overruns.

However, the challenge of delays does not rest solely with contractors. 

We have seen that client departments often contribute to these delays by withholding payments to contractors, which disrupts project timelines. 

We are addressing this by establishing payment protocols to ensure client departments meet their financial obligations promptly.

Moreover, the R14 billion owed to us by user departments must be paid, or else we will be forced to start treating government departments as debtors and apply debtor policies, which may include debt collection and eviction.

Delayed payments have been a major source of frustration, resulting in project stoppages and, ultimately, increased costs. 

By holding client departments accountable, we are addressing a key bottleneck, ensuring that project funding flows efficiently from start to finish.

Honourable Deputy Speaker,
For too long, the Department of Public Works and Infrastructure has struggled with a skills deficit, undermining our project management capabilities. 

In response, we are making a public call for experienced engineers, project managers, and construction specialists to rejoin the department. 

Similar to Eskom’s approach, we are reaching out to seasoned professionals with the skills needed to oversee complex projects and help us deliver results. 

It is well known that too many projects have been allocated to too few competent project managers, and the return of these essential skills will help us resolve this issue.

This recruitment drive will play a crucial role in helping us address the close to R3 billion backlog in incomplete projects by ensuring we have the expertise required to bring these initiatives to completion.

To streamline infrastructure delivery models, we are also enhancing our partnership with Infrastructure South Africa, or ISA. 

This partnership will enable us to expedite projects where severe delays are experienced, leveraging ISA’s expertise and resources. 

ISA has proven experience in cutting through red tape, removing bureaucratic barriers, and fast-tracking essential projects—critical to reducing our backlog and ensuring that projects become shovel-ready without undue delay.

We are additionally working closely with the Auditor-General of South Africa, or AGSA, to implement live auditing processes. 

This proactive approach allows us to address financial and operational issues as they arise rather than waiting until little can be done to remedy the situation. 

Regular interim financial statements and live audits will provide a real-time view of project finances, prompting corrective action where necessary. 

This partnership with AGSA underscores our commitment to transparency, accountability, and responsible fiscal management.

One of the key initiatives we are implementing to address project delays is the National Construction Summit on Crime-Free Construction Sites, taking place next Tuesday, 19 November 2024, at the Durban ICC. 

This summit will bring together key stakeholders, including Police Minister Senzo Mchunu, Finance Minister Enoch Godongwana, and Public Works MECs from all nine provinces, to develop comprehensive solutions to combat the disruption to construction sites across the country. 

Often referred to as the ‘construction mafia’, these criminal syndicates have disrupted countless projects, costing both the public and private sectors millions. 

As I stated shortly after my appointment, we are committed to restoring the rule of law at construction sites across the country. 

Furthermore, we are formalising our approach to public asset management with the introduction of technical task teams in cities across the country. 

Last week, we signed a first-of-its-kind memorandum of understanding with the eThekwini Metropolitan Municipality and the KwaZulu-Natal Provincial Department of Public Works to identify and repurpose neglected state-owned properties in the city. 

By releasing these properties for requests for proposals, we aim to attract private sector investment to revitalise these assets for productive use. 

This initiative represents a significant shift in how we manage public assets—moving from passive ownership to active utilisation.

Properties like the Police Barracks, which have remained vacant for years, will now be considered for refurbishment or repurposing. 

This will help generate income for the department, attract investment, create jobs, and add value to the local communities.

Honourable Deputy Speaker,
As we address these deep-seated issues, we are laying the groundwork for a renewed, more effective Department of Public Works and Infrastructure. 

Every measure we implement, from blacklisting to live auditing, is a step towards restoring accountability and ensuring that every project undertaken by this department fulfils its purpose. 

This commitment is not only to the buildings and structures we erect but also to the South Africans who rely on these services and the communities they are meant to serve.

Let me be clear: I will not tolerate or accept shoddy work, delayed projects, or excuses—whether from officials or contractors. 

The days of taking advantage of South Africans and crushing their dreams are over.

I want to assure the members of this house, and indeed South Africa at large, that we are committed to overcoming the obstacles that have held back our nation’s infrastructure. 

As I have mentioned, we have a significant task ahead of us, but I am certain that with determination, transparency, and the rigorous standards we are implementing, we can bring an end to the severe delays that have plagued construction projects.

Honourable Deputy Speaker,
We are truly building a better South Africa—one where public assets genuinely serve the public good, and every infrastructure project lays the foundation for future growth and opportunity. 

We are creating a South Africa where the era of wasting public funds on projects that run over time and over budget comes to an end.

I encourage you to work with us as we take action to achieve this goal. 

Let us build South Africa together.

Thank you.

Issued by James de Villiers, Spokesperson to the Minister, 14 November 2024