A taste of what's to come: Transnet overspends by 146% on pipeline
Public Enterprises Minister Malusi Gigaba must explain to parliament how he intends to reign in cost overruns incurred through the mismanagement of infrastructure projects by State Owned Enterprises (SOEs).
At the end of October, the DA highlighted our concern about the capacity of State Owned Enterprises (SOEs) to raise money for and implement the proposed Strategic Infrastructure Projects (SIPs) to be carried out over the next 15 years at a cost of R4 trillion.
Reports in the media yesterday outlined cost overruns incurred in the construction of the 555km fuel pipeline from Durban to Johannesburg. Initial phase 1 cost estimates for the New Multi Product Pipeline (NMPP) of R9.5 billion have ballooned by 146% to R23.4 billion.
This confirms that our concerns are legitimate and that the South African public is likely to pay dearly for the government's stance that SOEs must drive infrastructure roll-out.
More damning is the explanation given for the overruns by Public Enterprises Minister Malusi Gigaba. Minister Gigaba pointed to the parastatals "lack of capacity and in-house expertise" as well as the consequent "over-reliance on contractors" as the significant challenges facing the NMPP.