Megaprojects require crucial planning to ensure success

02 September 2015

Megaprojects are often over budget and delayed and project planning is a crucial element in ensuring the successful delivery of such projects.

Given the size of megaprojects, there were also significant capacity constraints in managing the project from planning to execution, Development Bank of Southern Africa international financing group executive manager Moe Shaik told delegates at the Infrastructure Africa Business Forum on Tuesday.

He noted that governments did not conduct proper consultation with the users of infrastructure. “I [believe] that e-tolling is right. The user-pays principle is correct. We must pay e-tolls to ensure that future generations will have the kind of network for them to be able to build new infrastructure,” said Shaik.

However, e-tolls had not undergone a proper consultation process and, as a result, an opposition movement developed that rejected the system. All the work that had been done by the South African National Roads Agency to explain the benefits of e-tolls should have been done in the beginning.

“Unfortunately and invariably, it’s the user that pays. We need to move away from rent-seeking behaviour. It causes infrastructure to be unsustainable,” he said.

Shaik noted that there was an increase in private participation in infrastructure investment in Africa between 1990 and 2013, especially from China.

Some of the challenges facing Africa included a decline in commodity prices, including oil prices, over the past few months.

The strengthening of the US dollar, the possible build-up of government arrears and the overexposure of African banks to oil-producing African countries resulted in declining financing available to Africa, the steep rise of financing costs and lower growth and inflationary pressures.

“We need to pay more attention to beneficiation and move away from commodity dependency,” he suggested.

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