You don’t have to be an expert on urban infrastructure to know that South Africa could be doing a much better job than it currently is.
Weeks after a deadly gas explosion wreaked havoc in the Johannesburg CBD, for example, repair work (set to cost approximately R178 million) is yet to begin.
At the same time, Johannesburg residents and businesses frequently face long power outages as the city’s electrical infrastructure is unable to cope with load shedding. You’ll hear similar stories in towns and cities across South Africa. Those stories don’t just concern power and electricity either. Water outages, sewer networks on the verge of collapse, and roads littered by tens of millions of potholes are other common sources of frustration.
But those infrastructure challenges aren’t just inconvenient for the people living and working in South Africa’s towns and cities. They’re also an active threat to local and international real estate investment. And if the country is to return to the kind of economic growth that promotes job creation, it’s a situation that desperately needs to be addressed.
Infrastructure is the backbone of the sector
Before digging into how to address a situation that is at once increasingly urgent and complex, it’s worth reiterating how important functional infrastructure is to the sector.
It is, simply put, the industry’s backbone. How good or poor a place’s infrastructure has a significant impact on how people are able to capitalise and use property efficiently. That’s as true for residential property owners as it is for companies that have large commercial real estate portfolios.
While infrastructure challenges differ from place to place (Capetonians, for instance, lose fewer hours to load shedding), it should be absolutely clear that there are very few property owners in South Africa getting maximum efficiency out of their real estate right now. And that’s having a negative impact on property investment (would you put money into a building where the road is potholed, the power is out for hours at a time, and the main water connection bursts every few weeks?). But it should also be clear that the situation isn’t going to magically improve overnight, especially given the country’s fiscal constraints.
As such, a new approach will be essential to repairing the country’s damaged infrastructure and encouraging property investment once again.
The need for a new social compact
That new approach must start with the realisation that the government cannot fix South Africa’s infrastructure on its own. Even if 71% of the country’s GDP wasn’t going into paying back debt, it would be a tall order for it to get infrastructure where it needs to be. Even ending load shedding would take R500 billion in investment, according to at least one analyst.
It’s also true that much of the blame for the country’s infrastructure decay can be laid at the feet of the government (at all levels) as well as the SOE and agency officials they appoint (who are supposed to build, upgrade, and maintain infrastructure). But playing the blame game helps no one.
Instead, what may be needed is a new, infrastructure-focused, social compact between the public and private sectors. This will help ensure that infrastructure is maintained and grown. Doing so doesn’t just benefit the occupants of a building on a particular street either. Executed properly, it can quickly turn into a groundswell that benefits an entire area, municipality, or even district.
It’s not a pipe dream either. The Tidy Towns initiative on the KZN South Coast, for example, has helped revitalise parts of the KZN South Coast by cleaning up beaches, roads, pavements, and verges. In doing so, it has provided people with employment opportunities and improved the tourism experience in the area. That, in turn, could lead to improving property prices and the incentivisation of investment in the region. Key to the initiative’s ability to achieve these results was a willingness to work with, rather than against, the local municipality and law enforcement.
Understanding the limits
Even with this kind of collaborative approach, it’s important for the private sector to understand its own limits. While the checks and balances provided by regulations and bylaws can feel frustrating, they’re there for a reason and trying to skirt them will only cause trouble.
This should not, however, stop anyone involved in the property sector from taking steps to engage with government entities and provide workable solutions. Outsurance’s road pointsmen project and Discovery’s branded pothole repairs are good examples of this.
That’s not to say that we shouldn’t hold government, state agency, and SOE officials accountable for their infrastructure failings, but we also need to find a way forward and that means working together.
Challenges as opportunities
Ultimately, a private sector that works with the government and within the confines of the law to address the country’s infrastructure challenges has much to gain from doing so. Make no mistake, the challenges are real but they also represent an opportunity to help build a better country for everyone.
It doesn’t hurt that a sector that can see the bigger picture and is working towards real change that positively impacts the country, will likely be more appealing to investors anyway.
