Industrial Development Corporation of South Africa Limited Presentation

1. Day Month Year Industrial Development Corporation of South Africa Limited Presentation COMMENTS ON THE INFRASTRUCTURE DEVELOPMENT BILL, 2013 14 January 2014

2. Table of Contents • Introduction • Comments on Part 1 of the Bill • Comments on Part 2 of the Bill • Comments of Part 3 of the Bill • Comments on Part 4 of the Bill • Comments on Part 6 of the Bill • Conclusion

3. INTRODUCTION • IDC welcomes the introduction of the Infrastructure Development Bill, and wishes to express its gratitude for the opportunity afforded to it to comment on this Bill. • The development of infrastructure will play a large part in contributing a competitive base for the south African Economy and industrialisation. • In principle IDC supports the Bill but wishes to make comments on some specific sections in order to enhance the Bill.

4. Comments – PART 1 of the Bill • HEAD NOTE – includes the following words: “ to improve the management of such infrastructure during all life-cycle phase, including planning approval, implementation and operations”. This is inconsistent with the text of the Bill where none of the structures are unambiguously given the authority to control the actual implementation and management of a project. Definitions • “applicant” – the Bill is not clear on who exactly an applicant will be. It is also silent on the content of an application or the methodology to bring an application to the attention of the Committee. • “infrastructure”- an accurate description of the infrastructure that is the subject matter of the Bill is required. The Bill seems to make a distinction between public infrastructure and other infrastructure in the definition of “national infrastructure plan”, however the definition appears to exclude any infrastructure development that may be anticipated which is not included in the national infrastructure plan. • The Bill should also make it clear that the introduction of the Commission does not represent an additional approval process (currently this is not clear in the Bill)

5. Comments continued… • Section 2(b)- as mentioned above, none of the structures contemplated by the Bill has any authority to execute a project and largely contemplates facilitation. • It must be noted that currently the Bill does not provide a budget or other provisions for the funding of the Commission’s activities….it appears to anticipate that the budget support will come from line ministries.

6. Comments on PART 2 of the Bill STRUCTURES & COMPOSITION OF THE PICC • If the Commission is intended to exist in its current form, the Bill should be clear in that regard. • The Committee is composed of senior government officials…the practical implementation of the provisions of the Bill must be considered. • SOE’s have the responsibility for the development of many of the categories of infrastructure listed in the Bill, however, the Bill only specifically provides for Ministers and government officials to form part of the structures…stronger emphasis on the inclusion of SOE’s in the structures can assist with coordination and implementation. • The ability of the Commission to regulate its own affairs (e.g. setting the quorum) may be acceptable, however Sec 3(5) requires that all decisions are made on a majority vote basis, but it does not set a quorum. Without the quorum the default position would be that all the members be present to determine the majority. This may not be practically possible….and the ability of the commission to function may be severely affected. Thus, the Bill should be amended appropriately. • In Section 6(3), the Bill should provide that …..”the Commission must (instead of “may”) determine its own procedures”

7. Comments on Part 2 of the Bill continued…. • Section 3(7) is unclear on what is meant by “secure”….in any event the Commission does not have a budget, so the ability to “secure” such services is probably limited. FUNCTIONS OF THE COMMISSION • It seems as if the Bill intends giving legislative status to an existing position (i.e. the existence of the Commission continues), by extension one can assume that the plan approved in 2012 by the Commission is the currently applicable national infrastructure plan since the national infrastructure plan is not defined properly in the Bill (referred to as one adopted by the Commission). The Bill does not provide for the adoption of a new plan or the ratification of the existing plan….in this event, the constitutionality of retrospective regulation needs to be borne in mind. • The way in which the various duties and functions of the Commission is described is vague and reflective more of policy than legislative drafting…..the fundamental flaw is that it describes those actions required of the Commission, but nowhere bestows any authority.

8. Comments on Part 2 continued…. EXPROPRIATION OF LAND BY COMMISSION • Section 5 of the Bill should be revised…..there is no reason to allow for expropriation by Commission if there is no provision for a budget, nor any power to own land or to dispose of land. • Additionally, the provision runs contrary to the facilitative intent of the Bill. If this is included in the Bill, it should be in the context of providing assistance to the relevant authority in control of any SIP to expropriate land. MANAGEMENT COMMITTEE • It is suggested that the Management Committee be obliged to determine its own procedures and to publish the same. • There is no clear delineation of the functions of the management Committee and the Commission, there seems to be overlaps inn functions. From a legislative drafting perspective, these should be clarified and overlaps avoided enabling the effective functioning of the Commission and its structures.

9. Comments on Part 3 of the Bill DESIGNATION OF STRATEGIC INTERGRATED PROJECTS & CONFLICTS IN INFRASTRUCTURE PLANNING • The Bill is not clear on what is meant by a “conflict in infrastructure” • Section 8 of the Bill ventures into the realm of procurement….however, the Commission does not have the authority to procure, but merely to facilitate the approval processes. In this event, the Commission should also not have the power to direct procurement methodology. In addition, public tendering may not always be appropriate and the door should not be closed on other procurement processes that may not require a public tender, but which still comply with Section 217 of the Constitution. • Accordingly, there is no reason to try and regulate procurement in the Bill if the relevant procuring parties remain subject to procurement laws.

10. Comments on Part 4 of the Bill MAIN PURPOSES OF STEERING COMMITTEES • None of the structures contemplated by the Bill has the authority or the ability to implement a project… any project plan being developed for in terms of Sec 11(c) and referred to the Secretariat for approval cannot be approved by Secretariat, because it does not have the authority to do so. • The type of colloquial language in Sec 11(g) (“one-stop-shop”) should be avoided, unless it is specifically defined. DISQUALIFICATION OF MEMBERSHIP OF STEERING COMMITTEES • Section 13 of the Bill should be checked for consistency with the Prevention & Combating of Corrupt Activities Act No 12 of 2004 and aligned therewith for consistent treatment and application of the law. • In addition, once this section has been aligned, it should not only be applicable to appointments to the steering committees, but should extend to all the structures comprising the Commission.

11. Comments on Part 4 continued…. FUNCTIONS OF THE SIP COORDINATORS • The Bill emphasises the existence of the current SIP coordinators as if they were appointed in terms of the Act, however, the Bill does not spell out in detail the their functions. As it stands, it appears that the SIP coordinators will play the chairing function in its capacity as chair of a steering committee appointed by the Secretariat. APPROVALS, AUTHORISATIONS, LICENCES, PERMISSIONS & EXEMPTIONS • Section 15 deals with the steps to be taken by the relevant steering committee to facilitate processes... however, most provisions of the Bill will rely heavily on existing legislation and administrative processes to ensure that approvals, authorisations, licenses etc are granted. • Schedule 2 of the Bill specifies timeline for certain steps in the process to be completed, it does not provide for any sanction if these timelines are not met. • In addition, it would be useful if the Bill could highlight departments responsible for typical authorisations to emphasise accountability.

12. Comments continued…. • The Bill envisages a situation where all necessary authorisations could be applied for simultaneously... not sure if this is not possible in practice given the different requirements of the various regulatory authorities. STEERING COMMITTEES & PROCEDURES • Budgeting and the responsibilities for costs are set out in Section 16 of the Bill, and one would assume that the budget allocation is dealt with by government internally, without any external public effect.

13. Comments on Part 6 of the Bill • Part 6 of the Bill deals with amongst other things, the delegation of authority…. however, Sec 20 needs to be revised to make it clear that the Commission itself has no authority to grant any approvals or licenses in terms of the Bill. Thus, Sec 20(4)(c) is accordingly superfluous. NATIONAL DEVELOPMENT GOALS & LOCALISATION • In addition to the project or programme management functions, the Bill assigns to the steering committees, it also tasks them with identifying opportunities to maximise national development goals associated with SIPs….this may lead to a dilution in focus on steering committees on national development goals as they are likely to concentrate their effort on the planning and implementation of the SIPs. It therefore proposed that the Bill provides for the establishment of separate project structures at the discretion of the Secretariat specifically focused on achieving national development objectives • Section 21(1)(b) of the Bill lists several criteria that must be applied in the implementation of a project, however localisation of inputs into the project is not included in the list. If localisation is ignored in the implementation of projects, the country will lose a major opportunity for industrialisation and increased levels of employment… thus we propose that the Bill should include and define the term localisation.

14. Comments on Part 6 continued…. ACCESS TO INFORMATION • Access to and disclosure of sensitive information are two contentious issues when dealing with SIPs that need to be resolved….it is proposed that the Bill includes some mechanism that gives the PICC and its relevant structures access to information pertaining to SIPs. • In addition, if a project is deemed to be a SIP, there should be some kind of disclosure mechanism between the PICC and the implementing agency/ project developer provided for in the Bill. FEEDBACK MECHANISM • The feedback mechanisms between the PICC and the SIP coordinators are inadequate…currently, very little if any feedback is provided to the SIP coordinators on problems and issues reported into the PICC for resolution….it is proposed that the Bill should make provisions for the Secretariat to keep log of problems and issues raised by SIP coordinators and provide regular feedback on progress. • Finally, the Bill provides no clarity on the role of the SIP coordinators and the Localisation Project Office.

15. THANK YOU

16. Day Month Year The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 Email prosperc@idc.co.za