Remove obstacles to rebuild SA’s economy

by Ofentse Sefolo
Remove obstacles to rebuild SA’s economy

Opinion by Howard Betts

Statistics South Africa has confirmed that our economy contracted by a record seven percent because of the Covid-19 pandemic – the worst contraction in 90 years. It is not important, it’s critical that we get SA’s economy back on track.

It is well-known that one of the best ways to stimulate economic growth is through the development of infrastructure. Transportation, power and water infrastructure benefit everyone in the economy as public goods, and their creation, is generally a good stimulus for GDP growth. It enables development in the private sector too. Construction activity in both public and private sectors stimulates job creation, builds skills and ultimately improves the lives of the citizens of a country.

All this is good in theory but putting it into practice is another matter. How do we take these noble aims and start translating them into reality today?

Starting with the obvious

Perhaps an obvious place to start is the highly contentious council approval process.

Accounts for all submissions must be settled in full before the process begins, but approvals are bogged down in what is now an even lengthier process than before. My proposal, to begin with, is that a ten percent deposit should be paid for planning or other land use submissions with the remaining balance being paid on approval. Whether this is actionable or not is debatable, but the reality is that the slow pace of council approvals – particularly in Johannesburg – is holding up development.

The difficult reality is that although development can help stimulate economic growth, the construction sector is usually the one of the first to see the effects of any economic cycle – which means it is also quick to suffer the effects of a downturn. If we are trying to get our economy moving by stimulating development, surely it does not make sense to hamper an industry which needs to benefit from an upswing quickly.

As it is, developers face massive holding costs for as long as the land they are developing cannot generate revenue. Professional teams deploy massive resources – both human and financial – to development proposals, often at risk. All this amounts to a pool of resources which, in theory, could be used efficiently elsewhere, meaning that millions and sometimes billions of rands are effectively frozen until projects actually break ground.

“The industry which could do the best for the economy the fastest is being unnecessarily hampered.”

Rezoning, the biggest concern

In our experience as a company, the greatest difficulty we see in getting a development off the ground is in the town planning process. Surely, it should now be essential to have an integrated electronic system which allows for the input required from the various departments regarding water, roads, traffic and power, rather than one in which hard copy documents still get lost in filing rooms!

My biggest concern is in the rezoning process, which never seems to take less than a year in our experience. There is almost no doubt that this can be improved upon. I would suggest that three months is more than sufficient.

Howard Betts

We find that site development plan (SDP) submissions work a little more efficiently, mostly taking around three months to approve. We have seen some approvals happening faster, but this system would also benefit from being streamlined.

I have engaged with the Association of Construction Project Managers (ACPM) on the matter and I am aware that the South African Property Owners Association (SAPOA) and the South African Council for the Architectural Profession (SACAP) both have initiatives underway to try and address these issues with various authorities. Ideally, one would hope that the various industry representative bodies could pool their resources and expertise to tackle this in a united fashion.

Hope remains
Although the overall picture of the systemic challenges that the municipal system faces in South Africa is rather depressing, we need to remain hopeful that solutions can be found. This is still a country full of potential!

It will remain to be seen how things pan out, but one thing is clear: we need to enable development and construction in this country urgently. Not to do so would be a wasted opportunity for much-needed economic stimulus.

Our sincere thanks and appreciation to Betts & Townsend (Pty) Ltd for their submission of this article.

For more information contact: howard@btprojects.com

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