Infrastructure procurement and delivery reform implications: a municipal perspective

By Nothando Bizana

Infrastructure development is universally considered one of three key parts of the foundation on which to build an economy. The quantum of global infrastructure investment is testament to the existence of a direct correlation between increased infrastructure investment and socio-economic growth.

Local government
Local government has a constitutional mandate to provide an accountable local government system, deliver quality services, stimulate economic growth and support social development in an inclusive manner. Local government is the sphere of government at the coal face of service delivery - the sphere that plans, develops and maintains infrastructure.

However, while progress has been made in delivering basic services in South Africa since 1994, governance systems remain a significant concern.

A 2016/17 local government audit revealed an overall decline in municipalities' performance in terms of finances, infrastructure delivery and maintenance. The audit also found that poor planning, failing to comply with supply chain management (SCM) processes and inadequate project management caused delays or non-delivery of infrastructure projects.

And, it is a widely-held view that the state of decline is continuing, despite various government interventions to strengthen municipal governance systems and improve capacity.

The decline can be attributed to a lack of leadership and accountability: in environments where there is no consequence management, non-compliance with supply chain regulations will go unchecked and possibly become a habit, resulting in waste and sub-optimal infrastructure development.

It would seem then that infrastructure procurement and delivery management reform are required to capacitate municipalities to fulfil South Africa's development agenda and advance the national economic growth imperatives.

Impetus for infrastructure procurement reform
The magnitude of infrastructure procurement spend demands a high-quality public governance system that is underpinned by accountability and transparency to achieve value-for-money and fit-for-purpose outcomes. Various reports, including the World Bank Regional Strategy for Africa, indicate that dysfunctional procurement practices and budget overruns have contributed significantly to inadequate infrastructure development on the African continent.

South Africa, like many other developing countries, has introduced infrastructure procurement and delivery management reform to promote fairness, transparency, equality, value for money and accountability. Essentially, reform is introduced to create a robust and modern SCM system that places service delivery at its core and delivers value for money, which is achieved through several mechanisms.

One of these mechanisms is the Infrastructure Development Management System (IDMS).

While the IDMS's focus is on SCM, it also highlights the forward and backward linkage between planning and budgeting, and asset management systems. Planning and budgeting outcomes are inputs into the SCM process, while asset management decisions are informed by the outcomes of SCM processes.

Another mechanism is the Standard for Infrastructure Procurement and Delivery Management (SIPDM).

The SIPDM (integral to the IDMS) differentiates between goods and services, and infrastructure delivery supply chains and promotes efficient infrastructure planning and budgeting. It firmly establishes a control framework for planning, designing and executing infrastructure projects by spelling out minimum requirements for infrastructure procurement, institutional arrangements and processes.

The systems, processes and performance management system form the institutional system for infrastructure delivery. Linking infrastructure procurement to an overarching strategy with well thought-out plans, realistic budgets and consistent reporting is crucial for efficient and effective service delivery.

Reform implementation challenges
South Africa's unique challenges in relation to SCM reform implementation include the following:
- Inadequate human capital skills
- Lack of clarity on regulations and reform objectives
- Lack of effective stakeholder engagement (implementers)
- Service provider shortcomings
- Lack of ongoing training

Proposed way forward
To ensure effective implementation, technical and non-technical dynamics need to be considered. Key drivers for effective implementation include, but are not limited to:
- Implementing consequence management for non-compliance
- Providing ongoing training and technical support through inter-governmental support initiatives
- Forming strategic partnerships with academic institutions and industry professional bodies to accelerate supply chain professionalisation
- Conducting regular stakeholder engagement sessions with key stakeholders, including suppliers
- Creating political and administrative stability to ensure leadership whose intentions are aligned with reform objectives

The infrastructure development budget allocated to municipalities must be spent with probity. Effective implementation of infrastructure procurement and delivery management reform requires professionals who understand the strategic importance of SCM in the broader socio-economic landscape of the country.

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