Trump's toll plan a fit for South Africa
US President Donald Trump made a point in his inauguration speech to emphasise his election pledge to spend $1 trillion on infrastructure investment over 10 years. He has repeatedly promised to “rebuild our highways, bridges, tunnels, airports, schools and hospitals”. In his inauguration address, the Republican president said that the
nation’s infrastructure had “fallen into disrepair and decay”.
America is not alone in facing an infrastructure backlog. Rapid wealth accumulation and assets such as cars, as well as a far more mobile population, has added to the need for newer and expanded infrastructure in many countries, including ours.
Corporate South Africa is flush with cash at the moment, at last count sitting on more than R725bn on its balance sheet that is available to invest. It’s obvious that South Africa Inc is on a long-term investment strike – at least at home.
The American president’s stance could be the key to unlocking these corporate balance sheets.
It is clear that businesses would be prepared to invest in the local economy where incentives are in place to
overcome other concerns. We already have templates for successful publicprivate- partnerships in several sectors of the economy.
In the renewable energy and toll road sectors, regulations exist. Car manufacturing companies also invest due to well-thought-out policy and predictable incentive packages. These examples create many jobs and stimulate the economy at negligible cost to the government. It needs to be rolled out to many more sectors. Starting with accelerated toll road building.
The South African government could take a leaf from the US president’s book – he has agreed to a policy that provides tax credits or tolls on new roads. The US plan in its current form would seek to incentivise the private sector to increase investment in infrastructure projects on the basis of tax credits and future usage
fees, such as road tolls. As a result, US governors have already flagged 300 high-priority projects that are ready to proceed.
In America, there is a full consensus that there are infrastructure problems. We would do well to follow policy leads. There is already a full consensus in South Africa. There is also the capital on South Africa lnc’s balance sheet. To kickstart South Africa’s own infrastructure roll-out would simply require a change of heart by the government as to the level of private participation.
For instance, President Trump’s policy aims to sidestep political squabbles by focusing mostly on private investment. It’s a policy choice that South Africa could immediately follow for quick results.
But Donald Trump is not the only leader looking to stimulate infrastructure development through the private sector; Germany, India and Chile are also looking at private sector participation in their road systems. Tolls generate sufficient cash flow to develop the infrastructure more efficiently.
Graeme Blewitt is the CEO of Bakwena Platinum Corridor Concessionaire
Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.
Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.
