R1.3tn for infrastructure: Can SA deliver?

The South African government’s pledge to invest R1.3 trillion in infrastructure projects over the next three years has been met with cautious optimism from industry leaders, who warn that major structural challenges could hinder progress.

At the Collective Wisdom 2025 conference, hosted by construction law firm MDA Attorneys, key figures in the construction sector discussed both opportunities and obstacles facing the industry. While there are signs of recovery, concerns remain over project delays, bid cancellations, inadequate maintenance funding, corruption, and regulatory inconsistencies.

Russell Crawford, CEO of Stefanutti Stocks, acknowledged the potential for project awards but cautioned that progress remains slow. “We are cautiously optimistic,” he said, noting that even with planned infrastructure spending until 2030, it would still fall short of addressing the country’s maintenance backlog.

Clinton Crowie, CEO of ENZA Construction, highlighted the sector’s role in job creation, provided that projects are awarded consistently. He stressed the importance of skills training but warned that inconsistent project rollout limits the private sector’s ability to invest in workforce development.

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Managing director of WBHO Civils Berto Smit pointed to the renewable energy sector as a key opportunity but cited capacity constraints at Eskom as a significant challenge.

“The renewable energy sector is a significant opportunity,” he stated.

However, he added that varying procurement criteria across government entities complicate the industry’s ability to respond effectively.

A recurring frustration among panellists was the drawn-out nature of public-private partnership (PPP) approvals, with bid cancellations adding to the sector’s woes.

“We spend a fortune on PPP bids, and they just get cancelled,” Crawford said, questioning whether construction companies were being used for feasibility studies rather than receiving actual contracts.

Conrad Stark, CEO of EHL Engineering Group, expressed concern over the stagnation in project design. “I’m puzzled about why engineering activity is not what it should be. In infrastructure work, if someone is not designing it, the constructors won’t have anything to build,” he remarked.

Concerns were also raised about foreign contractors operating under different regulatory requirements, which panellists warned could limit economic benefits for South African firms.

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To shift from cautious optimism to confidence, construction leaders called for improved trust, engagement, and tangible delivery. Smit emphasised the need for meaningful discussions with the government: “I am involved with SAFCEC (South African Forum of Civil Engineering Contractors), the largest employer organisation in our industry, which has put extensive effort and time into government engagement on matters affecting our industry. We expect them to take note of our concerns and possible solutions, but currently, there is no meaningful conversation.”

Despite these challenges, the sector has contributed significantly to employment, with Crawford noting an increase of 178 000 jobs, even before a major surge in activity. Industry leaders believe that if bureaucratic hurdles are removed and better collaboration with the government is achieved, the construction sector could play a crucial role in tackling South Africa’s infrastructure and unemployment crises.

The discussion formed part of the Constructors Forum at the 11th annual Collective Wisdom conference, which offered insights into the state of the construction industry and potential paths forward.

This article was republished from Moneyweb. Read the original here.