Privatisation reveals the solution to infrastructure collapse

Who will build the roads? Certainly not the South African government, and as NICHOLAS WOODE-SMITH writes, neither does it fix them…

Every year, we see infrastructure collapse across the board. Eskom continues to fail to keep the lights on, roads start to resemble the Somme, railways rust away, and ports pile up with undelivered goods. South Africa faces logistical nightmares that freeze the wheels of commerce, often literally. This leads to supply shortages and backlogs, loss of income, and loss of jobs.

And this is not to mention South Africa’s deteriorating water infrastructure. The Department of Water and Sanitation has reported on the worrying state of South Africa’s drinking water: only 49% of water systems are of a satisfactory microbiological quality. That means that over half of all South Africans only have access to unsafe drinking water.

President Cyril Ramaphosa has lamented the dire state of our infrastructure, blaming local governments for not spending their allotted budgets to maintain or expand infrastructure. He cited a lack of implementation capacity as the reason for these local governments failing to do their jobs, but I doubt this. Capacity can be built pretty easily. If budgets are present, then they can be used to hire skilled contractors or purchase necessary equipment.

Most local governments are incompetent and corrupt. They don’t see the point in doing their jobs because they are just going to be appointed or elected again, so they just rake in their salaries and let their constituencies collapse. Transnet also adds fuel to the fire by incompetently running our supply lines and crucial commercial infrastructure. The terrible performance of the parastatal has resulted in immeasurable damage to the economy in the form of delays, backlogs, and the loss of packages.

All the while, Transnet looks on as our railways and ports deteriorate into nothing. And while people beg them to sort themselves out, the government can only admit that it doesn’t have the skills to solve the crisis.

Attempts to partially privatise Transnet’s Durban Container Terminal (DCT 2) have been met with opposition from unions, which cite a potential loss of 55,000 jobs if the partial privatisation goes through. I find this hard to believe. Why would privatisation shed 55,000 jobsif those jobs were at all useful? If, on the other hand, those jobs were unnecessary, why should they be protected?

So, even when Transnet tries to sort out its dire state, it is met with petulant opposition from trade unions and ideologues. Similarly to how unions prevented Eskom from being privatised in the 1990s, they are now preventing Transnet from desperately trying to save South Africa’s infrastructure from itself, all in the name of petty ideology and greed. While Transnet flip-flops between privatisation and retaining relevance, it is attempting to borrow R18 billion from the BRICS Bank to upgrade locomotives that will inevitably be torched by saboteurs or collapse on rusted railways.

On every front, infrastructure is collapsing, causing no end of strife for South Africans. Local government, Transnet, Eskom, and every other public sector entity that is meant to keep roads paved, water clean, electricity on, and trains chugging along have failed to fulfil the very basics of their job.

The solution to all their failures is the same. Remove these responsibilities from their domains and place it in the hands of profit-motivated, pragmatic, and non-political actors. Simply, infrastructural maintenance, expansion, and construction must be privatised as much as possible. Trade unions and their petty whining must not be allowed to get in the way.

Companies are motivated by profit and reputation to do their job. If they are unable to service railways and allow trains to deliver freight, then they don’t make money. If they can’t produce electricity and sell it to consumers, they don’t profit. If roads are unusable, people won’t want to use them. Some infrastructure can be privatised more simply than others. Electricity, for instance, should be de-monopolised and produced by a flourishing free market.

Even for harder-to-privatise infrastructure like roads, however, there is still a free market solution. Rather than putting the responsibility of road maintenance on the local government, assign an area to a company that has won a fair and transparent tender. Have them paid directly from the national budget, or even from the local taxpayers. Eliminate as many middlemen as possible.

Perhaps, in other countries, infrastructure can be publicly owned and run efficiently. But not in South Africa. The government has proven time and again that it is both incompetent and unwilling to do its job properly. The solution, therefore, is to take the job away from it. If this gets our infrastructure – and notably our trains – back on track, then we should all be for it.