Public-private partnerships are playing a key role in helping South Africa meet its infrastructural and development investment requirements. Get an inside view into some of South Africa’s key public-private partnerships and the business leaders driving them, with our panel of experts.

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It’s no secret that we are living in complex times… 2024 will be the busiest election year ever recorded, with half of the world’s population hitting the voting booths. Wars are raging on multiple continents and 2023 was the hottest year on record, by much more than expected. Crime, unemployment, inflation and corruption continue to dominate the headlines.

Understandably, there is a feeling of uncertainty in the world at the moment. But, despite seemingly insurmountable challenges, South Africans prove that when individuals, businesses and communities unite, amazing change can happen.

Facilitated by renowned journalist, Ferial Haffajee, the panel consisted of Cumesh Moodliar (CEO, Investec SA), Fumani Mthembi (co-founder and director of Pele Energy Group), Busisiwe Mavuso (CEO of Business Leadership SA), Mteto Nyati (chair at Eskom and executive chair at BSG), Mark Rayner (Vumacam investor, co-founder of Leadwood Partners) and Reyburn Hendricks (CEO at H1 Holdings).

Business gets involved

Former CEO of Investec, Richard Wainwright, was closely involved with the CEO initiative. Cumesh will now take on this role. “There are 130 CEOs representing various companies who got together a few months ago, especially given the energy crisis, who all have a deeply vested interest in the wellbeing of SA Inc. My personal view is that it is our time to lean in, in an apolitical, agnostic way, to build a better foundation.”

He continues to add that there are three focus areas. “The one was the energy crisis, the second related to crime and corruption, and the third was transport and logistics. So three work streams have been set up and over 350 professionals have been seconded from various businesses across SA to support the government and the broader coalition to help drive some of those changes.”

                                                                                   Cumesh Moodliar

 

“My personal view is that it is our time to lean in, in an apolitical, agnostic way, to build a better foundation”.

Cumesh emphasizes that privatisation is not at the expense of the state. The goal is to get the state working. But, currently we’re putting the entire country and employment at risk. “We should be growing in line with emerging market peers. So there’s a lot of work ahead for us. There’s a role for the state to represent those that are disenfranchised, but there’s also a role for conscious capitalism and a role for us to find the right blend to honour a social contract in this country.” 

Setting clear targets

Busisiwe Mavuso (CEO of Business Leadership SA), echoes Cumesh’s sentiment. “We have very clear targets. By the end of 2024, we know what we would like to achieve from a delivery perspective and the deadlines that we’ve set ourselves. There are delays, but there is commitment. The president’s head and heart is in the right place, he’s very committed to the structural reform agenda.”

She cites the example of the energy sector, where the private sector for the first time can generate electricity. “That was not the case before. And I think honestly, the movement at the moment is a privatisation movement.” Another example is Transnet. “When you look at the road map, the locomotives that are actually going to be run and owned by the private sector.”

She details the plans for the next couple of years. “If we deliver as per the plan, we are seeing stage one loadshedding by December 2024 and by December 2025, loadshedding would be a thing of the past. There will be no more backlog at our ports. We are also working to get out of greylisting by 2025.”

“CEOs have actually rolled up their sleeves and saying we need to make sure that we get this done. This is about national interest, South Africa and its people.” Busisiwe Mavuso

Leadership matters

From an SOE perspective, Mteto Nyati (chair at Eskom and executive chair at BSG) states that he joined Eskom to use his skills to try to provide the kind of leadership that is required.

“Some of the challenges that I found there about 18 months ago was an environment where leaders are not leading, an environment where managers are not managing, where things like standard operating procedures are not being followed.” He continues to say they are now consciously bringing back discipline. “Leadership matters. If you put a few leaders in place, people who are able to drive a particular agenda and bring in the discipline, you will start to see great things happening.”

                                                                                   Mteto Nyati

 

“Leadership matters. If you put a few leaders in place, people who are able to drive a particular agenda and bring in the discipline, you will start to see great things happening”.

“I’m in that position where I can say that there’s clearly light at the end of the tunnel.” He states that they produced a 24 month generation recovery plan. “We’re doing more maintenance, we’re having less load shedding and less unplanned outages. Importantly, there is a discipline of making sure that Eskom is looking at these numbers every week and holding people accountable.”

Regulatory reform enables business

Reyburn Hendricks (CEO at H1 Holdings) remarks that good regulatory reform has improved business.

 

“The growth of our business has been really off the back of deregulation. Before August 2021, there was a one megawatt cap of any renewable plant wanting to sell power in the private market space. There was a relaxation in August 2021 from one megawatt to 100 megawatts and then the removal of this cap in December 2022. From 2018 – 2021, the registration of private sector projects averaged 46 megawatts a year. After the reforms mentioned, this increased to 4 530 megawatts in 2023 – a near 100-fold increase.”

He adds that large mining companies have begun to announce the construction of their very large projects. His company is looking to back a block of about 500 megawatts sometime around the middle of the year.

“So the regulatory reform has meant that there’s been the switch from the government programme to the private power market sector. And that’s a good example of private/public partnerships.”

Focus on communities, create employment

Fumani Mthembi (co-founder and director of Pele Energy Group), says the focus should be on communities as well. Their emphasis on industrialisation is because that’s where job creation lives.

“We can build a 100 megawatt power plant with, let’s say, 300 people for a very defined period. Thereafter, we don’t need more than 20 people to run that power plant. The contrary is that if you had a wind tower manufacturing facility, you could hire 300 people for people who are semi to highly skilled in that environment on a permanent basis and create lasting jobs.”

She reiterates that the manufacturing sector is not one that you switch on and off. “You need to be quite clear in how exactly you roll that out. And then you need to stay the course. We need to have a 20 year outlook on the industrialisation of the sector.”

She explains that Pele operates in remote areas such as Prieska in the Northern Cape. Their view is to ensure the industrialisation of that community. “We focus on human capital development. The establishment of new industries, in other words, supplementary industries. We have a wind farm, that’s great. That’s not enough.

When we go into these rural communities, what we’re seeing are future cities, and that’s what we’re building, using our energy assets as an anchor for that.”

                                                                                   Fumani Mthembi

 

“We focus on human capital development. When we go into these rural communities, we see future cities. That’s what we’re building, using our energy assets as an anchor for that”.

Integrating the fight against crime

Mark Rayner (Vumacam investor, co-founder of Leadwood Partners) is part of the Crime and Corruption Workstream. He adds that crime statistics are alarming, but that is where his company is working.

“If you look around the intersections in Johannesburg, you’ll see our camera poles. And there’s about 7 000 across the area. The artificial intelligence and the analytics behind live video streams allows amazing things. We have connectivity, fibre and wireless connectivity. And we’ve got cloud now, so we can store enormous amounts of video and analyse it.”

He remarks that this is an amazing example of a public/private partnership, one where private security companies and SAPS are all using the same technology platform. “Previously, they would never have talked to each other. They actually are forced to assist each other by technology. Now we get these really satisfying kinds of daily reports of an arrest where you’ll see a security company, SAPS and Metro police all arriving to apprehend a suspect.”

They are creating a new breed of security guard actually sitting behind a screen, getting intelligent reports of the alerts the cameras have triggered. “We can then immediately trigger a workflow that can alert the local security company and the nearest Joburg Metro Police.”

Is it making an impact? “Absolutely,” he answers. “Between the private/public sector partnership, we’re making up to 500 arrests a month at the moment. There’s half a million security guards employed in this country by the private sector.” He emphasizes that the National Prosecuting Authority’s critical role now is to take criminals through the justice system, correctional services, etc.

As president, what would your first order of business be?

Cumesh states that crime and corruption will probably be first on his agenda. Everything else follows and flows from that. Fumani would focus on building economies. “The real opportunity that we have in this country is to use the energy of the young people. The talent that we have in our society can convert into something meaningful.”

For Reyburn it would be the grid extension in the areas where the best solar and wind resources are and very soon. Mark says that we would focus on getting the right people in the right jobs. “I think that solves a lot for our country.”

A final word

Navigating uncertainty becomes a little easier when you understand the context of the world today and can make informed decisions. It is the difference between thriving and failing.

Our hope is that this event empowers you to navigate uncertainty with confidence and resilience. As a leading international Private Bank and Wealth Manager, we can help you chart the course and assist you during every step of your journey.

• What are public private partnerships?
• Why are public private partnerships important?

DM/BM