Construction industry anxiously awaits government’s R3-trillion infrastructure spend - no tenders yet issued

DBSA frantically attempting a turnaround strategy

The government’s infrastructure bank, DBSA, is expected to play a leading role in the planned infrastructure investment programme.

The First National Bank/Bureau of Economic Research building confidence index for the fourth quarter showed seven out of 10 respondents rate business conditions as unsatisfactory.

Treasury head of public finance, Andrew Donaldson, says the DBSA’s core business should be lending to municipalities for infrastructure (which has been in decline since 2005). The DBSA will henceforth partner with government departments — in particular health and education — to establish programme management teams that will plan, design and deliver priority projects.

In post-apartheid SA, the DBSA has been expected to self-finance. However, Treasury will henceforth provide financial transfers in a new funding model that will see "blended finance raised from the capital markets with fiscal transfers to capitalise growth".

The DBSA posted a loss of R370m last year, in part due to bad equity investments. While the DBSA has announced a voluntary retrenchment process, it is believed that it aims to cut its staff from 750 to 300 people (following an evaluation by consultancy Bain).

New DBSA CEO, Patrick Dlamini, hopes turnaround strategy will return the DBSA to profitability by 2013 and double its loan book to R91bn by 2017.