New bill falls short on climate-resilient infrastructure

The catastrophic floods in Durban have focused much attention on the capacity of the state. In particular, how capable is it of delivering infrastructure that is resilient in an increasingly unstable climate?

This is especially so in light of the recent release of the Climate Change Bill (open for comment until May 27), whose primary aim is to “enable the development of an effective climate change response and a long-term, just transition to a low-carbon and climateresilient economy and society for SA in the context of sustainable development”.

While the bill is certainly a step in the right direction, it falls short of what is needed. Having worked in the municipal, climate-resilient infrastructure space for some years, I have first-hand knowledge of just how tricky the legislative and regulatory environment is.

The bill mandates district intergovernmental forums to act as municipal forums on climate change, which must “co-ordinate climate change response actions for those activities within its operational control”, but to suggest that the system of municipal plans supporting aligned and targeted spatial investment is a quagmire is a huge understatement.

From a planning perspective, Cape Town, Johannesburg, Tshwane and Durban have all benefited from the development of climate action plans developed in partnership with C40 Cities. The partnership provided them with relevant technical support to effectively tackle climate change through policy support, technical assistance and political engagement on adaptation and water; air quality; energy and buildings; food systems; transportation urban planning; and waste management.

But for nonmetros the support required to successfully navigate the complex web of utility master plans, settlement plans, spatial development frameworks, climate vulnerability assessments, integrated development plans, capital expenditure frameworks and long-term financial plans (to name but a few) remains woefully inadequate. Not only this, but there are a host of additional challenges that must be faced, such as infrastructure budget shortfalls; increasing pressure from the Treasury for municipalities to divert spending to social welfare over infrastructure spending; and a procurement landscape that is hostile to even the most wellmeaning procurement officer who might wish to place longterm economic efficiency over short-term cost savings.

In 2016, engineering powerhouse Aurecon was contracted by the Western Cape government to assess the cash flow implications of sustainable infrastructure choices over the long term by applying a lifecycle cost analysis to capital and operation expenditure. It found that while sustainable infrastructure choices tended towards higher upfront costs, the long-term savings were significant. But procurement officers tended to avoid these types of infrastructure due to concerns over deviations from the Municipal Finance Management Act, which emphasises short-term capital budget efficiency and has historically separated out capital expenditure from current expenses. Yet a 2018 update to the Policy Framework for Municipal Borrowing said for sustainability, “rehabilitation and replacement needs — as well as operation and maintenance costs — must be considered”.

These developments gave rise to the Sustainable Infrastructure Development & Finance Facility Programme in the Western Cape, focusing on debt-based infrastructural development in secondary cities with clean audits. The facility applies a total cost of ownership approach to project development and incorporates sustainability-linked costs, including greenhouse gas emissions, waste production, energy efficiency, water impacts and land footprint. Given the increasingly dire domestic fiscal landscape, the growing support for sustainable infrastructure emanating from multiple development finance institutions (DFIs) must be seen as a vital tool in developing resilient infrastructure.

Since there are no state guarantees for municipal debt in SA, the only way to reduce risk perception by private lenders is credit enhancement through first loss positions and guarantees, now counted as official development assistance. Ensuring good governance in local government is the gatekeeper to taking part with these DFIs, accessing private sector debt and delivering climate resilience.