AfricaLive: What are you set on accomplishing in your new role at Bigen Africa?
Dr. Mthandazo Ngwenya: Our tagline at Bigen is doing good while doing business. This philosophy permeates in all our areas of activity. As we turn half a century old next year, we reflect on all the years of resilience despite operating in an environment riddled by scandal and corruption cases. We have managed to stand the test of time because ethics is one of our core pillars. At Bigen we know that being embroiled in scandals is a killer that can affect a firm’s longevity, workmanship, and legitimacy. My job is, therefore, to maintain our good ethical tradition as well as attract capital for our social-economic development.
We are in the process of taking on some large infrastructure projects in far-flung places all around the country and beyond. Most of our projects will be in remote areas and we intend to ensure that at least 30 per cent of the value of the build accrues within a 50-kilometre radius of the site of the project. The point is to revolutionise the way projects are delivered. We no longer want scenarios where fancy dams and other structures are built in a community, yet the lives of the people there remain unchanged.
We are taking deliberate steps to ensure that we source materials as well as skills from nearby communities at our sites so that locals can have upward mobility economically. Our service offering to clients is, therefore, not only high-quality structures but a commitment to improving the local economy through jobs and skills transference. If infrastructure is to play a part in the improvement of lives, it has to be delivered that way and that is what I seek to accomplish in my time here.
AfricaLive: Most African engineers feel like African local content policies are not being enforced enough. What steps need to be taken to ensure that local companies are involved in huge infrastructure projects instead of just being passed up?
Dr. Mthandazo Ngwenya: It’s indeed disheartening that most of our major infrastructure projects go to foreign companies. Our challenge is that most of our governments do not have the funding to procure big projects. Loans, therefore, have to be sought after from international lenders. Countries that have burnt bridges with conventional international lenders like the IMF now have to resort to PPPs or other methods of financing.
PPPs for large projects are hard to structure in Africa with local firms, so such deals are made mostly with multinationals. Under such circumstances, the focus is not on ensuring local companies get advantages but on getting the project done cost-effectively.
AfricaLive: What is the role of private players like you in creating awareness on such issues?
Dr. Mthandazo Ngwenya: In the context of South Africa, we are fortunate enough to have certain provisions in our public procurement framework. The bulk of our infrastructure build is being financed by the government through its annual budget or by certain state agencies. Our policy framework forces 30 per cent of the cost of the piece of infrastructure to be invested in the target community. It also forces the participation of black workmanship, as well as the involvement of youth, and women. Our model has allowed us to service our communities and patronise local businesses as we go along. We have also created this African Infrastructure Preparation fund (AIP) which will help in securing private capital for infrastructure projects. A lack of adequate preparation for projects is one of the main reasons why we don’t have sufficient infrastructure in this continent.
Proper project preparation is a mandatory stage which consumes about 10 per cent of the cost of the whole build. Our AIP facility is, therefore, needed and we have been interacting with Africa Development Bank (ADB) to grow it. We would like to scale this model throughout the continent so that African projects can be more presentable on the international scene.
AfricaLive: Where do you see partnership opportunities as you seek to scale your operations and how can partnerships work to de-risk Africa?
Dr. Mthandazo Ngwenya: Our AIP facility is a de-risking tool. It seeks to prepare projects in such a manner that they can be presented in the international market and be bankable. Initiatives like ours which clearly show local participation in an empowering way will usually improve your score with international lenders like the World Bank. Once you have your projects backed by such giant lenders, it goes a long way in de-risking and attracting even more partnerships. De-risking also involves getting the right insurance against political risk through institutions like the Afreximbank.
AfricaLive: As you seek to grow your AIP facility, what exciting infrastructure projects are you looking forward to in the near future?
Dr. Mthandazo Ngwenya: I am excited about the work we have been putting over the last three years on the Mucina Intermodal Terminal (MIT). The project is all about creating a corridor that will help improve trade and movement of goods between South Africa, Zambia and Zimbabwe. We will have a rail line that will start from the port in Durban, cutting through Zimbabwe, into the Zambian mines. Through the railway, we will have better access to the copper deposits of Zambia and have them exported.
The rails will also help ferry other important goods from these countries up north, to help boost trade volumes. The project also involves the construction of a dry port at the border between Zimbabwe and South Africa to help clear trading activities. We have managed to get the governments of South Africa, Zambia, and Zimbabwe onboard with the projects. The three governments co-signing the project will work to facilitate investments in the project.
We are still doing structural assessments and are in the process of finalising some deals with certain mines. Our target is to have the locomotives in place and begin moving shipments by June next year. The long term goal is to have a railway corridor that keeps going up north. We can have an “AfCFTA” agreement in place, but if we don’t have the means to move goods affordably from Egypt to Capetown, or from Durban to Mombasa, it means nothing.
AfricaLive: How do you think academia can collaborate with the private engineering sector when it comes to developing skills that Africa needs to prosper?
Dr. Mthandazo Ngwenya: Data from the Engineering Council of South Africa shows that despite government efforts to enhance and encourage education, POC and women are still lagging behind in their participation in the engineering scene. We need to work together to build capacity and have it more targeted to uplift marginalised groups and get registered with the engineering council.
AfricaLive: If you were to bring together South Africa’s leaders from government, higher education, and business to a roundtable meeting held at your HQ – what would be the main item on your agenda?
Dr. Mthandazo Ngwenya: I would bring up the need to structure effective PPP deals that are supported by enabling domestic regulations. Investors are sometimes afraid to get involved in certain countries because they feel that there is no rule of law. Anyone who wants to set up a PPP deal with a certain country on the development of a piece of infrastructure needs certain assurances.
Investors are usually turned off by political risk as well as populist rhetoric that advocates for the nationalisation of certain sectors. The African Development Bank has spoken about an Africa infrastructure gap of about $2 Trillion. Our infrastructure gap has to be financed part internally and part externally as well. We must, therefore, create enabling environments for investment.
AfricaLive: What is your outlook for Bigen in the next five to ten years and how confident are you in the future of the sector across the continent?
Dr. Mthandazo Ngwenya: Over the next ten years, I see us getting more exposed to other African countries than we are now. Our continental footprint will grow with us opening up offices across the continent. We also want to ensure that our approach to development is hard-wired in all our projects.
