NEALE HILL: Public-private sector co-operation a potent weapon to fix SA’s ills
Ford’s investment in SA shows multisector partnerships work, writes Neale Hill
Nobody with a clear-eyed outlook can deny that our nation’s economy and its energy, food and water security are concerning, and we face a slow recovery from the Covid-19 economic downturn.
Many other indices show how far we must go to address its scourges — poverty, inequality, unemployment and crime among them.
But we’re also a resourceful nation, with a penchant for surprising and silencing doubters. Just more than a decade ago we hosted the Fifa 2010 World Cup: a joyous occasion that showcased the Beautiful Game, the beauty of this country and its welcoming, hospitable people.
Before the event, tabloids in the UK warned of visitors being butchered on arrival. They recommended “stab vests” and suggested that sharks would “target” British visitors venturing into our waters.
That didn’t happen; sharks are discerning predators with little inclination to harvest bathers, whether in Union Jack swimming-shorts or not.
The success of the tournament — and the global exposure — was a vuvuzela-rowdy example of what co-operation between business, the government and ordinary people can bring. Since then we’ve faced many hurdles, including a pandemic. All required a unity of purpose to overcome.
But we have another example of how co-operation can be, if not quite a superpower, then at least a catalyst: Ford’s investment of $1.05bn (R15.8bn) in our manufacturing operations. It’s the biggest investment in Ford’s 98-year history in SA, and one of the largest in the local automotive industry.
This mammoth undertaking will transform our Silverton operation, increasing our annual installed capacity to 200,000, supporting production of the all-new Ford Ranger pickup for the domestic market and export.
That will help create 1,200 incremental Ford jobs in SA, increasing our local workforce to 5,500, and adding 10,000 new jobs across our local supplier network, boosting the total to 60,000.
It required development of an integrated public-private partnership (PPP) to drive growth, create jobs and boost the economy. We worked closely with all three spheres of government in the development of the Tshwane Automotive Special Economic Zone (TASEZ) next to our Silverton Assembly Plant.
The launch of the TASEZ was a milestone, after five years of engagement between Ford, the department of trade, industry and competition, Gauteng province and Tshwane.
It was the first SEZ of its kind: a new, region-based model for SEZs to attract domestic and international investment to help businesses become more competitive globally. It also was the first to be implemented as a joint initiative between the public and private sectors, with Ford represented on the TASEZ board.
This project proved that SA can be globally relevant and competitive, and that working with the government is essential to unleash that potential.
It’s why we are again working closely with the relevant departments and state-owned enterprises (SOE) such as Transnet in developing the Gauteng-Eastern Cape high capacity rail freight corridor. It will link the Silverton assembly plant and TASEZ, with Gqeberha, which is home to Ford’s Struandale engine plant. It will carry all Ford’s inbound and outbound logistics through Gqeberha to boost higher production volumes for the Ford Ranger pickup, supporting exports to more than 100 markets.
Infrastructural development is complex and demanding, especially on the scale of Ford’s investment. None of the work we’ve committed to would be feasible without co-operation.
So far, the spirit and letter of that co-operation has been exemplary. There is an orderly urgency, a shared understanding that our work goes to the heart of what’s needed to drive post-Covid-19 growth.
In 2018, the National Treasury reported that infrastructure investment as a percentage of GDP needed to grow from 19.5% in 2016 to 30% in 2030. Covid-19 will have made that curve steeper and the need for cross-sectoral co-operation more pressing.
What else could PPPs fix? SA’s huge water crisis? Infrastructure News found that SA could cut its infrastructure spend — or reallocate it — if it addresses the wastage of billions of litres of water annually through leaks. A major driver of our water shortage, it found, is poor co-ordination between the government and private sector, losing SA 41% of its available supply.
The possibility of a “Day Zero” in the Nelson Mandela Bay metropole, Gqeberha included, is obviously on our minds at Ford.
Averting that, or expanding a production line, building a 1,100km railway line and deepening a harbour to boost exports, demands co-operation. With cross-sectoral commitment so much becomes feasible. We’re ready for that as part of our objective to create a brighter, more promising future for SA.
• Hill is MD of Ford SA.
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