August 29, 2006
By Anish Abraham
SOME 500 potential investors are attending a conference at the Sandton Convention Centre to look at ways of financing infrastructure in the city.
Hosted by the City of Johannesburg from 29 and 30 August, the conference will investigate cheaper ways for the city to raise finance to address its infrastructure backlog.
The two-day conference will bring together participants from various industries such as finance, construction and information technology, amongst others.
"We have to seek alternative, innovative and cost-effective funding solutions to finance the City of Johannesburg's capital and infrastructure projects," said Mankodi Moitse, Joburg's executive director of finance.
The first such conference to be held by the City, it is aimed at informing the public about capital projects it is undertaking. Participants will also be given information on projected cash flows of the projects to ensure investors are able to provide more cost-effective finance.
Presentations will be given on the capital expenditure projects of the various City departments as well as individual municipal-owned entities such as City Power, Joburg Water and the Joburg Roads Agency.
"As a City we are telling them what we want to do over the next three to five years and even longer. What we want is a cost-effective way in which we can render those services," she said.
According to city treasurer, Jason Ngobeni, Joburg's infrastructure backlog stands at some R8-billion, an unfeasible amount on the City's balance sheet.
Joburg has already sought alternative forms of financing in the past, through issuing municipal bonds, which Ngobeni said was the first step. Municipal bonds and loans from banks are two ways in which money is raised to fund capital expenditure. In addition, the City uses its cash surpluses and grants and funds from provincial and national government to fund capital expenditure.
"But current funding is limited and cannot cope with the growing demand of the economy. The City wants to accelerate its capital infrastructure investment," said Moitse.
The conference forms part of a compulsory briefing for those who are interested in later putting forward proposals for unique and innovative funding mechanisms.
"We will then solicit proposals from prospective bidders without them having to fear that their intellectual property would be exposed to the public or potential competitors," added Ngobeni. Unlike the traditional procurement of products of services, it will not have to go through a tender process, whereby the required financial solution is advertised.
"The benefits of having such a conference is the formation of a partnership with the private sector in accelerating service delivery and access to donor and grant funding from institutions who have capital earmarked for specific infrastructure projects," said Moitse.
The conference takes place at the Sandton Convention Centre on 29 and 30 August, and potential investors should submit their proposals before 15 October.
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