Centralization: The Key To Delivering Ramaphosa’s R1 Trillion Infrastructure Vision

As President Cyril Ramaphosa addresses the 2025 National Construction Summit underway at the Birchwood Hotel in Ekurhuleni today, his announcement of R1 trillion for infrastructure isn’t just ambitious; it’s a defining moment for South Africa’s economic future. But as delegates gather over these two days, one critical question demands urgent attention: Can our current fragmented system actually deliver on this promise? Thirty years of evidence says no. The solution isn’t more money or more programs; it’s fundamental institutional reform through centralization of infrastructure budgets.

President Ramaphosa is telling the summit that his administration has placed infrastructure development at the centre of the country’s economic growth strategy. Preparing to welcome international leaders to the G20 Summit next week, he has stated that the R1 trillion medium-term budget allocations by Finance Minister Enoch Godongwana is central to his administration’s bold plans, with all involved ministers committed to turning the country into “a big construction site.”

The construction industry’s recent job growth and favourable budget allocation have bolstered the President’s confidence. He urged international visitors to observe ongoing projects nationwide, believing this visibility will stimulate investment in the country’s infrastructure development program, which is crucial for the struggling economy.

“The construction industry is a crucial driver for the growth we envision for our country. This industry has contributed 130,000 jobs in the third quarter of this year, and these new jobs reflect an upswing in the industry. These jobs are transforming communities, contributing to a more inclusive South Africa, and that is why we are committed to R1 trillion spending over the medium term. This is the first time since the dawn of democracy that such large sums have been committed to infrastructure,” he said.

Finance Minister Enoch Godongwana has outlined several initiatives to shift government spending from consumption to capital investment, including plans for a R15-billion infrastructure bond in the coming months. Capital payments will be the fastest-growing area of spending over the next three years, with plans advancing to accelerate private sector participation in infrastructure financing and delivery.

As the summit continues tomorrow, the President’s confidence in the construction industry’s potential is justified – 130,000 new jobs in Quarter 3 alone proves the sector’s capacity. But job creation and genuine transformation are different goals. While government accounts for 40% of infrastructure investment and spends billions on contractor development, fewer than 36% of contractors progress beyond their initial CIDB grade. This isn’t a funding problem, it is a structural one. The same fragmented system that will spend President Ramaphosa’s R1 trillion has systematically failed emerging contractors for three decades.

What the summit must confront is this: thirty years into our democracy, South Africa faces a troubling challenge. Despite government spending billions annually on contractor development programs, previously disadvantaged people including women, youth and people with disability remain severely underrepresented on the Construction Industry Development Board (CIDB) Register of Contractors. Fewer than 36% of contractors in development programs progress beyond their initial grade, trapped in lower CIDB grades with limited progression, poor access to funding, and weak post-program support.

The solution lies not in creating more development programs, but in fundamentally restructuring how we manage infrastructure spending. It’s time for South Africa to centralize infrastructure budgets into specialized departments, which in this case is the Department of Public Works and Infrastructure nationally, and provincial departments like Roads and Public Works provincially, as the Northern Cape is demonstrating. This isn’t just administrative reform, it’s the key to unlocking genuine economic transformation in our construction sector.

Our current system asks the impossible of both government departments and emerging contractors. We expect education officials, who are trained in delivering quality education, curriculum development and enhancing learner outcomes, to be burdened by infrastructure-related responsibilities. We burden health professionals with hospital building contracts when their expertise lies in patient care. Meanwhile, emerging contractors must navigate a maze of different procurement standards, payment systems, and support structures across multiple departments, each applying different standards not aligned to any unifying framework.

This fragmentation doesn’t just create inefficiency, it systematically disadvantages the very contractors we claim to want to develop. A small emerging contractor cannot afford to become expert in the procurement peculiarities of education, health, transport, and housing departments simultaneously. They cannot build relationships with procurement officials scattered across the entire government apparatus. They cannot survive the different payment cycles and administrative requirements that vary from department to department.

Finance Minister Godongwana’s toolkit, the R15-billion infrastructure bond, reconfigured Budget Facility for Infrastructure (BFI) with quarterly bid windows, and approval of R379.1-billion in projects, provides unprecedented opportunity. Delivering the MTBPS this week, the Minister indicated that in the first two quarters since the BFI reconfiguration, 28 submissions with a total capital cost exceeding R379.1-billion were received, with approvals made for projects in science, water and sanitation, and transport and logistics sectors, including two major rail rehabilitation projects for the North Corridor and the Iron Ore Corridor.

But opportunity means nothing without access. Emerging contractors cannot effectively engage with 28 submissions across science, water, sanitation, transport, and logistics when these projects are scattered across different departments with different procurement officials, payment cycles, and support systems. Centralized infrastructure departments turn Godongwana’s financial instruments into actual contractor development opportunities.

South Africa wouldn’t be charting untested waters. The United Kingdom’s Crown Commercial Service (CCS) has demonstrated the transformative power of centralized procurement, securing commercial benefits of £4.9 billion in 2023/24 alone. Over just three years, CCS construction team benefits increased from £5 million to £226 million, representing significant savings for the public purse.

Even more relevant to emerging economies is Singapore’s GeBIZ system, established in June 2000 to simplify government procurement and tender activities. GeBIZ serves as the Singapore Government’s one-stop e-procurement portal where suppliers can conduct e-commerce with the government, providing a centralized platform for all public sector business opportunities. This centralized approach allows suppliers to identify business opportunities quickly, bid for them conveniently, and manage transactions easily, while providing public agencies with streamlined workflows that improve productivity.

These international examples demonstrate that centralization isn’t just theoretical—it’s a proven strategy for improving procurement efficiency and supporting business development. The Organisation for Economic Co-operation and Development’s (OECD) Infrastructure Governance principles emphasize that “good governance of infrastructure not only promotes value for money and affordability, but also helps to make the right projects happen in a manner that is trusted by users and citizens.”

While the summit at Birchwood focuses on national vision, one province is already proving centralization works. The Northern Cape isn’t waiting for perfect conditions, it’s building the blueprint that this summit needs to consider.

Building on global best practices, the Northern Cape’s remodeling of the Department of Roads and Public Works offers compelling real-time evidence of centralization in action. Under Premier Dr. Zamani Saul’s leadership and MEC Fufe Makatong’s guidance, this isn’t theoretical reform it is happening now.

The province has completed internal consultations and is actively engaging User Departments to transfer Equitable Share and Division of Revenue Act (DORA)-funded posts, bringing in both core staff and scarce technical skills. Consultations with labour are ongoing, supported by a multi-stakeholder task team led by the Office of the Premier. Supporting this transformation, a Skills Audit, Climate Survey, and technical structure review have been completed, with the province now fast-tracking the secondment and transfer of key personnel to fully capacitate the Department.

This complex but vital reform demonstrates exactly what centralization looks like in practice: building “a modern, growing, successful and more responsive infrastructure delivery model.” 

The Northern Cape’s methodical approach, completing skills audits, engaging stakeholders, and transferring technical expertise – provides the blueprint for how other provinces can implement similar reforms.

Rather than expecting each department to independently develop technical capabilities they’ll never fully master, the Northern Cape model proves that concentrating this expertise within a dedicated infrastructure department isn’t just theoretical, it’s achievable. This isn’t just about efficiency; it’s about creating the specialized environment where contractor development can actually succeed.

The Northern Cape’s reforms demonstrate exactly how centralization can ensure Ramaphosa’s R1 trillion commitment delivers on its promise. Without this institutional framework, we risk repeating decades of scattered spending that created contractors trapped in lower grades rather than thriving businesses.

The key is ensuring that centralization creates specialization, not just larger bureaucracies. Success depends on building departments focused entirely on infrastructure delivery and contractor development, with clear performance metrics tied to both project delivery and transformation outcomes.

As G20 leaders arrive next week to witness South Africa’s infrastructure ambitions, they’ll see the R1 trillion commitment. The question is whether they’ll see the institutional capacity to deliver it effectively.

The proposed legislative amendments to the CIDB Act of 2000 will help, but institutional reform is equally crucial. The R1 trillion medium-term infrastructure investment commitment from Finance Minister Enoch Godongwana provides the financial foundation. Centralizing infrastructure budgets provides the institutional framework to ensure these resources translate into genuine contractor development and economic transformation.

President Ramaphosa is telling the summit today that this is “the first time since the dawn of democracy that such large sums have been committed to infrastructure.” Let it also be the first time we build the institutional framework to ensure those sums create the transformation we’ve promised since 1994.

We cannot continue expecting different results from the same fragmented system. As the summit concludes tomorrow, the delegates heading back to their provinces and departments must carry more than inspiration, they must carry a commitment to institutional reform. Centralizing infrastructure budgets offers a path to the economic transformation we’ve promised our people since 1994. 

The time for incremental change has passed. Our emerging contractors, our economy, and our democratic promise deserve nothing less than fundamental reform.

Zandisile Luphahla works as spokesperson for the Northern Cape Department of Roads and Public Works, where he witnesses daily the challenges and opportunities of infrastructure reform. He recently completed his Construction Management studies at the University of Cape Town.

Disclaimer: The views expressed in this article is solely that of Zandisile Luphahla, Spokesperson for the Northern Cape Department of Roads and Public Works, and does not necessarily reflect the views of Mzansi Agriculture Talk, his employers, or other associated parties.