Ipsos had MK on 55% in eThekwini and the DA on 17%. Dean Macpherson told Alec Hogg he did not trust those numbers, and said the DA would end up either the largest party in Durban or the largest party in its governing coalition. The DA's KwaZulu-Natal chairperson walked through a little-known rule that, in his telling, leaves only two realistic contenders for Durban's mayoralty, and explained why a single councillor could decide who runs many KZN councils. Wearing his ministerial hat, he argued that the trillion rand set aside for infrastructure was not short of money but stuck in procurement, with only one in six big tenders awarded. He described how the Independent Development Trust went from an entity he considered shutting down to tripling its cash in a year, why the state was now selling land it did not need, and how he squared administering the Expropriation Act with his own party's court challenge against it..Listen here.Edited transcript of the interview.Alec Hogg (01:38) Two years ago, 79% of public works projects were running late. Dean Macpherson, who is the Minister of Public Works and Infrastructure, has since overseen 176 construction mafia convictions. Before that, not even a handful. But a trillion rand is budgeted for infrastructure by the state, and spending is falling. We're going to find out why from him a little later. We're also going to ask him about the election. He is the DA's chairperson in KwaZulu-Natal. He did tell us in August at the BizNews Conference that he expects that the DA will be the biggest party in eThekwini. But Ipsos has recently polled MK party at 55% and the DA at 17%. So someone's wrong. We'll find out who.Welcome to BizNews Edge, business without the spin. Really good to have you back here on BizNews TV. Goodness, we met in London a few years ago, then the BizNews Conference in the Drakensberg, now you're in Hermanus. What are you here for? Dean Macpherson (02:54) Hopefully now I'm a fully ensconced tribe member. Of course. So it's good to be with you. And I'm here for, actually, a DA fundraiser later this evening at the golf club. I was in Johannesburg earlier this morning at Minister Leon Schreiber's Quantum Leap announcement in Home Affairs, where we're supporting them on some of the ports of entry. So it's been a busy day, but I'm glad to be back by the sea, which is where I come from. Alec Hogg (03:25) Yeah, Joburg this morning. And what did he say that the... Dean Macpherson (03:29) Basically, he made announcements on the end of the green ID book and phasing that out, the big campaign that they're going on to make sure that every single South African is documented and has an ID, the introduction of e-passports, which is going to be a game changer, and the introduction of digital ID, which, you know, is going to really be able to connect South Africans in ways that they've never been able to do so, cut down on fraud and, you know, take us into the future. So it was really exciting. Alec Hogg (04:04) With the exception of John Steenhuisen, and we know that's been well documented, the DA guys have done pretty well in Cabinet. I mean, yourself and Leon, obvious examples of that. Did you expect it when the GNU was put together? Dean Macpherson (04:19) Did I expect to be a minister? Alec Hogg (04:21) Well, that you'd have the leeway when you were appointed. Okay, so the GNU...Dean Macpherson (04:25) You know, I mean, obviously it's a complicated animal. You know, in some ways there aren't really lines, in some ways there are. You know, I think that we know more than I did, you know, two and a half years ago about how government works. Some things I've got wrong, a lot of stuff I've got right, and continue to learn. As I said, no one gave me a book on how to be a minister for dummies on the third of July. So it's been the most unbelievable experience. There's no job like this. Absolutely unbelievable. And I'm continuing to learn. And, you know, I think that the cadence of output is now increasing, now that we're sort of two years in, because we know what works, we know what doesn't work, we know how to manoeuvre through the system and how to get things done.Alec Hogg (05:19) Has the country benefited from the GNU?Dean Macpherson (05:22) Well, I think in politics, Alec, the question is always: compared to what? So, you know, what would the country have been without this version of a GNU? What would it have been with an MK or an EFF GNU? So are we where we want to be? Absolutely not. Growth is anaemic, there is far too much joblessness, and we aren't seeing the investment that we need to. And we're working hard to try and change that. But, you know, we're not the only party in the GNU. There's, you know, a number of others. But, you know, I think that realistically, and I mean this, I think without doubt, that if it had been an MK or an EFF combination, things would have been a lot worse. Now, you can't go to the electorate and say vote for us because it could have been worse. But, you know, my argument is: if you want us to be able to do more, we need more support.Alec Hogg (06:20) Your answer was easy. All you had to do was say, look at the rand. Rand's been pretty firm.Dean Macpherson (06:24) Well, I mean, I think, particularly in the context of where we are at the moment in the Middle East, you know, interest rates, you know, oil price, relatively stable. Inflation is higher than it should be, but still relatively stable. So, you know, I mean, tourism just topped a million new tourists coming in. It is a record.Alec Hogg (06:51) Is that the highest?Dean Macpherson (06:53) So, you know, you're starting to see some of the work that we're doing. You know, we've introduced our first, you know, RFI into Telkom Towers. You know, that's...Alec Hogg (07:09) What does that mean?Dean Macpherson (07:09) That's a request for information, which will lead on to, you know, eventually the awarding of a PPP, R4.5 billion, into a public-private partnership. Sorry, I'll speak layman lingo. And, you know, that's a government precinct that's been derelict for a decade, that we've suffered a R700 million loss on. We're going to put it out to the private sector, drive R4.5 billion new investment into the Tshwane inner city. That's never happened before. You know, today we did the single largest land disposal, I think, in our history, of 256 hectares of land disposed out of government. So, you know, those things just didn't happen. What Leon is doing, what Siviwe is doing, what Solly is doing, those are all new things of this government, and we would love to do more, of course. But I think that if you measure the DA in government, I think that we've been pretty good with what we have.Alec Hogg (08:05) I had a really interesting chat yesterday with Gayton McKenzie.Dean Macpherson (08:08) I watched it.Alec Hogg (08:09) Okay, so we're going to talk about KZN in a moment, because it's quite a big story there. He says that you guys all work for the President, the President's the boss. And he said that he's been accused of sucking up to Cyril Ramaphosa, but he said, he's my boss, so of course I'm going to listen to what he has to say. And he said even the DA ministers work together in the Cabinet as almost the unified pro-South African grouping. Is that your experience?Dean Macpherson (08:42) Well, I mean, I think that where there are issues that we agree on, we work really well. Where there are issues that we've disagreed on, you know, we don't hesitate to make those calls and say so. Absolutely.Alec Hogg (08:55) So it's a vibrant Cabinet.Dean Macpherson (08:56) I mean, I don't disclose the conversations of Cabinet, but, you know, there's some pretty robust discussions that we have. And that's natural, considering that it's a multiparty government.Alec Hogg (09:12) But that's good.Dean Macpherson (09:12) And of course it's good. Of course it's good. That is, you know, a healthy sign of a multiparty government. Of course there are issues that we do disagree on. And, you know, as I said, we aren't afraid to raise those, but we do so in the appropriate way and in the appropriate manner. And it's about being able to convince each other that there could be a better way. And, you know, having that open mind to say, actually, maybe we can do it like this, or maybe we can do it like that. And I have to be receptive to that as well. That actually maybe there could be a better way to do something.Alec Hogg (09:54) Very positive, what you said now, because as a citizen of this country, we want our board of directors to have robust conversations, but to speak respectfully. And sometimes, when stuff gets put in the media, criticism of one or another, I guess, of Cabinet members, the message might come through in a somewhat distorted manner. When you're in a room together, and it's all Chatham House rules, it sounds to me like it is working.Dean Macpherson (10:23) Look, I think we shouldn't be naive that we're all political animals as well, and Gayton is a political animal. He knows how to play the game, and so do we. And so, you know, we also fight for our... you know, I mean, we're all governed by political ideology. Anyone who thinks that you go into government and you have sort of a benevolent view of everything, I think that that's not true. And so, you know, we advance our agendas, and some of those we win, some of them we don't. But, you know, I always say, if you wanted me to win 100% of the argument, give me 51% of the vote. I could do that. But we don't. We have 20% of the vote, and so we have to try and say, how do we win the most amount of arguments with the numbers that we have? And that's difficult, and we're not going to win everything, but we're always going to stand on our principle 100% of the time.Alec Hogg (11:18) That 51% of the vote in eThekwini. Ipsos... I know Helen Zille, when I spoke to her last week, she said that she doesn't believe their numbers at all, but their numbers are showing MK at 55% in eThekwini and the DA at 17. You're the leader of the DA in KZN, in KwaZulu-Natal. How are you seeing that race?Dean Macpherson (11:46) So, I mean, Helen is right about Ipsos, that, you know, they often get it wrong about the DA, and they often undercount the DA. And yes...Alec Hogg (11:57) What do you think that is?Dean Macpherson (11:58) Well, I think that their methodology assumes that every single person that they speak to is going to vote. And so even when they publish their data, it's very difficult to decipher what is the turnout of voters, or how do they model it on turnout? And, you know, so you can go and interview 100 people. It's most likely, we know that, you know, five and a half of them or five of them will come out to vote. So you can't then, you know, aggregate the responses of those other 50 that aren't going to vote. And when they publish that, it's less clear as to what that actually means.So, you know, I also don't know what was the breakdown of the people that they polled actually from eThekwini. Were they people in Johannesburg saying, yeah, if I was in Durban, I'd vote for this party or that party? It's just not clear. I really do back the polling of the Social Research Foundation. I think that they are very spot on and very accurate. We do our own polling on a weekly basis, every Friday. I see what that polling is. And, you know, the leader of my party, Geordin Hill-Lewis, has often said that when we look at that polling on a Friday, one week it's the DA, one week it's MK. And it's this constant battle to see who's the largest party. I mean, the polling is telling us that the ANC is dead in KZN. So I really do predict that we are going to be either the largest party in eThekwini, or we are going to be the largest party in a governing coalition. Because we've been clear: no MK. It's not going to happen.Alec Hogg (13:43) And no ifs?Dean Macpherson (13:44) So absolutely not. I mean, that's the decision of our party. We took that many years ago, and we stand by that. But interestingly, we've got 53 municipalities in the province. I think that certainly one of them that's going to have an outright majority will be uMngeni.Alec Hogg (14:02) Chris Pappas.Dean Macpherson (14:07) I think they call them prediction markets. So maybe I've put a bet on that. And, you know, maybe one other, but the rest of them are all going to be hung. And that's going to be very interesting.Alec Hogg (14:18) What's the maybe of one other?Dean Macpherson (14:20) Maybe Msunduzi could be a majority MK. I mean, they are doing quite well there. But, you know, the reality is that every single vote is going to count in this election. And so I foresee a situation where the DA is going to be the largest party in many of these municipalities, or alternatively, it's going to be the kingmaker in many of those municipalities.Alec Hogg (14:44) What does that mean?Dean Macpherson (14:45) Well, you know, in many of these municipalities, some of them only have 20 or 25 councillors. It could come down to a single councillor, a single DA councillor in a municipality, to determine which way the vote goes. Look what happened in the KwaZulu-Natal legislature in 2024. We have a one-seat coalition majority there. It could be the same thing. The NFP got one seat; they helped us form the government. The DA in many of those municipalities could just get one seat to form a government. So KZN is going to be the most fascinating electoral prospect in the country.And there's an interesting reason, Alec. You will know the history of KwaZulu-Natal. A black voter in KwaZulu-Natal is more likely to vote for another political party, other than the one that they may have voted for in a previous election, compared to any other province. And that means that black voters are far more fluid in KZN than they are in any other province. They can vote for the DA, the ANC, MK, IFP, NFP.Alec Hogg (15:55) Gayton?Dean Macpherson (15:56) And that's... well, the PA doesn't really have a presence in KwaZulu-Natal. I had a look at their list for KZN. I don't think that they've submitted many councillors for the province.Alec Hogg (16:07) But he wants that three and a half percent in eThekwini.Dean Macpherson (16:11) I don't foresee that, to be honest. And, you know, he said, you know, that for Zuma.Alec Hogg (16:17) He gets it, he goes with it. Dean Macpherson (16:18) Yeah. And, I mean, that's his choice, and, you know, he must be able to explain that. But, you know, I certainly don't think that the best thing for Durban would be a Jacob Zuma-led municipality. I mean, they've changed their mayoral candidate once. I'm pretty sure that they're going to change it a few more times before we get to the election. And then you're then going to have the constant changes after that. Durban cannot afford to have a party that is changing its mayor every other week. And so, you know, in my view, to even suggest that that might be an option, you know, that's not taking Durban seriously.Alec Hogg (17:00) Haniff Hoosen was sitting where you're sitting now. He, in fact, I think, was either our first or our second interview in our new studio. And it was interesting to get his insights in KZN. He is the mayoral candidate for eThekwini. He seems quite confident. He said, look, it's a toss-up, as you say: one day we're in front, one day we're behind. He was telling us from his perspective. But that coalition... that would suggest coalitions. Who's on your side there?Dean Macpherson (17:30) Well, I famously once was told by Athol Trollip, no less, a former colleague of mine, that you don't talk about a penalty shootout until you've played the 90 minutes.Alec Hogg (17:38) Good point.Dean Macpherson (17:39) So, you know, I'm focused on the 4th of November. And, you know, the DA, Alec, is very different. When you go to coalition discussions with other parties, the first thing that they want to talk about: who's going to be the mayor, who's going to be the deputy mayor, who's going to be this, et cetera. It's almost like they've gone to a car dealership before the ballots have even been counted. The DA is different. We talk about positions last. We're going to talk about principles, first of all. Are you going to agree to a radical shake-up in the way that the city is run? Are you going to agree to, you know, a business-friendly, job-creating environment in the city? Are we going to agree that we're going to resource the metropolis so that we can have offices in every single ward? Once we can agree to those important things... Are we going to fix the water crisis in the municipality once and for all? Once we deal with those principles, then we get on to the discussion of positions. So any political party that can agree to the principles that we will lay out, we can go into coalition if we need be. But we'll have that discussion after the election.Because, you know, a lot of people are talking about mayoral candidates. Everyone's a mayoral candidate in this country. It's bizarre. You can't be a mayoral candidate in eThekwini with one seat. And I'll tell you why, Alec. We have a different system of governance. In the City of Cape Town, the mayor holds the executive function of the municipality, and then he delegates that out to MMCs.Alec Hogg (19:25) So just again, slowly, what does that mean?Dean Macpherson (19:27) So we have two systems of local government in our country. Many people don't know this. You have an executive mayor, and you have an executive committee.Alec Hogg (19:38) Executive mayor, like a chief executive of a company.Dean Macpherson (19:40) So, like, Geordin is the executive mayor of Cape Town. He holds the executive power of the council. He then delegates that to members of the mayoral committee. This municipality here, Overstrand, is run like that. The eThekwini council, in fact all municipalities in KwaZulu-Natal and Limpopo, the executive power rests in an executive committee, which is proportionately allocated on the basis of votes. So right now, the DA has three seats in that executive committee, the ANC has four, the EFF has one, the IFP has one, and then they donated a seat to the NFP to try and form a majority. Now, in terms of the Municipal Structures Act, you cannot be elected the mayor of an executive committee-run city unless you are on the executive committee. So a party with one seat is not going to qualify to be on the exco. So you have to meet a threshold to be on the executive committee.Alec Hogg (20:51) That is different in Joburg.Dean Macpherson (20:52) Yes, they have an executive mayor. So the only people who will be able to get on exco will be the DA, the ANC, the MK and the IFP. Four parties. That's where the mayor will come from. So you can call yourself mayoral candidate of this party and that party. Unless you're on exco, you cannot be elected as the mayor.Alec Hogg (21:15) How's that exco elected?Dean Macpherson (21:17) Well, it's proportionally representative. So there's ten seats, and then depending on the vote share that you get. But there's obviously a qualification. So you could have, let's say, ActionSA. They have four seats in that municipality. Even if they doubled their votes to eight, they still wouldn't get it. You have to have about 20 seats to be on the executive committee. And that's why we need to narrow the focus on who's going to be the mayor in eThekwini, because it can only come from four parties.Alec Hogg (21:47) That sounds like a much more sensible approach. We know what's happened in Joburg, where, "I need your vote. You've got one seat in the whole 400? Come in and we'll make you mayor." Which sounds really crazy. But this seems like a much more sensible approach.Dean Macpherson (22:04) Well, I think it has pros and cons. So the pros, obviously, is that it allows for multiparty representation in an executive system. The con about that, if I can say, is that, you know, if you are the mayor, and let's say Helen is going to be the mayor, you need someone like Helen to have that control and that executive authority to say, we're going to get this done, come hell or high water. We're going to break through, and we're not going to discuss this anymore. It's going to happen. So it has its pros and cons. In KZN, we've become accustomed to it. It obviously allows more parties to participate. It creates instability at times, whereas if you have a majority, it's excellent, because you can just, you know, power through and make the changes that you need.Dean Macpherson (23:08) I think that the DA is going to be the largest party, or the largest party in the coalition. I think that Haniff is going to be the mayor, because he's number one, so he will be number one on the executive committee, and he will be our candidate. You know, I really tried to crystallise it even further from those four parties. When the councillors sit to vote on election day, because it's only the councillors that elect the mayor, there will only be two possible options: MK or DA. That's going to be it. ANC will be too small, IFP will be too small, EFF, they won't exist anymore. And that's the choice that every single party is going to make.Now, let me tell you what happened in 2021, because I was there. The DA and the ANC stood for mayor. A lady by the name of Nicole Graham. I was the chair at the time. All the parties came around and they said, "DA, we're voting for you." We said excellent. When it came out to vote, a particular party, ActionSA, actually, their leader at the time, of course, led all of the small parties to go and vote for the ANC. And we lost by nine council seats, because there are 17 parties in eThekwini that have two seats or less.Now, we had the last council meeting this week. I can tell you, Alec, without fail, and I'll show you afterwards, all of those small seats, one- and two-seat parties, none of them even came to the council meeting. They can't even be bothered anymore. They get paid a salary; they don't even come to work. And so we really have to try and crystallise voters' minds that there's two choices, DA or ANC. No other political party is going to be able to make it onto the executive. So MK and DA. No other small party is going to be able to make it onto that executive committee. Don't waste your vote on that. And let's try and actually get Durban moving under Haniff Hoosen.Alec Hogg (25:12) This is so interesting. Thank you for sharing that, because I'm sure even people in KZN are not aware of it. One doesn't look at how the sausage is made too often.Dean Macpherson (25:25) It's highly technical, but it's critically important. And so, you know, when I go to a public meeting, I mean, I don't want to bore people with, you know, the technical thing, but it is important, and maybe your viewers appreciate that.Alec Hogg (25:36) What other municipalities in KwaZulu-Natal are in play?Dean Macpherson (25:40) I really like KwaDukuza, that's Ballito and Salt Rock. We have an excellent mayoral candidate there, from that area. I think that we're going to do really well there. I think that we're going to be the largest party there. And I like that municipality because it has one thing that eThekwini and many other municipalities don't have: they have a stable water supply. You know, in 1999 it was the first water concession granted in the country, to a company called Siza Water. So all of the water is privately distributed. It's under the ANC, by the way. So they talk about privatising local municipalities; they started that in 1999, and it worked. And so the residential and commercial market there is booming, because they have stable water all the time. So we see a lot of potential there.Also, obviously, our priority is to retain uMngeni with an outright majority. I think we're going to do really well on the South Coast, Ray Nkonyeni, that's sort of Port Shepstone, Margate. North of that, Umdoni, it's like the Park Rynie sort of area. We're going to do well there. And I think that we are going to have these interesting outcomes where, with just one seat, we're going to determine which way governments go.Alec Hogg (26:58) Because there's MK versus...Dean Macpherson (26:59) Correct, yes. And so I think that it's going to be the most fascinating. KZN always is an unbelievable place to do politics. It's the hardest place. With respect, people have no idea how hard it is to do politics in that province. It's really difficult. But I think actually that in many ways, KZN is at the forefront of the coalition revolution in our country, in saying, how do parties work together for a common outcome? And those outcomes can vary. We've done it in the provincial legislature. I think we're going to do that in many municipalities going forward now.Alec Hogg (27:38) Working together, coalitions, provincial unity. Gayton McKenzie says he'll work with anyone. And he says, on the one hand, he said when we spoke earlier this week, he's going to try and get MK across the line in eThekwini. I don't know why, but that's what he wants to do. But he says he'll work with Helen Zille in Joburg, begrudgingly, but he will do that. The DA seems to have a different approach. There are certain parties that you will not work with. You won't work with anyone. Why?Dean Macpherson (28:11) As I said, the first question that we ask is not who's going to be the mayor or the president or the MEC or the minister. The first thing is the principles. Can you agree to those, yes or no? If you can agree to those, we're good to go. So why can't we work with MK? Well, MK don't believe in the Constitution, first of all. So you can't...Alec Hogg (28:34) Gayton's not that mad about it. He says you must suspend it. Bring in the death penalty.Dean Macpherson (28:37) Well, yeah. Well, you know, I'm a constitutionalist, and I think, you know, it's easy to sort of play fast and loose with the Constitution until you need it. Until you start being, you know, jailed because you've said something on a media platform that a certain politician doesn't like. You know, I think that that's crazy, quite frankly. So, I mean, absolutely.Alec Hogg (28:58) That attacks your freedom. It protects your freedom.Dean Macpherson (29:07) Not just your freedom: your freedom to be an individual, your freedom to trade, your freedom to access healthcare as you so choose, you know, the freedom to believe in any religion that you wish, or live, or to own your property. So, you know, I think anyone who wants to suspend the Constitution, you know, I think that we should look at what their motives are. What are the end goals and motives of that? Because, I mean, the world is littered with examples of what happens when you start to suspend a constitution. And I don't even think that that's something that should be said in jest, quite frankly.Alec Hogg (29:42) El Salvador, Bukele. He was saying we've got to clean up crime.Dean Macpherson (29:46) So, you know, let me tell you, I also appreciate the history of this country. I think that there are far too many people that literally lost their lives to have a democratic dispensation and constitution. And I'm not, you know... I mean, just from a moral point of view, how do you say that people who gave up their lives, you know, gave everything, that that sacrifice is worth being suspended? I don't think that that's a...Alec Hogg (30:15) So there are other ways of...Dean Macpherson (30:17) So why can't we work with MK? Well, they don't believe in the Constitution. They think that pregnant girls should be sent to Robben Island. I mean, I don't think that that's a clever idea.Alec Hogg (30:25) Where does that come from?Dean Macpherson (30:26) Zuma said that himself. Go and research that. You should ask why he believes that they should be sent to Robben Island. That's what he said. To do what? I don't know, go to labour camps, who knows? So we can't agree with that. The EFF, obviously, they don't believe in section 25 of the Constitution. So, you know, we can't work with them. We could never work with them.Alec Hogg (30:49) What is this?Dean Macpherson (30:50) That's the guarantee to own property. So just on those sorts of bases, you know, you start to eliminate and exclude parties on what they believe in. And, you know, we can work with parties, as we have done in the GNU and the GPU, because they believe, and they have publicly subscribed to, a number of those principles: a market-based economy, section 25, you know, dealing with crime, et cetera, et cetera. It was spelt out. So on that basis, you can then work together. And then there might be local context and local variances that take place.Alec Hogg (31:33) So where's the IFP in all of this? And I ask this because, again, Gayton McKenzie said he's put together a coalition to keep Helen Zille out of Johannesburg, and he listed the IFP amongst those who've agreed to be in his group.Dean Macpherson (31:46) Yeah. Well, I mean, they haven't come out and verified that.Alec Hogg (31:51) Sorry, actually, he did correct me on that one. He did. He said that's who he thinks. Yes.Dean Macpherson (31:55) So, you know, what you think and what you do are two different things. We obviously work with them in KwaZulu-Natal. It's not easy. I mean, you know, we have some very big disagreements. But again, you know, I often say: compared to what? You know, do you want the ANC to govern in local municipalities? Do we want the MK to govern in the legislature? I was there on the 15th of December last year when the MK started assaulting the Speaker of the legislature, when they had the motion of no confidence against the Premier. I just, you know, in good conscience, couldn't allow a group like that to, you know, to run a province, because they lost the motion of no confidence.Just the other day, they had a rally in Phoenix, and their head of marketing said something very interesting. He said if you vote for the DA, we will make sure that we switch off your electricity and switch off your water, if you're in eThekwini. Now, I'm interested if Mr McKenzie, you know, supports that sort of rhetoric, or if that would be the policy position of eThekwini. So MK is a dangerous party. They don't believe in the Constitution. They believe in punishing people for voting for a party of their choice. And that is the choice that every voter is now going to have before them on the 4th of November, certainly in KZN.Alec Hogg (33:24) We've spoken a lot now about your DA hat. Now we need to talk about your GNU hat and your position as the Minister of Public Works and Infrastructure. What about this trillion-rand budget that's actually not being fully spent? What's going on there?Dean Macpherson (33:40) So I actually did an interesting talk at Cox Yeats in Johannesburg about two weeks ago, and they posed the question to me around procurement reform. And I said to them that the debate no longer is whether there's enough money for our infrastructure build. Yes, there is. We've got more than enough money. The problem is that we cannot get it procured correctly. Now, Infrastructure South Africa... and I really would recommend you interview my head of Infrastructure South Africa, Ms Mameetse Masemola, excellent and very knowledgeable. They did some research, and over the last 12 months, of the 2,800-odd big infrastructure tenders that were published, only one in six of them were awarded. One in six.Alec Hogg (34:29) Hmm.Dean Macpherson (34:30) So that starts to... I'll get to the why in a minute. So that starts to explain the correlation between a failure to spend, as an example, of gross fixed capital formation. We've seen it's declined for two years in a row. And then we have this trillion rand. So there's something missing, and that something missing is procurement.Now, the why. The why is that our research has shown that projects are not prepared correctly. So when they go out to tender, the market can't make heads or tails of them sometimes, or the risk is not clearly defined, so people can't price in risk, and they say, you know, we're not interested in that. Or some of them actually just lapse; they don't even get completed on time. So we've said... the problem is many of those lie in state-owned entities, the line-function government departments, et cetera. So we've said, well, what we will do is we will do a lot of the preparation work ourselves. We will literally pay and do it so that it can go to market and find funders. And we have started to actually spend a lot of money, R600 million over three years, in project preparation. We are starting to see now an uptick in projects going to the market and then being funded. Now, obviously, then being built is a different story, because that takes time to do. So some of our interventions are starting to show fruit, but a hell of a lot more needs to be done so that we can actually spend that trillion rand and not just have it sitting in a pot.Alec Hogg (36:19) You know, this reminds me of what Neal Froneman was saying to us the other day. He said when you build a gold mine, you have a pre-feasibility study. First you raise the money for the feasibility study. You then have a feasibility study. Only once you've got there do you then sink the first shaft. And it's many years before you pull out the first gold.Dean Macpherson (36:41) And if you don't get that right, your preparation planning...Alec Hogg (36:45) What's that story about those who fail to plan, plan to fail?Dean Macpherson (36:49) So, some other research that we did is we found that, you know, 90% of projects actually failed because they don't have proper feasibility.Alec Hogg (36:58) Yeah.Dean Macpherson (36:59) So we take that really seriously, and the work of Infrastructure South Africa is focused on that work too. But the interesting thing is now, we are now getting grant funding from development finance institutions and multinational [institutions]...Alec Hogg (37:18) Grant, meaning for free.Dean Macpherson (37:19) Free, because we've said, listen, you guys want to fund these projects. There's a huge appetite. That's why I said money is not the issue. Give us grant funding. We will then make sure that projects are coming out in energy, logistics, water, et cetera, so that you can then fund it. But it's in your interest to give us the grant funding. We will get the projects out. You can then make sense of them, and you can fund them. So banks actually now see that work as critically important to be able to, you know, increase their portfolio of financing in infrastructure in South Africa.Alec Hogg (37:55) Is it a bit like with a mine? You've got to fund the feasibility stage, so the grant funding would actually fund the planning of this?Dean Macpherson (38:05) Correct. Correct. And then once you've got that bankable project, you can then go to the market. So we don't say, listen, if you give us grant funding, you can then fund the project. The project sponsor has to go to open tender on that. But they have a better chance of being able to fund something that they understand, because we have prepared it with their grant funding.Alec Hogg (38:33) Good news indeed. It's a lot of what seems to be happening in South Africa at the moment. I know there's many doomsayers. Much of the sense, when I talk to business executives and people generally who are plugged in, is that we've really come a long way, but it's not always in your face. It's not always visible. And this seems to be another example of it. Get the planning done first, and then you will see the result.Dean Macpherson (39:03) You know, Geordin Hill-Lewis, leader of the DA and the mayor of Cape Town, says something profound. He says infrastructure spending is the lifeblood of any city. Just look at Cape Town and other cities as an example. They've put together a record budget of R12 billion. That is more than other metros combined.Alec Hogg (39:21) All right.Dean Macpherson (39:22) But where does that go to? That goes into sewage pipes, into wastewater treatment. Stuff that's not sexy and that's not under the ground. And you don't know how important it is until it doesn't work. Trust me, I know. I live in Durban. When the sewage is overflowing, it's terrible. Closes the beaches, in the rivers, down the streets. And so many people don't appreciate that sort of important, critical infrastructure work that goes on until it's too late. And we have to catch up. We have to catch up in a big way on major catalytic infrastructure.I was in Dubai last week. I mean, they're just building not ten years in advance, but 20, 30, 40 years in advance. Sure, they've got literally all the money in the world. But they cannot stop thinking about what the Dubai of 20 or 30 years looks like. Because if they slow down, if they miss their targets, it then affects them in a way. And in many senses, that's what happened when we stopped investing in infrastructure in the mid-2000s. We're paying that price now. So we've got two things that we have to do. One, we have to build just to catch up, and then we have to start looking forward into the future, 20, 30 years.Alec Hogg (40:53) You spoke about Telkom Towers. What other projects have you got? I think at the conference you were talking about the state owning 88,000 buildings, yet it pays R6 billion a year in leases.Dean Macpherson (41:04) Yes.Alec Hogg (41:05) That all seems pretty wonky. Have you made much progress there?Dean Macpherson (41:09) Yes. You know, that's a long, hard slog, but we are. As I said, today, you know, we did something phenomenal today. The single largest land disposal...Alec Hogg (41:20) So you actually did it today? I thought that might've been a...Dean Macpherson (41:22) No, no, no. 256 hectares.Alec Hogg (41:25) Where?Dean Macpherson (41:26) I don't want to say just yet, because we're going to do a great public announcement about it. But it is an economic driver. We don't need to own it anymore. And I said to the department, maybe the previous predisposition might have been, you know, to hold on to everything. That is not the policy position of the seventh administration in Public Works. We either use it, or we dispose of it. Those are the two options that exist.So I had a meeting with the officials this week. We are carrying on with the 801 disposals that we will do in this financial year, from zero to 801. I mean, that's pretty big. We are also bringing on new projects that have been stalled. We've seen a 50% increase from June to July (I don't have the August and September figures yet) in projects that were dormant, that had stalled, that are now back online. So we are ramping up those projects that have just been sitting there. So there's good progress. It's not enough. We want to monetise our portfolio. We want to generate money for the country through these assets. And so whether it's through public-private partnerships like Telkom Towers, or whether it's through disposals, Public Works has to start acting and behaving as an asset manager and not as a keeper of bad buildings.Alec Hogg (42:54) As you've been saying, as an asset manager, just looking at the consequences... the IDT, Independent Development Trust, that's a story. And I don't think we've gotten... just from your perspective.Dean Macpherson (43:08) Yeah. When I came into office, that was literally my first crisis that I had to deal with, and it was literally immediately. Now, you and your viewers may recall that there was an 800, 880 million rand contract that had been awarded to the IDT to build pressurised oxygen plants in hospitals. And they had awarded it to a company that had no history or background in ever doing anything like that. It was called Bulkeng. And when I started to dig into it, the board started to, you know, hide things from me. They didn't want to play open cards, and so on. And so I took the pretty drastic decision at the time to fire the chairperson and the other ministerial appointee, because, in the first instance, they hadn't been correctly appointed, and he didn't even qualify to be the chairperson. He was unlawfully the chairperson. That then led to, you know, the board then being in court, and they then ran out of time. We then had to appoint a new board. And when we did that, I mean, we came under the most vicious attacks. The chairperson... I mean, it was just shocking what went on there.And then, lo and behold, the suspended CEO, because she had been suspended at the time, because I had initiated a forensic audit into this contract and there were shortcomings on her behalf, the board suspended her. She was then caught on camera, I still have to say allegedly, because it's unbelievable that after a year they still haven't arrested anyone, but she was allegedly caught on camera taking that bribe. You'll remember, from Pieter-Louis Myburgh. She then left. I refused to give her a golden handshake. There's no possibility of that.And this week we have appointed our new CEO, an unbelievably talented man, just, you know, salt of the earth, a chartered accountant. So, you know, we're not looking for someone who doesn't know the job. We have a fully functional board. And you know what's amazing? Their business book in the last 12 months has gone from two billion to six billion. Their cash on hand has tripled in 12 months.Dean Macpherson (45:32) This is an entity that was in serious trouble, and I even questioned whether we were going to dissolve it. But I couldn't, because they do such an important job in the social infrastructure space: building schools, clinics, you know, stuff that is not commercially viable at times. And it's a big, big lesson that I've taken forward. Act early, act quickly, do the right thing, put in the right people, and the results speak for themselves. Two to six billion, triple cash on hand, and they're now flying.Alec Hogg (46:07) When do you think that penny is going to drop with the South African electorate? It's a pretty open-and-shut case. You haven't got schools, or you haven't got as many schools as we should have in this country, and they aren't building as many as they should, because we've got an organisation like the IDT, which really was terribly corrupted. Now that it's getting fixed up, you'll see more schools being built, et cetera. But the electorate doesn't seem to kind of get that yet. How long do you think it's going to take for us to mature and vote for what is good for the country?Dean Macpherson (46:40) Well, in some ways, I think that that maturity has taken place, particularly in urban areas. I had this conversation with... you know, if you look at the decline of the ANC, that almost mirrors the urbanisation of urban areas. So, as you know, as the economy grew, certainly up to 2008, urbanisation, you know, really increased. People came into the cities, and they came to look for jobs, et cetera. So in some ways, maybe, you know, the ANC was an architect of its own decline by the urbanisation in South Africa. And then you see from 2008 to 2016, people start to become disillusioned as the economy declines. They can't find jobs in urban areas. Then what happens in 2016, Alec? The ANC lose majorities across the country in metros. So there's a strong correlation between, you know, declining economy, people in urban areas.So I think that people have learned that actually, if things aren't working, if the economy isn't growing, that we're not going to vote for parties that are associated with that. Now, our big job is to try and transition those voters to say, not voting because you are happy is not good enough. You now then need to vote for a party that actually can deliver and can fix the decline that we've seen. I do think, in some respects, maybe to use Minister Schreiber's idea of a quantum leap, maybe to expect that quantum leap to take place in such a short space of time is ambitious and optimistic. But I think that voters certainly are able to identify who is responsible for those problems. We as politicians and political parties, no matter which one we come from, have to then say, how do we convince them to vote for us, and not just to not vote at all?Alec Hogg (48:59) But for you, so that you can fix it. We've got a few questions.Dean Macpherson (49:04) Great.Alec Hogg (49:04) Annelies Taylor wants to know: why is there little water by me in Boksburg?Dean Macpherson (49:08) So water is... I think, if I'm right, in Gauteng it's distributed by water boards or water authorities. And, you know, I mean, we as Public Works have nothing to do with that. But I think that the principle that Annelies needs to be aware of is that what we've seen is a lot of these entities and municipalities do not ring-fence the income, or the money that they get for distribution, and they then use that to cross-subsidise other departments in their municipalities. That's why we actually fully support the metro trading services reform that says the money from electricity distribution and water distribution must be ring-fenced for that use only, to invest in capital infrastructure.Alec Hogg (50:04) Okay, just unpack that. Money comes in for electricity...Dean Macpherson (50:09) You open your tap, all right? The water comes in, you get a bill from your municipality. That municipality is probably the purchaser of bulk water and then reticulates it to you. You then pay whatever you pay. The municipality collects that money. Instead of ring-fencing that to expand infrastructure on water, they use that then to pay salaries in the, you know, the grass-cutting department.Alec Hogg (50:40) Or buy new cars.Dean Macpherson (50:41) That's wrong. Or whatever. So unless you ring-fence that, then you're in trouble. And that's what's happened in many of these municipalities. That water and electricity, which generates revenue for municipalities, then goes and pays for municipal officials instead of being reinvested back into the network. So the government has launched the metro trading services...Alec Hogg (51:00) Is that law coming in?Dean Macpherson (51:05) ...where they are now going to absolutely ring-fence that. So these will be trading entities. So whether it be Overstrand water or Overstrand electricity, those will be specific trading entities, which will then have to ring-fence their funding and then reinvest that back into capital infrastructure projects. And that's critical, because if you're paying for the grass-cutting department with your water, and then the water pipes break and you're not renewing them over time, that's what we've seen in many of these places. So, you know, I would say that to Annelies in Boksburg. And, you know, I know in Johannesburg it's terrible, but hopefully these reforms will take hold in time and then actually start to produce those results.Alec Hogg (51:57) Starting to feel a lot more kind of upbeat by what you're saying. Just maybe this is...Dean Macpherson (52:02) It's not even Christmas yet.Alec Hogg (52:04) Yes. Renaldo... Renaldo has posted a question. He says: question for the minister. Why did he not provide comment during the court case against EWC, and why he didn't assist the court on whether the policy is bad for South Africa? Got a second question.Dean Macpherson (52:22) So let me say that I know he obviously loves to try and elevate his views through the DA. It was actually... the DA was the only political party that went to court, by the way, on that. His party didn't, the Freedom Front. They had nothing to say. So I find it ironic that he's interested about what I say or don't say when they had nothing to say. But let me tell you what we did. I had a duty as a minister to assist the court in understanding the applications before us. So I abided, by saying that whatever the court comes to, I will accept as the minister. We helped them understand the contradiction in the clauses. We helped them understand the amicus applications that were made. We had about 20 days to do so... people who wanted to join the case. So anyone could have joined the case.Alec Hogg (53:17) With amici.Dean Macpherson (53:22) Any political party, any organisation. Many political parties joined, by the way. His didn't, but that was their choice. And we then assisted the court to understand exactly what was before them. And I think that that was actually the responsible thing to do. Because as a minister, you must either oppose or you must abide. Those are the two choices that you must have.And actually, if you go and have a look on record, my founding affidavits are there. They're quite good. And they help the court to understand the process that took place, and then for the court to be able to make that decision. I didn't write that legislation, I didn't draft that legislation, and so the correct and responsible thing to do as the minister is to say: there are valid challenges that have been placed before the court. This is the information that we have, or that we know of. These are some of the views that we have. We now ask you to make that judgment. So to say that I said nothing is actually false, and it's incorrect.Alec Hogg (54:31) Okay, second question is related to my first. How can you be the minister to implement EWC, but then be part of a political party that's taking EWC to court? Isn't that a moral conflict?Dean Macpherson (54:44) Well, I mean, I would make the same argument about his minister, Minister Groenewald. You know, his party says that they are against B-BBEE, but his minister puts out tenders that include B-BBEE. So, you know, the reality is that we work in a political environment that, yes, I'm the minister, but I have to separate that from the party. The party has taken... I'm cited as one of those. I have said that I'll abide by the order of the court, and that's exactly what I've done.Alec Hogg (55:17) Okay. Dorian Venable says: I know this is a local government election, but as this is a hot topic, how does the DA plan to ensure that international relations is not the sole purview of the ANC? For example, that there are two deputy ministers.Dean Macpherson (55:35) So, I mean, I think that that's obviously been a really big topic within the public discourse, and certainly within the GNU, around international policy and international relations. It has been discussed, and, you know, numerous times. And maybe, in hindsight, when the negotiations took place, there should have been more focus on that. I do think that certainly, as a country, we have to get our international relations position, you know, right. And I think that it's changing in this, you know, multipolar world that we have, and being able to navigate these. And I think, you know, someone like Mark Carney is a very interesting politician. He is able to...Alec Hogg (56:16) Canada.Dean Macpherson (56:17) Yeah, the Prime Minister. He's able to thread the needle, as they would say, and be able to stand up for, you know, his country while being able to cut trade deals across the world. You know, Narendra Modi is a very fascinating guy, as India's Prime Minister, and also able to, you know, say what's in the best interests of India and then be able to navigate that as well, and be able to cut deals across the world. And that's, I think, what South Africa's position needs to become. You know, friends with everyone. Being able to say what is the national interest. I mean, there are obviously some people we shouldn't be friends with, but, you know, being able to say what's in the national interest. And what is that national interest? The national interest is to get as much investment into this country as possible, to get as many people employed as possible, and to make South Africa as prosperous as possible. And anyone that can align with that, as Mark Carney is saying, you know, to people who want to support Canada, I think that that's the kind of position we should be looking forward to.Alec Hogg (57:35) Do you think there's an understanding of a real basic economic fact in Cabinet, that as a developing country you need money from outside to grow the economy? You don't have enough money in the economy to grow it. Unless the locals start investing, then the outside guys don't. And it's almost like the path that you've outlined there, the non-aligned path: great friends with anybody, but we aren't enemies with anybody either.Dean Macpherson (58:06) Yeah.Alec Hogg (58:07) Is there a realisation? Because it almost feels like we don't really need their money, whereas, hence, our unemployment is continuing to rise to a ridiculously high level.Dean Macpherson (58:18) I mean, you know, I make this great example. You know, before the GNU... does anyone really think the pace of concessions and international interest in concessions would be where it is today without the GNU? Now, let me give you an example. Fifteen years ago, Alec, when we had the worst kind of load shedding, the idea of private sector participation was just non-existent. And a crisis has a strange way of accelerating what is obvious and necessary to anyone. So, you know, that really led to the investment into renewable energy, mostly international.And now you look at what's happening in port and rail. The port operator for Durban is a Filipino company. They're investing, I think, R25 billion into that. If you look at the... I think the rail... the rail operators, sorry, no, the transmission operators: all seven of those that have been pre-qualified are international companies. If you look at the rail operators, I stand to be corrected, but there's 11, and I think maybe the majority of them are international operators as well. So I think that that is starting to filter through. Is it at the level that it should be? Absolutely not. Can we do so much more to attract international investment? Yes, we can. But I think that it is not a moment in time. It's possibly a journey that is ramping up, but we all have a responsibility to do a lot more.Alec Hogg (01:00:06) Extraordinary. When you talk about 15 years ago, something that I haven't really spoken much about was that Warren Buffett's son, Howard Buffett, who had a farm in South Africa... and you may be aware that his company, Berkshire Hathaway, has got a huge electricity company in the United States. I put them together, Howard, because I know him, with Eskom. And at the time, they started talking.Dean Macpherson (01:00:33) Yes.Alec Hogg (01:00:34) And unfortunately, nothing came of it, because of the mindset that we had at the time. But can you imagine how different things might have been if we'd had that international investment back at that stage? But at least, if there were those discussions today, it seems like the mood has changed.Dean Macpherson (01:00:52) Yes. I mean, there's no doubt that, you know, business has an important role to play. And I was at the launch of the third phase of the government-business initiative, and I was there with a lot of the CEOs. And I get the sense that government, maybe sometimes, too... the ANC's criticism from some of the other partners, I mean, they get told that they're too business-friendly. I mean, the SACP say that, Cosatu say that. So, you know, I think that sometimes they try and walk, you know, a bit of a middle line. But I think that the evidence shows that that business partnership, and, you know, business working with government, is only getting stronger, not less. As I said, there's so much more that we can do. I mean, it's unbelievable what more we could do. But we always have to say, in the context of where we find ourselves, you know, maybe it's a little bit constrained, but how do we try and push those gates for more? And obviously, if, you know, we were a 51% party in national government, it might be a little bit different. I mean, in fact, I can guarantee it would be a bit different. But our job, certainly, as the DA in government, is to continue to try and push that, encourage them, get them over the line, and say that concessions, private sector investment, international investment is the future for South Africa, and a guarantor of our success.Alec Hogg (01:02:23) Not just the future. It's quite clearly the only path to economic growth.Dean Macpherson (01:02:27) We also have to unlock domestic investment. And that still worries me, about, you know... we've got to unlock that...Alec Hogg (01:02:35) Trillion rand on the balance sheets of South African companies. Last question.Dean Macpherson (01:02:39) Yes.Alec Hogg (01:02:40) From someone, Terminator, says: if compensation for something is worth nil, how can it be called compensation? I don't know what's...Dean Macpherson (01:02:53) Okay. I think some of the bots have obviously got onto your...Alec Hogg (01:02:59) There we go, the Terminator. Sorry, Terminator, I don't understand.Dean Macpherson (01:03:03) But, you know, I mean, I'm very clear, and I want to be very, very clear, that section 25 is sacrosanct in our country in terms of our Constitution. That, you know, if you own a property, no one has the right to take it away from you. And I think that that's why this court case is so important: that we can have a regime that supports property investment, supports property rights in this country, that no one can ever come and snatch your property away, as we've seen in countries north of the border. That's certainly something that we will never support, something that I can never support. And that's why, you know, we're having this court case now, at the moment.Alec Hogg (01:03:52) Well, it's been such a pleasure to have the Minister of Public Works and Infrastructure, Dean Macpherson, here in our studio. Maybe those ideas are finally starting to land. Maybe people in Pretoria who haven't been exposed to the realities of economics are starting to finally understand that, hang on, we need money to come into the country if we are going to reduce unemployment. We can't do it ourselves. Government certainly can't do it. Government is funded by taxpayers. And if that penny drops, well, just a small mindset shift, all of these other ideological issues that have caused this country so much damage would be put into a different light, one believes. It's been a pleasure to be with the minister. I'm Alec Hogg from BizNews.com..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. 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