S Africa's 'construction mafias' scaring away investors, says minister

Powerful and politically-connected "construction mafias" are scaring away investors and holding back infrastructure projects needed to grow South Africa's economy, the country's new public works and infrastructure minister said on Friday.

Dean Macpherson took office last month in South Africa's new coalition government and is now tasked with helping execute President Cyril Ramaphosa's plan to turn the country into a construction site.

Ramaphosa said in his first policy speech to the new parliament that inclusive economic growth would be driven by massive investment in infrastructure. But for that to happen the state will need to tackle the rampant criminal gangs that invade construction sites, Macpherson said in an interview.

"It's a big threat to us," he said. "It actually physically stops projects that are underway (and) it creates a barrier to entry for the private sector because if there's going to be stoppages and cost overruns, that eats into their margins."

"Why would you deploy capital that's going to sit in a project indefinitely, possibly and that you're then going to have to start paying more and more towards to keep gangsters off of your site?" he said.

His department is looking at new funding models to attract private sector investment, he said, adding the treasury was working on reforms to the public‐private partnership regulations .