By Greg Ardé
KZN business is out in force to fix a province critical to the national economy, but the challenge is enormous.
A recent Moneyweb article summed up in a few lines how important KZN is to the national economy. Referencing a 2019 Stats SA report it said KZN was responsible for R16 of every R100 generated by the national economy. And, the Durban harbour handles 60% of imports into the country.
Zutari, a global firm of engineering consultants, was among many companies that assembled teams of experts to respond to the disaster. The response of just this one team was illustrative of the role played by private sector in helping devise cost-effective and resilient solutions in the rebuild.
Zutari technical director Tashna Margo said, “We effectively pulled together significant resources as quickly as possible to assist.” The Zutari team alone included dams boffin Frank Denys, water resources engineer Martin Kleynhans, geotech specialist Gabi Wojtowitz, and sustainability maesto James Cullis.
The economic impact of the floods in KZN will be felt for a while to come, and although for some the outlook is bleak, for others there are prospects. For example, Malusi Mthuli, KZN Provincial Head at FNB Commercial Property Finance said the floods meant increased demand for space in an economy weighted to warehousing and logistics.
In the first few weeks following the floods, SA Canegrowers said industry losses – as calculated by a survey amongst 300 canegrowers in rural areas – totalled R222-million.
At the same time, insurer Old Mutual said it had received more than 720 claims, estimated at R245-million.
Wynand van Vuuren from King Price Insurance told KZN INVEST the floods payouts would dwarf that of the R7-billion Knysna fires. He said flood damage costs were upwards of R17-billion. “The cost of premiums after disasters like this will be more expensive. We’ve also seen that reinsurers limit their exposure by excluding certain risks. For example, where they previously covered areas built under the 100-year flood line, this would now be reduced to a 10-year flood line.”
Economist Glen Robbins said eThekwini faced an uphill battle. It had been damaged by decades of poor national economic underperformance, dismal employment statistics, squandering of public funds and governance, and technical challenges.
After the floods the Durban Chamber of Commerce and Industry and KZN Premier Sihle Zikalala asked President Cyril Ramaphosa for an urgent meeting to discuss a joint approach to the rebuild after the initial response to the humanitarian crisis.
Chamber CEO Palesa Phili said it was vital to categorically outline challenges. There is an urgent need to fix infrastructure, particularly in the critical South Durban area which is home to back-of-port logistics businesses and massive manufacturing plants like Toyota, Mondi and South African Breweries.
Other key issues are infrastructural maintenance and the safety and security of companies in an era where business forums are on the rise. “It was very important to have a discussion with the President to make sure different spheres of government speak one language. This requires all hands on deck. We aren’t just looking at government to fix issues. We need to work together.”
Phili said many people didn’t understand the significance of South Durban with such significant investments in manufacturing and logistics. The manufacturing sector in Durban alone employs more than 34 000 people, many of whom are still unable to work because of the flood damage.
The devastating impact of the floods after Covid and the July 2021 unrest presented unique challenges that demanded a collective response. The dire challenge extended across all sectors from manufacturing to tourism. “There will be serious impact – assessments are still ongoing, realistically it will take weeks before some businesses are operational,” continued Phili.
Is business satisfied that government is aware of the scope of the task? Phili said internal government communication wasn’t effective. If it were effective, then outdated infrastructure in South Durban would have been replaced. Storm water systems are non-existent in some places, she said.
Phili said the success of KZN’s public-private partnerships could help address key vulnerabilities that business had warned about. A priority in the rebuild meant a deep look at infrastructure. In the case of water systems, this meant checking all the way back to dams.
“The feedback we’re getting is that the dams aren’t being maintained – which we need to address to avoid another catastrophic situation.” The city’s stormwater system needs urgent attention. “We’ve got aging infrastructure. We’ve got a whole list of developers that have been waiting for years to get on with the infrastructure upgrade. These could create much needed jobs – but we also need an environment secure from criminals out to destroy these investments,” said Phili.
Has KZN has forged a stronger sense of purpose from the floods? “Absolutely. We’re very resilient. Businesses are willing to rebuild to make sure this province works.”
But, Phili added: “At the same time we need government to help us to make sure that our investment is safe, that it’s not going to be compromised in any way. There are laws and a criminal justice system that ensures that those who do wrong spend a very long time in jail.”