The Case for Public-Private Partnerships in South Africa: Is South Africa Ready?

Original Study by Daniel Nugent  & Johan Burger.

South Africa’s National Infrastructure Plan 2050 indicates an intention to augment the financial capacity and technical expertise of its delivery agencies by engaging in strategic partnerships with the private sector through public-private partnerships (PPPs). The objective of this paper is to identify, measure and critically consider the critical success factors for the effective delivery of PPPs in South Africa.

PPPs have been part of South African infrastructure policy for over two decades.  Since the promulgation of South Africa’s PPP regulations in 2001, 34 PPP projects have been concluded at a total value of R89.3 billion.  However, fewer than one third of the number of projects initiated reached financial close.  In addition, after peaking in the 2011/12 financial year at an annual investment of R10.7 million, PPPs have largely fallen out of favor, dropping to just R4.8 billion five years later, remaining at this level since.  Looking ahead questions need to be asked about the viability of the PPP approach in delivering value given the large scale of public funds committed and long-term contractual commitments.

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