What are public-private partnerships?

Public-private partnerships (PPPs) are collaborations between government and private sector organisations to jointly deliver services or infrastructure projects. Through shared resources and expertise, they aim to address public needs efficiently. PPPs can span sectors like healthcare, infrastructure and education, fostering innovation and leveraging investment for social benefit.

How can effective public-private partnerships be created?

Government accepts that the South African economy’s recovery and reconstruction requires a strong public-private partnership framework focused on structural reforms . While the private sector can inject capital, skills and innovation towards public development projects, it’s the government’s role to create an enabling environment that can allow PPPs to succeed. This includes: responsible and accountable leadership and alignment within the public sector structuring bankable projects through concession arrangements and other public-private funding models a clear and transparent policy framework Such certainty and confidence will be key to convincing investors that there is a workable framework for realising financial returns, and thus for attracting greater private sector investment. To this end, the government is working hard to remove the hurdles involved in PPPs. Richard Wainwright, Investec Bank CEO and chairman of the Banking Association of South Africa (BASA), says the key focus in the shorter term should be on establishing a smaller number of effective projects to provide the proof-of-concept for effective PPP models that can get the infrastructural flywheel turning. Conversely, with every project that gets delayed or snarled up in red tape, the investment case deteriorates.

Why are public private partnerships important?

Public-private partnerships play a key role in improving the ability of governments to meet the public’s infrastructural and developmental requirements. By leveraging private sector resources and expertise, governments address gaps in their capacity, enhancing service delivery, spurring economic growth, and fostering sustainable development for communities.

Public-private partnerships

Across South Africa, new synergies between the private and public sectors are emerging to tackle the blockages hindering economic growth in the country.

By channelling the resources and expertise of diverse stakeholders to efficiently address public needs, these emerging public-private partnerships (PPPs) are proving a gamechanger in addressing the country’s many developmental and infrastructure challenges.

Regional nuances emerge

Infrastructure

Increasingly, the state requires the assistance and involvement of the private sector to either operate or deliver on bulk infrastructure, and as such, opportunities for public-private partnerships seem endless.

Plugging the energy crisis is a make-or-break challenge South Africa needs to overcome, with an estimated 4 000 to 6 000 megawatt deficit in generation capacity to what the economy requires. This has sparked huge private sector investment in alternative energy solutions: South Africa will break into the world’s top-10 biggest solar photovoltaic markets according to a recent Bloomberg report, with about 3.3 GW of solar additions in 2023.

There are also green shoots in Transnet’s willingness to work closer to the private sector to deal with South Africa’s ongoing port congestion woes and improve its sea freight capabilities. Private companies can benefit from public sector opportunities by participating in the concessions and tenders of Transnet’s Port Master Plan, such as the Natcor (Natal corridor railway line) container line, which is out to tender on a 10-year concession.

Education

South Africa suffers from poor returns on its investments in education. Despite receiving the largest share of government spending of any portfolio, South Africa’s per capita learning outcomes are the worst among low- and middle-income countries, according to the Centre for Development and Enterprise (CDE).

PPPs are playing a key role in turning these fortunes around. In addition to building new schools and infrastructure, PPPs exist to fund greater teacher training capacity as well as supplementary programmes to improve the quality of education.

There are also initiatives from private impact investors and funds contributing to improved education outcomes in South Africa.

Healthcare

Prominent healthcare activist Dr Aslam Dasoo of the Progressive Health Forum suggests PPPs must play a crucial role in combatting the deep-rooted challenges in delivering universal healthcare in South Africa.

By engaging in partnerships that prioritise equitable access and quality care, the government can harness the efficiency and accountability of the private sector while ensuring that healthcare remains a public good. Ultimately, embracing PPPs in the healthcare sector represents a pragmatic and inclusive approach to building a healthier future for all South Africans.

What are public-private partnerships?

What are public-private partnerships?

Public-private partnerships (PPPs) are collaborations between government and private sector organisations to jointly deliver services or infrastructure projects. Through shared resources and expertise, they aim to address public needs efficiently. PPPs can span sectors like healthcare, infrastructure and education, fostering innovation and leveraging investment for social benefit.
How can effective public-private partnerships be created?
How can effective public-private partnerships be created?

Government accepts that the South African economy’s recovery and reconstruction requires a strong public-private partnership framework focused on structural reforms.

While the private sector can inject capital, skills and innovation towards public development projects, it’s the government’s role to create an enabling environment that can allow PPPs to succeed. This includes:
- responsible and accountable leadership and alignment within the public sector
- structuring bankable projects through concession arrangements and other public-private funding models
- a clear and transparent policy framework
Such certainty and confidence will be key to convincing investors that there is a workable framework for realising financial returns, and thus for attracting greater private sector investment.

To this end, the government is working hard to remove the hurdles involved in PPPs. Richard Wainwright, Investec Bank CEO and chairman of the Banking Association of South Africa (BASA), says the key focus in the shorter term should be on establishing a smaller number of effective projects to provide the proof-of-concept for effective PPP models that can get the infrastructural flywheel turning. Conversely, with every project that gets delayed or snarled up in red tape, the investment case deteriorates.
Why are public private partnerships important?

Why are public private partnerships important?

Public-private partnerships play a key role in improving the ability of governments to meet the public’s infrastructural and developmental requirements. By leveraging private sector resources and expertise, governments address gaps in their capacity, enhancing service delivery, spurring economic growth, and fostering sustainable development for communities.