Government Must Level the PPP Playing Field to Encourage Private Sector Investment
The South African government is actively pursuing innovative funding mechanisms to enhance infrastructure financing and delivery . These measures aim to optimise the infrastructure value chain , improve efficiency and attract private sector participation . Leading consulting engineering and infrastructure advisory practice Zutari is seeing an uptick in local projects following the ‘ 2024 Budget Review : Public-Sector Infrastructure and Public-Private Partnerships Update ’ released in February by National Treasury .
“ There are projects coming to market to which we look forward to securing and continue to serve South African and international clients . Having successfully tendered for government work in the past , hopefully we will be one of the consulting engineering firms that continue to sustain and grow the economy through the work we do ,” comments Vishaal Lutchman , MD , Transport at Zutari .
The power sector is being unbundled to allow for increased private sector involvement , while the second major area of reform is around rail and port infrastructure . The concept of a landlord model was postulated many years ago . With the current slip in operations , it is under reconsideration as a solution whereas it was resisted in the past .
The corporatisation of the Transnet National Ports Authority and establishment of the Infrastructure Manager are two longawaited reforms . “ I am , however , cautious that the factors driving the decision to reform masks failures in the two ecosystems that will not be addressed in the transition , giving exposure to downstream risks ,” warns Lutchman .
This comes in the wake of the announcement of a three-year R943.8 billion infrastructure investment programme involving State-owned companies , municipalities and provincial and national government . Spending on buildings and fixed structures will increase by an average of 15.9 % during this period .
“ Investing in infrastructure is critical for South Africa ’ s economic development and social progress ,” highlights Stephan Jooste , MD , Management and Sustainability at Zutari . “ Infrastructure investment has been shown to drive job creation , reduce unemployment and stimulate economic activity , particularly benefiting marginalised communities and redressing societal inequalities through improved services .”
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