Real Estate Investor Magazine South Africa September 2016 | Page 38

DEVELOPMENT Public Private Partnerships Powering the economy BY KATE THOMPSON-DUWE W ith South Africa’s credit rating having avoided being downgraded to ‘junk status’, Professor of Finance at the Wits Business School, Kalu Ojah, recently intimated that Public-Private Partnerships (PPPs) have a role to play in growing our economy. This is not a new strategy; Finance Minister Pravin Gordhan repeatedly emphasised the need for PPPs in the 2016 Budget Speech. The Budget tabled was guided by the National Development Plan 2030 (NDP) which has PPPs listed as one of the critical actions to be undertaken to reduce poverty and inequality by 2030. Gordhan outlined the government’s investment in cities and urban networks which includes over 90 integrated land development projects, valued at more than R130 billion, that are in progress to reshape our cities in partnership with the private sector. The renewal of declining urban centres is a crucial component of economic policy due to them being a sizeable source of regional economic growth, a significant contributor to gross national domestic product and a vital source of revenue for local government. This, coupled with the United Nations estimating that 71.3% of South Africa’s population will be living in urban areas by 2030, highlights the need for PPPs geared towards urban renewal. Cities across South Africa are already reaping the 36 SEPTEMBER 2016 SA Real Estate Investor benefits of the involvement of PPPs in the renewal of urban areas. Nationally, these include examples such as the Braamfontein regeneration project in Gauteng, Durban’s Facilities Management Priority Zone project and various PPP projects in the Western Cape. The Priority Zones Project has successfully reduced crime, produced a cleaner environment and attracted the public and tourists back to Durban’s inner city. Braamfontein has been transformed from a dilapidated business district to a well designed urban neighbourhood lined with busy bars, clubs and restaurants, chic hotels and art galleries. This is as a result of local government’s multi-million rand regeneration programme for the area, supplemented by significant private-sector investment. The Priority Zones Project has successfully reduced crime, produced a cleaner environment and attracted www.reimag.co.za