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