Public-Private Partnerships can downgrade-proof Gauteng

13 July 2017

Given the current economic climate, and the recent downgrades of South Africa’s sovereign status by ratings agencies, Gauteng Finance MEC Barbara Creecy should invest more effort in advancing Public-Private Partnerships (PPP) in the province to “downgrade-proof” our ability to build new infrastructure.

Cited by Gauteng Premier, David Makhura as the catalyst for stimulating economic growth, infrastructure projects will be key to reviving the economy of the province.

However, given the limited resources available to government, it would be advantageous to think outside the box and find creative ways to launch new infrastructure projects that will be of a high standard.

We should learn from the experience of Greece who are emerging from a devastating financial situation.

There for example they launched the 24 Schools PPP project in the wider Athens area aimed to address the existing quantity and quality need for schools, covering 6 500 students across 10 municipalities. The benefits of this project, once completed, included the timely and enhanced delivery of schools to improve educational outcomes, better maintenance through the lifetime of the project, high service standards, the response to user needs, and significant savings in costs. This is because the private sector brings the following advantages:

Access to better interest rates;Delivery of projects more efficiently; andBetter absorption of the risks involved in carrying out projects.

Subsequent to the 24 Schools PPP project having been rolled out, there have been 10 more successful PPPs in Greece spanning sectors including waste management, transport, ICT and broadband.

Given that many of the historical challenges with infrastructure projects in Gauteng stem from the fact that the Department of Infrastructure Development (DID) does not have the in-house expertise to see projects to completion or on time, the dynamics of PPP projects will bring on board cost savings, greater accountability and professionalism.

These projects will also stimulate real, meaningful jobs with skills transfer – something beyond what the current Expanded Public Works Programme (EPWP) has to offer participants.

If this ANC-run Provincial Government is serious about getting Gauteng working, then it would champion PPP projects with full enthusiasm. Failure to do so will see the economy continue on its haphazard road to nowhere.

Issued by Mike Moriarty, DA Gauteng Chief Whip, 13 July 2017