Public Private Partnerships of South Africa

South Africa is a leader in public–private partnerships in the southern African region, with a highly developed dedicated legal structure in place. The 1999 Public Finance Management Act (PFMA) and Treasury Regulation 16 cover national and provincial procedures while municipal public–private partnerships are

governed by the 2003 Municipal Finance Management Act (MFMA). The legal and regulatory framework for public–private partnerships defines differences between national and provincial PPPs, and municipal PPPs in terms of areas of interest and advocacy of public participation. However, affordability, value for money and risk transfers remain common objectives to both frameworks. A PPP unit was founded in 2004 to achieve standardisation and the swift financial close of projects. A unique feature of public–private partnership legislation in South Africa is the terms for Black Economic Empowerment (BEE) articulated as a compatible key objective. PPP legislation defines BEE requirements to alleviate both the precedence of inequality in South Africa and the inequalities that can arise from public–private partnerships in developing countries.

National public–private partnerships far outnumber the quantity of municipal projects in South Africa, though the Municipal Infrastructure Investment Client (MIIC) advocates PPPs and some have been achieved, such as the DTI Provincial Accommodation Project. Mistrust by labour unions still characterises the use of PPPs in municipalities, with anxiety surrounding the average unemployment rate of 26 per cent. Health care and transport are core areas for public–private partnerships in South Africa, with the build–operate–own–transfer model most prevalent.