Public–private partnerships are critical critical to achieving SA's NDP goals - CNBC Africa

Public–private partnerships are critical critical to achieving SA's NDP goals


by Trust Matsilele 0

PPPs critical to achieving NDP goals. PHOTO: Wikipedia

Public private partnerships (PPPs) are critical to South Africa realising its National Development Plan goals, according to Mohan Vivekanandan, Group Executive for Strategy, Development Bank of Southern Africa (DBSA).

He also added that, in the renewable energy sector, about 193 billion rand had been brought into the sector through PPPs.

“We are in a position where we have to find ways to crowd private investment especially in economically viable projects due to our debt to GDP ratio.”

He also warned that South Africa's debt to GDP ratio was now close to 50 per cent comparable to less than 20 per cent before the 2009 global financial crisis adding the economy has to find ways to crowd in the provate sector.

Godwin Khosa, CEO, National Education Collaboration Trust, said the education sector was seeing benefits of public-private partnerships.

“In the education space, we are faring well in sectors requiring hard infrastructure investment. We have established a partnership between business, government, labour and civil society so as to improve the quality of education and software infrastructure investment,” said Khosa.

“All of the sectors have come into this collaboration in a big way with government, for the first time making contribution available to an independent entity that receives resources from the private sector as well.”

However, fortunes have been different in the construction sector.

Mike Upton, Former CEO, of Group Five says the construction sector has experienced a robust decade.

“In the industry where I come from as we have seen four or five projects that have been successful against 15 failing during the same period,” said Upton.

“Projects are not necessary un-bankable but the challenge is with ideology and lack of clarity. We have gone backwards as a country in terms of accessing huge appetite for private debt and equity,” he said.

“We seem to want to build the entire infrastructure through the fiscus, this is not possible.”

Edward Kieswetter, Group Executive, Alexander Forbes said there was need to have a more focused approach when it comes to allocation of resources.

“There is no shortage of money, the challenge is in attracting and directing these resources properly,” he said.

He added that infrastructural investment was not supposed to be a drain in the fiscus and public resources as there is private sector money.

“There are enough examples from which we can learn from as far private sector money is concerned especially from countries like China, Singapore and South Korea.”