The government will reform the regulation of public-private partnerships in hopes of attracting more private sector participation.

This is part of National Treasury’s strategy to move the economy onto a higher and more inclusive growth path.

During his Medium Term Fiscal Policy Speech (MTBPS) on Wednesday, Finance Minister Enoch Godongwana said one of the pillars of growing the country’s economy is effective investments in infrastructure.

Modification of the regulations on public-private partnerships

The government’s decision to amend the regulation of public-private partnerships (PPPs) aims to successfully mobilize significant financing and technical expertise from the private sector to increase the limited capacity and capabilities of the public sector.

“We are amending the PPP regulations to simplify the requirements for carrying out these projects,” the minister said.

He said amended Treasury Regulation 16 will be made public before the end of November 2024 for implementation in 2025/26. While Regulation 309 on municipal PPPs will be finalized by June 2025.

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Private investment is needed

“We are building dedicated capacity to plan, prepare and design programs that will generate a credible pipeline of projects that can be brought to market. »

However, he added that there are already projects that require private investment.

The first is the Department of Water and Sanitation’s Office of Water Partnerships, which already has two priority programs for non-revenue water and wastewater recycling that require private investment.

“The resolution of the Gauteng Freeway Improvement Project has unlocked a project portfolio worth R85 billion for the toll-free network over the next three years. We improve the capital budgeting process.

A guide to submitting proposals

Minister Godongwana added that Treasury would release a guide for submitting proposals in January 2025,

The Department of Transport, Transnet and South Africa’s Passenger Rail Agency are finalizing a list of priority projects that will be brought to market in 2025/26 for the private sector to participate.

“The Infrastructure Budget Facility is being reconfigured into a centralized gateway for all major infrastructure projects that require budgetary support to move forward. »

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Efforts to increase funding

He added that the government is working to increase the number of donors in order to diversify the financing of public infrastructure through new mechanisms and instruments.

“These include build-operate-transfer (BOT) structures and other concessions. »

Godongwana said budgetary support is being offered for projects under the 2024 Infrastructure Budget Facility (BFI).

These include projects such as two hospital projects, including a district hospital in Limpopo; expansion of landside capacity at the Cape Town Container Terminal; and capacity improvements on the rail network from Waltloo to Gqeberha.

“A call for proposals will be issued this year for funders interested in supporting these projects, as well as urban rail revitalization, disaster relief and metropolitan business services projects.”

“The result will be faster delivery of infrastructure that supports economic growth, expanding access to basic services and boosting job creation. »

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