http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.34Change: -0.01
R/$ = 10.68Change: 0.03
Au 1294.21 $/ozChange: -0.38
Pt 1463.50 $/ozChange: 3.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 04, 2012

Future PPP model must balance public, private risk more ‘equitably’

Back
Africa|Education|Housing|PROJECT|Projects|Resources|Water|Africa|South Africa|Columbia University|Energy|Logistics|Ebrahim Patel|Infrastructure|Joseph Stiglitz|Water|Bearing
Africa|Education|Housing|PROJECT|Projects|Resources|Water|Africa|||Energy|Logistics|Infrastructure|Water|Bearing
africa-company|education-company|housing|project|projects|resources|water-company|africa|south-africa|columbia-university-facility|energy|logistics|ebrahim-patel|infrastructure|joseph-stiglitz|water|bearing
© Reuse this



Economic Development Minister Ebrahim Patel has called for a new dialogue on the appropriate structuring of public–private partnerships (PPPs) in South Africa, which was gearing up to implement a multitrillion-rand infra- structure roll-out over the coming two decades.

Speaking at the recent yearly Economic Development Conference, in Ekurhuleni, Patel said there was an opportunity for the private sector to be integrated into the 17 strategic infrastructure projects, or Sips, outlined by the Presidential Infra- structure Coordinating Commission. Sips included logistics, energy and water programmes designed to catalyse growth and investment in five geographically defined regions, or corridors. Also included were housing, health, education, communications, science and cross-border projects and initiatives.

However, Patel argued that future PPPs would have to embrace an “equitable risk transfer” to the private sector, as opposed to the models deployed in the recent past that had left the public sector bearing the bulk of the risk burden.

There was currently widespread unhappiness in the private sector about the stop-start nature of PPP projects, some of which had also been cancelled after protracted delays.

Some Concern

There was also some concern that the current infrastructure plan was overly dominated by State-owned companies and departments, with the private sector’s role limited to buying government or utility bonds and supplying material and technical inputs to projects.

Patel said there was a need to open a discussion on the “appropriate” structuring of PPPs.

But he also stressed that opportunities exist for innovative funding, “including accessing retirement funding as equity in infrastructure projects”. No reference was made, though, to prescribing that specific resources be set aside by pension funds to support the infrastructure plan.

Patel received support for his appeal for more equitably partnerships with the private sector, as well as for mobilised domestic savings in favour of infrastructure, from renowned economist Professor Joseph Stiglitz.

The Nobel Prize in economics recipient, who is currently associated with Columbia University, argued that skewed risk alloca- tions were unhealthy. There was a need, therefore, to “look beyond the rhetoric” around partnerships in infrastructure and calculate the “cost of capital, who gains and who carries the risk”.

Stiglitz noted, too, that a number of East Asian economies had successfully channelled pension funds in support of the infrastructure that had been developed to facilitate their rapid export-led growth strategies.

South Africa should, thus, consider the carrots and sticks needed to help direct domestic savings towards projects that would stimulate future growth and investment.

Stiglitz also welcomed South Africa’s long-term focus on infrastructure, which he said would have both demand- and supply-side multiplier effects.

The average returns associated with such infrastructure programmes that had been pursued elsewhere had been high, even when the inevitable project failures were included in the calculation.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
More
 
 
Latest News
While the global economy continues to battle growth headwinds as it slowly emerges from a lingering post-recessionary phase, the greatest inhibitors to South African economic development are largely domestic and within government’s control, Finance Minister...
Building materials firm Infrasors said on Friday that FD Marius Potgieter, who had occupied the position since July 1, 2009, had tendered his resignation and would leave the company with immediate effect.  Construction supplies manufacturer Afrimat FD and Infrasors...
Telecommunications group Telkom on Friday announced that, following extensive facilitated consultations and deliberations, management and organised labour had reached consensus that the company’s current restructuring process would proceed.  “The parties have...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks