http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.35Change: -0.06
R/$ = 12.15Change: 0.01
Au 1189.85 $/ozChange: 1.35
Pt 1113.50 $/ozChange: -2.50
 
 
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 Letters 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|Export|Health|Housing|PROJECT|Projects|Resources|Water|Africa|South Africa|Columbia University|Energy|Logistics|Ebrahim Patel|Infrastructure|Joseph Stiglitz|Water|Bearing
Africa|Education|Export|Health|Housing|PROJECT|Projects|Resources|Water|Africa|||Energy|Logistics|Infrastructure|Water|Bearing
africa-company|education-company|export|health|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
Creamer Media Senior Deputy Editor
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
More
 
 
Latest News
All grades of petrol will increase by 47c/ℓ on Wednesday, the Department of Energy announced on Friday. The reef price for unleaded 93 and LRP petrol was currently standing at R12.61/ℓ, while unleaded 95 cost R12.89/ℓ.
JSE-listed Tower Property Fund has acquired the Link Hills Shopping Centre, in Waterfall, KwaZulu-Natal for R160.9-million from The Sabre Trust and Matlu Family Trust. The shopping centre, on Inanda Road, was situated in an upper-high-growth residential area, next to...
South Africa recorded a trade deficit of R2.51-billion ($207-million) in April from a revised shortfall of R9-million in March, data from the revenue agency showed on Friday. Exports fell by 7.5% to R84-billion, while imports were down 4.8% to R86.5-billion on a...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $96 Close
Subscribe Now for $96