http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.06Change: -0.14
R/$ = 11.66Change: -0.12
Au 1213.36 $/ozChange: -4.14
Pt 1189.50 $/ozChange: -1.00
 
 
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 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|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
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
More
 
 
Latest News
Salani Sithole
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
The Gauteng Provincial Government has outlined plans to develop a handful of “mega” human settlements as part of an ambitious long-term housing development strategy aimed at narrowing the housing backlog, with plans afoot to replace informal settlements with...
Eskom power stations
While State-owned power utility Eskom was unable to cut off electricity supply to some of its neighbouring trade partners, it was able to reduce energy exports by 10% when load shedding was implemented locally. The Department of Public Enterprise explained that Eskom...
More
 
 
Recent Research Reports
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.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
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.
 
 
 
 
 
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...
 
 
 
 
 
 
 
 
 
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