By Richard Mantu

THE National Treasury has raised the bar in implementing South Africa's infrastructure projects by launching a comprehensive manual and standardised provisions under which public-private partnership (PPP) deals will be structured.

The PPP Manual provides practical steps to undergo when institutions undertake a partnership project and aims to empower institutions responsible for South Africa's infrastructure improvements and service delivery.

The standardised PPP provisions are extracted from the world's best practices, adapted to suit South African priorities. They aim to create certainty about the terms under which related deals will be structured to achieve better implementation.

Launching the manual and standardised PPP provisions in Johannesburg this week, Finance Minister Trevor Manuel said the manual was the first in the world to take stakeholders through the project cycle step-by-step.

"There really is no longer any excuse for public-sector managers who dilly-dally in implementing their mandates, and no reason for the private sector to doubt government's commitment to this delivery path," he said.

"That is what PPP projects are about. The public gets better, more cost-effective services; the private sector gets new business opportunities. Both are in the interests of the nation. Doubtless, it is a fine balance to strike in each deal," he said.

Manuel said PPP projects in South Africa were in their infancy. Capacity and progress should be measured with honesty, he said.

He said trust was another important factor in building partnerships between government and private sector, citizens and service providers.

"But even when every lawyer around the table has exhausted his supply of sub-clauses and annexures, there is still a residual space, that is unknown, and that relies on good faith and solidarity. Trust is the bedrock of partnership," said Manuel.

The release of the PPP manual and standardised PPP provisions follows the release of the code of good practice for black economic empowerment (BEE).

The code provides for a balanced scorecard with indicative targets and weightings for each element of the private party's equity structure, management, sub-contracting and local socio-economic impact.

It also guides institutions on how to make appropriate decisions about BEE targets during feasibility and procurement phases.

In the PPPs concluded to date, black equity has been successfully achieved at between 25 and 40 percent of the private parties' shareholding and sub-contracting in deals that have gone to a similar percentage of black enterprises.

SMEs have also benefited people at a local level, and black management control was acquired and extended in all the projects.
Source: Buanews