Factors limiting public-private partnerships in South Africa's water sector

Abstract

South Africa is a water scarce country with climate change impacting water security for the worst. Its economy is also struggling, causing its infrastructure spend to decline. There is currently a historical backlog in water infrastructure spend, with a lack of critical skills in the sector to utilise the little money that is available. Public private partnerships (PPPs) is a proven method for emerging economies to address their infrastructure backlogs by utilising the support from private organisations. This has been done for decades throughout the world and in the past 20 years, in many sectors in South Africa. National treasury developed world-class PPP guidelines in 2004 but there is little evidence of it bearing much fruit in aiding the water sector of late. This qualitative study focusses on establishing whether PPPs should be pursued for water infrastructure projects, when compared with other financing and development models and also on what the limiting factors could be that stifle this method of infrastructure development. Interviews were held with 13 experts on both sides of the PPP spectrum. It was found that PPPs are a highly advisable option to consider in order to solve for the infrastructure backlogs in the South African water sector. PPPs can offer elements that can kick-start a virtuous cycle of economic growth. Furthermore, it is found that the main reasons for the lack of PPPs lie with government and more specifically in a the lack of political will, onerous processes and legislation, and a lack of able resources that can manage PPPs.