Bara is one of the public private partnerships projects that are being implemented by the provincial government.
COMMENT
Liesel Lombaard
South Africa is blessed with strong capital markets, a competitive private sector, proud democracy and a robust economic outlook. Yet, in the current climate of declining growth, emerging entrepreneurs, a need for new jobs and a concerted drive to improve public service delivery, South Africa's public private partnerships mechanism provides a great opportunity to galvanise this energy for the common good.
South African law defines a public private partnership as a contract between a public sector institution and a private party, in which the private party assumes a substantial financial, technical and operational risk in the design, financing, building and operation of a project.
The private sector has much to offer in terms of financial resources, people skills and experience as an investment in public infrastructure and services.
It is through partnerships that public and private sectors can both achieve their goals to the benefit of everyone in the province.
This will bring certainty, improved efficiency, affordability, reduced risk perception and thus better delivery cost. This can be possible by leveraging private sector finance and expertise aimed at enhancing service delivery.
By its nature, a public private partnership entails:
• targeted public spending, principally on outputs to agreed standards;
• leveraging private sector financing and efficiencies;
• allocating risks to the party best able to manage the risk.
The vision of the Gauteng public private partnership unit is to provide regulatory advice to all public private partnership initiatives, contributing to economic growth, development, employment opportunities, and promoting an enabling environment for infrastructure delivery, in both provincial and municipal sphere.
Public private partnerships in the province speak directly to the strategic goal of the Gauteng provincial government of "an efficient, effective and development orientated public service".
They are therefore inextricably linked to the Gauteng provincial treasury's broad goal to promote sustainable public private partnerships for the infrastructure development that is crucial for the enhancement of service delivery.
The targets that have been agreed for investment in infrastructure, empowerment, small business development and public services can only be met through rapid growth in well-designed public private partnerships through which private finance is effectively mobilised.
The diverse interests of the public and private sectors can be harnessed for the collective good. This is what public private partnerships are about.
The public sector gets better, more cost effective services while the private sector gets new business opportunities.
Both are in the interest of South Africa.
The primary function of Gauteng's provincial treasury will be to regulate the public private partnership sector in Gauteng to ensure delivery in return for the state's very significant financial investment. These financial investments through public private partnerships are critical in meeting the socio-economic needs of the people of Gauteng, which is one of the most important priorities of the provincial government.
Economic growth, job creation and poverty alleviation are such immense challenges that the government cannot meet alone.
Furthermore, although the government has implemented a range of infrastructure delivery programmes that have contributed significantly to increased access to services, a large backlog remains.
Addressing backlogs in essential public services and simultaneously maintaining fiscal prudence require the country's budgetary resources to work harder.
Public private partnerships can be leveraged as an important mechanism for a solution.
Currently, the focus of public private partnership initiatives in the province are geared towards the following sectors where critical infrastructure needs exist such as health, sanitation, waste treatment, tourism and accommodation projects.
The Chris Hani Baragwanath Hospital Project is a public private partnership.
The objective of this flagship project is to improve medical service delivery in the district by refocusing Baragwanath Hospital as a specialist central referral hospital providing mainly level three and some level two medical services.
At the same time, the project will capacitate, build and revitalise satellite district hospitals to handle the high volume of level one and some level two medical services. The project will contribute to primary health care being more readily available where it is needed.
It will also result in an improvement in the quality and standard of the higher level medical care that is already provided by Baragwanath Hospital and will ensure greater cost effectiveness in the health care deliver system.
Liesel Lombaard is chief director of the public private partnership unit of the Gauteng treasury. [email protected] Gauteng Provincial Treasury, 14th Floor, 78 Fox Street (corner Simmons Sreet), Johannesburg City Centre. Telephone: 011 227 9002