Authors: Matshidze, Lindelani and Root, David
This paper evaluates the effectiveness of a risk allocation and sharing mechanism within South Africa’s Public Private Partnership (PPPs) framework. South Africa like most medium income countries is faced with an increase social expenditure, which widening budgets deficits. As a results of this the government reduces its infrastructure spend, which impacts on its infrastructure investment to reduce the budget deficits. Since the late 1990’s South African government launched a PPPs unit to assist in moberlising private sector financial resource to plug off of infrastructure financing deficits. However these arrangements brings along benefits and disadvantages. Benefits such as public sector access to private capital and expertise. However they also have a number disadvantages in terms of risks in terms of allowing private sector to perform private sectors functions. Sharing and optimum allocation of these risks is crucial in achieving project success factors. The question has been about South Africa’s government ability to safe guard and protects financial resources of the private sector. This paper uses a case study of a road project in Gauteng Province, South Africa, to evaluate risk-sharing mechanism within South Africa’s PPPs arrangement.
Keywords: component; PPPs, Infrastructure, Roads, Risks, Introduction