Nelspruit and Dolphin Coast: Lessons from the first concession contracts

Abstract

South Africa's first two long‐term concession contracts for water and sanitation were signed in early 1999. These complex public‐private partnerships (PPPs) in Nelspruit and Dolphin Coast will use private sector management expertise, as well as huge amounts of private capital investment, to address service delivery challenges in both areas. Especially important will be the extension of essential services to previously disadvantaged residents of both municipalities. The processes of preparing and negotiating these deals have been long and difficult. Councillors and officials have had to overcome a series of obstacles on their way to closing the deal, including fundamental misunderstandings about how such projects work on the part of unions, the general public, other government officials and even some members of South Africa's financial services community. This article provides an account of how and why these PPP projects were developed, and offers some of the key lessons learned regarding how to improve the process in the future.