South Africa's infrastructure service delivery needs: The role and challenge for public‐private partnerships

Abstract

South Africa's development challenges include over R100 billion needed in investment in infrastructure over the next ten years. Municipalities lack the institutional and financial capacity to address this alone and have to raise private sector finance to supplement their own resources and government grants. The borrowing of capital requires a well‐run administration that is able to raise sufficient revenue to meet all running costs, including loan redemption. Municipalities are showing increasing interest in municipal service partnerships (MSPs), including public‐private partnerships (PPPs), as a way of improving efficiency and accessing capital markets. This raises a number of challenges that include understanding and dealing with the continuing negative perceptions of the role of the private sector; clarifying the roles of the private sector and the government, especially local government; and addressing those issues necessary to produce effective and efficient MSPs in South Africa.