SADC PPP Case Studies

SADC Business Barriers

A set of case studies within the overall project, examining private sector experiences of Public Private Partnerships (PPP), has been developed by the Southern African Development Community (SADC), with support from GIZ.

These case studies were commissioned in recognition of the difficulties which can accompany PPP, particularly in the context of developing countries. Limited experience, expertise and organisational resources put their successful implementation at risk in large parts of the region.

Given that PPP can be an instrument for financing infrastructure development in the SADC region, these systemic weaknesses are a constraint to private investment in infrastructure and they need to be addressed at both national and regional level.

A number of key constraints to effective PPP implementation have emegered from the case studies, including lack of infrastructure, fragmented decision-making, lack of clear policies, and corruption.

The case studies

The PPP case studies were commissioned as a rapid scan of a cross-section of PPPs, to see how the private sector partners had experienced PPP implementation. The case studies were not intended to be detailed analyses, but rather a scan to see if particular trends were emerging.

The six case studies are deliberately quite diverse in their nature:

PPP Name Country(ies) Sector PPP type
N4 Toll concession South Africa
Mozambique
Transport Concession
Lesotho New Referral Hospital Lesotho Health Build Operate Transfer
Covane Community Lodge Mozambique Tourism Community-Public-Private Partnership
Walvis Bay Corridor Namibia Transport and trade facilitation Hybrid co-operation partnership
Daan Viljoen Nature Reserve Namibia Tourism Lease-rehabilitate-operate-transfer
Ilembe water South Africa Water Concession

The methodology used for developing the case studies was simple and involved the following:

  • A review of documents and websites
  • Drafting of an overview of the PPP
  • Identifying missing information
  • Conducting telephonic interviews to supplement information

The constraints of the study mainly related to the fact that in some cases the people responsible for planning and implementing the PPPs, particularly at the outset, had moved on or were difficult to trace. A second constraint is that in some cases the private partners were reluctant to be too critical of the public partner, for fear of endangering the relationship. This also meant that in some cases middle managers gave information, as opposed to the top management.

SADC has recognised the need to enhance the enabling environment for private sector participation in infrastructure. Improving the attractiveness of private sector investment in the SADC region requires strengthening several key areas.

The key constraints from a private sector perspective

It is interesting to note common themes running through the case studies in terms of constraints identified by the private partners and these include the following:

  • Lack of clear PPP policy in countries
  • Low capacity and no institutions responsible for driving PPPs
  • The private sector did not understand local laws and customs
  • Low quality and age of infrastructure
  • Bureaucratic procedures and fragmented decision-making
  • Affordability of the service by local citizens
  • Suspicion of private sector motives
  • Corruption

Background

The PPP case studies were commissioned by GIZ for the SADC-DFRC PPP Network.

The establishment of this network goes back to June 2010, when the SADC Ministers of Infrastructure of the Southern African Development Community (SADC) mandated the SADC Secretariat, working closely with SADC Development Finance Resource Centre (DFRC), to establish mechanisms for expanding use of Public Private Partnerships as an instrument for financing infrastructure development in the SADC region.

Consultative meetings involving the SADC secretariat (Trade, Industry, Finance and Investment as well as Infrastructure and Services Directorates), the SADC DFRC and international cooperating partners, were subsequently held, and a draft PPP Capacity Development Strategy for SADC was developed. An agreement was also reached to convene a regional forum on PPPs which would bring together a wider cross-section of stakeholders from the public and private sectors, as well as the international communities.

This regional forum on PPPs was launched in February 2011 in Midrand, South Africa, where agreement was reached to launch the SADC PPP Network as a platform for exchange of information and experiences, and as a basis for capacity development in PPP in the public and private sectors as well as promoting harmonisation in PPP policy and regulatory frameworks in the region.

The successful implementation of PPP programmes requires a number of enabling factors, which include adequate institutions for coordinating and supporting the necessary legal, organisational and policy framework. Most SADC countries are developing, or are in the process of developing such programmes, but limited experience, expertise and organisational resources put their successful implementation at risk in large parts of the region.

These systemic weaknesses are a constraint to private investment in infrastructure and they need to be addressed at both national and regional level. Poorly organised PPPs result, inter alia, in project failure and/or excessive bid costs for the private sector, procurement delays and poor project execution. This can, in turn, contribute to dissatisfaction with the instrument by public sector clients and the general public.

The SADC PPP Network, together with the relevant ministries in member states, focuses on improving

  • the respective fiscal and budgetary framework in the member states;
  • the legal, institutional and regulatory framework;
  • the administrative and technical capacity to develop and supervise projects;
  • the domestic financial capacity; and
  • political support for PPPs.

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