Private sector welcomes draft PPP regulations

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The private sector has welcomed the draft amendments to National Treasury’s Public Private Partnership (PPP) Regulations which are currently out for public comment.

Treasury says the amendments to the regulations are aimed at building a stronger public private partnership pipeline and improved management of Unsolicited Proposals (USPs).

PPPs use private sector funding for large-scale infrastructure projects such as roads, water works, bridges and hospitals.

The National Treasury says the amendments to regulation 16 are aimed at encouraging the private sector to propose more Unsolicited Projects.

It emphasises that unsolicited proposals from the private sector must be either innovative or serve the procuring government department’s strategic objectives.

Director of Infrastructure Finance in the Budget Office of the National Treasury, Dorcas Kayo, elaborates.

“The incentive is in two-ways. One we are saying where there is a two-stage bidding process, you are automatically prequalified and shortlisted into the process.  The other one is on the reimbursement of preparing the feasibility study – as we know that this can be quite expensive – and we recognise that. We’re saying if you the bidder provide a competitive bid, but fail to win the tender, then you will be reimbursed for the development of the feasibility study.”

Senior Legal Advisor at Rand Merchant Bank, Viola Ngwenya, says the latest provisions to ensure project continuity in the proposed amendments of the regulations are encouraging.

“There’s a great excitement that PPPs are going to get started again. From a developer’s perspective, it’s really having a pipeline that’s understood, having the continuity of projects like where you don’t end up investing in a project with no assurance that you’ll win and the process gets stopped…so we’re encouraged to see regulations that prevent that. And then also the timelines like for procuring approvals, those things really have to be looked at.”

The draft amendments to National Treasury Regulation 16 and Municipal Regulation 309, which govern PPPs, were published for public comment in February with a revised deadline of April 15 for comments.

VIDEO | Black Business Council CEO, Kganki Matabane, elaborates on the PPP Regulations: