Public Private Partnerships. The South African Experience

Transcription

1 Public Private Partnerships The South African Experience Geneva UNECE 18 November Uven Bunsee PPP Unit, South African National Treasury 1

2 2 General Demographics Population: 44 m Credit rating S&P: BBB+ GDP growth: 2.1% (Jan-July 2003); 3% (2002) GDP (US$b): 2002:$147; 2003: $164 CPI year-on-year: 3.7% (Sept 2003); 7.7% (Jan-Sep 2003); 9.2% (2002). Exchange rate: R6.96/US$ (average Nov 2003) Repo rate: 8.5% (Nov 2003) People with HIV in 2003: est. 4.5 m Racial distribution - 78% African Black, 8,6% Coloured, 10,4% White and 3% Asian.

3 3 Forces for Change Surging infrastructure demand Capacity to deliver on demands New financing sources and mechanisms Technological change More experience of private participation in infrastructure

4 SA s regulatory framework for PPPs 4 THE CONSTITUTION (Act 108 of 1996) Section 217 (1): When an organ of state contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective. PUBLIC FINANCE MANAGEMENT ACT (Act 1 of 1999) Accounting Officer or Accounting Authority responsible for effective and efficient use of fiscal resources in the public interest Accounting Officer (Head of Dept) responsible and criminally liable in event of mismanagement Procurement is responsibility of the Accounting Officer/ Authority. National Treasury strong role in financial management

5 5 SA s regulatory framework for PPPs Strategic Framework on PPPs adopted by Cabinet PFMA Treasury Regulations (2000) First issued in terms of PFMA in May Reg 16 deals with PPPs, applies to all: national departments, provincial departments & Schedule 3 public entities and business enterprises [not to local govt - Municipal Finance Management Act] Reg 16 powers rest with National Treasury Key elements of National Treasury approval required: Affordability Value-for-money Appropriate risk transfer

6 6 Treasury Reg 16: Definition of a PPP Outsource Capitalisation is for government account Government buys specific services but retains risk Fixed and movable assets belong to government degree of risk transfer to private party PPP PP performs Institutional Function or uses state property & transfer of financial/technical/operational Risk Private party: Finances (whole or most) Designs/Builds/Operates Government purchases complete service and/or enables business Fixed assets belong to government Privatise Assets purchased Liabilities purchased Government has regulatory function only

7 7 PPP Project Life Cycle Register PPP Project Appoint Project Officer Appoint Transaction Advisors Feasibility study Prepare procurement documentation Bidding Process Selection of Preferred Bidder Negotiation Financial Closure Treasury Approval I: Demonstrating Affordability Treasury Approval II: Demonstrating Value for Money II A: Procurement Documentation II B: Value for Money Report Treasury Approval III: Financial Closure

8 8 Key PPP project life-cycle elements Treasury Approval I: Feasibility Rand Affordability Preliminary affordability Nominal affordability Adjustment for private sector efficiency Value for money Actual affordability and vfm NB: Value for money is only achieved if all appropriate risks are transferred to the private sector Public Sector Comparator (PSC) Riskadjusted PSC PPP reference private sector proposal

9 9 PPP Unit PPP Unit established in National Treasury (2000): Issues formal Treasury Authorisations ito Regulations Assists Depts in appointing Transaction Advisors Provides in-depth technical assistance to Departments through PPP project cycle Produces PPP policy and Guidelines Runs PPP Training courses (8000 officials trained to date) Publicises PPPs in progress (PPP Quarterly) Project Development Facility for transaction costs Is establishing black empowerment bidder-support facility

10 10 PPP projects on the books per Project Life-cycle phase Inception: 17 Feasibility: 15 Procurement:: 7 Negotiations: 3 Total: 42 Closed deals since Treasury PPP Regs in May 2000: 11 8 closed PPP deals prior to Treasury PPP Regs: (N3 and N4 toll roads, two prisons, SANParks)

11 11 PPP projects on the books Active PPP projects per sector registered with PPP Unit (excl closed deals) Government accommodation Transport (rail, airports, fleet, bus) Eco-tourism, conservation Health Education 12 IT 7 Defence

12 12 PPP Guidelines and Standardisation PPP Guideline Manual: (new edition Jan 2004) Project Officer - skills, roles, responsibilites - new Transaction Advisors - updated Project Development Facility: rules & procedures - new Introduction to Project Finance - updated Feasibility Study - updated PPP procurement process - updated Black Economic Empowerment - new PPP Contract Management - new Close-out report format - Case Study - new Accountant General and Auditor General requirements - new Standardised PPP Provisions: Contract terms (Dec 2003)

13 13 Secrets of Success Firm regulatory Framework Procedural certainty Unit located in the Budget Office of the National Treasury Access to foreign expertise Early drafting of guidelines (and continuous updating) Regular training Effective communications strategy Political support and commitment to the Programme

14 14 What would we have done differently? At this stage, nothing but current challenges are: Municipal PPP projects not currently regulated by National Treasury PPP Unit (Municipal Finance Management Act) Technical assistance v regulatory function Growing number of projects, delegation to provincial treasuries and capacity building Capacity of government departments to manage and implement PPP projects

15 15 Contact PPP Unit South African National Treasury 240 Vermeulen St, Pretoria South Africa Tel