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Public Private Partnerships

Public Private Partnerships. Overview : South Africa’s Road Concession Market by Leo Rohrig CEO: Bakwena Platinum Corridor Concessionaire. PUBLIC SECTOR. OUTSOURCING. HIGH. PPP. PRIVATISATION. LOW. PRIVATE SECTOR. HIGH. LOW. PPP: Transfer of Risks, Rights & Obligations.

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Public Private Partnerships

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  1. Public Private Partnerships Overview : South Africa’s Road Concession Market by Leo Rohrig CEO: Bakwena Platinum Corridor Concessionaire PIARC - Durban 2003 - P.P.P in S.A.

  2. PUBLICSECTOR OUTSOURCING HIGH PPP PRIVATISATION LOW PRIVATE SECTOR HIGH LOW PPP: Transfer of Risks, Rights & Obligations PIARC - Durban 2003 - P.P.P in S.A.

  3. PPP’s in South Africa PIARC - Durban 2003 - P.P.P in S.A.

  4. Toll Road Concessions PIARC - Durban 2003 - P.P.P in S.A.

  5. Toll Road PPP : Parties • SANRAL: Implementing Authority • SPONSORS: Developers & Equity Providers • INVESTORS: Equity Providers • LENDERS: Loan Fund Providers + Advisors across spectrum PIARC - Durban 2003 - P.P.P in S.A.

  6. PPP : Breaking New Ground (1) • SANRAL • Political Acceptance • Transfer of Rights • Control Obligations • SPONSORS • Assuming New Risks • Funding Project Development • Accepting Delayed Returns PIARC - Durban 2003 - P.P.P in S.A.

  7. PPP : Breaking New Ground (2) • INVESTORS • Understand Infrastructure & Traffic • Associated risks • Different Return Profile • LENDERS • Setting Performance Criteria • Agree risk limitations • Implement Control Mechanisms PIARC - Durban 2003 - P.P.P in S.A.

  8. Transfer of Risks TECHNICAL : PIARC - Durban 2003 - P.P.P in S.A.

  9. Transfer of Risks COMMERCIAL PIARC - Durban 2003 - P.P.P in S.A.

  10. Sponsor’s new Focus PIARC - Durban 2003 - P.P.P in S.A.

  11. Development Process • Prequalification Request • Tender • Best And Final Offer ( BAFO ) • Preferred Bidder • Concessionaire - all at developers risk – Revised process now agreed PIARC - Durban 2003 - P.P.P in S.A.

  12. Participation of PDEs • Equity : ( Minority ) Shareholding • Project : D&C Joint Ventures D&C Sub Contracts O&M Sub Contracts Direct Assistance to SMMEs Limitations: Access to funds PIARC - Durban 2003 - P.P.P in S.A.

  13. Socio-economic Upliftment Employment :D & C activities ( current & future) O & M activities (permanent ) Training & Capacity Building: Skills transfer & Mentorship Bursaries & Scholarships Economic Growth Promotion : Community Participation Development Fund PIARC - Durban 2003 - P.P.P in S.A.

  14. Way Forward • Number of self-sustainable road sectors limited • Future schemes need increased government participation to lever private sector input • Equity holding • Subsidies • Guarantees • Apply agreed process changes • Advance the PPP process PIARC - Durban 2003 - P.P.P in S.A.

  15. Advance the PPP Concept Remove misperceptions Intensify information process e.g. fuel levy Unpack complex structures Sell benefits of PPPs Efficient service delivery Provide employment Free government funds Retain resources and expertise PIARC - Durban 2003 - P.P.P in S.A.

  16. The PPP Delivery • Construct / upgrade 1300 km National Road • Private Sector Funding : R 9 billions • Average Daily Traffic 230000 vehicles • + 10 % Heavies • 15 Mainline & 14 Ramp Plazas : 223 lanes • Electronic Toll Collection introduced • Enhanced road safety : SOS & IMS • 13300 new jobs created > multiplier effect 6 • R 108 mio for community upliftment PIARC - Durban 2003 - P.P.P in S.A.

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