The programme drew on the capacity of the private sector, avoided market distortions and encouraged innovation. Projects were linked to institutions with the capacity to sustain them.
Infrastructure  
Investment and Markets
Tourism
Business Process Outsourcing
Community Investment
Public Services
Education
Infrastructure
Public Works
Partnerships and Resources
Partnerships, dialogue and
communication
Resources
Communications
Corporate Partners
Board and Management
People in the Projects
Introduction
Exhibit
Stories
Credits
The purpose of the Business Trust Support Programme for Accelerated Infrastructure Development was to mobilise private support for the development of municipal infrastructure.
 
It was developed in the context of a historical infrastructure investment deficit with public investment falling from 8,1% of GDP in 1976 to 2,6% in 2002. In response, the government established a large-scale public infrastructure programme with annual spending rising from R85 billion in 2006 to R235 billion in 2009. However the capacity of municipalities to participate in the programme was low with 71% of local authorities under-spending their capital budgets in 2007. It is at this level where the quality of life depends on access to clean water, sanitation, electricity and waste removal.
The strategy of the Business Trust support programme was to:
Improve project preparation: Projects developed at the municipal level frequently fail because they are poorly prepared.
Enhance procurement: The formal link between the public and private sectors in infrastructure provision is the procurement system. These systems are often complex, time consuming and subject to maladministration.
Support delivery: Municipalities require support to meet service delivery obligations.
Monitor access: The aim of providing universal access to basic services can’t be met without tracking changes in access for communities.
Improve engagement between public and private sectors: Private contractors doubt the information available on public infrastructure plans and public officials are sceptical about the commitment of the private sector to meet development objectives.
The programme operated in partnership with the Presidency and the National Treasury, and provided support to the Department of Cooperative Governance. It was built on a careful analysis of needs and opportunities. It aimed to draw on the capacity of the private sector, avoid market distortions and encourage innovation. Projects undertaken were linked to institutions with the capacity to sustain them.
The programme drew on the capacity of the private sector, avoided market distortions and encouraged innovation. Projects were linked to institutions with the capacity to sustain them.
 

 
Results
Improve project preparation
Ukulungisa Project Preparation Fund created
The Fund which was established by the Business Trust in 2009 enables municipalities to procure project preparation services from the commercial consulting industry.
By 2010, 22 projects were in preparation with a combined value of R637 million.
That figure was set to rise to R826 million by December 2012 with 100 000 households benefitting from improved water, sanitation and other services.
Enhance procurement
New procurement framework developed
The procurement framework enables local authorities to select from a range of procurement options and streamline the procurement process. A pilot project with the Limpopo Department of Education showed how over 2 000 procurement interactions could be cut to under 200 over a five-year period. These standards were adopted by the Construction Industry Development Board.
Support delivery
Municipal Infrastructure Service Agency design developed for the Department of Cooperative Governance
R590 million was provided in the government estimates of national expenditure for the establishment of the agency.
Monitor access
New index created to track access to services
The Universal Household Access to Basic Services Index tracks access to water, sanitation, refuse and electricity across municipalities on an annual basis.
Improve engagement
Infrastructure dialogues series established
Dialogues between public and private managers initiated by the Business Trust have been institutionalised in the Development Bank of South Africa with support from the Cities Network.
 

 
Lessons
Public infrastructure depends on private delivery
The accelerated provision of public infrastructure depends on the procurement of finance, management, operating capacity and supply inputs from the private sector.
PPPs are not a panacea in themselves
There is a need for sector-specific procurement strategies that locate state, private and partnership provision for finance, management and operating capacity in a logical framework.
Improved procurement is key to effective service delivery
Improved participation by the private sector requires improved procurement frameworks, improved information on input supplies and enhanced communication between the public and private sectors.
Support needs to be organised
An array of “support programmes” was found. These are provided by commercial firms, NGOs and various parts of government. In contrast to the perceived need for more support, this indicated that there is a need for greater capacity to organise the support available.
Improved participation by the private sector requires improved procurement frameworks, improved information on input supplies and enhanced communication between the public and private sectors.
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