In Partnership with Republic of Korea Ministry of Strategy and Finance

Value for Money: Identifying/Screening PPP Proposals in South Africa

In 1997, the South African Cabinet approved an inter-departmental task team to create a package of policy, legislative, and institutional reforms to create an enabling environment for PPPs. To facilitate this work, several pioneering PPPs were carried out by the South African Roads Agency, Department of Public Works and Correctional Services, South African National Parks, and two municipalities. The lessons learned from these preliminary projects helped in the development of a strategic framework for PPPs in 1999. The Parliament of South Africa passed the Public Finance Management Act (PFMA) in 1999. In 2000, the National Treasury enacted Treasury Regulation 16 in terms of the PFMA, which outlined the definitions and functions of PPP. This led to the establishment of the PPP Unit within the National Treasury and the publication of the Public Private Partnership Manual in 2004, which has since been updated to reflect changes to law and policy.

The Government Technical Advisory Centre (GTAC) provides specialized analytical support to the National Treasury for the assessment of proposed large infrastructure investments. Project appraisals of megaprojects are undertaken to determine the likely economic and financial viability of the project, particularly where financial support is being requested from the fiscus. GTAC also performs related types of analysis, such as the likely impact of infrastructure investments on the financial sustainability of public utilities, financial cost comparisons of different elements of proposed investment programs, and potential funding mechanisms for infrastructure projects and programs. GTAC’s aim is to ensure that support is provided to the government in identifying public projects that offer the greatest value for money and contribute the most toward promoting economic growth and social welfare. The Capital Projects Unit has developed in-house methodologies for assessing projects and programs.

GTAC seeks to assess proposals based on their value for money. Value is the economic and social activities the infrastructure supports, and money is the cost to put the infrastructure in place. The Capital Projects Unit assesses a proposal’s value for money by examining its social and economic context, demand, viability, financial aspects, and project deliverability.

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About the Presenters

Nicky Prins

Nicky Prins is Chief Director of the National Capital Projects (NCP) Unit at the National Treasury in South Africa. The unit assesses large public infrastructure investments, to advise the Treasury on the economic implications of different options and possible funding routes. She is also responsible for chairing the Task Team on Private Sector Financing of Infrastructure, which was formed between the South African government, the private sector, and labor in early 2013. The Task Team is focused on identifying specific areas where a joint contribution can be made that will unlock greater private sector investment. Ms. Prins joined the National Treasury in 2009 as a Director in the Micro-Economic Policy Unit, working on industrial policy, and in 2011 was made responsible for heading up the newly-created NCP Unit, where she has overseen the building of a team of infrastructure investment analysts. Prior to this she worked as an economist at the Economist Intelligence Unit in London as well as for Dunn & Bradstreet Country Risk Services in the United Kingdom. She holds a BA (Hons) from the University of the Witwatersrand, Johannesburg, and has an ongoing research interest in global financial crises and the role that rebuilding business confidence plays in driving economic recovery.

William (Will) Dachs

Will Dachs is the Chief Operating Officer of the Gautrain Management Agency, which is the owner of the assets of the Gautrain Rapid Rail Link, a US$3 billion urban rail PPP. Prior to this, Will was the head of the Public Private Partnership Unit at the South African National Treasury and one of the unit’s founding members in 2000. In his time with the PPP unit, he has worked on several large infrastructure PPP projects in the renewable energy, health, transport, and logistics sectors. Between 2007 and 2009, Will worked for the World Bank as a senior finance specialist focusing on infrastructure finance in Central and East Asia. He has also worked as an independent contractor, advising a range of domestic and international public sector clients on the financial and institutional aspects of infrastructure finance. He is a professional engineer with degrees in civil engineering and law.

Rob Richards

Rob is a PPP and Infrastructure Consultant for the World Bank Group’s PPP Cross-Cutting Solution Area (CCSA). Currently he is collaborating on the development of a PPP screening tool to facilitate governments in better identifying potential PPP projects. In this regard, Rob has reviewed more than 20 PPP unit identification and screening tools and methodologies. He is leading a webinar series on the same subject matter. Rob also works with the Public Private Infrastructure Advisory Facility on database improvement/management, and has worked on the PPP CCSA comments team, Private Participation in Infrastructure database, and an internal PPP tagging exercise.

Questions Submitted

Dr. Illakkuvan

Submitted 1:35 am, November 28, 2016

"Value is the economic and social activities the infrastructure supports, and money is the cost to put the infrastructure in place"! Very Good!!

Dr. Illakkuvan

Submitted 11:06 pm, November 27, 2016

"GTAC seeks to assess proposals based on their value for money"! Good!!

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