Public-Private Partnerships in Government Supply Chains: Risks and Rewards
This Duja Consulting paper delves into Public-Private Partnerships (PPPs) in South Africa’s government supply chains, weighing the risks and rewards.
Key takeaways:
- Unlocking Investment: PPPs can bridge public funding gaps and accelerate infrastructure projects by leveraging private capital and expertise.
- Efficiency Gains: Private partners bring innovation and supply chain best practices, improving service delivery and accountability through performance-based contracts.
- Risk Management is Vital: PPPs carry risks – from complex contracts to public mistrust – requiring strong governance, transparency, and capacity building to succeed.
- South Africa’s PPP Future: With new reforms simplifying processes, SA can reignite PPP deals. A case study of Kenya’s Nairobi Expressway PPP highlights how balanced risk-sharing leads to success.
Read the full paper for an in-depth look at how smart partnerships can transform government supply chains.
Executive Summary
- Bridging the Funding Gap: Public-Private Partnerships (PPPs) enable the South African government to undertake large-scale projects without overextending public finances. By leveraging private capital and expertise, PPPs offer a viable alternative to traditional public procurement, easing budget constraints in infrastructure, healthcare, and other critical supply chains.
- Efficiency and Innovation: Private partners bring specialized skills and technology, implementing best practices in procurement, logistics, and supply chain management to mitigate delays and reduce waste. PPP contracts often include performance standards that ensure high-quality service delivery and maintenance over the project lifecycle. This results in more efficient project execution, improved public services, and opportunities for innovation (such as green infrastructure and digital solutions).
- Socio-Economic Benefits: Well-structured PPPs can create jobs, develop local supply industries, and align with South Africa’s development goals. Many South African PPP deals incorporate Black Economic Empowerment requirements, so that private partners contribute to equity and skills development alongside profit goals. Successful projects like the Gautrain rail link and the Renewable Energy Independent Power Producer Programme (REIPPP) demonstrate how PPPs can deliver public value – from improved transport connectivity to enhanced power generation capacity.
- Risks and Governance Challenges: Despite the rewards, PPPs carry significant risks. Common pitfalls include unclear policies, bureaucratic bottlenecks, and weak public-sector capacity to manage complex contracts. Without strong governance, PPPs may suffer from cost overruns, delays, or even corruption – eroding public trust. A lack of trust and cooperation between sectors, often rooted in South Africa’s history of public and private sector corruption, remains a major obstacle to PPP success. Ensuring transparency, accountability, and fair risk-sharing is critical to mitigate these risks.
- South Africa and Beyond – The Path Forward: In South Africa, PPP activity has slowed in recent years due to regulatory complexity and inconsistent political support. However, renewed commitment is emerging: the National Treasury has introduced reforms to streamline PPP processes and attract investors. A comparative case study from elsewhere in Africa – Kenya’s Nairobi Expressway – illustrates how effective risk allocation and stakeholder engagement can make a PPP project successful. The call to action is clear: South African policymakers and business leaders must collaborate to strengthen the PPP framework, address governance gaps, and boldly pursue partnerships that balance risks and rewards for public benefit.
Introduction
Public-Private Partnerships (PPPs) are cooperative agreements between government bodies and private sector entities to deliver public services or infrastructure, with the private party assuming substantial risk in the project’s design, financing, construction, or operation. In essence, a PPP harnesses the resources and expertise of the private sector to augment public supply chains and service delivery, under a contract that defines each party’s roles and rewards. This model has gained traction as governments worldwide face budget constraints and complex service delivery challenges that cannot be met by the public sector alone. South Africa is no exception: persistent fiscal pressures and infrastructure backlogs have spurred calls for greater public-private collaboration to meet development needs.
In the South African context, PPPs have been identified as a “viable option for bridging [the infrastructure] deficit by augmenting deficiencies within the public sector budget with private capital”. The government’s own analyses highlight that without private sector investment, financing critical projects will be increasingly difficult amid growing fiscal constraints. South Africa’s Strategic Infrastructure Projects pipeline stood at roughly R540 billion in 2024 – yet the National Treasury estimates about R3.2 trillion (US$168 billion) in private investment is needed by 2030 to meet the country’s overall infrastructure needs. Clearly, traditional procurement and public funding alone are insufficient, prompting a renewed emphasis on PPP models to upgrade transport networks, strengthen healthcare supply chains, expand water and energy infrastructure, and modernise logistics for service delivery. President Cyril Ramaphosa underscored this urgency by describing infrastructure investment as an “enormous economic multiplier” and calling for a PPP framework that removes policy bottlenecks and accelerates private-sector engagement.
This paper examines the risks and rewards of PPPs in government supply chains, with a focus on South Africa’s experience. It explores how PPPs can improve efficiency and innovation in delivering public goods, while also analysing the challenges that have constrained PPP uptake. A comparative case study from elsewhere in Africa provides additional insight into success factors and pitfalls. Senior business and government stakeholders – the intended audience for this analysis – will find a structured overview of PPP benefits, the governance and operational risks to navigate, and recommendations for harnessing PPPs to strengthen South Africa’s supply chains. The discussion is rooted in credible sources and real-world examples, balancing a business-oriented perspective with the public interest imperative.
1. Rewards of PPPs in Government Supply Chains
1.1 Accelerating Infrastructure Development and Innovation: PPPs offer a powerful mechanism for governments to execute large projects that might otherwise be unaffordable or slow to materialise. One primary reward is the ability to bridge funding gaps – the private partner typically finances upfront capital costs, allowing the government to pay over time as milestones are achieved. This arrangement provides a sustainable alternative to piling on public debt, especially for capital-intensive sectors like transportation, energy, and healthcare. By sharing project costs and responsibilities, PPPs enable South Africa to undertake needed upgrades (e.g. highways, hospitals, power plants) that its constrained public budget could not support alone. The risk transfer inherent in PPP contracts means private firms shoulder significant financial and operational risks traditionally carried by the state. This not only relieves the immediate fiscal burden on the government, but also incentivises the private partner to control costs and deliver on schedule – since their returns depend on performance. Indeed, international evidence shows that when risks are allocated to the party best able to manage them, projects tend to be completed more efficiently and cost-effectively.
1.2 Efficiency in Procurement and Supply Chain Management: A well-designed PPP can inject private-sector efficiency and know-how into public supply chains. Private companies often excel in project management and can streamline procurement and logistics using advanced tools. In a PPP, the private partner is empowered – and motivated – to implement best practices in sourcing materials, managing the supply chain, and deploying technology to avoid delays. South African public projects have historically been marred by protracted timelines and cost escalations; by contrast, PPP arrangements introduce a profit motive to stay on schedule and within budget. For example, under a PPP the contractor might use digital tracking systems to optimise inventory and delivery for a hospital supply chain, or employ innovative construction methods to speed up building a highway. The focus on return on investment (ROI) drives innovation: private partners continuously seek efficiencies (e.g. just-in-time delivery, lean inventory management) that not only save costs but also reduce waste in the supply process. Ultimately, citizens benefit from faster project delivery and more reliable services. A notable illustration is South Africa’s Renewable Energy IPP programme, where private producers rapidly added generation capacity using wind and solar technology, with the government buying power once plants came online. This PPP-style procurement brought in new technical expertise and helped alleviate power shortages more swiftly than a purely state-driven build-out.
1.3 Quality Performance and Accountability: Another reward of PPPs is the potential for higher-quality outcomes through performance-based contracts. Unlike traditional public procurement, where a contractor might disengage after construction, PPP contracts typically span the full lifecycle – including long-term operations and maintenance. The private partner is contractually bound to meet defined service standards and maintenance requirements, often enforced via strict Service Level Agreements (SLAs). This means that a road, school, or water plant delivered under a PPP is not only built but also maintained at agreed standards for decades. For the South African government, this translates into greater assurance that public assets will remain functional and safe, without sudden strain on departmental budgets for upkeep. If performance falters, the government can invoke penalty clauses or other remedies, holding the private operator accountable. Such arrangements help ensure continuity of service – a critical factor in supply chain contexts like healthcare. For instance, a PPP in vaccine supply (the Biovac Institute established in South Africa) guaranteed an uninterrupted supply of vaccines for the national immunisation program, even when global shortages arose. By tying payments or concessions to outcomes, PPPs align the private partner’s incentives with public interest: success is measured not just by completing a facility, but by delivering sustained value to end-users. This accountability, coupled with regular reporting and oversight, also helps to minimise corruption risks by making misuse of funds or neglect of duties easier to detect. In short, well-structured PPPs build a culture of performance excellence in public supply chains.
1.4 Economic and Social Co-Benefits: Beyond direct project outcomes, PPPs can generate broader socio-economic benefits – an especially important reward in South Africa’s context of high unemployment and inequality. Major PPP projects often create jobs across various skill levels, from construction workers and engineers to ongoing roles in facility management and service delivery. Local suppliers and subcontractors may gain new business opportunities as private partners procure goods and services domestically, thus stimulating local industries and SMEs. For example, the Gautrain rapid rail PPP not only improved transit between Johannesburg and Pretoria, but also involved local firms in its construction and requires the concessionaire to meet local content and employment targets. Similarly, many PPPs in South Africa are structured to advance Black Economic Empowerment: private consortia are evaluated on their inclusion of historically disadvantaged groups and on contributions to skills development and equity goals. Such requirements ensure that PPPs support the National Development Plan objectives, channelling some private-sector gains into social investment. Ultimately, a successful PPP can leave a legacy of enhanced local capacity – transferring skills and technology to public sector staff and emerging businesses – and improved confidence from citizens benefiting from better services. These less tangible rewards, like community upliftment and investor confidence, are vital for long-term development. The bottom line is that when properly managed, PPPs create a win-win: the private sector earns returns, and the public sector achieves outcomes that would be hard to attain alone, from modernised supply chains to measurable social impact.
2. Risks and Challenges of PPPs in Government Supply Chains
While PPPs hold much promise, they also come with significant risks and challenges that must be carefully navigated. If these issues are not addressed, PPP projects can falter or even fail, leaving governments to pick up the pieces. Key risks in the South African government supply chain context include:
- Complexity and Capacity Constraints: Structuring and managing a PPP is inherently complex. Contracts can span hundreds of pages, detailing risk allocation, performance metrics, financing arrangements, and more. Public-sector agencies often lack the specialist skills and experience to negotiate and oversee such deals effectively. In fact, only about 15% of African public officials are trained in PPP management, highlighting a capacity gap that can lead to costly errors. In South Africa, many municipalities and departments face shortages of legal and financial expertise, making it difficult to conduct rigorous feasibility studies or enforce PPP contracts. This can tilt negotiations in favour of private partners or result in poorly crafted agreements that expose the government to undue risk. Without strong institutional capacity, there is a danger that PPPs may not deliver value for money – or worse, that public interests are compromised by opportunistic contracting.
- Regulatory and Procedural Bottlenecks: A recurring challenge has been South Africa’s cumbersome PPP approval process. Until recently, every national or provincial PPP had to clear multiple Treasury approvals and follow a regimented project cycle, which often took years from concept to contract. These bureaucratic hurdles have dampened private sector interest. The legislative and regulatory framework, while intended to ensure due diligence, became seen as confusing and onerous, deterring investors and slowing down project delivery. Moreover, fragmented decision-making across different government levels has led to delays – for example, a transport PPP might need buy-in from a municipal authority, a provincial department, and National Treasury, each with their own procedures. Such red tape increases transaction costs and uncertainty. The risk is that promising projects never get off the ground, or that private bidders demand higher returns to compensate for procedural risks, making the PPP more expensive for the public.
- Political and Governance Risks: PPPs thrive on long-term stability and trust – yet these can be undermined by political dynamics. In South Africa, inconsistent political commitment to PPPs has been noted as a barrier to uptake. Changes in leadership or policy priorities can stall or cancel projects (for instance, if a new administration is sceptical of private partnerships). Additionally, the politicisation of infrastructure – where projects become tied up in party politics or patronage – creates risk for investors and can distort project selection. Strong, transparent governance is needed to ensure PPPs serve the public interest rather than political interests. However, governance shortfalls have occurred: some past PPP efforts were hampered by poor contract management and oversight by the government. This can result in contractual disputes or under-performance going unchecked. There is also the issue of contingent liabilities – if a PPP underperforms financially (e.g. a tolled road with lower-than-expected traffic), the government may be contractually obliged to compensate the private operator or assume the project, impacting public finances. Such fiscal risks need careful monitoring.
- Trust and Transparency Issues: Perhaps the most sensitive risk in PPPs is the erosion of public trust if the partnership is perceived as favouring private profits over public good. South Africa’s history of corporate and government corruption has bred scepticism; a lack of trust and cooperation between public and private players is cited as a major obstacle to PPP success. This mistrust can manifest in various ways. On the government side, officials may be wary of being drawn into deals that later attract public criticism or scandal. On the community side, citizens may resist PPP projects – for example, opposing toll roads, rate increases, or private management of essential services – if they fear being exploited or if consultation is lacking. A notable example was the public backlash to Gauteng’s e-tolling scheme, a PPP-style toll road project, which faced boycotts amid perceptions of high costs and insufficient transparency. Corruption is a related risk: PPPs, by their complexity, can provide opportunities for rent-seeking if not vigilantly managed. Without transparency in procurement and robust anti-corruption measures, there is a danger that contracts could be awarded to cronies or that private partners might cut corners to boost profits, at the expense of quality and safety. The suspicion of private sector motives remains high in some quarters, meaning PPPs must work double-time to prove their integrity and value. Full disclosure of project information, open bidding processes, and community engagement are essential to mitigate this risk and build legitimacy for PPP initiatives.
- Affordability and Equity Concerns: Lastly, PPPs can entail social risks. If a project’s revenue model relies on user fees (such as highway tolls or utility tariffs), there is a risk that poorer citizens might be priced out of access to the service. Ensuring affordability and equitable access is a constant challenge – the government may need to provide subsidies or regulate tariffs to protect vulnerable groups, which adds complexity to the PPP agreement. Failure to address this can lead to public anger or exclusion of the very people the project is meant to serve. Additionally, long-term PPP contracts can limit flexibility; if public needs change or a private partner underperforms, it may be difficult or costly to terminate the contract early. This lock-in risk means governments must get it right the first time, underscoring the importance of rigorous planning and scenario analysis upfront.
In summary, PPPs in government supply chains are not a panacea – they are high-stakes ventures that require robust frameworks and competencies to succeed. South Africa’s experience shows that unclear policies, limited capacity, and low trust can quickly derail partnerships. However, these risks can be mitigated. The next section discusses how South Africa has approached PPPs, learning from both achievements and missteps, and what steps are being taken to improve the PPP environment.
3. The South African PPP Landscape: Achievements and Lessons
3.1 Track Record in Brief: South Africa was an early adopter of PPPs in Africa, establishing a dedicated PPP Unit in National Treasury in the early 2000s and pioneering projects across sectors. Since the formal introduction of PPPs in 1998, the country has completed 34 PPP projects with a total value of about R89.3 billion as of 2023. These include high-profile successes often cited in business circles. The Gautrain rapid rail link, launched in 2010, was one of Africa’s first modern rapid transit PPPs. It mobilised private finance and expertise to deliver a world-class rail system that now carries thousands of commuters daily, easing road congestion and linking economic hubs. Another success has been the Renewable Energy Independent Power Producer Programme (REIPPP), where the government procures electricity from privately built renewable energy projects. Since 2011, multiple bidding rounds have attracted billions in investment from independent power producers, adding much-needed generation capacity and promoting clean energy. Under the REIPPP PPP framework, South Africa contracted over 6,000 MW of renewable capacity by partnering with private firms – a remarkable scale-up that would have been difficult through state-owned utility investment alone. These examples underscore how PPPs have delivered tangible benefits: Gautrain transformed public transport habits in Gauteng, and renewable IPPs have helped diversify the energy supply while creating green jobs.
3.2 Institutional Framework and Reforms: South Africa’s PPP framework is governed by the Public Finance Management Act (PFMA) and Treasury Regulation 16, which set out a rigorous process for project approval and implementation. By definition under South African law, a PPP requires the private party to assume substantial financial, technical and operational risk in the project – ensuring that the partner has “skin in the game.” National Treasury’s PPP Unit (recently bolstered as the GTAC – Government Technical Advisory Centre) provides guidance and oversight for national and provincial PPPs, reviewing feasibility studies and tender documents to safeguard the public interest. Despite this formal structure, PPP activity in the past decade slowed significantly. As noted, the number of new PPP deals dwindled, reflecting investor concerns and institutional fatigue. Key lessons emerged from this lull. Firstly, a “one-size-fits-all” approval process was seen to be too slow and inflexible, especially for smaller projects. Secondly, gaps in political support and coordination meant some projects languished without championing. And thirdly – as evidenced by certain troubled projects – the public sector needed stronger contract management skills to ensure partnerships stayed on track.
The government has responded by initiating important reforms to revitalise PPPs. In 2019, with World Bank support, a review of the PPP regime was launched. This led to proposed amendments (gazetted in early 2024) aimed at simplifying and speeding up PPP procedures. Notably, the reforms introduce two differentiated pathways: one for large, complex projects and a streamlined pathway for smaller PPPs (under R2 billion). For low-value projects, onerous multiple-stage Treasury approvals are being removed, allowing departments to close deals faster and with less red tape. The intention is to make PPPs more accessible to municipalities and entities that need quick solutions for moderate-scale initiatives (such as building a clinic or upgrading IT systems) without years of paperwork. In tandem, National Treasury is strengthening institutional support – establishing a renewed central PPP Unit to advise and assist contracting authorities through the project lifecycle. Emphasis is also placed on better contract management and oversight mechanisms in the new guidelines, addressing past shortcomings. These changes have been welcomed by investors; as Standard Bank’s infrastructure finance team observed, the overhaul of the framework “sends the right message to international investors” that South Africa is committed to more bankable and efficient PPP processes. Early indications show a rebuilding pipeline: the total value of strategic infrastructure projects grew from R340 billion in mid-2020 to R540 billion by late 2024, signalling an intent to leverage PPPs to fund a significant portion of this portfolio.
3.3 Balancing Risks and Rewards in Practice: South Africa’s experience offers several cautionary tales and best practices. On one hand, successful projects like Gautrain highlight the importance of clear scope, thorough feasibility analysis, and partnership balance – the Gautrain concession was structured with independent monitors and strict performance clauses, ensuring the private operator met socio-economic obligations (such as local procurement and black empowerment targets) throughout. On the other hand, stalled projects underscore issues such as community consultation and pricing. The failed e-tolls project taught stakeholders that without public buy-in and transparent tariff setting, even technically sound PPPs can face user resistance. Another learning is the need for political will at the highest levels: sustained support from the Presidency and Cabinet can fast-track critical PPPs, whereas ambivalence or mixed messages can cause private partners to walk away due to uncertainty. The recent reforms directly tackle some lessons – for example, by clarifying the regulatory maze, they hope to rekindle private sector confidence that was lost when deals became too arduous to conclude. There is also a drive to integrate PPP planning with national development goals (like the National Development Plan 2030), so that projects are not pursued in silos but rather as part of a coherent strategy to deliver public value.
In summary, South Africa’s PPP landscape has had modest successes, notable challenges, and now a renewed impetus. The country stands at a crossroads: with the right adjustments, PPPs could unlock billions in investment and vastly improve government supply chains – but success will depend on addressing the risk factors outlined earlier. As we look for guidance and inspiration, it is useful to examine how another African nation has implemented a PPP, to glean additional insights on managing risks and rewards.
4. Comparative Case Study: Kenya’s Nairobi Expressway PPP
To illustrate PPP risks and rewards in action, one can look at the Nairobi Expressway in Kenya – a flagship PPP project that offers valuable lessons for South Africa and other countries. Completed in 2022, the Nairobi Expressway is a 27 km toll road linking the Jomo Kenyatta International Airport with Nairobi’s city centre. The project was structured as a Build-Operate-Transfer (BOT) concession with a 27-year term, involving a private consortium led by the China Road and Bridge Corporation (CRBC) and the Kenya National Highways Authority as the public partner. Built at a cost of around US$668 million, this PPP has dramatically improved logistics and travel times in the capital: a journey that once took two hours in crippling traffic can now be done in about 20 minutes on the expressway. About 50,000 vehicles use the road daily, boosting productivity and trade flow in and around Nairobi. Such immediate rewards – congestion relief and economic efficiency – demonstrate why governments pursue PPPs. However, equally instructive is how the project was executed and risks managed.
Risk Allocation and Mitigation: The Nairobi Expressway’s success is often attributed to a balanced sharing of risks and rewards. The private partner (CRBC) assumed construction risk, agreeing to deliver the road on budget and even managing to complete it 10 months ahead of schedule. Meanwhile, recognizing the demand risk in toll road projects, the Kenyan government provided a revenue guarantee: it guaranteed a minimum level of toll revenue, which protects the concessionaire’s returns if traffic volumes fall short. This guarantee made the project attractive to the investor and its financiers, but it also means the government carries a contingent liability – a calculated risk that was deemed acceptable to get the road built. Political and regulatory risks were mitigated through Kenya’s robust PPP Act (updated in 2021) and the involvement of multilateral advisors; for instance, the African Development Bank advised on best practices, helping to instill investor confidence despite Kenya’s evolving regulatory environment. The project also tackled operational challenges proactively: land acquisition (often a source of delay in infrastructure projects) was handled through early compensation arrangements, avoiding protracted disputes that have plagued similar projects elsewhere.
Stakeholder Engagement and Challenges: Despite its achievements, the project was not without controversy. There was initial public resistance – some Nairobi residents and civil society groups voiced concerns over toll costs and land impacts. Lessons were learned about the need for community engagement: the project team engaged in public awareness campaigns and adjusted certain designs (like adding footbridges) to address local concerns. This mirrors South Africa’s experience that transparency and consultation are key to public acceptance. Another challenge was the heavy involvement of a foreign investor, which raised debates about debt and profit repatriation. For Kenya, the decision to partner with an experienced international firm brought in expertise and quick execution, but it also means that toll revenues will flow to the private operator (and its backers) for years before the road transfers back to the state. This trade-off between short-term public benefit and long-term private gain is inherent in PPPs. In the Nairobi case, the government judged that the economic benefits of immediate infrastructure outweighed the cost of sharing toll revenues. Importantly, the deal includes provisions for regular audits and performance monitoring to ensure the operator meets maintenance and service standards over the concession life.
Key Takeaways: The Nairobi Expressway exemplifies several PPP principles relevant to South Africa’s supply chain challenges. First, strong government commitment and clear policy support (Kenya’s enabling laws, political backing, and institutional capacity) were fundamental – these gave private investors the confidence to engage. Second, meticulous risk mitigation strategies (like revenue guarantees and involvement of development finance institutions) can make otherwise risky projects bankable. Third, community and stakeholder engagement is not a box-ticking exercise but a determinant of success; addressing public concerns early helped avoid backlash in Kenya, just as it would in South Africa where public sentiment can be decisive. Lastly, the Nairobi case highlights that capacity building is crucial – the report noted that only 15% of African officials being PPP-trained is a continental challenge. To replicate successes like Nairobi, countries must invest in training public officials in PPP project preparation and oversight. In conclusion, Kenya’s experience with the Nairobi Expressway underscores that PPPs, when well-prepared and managed, can deliver infrastructure faster and more efficiently, but they require thoughtful risk-sharing and diligent governance. South Africa can draw on these insights as it reinvigorates its own PPP program, ensuring that the pursuit of private capital does not compromise the public interest.
Conclusion
Public-Private Partnerships in government supply chains represent a dynamic interplay of risk and reward. For South Africa, harnessing PPPs is not just a financial necessity but a strategic opportunity to modernise infrastructure and improve service delivery in an era of constrained public resources. The rewards are evident: PPPs can mobilise billions in investment, introduce cutting-edge expertise, and instill performance discipline in projects that serve the public. From faster project completion and enhanced maintenance standards to job creation and technology transfer, a successful PPP can markedly amplify the impact of government programmes. Moreover, by aligning private incentives with public goals – such as through carefully crafted contracts that enforce service quality and socio-economic targets – PPPs can achieve outcomes that go beyond what either sector could accomplish alone.
Yet, as this paper has explored, these benefits do not come automatically. The risks inherent in PPPs are real and must be managed with foresight. Poorly structured partnerships or weak oversight can lead to outcomes contrary to the public interest: wasted funds, unmet needs, or long-term liabilities on the state’s balance sheet. South Africa’s own mixed history with PPPs has laid bare issues of capacity, governance, and trust that need to be addressed. Encouragingly, reforms are underway to streamline processes and rebuild confidence, suggesting that lessons have been learned. The comparative look at Kenya’s Nairobi Expressway reaffirmed timeless principles – the importance of risk allocation, stakeholder engagement, and political will – which are just as pertinent in the South African context.
For senior business and government stakeholders, the path forward is about striking a prudent balance. It means selecting PPP projects judiciously, with rigorous feasibility checks to ensure value-for-money and affordability. It means fostering transparency and accountability at every stage, to maintain public trust and keep partners answerable for results. And it means investing in the soft infrastructure of PPPs: training officials, strengthening institutions like the PPP Unit, and creating an environment where private innovation can flourish in service of public objectives. When these conditions are met, the “rewards” side of the equation – efficient supply chains, resilient infrastructure, and shared prosperity – will far outweigh the risks. South Africa has the frameworks and experience; with renewed commitment, PPPs can indeed become a cornerstone of delivering the National Development Plan and beyond. The challenge is to proceed with eyes open, leveraging the private sector’s strengths while safeguarding the public good. If done right, public-private partnerships could herald a new era of collaborative development, turning fiscal constraints into an opportunity for innovation and inclusive growth.
The analysis above makes one thing clear: South Africa cannot afford to overlook PPPs as a mechanism for development, but neither can it afford to get them wrong. It is a call to action for all stakeholders:
- Government leaders: Prioritise the implementation of recent PPP reforms. Clear the bottlenecks that remain, ensure transparency in project selection, and demonstrate political will by championing well-structured pilot projects. By actively addressing capacity gaps – for example, by empowering the new PPP Unit and investing in skills development – government can create an enabling environment where partnerships thrive.
- Private sector and investors: Step up with innovative solutions and competitive offers that deliver genuine value. Embrace the spirit of partnership – this means not only seeking profit, but also understanding public priorities like affordability and socio-economic impact. The private sector should engage in early dialogue with communities and offer knowledge transfer to public counterparts, cementing a cooperative rather than adversarial relationship.
- Civil society and oversight bodies: Play a watchdog role that constructively improves PPP outcomes. Insist on open information and stakeholder consultation from the outset of projects. Where PPPs succeed, communicate these successes to build public confidence; where there are warning signs, raise them early so they can be corrected. An informed, involved citizenry is a crucial check-and-balance to ensure PPPs remain focused on public benefit.
This Duja Consulting paper has highlighted both the promise and the pitfalls of PPPs in our government supply chains. The reward – modern infrastructure, efficient services, economic growth – is within reach if we can collaboratively manage the risk through good governance and mutual trust. Now is the time to act. Senior decision-makers in South Africa’s public and private sectors must come together to turn policy into practice. By forging partnerships grounded in integrity, transparency, and shared purpose, we can unlock new efficiencies in supply chains and deliver lasting value to the citizens of South Africa. The call to action is simple: let’s build the future together, wisely balancing risks and rewards, through robust public-private partnerships.
