Abstract
M.Phil.
Economic growth and the provision of adequate infrastructure are
highly interrelated. Infrastructure- plays a critical role in promoting economic growth
through enhancing productivity, improving competitiveness, reducing poverty, linking
people and organisations together through telecommunications and contributing to
environmental sustainability. Population growth and rapid urbanisation have placed enormous pressure on existing infrastructure, thus presenting a daunting challenge to governments worldwide
The scope of global demographic, public health and safety needs, as well as economic development goals, translates into infrastructure requirements far in excess of currently available financing resources.
While the degree of this funding backlog differs from country to country, it extends from the poorest to the richest of nations. This is true even in the United States, which enjoys the full benefits of decentralized government responsibility and an extensive domestic
debt market. Recognition of this funding gap has resulted in a nearly universal acceptance that the private sector can and should play a larger role in the financing of infrastructure in partnership with the public sector [35].
The 1990s saw a revolution in the provision of infrastructure services as governments worldwide turned to the private sector for financing and management expertise. In developing countries in 1990 —2001, nearly 2,500 infrastructure projects involved private participation, attracting investment commitments of US750 billion [40].
South Africa has an estimated infrastructure backlog of R 170.7 billion [3]. In addition there is increasing demand for much-needed new and improved infrastructure such as water supply and sanitation systems, affordable housing and electricity supply, health care
facilities, schools, roads, tourism infrastructure, airports and harbour facilities, to name but a few [4]. With the private sector organisations having a large pool of sources from which they can seek funding from both local and international financial markets and the government having fragmented expertise over different state departments, debilitating red tape and bureaucracy, more pressing needs for funding elsewhere and inability to roll out projects, private sector involvement in infrastructure provision has been widely considered and implemented as a preferred method of financing infrastructure provision. This collaboration between public and private sectors is crucial in order to increase the
sources of funding available for infrastructure and reduce the pressure on fiscal budgets.
This has resulted in an increased collaboration between the public and private sectors in order to meet a country's infrastructure requirements. Consequently, the Public Private Partnership (PPP) procurement method of undertaking large infrastructure projects