Abstract
Freight transport infrastructure is an indispensable requirement for economic
growth, development and prosperity. Public–private partnerships (PPPs), as a mechanism to
fund and construct freight transport infrastructure, have been suggested by many in private
and public sectors.
Objectives: The concept of PPPs is dealt with, and the relevance of this mechanism is expanded
upon. It is clear that PPPs in the rail environment present huge challenges and complexities.
The objective was to determine whether PPPs are a viable mechanism to fund freight transport
infrastructure in South Africa.
Method: Experiences with rail PPPs worldwide have shown that many failures occurred
implementing these. The challenges and complexities of PPPs, in the freight rail environment,
are highlighted together with the benefits, risks and best practices of PPPs. It is shown that
suitable policies, legislation and regulations concerning PPPs are in place in South Africa.
Results: A proper framework and methodology to proceed should be in place. PPPs take time
and are complex. Government involvement remains essential. Firm contractual agreements
between parties are essential. Risk handling, risk sharing and the magnitude of risks should be
clarified with agreement on where the risks reside. Financial viability, with value for money
(VfM) and financial benefits for private sector role players are non-negotiable.
Conclusion: Appropriate legislation for implementing PPPs must be in place while two further
important elements are economic circumstances and proper project execution. Taking all these
factors into consideration, the freight transport sector can only benefit from successfully
negotiated and implemented PPPs.