PPPs needed for future of road infrastructure

Public–private partnerships (PPPs) and concessions are effective means through which road infrastructure can be developed, and the private sector can play important roles in road infrastructure projects, says business law and litigation firm Fasken Martineau partner Rakhee Bhoora.

“This is partly because some of the risks associated with large projects are shared, innovative technology and funding are brought to the fore and PPPs and concessions stimulate the economy,” she says.

Bhoora adds that economic growth is strongly dependent on the provision of adequate infrastructure. Huge demand for infrastructure cannot be met solely by government. PPPs and concessions provide unique opportunities to meet the demands and challenges associated with infrastructure development, particularly the funding need.

“Currently, the State’s purse is constrained and infrastructure development, unfortunately, is not always the highest priority. PPPs and concessions enable development to take place with a far lesser burden on the fiscus,” she notes.

Fasken Martineau partner Lara Bezuidenhoudt says that the N4 Maputo corridor, which crosses the border of South Africa and Mozambique, is a good example of how funding particular infrastructure through PPPs benefits the public in a way that taxes might not have been able to do, as the benefit can be delivered to the public so much earlier.

“The world is divided into those who support PPPs and concessions and those who do not support them; however, the bottom line is that it is not possible any longer to collect enough taxes to adequately develop all the infrastructure that is required. With a global infrastructure investment requirement of in excess of $2-trillion by 2020, PPPs and concessions are a necessary reality,” she says.

Bezuidenhoudt explains that transport and logistics infrastructure play a pivotal role in developing the economy and if taxes are not adequate to allow for the development and maintenance of existing infrastructure, alternative methods help keep the roads in a safe and satisfactory condition.

Looking forward, she points out that, at a senior level, government has identified – in the National Infrastructure Plan, which was adopted by Cabinet and the Presidential Infrastructure Coordinating Commission in 2012 – 18 Strategic Integrated Projects, which involve many infrastructure projects to be implemented across South Africa in the years to come.