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Saturday, October 31, 2009 |
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Demystifying public private partnerships
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Source: Rob King
Public Private Partnerships (PPP) has become a buzzword in the construction industry - and is a project procurement type that is very relevant for all of Stefanutti Stocks business units.
A PPP is a partnership between government (the public sector) and the private sector where the private sector is contracted to deliver services that would normally be provided by government. In a PPP the overstretched public sector utilises private sector resources to finance, build, operate and transfer back a public asset.
In South Africa the PPP principle has mainly applied to toll roads and office accommodation, however PPP services can range from the payment of government pensions to the provision of serviced office accommodation, power supply, water and sanitation, schools, universities, accommodation and the treatment of solid waste. “Currently, the increased pressure on municipalities to step up their service delivery poses an opportunity for the Group”, says Rob King, head of the Stefanutti Stocks Concessions business unit. “We have submitted a couple of tenders and are eagerly awaiting the results”.
In principle, regardless of what service is being provided, the PPP process remains the same. It is complex and time consuming, and it could take between two and three years before construction starts. However, this is quite reasonable when considering how long the normal process takes from inception to procurement of a contractor with the added advantage of a fully funded, fixed price offering with the maintenance and running costs included to boot.
“As a government procurement method, PPPs are here to stay” says Rob. “Stefanutti Stocks is up there with the best of them - it is up to us to capitalise on every opportunity that presents itself”.
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