Government turning to the private sector again

 ·16 Apr 2024

National Treasury is extending the deadline for public comments for the Budget Facility for Infrastructure (BFI), which aims to increase private sector participation in South Africa’s infrastructure.

The public comment deadline has been extended to 17 May 2024, giving project sponsors more time to package and submit their proposals.

“The BFI is a reform established in 2016 to support the execution of priority infrastructure projects and programmes through a more rigorous planning, appraisal, and selection process,” said National Treasury.

“The National Treasury intends to utilise this BFI Window to develop a pipeline of projects and programmes to test alternative financing and funding models.”

Public institutions, such as National, Provincial, and Municipal governments, are invited to submit projects and programmes that will form part of the project.

The main aim of the BFI Special Window is to close funding gaps, providing viability gap funding for projects and programmes that will use private sector financing and technical assistance.

“The Call for Proposals is open to projects and programmes that are undertaken under alternative financing and delivery mechanisms and private sector participation frameworks such as Public-Private Partnership (PPPs) and concessions,” said National Treasury.

The BFI can be seen below: (Mobile users click here):

Growing partnership

The South African government has been increasingly turning to the private sector for assistance in recent times.

Last year, President Cyril Ramaphosa and over a hundred CEOs from South Africa’s biggest companies agreed to work together to tackle three of the nation’s biggest issues – energy, logistics and crime.

In terms of logistics, Transnet has taken a number of steps to ensure greater private sector participation.

During the 2024 Budget Speech, Finance Minister Enoch Godongwana said that third-party access would be introduced to Transnet’s freight rail network from May of this year.

A PPP has also been secured to upgrade Pier 2 of the Durban Container Terminal, with the Minister saying that private investment will go into equipment, and enhance techonoglocal capability and operational efficiency.

In terms of energy, Eskom will soon unbundle into three separate companies, focusing on generation, distribution and transmission.

As Eskom’s generation failures have been the root cause of load shedding, the unbundling should see greater private sector generation, with Eskom’s transmission company acting as a buyer in the new open electricity market.

Read: The truth behind Eskom’s load shedding success

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