'Unrealistic preconditions' could sink public-private partnerships in SA

The government risks sabotaging critical infrastructure projects with unrealistic preconditions for public-private partnerships, the Cape Chamber of Commerce and Industry cautioned on Friday.

President of the chamber Jacques Moolman said this was evident in Transnet’s handling of the privatisation process for the container terminals at Ngqura and the container corridor between Johannesburg and Durban.

“Transnet is insisting potential partners take on all 3,573 Transnet Freight Rail staff as a precondition for involvement in the corridor project, it was reported this week. In addition, prospective partners would need to invest over R5bn in the project without acquiring any ownership stake,” he said.

Moolman said it was unlikely the government would attract private partners unless the partnerships were based on sound business principles and policies.

“Government has committed to much-needed reform, especially in relation to key economic sectors such as energy and infrastructure. It needs to harness private-sector expertise to help the public service perform better. But the key reason the private sector outperforms the public sector is because private businesses demand their staff perform. If a business fails to perform, it loses customers and investors.

“The same principle must apply to Transnet and its critical infrastructure projects that are too important to fail. They require sound business principles to underpin operations.

“Transnet leaders cannot be allowed to prioritise their own wellbeing over what is best for the country.”

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