An analysis of the effectiveness of the Public Private Partnership (PPP) procurement process for tourism projects.

Abstract

Although the South African government has implemented a range of infrastructure delivery programs that have significantly increased access to services, large backlogs remain. Within the same context, National Treasury concedes that it would be wrong to assume that government can meet this challenge alone. The state is expected to complement its budgetary capacity with investment capital and the wealth of innovative and special skills available within the private sector, through public private partnerships. Two out of ten government entities, who applied to go through the public private partnership procurement process, reach the end of this process. This increasing failure rate of public private partnership procurement initiatives was the motivating factor to conducting this study. Therefore, the objective of the study was to evaluate the effectiveness of the public private partnership procurement process and to better understand the reasons for Treasury Approval Phases being passed or not passed with the intention of formulating more effective guidelines to assist in guiding organisations as they embark on this process. This was a qualitative study conducted among 36 participants who were managers and coordinators of tourism PPP projects within KwaZulu-Natal and Mpumalanga Provinces of South Africa. They were selected purposefully. There were individual interviews conducted and a focus group discussion consisting of twelve (12) people. Data was analysed thematically. This study revealed that there is an understanding of the meaning of the public private partnerships and of the theories that influence or should influence the process. However, the study further revealed that there are gaps with the implementation of the process. The guidelines provided through the Treasury Department, are unable to regulate the process to ensure that the stages are finalized timeously. The biggest challenge was with the project initiation stage. Gaps in managing the project initiation stage contribute to the reason why most organization struggle to proceed beyond the Treasury Approval 1 stage. Other areas identified as critical contributors to the failures within the process were capacity building on PPPs, ensuring that the enabling environment is ready for PPPs and the financial support for project facilitation process. The study concluded that the public private partnership procurement process is a very good policy tool that, if managed and structured correctly, can create many positive benefits. However, the gaps within the enabling environment and practice, renders it ineffective. Hence the proposed model’s focus on the PPP project initiation stage.