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Tendering Process Opens for Two of Gauteng's Multibillion Rand Public Private Partnership Projects
Source: allAfrica.com
Source Date: Friday, October 21, 2011
Focus: Institution and HR Management
Country: South Africa
Created: Oct 21, 2011

The estimated capital value of the CHB Academic Hospital Revitalisation Project is R 7 billion, making it the largest PPP in the healthcare sector in Gauteng Province.

"We are committed to work with the private sector to improve infrastructure service delivery to the people of Gauteng," Mr. Mandla Nkomfe, Gauteng Finance MEC said. "This project was necessitated by the realisation that the facilities at the hospital were ageing and the frequency of maintenance led to a large increase in running costs," he added.

The CHB Hospital Revitalisation Project involves the construction of a totally new hospital building at the Lilian Ngoyi site situated in the same vicinity as CHB.

Once completed, the CHB Academic Hospital will become the largest academic referral hospitals in the province, providing specialised services in accordance with the objectives of National Health Insurance - accessible health care services to all.

"As we have said before, government alone cannot address the infrastructure backlog that we have in the province. That is why we are exploring alternative sources of funding. As such there are many projects that would be designed as PPPs; they range from eco-tourism, sanitation and, solid waste treatment," MEC Nkomfe said.

"One of these is the City of Johannesburg Waste to Energy Project with an estimated capital value of between R6 billion to R10 billion. The tendering process for this project will open next month (November) and we expect a lot of interest from environmental management companies eager to showcase their technologies in this area," MEC Nkomfe explained.

The aim of this project is to reduce City of Johannesburg (CoJ's) waste to landfill by about 60-80%. This will require the diversion of 500 000 tons of waste from landfill sites out of about 1 600 000 tons. The output will be the generation of electricity and heat, a green energy initiative.

In order to achieve the best practice in this area, the Gauteng Department of Finance has adopted the following approach:

we select projects that best fit the national, provincial or local government priorities for economic development to enhance "buy in";

we align proposed projects to strategic plans and mandates to enable effective implementation;

we do proper groundwork at inception of projects with regards to option analysis: this ensures selection of options with clear value drivers for government;

we also seek project partners with strong levels of commitment and expertise with infrastructure assets;

we place particular attention to contract negotiation to ensure watertight contract terms and conditions;

once the agreement has been reached, we always ensure effective contract management.

The targets for investment in infrastructure, empowerment, small business development and public services can only be met through rapid growth in well-designed private finance initiatives, such as PPPs, which are effectively mobilised.

The diverse interests of the public and private sectors can be harnessed for the collective good whereby the pool of expertise and resources available in the private sector are managed in such a way that it accelerates service delivery. The public sector gets better, more cost effective services while the private sector gets new business opportunities.


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