Thesis (MBA)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: Providing basic access to water and sanitation is critical for poverty alleviation and
stimulating economic growth, but at the same time it is putting a huge strain on South
Africa’s existing economic infrastructure. Local governments allow their existing
wastewater infrastructure to deteriorate to the extent that it no longer functions according
to its design, and then apply for capital funding for refurbishment.
Capital investment alone will not provide a sustainable solution to meet the increased
demand on the ageing wastewater infrastructure, since local governments do not have
the financial means and technical capacity to adequately maintain and operate their
infrastructure. A paradigm shift is required to develop alternative and innovative business
models to ensure a sustainable solution providing continued and consistent capacity as a
basis for further expansion.
Public-private partnerships (PPP) could provide a feasible solution towards building a
sustainable technical capacity at local governments. Engaging the private sector must
however not be aimed towards access to private sector finance, but rather the
improvement in operational efficiency and increased level in service. Obtaining private
sector finances will be the wrong focus for engaging in PPP undertakings in South Africa.
Private operation must be combined with public financing. The design-build-operate
(DBO) model with public financing would be highly viable. Such an arrangement will hold
no financial risk to the private sector entity with revenue collection strictly remaining a
local government function. The DBO method of delivery (with public funding) will be an
effective way to realize cost savings, achieve efficiencies in construction and operation,
utilize expertise, and most importantly, for skills transfers and capacity building at local
government level. Ultimate sustainability will only be achieved once local government is
able to raise the majority of its own funds for operation and maintenance through tariffs
and other instruments, including some towards capital redemption.
Grant funding must make provision for maintenance and operation of all capital funded
projects. All shareholders must join forces in lobbying this concept at the highest political
echelons because in terms of Section 154 of the Bill of Rights, national and provincial
governments have a duty towards local governments to support and strengthen their
capacity, to effectively perform their functions.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/97275 |
| Date | 12 1900 |
| Creators | Coetzer, Casper |
| Contributors | Nel, C., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | xi, 103 pages : colour illustrations |
| Rights | Stellenbosch University |
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