This paper focuses on the impact of the PPP debt load on the sustainability of this method as a vehicle for infrastructure provision.
Since the introduction of PPPs in South Africa about sixteen years ago, a lot of government agencies have demonstrated a growing amenability towards adopting this procurement approach in infrastructure provision. Although in the short-term a lot of money is freed up to meet the other competing immediate social and hard infrastructural needs.
The long-term accumulation of the debt due to the implementation of several projects has to be properly studied. This paper articulates the impact the rise of the debt load has on the sustainability of this method. It also assesses the long-term impact of PPPs preference and the concomitant debt load accumulation.
The proclivity for their preference as demonstrated among others the health sector appears to be based on individual departmental judgement based on isolated project-based affordability without any holistic governmental capping thereto.
This mounting debt which is mortgaging the current infrastructure to the progeny could result in a long-term boomeranging benefit. PPPs should be considered as heavy infrastructure governmental hire-purchase scheme and the plethora thereof should be controlled by stringent policy stipulations. There has to be nationwide policy capping the use of PPPs based on departmental affordability which is reliant on a well devised formula.
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