- South Africa’s Minister of Finance, Mr Enoch Godongwana, has amended National Treasury Regulation 16 in relation to Public Private Partnerships (PPP).
- This paves the way for less red tape in PPP projects under R2 million.
- The amendment also introduces the concept of unsolicited proposals, where a company can pitch ideas for projects to a state institution instead of first waiting for the government to request bids.
- The new rules take effect on 1st June 2025.
The move comes as the government recognises the importance of PPPs as a lever to deliver much-needed infrastructure, and ease pressure on stretched government finances.
The National Treasury is advancing the implementation of recommendations from the comprehensive review of the PPP regulatory framework across all three spheres of government. The resulting changes are expected to drive higher confidence and investment in PPPs as well as greater private-sector participation.
The final amendments to NTR 16 were issued in Gazette Notice 5841 of 7-2-25 Amendments to PFMA Treasury Regulation 16. The areas that were amended are summarised as follows:
- The NTR 16 rationalizes the approvals for smaller projects with a proposed threshold that exempts projects from Treasury Approvals IIA and IIB. The threshold has been issued in a notice in the Gazette.
- The PPP Advisory Unit’s roles and responsibilities have been given expression in the amendments, in order to support institutions in the planning and procurement process for PPPs and to fast track the conclusion of PPP projects to reach financial close.
- Furthermore, the amendments provide a clear delineation of institutional roles and responsibilities in terms of the PPP advisory function and the regulatory function.
- A provision is made in the amendments to empower national departments to establish dedicated units tasked with adopting a programmatic approach to support PPPs on behalf of other organs of state within the strategic sectors under their jurisdiction. The PPP Advisory
- Unit will collaborate closely with these departmental units to ensure effective coordination and execution of PPP initiatives.
- The legislative amendments provide mechanisms to report, track and manage Fiscal Commitments and Contingent Liabilities through the FCCL reporting requirements at Treasury Approval I, IIB and III.
- The provisions with respect to granting exemptions to NTR 16 have been improved to ensure good governance. The provision with respect to applications where institutions seek approvals for amendments to PPP agreements has been improved and clearly explained to ensure good governance.
- The provision of a clear framework for receiving and processing PPP Unsolicited Proposals together with incentives to ease entry for the private sector.
Author: Bryan Groenendaal
