J Mashamba: Pubic Private Partnership seminar

16 November 2006

Programme Director
My colleagues, Members of the Executive Council
Mayors here present
Heads of Department
Colleagues from National Treasury
The Business fraternity
All government officials
Members of the media
Distinguished guests
Ladies and gentlemen

When Minister Trevor Manuel tabled the Medium Term Budget Policy Statement a
few weeks ago, he quoted from a play entitled 'Sizwe Banzi is dead.' Please
allow me to set the scene by sharing the quotation with you this morning. The
play tells of a migrant worker who composes a letter to be sent to his wife.
The story contrasts the cruelty of the pass laws and desperation of migrant
workers, with the dreams and aspirations of people dressed up, in their Sunday
best, for a family photograph.

In the play Styles (a character) describes his photo studio, which the
Minister quoted thus, "This is a strong room of dreams. The dreamers? He asks
my people. The simple people, who you never find mentioned in the history
books, who never get statues erected to them, or monuments commemorating their
great deeds. People who would be forgotten and their dreams with them, if it
wasn't for Styles. That's what I do friends. Put down, in my own way, on paper
the dreams and hopes of my people so that even their children's children will
remember."

'Sizwe Banzi is dead' is set in 1971, at a time when apartheid was most
rigid, and the gulf between rich and poor, between black and white were
unrelenting. Today, twelve years into our democracy, we still have dreams
beyond the material conditions under which we live, and we still have mountains
to climb in pursuit of fairness, justice and equal opportunity.

But we have broken open that desperate strong room of dreams that Styles
spoke about; we are now living out our hopes and aspirations, writing laws that
put people first, building institutions that respect people's rights,
constructing houses, creating jobs and providing services.

Today, there are many components of the civil service that work well; where
departments deliver services of a high quality and citizens are treated with
respect and dignity; there are many schools where effective learning and
teaching takes place; many rural communities now, for the first time, have
tarred roads that link them with other communities and urban areas; and many
millions of our people are served by our hospitals and clinics.

However, there are also very clear inadequacies. Despite the above and the
fact that public spending has increased over the past five years, we are
increasingly concerned that many of our people still have not seen the benefit
of the significant rise in public spending and the growth of the economy.

The key challenges we face as a country are to sustain our economic growth
and public spending, broaden participation and extend opportunities to all. We
must strengthen our capacity to deepen the quality of social development. We
must accelerate growth and share its benefits with all.

In short, we must find ways and means to urgently translate the dreams and
aspirations of ordinary people into new realities.

Programme Director, it is indeed a pleasure for me to presenting a keynote
address at this PPP seminar, which in my understanding is the first of its kind
in the country. We are honoured, as the people of Limpopo, to host this
important gathering. I believe that all the key institutions and role-players
are either present or represented in this seminar. It is thus our hope that,
when we all leave, we would have learned from our peers and be well motivated
and geared up to use PPPs as an alternative model to deliver the services that
our people so desperately yearn for.

As President Thabo Mbeki once put it, "We have to construct a new world that
is more equitable and responsive to the needs of the poor; mobilise all our
people voluntarily to act together to achieve goals of reconstruction and
development and to consolidate the practice of creating PPPs."

Limpopo province is unique in terms of its natural resources and acquired
assets and of course, has great people but its settings, as is the case in most
other provinces, are common to those of underdeveloped regions. There are
prevailing high levels of poverty and unemployment yet we possess great
untapped opportunities that can assist in the eradication of social and
economic ills.

Our province is, arguably, one of the largest food producing regions; has
high valued bio-diversity resources; attractive tourism destinations and
valuable mineral reserves.

As a province and country, we have set ourselves clear targets in respect of
reducing the levels of poverty, the rate of unemployment, the rate of
illiteracy and fast-tracking the growth of our economy. This government has
been working tirelessly to level the playing fields by regulating and
developing strategies aimed at facilitating the creation of a better life for
all.

There are areas where we are obviously performing very well. But the
perpetual problem of under spending on budgets remains a major challenge and
cause for great concern. Hence, there is a need for us to take a critical look
at our service delivery strategies and explore alternative ways that can
accelerate service delivery.

Distinguished guests, this is a great platform for us to share experiences
and copy best practices. In Limpopo we identified a need to improve the
performance of some of our public entities, business units, service points and
the whole service delivery system throughout the province. This necessitated
the establishment of a dedicated technical restructuring Unit called the
Provincial Asset Restructuring Unit, better known as PARU. The purpose and
intention for this Unit is to look at alternative service delivery models and
provide technical assistance to departments in respect of restructuring
initiatives and PPPs.

This seminar is a joint effort between the Limpopo Provincial Treasury and
the National Treasury's PPP Unit. There are a number of potential PPP projects
within the social and economic clusters. All it requires of us is to change our
thinking and to embrace this new approach to service delivery. PPPs are a
creative procurement solution that can assist in eradicating poverty and
driving development. This model can double the rate at which we provide our
health, education, transport, water, sanitation, conservation, heritage and
recreation services in order to instil a sense of pride in all our people.

PPPs are about combining the pool of expertise and resources available in
the private sector and managing it in such a way that it accelerates service
delivery and allows government to focus on its core mandates and
responsibilities. As Minister Manuel noted at the launch of the
standardisations provisions and PPP manual, "This is what PPPs are about. The
public gets better, more cost effective services; the private sector gets new
business opportunities. Both are in the interests of the nation" (August 2004).
As government, we need to shift our focus from focusing on non-core functions
and ensure that services are delivered to the poorest of the poor.

Regulation 16 of the Public Finance Management Act (PFMA) allows us to
pursue PPPs. Through a PPP, services can be delivered in a more cost effective
and affordable manner. The value derived from PPPs can be enormous as risks are
appropriately transferred to the private party where they are best managed. The
focus on PPPs is on services rather than assets employed; government
administrations the world over have come to a realisation that they should not
be too focused on owning, managing, operating and maintaining assets. Rather,
their primary objectives should be to provide policies, regulations, frameworks
and guidelines as well as the delivery of quality services to the people.

We are confident that this seminar will assist us to develop PPPs with the
sole aim of delivering quality services to the people. PPPs are generally
regarded as the key to reaching disadvantaged populations while minimising
costs to the government, shifting risks to the private sector, and enabling
national, provincial, and municipal governments to concentrate on their core
missions.

We have ample opportunities for potential PPP projects in all our provinces.
Let us assess the feasibility of this procurement model in remodelling
projects, assets and services!

I must state, in conclusion, that PPPs will only work if we radically
improve on our contract negotiation and management skills. Treasury does
provide technical support, but until and unless all of us prioritise the
effective management of Service Level Agreements, PPPs will not yield the
desired results. This is usually where even the best conceptualised PPP can go
horribly wrong.

Thank you most sincerely to all of you for attending this groundbreaking
initiative, especially the guests who have travelled from our sister
provinces.

Let us all enjoy and learn from this PPP seminar!

I thank you!

Issued by: Limpopo Provincial Government
16 November 2006