The public-private partnership enigma

One of the government`s primary objectives has been to deliver high-quality basic services to historically under-serviced areas. Another major aim is to ensure greater racial diversity in both government and the private business community.

Public private partnerships (PPPs) have been seen as useful in achieving both goals. PPPs are said to be about promoting efficient and competitive public service delivery. The theory is that such partnership operations can reach and service disadvantaged populations while minimising cost to the government - shifting risk to the private sector and enabling national, provincial and municipal governments to concentrate on their core missions.

However, while the private sector appears to be in a position to assist government in increasing access to services, large backlogs remain. The ICT sector in particular has been criticised for delays in implementing government projects and for budgetary issues.

PPPs are a wonderful idea in theory, says Raj Wanniappa, public sector GM at Dimension Data.

"The concept of PPPs has a lot of benefits for both government and service providers, but the process has already proved to have problems," says Wanniappa. "For example, the process is too lengthy. Government has to find a way to shorten the time it takes to set up the right partners and get approval from the national treasury."

He says these delays have other implications, as partners start identifying problems and risks during this time. "The steps stipulated in the Public Finance Management Act (PFMA), coupled with stipulations by the treasury, can take almost a year to complete, depending on the cooperating government department. By the time the job is started, both parties have reservations and that is not a good collaborative environment."

Looking at the challenges facing such partnerships in SA, however, he believes it would be advisable for government and industry rather to work on a model that is somewhere between a PPP and a tender.

Wanniappa explains the lengthy process of setting up a PPP is also a contributing factor to the large service delivery backlogs in the country.

"It would be better for government to move away from the model of a large-scale PPP to a more manageable strategic partnership model, removing all bureaucracy and resulting in faster service delivery."

There is a lot of capacity for most PPP initiatives to bear fruit, but there are a lot of challenges that government must face.

Tim Ellis, regional sales manager for public sector, Cisco Systems

He says though there are guidelines, such as those in the PFMA and others outlined by the treasury, that are supposed to support the process of setting up a PPP, it is necessary for roles and responsibilities to be more clearly defined.

"In a tender process, for example, one has a service level agreement from which to work, and this clearly defines what everyone is expected to bring to the table. As it is a punitive process, the chances of being able to pass on responsibility are minimised. Through these types of partnerships, both government and the private sector are learning how the other works. In the process, there are many misunderstandings of the others` operations. This sometimes leads to the private sector being held accountable for delays in delivery."

Wanniappa points out that while it would be ideal for government to have customised technology to address specific issues, the use of off-the-shelf capabilities rather than bespoke development could save the country a lot of time and money.

"It is all good and well to try and have our own systems built for SA but, at the same time, we could try to use some of the tried and tested methods of other countries, like Ireland, in our PPP processes," he elaborates.

Judging from processes being looked at to try and rectify issues such as insufficient policy documentation, clear guidelines on responsibility and roles to be played in a PPP, he adds, it will take between three and five years for SA to reach a level where PPPs can go off without a hitch.

"The PFMA and treasury guidelines have helped create a feasible PPP environment, but there is still a lot of work to be done. I believe any other frameworks to be developed should be done in joint consultation with the private sector. We recognise the need for government to move into a PPP model, and the associated benefits. However, let`s get the stringent policies to assign obligations to government and the service provider," says Wanniappa.

Tim Ellis, regional sales manager for public sector at Cisco Systems, agrees, saying there is a lot to be gained by the private sector if regulations and frameworks supporting PPPs are made clear.

"There is a lot of capacity for most PPP initiatives to bear fruit, but there are a lot of challenges that government must face," notes Ellis. "Sometimes these projects are classified as non-critical initiatives, thus making it difficult for government to raise funds for them."

He says while they may seem critical at domestic level, the onus does sometimes fall on the private sector to source funding for them.

"PPP models have worked in transforming the economies and service delivery of other emerging markets and, with a little more consultation, a similar model will be perfected for SA. One of the key areas to be identified is who brings what to the table. This applies to labour, skills, intellectual property and funding."

Some players have blamed misunderstandings over PPPs on the State IT Agency (Sita), saying it is mandated to play a regulatory and infrastructure-providing role in joint efforts between the ICT sector and government, but has yet to perfect the regulation of PPPs.

In its defence, Sita accepts there is broad acceptance of the necessity to centralise ICT service management and ensure its coordination by a single public sector entity on behalf of government. However, the organisations says, it is also widely recognised that the range of skills and resources needed to provide the comprehensive, cutting-edge IT requirements cannot be adequately accommodated within a single institution.

Mavuso Msimang, CEO of Sita, says the organisation has always operated in some form of partnership with private and other public sector ICT and telecoms companies.

"These relationships have largely been based on the provision of essential infrastructure, and the procurement of hardware, software and services that Sita was perceived not to be in a position to supply to government at the time."

Msimang says Sita has often found itself in a position where it has to defend the inherent conflict in its ICT standards setting and product certification role, and certify the suitability of ICT goods and services while, at the same time, competing with private suppliers in the provision of the same or similar services.

"The organisation has frequently been accused of simultaneously acting as referee and player. Interestingly, the charge has been laid by service providers, suppliers and clients alike. The need to rectify the status quo is both urgent and imperative," he explains.

The need to rectify the status quo is both urgent and imperative.

Mavuso Msimang, CEO, Sita

Msimang assures that, as service delivery gradually passes to the private-operator domain, Sita is necessarily re-positioning itself and gearing up to play the role of prime systems integrator, with a requisite suite of service and project management skills.

"By and large such skills are not currently resident within the organisation. The focus will be on scaling up on incumbent skills and on the deployment of pertinent additional resources," he explains.

Msimang also says recent media reports about Sita having preferred partners within the ICT industry have caused a great deal of anxiety. "It is perhaps necessary to restate that Sita private sector partnerships will be undertaken through the tried and tested procurement procedures and processes normally followed by Sita.

"We expect to finish the current round of consultations by August of this year. These consultations seek to canvas the views of industry on the modalities of the planned partnership," he explains.

Government`s struggle to find a way to increase access to services has also resulted in a call for a ministry of ICT. Public and private sector alike are fast realising that the need for a centralised and specialised body to govern and ensure growth of the industry is undeniable.

Baldwin Ramasobane, GM at Sita for Limpopo Province, was recently reported as saying that no one really knows which government institution is responsible for handling ICT issues directly, and thus resolving problems of inadequate ICT budgets.

He also stated the Department of Communications and government`s IT officers (the Gito council) were in discussions about the appointment of an ICT minister.