1. Bakwena Platinum Corridor Concessionaire (Pty ) Ltd
PPP in Practice
CASE STUDY : BAKWENA by
Leo Rohrig
CEO
Bakwena Platinum Corridor Concessionaire (Pty ) Ltd
Introduction
Allow me to start with a disclaimer :
I am not a technical expert on RFID and consequently will not be responsible for any mishap befalling you, if the personal views and experiences, which I am going to share with you, should turn out to be irrelevant or even inapplicable to your business.
PPP IN PRACTICE

2. SOUTH AFRICAN ROADS Total road network: 536,000 km
National roads : ,000 km
Tolled roads : ,421 km
PPP concessions : ,220 km
For the maintenance of existing and the construction of new roads we have a funding back-log of 10 billion $ ….
And yet,
Only 2.5% of our paved road network is tolled and only half of the toll roads are provided by concessions.
PPP IN PRACTICE

3. Toll Road Concessions Maputo Corridor Witbank - Maputo N4 510 km
N3 Corridor
Heidelberg - Cedara N3
410 km
Platinum Corridor
Warmbaths – Pretoria – Botswana
N1 / N4
390 km
The first concession was the Maputo Corridor from Witbank to Maputo on National Road 4 which is 315 miles long.
The next was the N3 corridor from Heidelberg to Cedara on the Johannesburg to Durban grid with 260 miles.
The third and last concession is the Bakwena Platinum Corridor on the N1 north and the N4 west with 245 miles.
It is the Bakwena project which provided me with the experience which I’m going to share with you. Incidentally, the name Bakwena was derived from the name of a local tribe, meaning : People of the Crocodile.
Hence our little logo.
PPP IN PRACTICE

4. Concessions = PPP Implementing Authority : public sector
Developer & Funders : private sector
Road concession = BOT
Design, Construction, Financing, Operation, Maintenance, Upgrade and Traffic Risk accepted by the Concessionaire
PPP IN PRACTICE

5. PPP: Transfer of Risks, Rights & Obligations
PUBLIC SECTOR
HIGH
PRIVATISATION
CONTRACTING
PRIVATE SECTOR
LOW
PPP
PPP IN PRACTICE

6. Bakwena : Development Stages
Prequalification Request 1997
Tender
Best And Final Offer
Preferred Bidder Nov 1999
Contract signed Oct 2000
Effective Date Aug 2001
- all at developers risk –
PPP IN PRACTICE

7. Relationship Criteria
Public < > Private sector interaction is
critical in both phases :
Project Development & Execution
Test : Commitment
Capacity
Attitude
PPP IN PRACTICE

8. Commitment To go ahead -Timeously To remove obstacles
To underwrite the need for PPPs
Full political support, inclusive and beyond the Implementing Authority.
Risk acceptance commits the private sector.
PPP IN PRACTICE

9. Commitment Remove obstacles
i.e abuse of environmental legislation by objectors
Transparency of government funding
Propagate need for PPPs – service delivery
PPP IN PRACTICE

10. CHALLENGES TO BE MET Environmental approval process
Anti Project campaigns
Demonstrations and Obstructions
Impact on Timing and Resources
More directly related to our project where the following environmental challenges.
The environmental legislation is often vague and
untested in courts.
Assessment process is cumbersome .
Detailed regulations are missing or contradictory.
Authorisations, once you get them, can and will be
challenged.
Bio-physical and socio-economic issues get mixed up.
PPP IN PRACTICE

11. ENVIRONMENTAL EXPERIENCE
Ensure : there are no genuine green issues
Expose hidden commercial agenda
Meticulous process compliance
Involve public, record all I&AP contacts
More directly related to our project where the following environmental challenges.
The environmental legislation is often vague and
untested in courts.
Assessment process is cumbersome .
Detailed regulations are missing or contradictory.
Authorisations, once you get them, can and will be
challenged.
Bio-physical and socio-economic issues get mixed up.
PPP IN PRACTICE

12. ANTI-PROJECT CAMPAIGNS
FLYERS & PAMPHLETS
PROTEST MEETINGS
DISRUPTIONS OF INFO MEETINGS
MEDIA MOBILISATION
Common Characteristic :
FEW FACTS – PLENTY EMOTION
On top of that we faced a variety of anti-toll campaigns.
They came at us with flyers and pamphlets,
they conducted protest meetings and
disrupted our information meetings and
they availed themselves of every media form
television, radio and daily press.
And they tried to organise demonstrations.
We soon identified the common characteristics in all of that –
few facts – plenty emotion
and we learned from it.
PPP IN PRACTICE

13. ANTI-PROJECT : RESPONSE
Accept : concessions are quite complex
Funding, Financing, Design, Construct, Operate, Maintain & Upgrade
Dissect into comprehensible components
Conduct info meeting
Embark on step-by-step information campaign
Be patient and transparent
The first thing we had to accept is the fact that concessions are quite complex.
To make each component, the funding and financing, the design and construct aspect, the operation, maintenance and upgrade features, to make these transparent for your ordinary citizen is quite a challenge.
So we unpacked the issues and repacked them into comprehensible components and
embarked on a step-by-step information campaign
reaching 5000 interested and affected parties, each one individually identified.
We reached them with our roadshows and pamphlets
and we reached countless more through
media presentations and interviews.
PPP IN PRACTICE

14. DEMONSTRATIONS & OBSTRUCTIONS
Avoid confrontation
Remain available to media
Objective = make them ‘non-events’
Defuse : Introductory special offers
We also dealt with demonstrations which the anti toll lobby organised.
In our case, demonstration needed prior approval by the authorities, hence they were known in advance.
This gave us the chance to influence their location and timing, definitely outside peak traffic hours.
We convinced the police to keep a low profile, waiting discreetly in the vicinity, as did we : priority one is to avoid confrontation.
But we remained available to the media, in fact we fed them “traffic” related positive information.
You don’t ignore these activities but remember :
The objective is to make them non-events.
PPP IN PRACTICE

15. OUR CHOICE N1 Pretoria 10 km N1 Pretoria 10 km
PPP IN PRACTICE

16. Capacity PPP deals are very complex and have
technical, legal, commercial, financial, environmental components
Competency of the parties :
Previous in-house experience
Access to external resources
Legislative framework
PPP IN PRACTICE

17. Partnership is sharing
Attitude
Traditional : IA = client
Private Partner = contractor
who, for the privilege of a profit opportunity
has to solve all problems.
Partnership is sharing
Fairly !
PPP IN PRACTICE

18. RISK ALLOCATION RISK CARRIED by Tariffs Approved up front Discounts
BPCC
Protestor Action
Traffic >>> REVENUE
Design, Construction, Maintenance, Upgrading
Overloading
BPCC & SANRAL
Competing Roads
Termination
BPCC, SANRAL, LENDERS
PPP IN PRACTICE

19. Participation of PDEs Equity : ( Minority ) Shareholding
Limitations: Access to funds
Project : Joint Ventures
Sub Contracts
Direct Assistance to SMMEs
Employment creation
PPP IN PRACTICE

20. Socio-economic Upliftment
Training & Capacity Building:
Skills transfer & Mentorship
Bursaries & Scholarships
Economic Growth Promotion :
Community Participation
Development Fund
PPP IN PRACTICE

21. Way Forward
Many schemes will need increased government participation to lever private sector input
Facilitate Deal-Flow : Money won’t wait forever
Advance the PPP process
Efficient service delivery
Provide employment
Free government funds
Retain resources and expertise
PPP does deliver
PPP IN PRACTICE

22. The PPP Delivery Construct / upgrade 1300 km National Road
Private Sector Funding : R 9 billions
Average Daily Traffic vehicles
+ 10 % Heavies
15 Mainline & 14 Ramp Plazas : 223 lanes
Electronic Toll Collection introduced
Enhanced road safety : SOS & IMS
13300 new jobs created > multiplier effect 6
R 108 mio for community upliftment
PPP IN PRACTICE

23. The End
I dedicate the rest of my allocated time to your lunch-break and rest my case. Thank you for your attention.
PPP IN PRACTICE