Government amends regulations for PPPs

The Minister of Finance Enoch Godongwana has amended the regulations of the Public Private Partnerships (PPPs), in an effort to deliver much-needed infrastructure and ease pressure on stretched government finances.

“Although the economic landscape has significantly changed over the years, the PPP regulatory framework has remained static for close to 15 years,” the National Treasury said on Thursday.

In terms of section 76 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), the Minister has amended the National Treasury Regulation 16 (NTR 16).

The National Treasury said it 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.

“As highlighted in the 2024 Budget, amendments were drafted to the National Treasury Regulation 16 (NTR 16) and the Municipal PPP Regulation 309, which govern PPPs.

“The National Treasury issued these amendments for public comment on 19 February 2024. The public commentary process closed on 15 April 2024,” National Treasury said.

The National Treasury noted that it has made good progress in addressing the public comments and amending NTR16.

The final amendments to NTR 16 were issued in Gazette Notice 5841 of 7-2-25 Amendments to PFMA Treasury Regulation 16: https://www.treasury.gov.za/legislation/regulations/Amendments%20to%20PFMA%20Treasury%20Regulation%2016%20Notice.pdf.

The areas that were amended are summarised as follows:

• The NTR 16 rationalises 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.

Communication will be issued in response to all public comments received on NTR 16.

“Further details will be provided in the 2025 Budget Review documents covering supporting processes to enable procuring institutions to meet the new requirements introduced by the amendments.

“The amendments to the Municipal PPP Regulation 309 require more time because of procedural processes, including consultation with Parliament. These amendments will be finalised by June 2025,” National Treasury said. – SAnews.gov.za