Public-Private Partnerships Key to South African Markets

Improved water efficiency is becoming increasingly critical in South Africa, and public-private partnerships (PPPs) will be the lynchpin in attaining this objective, according to a Sept. 25 press release from Frost & Sullivan.

New analysis from the firm, "Procurement Processes and Outsourcing in the South African Water and Wastewater Market," finds that the treatment equipment market earned revenues of US $157.1 million in 2007 and estimates this to reach US $265.5 million in 2014. The water and wastewater outsourcing market earned revenues of US $140.1 million in 2007 and estimates this to reach US $237.6 million in 2014.

"PPPs enable a synergy between the best that government and the private sectors have to offer," notes Frost & Sullivan Industry Analyst David Winter. "They harness the energies of both partners to achieve an unprecedented, and much desired, outcome."

The Durban Water Recycling Project is an outstanding example of a PPP that demonstrates an innovative approach to several challenges relating to water resource management. The project has not only contributed to the effective management of industrial effluent but has also helped reduce the demand for water by industries, thereby freeing potable water for about 300,000 people in the Durban metro area.

Privatization is a very sensitive issue within the South African labor market. Labor unions have a fundamental ideological opposition to PPPs, viewing them as a threat to job creation, which remains one of South Africa's biggest challenges. "Official unemployment figures are estimated to be around 26 percent," explains Winter. "Hence, labor unions, who have always been against privatization, will view any PPP formation as a form of privatization of state-owned assets and a serious threat to job creation."

Competent employees are crucial for effective project implementation, especially in an environment where old and new technologies have to function in unison. Technical competence is central to high-class service delivery and industry players will need to demonstrate dedication to skills development with sound black economic empowerment credentials.

For a virtual brochure that provides manufacturers, end users, and other industry participants with an overview of the procurement processes and outsourcing in the South African water and wastewater market, send an e-mail to Patrick Cairns, Corporate Communications, at patrick.cairns@frost.com. Please include your full name, company name, title, telephone number, company e-mail address, company Web site, city, state and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership™ empower clients to create a growth-focused culture that generates, evaluates, and implements effective growth strategies.

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