International Construction Law Review

Chantal-Aimée Doerries KC; Professor Douglas Jones AO

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SOUTH AFRICAN MUNICIPAL SERVICE PARTNERSHIPS

PETER DZAKULA1

Senior Associate, Projects Group, K & L Gates, London

In South Africa today, there is a huge demand for new infrastructure and for the provision of basic services such as water and electricity. Much of this demand needs to be satisfied at the municipal level. Municipalities are a division of local government and are responsible for ensuring the delivery of municipal services. In 1998, at the time of publication of the White Paper on Municipal Service Partnerships, the municipal infrastructure and service backlog was conservatively estimated at about R38.5 billion for a basic level of service. It was estimated that if these backlogs were addressed by public sector resources alone, it would only be in 2065 that many communities would be able to get adequate services. Providing services is particularly difficult in South Africa where two historically different economies are effectively being merged.

In response to the high demand and backlog, the White Paper recommended that municipalities look for innovative ways of providing and accelerating the delivery of municipal services. It set out a precedent for the use of Municipal Service Partnerships or “MSPs”. MSPs are aimed at marshalling the resources of public institutions, Community Based Organisations or “CBOs”, Non-governmental Organisations or “NGOs” and the private sector, towards meeting these demands.

This article looks briefly at the types of MSPs, the legislative framework, the procurement process and risk allocation. It draws heavily from the White Paper on Municipal Service Partnerships and the Practical Guide on Municipal Service Partnerships 2006–2010 published by the Department of Provincial and Local Government.

1. What are MSPs?

MSPs, in simple terms, involve a contractual relationship where an external organisation takes responsibility for all or part of the delivery of a municipal service. This can involve a partial or complete transfer of staff and other assets and resources. The external organisation may be from the private

1 Peter Dzakula and Christopher Causer (a partner in the Projects Group at K & L Gates) were recently in South Africa representing the tri-sector not for profit organisation Partners for Water and Sanitation. They acted as facilitators for MSP training sessions sponsored by the South African Department of Provincial and Local Government.

[2007

The International Construction Law Review

416

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