A framework for financing public infrastructure in South Africa

Abstract

The lack of a framework for selecting appropriate funding mechanisms results in costly and inefficient financing of public infrastructure projects in South Africa. The purpose of this research was to determine the nature, the utilisation and the appropriateness of various public infrastructure financing mechanisms. Twenty major public infrastructure projects were used to conduct the exploratory study of public infrastructure financing practices in South Africa. Although the research found that South African financing practices were similar to practices in developed economies, it was also found that the capacity of public institutions to manage infrastructure projects needed strengthening. The research further found that markets for other mechanisms had to be developed further to provide more financing options. Finally, a conceptual framework that provides a consistent and systematic process in selecting appropriate and efficient public infrastructure financing decisions was proposed.