Innovation Beyond Conventional Procurement: Rethinking Public-Private Collaboration in South Africa

South Africa’s struggle with efficient service delivery is no secret. From healthcare and education to infrastructure and utilities, the demand for quality services is growing rapidly, yet government institutions are hampered by limited resources, bureaucratic bottlenecks, and persistent governance challenges. With urban populations expanding and technology advancing at a rapid pace, the conventional procurement model reliant on rigid contracts and lengthy tender processes has become increasingly inadequate.

To meet these pressing needs, the country must look beyond traditional procurement and embrace a more dynamic model of collaboration: Public-Private Partnerships (hereafter referred to as “PPPs”). Done right, these collaborations not only expand government capacity but also foster innovation, accountability, and long-term sustainability.

Why Conventional Procurement Falls Short

The standard procurement process in South Africa emphasizes rigid compliance, lengthy approvals, and cost-minimization over innovation. While this ensures accountability, it comes with significant trade-offs. Delays in project implementation, inflexible contracts, and limited engagement with private-sector expertise often derail service delivery. Moreover, corruption and mismanagement have undermined public trust in the system. This approach has left little room for creativity or adaptation. In a country where needs evolve quickly, procurement models that cannot pivot swiftly are destined to underperform.

Innovation Through Collaboration

Public-private collaboration reimagines how services are delivered. Instead of government operating in isolation, PPPs leverage private-sector efficiency, investment, and expertise to co-create solutions. This model spreads financial risk, accelerates project execution, and brings in fresh ideas.

Below are several innovative approaches that are beginning to take root in South Africa:

1. Co-Creation and Shared Investment: Partnerships where both sectors design solutions together and share financial responsibility.
2. Outcome-Based Contracting: Payment is linked to results such as improved patient outcomes in healthcare or job placements in training programs rather than just compliance with inputs.
3. Social Impact Investing: Blending public funds with private capital to finance development projects, with repayment tied to measurable social outcomes.
4. Agile Procurement Models: Frameworks that replace red tape with adaptive contracting, allowing projects to adjust in real time to shifting circumstances.

These models encourage innovation and align incentives toward delivering impact rather than simply meeting contractual checkboxes.

Lessons from South Africa’s Case Studies

Recent examples demonstrate that PPPs can transform service delivery when implemented effectively. Smart City Projects such as in Cape Town, where AI-driven traffic systems have reduced congestion, while Johannesburg’s smart metering has improved billing accuracy and resource efficiency.

In healthcare collaborations, mobile health clinics and telemedicine, powered by private tech firms, are extending care to rural areas. Partnerships between public hospitals and private networks have also improved access to equipment and specialist services.

The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has enabled private companies to supply wind, solar, and hydro power to the national grid, reducing dependence on coal and mitigating energy shortages.

And in infrastructure development flagship projects like the Gautrain illustrate how PPPs can deliver world-class transport while easing the financial burden on government.

These initiatives underscore how collaborative models can achieve efficiency, scale, and sustainability qualities that traditional procurement often fails to deliver.

Strengthening the Framework: Treasury’s Amendments

Recognizing the need for reform, the National Treasury has amended National Treasury Regulation 16 (NTR 16) to modernize South Africa’s PPP framework. For the first time in nearly 15 years, these changes introduce streamlined approvals for smaller projects, clarify institutional responsibilities, and improve governance mechanisms around unsolicited proposals and fiscal commitments.

Crucially, the amendments empower government departments to establish dedicated PPP units, enabling a more programmatic and coordinated approach. This shift signals a stronger commitment to creating an enabling environment where private-sector participation can flourish.

The Road Ahead

For South Africa, the path forward requires more than regulatory reform – it demands a mindset shift. Government, private partners, and communities must see themselves as co-creators of solutions rather than as players in a transactional relationship. By drawing inspiration from international best practices such as the UK’s outcome-based contracting, Singapore’s blockchain-enabled procurement, or Brazil’s social impact investing South Africa can leapfrog the inefficiencies of its’ current system.

Conclusion

Conventional procurement in South Africa has reached its limits. To achieve faster, fairer, and more sustainable service delivery the country must fully embrace innovative public-private collaboration. PPPs are not a silver bullet, but when structured with transparency, accountability, and shared purpose, they can unlock efficiency, investment, and innovation that government alone cannot achieve. In a time when public demand is intensifying and resources are stretched thin, rethinking procurement is not optional it is essential for building a resilient and inclusive future.

Cebo Ngobese

Attorney | LLB

Corporate Advisory and Forensic Services