Unsolicited PPP proposals in South Africa under Treasury Regulation 16

The legal basis

Finance Minister Enoch Godongwana amended National Treasury Regulation 16 under section 76 of the Public Finance Management Act, 1999 ³. The amendments were published as Government Notice 5841 in Government Gazette No. 52061 on 7 February 2025 ¹.

National Treasury published the draft for public comment on 19 February 2024. The comment period closed on 15 April 2024 ². A government statement on the draft said the change was meant to give the private sector clear rules for pursuing projects ⁴.

The amendments took effect on 1 June 2025. They apply to projects registered on or after that date. They apply to earlier projects whose feasibility study had not yet gone for Treasury Approval I ¹.

Who may submit and what qualifies

The regulation defines an unsolicited proposal as one prepared by a proponent and submitted under regulation 16.11 to an institution for the development of a PPP project. A proponent is a private sector party ¹.

Under regulation 16.11.2 the project must meet PPP criteria. It must fall within strategic sectors listed by National Treasury or pursue the objectives of the institutional function. It must add value to the design, development and cost effectiveness of service delivery ¹. Meeting these tests does not oblige an institution to accept a proposal ¹.

Regulation 16.15 bars parties on National Treasury's restricted suppliers database. It bars a proponent, director or officer convicted of listed offences, including offences under sections 12 or 13 of the Prevention and Combating of Corrupt Activities Act ¹. The proponent pays all its own costs of preparing and submitting the proposal ¹.

Steps after submission

• The proponent submits the proposal, in the format National Treasury sets, to the institution responsible for the function ¹.
• The accounting officer or authority evaluates it and tells the proponent the decision and the reasons ¹.
• If accepted, the institution registers the feasibility study with the relevant treasury and tells it the proposal's validity period ¹.
• The proponent states any protection it claims over the proposal and pays the institution a review fee to fund the transaction advisor ¹.
• During the validity period the institution may not run its own feasibility study for the project or recognise a rival proposal for the same project ¹.
• The institution submits a feasibility study for Treasury Approval I. Procurement then follows regulations 16.5 and 16.6 ¹.

The proponent's position in the tender

If the procurement has a prequalification stage, the proponent is automatically prequalified and shortlisted ¹.

A proponent that submits a compliant bid but is not chosen as preferred bidder gets a development fee if the project reaches financial close. The fee is a pass-through cost paid by the appointed preferred bidder ¹. No fee is due if the proponent does not bid, submits a non-compliant bid, or the project does not reach financial close ¹.

The amended regulation text does not give the proponent a right to match or a scoring bonus ¹.

Earlier practice recorded by the World Bank

The 2017 World Bank guidelines list South Africa as a country that reimburses proponents for development costs. They say it approves only innovative proposals that show unique benefits ⁵.

The World Bank PPP Reference Guide describes a two-stage best and final offer process for roads. The top two bidders from the first round resubmit offers, and the proponent is invited if it is not in the top two. A developer's fee is payable by the winning bidder ⁶.

A 2007 PPIAF working paper counted 4 unsolicited proposals presented in South Africa, with none tendered or completed at that time ⁷.