Related Papers
Public Private Partnership for Transformational African Economies: A case of South African PPP Hospital
2020 •
Nthatisi Khatleli
South African transformational economic policy since 1994 after the new African National Congress (ANC) took power seeks to achieve both racial desegregation and economic inclusivity. The self-evident acknowledgement that normalization of the once racially exclusionary economy will not be self-equilibrating has induced state intervention in the use of every procurement tool to achieve its policy of Black Economic Empowerment (BEE). The identification of Public Private Partnerships (PPPs) as an important element in effecting the transition is here tested. The long-term nature and peculiarity of each PPP agreement works to the advantage of the government to effect socioeconomic benefits.
Proceedings TG59 People in Construction
Skilling the Contracts Manager: A Critical Look At The PPP Contract Structure In Enhancing Skills Transfer In South Africa
2009 •
Nthatisi Khatleli
AND KEYWORDS Purpose: As part of its BEE endeavour the South African government has identified PPPs as a vehicle to efficiently transfer skills to emerging Previously Disadvantaged Individuals (PDIs) managers. The ex post distortional phenomenon of moral hazard abound in many contracts, it is however here demonstrated that the adoption of a self-monitoring contract in a PPP setup can smother moral hazard and enhance skills transfer and empowerment of the PDIs. Design: Recourse is sought from the economic theory of Principal agent theory as a methodology of interpretation because of the nature of PPPs in delegating responsibility to the consortium (agent). A phenomenological approach was adopted where all the key management players in the consortium were interviewed. Findings: The rigour of self-monitoring contractual regimen compels the consortium to nurture the PDIs in order to adhere to service level agreements, and avoid penalty escalations which have a negative bearing on the bottom line and could ultimately lead to contract termination. The centrality of BEE in the contract creates an incubatory environment, as the PDIs involvement cannot be compromised without contractual implications.
CIDB Conference
Efficacious Previously Disadvantaged Individuals/Institutions (PDI) Involvement in Knowledge-Intensive Projects
2009 •
Nthatisi Khatleli
This research seeks to demonstrate that the high specialist knowledge tacitness in major partners in Public Private Partnerships (PPPs), can be harnessed to impart skills to Previously Disadvantaged Institutions (PDIs) and enhance their gainful involvement in projects. The research demonstrates that the pervasive practice of outsourcing only labour-intensive activities to PDIs, while executing complex tasks in-house in knowledge-intensive projects is pernicious to optimal Black Economic Empowerment (BEE) delivery. The individual's characteristics of general self-efficacy, and contextual issues of project environment and training design are invistigated as to their relevance as factors contributing to desirable BEE outcomes. Problem: The subcontracting of PDIs in projects may not lead to maximum BEE benefits because incongruities in the organisational interfaces between PDIs and established companies may affect knowledge and information dissemination. Previous research has demonstrated that complex and idiosyncratic knowledge is acquired more easily within company boundaries than across oragnisational boundaries. It has also been established that managers know more about the activities of their own employees than employees of subcontractors. These phenomena hamper the effectiveness of skills transfer initiatives across company boundaries embarked by established companies. The intrinsic nature of Joint Ventures (JVs) where PDIs are incorporated and subsumed into the organisational structures of established companies may mitigate the inter-organisational challenges that often constrain BEE. Approach and Findings: A qualitative research approach based on interviews with managers of established companies and PDIs at Albert Luthuli Hospital PPP project demonstrated an effacacious BEE approach militated by the formation of the consortium JVs. The long-term nature of PPPs fosters amenability to PDI access to esoteric expertise in knowledge-intensive projects which would otherwise not be easily acquired. Organizational peer support actuated by the formation of JVs at operational level was found to have a direct correlation to skills transfer. It was also established that work complexity at IALCH supports a mastery goal orientation in order to attain collective standards adherence, which in turn enhances skills acquisition by the PDIs. Conclusion: From theoritical perspective this study compliments existing models on inter-organisational skills transfer and extends their applicability to the BEE scenario in South Africa. On the practical front it is insightful on the correct policy formulation and implementation.
Efficacious Previously Disadvantaged Institution (PDI) Involvement in Knowledge-Intensive Projects -a South African Experience
2020 •
Nthatisi Khatleli
1 ; David.Root@uct.ac.za 2 ABSTRACT Purpose: This research seeks to demonstrate that the high specialist knowledge tacitness in major partners in Public Private Partnerships (PPPs) in South Africa, can be harnessed to impart skills to Previously Disadvantaged Institutions (PDIs) and enhance their gainful involvement in projects. The research demonstrates that the pervasive practice of outsourcing only labour-intensive activities to PDIs, while executing complex tasks in-house in knowledge-intensive projects is pernicious to optimal Black Economic Empowerment (BEE) delivery. The individual's characteristics of general self-efficacy, and contextual issues of project environment and training design are invistigated as to their relevance as factors contributing to desirable BEE outcomes. Problem: The subcontracting of PDIs in projects in South Africa may not lead to maximum BEE benefits because incongruities in the organisational interfaces between PDIs and established companies may affect knowledge and information dissemination. Previous research has demonstrated that complex and idiosyncratic knowledge is acquired more easily within company boundaries than across oragnisational boundaries. It has also been established that managers know more about the activities of their own employees than employees of subcontractors. These phenomena hamper the effectiveness of skills transfer initiatives across company boundaries embarked by established companies. The intrinsic nature of Joint Ventures (JVs) where PDIs are incorporated and subsumed into the organisational structures of established companies may mitigate the inter-organisational challenges that often constrain BEE. Approach and Findings: A qualitative research approach based on interviews with managers of established companies and PDIs at Albert Luthuli Hospital PPP project demonstrated an effacacious BEE approach militated by the formation of the consortium JVs. The long-term nature of PPPs fosters amenability to PDI access to esoteric expertise in knowledge-intensive projects which would otherwise not be easily acquired. Organizational peer support actuated by the formation of JVs at operational level was found to have a direct correlation to skills transfer. It was also established that work complexity at IALCH supports a mastery goal orientation in order to attain collective standards adherence, which in turn enhances skills acquisition by the PDIs. Conclusion: From theoritical perspective this study compliments existing models on inter-organisational skills transfer and extends their applicability to the BEE scenario in South Africa. On the practical front it is insightful on the correct policy formulation and implementation. This study is instructive on the appropriate contract structuring when placing local SMMES with multi-nationals in developing countries' knowledge-intensive PPPs.
Proceedings of the CIDB conference
Accidental Duality in South African PPPs Power Relations: is the small man protected
2011 •
Nthatisi Khatleli
The South African Government worked hard in providing a world-class PPP institutional framework to reduce asymmetric power relations favouring the private party. The unique requirement to incorporate previously disadvantaged institutions (PDIs), places an extra burden on the government in its quest to create a cooperative rather than a conflictual contracting process. The relative economic and capacity inequities between established companies and PDIs trigger a second set of pre-contractual power relations that spill-over into the contract delivery. Although rewards and penalties are embedded in the contract to protect the interests of the PDI partners, this paper illustrates the deficiencies of institutional trust in restricting opportunism. However the paper also demonstrates that system power militates a lot of cooperative tendencies by established companies. Whereas trust is generally regarded as binding cement of all relationships, it is here demonstrated that trust and power as the two mechanisms for coordinating expectations and interactions in contractual transactions interact and manifest themselves uniquely in different institutional contexts, such as the South African PPP environment.
Obstinate agents or maturing stewards? A critical look at the private sector's commitment to BEE policy in South African PPPs
2020 •
Nthatisi Khatleli
The South African Black Economic Empowerment (BEE) policy because of practical exigencies depends on the previously privileged white-owned companies, which normally lead the consortia for its implementation. This kind of arrangement requires the government to adopt a management disposition consistent with the principal agent (PA) theory. The PA theory major tenet is that the agent is not to be completely trusted, pertinently so in a country which had legitimized racial economic policy. It could rationally be assumed that psychological factors could predispose most main contractors (agents) in consortia to be surreptitiously resistant to the BEE drive. However it is demonstrated that these agents can transcend their own self-interests, and resolve their internal inter-motivational conflicts and align their motives with the government (principal) for greater positive externalities associated with trusted stewards. Trust is at the centre of contractual relationships. The principal steward (PS) theory as opposed to PA theory differs fundamentally in relation to the level of trust to be bestowed on the agents. According to PS theory stewards can be trusted, and be given a certain level of managerial discretion especially after a long-term interaction with the principal where target adherence has been demonstrated. Although trust on the one hand is not a default position adopted by the government (principal), it is here shown using a PPP case study that the consortia can have transcendental motives which are not purely utility maximizing, but are in the end mutually beneficial. The purpose of this paper is to demonstrate that agents in PPPs, as a result of pre and post contractual interactions, are able to evolve and adopt a posture more akin to a trusted steward on BEE implementation. It therefore provides a better insight for the policy-makers and practitioners on the utility of PPPs in delivering socioeconomic benefits.
Building Abroad Conference
MANAGING PRE-CONTRACTUAL AND POST-CONTRACTUAL OPPORTUNISM IN BEE DELIVERY IN PPPs
2008 •
Nthatisi Khatleli
Since the promulgation of the generic Black Economic Empowerment (BEE) legislation in South Africa, opportunism is known to abound. It is here demonstrated firstly, that pre-and post-contractual opportunism, which comes in the form of "adverse selection" and "moral hazard", seems to be highly mitigated in Public Private Partnerships (PPPs). Secondly, there appears to be a strong fit between PPP legislation and the Principal Agent theory requirements for mitigating opportunism occasioned by information asymmetry. The strength of the PPP legislation in this regard translates into better procurement processes and correct structuring of the contract, entered into by the government (the principal) and the consortium (the agent). The benefits accruing from this manifest themselves in better screening mechanisms that induce better signalling from the agents, pre-contractually. Post-contractually, the monitoring systems embedded in PPP contracts ameliorate BEE shirking and align principal/agent interests. The objective is therefore to use the Principal Agent theory to assess the efficacy of the Public Private Partnership (PPP) legislation in mitigating opportunism in BEE delivery.
Assessing public-private-partnerships in South Africa and how administrative law should respond
2018 •
Nokulunga Zondi
How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets
2011 •
E R Yescombe
Examining the Effectiveness of BEE Implementation: A Case Study of Eskom Restructuring 1995-2005
2007 •
Mabutho Shangase
