CONSTRUCTION BUSINESS & PROJECT MANAGEMENT CONFERENCE 2022 · Vol. 2022, Issue 1

An assessment of alternative financing mechanisms for municipal infrastructure projects in South Africa

Makgopa F Tshehla

Keywords: Financing mechanisms, infrastructure development, municipal infrastructure

Abstract

This research sought to identify the alternative financing mechanisms for municipal infrastructure in district and local municipalities in South Africa. The main objective of the study was to assess challenges and constraints faced by district and local municipalities in procuring alternative finance for infrastructure development. The study made use of a descriptive cross-sectional survey. A purposive sampling technique was used and a total of 19 participants formed part of the sample. Data was collected through self-administered questionnaires from a representative subset, made up of municipal officers in district and local municipalities in Gauteng, South Africa. The findings of the study reveal that municipal infrastructure is largely funded through grants and partly through own revenues. Another major finding was that district and local municipalities face challenges in procuring municipal infrastructure through alternative mechanisms. Public-Private Partnerships are complex and take long to unlock. As a result, there is limited consideration for alternative financing mechanisms. There is a need to cultivate a culture of exploring alternative financing mechanisms beyond PPPs.