An interrogation of public private partnership contracting risks: A South African case study of ICT service delivery

Public Private Partnership (PPP) project in the public sector of South Africa have come under major scrutiny in the last decade due to overspending and the failure of PPP projects being completed timely. The ruling party government have been under major scrutiny by the media, specifically the Treasury to be held accountable for the mismanagement of public funds. Opposition Parties on behalf of the citizens are demanding that public sector management are held accountable and that the right management be put in charge of managing PPP projects risks. In order to get better understanding of PPP project risks we will investigate the PPP contract for an information and Communication Technology (ICT) service delivery project between the Department of Labour and Siemens. In this regard the study looked at the contract to unearth its strengths and weaknesses as a mechanism for identifying and managing risks. Using an agency theory risk framework and qualitative content analysis, the researcher interrogated the PPP contract from a risk perspective. Content analysis, was used to interrogate the PPP contract documents, to build on a comprehensive risk framework. The agency theory framework suggested that risk factors for ICT service delivery are widely acknowledged in literature however; these were not specified in the PPP contract for ICT service delivery. The analysis identified risks inherent in PPP contracting that should be addressed to manage ICT service delivery. The risk framework provided risk strategies, which could provide important insights for managing risks in PPP contracting relationships for ICT services.