Public-private partnerships for tourism infrastructure development: Evidence from the Cradle of Humankind, South Africa

Public-private partnerships (PPP) are important vehicles for infrastructure development in the global South and increasingly applied in tourism. South Africa has extensively adopted the PPP approach for infrastructure development across several different sectors from transport, water and sanitation services, social development, office accommodation, health care and correctional services; increasingly the PPP approach is being applied to the tourism sector. This paper analyses the utilisation of the PPP approach to infrastructure development for tourism in South Africa using the case of the Cradle of Humankind World Heritage Site. In this example the PPP model has foundered and failed to deliver anticipated outcomes in terms of project sustainability and inclusive growth through community benefits. At the heart of the disappointments of this PPP is the issue of demand risk and inadequate visitor flows to the tourism destination. The critical need for thorough and rigorous feasibility studies is widely acknowledged in the South African experience. Yet in this tourism infrastructure project the original feasibility studies were faulty and wildly over-optimistic regarding visitor demand projections such that revenue streams to the private partner fell below sustainability thresholds. A turnaround strategy currently is being implemented to boost tourism growth and sustainability of the Cradle of Humankind.