Law & Regulation
Treasury Regulations for departments, trading entities, constitutional institutions and public entities
Regulation 16 makes these Treasury Regulations an independently important PPP instrument: it defines a covered PPP, assigns institutional responsibility, requires registration and feasibility work, and creates Treasury Approval I, IIA, IIB and III gateways through procurement and contract execution. Regulation 16A supplies a supporting national supply-chain-management framework. National Treasury's official March 2005 text (Government Gazette 27388) is the controlling version relied upon; a later Gazette amendment affecting a quoted provision must be checked before article-level implementation.
Legal Significance
What This Instrument Does
Operationalises the PFMA across financial management, expenditure, assets, liabilities, banking, reporting, public entities and other matters. Regulation 16 establishes the national/provincial PPP approval lifecycle for covered institutions; Regulation 16A establishes supply-chain-management requirements for specified institutions. Regulation 16 treats a PPP as a commercial transaction in which a private party performs an institutional function and/or uses state property, assumes substantial financial, technical and operational risk, and receives institutional payments, user charges or a combination; it requires the accounting officer/authority to control the process, register the project, undertake a feasibility study and demonstrate affordability, value for money and substantial risk transfer, with Treasury approvals required before procurement documents issue, before preferred-bidder appointment and before the agreement is signed. Instrument boundary: the Regulations do not replace the PFMA, Constitution, procurement legislation, sector approvals or the project contract, and do not prescribe every commercial clause; Regulation 16 applies only within its defined institutional and transaction scope — municipal PPPs follow the MFMA architecture instead.
Why It Matters
Regulation 16 is the approval spine of a covered national/provincial PPP — a project may be technically viable and commercially negotiated yet unable to proceed lawfully without the correct Treasury gateway. The regulation also constrains post-award deal drift: material changes between feasibility, bid evaluation and final contract can require revised analysis and approval, and material variations after signature are not merely bilateral commercial decisions.
Key Provisions
- Regulation 1.2 — Application
Specifies which parts apply to departments, constitutional institutions, categories of public entities and SARS. Practical consequence: confirm institutional classification and any delegation/exemption before building the approval timetable.
- Regulation 13 — Loans, guarantees, leases and commitments
Supplements PFMA controls for specified liabilities and commitments. Practical consequence: test structure classification and approvals under both Act and Regulations for lease-like PPPs and support arrangements.
- Regulation 16.1 — PPP definitions
Defines affordability, institutional function, private party, PPP, project officer, state property, value for money and related terms. Practical consequence: classify by substance — function/property, risk and remuneration — not by contract label.
- Regulation 16.2 — Exclusive competency
Provides that only the accounting officer or accounting authority may enter the PPP agreement for the institution. Practical consequence: delegated project teams may negotiate, but execution and accountability must conform to the regulation.
- Regulation 16.3 — Project inception
Requires registration with the relevant treasury, disclosure of internal expertise and appointment of a project officer and, when requested, transaction adviser. Practical consequence: Treasury registration and institutional resourcing should precede procurement commitments.
- Regulation 16.4 — Feasibility study / Treasury Approval I
Requires analysis of strategic benefit, legal deliverability, affordability, risk allocation, value for money and institutional capacity; prohibits procurement before written approval. Practical consequence: material assumption changes before Approval III can trigger revised feasibility and revised Approval I.
- Regulation 16.5.1–16.5.2 — Procurement documents / Approval IIA
Requires Treasury approval of procurement documents, including the draft PPP agreement, before issue to prospective bidders. Practical consequence: bid documents issued prematurely may expose the process to compliance and timetable risk.
- Regulation 16.5.3 — Procurement standard
Requires fair, equitable, transparent, competitive and cost-effective procurement and relevant preference compliance. Practical consequence: map Regulation 16 alongside the broader procurement framework — it does not displace it.
- Regulation 16.5.4–16.5.5 — Preferred bid / Approval IIB
Requires a Treasury-approved report showing how affordability, value for money and substantial risk transfer were satisfied before preferred-bidder appointment. Practical consequence: negotiated or evaluated outcomes cannot bypass the documented statutory criteria.
- Regulation 16.6 — Contract / Treasury Approval III
Requires Treasury approval before signature, including confirmation of core criteria, a management plan and satisfactory legal and other due diligence. Practical consequence: condition execution on Approval III and verify the final documents match the approved package.
- Regulation 16.7 — Agreement management
Makes the accounting officer/authority responsible for implementation, monitoring, enforcement, dispute management and reporting. Practical consequence: the authority needs a funded contract-management function and output-monitoring system throughout the term.
- Regulation 16.8 — Amendments, variations and waivers
Requires prior written Treasury approval for material changes and continued affordability, value for money and risk transfer. Practical consequence: build Treasury approval into variation timetables; contractual consent alone is not sufficient.
- Regulation 16.9 — Agreements binding on the state
Links state-binding effect to execution by the accounting officer/authority and receipt of required Treasury approvals. Practical consequence: closing diligence should capture both signatory authority and the complete Treasury approval record.
- Regulation 16.10 — Exemptions
Permits the relevant treasury, on written application and conditions, to exempt an institution from provisions of Regulation 16. Practical consequence: any exemption must be exact, written, within power and reflected in transaction diligence.
- Regulations 16A.3–16A.6 — Supply-chain management and procurement
Requires specified institutions to maintain compliant SCM systems and addresses bidding, committees, documentation and procurement methods. Practical consequence: apply Regulation 16A only to institutions within its stated reach and together with current procurement legislation.
InfraLex Relevance
Sits immediately below the PFMA and provides the operative national/provincial PPP gateway architecture, interfacing with constitutional procurement, institutional budgets and the PPP agreement. Not the GTAC PPP Manual, standardised PPP provisions, or a bankability standard.
Legal Framework Position
- PPP / ConcessionsPrimary / Framework Instrument
Primary / Parent Instrument
Instrument Overview
- Official Citation
- Issued under the Public Finance Management Act 1 of 1999; Government Gazette 27388, Government Notice R225, 15 March 2005
- Instrument Type
- Regulation
- Source Language
- English
- Effective Date
- 15 March 2005
- Last Verified
- 6 September 2026