THE state's lack of efficiency is one of the barriers to investment by the private sector, Economic Development Minister Ebrahim Patel said on Thursday.

He told a business forum on the sidelines of the African National Congress (ANC) policy conference that public-private partnerships (PPPs) - in which the public and the private sector share the financing, risk and reward of a public infrastructure project - were "critical" as they accounted for most of the jobs in the economy.

"Clearly the reason for idle cash, as you call it, on company balance sheets, is a mix of opportunity and return. On opportunity, one of the things we recognise is that the speed with which we move to unblock some of the constraints to investment is just too slow," he said.

The government aims to spend R845bn over the next three years to improve roads, railways and ports, increase power supply and improve social infrastructure.

"We've got to improve the efficiency of the state," he said.

Planning Minister Trevor Manuel said earlier this month it was a mistake to assume the state alone was responsible for improving infrastructure and could deliver it more cheaply than the private sector

"This notion that the state should be responsible for delivery ... is a nonstarter. If we want transformation, a lot will emerge from partnerships (with the private sector)," Mr Manuel said.

His comments are the strongest acknowledgment yet by a Cabinet minister that the government lacks capacity to deliver on its infrastructure plans.

In May Transnet CEO Brian Molefe said possible capacity problems were one of the threats to the group's R300bn investment programme.

Mr Patel also said on Thursday that the government had to be "mindful" that negotiations on international loans led to agreements that were "appropriate" for the South African economy.