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States should regulate projects

In Summary

• According to Kenya PPP program there were 72 PPP Projects in the pipeline as at June 2018.

• EAC civil society estimates the total value of PPPs projects in the country currently at Sh2.47 trillion ($2476 million) ahead of other EAC countries.

An ongoing road construction. /FILE
An ongoing road construction. /FILE

Poor development of public-private partnerships contracts has delayed in projects and cause of fiscal distress in the country.

According to East Africa Countries Civil Society Organisation, change in provision of services to private investors has caused a paradigm shift in policy and practice of international development financial institutions who previously funded governments to undertake development projects.

However, the new approach nowadays promotes active involvement of private actors, resulting in a mushroom of new instruments to speed up investments in the pursuit of other global public interests.

 
 

“PPPs should put people first before profit,” the society said in a statement.

The society has called member states to reclaim policy space and take bold measures to regulate or reject PPPs that do not place people’s interests at the center.

Governments have been the main providers of public goods and services.

However, private investments in the health sector, education, transport infrastructure, energy generation and supply services, water supply services among others have grown albeit under the PPP arrangement.

According to National Treasury, Kenya has 21 bilateral development partners including Swedish International Development Agency, governments of Japan, China, Belguim, Finland among others.

The country also has 16 other multi-lateral partners including International Development Association and European Development Fund.

According to Kenya PPP program there were 72 PPP Projects in the pipeline as at June 2018.

 
 

Some of the projects stated to be at negotiation stage include the construction and rehabilitation of the 71.5 kilometre existing roads from Bomas to Magadi, Bomas to Ruiru via Dagoreti and other link roads funded through annuity payments.

The government also planned to build 20,000 police housing units with Phase 1 comprising of 4,685 units developed at 9 sites within Nairobi. The project’s contracting authority is the State Department of Housing.

The society estimates the total value of PPPs projects in the country currently at Sh2.47 trillion ($2476 million) ahead of other EAC countries.

EAC civil society stated that PPPs posed risks on public sector including limited transparency and public scrutiny, higher prices for goods and services for intended consumers, cost overruns and delays being skewed more to the side of the contracting party or national government.

“Other risks include risk of losing key national assets to the private party in a PPP arrangement, escalated costs of delivering services and goods and drain of national purse as the government ends up paying much more per unit good or service under the PPP arrangement,” the society added.

Likewise, the domestic private sector may feel sidelined in participation of PPP projects.

In Rwanda, the projects have been valued at $618 million, $1488 million in Uganda and $815 million in Tanzania.

Burundi and South Sudan have not registered projects under the PPP arrangement.