- Through PPPs, governments aim to leverage on private sector experience, technical expertise and capital to spearhead the provision of services.
- in order for PPPs to be adequately and efficiently utilised, a robust legislative and regulatory framework is required.
Image: PSCU
Public Private Partnerships (PPPs) have long been touted as a preferred route toward achieving accelerated development through greater involvement by the private sector.
Through PPPs, governments aim to leverage on private sector experience, technical expertise and capital to spearhead the provision of services or delivery of critical projects. However, in order for PPPs to be adequately and efficiently utilised, thereafter translating to the successful completion of national interest deliverables, a robust legislative and regulatory framework is required. In a bid to achieve this, African governments have over the past two decades strived to develop and implement the necessary foundations that will enable them tap into PPP potentials.
Kenya has not been left behind in this journey. Indeed, within the East African region, Kenya is deemed as a mature PPP market given its pioneering step in enacting PPP legislation in 2013. The PPP Act 2013, shortcomings aside, sought to somewhat centralise and streamline the pursuit, approval, implementation and completion of PPP projects in Kenya. Several projects have been closed via the PPP Act 2013 including the Nairobi-Nakuru-Mau Summit Highway and the Nairobi Expressway which are both in various stages of completion. However, due to a number of shortcomings within the PPP Act 2013, particularly with respect to nurturing investor confidence and certainty, private sector interest and investment has failed to achieve the traction desired by the Government of Kenya (GoK).
Perhaps in recognition of the shortcomings of the PPP Act 2013, GoK has embarked on an ambitious reform of the PPP legislative framework applicable in Kenya. Through the recently released PPP Bill 2021 (the Bill), GoK hopes to introduce global best practises into Kenya’s PPP legislative framework in a bid to enhance investor confidence, provide certainty and efficiency in the conclusion of PPP arrangements, and ultimately boost the uptake of the PPP model with the Kenyan context.
From an administrative standpoint, the Bill establishes the Directorate of PPPs which will be housed within the National Treasury. The Directorate, which will replace the current PPP Unit, features expanded powers and responsibilities with an aim to centralise, streamline and depoliticise PPP projects. The Directorate will be mandated with originating, guiding and coordinating the selection of PPPs, overseeing project appraisal, providing technical expertise in the implementation of projects and overseeing PPP contract management frameworks.
The Bill similarly seeks to expand the PPP framework to include additional contract structures such as public-private join ventures and strategic partnerships. The recognition of additional contracting structures will further streamline and centralise engagements between the public and private sector due to the requirement that the same be channelled through the Directorate.
Further, the Bill empowers county governments to conclude PPP arrangements directly, albeit with input from the Directorate, and imposes local content and skills transfer requirements. With respect to county government involvement, it is likely that the provision will increase flexibility at the county level in the spirit of devolution. On the local content and skills transfer front, the same is expected to result in local capacity building.
As a whole, the PPP reforms proposed are indeed welcome and if implemented correctly, will result in sustainable economic development in the long run.
Karen Kandie-MD IDB Capital