Cabinet okays Bill on public-private sector pacts

December 6, 2011
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A past Cabinet meeting/FILE
NAIROBI, Kenya Dec 6 – The Cabinet on Tuesday approved the Public Private Partnership Policy and Public Private Partnership Bill 2011.

The law is expected to standardize procurement, privatization laws as well as infrastructure development arrangements to make projects under PPPs more investor friendly.

“Both the policy and Bill seek to create a conducive environment for private sector participation in the provision of public services through investment of capital, managerial skills and technology,” a statement sent by the Presidential Press Service reads.

Ministry of Finance Permanent Secretary Joseph Kinyua last week said that he expects to have the proposals passed into law in the first quarter of 2012 after being approved by Parliament.

“Investors coming to Kenya especially for infrastructure projects face numerous risks and their biggest question is always around procurement. This new law will be able to address their concerns and put them at ease so that they can put in money into the projects, “Kinyua said.

The Bill establishes institutions to regulate, facilitate, monitor, supervise and approve Private Public Partnerships bringing together numerous functions previously conducted by different offices, which had been identified as a serious bottleneck by investors.

Kenya has been operating under public private partnership regulations that were introduced in 2009 that had created overlapping functions creating confusion as to what body is required to carry out a particular project.

The Cabinet’s endorsement of the PPP Policy and Bill is seen as an indication of the government’s commitment towards creating an enabling environment for attracting private sector partners in financing and managing infrastructure services.

With Vision 2030 heavy on infrastructure development, the Treasury estimates a funding gap of close to $40 billion (Sh3.5 trillion), hence the need to make PPPs investor friendly.

Reforms in the sector would make Kenya an ideal investment destination and help with the off budget financing of the ambitious projects in a bid to stimulate economic growth.

The law seeks to create a fund to finance feasibility studies for viable government projects. It also establishes a Resolution Committee to settle any disputes during the tendering process rather than having them go to the courts.

At the same time, in a bid to revive the pyrethrum sector, the Cabinet also approved the disposal of non-core assets by the Pyrethrum Board of Kenya in order to enhance its operational capacity.

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