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Treasury PS Joseph Kinyua

Kenya

Kenya drafting a new PPP law

NAIROBI, Kenya, Dec 1 – The Ministry of Finance on Thursday said it expects to have a Public Private Partnership law in place in the first quarter of 2012.

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

Finance Permanent Secretary Joseph Kinyua said the draft Bill had already been endorsed by the Cabinet sub committee on Finance and was waiting to be presented to the full Cabinet some time in January for approval.

The law is expected to reduce the risks most investors face when thinking of taking up infrastructure projects in the country, thus enabling them to make faster decisions in terms of investment.

“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.

Kenya has been operating under public private partnership regulations that were introduced in 2009, but the PS said these had created overlapping functions bringing in confusion as to what body is required to carry out a particular project.

As a result, most of the projects have taken longer to be prepared and approved.

Kinyua said the law would aim to articulate and underscore the government’s commitment towards creating an enabling environment for attracting private sector partners in financing and managing infrastructure services.

“It is necessary that we harmonise and bring all the PPP projects under law so that it is clear to stakeholders and we have a proper environment to which they can look,” he said.

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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.

He was speaking on the sidelines of the third African Public Private Partnership Conference. Over the last ten years the government has focused on infrastructure development and has prioritised infrastructure spending in successive budgets by allocating approximately seven percent of GDP to infrastructure development.

The PS said he expects the reforms would 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.

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