OO&K team seeks to enhance the client’s knowledge of Public Private Partnerships. Public Private Partnerships (PPP’s) is the partnership between government and the private sector, which is aimed at financing, designing, implementing and operating public sector facilities and services. It allows the public sector to contract with the private sector.
Public Private Partnerships, which are generally referred to as PPPs, are arrangements between a contracting authority and a private entity. In such an arrangement, the private entity undertakes to perform a public function or to provide a service on behalf of the contracting authority and is generally liable for risks arising from the performance of such function. The party must abide by the terms of the project agreement. The Private party is remunerated by way of compensation from a public fund, charges or fees collected by the private party from users or consumers of a service provided to them or a combination of such compensation and such charges or fees. Examples of PPPs include, but not limited to, the following:
In Kenya, several examples of PPP projects entail the development fo 10,000 kilometres of Road, with foreign companies using the annuity approach, the generation of 5,000 MW of electricity, according to National Treasury Budget, and the construction of several university hostels within Kenya, mostly governed by the Ministry of Education. Additionally, PPP examples n Kenya also include the development of Seaports, for instance, the Port of Mombasa and Lamu. The expansion of Mombasa-Nairobi-Malaba Highway is also another example, as well as the construction of the second Nyali Bridge in Mombasa, to name a few examples of past and ongoing PPPs in our nation.
This method of Partnerships has unlimited benefits to the Kenyan economy. With such, comes the ability to meet the increased demand for quality and affordable services from citizens i.e. transport, water and sewerage, telecommunications, power, social services. Moreover, it reduces the funding gap for infrastructure, estimated at USD 40 Billion over the next 8 years, whilst providing a new source of investment capital for required infrastructure projects. Another benefit is that PPPs reduce government sovereign borrowings and the associated risks such as debt and drive the creation of local long-term funding market. PPPs utilize efficiencies of the private sector in running public service. This ultimately leads to the expansion of the opportunities, stimulates job creation for Kenyans and enhances the economy as a whole. Within this realm, our knowledge entails the provision of advice, drafting of Public-Private Partnership contracts, negotiation of contractual terms such as partnership, conducting due diligence and regulatory compliance with requirements set out by the Public Private Partnership Act, No. 15 of 2013.
