The different types of PPPs in which Kenya can invest are BOT (Build Operate Transfer) agreements; Build own operating agreements (BOO); Lease-renovation Operating Transfer Agreements (LROAs); Construction Lease Transfer Contracts (BLTs); Design, build, manage financial arrangements (DCMF) and build BOOR (Build Own Operate Remove) agreements. There are different types of public-private partnership agreements (often referred to as PPPs and P3s) or private finance initiatives or IFPs in the UK, depending on the type of project (e.B a road or prison), the degree of risk transfer, the level of investment and the desired outcome. The private sector builds and owns the plant for the duration of the contract, with the main objective of covering construction costs (and more) during the operation phase. At the end of the contract, the facility is returned to the government. This structure is appropriate if the government has a large infrastructure funding gap, as equity and business risk remains in the hands of the private sector for the duration of the contract. This model is often used for school and hospital contracts. Greater consistency in licensing, more appropriate approval levels and the addition of timelines will provide investors with more clarity and create a more efficient process for developing PPPs. In addition, projects are depoliticized by reducing the government`s direct role in PPPs by abolishing the cabinet approval function and are less likely to derail in order to achieve competing policy objectives. The new bill aims to address some of the shortcomings of the 2013 law from an investor perspective. The changes include a safer and streamlined project process with clear timelines. expanded procurement opportunities and a more user-friendly procedure for unsolicited bids, known as «private sector-initiated investment proposals». The bill also provides for more robust project management and a more robust institutional framework through the creation of a PPP Directorate and Project Implementation Teams.
Design – Construction – Maintenance – Finance (DCMF) Kenya`s Vision 2030 plan aims to make the country an industrialized middle-income economy by 2030. According to the plan, the Kenyan government has planned to spend about $60 billion to build the infrastructure, while relying heavily on PPP agreements to achieve this goal. The Government has therefore sought to create an enabling environment for the implementation of PPPs by creating the legal and regulatory framework by enacting laws and regulations that promote and encourage PPPs. In this context, Parliament passed the Public-Private Partnerships Act No. 15 of 2013 («the Act») to provide for the participation of the private sector in the financing, construction, development, operation and maintenance of government infrastructure projects through concessions or other contractual arrangements. However, there are still some concerns. First, the new Swiss counter-decision procedure could discourage the private sector from submitting unsolicited tenders, in particular if the contracting authority does not exercise its discretion to provide a compensation mechanism for the promoter in return for the costs it is likely to have incurred during the development phase. Unsolicited bids should be encouraged, and a more creative framework would consider alternative methods of assessing the value for money of an unsolicited bid, for example through benchmarking data, rather than relying on a Swiss challenge process that generally deters potential promoters. In order to attract foreign investors and in cases where the domestic workforce lacks expertise, Kenya`s PPP policy provides compensation for these foreign investors if the project is interrupted due to political instability or other unavoidable circumstances. The Kenyan government has also put in place performance monitoring mechanisms to evaluate PPP projects. In addition, there is a reduction in risk through comfort/support letters, guarantees and subsidies. Private companies can also make direct arrangements with lenders to finance PPP projects.
Kenya has a proven track record of infrastructure projects built with PPPs. These include the port of Mombasa Grain Terminal, which was built in 1998; the Malindi Water Service, built in 1999 with a 5-year management contract; the cargo terminal at Jomo Kenyatta International Airport (JKIA Cargo), built in 1998; including the Kenya-Uganda railway concession in 2006. . . .