In September 2013 we issued a projects & construction updater on Public Private Partnerships (PPP) in Tanzania. Following the implementation of the Finance Act 2014 we published an update on the changes that had been made to PPP in Tanzania. As a further development, the PPP Amendment Bill 2014 (the Amendment Bill) has now been drafted. Whilst the Amendment Bill has not yet been enshrined in Tanzanian law, we are providing you with a guide to the Amendment Bill and how it stands to change Tanzanian PPP in the future.
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Potential competitive tendering for unsolicited PPP projects
Both solicited and unsolicited proposals are governed by the Public Private Partnership Act 2010 (the PPP Act) and the Public Procurement Act 2011 (the PP Act). A solicited proposal is one initiated by the public sector. An unsolicited proposal is one initiated by the private sector.Potential competitive tendering for unsolicited PPP projects
The Finance Act 2013 (the FA 2013) amended the PPP Act and the PP Act. Following the Finance Act, unsolicited proposals were no longer required to be competitively tendered. This law has now been amended once again.
The Amendment Bill provides that except for unsolicited projects, all PPP projects must be procured through an open and competitive bidding process.
When considering an unsolicited project, however, the National Investment Steering Committee (NISC) may order that the procurement of that project is to be made on a competitive bidding basis, if it deems it is in the public interest.
Accordingly, whilst there is now a presumption that a party submitting an unsolicited proposal shall not be subject to a competitive bidding process, if the NISC deems appropriate, it may demand that the project is procured on a competitive basis.
New PPP authorities established
The Amendment Bill replaces the current Coordination Unit and Finance Unit with the Public Private Partnership Centre (PPP Centre) and the Public Private Partnership Technical Committee (PPP Technical Committee).
The PPP Centre
- Provides PPP technical assistance to the Government
- Recommends guidelines and procedural practices to the Government in relation to PPP projects
- Assesses proposed PPP projects and forwards those projects it deems appropriate to the PPP Technical Committee for further consideration
The PPP Technical Committee
- Considers PPP proposals made to it by the PPP Centre
- Recommends PPP projects to be approved by the NISC
- Reviews and makes recommendations for the allocation of funds from the Public Private Partnership Facilitation Fund (the Facilitation Fund) (described below)
The PPP Technical Committee will be made up of a series of public officials including, inter alios, the secretaries of the Ministries of finance and land, the Deputy Attorney General and the Commissioner General of the Tanzania Revenue Authority. The PPP Technical Committee will also include one person from the private sector. This person will be selected by the Minister for Investment upon the recommendation of the Tanzania Private Sector Foundation.
The Facilitation Fund
The Amendment Bill establishes a fund, to be known as the Facilitation Fund. Upon approval by the PPP Technical Committee, the Facilitation Fund shall be used to:
- Finance feasibility studies and other project preparation costs as may be required by a contracting authority
- Provide resources to assist projects with limited financial viability and high economic benefit
The Facilitation Fund will follow prescribed accountancy rules and will be set up by the PPP Centre. Fund proceeds will be held by a ‘reputable investment bank’. The application of any monies held by the Facilitation Fund will require the prior approval of the NISC.