The Public Private Partnerships Act, 2013, which amended the applicable legal framework , has now come into force (it was published in the Kenyan Law Gazette on 25 January 2013 and “received” by the National Council for Law Reporting on 11 March 2013).
This law was adopted in line with the national development programme called “Vision 2030”, which is currently implemented in Kenya. This plan aims to transform Kenya into an “average-income country”, particularly through the realisation of key projects that require important funding, which, in practice, cannot be fully supported by the Government.
The new legal framework established under the PPP law will render “Vision 2030” projects more attractive for private investors:
Three new institutions are established:
- the PPP Committee, which is responsible for monitoring projects and preparing guidelines;
- the PPP Unit, which serves as the secretariat and technical arm of the Committee; and
- PPP Nodes, established by each contracting public authority (which will identify, screen and prioritise projects, oversee the management of the project, etc.).
- Before entering into a PPP agreement, the concerned public entity shall strike a balance between the advantages of using a PPP, developing the facility or providing the service itself.
- Key steps must be followed for each project: feasibility studies; pre-qualification; call for tenders and disclosure of the benefits of the project through electronic media.
- Each PPP shall comply with three key criteria: value for money; affordability for the contracting government entity and the end users; and appropriate transfer of risks to the private party.
- The successful bidder shall establish a project company, in which a public body may be a minority shareholder.
- Project companies may request the secondment of public sector employees from the public contracting authority. Employees on secondment shall be subject only to the direction and control of the company.
- Establishment of the Public Private Partnership Project Facilitation Fund.
- The private sector has the power to initiate and suggest an investment in a project or the development of an activity to the Government.
- PPP agreements shall be governed by the laws of Kenya, any provisions to the contrary shall be void. Any dispute arising out of PPP agreements shall be resolved in accordance with the laws of Kenya.