Commentary: Kenya’s Public Private Partnerships Bill 2021

The specific Act or law governing Public Private Partnerships (PPPs) in Kenya is the Public Private Partnerships Act of 2013. A new Public Private Partnerships Bill, 2021 is proposed to replace the current Act.

Prior to the enactment of the 2013 PPP Act, Kenya had already witnessed significant private sector participation in public sector activities, particularly in the energy sector through the involvement of Independent Power Producers (IPPs).

Since then a number of PPP projects have been concluded under the 2013 Act. The PPP Unit of the National Treasury reports on its website that as of March 2020, the country has a project pipeline covering various sectors. These are Transport and Infrastructure, Education, Health, Energy, Environment and Sanitation, Water, Housing, Industry and Manufacturing.

It further reports that a total of 80 projects have been approved, 74 of these from a solicited process and 6 as Privately Initiated Investment Proposals (PIIPs).

Reasons for the introduction of The Public Private Partnerships PPP Bill, 2021 are to streamline the regulatory framework for PPPs, enhance efficiency in the PPP process through reducing the number of oversight approvals and proposing timelines on key project processes and stages. The Bill also seeks to address existing gaps in the current Act of 2013.This article highlights a number of the significant proposed changes.

The Bill proposes the establishment of the Directorate of Public Private Partnerships. The functions of the Directorate would include originating, guiding and coordinating the selection of PPPs, overseeing project appraisal, providing technical expertise in the implementation of projects and overseeing PPP contract management frameworks.

Under the current law, there exists a PPP Unit, with somewhat limited functions. The PPP Unit is housed within the National Treasury.

The PPP Bill also proposes to do away with Nodes that are established in each contracting authority that intends to enter into a PPP. A Node consists of financial, technical procurement, legal and other necessary staff whose functions are to identify, screen and prioritise projects, appraise projects and undertake the tendering process.

The establishment of a Directorate with greater responsibilities is beneficial to centralise PPP processes and functions.

This is likely to enhance efficiency and result in better coordination overall, particularly given the complexity of PPP procurement. It is worth noting that a Director-General of the PPP Directorate was appointed earlier this year, possibly in anticipation of the enactment of the new PPP law.