Information gap shuts investors out of E. African public projects, says lobby
Posted Sunday, August 19 2012 at 15:40
Local investors are not participating in mega projects within the East African Community because of inadequate information given by governments.
A private sector lobby has said that funding and capacity gaps were other reasons why local contractors were missing out on the projects which have, in the recent past, been undertaken by Chinese companies.
“These projects are normally shrouded in secrecy and there is little information for the private sector. We have to change the way things are done if we intend to empower local investors,” said Charles Kahuthu, a regional co-ordinator of the East African Chamber of Commerce, Industry and Agriculture (EACCIA) at a workshop held at Mombasa Beach Hotel last week.
The meeting brought together officials of chambers of commerce in the five EAC countries and government officials to explore ways of involving the private sector in regional infrastructural development.
To address this challenge, EACCIA has partnered with the European Union and launched the PPP Project Advisory Unit Network (PAUN), which will work to build capacity among players in the private sector with the intention of identifying and promoting public-private-partnership opportunities in the region.
Mr Kahuthu challenged the private sector to unite and form consortia that would enable them to mobilise enough funds rather than engage in unproductive competition, adding that besides building capacity they would link private investors with development partners who would provide funding.
Some of the projects that are lined up for implementation in East Africa are the Sh1.5 trillion Lamu Port Southern Sudan Ethiopia Transport (LAPSSET) corridor with seven components which include a port, oil pipeline, resort cities, and refinery; and the construction of a new terminal at Jomo Kenyatta International Airport at a cost of Sh56 billion among others.
According to EACCIA, such projects are supported by international monetary institutions including the World Bank through the public sector.
“As a result, it is very difficult for local businesses to participate in PPP projects.
The local private sector, though benefiting from improved infrastructure that results from the project, is unable to gain any additional business and an opportunity for indigenous economic growth is lost,” said EACCIA in a statement.
“Understanding the idea of sustainable private provision of public services as risk-sharing partnership is critical,” the statement added.
However, the business leaders said the PPP legislative agenda being undertaken by East Africa Community member states was a step in the right direction.
They urged the governments to fast-track PPP Bills.
Uganda, Kenya, and Tanzania are in the process of finalising the Bills, Burundi, and Rwanda are also on track. Provisions of these laws stipulate procedures to be followed when governments engage in PPP projects.
“We are working in partnership with the private sector who are helping us in the development of the policy.