Partnerships with private sector key to country’s growth
Posted Sunday, August 12 2012 at 12:02
Public-private partnerships have been identified as one of the most effective methods of managing infrastructure and resources for the benefit of the citizens.
Through this system, the Government and private bodies jointly manage public resources using various methods. One of the biggest hurdles the Government faces is getting financing for these projects.
Another challenge would be managing, operating and running the initiatives efficiently. Such partnerships make it easier for the Government to delegate some of these functions to the private institutions and the overall effect is increased value for the public.
Public-private partnerships are beneficial to all the parties involved. Such an economy is usually very attractive to investors as a lot of opportunity is created for them.
Kenya is enacting its first Public -Private Partnership Law and this will hopefully attract more project and infrastructure investors into the country. When a regulatory framework is established, investor confidence is boosted.
Subsidiary legislation of public-private partnerships has been in existence through the Ministry of Finance Public Private Partnership Regulations of 2009. The Privatisation Act also contains some provisions which may touch on public-private partnerships.
These regulations and the Bill would be relevant for businesses and investors which intend to seize opportunities created in public project and infrastructure development.
The 2009 regulations provide ways in which private entities could participate jointly with the Government for the management of public infrastructure. One of these methods is through a management contract through which a private entity will be allowed to run a public resource while the Government retains it ownership.
The regulations place the cap at five years.
Examples where this has been used is in the management of Government-owned factories. The State would delegate the running of such facilities to a private body which has the technical knowledge while retaining ownership of the facility. It then pays the private entity a fee for this service.
The private entities can also lease an asset from the Government and charge the consumer fees for use of that facility. Ownership remains with the Government. The private entity makes its money from the fees it charges the end users.
This may not be common in Kenya but in other countries public parks and recreational facilities are run under public -private partnership through leasing.
A concession granted to a private entity requires that it maintains and upgrades the facility.
The concession is for a period of time and the money for the private body is through charging end users fees.
A lot of concessions have been done at the Maasai Mara. Some are private concessions between the landowners and private developers while others are between the local authorities and private entities.