Industry

PPPs given option to single-source projects under new law

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Ongoing construction of the Nairobi Expressway along Waiyaki Way. PHOTO | JEFF ANGOTE | NMG

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Summary

  • In a bid to address concerns around transparency in a country where a third of the budget is said to be lost to corruption every year, the law has restricted direct procurement option to exceptional circumstances.

Parties in Public-Private Partnerships (PPP) have the option to do direct procurement to cut costs and protect Kenya’s national interest after President Uhuru Kenyatta signed into law the bill on projects under build-operate-transfer (BoT) arrangements.

The PPP law allows entities in PPP deals to single-source work in a bid to speed up projects under the framework where the state has struggled to attract private investors since it came to force in 2013.

The option of direct procurement in the new law, which has repealed the previous one enacted in 2013, allows “partnerships to be procured either competitively or single-sourced through direct procurement or Privately-Initiated Proposals”.

Direct procurement, according to the memorandum, “simplifies procedural elements on the conduct of feasibility studies, tender evaluations, contract negotiations and approval applications”.

In a bid to address concerns around transparency in a country where a third of the budget is said to be lost to corruption every year, the law has restricted direct procurement option to exceptional circumstances.

These include situations where services can only be offered by a limited number of suppliers or contractors, where single sourcing will “significantly” lower the cost of the projects or where Kenya has a national interest through bilateral or international cooperation.

“The new Public-Private Partnerships Act repeals the 2013 legislation by providing an elaborate legal framework to cover both national and county level PPP projects,” the State House said in a statement on Tuesday.

“Further, the new law expands the role of the private sector in PPP initiatives beyond financing to include construction, operation and maintenance of the projects.”

Under the law, governors of devolved units will now undertake PPP projects in line with county integrated county development strategies without approval by the national government. They only need the nod from county assembles.

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