Let us all wait to hear how the High Court will interpret the private public partnership (PPP) law with regard to the controversial plan to concession the Jomo Kenyatta International Airport. With the matter now in court, the sub-judice principle prohibits commentary especially on the issues being argued before the judges.
We must wait to hear about how the court expresses itself on the legality of the so-called privately initiated projects – whether the law allows you to proceed and conclude with concessions without competitive bidding.
There are broader policy questions that go beyond the issues in court. Are there flaws in our PPP framework that make it difficult for us to roll out and conclude PPP projects? Do we have efficient institutions in this space?
Today, the Nairobi-Nakuru-Mau Summit corridor is one of the biggest threats to life and limb of the hundreds of thousands of citizens like me who drive on this route every other day.
According to statistics from the Kenya National Highways Authority (Kenha), this section of the road was carrying an estimated 20,000 vehicles in a day by 2017. And, vehicle traffic has been increasing at an annual rate of four per cent. Indeed, this is the most crowded and congested part of the Northern Corridor.
So, we came up with very big plans. The current two-lane highway was to be expanded into a four lane dual carriageway that would be expanded further into six-lane dual carriageways at busy sections.
The scope of the construction was to include widening of the existing road construction and building a 4km viaduct through Nakuru town. According to the estimates by Kenha, this project was to cost a whopping Sh180 billion. Because the government did not have the money, we decided to go the PPP route and chose the French construction conglomerate, the Vinci Highways Group- to do the job for us.
The French company would build the road for us with its own finances, take ownership and control of the highway for 30 years, and finally revert ownership to the State.
In October 2020, former President Uhuru Kenyatta visited Paris to witness the signing of agreements with the French company.
When President William Ruto visited France in March this year, the project was on top of the agenda of discussions with authorities in France.
Another large concession we have been planning-namely- the Nairobi to Mombasa Expressway also collapsed. We wanted the American construction conglomerate, Betchel- to build the road from its own money and recover it from charging tolls for a period of 30 years.
We have not succeeded in concessioning the Japanese-built Mombasa second container terminal since 2015. In July 2022, Treasury Cabinet Secretary Ukur Yatani invited DP World of Dubai to equip and operate the three completed berths in Lamu. No progress.
The procurement of KenGen’s 140 MW geothermal station under the PPP arrangement has been stuck for many years.
Clearly, we have not been very successful at rolling out PPP projects. Nearly 20 years since we introduced a PPP law, complete with a bureaucracy to spear head and rollout projects, the only major successful PPP projects you can count is the Nairobi Expressway and projects in the energy sector such as the Lake Turkana Wind Power.
The world over, PPP concessions are the rave. Heathrow’s terminal 5 was built under a PPP privately-initiated project by Heathrow Airport Holdings.
Instanbul’s new airport was also built by a concession led by Instanbul Grand Airport. The famous North-to South Highway in Malaysia that literally cuts the country into two, is reputed to be most successful PPP road project in the emerging market World.
In June this year, the media reported that Adani had signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage the second container terminal at the Dar es Salaam Port.
We need to strengthen and give more powers and autonomy to the institutions running the PPP programme. Until recently, the PPP programme was run by a thinly staffed unit under the Directorate of Portfolio Management at the National Treasury. The full directorate only came the other day.
Many keen observers of happenings in this space were baffled to learn that the National Treasury was planning to disband the autonomous directorate and take it back to the National Treasury. It is a mad cap idea.
There is this other moribund entity known as the Public Private Partnership Review Committee that listens to complaints about procurement of PPPs. The last time I heard of it was when Prof Githuj Muigai was appointed to chair it. It seems to me that its functions overlap with those of Public Procurement Oversight Authority. Institutions matter.
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