Ensure transparency in PPP project plans


Treasury Cabinet Secretary Prof Njuguna Ndung’u at a press briefing on November 10, 2022. PHOTO | DIANA NGILA | NMG

The World Bank is right to call on the government to accelerate the use of public-private partnerships (PPPs) in delivering major infrastructure projects.

The institution, which has pledged to mobilise a total of $2.5 billion (Sh307 billion) for completion of various PPP projects between next year and 2027, says the government has little room to take on more debt to deliver public services.

Through PPP, private firms use their resources to build infrastructure and are allowed to charge the public a fee for periods typically running into a few decades.

The projects are usually surrendered to the State at the end of the agreed period.

This system of self-financing projects is more sustainable and prudent, avoiding a scenario where the government has to borrow to fund all the projects deemed necessary.

This is especially the case now that the government is facing pressures from weakening of the shilling and higher interest rates on domestic debt as well as in the international market where it has become prohibitively expensive to issue a new Eurobond.

As much as PPPs offer a viable alternative to funding infrastructure, they could also prove costly if not implemented well.

The World Bank says the government should improve governance, increase transparency and minimise opportunities for corruption in such agreements.

There should also be a fair balance of risk between the State and private sector players. Adhering to these principles will ensure that PPPs are channelled to much-needed infrastructure projects at reasonable cost to the public, creating a win-win outcome for all.