PPPs are therefore joint ventures or collaborative efforts between the public and the private sector. PPPs are therefore different from privatisation and outsourcing. Unlike in privatisation, a public entity in a PPP usually does not lose oversight or control of the subject-matter of the PPP. In outsourcing, a public entity such as a local authority merely hires a private entity to do something such as garbage collection that the concerned public entity lacks the capacity do effectively.

One of the justifications of PPPs is a public entity’s lack of adequate financial resources for providing the service or facility that the public needs. This allows a well-resourced private entity to partner with the concerned public body to provide the needed public services or facilities, especially those that require huge capital investment such as construction of roads, railways, water treatment plants, energy generation plants, and sports stadia. PPPs agreements often contain mechanisms for a private partner to recoup its investment by for example charging and collecting user fees for a specified period.

The NCPPP has identified six keys to successful PPPs. The first is a supportive legal and political environment, implying a law that regulates PPPs and high-level political commitment to PPPs. In Kenya, PPPs are regulated by the Public Procurement and Disposal (Public Private Partnerships) Regulations of 2009, made under the Public Procurement and Disposal Act of 2005. The PPP Regulations establishes a PPP Steering Committee, which sets PPP standards and procedures. Further, the PPP Regulations require the Cabinet to approve PPP projects worth US$10 million and above. Could lack of political will have driven Sports and Youth Affairs Minister Prof. Hellen Sambili’s decision in early 2009 to scuttle the US$ 1.5 million, three-year deal between the Sports Stadia Management Board and the Coca-Cola East and Central Africa, in which the multi-national company was to exclusively brand, and refurbish Nairobi’s Nyayo National Stadium.

The second key to a successful PPP is an active public sector partner. In this regard, a public entity in a PPP must actively monitor its partner private entity to ensure that it effectively and efficiently delivers on its obligations. In fact, PPP Regulation 23(1) requires a public entity party to a PPP to establish a unit of senior staff to oversee the day-to-day management of a PPP. Further, PPP Regulation 23(3) mandates a public entity to ensure that its properties are protected from forfeiture, theft, loss, wastage and misuse under a PPP. Regarding the non-performing RVR, which was to invest in, operate, modernise and maintain the Kenya-Uganda railway under a 25-year deal signed in 2006, the vexing question is: Why did it take the governments of Kenya and Uganda over three years to realise that RVR had terribly failed to honour its concession obligations, particularly payment of concession fees and modernisation of the rail infrastructure?

The third key is a watertight PPP contract. The minimum contractual provisions of a PPP under PPP Regulation 21 include: duration of the contract, which is important to avoid a public entity being cheated by its partner private entity into granting it an unreasonably long timeframe for recouping its investment; description of the good, works or services to be provided; payment arrangements; clear allocation of risks and responsibilities between the parties; a monitoring and evaluation framework; dispute resolution mechanisms; and remedies available to an aggrieved party.

The fourth key to a successful PPP is guaranteed revenue stream to the partner private entity. Obviously, a private entity will invest its resources through a PPP only if it will be sure to recover its investment. However, a public entity must watch out for exploitation of members of the public through exorbitant user charges levied by its private partner in the name of recouping its investment. In fact, PPP Regulation 27 requires all PPPs to be audited annually.

The fifth key is stakeholder support of the PPP. This may only be guaranteed if key stakeholders participate actively in the whole project cycle, that is, conception, design, monitoring of implementation, and evaluation of a PPP. However, other than three private sector nominees to the PPP Steering Committee, the PPP Regulations are silent on the participation or consultation of other stakeholders such as interested or affected members of the public and civil society. For example, after the signing of a PPP agreement, PPP Regulation 21 requires the publishing of information about the concluded PPP tender—such as name of the project, the winning bidder, the PPP price and the duration of the PPP—in at least two newspapers of national circulation, or on the public entity’s website. Why is such publishing of information happening before, not after, the signing of the PPP agreement? Is the contemplated publishing of information merely for information’s sake, considering that there is no provision for receiving feedback from interested stakeholders. With Kenya lacking a freedom of information law, many stakeholders, especially those initially locked out from the PPP process, may not effectively participate in debating, monitoring or evaluating planned, ongoing, or concluded PPPs because of lack of access to crucial information about those partnerships. Without stakeholder support, a PPP may face opposition from aggrieved interest groups.

The sixth and final key to a successful PPP is a carefully chosen partner. This implies that a public entity must procure its partner private entity openly and fairly by first circulating and receiving PPP invitations from a wide pool of potential private partners. For example, only one private firm responded to the government’s 2007 advertisement for tolling of a section of the Northern corridor road, in which the concessionaire was to build a 107-km road and recoup its investments through tolling. PPP Regulation 16(1) mandates a public entity to advertise PPP invitations in not only at least two national newspapers, but also on its website so that information about planned PPPs is not shared only among a small cartel of bidders. PPPs are relatively effective in developed countries because of those countries’ strong transparency and accountability mechanisms. Therefore, Kenya must strengthen checks and balances in its PPPs, including stakeholder participation, to reap the benefits that successful PPPs may provide to the public in the context of the massive infrastructural development planned under Kenya’s Vision 2030.

The writer is the Governance and Policy Officer, TIKenya