Public Private Partnerships (PPPs) have become increasingly widespread for the implementation of infrastructure projects in many countries throughout the world. The potential benefits are especially attractive in less developed countries where public funds for infrastructure development are clearly insufficient to satisfy demand. In recognition of this, many African countries, including the member states of the EAC, are moving to create the necessary legislative and institutional framework to facilitate the greater use of PPPs in infrastructure development. In support of these developments, a substantial body of material is now available for the public sector on good practice in PPPs, and international institutions such as the WorldBank and several donor organizations are providing technical assistance and support to some national governments in the area of PPP for infrastructure projects. In comparison, there is very little support available to the private sector in African countries for their participation in PPP projects. As a result of this situation, it is very difficult for local businesses to participate in PPP projects and implementation contracts are generally awarded to large, multinational corporations. Thus the local private sector, though benefiting from the improved infrastructure that results from the project, is unable to gain any additional business directly
Service Benefits
- The role of EACCIA
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To tackle this problem EACCIA has taken the lead by establishing a Public Private Partnership Project Advisory Unit Network (PPP PAUN) across the EAC member states. The PPP PAUN aims to address these obstacles by raising awareness, building capacity and strengthening dialogue with both the private sector and government at local, national and regional levels. The network consists of Project Advisory Units (Paus) housed within private sector organizations in the five member countries of the EAC, and a lead PAU based at EACCIA. We have proposed to anchor these in the chambers of commerce because a chamber of commerce attracts its membership from all sectors of the economy and PPP projects can be implemented in any sector, such as in health, and education, as well as delivering many other social services projects. However, PPP projects, for now, have been most popular within the productive sector of the economy and, at times, in the “enablers” sectors. In addition to the above, the EACCIA has developed a comprehensive PPP Training Programme, with the support of the European Union, which targets both the public as well as the private sector. A PPP Training course that focuses on the devolved forms of government, as well as the region’s private sector operators, is available and this can be very useful to Kenya’s County Governments, so that they are able to identify this new form of project/programme financing, to ensure that they have less dependence on the National Government in funding many of their development programmes at the County level, as it is the case currently.
- Private Sector Involvement in PPPs
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The genesis of the private sector involvement in PPPs was in 2004. In that year, the three chambers of commerce from the countries which were by that time member states of the East African Community, namely; the Kenya National Chamber of Commerce and Industry (KNCCI), Uganda National Chamber of Commerce and Industry (UNCCI) and the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA). Undertake a study entitled “Study on Private Investment in Urban Road Transport in Eastern Africa” which looked into the investment climate in East Africa which affects investment by the private sector in urban road transport infrastructure development and transport service delivery. The study was supported by the European Union. After it was successfully concluded, a a two-day international workshop which was held in Nairobi, Kenya attracted participants from Ethiopia, Kenya, Uganda, Tanzania and Rwanda. The study established that there exists great potential for PPP in East Africa in road transport development. It also established that there are substantial private sector financial resources available for investment in the transport sector development in the region. However, even if the legal, institutional and regulatory systems in the region had the basic elements required to support PPP projects, they required significant strengthening. In 2006, a follow-up on the 2004 study namely; “Feasibility study of the use of Private Finance in the Development of Urban Road Transport Infrastructure” was undertaken. It carried out a robust data collection and analysis on the viability of a PPP project in urban road infrastructure development. It confirmed the viability of the use of private sector financial resources in East Africa to undertake PPP projects, with an IRR above 20 per cent. However, the studies established that these opportunities cannot be exploited due to insufficient of understanding of the PPP concept.
- 2012 project implemented by the East Africa Chamber of Commerce, Industry and Agriculture (EACCIA) with the support of the ACP Business Climate Facility (BizClim) Programme of the European Union
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The 2012 project implemented by the East Africa Chamber of Commerce, Industry and Agriculture (EACCIA) with the support of the ACP Business Climate Facility (BizClim) Programme of the European Union, titled “Reinforcing the Capacities of the East African Private Sector of Infrastructure Development”, aimed at addressing the gaps which had been identified by the two earlier studies which posed challenges for private sector involvement in infrastructure development through PPPs. In order to strengthen the private sector to understand and embrace the PPP concept, it was proposed that a network of Project Advisory Units (PAUs) be set up and to be anchored in each of the chambers of commerce of the current member states of the EAC. In 2014-2015, the project “Mobilizing Private Sector Funding through PPPs for Economic and Social Development in the Northern Corridor” was jointly implemented by EACCIA and the Secretariat of the Northern Corridor Transit and Transport Coordination Authority (NCTTCA). The project aims at developing harmonized PPP Guidelines and a Handbook, as well as a Strategy and Action Plan for use by both public and private sectors in negotiating and implementing PPP deals and projects.
