Let’s procure PPPs competitively for greater success

The government was cautious not to tinker with taxation, a move that instigated backlash in the last fiscal year.

With the lion’s share of the budget directed to servicing debt and recurrent expenditure, however, Treasury mandarins were left scratching heads over how to plug the Sh923 billion deficit.

The government indicated it would borrow to plug the hole. It would borrow Sh592 billion locally and Sh284 billion from international markets. All in all, the state of play leaves few resources on the table for development.

To address this, the state has prioritised public private partnership (PPP) projects as it seeks to tap into private capital for infrastructure development.

Whereas PPP is a creative tool when utilised well, it can attract dissent if citizens feel “valuable state assets and opportunities are handed to the politically connected for a song”.

The attempt to sign a 30-year JKIA modernisation concession with the Adani Group last year comes to mind.

It is instructive that the government plans to roll out 32 PPP projects valued at more than Sh70 billion in sectors such as energy, water, housing, health and transport. With such a huge role to play, the PPP agenda must be implemented with care, prudence and diligence.

Key to this is greater competition in structuring PPP deals and transparency for better value for money and social licence to undertake the projects.

It’s commendable that the Treasury CS promised Parliament a full disclosure of privately initiated investment proposal (PIIPs) – a positive move but still perhaps inadequate in shoring up confidence in PPP.

The Public Private Partnerships Act, 2021 allows PIIPs as a procurement method, but it is concerning that this seems to be the preferred method of the government, leaving out the other more widely accepted ways – competitive and restricted bidding – which conform more to public ethos.

Buying and leasing state assets and opportunities is a high-stakes game. Not only do they involve big contracts, they are also lengthy and involve delivery of key public goods such as transport, health and education. In case of toll roads, it entails end-user charges usually borne by motorists.

It then goes without saying that such concessions must be robustly negotiated in the most transparent manner and only involving reputable entities. This ensures the highest value for money and greater buy in by wananchi.

The PPP terminology has progressed to include a fourth “P”, with practitioners now advocating for “People driven PPPs” – meaning putting public interest first. Delivering public infrastructure through private hands implies greater responsibility for state officials to insist on highest quality transactions and best bargains.

Competition and clear performance indicators are the levers that deliver these objectives.

The writer is a communications practitioner and former business journalist