Capital FM (Nairobi)

12 February 2013

Kenya: Govt Encourages Private-Public Partnerships

Nairobi — The government is urging the private sector to partner in Public Private Partnerships in order to address the lack of adequate infrastructure in the country by increasing investments in roads, rail, sea and air transport - along with focusing more on improving the energy supply, water and sanitation systems.

Speaking at the Public Private Partnership Workshop organised by the Ministry of Finance in conjunction with the World Bank, Finance Minister Robinson Githae said that the focus of the workshop would be on electricity generation in order to reduce the cost of business.

"An area of concern which has affected businesses in Kenya is the adequacy and reliability of electricity supply," he said.

Githae emphasised that they must create efficiency in the way they deliver their infrastructure projects and added that transport and energy sectors should be delivered through a PPP approach to reduce the sovereign borrowing by the government and to increase efficiency in delivering services to Kenyans.

"The lack of adequate infrastructure is a top constraint of doing business in Kenya and particularly infrastructure bottlenecks related to transport," he said.

He pointed to the inadequate terminal capacity at the port of Mombasa and the need to enhance road and rail interfaces to improve efficiency on the Northern Transport Corridor.

"The main focus on our first phase of our PPP program will be in transport (roads, rails, sea and airports) and electricity generation in order to address the key bottlenecks and reduce the cost of doing business in the country," he said.

"The public private partnership arrangements offer an opportunity for Kenya to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities in order to close the huge funding gap," he added.

Githae revealed that the World Bank recently extended financial support to the government for a credit of Sh3.49 billion to help Kenya increase the level of service and quality of targeted infrastructure services by mobilising private sector participation through a PPP model.

"This assistance will go a long way in helping the government prepare and implement a pipeline of a bankable PPP program in a systematic way," he said.

"In addition, it will help the government develop a framework for managing contingent liabilities associated with the PPP program, which is critical for the country's fiscal risk management and overall debt sustainability," he added.

He explained that since the government issued the PPP Regulations in 2009, a lot has done to further the initiative through government programs and partnerships.

"In 2011, the government approved a PPP policy framework and in December 2012, the PPP Law was enacted after a prioritised PPP project pipeline providing a list of projects that can be implemented through a PPP approach was completed in June 2012," he said.

He revealed that the Ministry of Finance has also organised several stakeholder workshops and trainings for both private and public sector players and several PPP project proposals have been reviewed by the PPP Steering Committee.

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