Fequently Asked Questions /

The Public Private Partnership Unit (PPPU) is established under Section 8 of the Public Private Partnership (PPP) Act, 2013 as a Special Purpose Unit within the National Treasury of the Government of Kenya (GOK).

The PPP Unit’s focus is to serve as the secretariat and technical arm of the PPP Committee, which is mandated with assessing and approving PPP projects in the country.

According to the Public Private Partnership (PPP) Act, 2013 – a PPP is an arrangement between a contracting authority (state department, agency, state corporation or county government) and a private party under which the private party:

  1. Undertakes to perform a public function or provide a service on behalf of the contracting authority;
  2. Receives a benefit for performing a public function by way of compensation from a public fund, charges or fees to consumers or a combination of both; and
  3. Is generally liable for risks arising from the performance of the function in the agreement.

It is currently estimated that there is a funding gap of approx. US$ 2 to 3 Billion per year that is needed to address the infrastructure requirements in the next 5 to 8 years. The Government of Kenya must therefore engage the private sector to bring this additional capital and to improve the efficiency of delivering public services.

The scope of PPPs are expected to cover both economic infrastructure (power generation, ports, airports, railway, roads, water supply, irrigation, etc.) and social infrastructure (housing, medical facilities, education facilities, prisons, solid waste management, etc.).

Myth 1: PPPs are more expensive and lead to excessive profits.

Reality: Private concession companies are incentivized to achieve cost efficiency and innovation in project delivery. Because PPPs transfer more risk (e.g. construction risk, cost overruns, delays, performance failures, operating costs etc.) to the private sector, govt. budgets and the public are protected, even if a project does not go as planned.

Myth 2: Private companies are not accountable to the public and thus may cut corners or allow projects to deteriorate.

Reality: The public partner owns and controls the transportation asset. Strict contractual requirements, performance standards, and remedies hold the private partner accountable to the public partner.

Myth 3: PPPs are a means to cut jobs and labour costs.

Reality: PPPs create construction and service industry jobs because most projects otherwise would be delayed or never built.

Myth 4: PPP procurements are secretive and lack transparency.

Reality: The laws that permit PPPs require an open and transparent public procurement process, typically through competitive bids to set requirements.

Myth 5: PPPs diminish environmental protection.

Reality: All environmental laws, land use, zoning, and mitigation requirements apply to public infrastructure projects and private PPP projects alike.

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