The appointment of Mr. Christopher Kirigua, who has thorough expertise on private sector investments as the Director General of the Department for Public Private Partnerships should be lauded. This is because it shows the highest level of commitment by the government on the need to tap into Public Private Partnerships which have been elevated much higher by establishing a department to coordinate various activities. This will enable the existing PPP unit to concentrate on its advisory role to the contracting authorities in matters PPPs, as the new department focuses on enhanced resource mobilization for the preparation and operationalization of PPPs across sectors, which will give the required public confidence on PPPs.
According to the African Development report of 2014, Kenya requires US$ 65 billion for infrastructural financing in order to meet its Kenya Vision 2030, where for example the energy sector requires 20 billion, housing and related housing infrastructure requires 10 billion, roads 9 billion. But in reality, the government financing for such investments requirements through normal budgetary cycles stood at US$ 25 billion, hence a deficit of US$ 40 billion. The same has been compounded by low investment levels by the private sector in instances where proactive measures are not put in place by the government, including administrative measures like the creation of a wholly dedicated department to instil stakeholder confidence.
PPPs are the must go to thing for Kenya because of our current debt levels, because it offers or creates room for the application of new technology, innovation, capital, effectiveness, efficiency, whole life cycle concept of projects, where a developer must factor in the design, finance, construction, operation and maintenance from the beginning to the end, which is a strong incentive for development of a superior product in order to avoid unnecessary costs. Application of PPPs will reduce our prevailing infrastructure financing gaps, and reduce address sovereign borrowings and debts, in addition to the creation of local long term funding market, which will lead to the expansion of the economy and stimulation of job creation, thereby increasing the quality of public services.
PPPs are not new because they existed by 381 BC, where the city state of Eretria (Greece) hired a foreign contractor (Chairephanes) to drain lake Ptechai, which had modern forms of contract finance, risk management and application of incentives like the exclusive use of land, retention of products and tax exemptions, akin to modern concessions.
Dr. Daniel Mutegi Giti 