Public Private Partnership (PPP) Is Not A Loan – Case For Rironi –Nakuru –Mau Summit Road Under PPP Deal.

President Uhuru Kenyatta is set to sign many business deals in France, including the PPP deal for the financing of the dualling of the Rironi-Nakuru- Mau summit road. The project should not be seen as increasing the loan portfolio for the country. This is the statement that I want to challenge by noting that contrary to such opinion, PPPs are not and cannot be equated to a loan, but should be seen as an innovative financing option for the developing countries. Road transportation accounts for more than 90% of all transport services and is the commonly used transportation facility to connect rural areas in Sub Saharan Africa, including Kenya, where almost 70 percent of the people live. The proposed road therefore serves both rural and urban areas with a huge potential for enhancing the national productivity.

The major challenges in roads subsector in Kenya includes the huge backlog of constructions, inadequate budgetary provisions, inadequate stakeholder participation in the sector, underperformance of the railways and legal gaps putting a strain on roads. These challenges have been addressed through a variety of means in the light of increasing globalization, which has necessitated the interconnection of the globe, hence the proposed road is part of the Northern corridor transport network.

There has been shifting policy directions globally on means of accelerating infrastructure development including roads, such that from 1980’s, PPPs have become more popular than other methods. Countries have realized their limited budgetary lines, the ever increasing debts and financial crises and also the diminishing abilities to expand their revenue bases. PPPs have thus been embraced because they lead to greater application of new technologies, innovation, efficiency, effectiveness and derive greater value for money than normal public funded projects.

These shifts in financing public projects as also been supported by the appreciation of linkages between application of incentives and resultant operational efficiencies. This school of thought holds that the private developer who is motivated can develop a project that leads to greater innovation and vice versa. There has also been increased acceptance of user pays principles in majority of projects, which means Kenyans are willing to pay a little for their convenience.