The decision to use the Lease and Operate Model, one of the Public Private Partnerships (PPP) models under the PPP Act 2021, essentially undoing the earlier decision to use privatization, is strategic. Privatization globally replaced municipalization, where municipals of old provided some services like street lighting through its revenues bases and collection or nationalization where assets were completely placed under national governments control and management. This meant that the private sector were completely removed from management and engagement in such facilities despite their known strengths. The aftermath of the second world war, famines, economic downturns and recessions that followed made countries to revert to privatization of the provision of goods and services because they lacked the finances and managerial acumen to economically run most of their commercial entities. Privatization was found to be problematic because some services and goods would not be fully effectively distributed if they were done through private sector since some of them were not profitable. It was found that the provision of some goods and services required the state presence to cover all geographical areas.
At the end, both nationalization and privatization bore serious implications for national development and stability. In the 1980’s and 90’s, there were the emergence of the Public Private Partnerships (PPP) though the concept existed since 381 BCE. PPPs are defined by arrangements where the public and private players work together to define, finance, construct, operate and provide goods and services. The parties share responsibilities and functions as per their capabilities. The proposed model of reviving sugar industries in Kenya through lease and operate therefore is a PPP and will allow continuous government involvement and enforcement of the revitalization strategy process, through setting standards, policies, programmes, rules and regulations, in addition to the monitoring and evaluation of the agreed outputs towards its revival. The government can also provide some part financing and the necessary enabling infrastructure, including energy mixes to enable the final products be affordable to consumers and profitable to investors.
Private players are expected to provide financial, technological, effective, innovative and managerial expertise from private sector. PPPs bring together the government, the farmers, the private entities and also the leadership in addressing the missing gaps in its management. PPPs create a mutual cycle of benefits between all players from the farmer (competitive cane prices), private sector (good rate of return on investments) to the government (welfare of citizens/ taxes). Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti
Dr. Daniel Mutegi Giti 