The president has concluded his development tour of China by concluding project development deals worth over Ksh. 688.7 billion from the engagements he had with key public and private entities. A closer analysis of these projects shows that they will be financed through Public Private Partnerships (PPPs) models and other collaborative arrangements. Kenya is not alone in utilizing PPPs in the development process because over 134 countries are using the model to deliver goods and services. The global market for PPPs is estimated to be over US$ 1049 billion, contributing between 15-20 percent of infrastructure investments. The growth is attributed to the fact that PPPs provide the bridge between demand and supply of resources, quality, accessibility and risk & benefits revolving around three key issues. First is improved governance & resource mobilization for financing huge infrastructural requirements, through mobilization of private capital. Secondly is improvement of the efficiency of the government investments and utilization of the resources; and thirdly is utilization of strategies focusing on service delivery measures which guarantees maximum benefits to the citizenry (roads, water, sewerage, housing, electricity, education, waste management, employment opportunities among others are highly needed).
PPPs provides a middle ground model between the government and private players, since privatization, where there is complete government removal from service provision, and nationalization, where there is total removal of private sector from service provision have faced opposition globally. PPPs have been practiced since 381 BCE when city state of Eretria, signed an agreement with a private contractor Chairephanes, to drain lake Ptechai. PPPs became more pronounced from the 1980’s begging in the UK (which had extensively used them in 1500’s to 18th century to finance many projects, including the colonialization project through Imperial British East African Company). By 20th century, the concept of PPPs was accepted across many jurisdictions as an alternative instrument through which public goods and services could be effectively and efficiently procured, implemented and developed.
PPPs are valuable and sustainable because they bring efficient capital, design, implementation, value for money (VfM), innovation through the bundling of functions and assigning them to the private entities, the whole of life cycle project development concept where private players have the whole spectrum of project activities from design to handing over, which makes it possible to introduce innovation. PPPs are off-balance sheet financing arrangements in a country meaning it is not a debt that reflects on government books. Private players get long and stable state contracts which are highly profitable, while the government gets to deliver goods and services to the citizens. Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti
Dr. Daniel Mutegi Giti 