The Cabinet has prioritized the construction of the Nairobi (Rironi)-Nakuru road starting next in the next few months through Public Private Partnerships (PPPs) to ease the burden of travelers and road users of this busy and equally important road corridor. Traffic gridlocks and other incidents are a normal occurrence along the highway and hence there is need to intervene and ensure the road is dualled to ensure effective and seamless transport along the road. The government has signaled its intention to use PPPs to develop this road and other infrastructure projects across the country, which is the right thing to do bearing in mind the dwindling public sector financing options, global financial crises, inadequate technology, managerial prowess and expertise capacities in the public sector among other challenges. PPPs involve a close working relationship between public and private players for a long period of time to deliver specified, agreed and well-defined goods and services that meet the needs and demands of the users.
PPPs are becoming popular after the realization that public and private players are not competitors, but strategic partners in development process; secondly, existing policies advocate for free market dynamics, free movement of capital and less of government and more of private sector or good governance models in development; thirdly societal changes, rapid urbanization, rapid expansion of markets and decreased revenues, hence inadequate budgets for the public sector to fund critical infrastructure and services. In the 1960’s, some countries attempted to provide goods and services of goods and through municipalities, nationalization and overregulation through price controls, but these failed to yield results, leading to the reversal to privatization and PPPs from the 1970’s. Between 1990 and 2001, 662 transport-related projects valued at US$ 135 billion were developed through PPPs, and the application of the model has grown tremendously in the last twenty years globally.
PPP arrangements are attractive because, firstly it leads to optimum transfer of project risks to the private sector who are naturally able to absorb them; secondly it makes governments to shifts from managing inputs to managing outcomes; thirdly, unlike privatization where government loses control, under PPPs, the public sector retains significant role as a buyer, or enabler of the services/ products; and fourthly, the private player is compensated through user charges/fees, government payments or both based on satisfactory performance. The main advantage of PPPs is that first it leads to enhanced capital availability for large scale projects; secondly it leads to introduction of private sector efficiency, effectiveness, technology, managerial expertise, innovation, flexibility, fiscal discipline, and superior projects delivery methods. Thirdly, it actualizes value for money and bundling of services under one contractor that saves resources. Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti
Dr. Daniel Mutegi Giti 