Ensure PPP works in real estate sector

Nairobi Expressway

The ongoing construction of Nairobi Expressway on October 16, 2020. The Sh59 billion project is being financed under the public-private partnership model.
 

Photo credit: File | Nation Media Group

Under the Kenya Vision 2030, the government and the private sector have been pursuing the right environment for implementation of public-private partnerships (PPPs) since 1996 to deliver projects in sectors such as infrastructure, housing, healthcare facilities and agriculture.

And there have been efforts towards a sound legal and regulatory framework to promote and encourage PPPs. For instance, the new Public Private Partnership Bill 2021 seeks to remove institutional and governance hurdles that have dogged PPPs over the past eight years. To ensure the success of this model in the real estate industry, the government should do the following.

First, despite coming up with the bill, which aims to address implementation of PPPs by the county governments, institutional framework and unsolicited proposals, the element of concessional agreements is still lacking. The government should provide a clear framework on related issues to avoid losing investor confidence.

Secondly, it should establish a specific procurement framework that is open, restricted and competitive with negotiation and competitive dialogue done with prior publication. It can then come up with ways to visibly track approvals digitally with publicly displayed information, to ensure competent and capable contractors who have been thoroughly vetted procure and manage PPPs efficiently.

Thirdly, it should woo the private sector with offers such as tax incentives to encourage uptake of projects. Fourthly, rather than get involved in the construction of houses, it should focus on enabling the private sector to do so. Under the ‘Big Four Agenda’, it has delivered less than 1,000 houses instead of the 500,000 yearly promise of four years ago.

Lastly, let it enable other forms of financial support to make projects commercially viable for private investors, such as joint ventures by private companies to finance PPP projects.

Mr Wamayuyi is an economic researcher. [email protected]

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