Eversheds PPP in Africa Guide - Nov 2016

Bridging the infrastructure gapA guide to PPP in Africa

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The African continent has a diverse need for infrastructure, due to a rich blend of economies at various stages of development.

Whilst there are many platforms for growth, Public Private Partnerships (PPPs) are an increasingly attractive model which, when deployed correctly, can bring significant benefits to the population.

With our proven track record advising on PPPs in Africa, we understand that there are many factors which must be considered and navigated before a project can successfully meet its objectives.

Through this guide, we provide an insight to some of the key elements needed to successfully deliver a PPP in selected countries on the continent. We are determined to being part of Africa’s development in the coming decade. To find more about the Eversheds Africa Group, please visit our website.

The Eversheds Africa Law Institute

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website. All information in this document is up to date as of Summer 2016.

A guide to PPP in Africa

Angola 2

Burkina Faso 5

Cameroon 9

Côte d’Ivoire (Ivory Coast) 13

Egypt 18

Ethiopia 22

Ghana 24

Kenya 28

Madagascar 31

Mali 34

Mauritius 37

Mozambique 40

Niger 44

Nigeria 49

Senegal 53

South Africa 57

Tanzania 60

Tunisia 62

Uganda 66

Zimbabwe 69

EALI members 72

Contents

1Data supplied by Analyse Africa, a digital database service from the Financial Times providing indicators to analyse, evaluate and spot opportunities in Africa

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Key statistics

Area1,246,700 sq.km (2014

Population21.4 million (2013)

GDPUS$124.2 billion (2013)

GDP per capitaUS$7,736 (2013)

GDP growth6.8% (2013)

Infrastructure Landscape and Context

Key players

CMAPP: the Ministerial Commission for the Evaluation of PPPs is responsible for the approval of projects, preparation of a procedural manual and guidance on the procurement process. It is comprised of the Ministers of Economy, Finance and Planning plus the relevant Minister for the type of PPP project being considered.

PPP Unit: the body mandated to attract private financing and ensure the fiscal sustainability of projects, which sits within the Ministry of Economy.

Executive: the Governmental Executive that provides final approval on projects being commissioned and signed.

Ministers: in each sector, Ministers will be responsible for delivering projects in accordance with guidance provided by the CMAPP.

Needs of the region A range of core and social infrastructure, including the provision of adequate water and electricity through to new transport.

Legal and Regulatory Framework

Law

On 14 January 2011, the Angolan parliament adopted the Law on public-private partnerships (Lei no. 2/11 de 14 de Janeiro: Lei Sobre as Parcerias Público-Privadas). It provides for a number of controls, facilitates the implementation of PPPs and establishes management of such projects at a lower cost.

Guidance

All PPPs must be aligned with the General Plan for Public-Private Partnerships, a cross-government department plan for the delivery of projects of strategic importance.

Budget

The relevant project must be included in the State General Budget Law for it to be considered for approval.

Please note that there is a prohibition on external advisers assisting the private partner during the procurement process.

AngolaFCB&A – EVC Advogados

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PPP Process

Process

The PPP law describes the process for the preparation of the project and the studies and documentation that need to be in place to support the project. The package will be prepared by the responsible Minister for the project. The CMAPP will then evaluate the project based on the information and documentation received. The CMAPP determines when a project can be launched for tender, in which case the responsible Minister can start with the selection of the private partner(s) and the negotiation of the terms of the partnership. The CMAPP can, upon proposal of the responsible Minister, decide to suspend or cancel the process if the results of the negotiations are not in line with the public interests that the partnership is intended to serve. The process will also stop if only one candidate partner is available, unless the CMAPP expressly decides otherwise.

Special purpose company

Before the partnership contract can be entered into, a special purpose entity will need to be established. The purpose of the entity, which can in principle be any of the commercial legal entities that are available under applicable Angolan law, will be entrusted with the implementation and management of the project. If the income of the special purpose entity exceeds an amount established by the CMAPP, it must be established in the form of a public limited company (sociedade anónimia). This company may then also issue (listed) securities in the national and international capital markets. If the company’s income exceeds thresholds determined by the CMAPP, it will be obliged to report under IFRS.

Contract execution

Once the successful bidder is selected and the contract negotiations are approved by the Audit Court (Tribunal das Contas), the CMAPP will submit the project file to the Executive for approval. After this approval has been obtained, the contract can be signed on behalf of the State by the Minister of Economy, the Minister of Finance and the Minister responsible for the sector to which the project relates.

Ongoing PPP Projects

1. Biomass power generation

Year: Proposed

Capital Value: To be confirmed

Sector: Energy

Details: New power plant consisting of eucalyptus biomass and hydroelectric plants of small and medium sizes in the Central Highlands of Angola, providing 500MW of energy which will deliver a 50% increase in the country’s power output.

2. Luanda Waterfront Development

Year: 2010

Capital Value: To be confirmed

Sector: Wastewater

Details: A 30-month project between the Government of Angola and Sociedade Baia de Luanda for the provision of the washing and treating of 600,000 tons of polluted sand and silt, and the construction of a wastewater system.

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3. Porto de Caio development

Year: 2014

Capital Value: US$60 million

Sector: Ports

Details: The development of a deep water port for improving logistics and the import/export capacity of the country. The project is being delivered in a three-phase plan.

Obstacles / Challenges

1. The PPP law does not specify the sectors or regions in which PPPs should be implemented. However, in light of policies that have been implemented in Angola, it is our opinion that such law must be analysed along with the New Angolan Private Investment

– infrastructures

– energy/electricity;

– wastewater treatment and water supply;

– sanitation, and

– waste management.

2. The main purpose of a PPP is to make sure that the public interest that underpinned the political decision to create that PPP is achieved. By way of example, PPPs may be created by means of one of the following types of contractual instruments:

– public works concession contracts

– public service concession contracts, and

– continuing supply contracts.

3. Under the PPP law, the public partner is mandatorily obliged to monitor and control the execution of the partnership, in order to guarantee that the public interest motivations underlying the PPP are being fulfilled.

4. PPPs must be renegotiated when a significant change occurs in the financial conditions that were initially set for the development of the partnership.

5. Unilateral modifications may be imposed by the public sector in relation to the private partner s contractual obligations or regarding the essential conditions of the development of the partnership.

6. Additionally, the public sector is legally entitled to an equal share of the financial benefits that arise from the PPP, during a set period of time. Such right is extended to the benefits arising from possible improvements on the financing conditions of the PPPs (for example, in the event of the renegotiation of the financing agreements for the PPP).

7. As regards the operating risk of PPPs in Angola, it should be highlighted that the country is a member of the Multilateral Investment Guarantee Agency (MIGA), which may provide assistance for dispute settlement as part of its political risk insurance products.

8. However, it should also be stressed that Angola is not a party to (i) the United Nations New York convention, (ii) the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), nor to (iii) the United Nations Conventions on the International Sale of Goods (CISG). As such, difficulties may arise for a private partner in the eventof a dispute with the Angolan Government, namely making it difficult to access international protection.

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Burkina FasoCabinet Sagnon-Zagre


Key statistics

Area274 200 km²


GDPUS$12.54 million (2014)

GDP per capitaUS$530.82 (2014)

GDP growth4.20% in the 3rd quarter of 2015

Number of projects ongoing 120 projects with total value of almost US$20 billion.

Key players The Presidential Board of Investment: created under decree 2007-739/PRES of 6 December 2007. The Board is responsible for giving recommendations on the promotion and development of private, public, national and foreign investments in Burkina Faso.

The public-private partnership Commission: it is responsible for making all proposals that fall under law 020-2013/AN of 23 May 2013 – the legal framework governing public-private partnerships and the implementation of PPP projects in Burkina Faso – to the Board of Ministers.

The directorate-general of procurement contracts: it validates the procurement process in advance of its occurence.

Needs of the region Energy and infrastructure.

The Public Procurement Regulatory Authority, a service under the Prime Minister that defines Public procurement policies.

The Directorate for the promotion of public-private partnerships, it is in charge of the establishment of the PPP’s annual programme of work.

The General Directorate responsible for monitoring public procurements and financial commitments: it controls at first sight the public procurement procedures including the public service delegation contract (PSD).

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The relevant regulations include:

– Art. 101, al.2 of the Constitution: “the law states the main principles to govern the preparation, carrying out and follow-up of national development programmes“.

– “Strategy for accelerated growth and sustainable development in 2011-2015” (SCADD), 2010. This document sets out the short, medium and long-term strategic approaches for economic and social development in Burkina Faso.

For public service delegations

– Decree 2008-173 PRES/PM/MEF of 16 April 2008, providing general regulations for procurement contracts and public service delegations in Burkina Faso.

– Decree 2012-123 PRES/PM/MEF of 2 2012, which amends decree 2008-173 PRES/PM/MEF of 16 April 2008, providing general regulations for procurement contracts and public service delegations in Burkina Faso.

– Order 04/2005/CM/UEMOA on the procurement process and the implementation and management of procurement contracts and public service delegations in the West African Economic and Monetary Union (UEMOA).

– Order 05/2005/CM/UEMOA on the control and regulation of procurement contracts and public service delegations in the West African Economic and Monetary Union.

For partnership contracts

– Law 020-2013/AN of 23 May providing the legal framework for public-private procurement contracts and the context in which PPP projects may be carried out in Burkina Faso.

– Decree 2014-024/PRES/PM/MEF of 3 February , which states how law 020-2013/AN of 23 May 2013 – providing the legal framework for public-private procurement contracts in Burkina Faso – is to be applied.

– Decree 2014-628/PRES/PM/MEF of 29 July 2014 on the creation, attributions, composition and function of the public-private partnership Commission OJ 43 of 23 October 2014.

PPP contracts are defined as “contracts through which a public authority makes a private partner responsible for all or part of the following: for a defined period of time, determined according to the duration of the repayment period for any investments or funding arrangements made: planning works or the equipment needed for public service; funding; building; transforming works or equipment; care and maintenance; use or management; other services provided as part of the public service mission”.

PPP Process

1. Process to be applied to public service delegation

Competition procedureAccording to the provisional threshold amount obtained by the delegation, the public call for competition must be made on a national scale or throughout the UEMOA.

Irrespective of the threshold, candidates may be pre-qualified, although this is not necessary.

2. The process to be applied to public-private partnerships

In theory, PPPs are to be used for projects falling under the PPP programme adopted by the Board of Ministers.

Competition procedure The private partner is selected through a national or international call to competition, depending on the complexity or financial scope of the project.

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The private partner is selected in a one or two-stage open call for tender.

A pre-qualification process is carried out prior to the call for tender. The public authority will enable each pre-qualified candidate to borrow the tender dossier in order to prepare their offer.

Non-competitive procedure Under exceptional circumstances, subject to approval from the Board of Ministers or the body considering state dismemberments, the public authority is authorised to negotiate a public-private partnership contract, without resorting to competition, in the three strict cases described below:

– in order to ensure the public service continues to run as a matter of urgency; “this urgency must be brought about by unforeseeable circumstances, independent of the will of the public authority leading the project”;

– when one single private entity is able to provide the service requested, “for example, when intellectual property rights, trade secrets or other exclusive rights must be exercised in order to be able to provide the service”; or

– should the pre-qualification process or call for tender fail and should the publication of a new invitation to the pre-qualification process or call for tender have proven fairly unsuccessful in assigning the project within the desired period of time.

Unsolicited proposals A public authority may consider spontaneous proposals if they do not involve projects for which a selection process has been opened or announced. If the authority decides to carry out the project proposed, it must launch a competitive call. In these circumstances, the person who put forward the proposal will be invited to participate in the selection process.


1. Solar plant in Zagtouli

Year: 2013 – present


Sector: Energy

Funding: The French Development Agency, the European Union and the European Investment Bank and Burkina Faso

Details: The project consists of building a 33 MWc photovoltaic solar plant in Zagtouli (near Ouagadougou). The development contract is guaranteed by the National Electricity Company of Burkina Faso (Sonabel).

2. Zina solar plant



Sector: Energy

Funding: The African Development Bank, Frontier Market, the Emerging Africa Infrastructure Fund

Details: The Burkina Faso electricity company (Sonabel) signed an agreement with the Canadian company Windiga Energie, in order to build and use a 20 MWc photovoltaic solar plant in the province of Mouhoun in Burkina Faso.

Alongside, Windiga Energie signed a purchase contract for such production with Sonabel, on 17 October 2014, in order to ensure distribution of the plant’s output.

This project will make Windiga Energie the leading independent electricity producer in Burkina Faso.

The project will have a 25 year duration, by the end of which time the plant will be transferred back to Burkina Faso at least 80% capacity for one symbolic franc.

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3. The Donsin airport project

Year: Step 1 (2013-2018)


Sector: Airport

Funding: The state of Burkina Faso, the World Bank, BAD, BOAD, BID, the Saudi development fund, the Kuwait development fund, BADEA and the OPEC fund for international development, OFID.

Details: Ouagadougou airport in the city centre has been heavily criticised, notably because it is impossible to extend. The government of Burkina Faso has therefore decided to transfer all airport activity to a platform located in Donsin, which is approximately 30km to the north of the capital. The feasibility study has shown that the best way of funding the airport construction is via a public-private partnership, with strong involvement from the Burkina Faso state.


“Strategy for accelerated growth and sustainable development in 2011-2015” (SCADD) made PPP a key driver of economic and social development of Burkina Faso. Unfortunately the social and political crises that shook the country in 2014 and 2015 have seriously affected the implementation of the 31 PPP projects identified in the programme.. Each project suffered a significant delay.

Sources

www.legiburkina.bf

www.egis.fr

www.diplomatie.gouv.fr

www.moad.bf

www.effectivecooperation.org

www.alpha.burkinafasoindia.org

www.afd.fr

www.burkina24.org

www.unece.org

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Key statistics

Area475 440 km²


GDPUS$29.57 million (2013)

GDP per capitaUS$1,328.64 (2013)



CameroonNgassam, Fansi & Mouafo, Avocats Associés

Number of projects ongoing Unknown.

Key players Public procurement Minister: the key player of the public procurement, in charge of the bidding process, the tendering and the control of the effective implementation;

The Procurement Contract Regulation Agency: in charge of the evaluation and the audit of procurements as well as the publication of procurement notices;

The Support Council for the Realisation of Partnership Contracts: in charge of the evaluation of the public-private partnership projects.

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1. On PPPs

The following legal and regulatory framework is relevant to PPPs in Cameroon:

– Law 2006/012 of 29 December 2006, which specifies the general scheme to be applied to partnership contracts

– Law 2008/009 of 16 July which specifies the fiscal, financial and accounting schemes to be applied to partnership contracts

– Decree 2008/0115 of 24 January 2008, which specifies how law 2006/012 of 29 December 2006 specifying the general regime for partnership contracts is to be applied

– Decree 2008/035 of 23 January 2008 on the organisation and function of the Supporting Board for the implementation of Partnership Contracts, which was amended by Decree 2012/148 of 21 March 2012

– Decree 2012/148 of 21 March 2012, which amends and completes certain provisions of decree 2008/035 of 23 January 2008 on the organisation and function of the Supporting Board for the implementation of Partnership Contracts

– Order 186/CAB/PM of 15 November 2011, which sets rates and determines how costs incurred as a result of partnership contracts are to be paid

– Notification 004/CAB/MINEPAT of 25 February 2014, contains a list of projects to be carried out under a public-private partnership in fiscal year 2014.

2. On CSPs

The following framework is to be applied to CSPs in Cameroon:

– Decree 2014/3863/PM 21 November 2014 on the organisation of technical supervision for activities under way

– Decree 2014/0611/PM of 24 March 2014, which specifies the conditions under which approaches to high- intensity labour may be used and applied

– Decree 2014/0004/PM of 16 January 2014, which specifies the different financing options for works managed by the road fund

– Decree 2011/1339/PM of 23 May 2011, which provides exemption from procurement contract regulation rights and grants the benefit of tender dossier acquisition charges for decentralised territory markets

– Decree 2012/076 of 8 March 2012, which amends and completes certain provisions of decree 2001048 of 23 February 2001, on the creation, organisation and function of

– the ARMP [procurement contract regulation agency]

– Decree 2012/075 of 8 March 2012, on the organisation of the Ministry of Procurement Contracts

– Decree 2005/5155/PM of 30 November 2005, which specifies how the Special Account created to regulate procurement contracts operates

– Decree 2003/651/PM of 16 April 2003, on the ways in which fiscal and customs regulations are to be applied to procurement contracts

– Decree 2003/651/PM of 16 April 2003, on the ways in which fiscal and customs regulations are to be applied to procurement contracts

– Decree 89913 of 31 May 1989, on the reorganisation of the permanent commission for Security and Defence Contracts.

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PPP Process

1. PPP

Prerequisite:

– A partnership contract may only be signed in order to carry out projects if an initial assessment has been carried out at the start of the procurement process, showing that:

- the project is too complex for the public entity, or

- on balance, the advantages and disadvantages of using the partnership approach conclude that a partnership should be deployed.

Stages of the procurement process

The following stages are required in order to facilitate the procurement of a partnership contract:

– a feasibility study

– a public call for expressions of interest

- a call for restricted tender, which should generate at least five candidates

– the presentation

– the pre-qualification dialogue

– the invitation to tender

– a bulletin containing the results, and

– the signing of the contract

Spontaneous offers or unsolicited proposals are permitted.

2. PSD

Ordinary process subject to publicity

– Opened invitation to tender, the sole procedure that is not subject to the non-objection opinion of the Public Procurement Ministry;

– Restricted invitation to tender, use of which depends on the special nature of the needs or their complexity;

– Request for proposals, which is used for technical, aesthetic or financial purposes.

Other processes

– Direct agreement which can be used after prior authorisation of the Public Procurement Authority;

– Special agreement which is not subject to any analysis from any commission. It concerns procurement in the national defence, homeland security and strategic interest of the state.

Delegations are comprised of:

– interested public companies

– leasing

– network operation, and

– public service concessions.

The following stages must be completed for the procurement of a PSD:

– pre-qualification, followed by

– opening up to competition.

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Building a pipeline for oil products between Limbe and Yaounde


Sector: Energy – Oil

Details: Funding, design, construction, use and maintenance of a pipeline system for transporting oil products in Cameroon, along the Limbe-Douala-Edea-Yaounde route.

Project for designing, building, using and maintaining a reference shopping centre in Bonamoussadi (North Douala)


Amount: US$22 million

Funding: CENAINVEST S.A./ACTIVA VIE

Sector: Infrastructure.

Details: Designing, building, operating and maintaining a reference shopping centre in Bonamoussadi (North Douala), under a Public-Private Partnership Contract.

Providing an additional 50,000 m3 of water per day in the town of Yaounde



Financing: 95% of the funding must be provided by the private partner and 5% must be provided by the public sector.

Sector: Water

Details: Building a factory that produces drinking water from the river Mefou between the départments of Mfoundi de la Mefou-et -Afamba and Mefou-et-Akono. This will affect 20 hectares of land.

Sources

www.cafrad.org

www.ppp-caneroun.com

www.minee.cm

www.ppp-cameroun.cm

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Côte d’Ivoire (Ivory Coast)Bile-Aka Brizoua-Bi & Associés


Number of projects ongoing 120 projects for an overall sum of approximately US$20 billion.

Funding

World Bank, African Development Bank.

Key players

The President of the Republic: the institutional framework for the development of PPP is placed under the authority of the President of the Republic.

The National Steering Committee for PPP (CNP-PPP): the decision-making, validation and guidance body of the institutional framework PPP. In particular, the Committee is responsible for validating projects to be carried out under the framework of PPP and monitoring their delivery. It is also involved in the process of selecting private candidates in that it validates documents relating to the call for tenders, methods of selecting candidates and evaluation criteria.

Key statistics

Area322,463 km²




GDP growth8.7% annual variation (2013)

Executive Secretariat of the PPP (SE-PPP): assists the CN-PPP in exercising its functions,

Support Unit of the PPP (CA-PPPP): mainly provides help and expertise to the CNP-PPP and SE-PPP.

Procurement Contracts National Regulation Authority: has sole competency for making decisions regarding disagreements relating to the procedures for awarding PPP contracts, without prejudice to judicial remedy and the intervention of authorities regulating each sector.

– National Authority for the Regulation of Public Procurement (ANRMP)

– Management of public procurement.

Needs of the region: Agriculture, education, health, infrastructure, transport, energy.

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1. On PPPs

To guarantee the economic development of Côte d’Ivoire, on 28 March 2012, the government approved the 2012 – 2015 National Development Plan (2012-2015 NDP) for coordinating economic, social and cultural policies.

The 2012-2015 NDPs are based on five strategic pillars:

– populations living in harmony in a safe society where good governance is guaranteed;

– the creation of more long-term, fairly distributed national wealth;

– the population having fair access to quality social services, particularly for women, children and other vulnerable groups;

– a population living in a healthy environment and acceptable living conditions, and

– raising Côte d’Ivoire’s position at regional and international level.

The 2012-2015 NDP encourages use of the public-private partnership contracts in the budgetary strategy of public authorities and a list of priority projects has been produced.

The 2012-2015 NDP was subject to review and a bill was presented by the government for adopting the 2016 – 2020 National Development Plan.

A legal and institutional framework was adopted in 2012 for public-private partnership contracts with decree 2012-1151 of 19 of December 2012 on public-private partnership contracts.

Other regulations that apply include:

– Decree 2012-1152 of the 19 December 2012 on powers, organisation and functioning of the institutional framework for steering public-private partnerships.

– decree 2014-246 of the 8 May 2014 which amends decree 2012-1152 of the 19 December 2012 on powers, organisation and functioning of the institutional framework for steering public-private partnerships.

– On 17 September 2015, the National Steering Committee for Public-Private Partnerships (CNP-PPP) launched an official portal on PPP: www.ppp.gouv.ci. The site details Côte d’Ivoire’s PPP projects in detail.

– Order 2012-487 of 12 June 2012 on the Investment Code.

– Decree 153 of 24 April 2013 on the appointment of the National Steering Committee for members of Public-Private Partnerships.

2. On public service delegations

The following regulations apply:

– Directive 04/2005/CM/UEMOA of 9 December 2005 on procedures for the award, implementation and payment of public procurement and public service delegations within the West African Economic and Monetary Union

– Directive 05/2005/CM/UEMOA of 9 December 2005 on the control and regulation of public procurement and public service delegations within the West African Economic and Monetary Union

– Decree 2009-259 of 6 August 2009 on the procurement contracts code

– Decree 2015-525 of 15 July 2015 amending decree 2009-259 of 6 August 2009 on the procurement contracts code, as modified by decree 2014-306 of 27 May 2014

– Decree 2014-306 of 27 May 2014 amending decree 2009-259 of 6 August 2009 on the procurement contracts code

– Decree 2013-308 of 8 May 2013 on amending decree 2009-260 of 6 August 2009 on the organisation and functioning of the National Authority for the Regulation of Public Procurement (ANRMP)

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– Decree 2009-260 of 6 August 2009 on the organisation and functioning of the National Authority for the Regulation of Public Procurement (ANRMP)

– Order 299/MEF/DGBF/DMP of 27 May 2010 the powers, organisation and functioning of the directorate of Public Procurement

– Order 804/MEF/DGBF/DMP of 19 October 2010 on the process for delegating the authority of the minister responsible for public procurement

– Order 199/MEF/DGBF/DMP of of 21 April 2010 amending order 2050/MEF/DGBF/DMP of 13 August 2002 on executing budget appropriations according to the procurement contracts Code

– Order 200/MEF/DGBF/DMP of 21 April on setting thresholds for contracting, validating and approving within the public procurement process

– Order 661/MEF/ANRMP of 14 September 2010 setting the process for making referrals, legal proceedings and decision-making in relation to the appeals and sanctions unit

– Order 805/MEF/DGBF/DMP of 19 October 2010 on the organisation and functioning of the Administrative Commission for Conciliation (CAC).

PPP Process

1. PPP

Prerequisites for resorting to PPPs Ivorian regulations do not subject the use of PPPs to any particular special conditions.

However, the recourse to a PPP by a public entity with a partnership contract must be justified by a prior assessment.

Following this assessment, the project must be specified in the National Development Plan by the public authority that wishes to enter into the contract in order for it to be accepted.

The procurement process The processes permitted for PPPs include:

– open tender: the preferred procurement process. It must be publicised at national and international level and a prior pre-qualification phase is possible but not obligatory

– restricted tender: the public entity may use this procurement process when the needs to be met require a particular skill which few applicants are able to provide

– competitive dialogue: which is organised by a charter produced by the CN-PPP

– direct negotiation: the contracting entity may only use this in four specific cases (extreme urgency, national defence or security, if only one operator is able to supply the required service, if the tender fails).

With the exception of open tender, the other procurement processes, which are dispensatory, must only be used in exceptional circumstances, justified by the contracting public authority and authorised in advance by the Minister of the Economy and Finance following the opinion of the CNP-PPP.

2. For public service delegations

In principle, the default process is the open tender. The contracting authority may, depending on how complex the project is, go through an open tender with pre-selection or a two-stage tender, or open tender with competition, or restricted tender.

Exceptionally, the contracting authority may have recourse to a direct agreement or mutual agreement.

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1. Underground project in Abidjan

Year: 2015 – 2019


Funding: World Bank, International Monetary Fund

Sector: Transport

Details: This project consists of creating a “métro”-style or underground urban transport to serve Côte d’Ivoire, from Anyama to Felix-Houphouët-Boigny International Airport. The project was approved by the World Bank and the International Monetary Fund. The project is anticipated to be carried out in two phases.

2. Renovating and fitting the University Hospital of Cocody


Amount: US$34.5 million

Funding: To be confirmed

Sector: Health

Details: Renovate buildings, reinforce technical equipment and provide the department with adequate tools to enable the hospital to provide patients with the best care possible on a diagnostic and therapeutic level.

3. CIPREL IV thermal power station



Funding: Oragroup, BOAD, BOA-CI, BIAO-CI, SIB-CI, SFI BAD, Proparco

Sector: Energy

Details: Ivorian electricity company Ciprel built a thermal power station in the industrial zone of Vridi in Abidjan. Combustion turbines produce the electricity. The power station known as CIPREL was built in several phases (I to III). Following the success of the project, in 2011, Côte d’Ivoire extended the power station with CIPREL IV and its 111 MW gas turbine, which went into service in January 2014 and a steam turbine with a 111 MW capacity is currently under construction.

CIPREL IV will enable a total capacity of 543 MW to be reached.


The Prime Minister strives to move from an agricultural economy towards an industrial economy.

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Sources

www.news.abidjan.net

www.challengesradio.com

www.gcNPD.gouv.ci

www.paris21.org

www.initiative-ppp-afrique.com

www.ppp.gouv.ci

news.abidjan.net

www.initiative-ppp-afrique.com

www.imf.org

www.eranove.com

www.news.abidjan.net

www.afrique-sur7.fr

The Basilica of Our Lady of Peace is a Catholic minor basilica dedicated to Our Lady of Peace in Yamoussoukro, the administrative capital of Côte d’Ivoire.

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Key statistics

Area1,010,407.87

Population91 million (2016 estimate)

GDP$330.765 billion (2016 estimate)

GDP per capita$3,740 (2016 estimate)



Number of projects 18 in total four of which have reached contract completion (focused on water, education transport and health sectors).

Key players

PPP Central Unit: promotes the national PPP initiative to key stakeholders within Government and the private sector. It develops PPP best practice, shares this and validates PPP project proposals. Furthermore, it provides technical, financial and legal expertise to the Supreme Committee for PPP Affairs and to the PPP Satellite Units at the Administrative Authorities.

PPP Satellite Units: units within the Administrative Authorities, established whenever necessary. A decree is issued by the Competent Authority of the Administrative Authority regarding the structure of such units, their competencies and the system of their work.

PPP Project Preparation Fund: established to fund the appointment of suitable transaction advisers at line ministry level in light of the global economic difficulties and the need to appoint advisers to progress projects.

Infrastructure Finance Facility Co: established as a local currency financial facility to enable project developers to hedge against exchange rate and convertibility risk, to enable long-term financing of projects.

Supreme Committee for Public Private Partnership Affairs: sets national PPP strategy, endorses its application across PPP projects and approves individual transactions.

Administrative Authorities: enter into PPP contracts with relevant project companies for the delivery of specific projects.

Needs of the region A broad range of infrastructure funded through private financing to ease pressure on the nation’s capital budget. PPP is viewed as a key ingredient to boost economic growth and development through improved infrastructure services, with a focus on education, health, transport, water and wastewater sectors.

EgyptShahid Law Firm

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Law: The Public Private Partnership Law No. 67 of 2010 provides a framework for PPP projects to be procured and operated under.

Regulations: The Executive PPP Regulations issued through Ministerial Decree No. 238 of 2011 provides for specific guidance on the structuring, deployment and implementation of PPP arrangements. Its key requirements include:

– Contract Term – 5 to 30 years from practical completion

– Contract Value – Less than US$12 million

– Governing Law – Egyptian law

PPP Process

Project Launch

– Prepare and issue an Information Memorandum to explain the project in detail, project scope, the method of selection, selection process, award criteria and submission requirements.

– A bidder conference may be held to provide further information.

Qualification

– A long list of candidates will be identified through applying the selection criteria.

– Three or four bidders will be shortlisted whose responses indicate they are particularly well qualified to undertake the project.

Tender

– An Invitation to Present Proposals (IPP) will be prepared, which contains sufficient information to enable the shortlisted bidders to prepare a full technical and financial bid, including a full project description, draft contract, evaluation criteria, submission requirements, output specification and payment mechanism.

Dialogue

– Dialogue with each shortlisted bidder to allow bidders to clarify aspects of the IPP, test technical proposals and discuss commercial issues.

– After the conclusion of dialogue, bidders submit their technical and financial tenders.

– A discussion of the technical and financial details of each proposal will be held with each qualified bidder to clarify their property allow them to reconsider areas that could be improved, discuss risk allocation and confirm the financial status of proposals.

– Clarifications are allowed so long as these fine-tune and do not change features in a way which would be likely to distort competition or have a discriminatory effect.

Evaluation

– Evaluation is then carried out: Technical evaluation takes place first, with financial evaluation following it.

Appointment

– A preferred bidder is appointed and a reserve bidder may be lined up where the authority has concerns regarding the preferred bidder.

– Fine-tuning of the contract is permitted at this stage, so long as it takes place on a fair basis.

– An operational manual is typically prepared to facilitate successful delivery.

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1. New Cairo Wastewater PPP Project

Year: Financial close was reached at the end of 2009

Capital Value: US$150 – 200 million

Sector: Wastewater

Details: New Cairo City is a satellite town of Greater Cairo which has a population of 550,000, and is due to expand to 3 million by 2029. Eversheds’ Tim Armsby advised on this PPP to construct and operate a new domestic wastewater treatment plant with a capacity of 250,000 m3/day. It was the first project to close under the Egyptian Government’s new PPP programme.

2. Abu Rawash Wastewater PPP Project

Year: Financial close due 2015

Capital Value: Approximately US$120 million

Sector: Wastewater

Details: Eversheds’ Tim Armsby advised on this PPP for the design, financing, construction and operation of a secondary treatment stage, cogeneration and digestion facilities for the Abu Rawash Wastewater Treatment Plant, and the operation and maintenance of the existing primary treatment facilities with a capacity of 1.2 million m3/day. When complete it will be one of the world’s largest plants in operation and is the first Egyptian PPP to include brownfield elements and the provision of a stapled financing package.

3. New Alexandria University Hospitals PPP Project

Year: 2012


Sector: Health

Details: Eversheds’ Tim Armsby advised the Egyptian Ministry of Finance on a pilot health sector PPP project. Technically, it is the most complex PPP project to be launched in Egypt to date and aims to deliver two hospitals for Alexandria University at Smouha Maternity University Hospital and Mowassat Specialized University Hospital, in accordance with international standards. Despite the impact of the Egyptian revolution, financial close was achieved in April 2012.

Legal 500, EMEA 2012 Edition (Projects and Infrastructure) noted that:

“Having been “ … retained by the Ministry of Finance as sole counsel on every social infrastructure project to date; and is instructed by various regional state entities on innovative construction and oil and gas projects. PPP mandates include a ground breaking construction project for two hospitals in Alexandria. The ‘highly experienced’ ... Tim Armsby [is] recommended”.

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1. Project Company “PPPCo”. being subject to restrictions stipulated in the provisions of the Companies Law No. 159 of 1981, such as Article 41 (employees profit sharing).

2. Setting specific prices for the products and services provided by the project as currently provided under under to Article 34(e) of Law No. 67 of 2010.

3. Transferring of profits to the foreign party in foreign currency without delay.

4. Ensuring the availability of energy at competitive prices and based on equality and non-discriminating basis.

5. Pursuant to Articles 12 and 13 of Law No. 67 of 2010, the Administrative Authority and the Competent Authority’s powers to intervene with the implementation of the PPP Contract.

6. Although Law No. 67 of 2010 is excluded and independent from the Public Tenders Law No. 89 for 1998, the authorities may have relied on the majority of provisions, effectively ignoring this exclusion.

7. The Ministry of Finance/PPP Central Unit should issue executive regulations addressing the handing over of the project at the expiry of the PPP Contract in accordance with Article 34 of Law No. 67 of 2010.

8. The need for prior approval by either the Supreme Committee for PPP Affairs (as currently pursuant to Article 35 of Law No. 67 of 2010) or the concerned minister (as currently pursuant to Article 1 of the Arbitration Law No. 27 of 1994).

Sources

www.pppcentralunit.mof.gov.egZamalek Island, Cairo, Egypt.

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Key statistics

Area1.14 million square km

PopulationAbove 84 million

GDPTo be confirmed.

GDP per capitaUS$550.00

GDP growth10.28%


Key players and needs of the region The Ethiopian Procurement and Property Administration Proclamation no. 649/2009 empower the Ministry of Finance and Economic Development to issue directive governing the rules for the formation and modes of implementation of public private partnership.


So far the Ministry of Finance and Economic Development has not issued a directive governing PPP rules in Ethiopia.

PPP Process

Since Ethiopia lacks a legislation particularly governing PPPs and an authorised public organ, the process and implementation of such partnership is left to the relevant ministries.


– Lehulu: an Ethiopian company named Kifiya Financial Technology PLC owns the company. It provides a one-stop facility for payments of all utility bills (including electricity, water and landline phone);

– The Addis Ababa Exhibition and Market Development Enterprise work together with the City Administration and the Addis Ababa Chamber of Commerce and Sectoral Association;

– The Africa JUICE Tibila SC, a joint venture between a Netherlands-based company, Africa JUICE BV and the Ethiopian government is engaged in the production of “Passion Fruit”.

EthiopiaFikadu Asfaw and Associates Law Office (FALO)

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Public and private sector partnership is raised by the government as a key strategy to enhance the country’s growth and development. However:

1. There is a lack of clear-cut legislations governing PPP rules;

2. There is a lack of authorised public organ (public agency) handling PPPs;

3. The absence of government guarantees and incentives could be taken as challenges for the development of PPPs in Ethiopia.

Sources

The Ethiopian Procurement and Property Administration

Proclamation no. 649/2009

The Ethiopian Investment Proclamation no. 769/2012

Investment Guide to Ethiopia

www.theafricareport.com

www.addisfortune.net

www.undp.org

www.worldlifeexpectancy.com

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Key statistics

Area227,540 sq.km (2014)






Number of projects

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Funding The majority of infrastructure development are funded by government budgets which come from revenue generated or loans contracted by the Government. Infrastructure development through a PPP programme will be funded from private resources with support provided by the Government in the form of government guarantee.

Key players Ministry of Finance (MoF): the government ministry responsible for co-ordinating the whole PPP programme through the various divisions and units under the ministry particularly the Public Investment Division (PID) which is made up of the Project and Financial Analysis (PFA) Unit and the PPP Advisory Unit (PAU).

Project and Financial Analysis (PFA) Unit: the PFA operates under the PID as the unit responsible for analysing the project and it ensures projects are consistent with the overarching government plan: that the use of PPP option is preferable to direct public procurement; financial viability and economic soundness; compliance with procurement process, etc.

PPP Advisory Unit: a unit under the PID which promotes PPPs and provides support to Contracting Entities in the identification, preparation of feasibilityanalyses, structuring, negotiations and procurement of PPP projects, In addition, the Unit is mandated to build capacity among public sector entities on implementation of PPPs.

Debt Management Division: a division under the MoF which ensures fiscal sustainability of PPP projects, considering both direct and contingent liabilities on government’s finances. The Division is also responsible for considering government’s supports required for PPP projects and the assisted financial implications.

Budget Division: a division under the MoF responsible for the incorporation of PPP projects into the annual budget.

PPP Approval Committee: this Committee is made up of ministers and heads of agencies that have a direct impact on the implementation of PPP projects. The Committee is responsible for approving PPP projects at various implementation stages.

Contracting Entities: these are government implementing entities made up of central government ministries, departments and agencies (MDAs) and local government metropolitan, municipal and district assemblies (MMDAs). These are the entities responsible for the implementation of projects that fall within their scope of responsibility.

GhanaAB & David

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Needs of the region A broad range of infrastructure, including:

– Roads – Rail – Airports – Ports – Accommodation – Water – Energy.


Law: The draft PPP law contained within the Ghana Public Private Partnership Bill – 2013has been reviewed by the World Bank and is under consideration by the Ministry of Finance (MoF) and the Attorney General’s Office.

Regulations: Associated PPP Regulations will be developed once the PPP law has been approved.

PPP Process

Project Inception

As soon as a contracting entity identifies a project that may be concluded as a PPP, the entity has to provide a Project Brief/Concept and register the project with the PID.

Pre-Feasibility Study

To determine whether the proposed PPP is in the best interests of the country, the contracting entity must undertake a pre- feasibility study and developa business case to explain the strategic and operational benefits of the proposed PPP for the contracting entity in line with its strategic objectives, and demonstrating the alignment of the project with the National Infrastructure Plan and government policy. The pre-feasibility study must describe in specific terms:

– in the case of a PPP involving the performance of the contracting authority’s function, the nature of the function concerned and the extent to which this institutional function, both legally and by nature, may be performed by a private party;

– in the case of a PPP involving the use of state property, a description of the state property concerned, the uses (if any) to which such state property has been subject prior to the registration of the proposed PPP, and a description of the types of use that a private party may legally subject such state property to; and

– an indication of the possible location(s) and provide estimates of broad project costs, and an initial indication of whether the project is likely to be viable and affordable.

Feasibility Study

A contracting entity shall undertake and submit to the PID a full feasibility study and appraisal of the proposed project. The full feasibility report should:

– in respect to a PPP project pursuant to which the contracting authority will incur any financial commitments, demonstrate the affordability of the PPP for the institution;

– set out the proposed allocation of financial, technical and operational risks between the institution and the private party;

– demonstrate the anticipated value for money to be achieved by the PPP;

– provide detailed estimates of the viability gap and the need for incentives; and

– explain the capacity of the institution to procure, implement, manage, enforce, monitor and report on the PPP.

Procurement Process

The procurement process must be based on a system that is fair, transparent, competitive and cost-effective. Usually, an international competitive bidding process is adopted.

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Qualification

– A request for expression of interest is published to the market.

– Interested bidders will need to respond to the pre-qualification process contained within it that request for expression of interest.

Tender

– A request for proposals will be issued to the shortlisted bidders.

– Each shortlisted bidder will need to respond to the submission requirements, and may be required to submit a bid security.

Evaluation

Evaluation will be performed to identify the selected bidder.

Dialogue

Negotiations may be held to review issues identified in the draft PPP Agreement as being subject to negotiation.

Appointment

– After the procurement process has been concluded but before the contracting authority concludes a PPP Agreement/Concession, the contracting authority must obtain approval from the Approving Authority for PPPs subject to the provisions of the Approval Schedule to this Policy and detailed regulations to be promulgated.

– A minimum 21 day standstill period from final approval to contract award must be observed prior to financial close.


1. Boankra Inland Port

Year: 2015


Sector: Ports/Rail

Details: The 400-acre inland port will be redeveloped through a BOT structure and linked effectively to the Tema and Takoradi ports through the development of an eastern corridor railway line. The project provides a significant increase in the country’s logistics capability.

2. Accra – Takoradi Highway Dualisation

Year: 2015

Capital Value: To be confirmed.

Sector: Roads

Detail: The project consist of a 185km Accra–Takoradi Highway. The Government intends to engage a private party who will design, finance and construct the road into four lanes and manage it for the concession period.

3. Accra – Tema Motorway Project

Year: 2015


Sector: Roads

Details: The Government intends to engage a private partner to design, finance and construct the 19.3km toll road that connects the Tema (the port city) to Accra and other parts of the country including other landlocked countries that ship goods through the Tema Port.

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4. Korle-Bu Teaching Hospital

Year: 2013


Sector: Health

Details: The delivery of a new laboratory and imaging service to improve hospital performance, address capacity constraints and ensure private sector revenue generation, including maintenance of the existing satellite laboratory services.

5. Model Markets

Year: 2015


Sector: Social/Community Base Development Project

Details: The Ministry of Local Government & Rural Development in collaboration with the relevant MMDAs are undertaking projects to modernise a number of markets. The project entails award of concessions to private partners to design, finance, construct and manage the specific markets for concession periods. Currently, there are about nine such markets for which procurement processes to engage the private partners has been initiated by the Accra Metropolitan Assembly.


1. PPP Champion: one main challenge is lack of a PPP champion to push forward the government’s PPP programme. Lack of political will to ensure implementation of the various projects initiated by the Government.

2. Awareness and Understanding: there are a number of capacity building programmes undertaken by the PID. However, awareness and understanding of full PPP implementation remains low within the public sector.

3. Government Support: inability of the Government to provide support especially in terms of any sovereign guarantees to support the implementation of projects.

4. Finance Structure: closely related to the above is the failure on the part of private partners to achieve financial close due to inappropriate structures adopted for specific projects, affecting bailability.

5. Risk Allocation: inappropriate project structure due to the allocation of risks to the wrong party in terms of the party which bears the design risk, cost overrun, market risks, etc. This usually leads to challenges in the implementation of the project.

Sources

www.mofep.gov.gh

www.dailyguideghana.com

www.observer.ug

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Key statistics

Area580,370 sq.km (2014)




GDP growth5.3 % (2014)


Key players

Public Private Partnership Committee: established by the Public Private Partnerships Act, 2013 (“PPP Act”) the PPP Committee consists of principal secretaries in various State Departments, including finance, government co-ordination, planning, lands, devolution, Attorney General and private sector representatives.

Its functions include identification of national priority projects, ensuring each project agreement is consistent with the PPP Act, formulation of policy guidelines, approval of projects submitted by a contracting authority, approval of feasibility studies conducted by a contracting authority, ensuring effective implementation of project agreements, and review of the legal, institutional and regulatory framework of PPPs.

Public Private Partnership Unit: the PPP Unit was established within the National Treasury, pursuant to the PPP Act. It serves as the secretariat and technical arm of the PPP Committee, providing

technical, financial and legal expertise to the PPP Committee and any PPP node. The PPP Unit makes recommendations on approval or rejection of projects prior to submission to the PPP Committee for approval, assists contracting authorities to identify, design, appraise, evaluate and negotiate projects, and ensures the tendering process conforms to the requirements of the PPP Act.

Public Private Partnership Node: the PPP Act requires that a contracting authority that intends to enter into a PPP shall establish a PPP node, headed by an accounting officer of the contracting authority and other relevant personnel. A PPP node shall, on behalf of the contracting authority, identify and prioritise projects, appraise project agreements, ensure that the project agreement and tendering process complies with the Act, monitor implementation of the project agreement, oversee management of a project and ensure transfer of assets at the expiry of a project.

Contracting Authority: defined within the PPP Act as a state department, agency, state corporation or county government which intends to have a function currently undertaken by it performed by a private party.

Needs of the region Vision 2030 is Kenya’s development blueprint, aiming to transform Kenya into a newly industrialised middle-income country, providing a high quality of life, services and facilities to all its citizens by the year 2030, with investment in infrastructure facilities being given the highest priority. However, the funds required to fully support the country’s development agenda and to meet the infrastructure deficit will require the involvement of the private sector, hence Public Private Partnerships are being used as a tool for development. In August 2014 the National Treasury,

KenyaMMAN Advocates

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through the PPP Unit, published a National Priority List of 59 PPP projects that have been approved by the Government. The List comprises projects in transport and infrastructure, energy and petroleum, water and sewerage, tertiary education facilities, public sector housing, hotels and convention centres, health equipment and infrastructure development, ICT, and special economic zones sectors.


Law: The Public Private Partnerships Act 2013. The preamble describes its role as providing for the participation of the private sector in the financing, construction, development, operation or maintenance of infrastructure or development projects of the Government through concession or other contractual arrangements; the establishment of the institutions to regulate, monitor or supervise the implementation of project agreements on infrastructure or development projects and for connected purposes.

Regulation: The Public Private Partnership Regulations 2014 (PPP Regulations). The Regulations govern the feasibility study process, appointment of advisers, the bidding process, negotiations and project agreements.

Guidelines: The Petition Committee Guidelines, 2014 were published by the Petition Committee established under the PPP Act to guide private party bidders and contracting authorities on the filing, hearing and determination of petitions in relation to the process for tendering for, or entering into, a project agreement.

Policy: A Policy Statement on Public Private Partnerships published in November 2011 by the Government underscored its commitment to the PPP model as a tool of development.

PPP Process

The PPP process is guided by the PPP Regulations. The PPP Regulations detail the process of project preparation and appraisal as well as the conduct of feasibility studies by contracting authorities and approval by the PPP Committee. In addition, the PPP Regulations prescribe how a contracting authority can procure transaction advisers to assist them in the PPP process. The PPP Regulations permit contracting of projects through solicited proposals and privately initiated investment proposals, with the process involved set out in the PPP Regulations. The negotiation process and entry into project agreements is also governed by the PPP Regulations.


1. Kenya Uganda Railway Line

Year: 2006

Sector: Transport

Details: The Governments of the Republic of Kenya and the Republic of Uganda agreed in 2004 to concession their respective railways together. Rift Valley Railways (RVR) signed Concession Agreements in 2006 and Amending Deeds in relation to these agreements in 2010. The concession has a 25 year duration. The concessionaire is to rehabilitate, operate and maintain the rail networks as one railway system so as to improve the management, operation and financial performance of the two rail networks in a coordinated manner.

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2. Independent Power Projects

Year: 1996 onwards

Sector: Energy

Details: Following the shift in the 1990s away from concessionary funding for power projects towards private sector participation in infrastructure and a wave of sector reforms, IPPs were introduced in Kenya in 1996 to meet the country’s energy demands.

IPP Name Type Capacity MW

Thika Power Thermal 87

Triumph Thermal 82

Gulf Power Thermal 80

Orpower Geothermal 52

Lake Turkana Wind 300


1. Inconsistent government resolve to implement approved projects.

2. High compensation costs involved in compulsory acquisition of private land required for projects.

3. Lack of public understanding of the potential benefit of PPP models such as tolling when contrasted with the cost to the public use of such infrastructure.

4. Lack of experience and capacity at the County Government level in implementing PPP projects.

5. Mandatory granting of operation and maintenance contracts for PPP projects to pre-determined parties where the construction of infrastructure was funded by a foreign government’s grants and loans.

6. Resistance to changing from traditional methods of procurement.

Sources

http://data.worldbank.org/country/kenya

www.pppunit.go.ke

www.kenyalaw.org

Policy Statement on Public Private Partnerships, Office of the Deputy Prime Minister and Ministry of Finance, November 2011

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The draft of law related to PPP was published in 2011 further to the World Bank’s campaign and with a view to increase the participation of private investments (international and national) and to improve the economy of Madagascar.

The provision 2015-039 regulating Public-Private Partnership (hereafter “the Law”) was voted by Parliament at its session on 9 December 2015.

It governs all economic and social sectors including those regulated by specific legislation, except the mining and hydrocarbon sectors.

Article 1 of the Law defines a PPP project as any contract, whatever its type and its denomination, by which the public authority concedes to a third party, for a prescribed period, according to the time for investments to be amortised or to the financing terms adopted:

– part or all of the financing of infrastructure, equipment, works or immaterial goods needed for public service, and

– part or all of their construction, rehabilitation, change, maintenance, exploitation or management, with or without delegation of public service.

A great support of the private sector is shown in the funding of some public private partnerships.

MadagascarHK-Jurifisc


Key statistics

Area58729.5 sq.km (2014)



GDP per capitaUS$382 (2016)


Key players National Committee for Private Public Partnerships: in charge of assisting the Government in defining its PPP policies and strategies.

The PPP Unit: in charge of assisting Contracting Authorities in pre-feasibility assessment and procurement of PPP contracts. The Unit is also in charge of monitoring and evaluating PPP practice in Madagascar.

The Procurement Contract Regulation Authority: controls the procurement procedure.

The Finance Ministry: in charge of ensuring financial and tax sustainability of the projects and whose approval is required prior to the conclusion of any PPP contract or its amendments that engage public funds.

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PPP Process

Depending on the circumstances, the public procurement procedure is led either in accordance with the procurement plan of the relevant the relevant International Financial Organization (e.g. the World Bank) that supports the project, together with the approval of the Bid Evaluation Committee, or with the provisions of the law 2004-009 dated 26 July 2004 on Code of public contracts.

Public procurement procedure may be conducted in three different ways:

– opened or restricted bidding

– direct agreement

– competitive dialogue.

Article 17 of the Law provides that a procurement notice for a PPP project conducted through an open bidding or a competitive dialogue procedure has to be published in the newspapers empowered to publish legal notices and on the Unit PPP website.

The same article states that the publication can be done by a mere advertisement and on the Unit PPP website when the cost of a PPP project is beyond the thresholds set from time to time by decrees.

The public procurement notice gives details of the evaluation criteria and the conditions of the the PPP contract. In this regard, article 29 of the Law states that bidders must provide a bid guarantee in the form of a first demand bank surety or a bank surety bond upon submission of their proposals. The guarantee is generally set at a cap of 50% of the expected investment.

The public authority may decide, at any time, not to pursue the procurement process. A notice of interruption must must be published in this case via the same methods as via the same methods as the initial public procurement notice and must specify the grounds on which the procurement process has been halted.

The public authority must opt for either the discontinuation or the launch of a new procedure, under either identical or adjusted conditions, in case of an unsuccessful tender.

A decree defines the procedure by which the public authority publishes the results of the procurement process.

At the conclusion of the PPP contract a copy of which is annexed to the tender documents, the winning bidder is required to furnish a performance guarantee relating to the anticipated investment in the same form as the bid guarantee.

The PPP contract determines freely the rights and obligations ofParties as well as how risks are shared between them.

The contract is drafted in accordance with international principles regulating the conclusion of contracts and international best practice of financing projects and PPPs.

The PPP contract may be terminated by mutual consent or on the initiative of each Party the event of serious misconduct, financial difficulties encountered by the other Party or in case of force majeure.

The private sector is entitled to a compensation for the suffered loss when the contract is breached by the public authority for general interest.

Possible reference to either a national or international arbitration procedure is permitted by article 49 of the Law for the resolution of any dispute related to the execution, interpretation or revocation of PPPs contracts.

Tender

A tender is the preferred procurement process in which the partnership contract is awarded to the tenderer whose tender is the most economically advantageous. It could be with or without required pre-qualification.

It can also be an open or restrictive tender.

Direct negotiation is possible for exclusively the following reasons (Art.24):

– national defence and public safety;

– for PPP subject of two consecutive identical tender that remained unsuccessful;

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– in presence of emergency situations that arose as defined by the PPP laws;

– if it refers to activities the operation of which is exclusively reserved for a patent holder, or a holder of mining or petroleum rights;

– in case of public interest reasons and under prior authorisation of the Council of Ministers;

– in case of complementary services of a prior PPP performed by the same operator.

Competitive dialogue

– It is possible for all complex PPPs above the minimum investment threshold or expected income provided for by decree when the contracting authority cannot determine the means necessary to meet its needs or to evaluate the technical, financial and legal solutions available on the market (Art.25). The approval of the Public Procurement Regulation Authority is required for the use of competitive dialogue.


1. Infrastructure

– Extension of Antsirabe Aerodrome for the shipment of local products by air. Eight private firms participate in the financing of the project;

– Rehabilitation of Ivato international airport and Nosy Be airport conceded to the consortium composed of Bouyges Bâtiment International, Aéroport de Paris Management, Meridian Africa and Colas Madagascar. Work is carried out for the receipt by Madagascar of the Summit of the Francophonie in 2016.

2. Agriculture

Collaboration between the Ministry of Breeding and the Group Avitech/LFL for the training of farmers.

3. Energy

Concession by the Ministry of Energy and Oil sector to private firms of the renovation and the operation of few hydroelectric facilities.

4. Education

Conclusion of partnership with construction firms for the building of public schools throughout the country.


The main obstacles with PPP in Madagascar are:

1. Politics: Madagascar is actually considered as a “high risk country” because of the current political instability, so this situation is not attractive for foreign investors.

2. Pricing:

– The cost of investment is very high (billions of dollars) so foreign investors have difficulties in bringing enough cash.

– The clearance tax cost is very expensive, so the importation of materials needed for the investment is very difficult.

3. Tax and jurisdictional insecurity

4. General corruption

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Mali Brysla Conseils


Key statistics

Area1,240,000 km²

Population17.96 million



GDP growth4.30% in 2015


To date, there is no legislation regarding public-private partnership contracts but a draft law is under way.

However, Mali has regulations on public service delegation in its public procurement contracts:

– Directive N°04/2005/CM/UEMOA of 9 December 2005 on the awarding, execution and regulation procedures of public procurement contracts and public service delegation of the West African Economic and Monetary Union;

– Directive n°05/2005/CM/UEMOA on the monitoring and regulation of public procurement contracts and public service delegation in the West African Economic and Monetary Union;

– Law 94-009 of 22 March 1994 on the fundamental principles of the creation, organisation, management and monitoring of public services;

– Decree 2015-0604/P-RM of 25 September 2015 on public procurement contracts and public service delegation;

– Decree 2015-3721/MEF-SG of 22 October 2015 determining the implementation details of the decree 2015-0604/P-RM ;

– Decree 2016-0155/PM-RM of 15 March 2016 on the organisation and functioning of the procurement contracts units; and

– Decree 08-485/P-RM of 11 August 2008 on the awarding, execution and regulations of public procurement contracts and public service delegation, amended by the decree 2011-079/P-RM of 22 February 2011. Those decrees govern only the public contracts notified prior to the effective date of the Decree 2015-0604/P-RM.

Number of ongoing Projects

Unknown.

Key players The National Authority regulating public procurements: a key player with several missions, including the definition of the national policies for public procurements and public service delegation contracts.

The general management of public public procurement and public service delegations: in charge of developing and monitoring the implementation of the public procurement and Public Service delegations’ national policies.

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PPP Process

Procedure for public service delegation

The awarding of a public service delegation agreement must be preceded by an advert that provides the clearest possible information on the project concerned. The deadline for submissions is at least forty-five (45) calendar days from the date of publication of the notice.

Pre-qualification of candidates may be arranged.

The private sector must prove that they satisfy the pre-qualification criteria that the delegating authority judges to be appropriate. This pre-qualification aims to identify potential co-contractors who offer sufficient technical and financial guarantees and have the capacity to ensure the continuity of the public service for which they are bidding.

The selection of offers must be carried out following an open tender procedure.


1. Segou solar plant

Year: 2015


Financing: International Finance Corporation

Details: A solar plant project with 33 MW of power is being constructed in Pélingana Wéré, Ségou. The plant was developed by the Norwegian Company Scatec Solar in partnership with IFC Infra Ventures and Africa Power 1. The project will be carried out under a concession agreement.

Currently being procured or feasibility being assessed:

The African School of Mines Mali is the third highest gold producer in Africa (70% of the country’s export earnings). This school should allow students to be trained in all areas of the mining profession. The cost of this project is fixed at approximately US$38 million. The State is asked to provide a grant of about US$17 million.

Waste Power Plant of Noumoumbougou A project for the construction of a power plant with a view to transform the solid waste in the town of Bamako into electrical energy (53,000 tons/year). The plant should have an installed power of 5MW. The cost of the project is provisionally evaluated at US$50.5 million.

Dry Ports of Kayes and Sikasso A project for the construction of areas for receiving goods mainly from the ports of Côte D’Ivoire and Senegal. This will involve granting a 20-year concession to the operator. The funding is estimated at about US$38 million.

Projects being finalised

This is predominantly in the field of the construction of solar or thermal power plants. It is important to note that these are contracts which are being finalised.

We have been unable to obtain precise data on the amount of these investments:

– Albatros Energy Mali Thermal Power Plant 60 MW In Kayes;

– Solar Power Plant 50MW Segou;

– Solar Power Plant 50MW Sikasso;

– Solar Power Plant 50MW Kita.

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1. In order to drive its economy forward, the State of Mali has identified a number of projects which it cannot manage alone due to the considerable investment required. These projects are likely to require a private partner. These are projects in the sector of Mines, Energy and Transport.

However, the current legislation in force in Mali is not fully suitable for implementing such projects. Arrangements regarding public service delegation feature in the Procurement Contract Code but they are not sufficient. Questions on the interpretation of these rules remain.

2. To resolve this problem, Mali requires specific legislation on PPPs. The aforementioned code which is currently being prepared will allow the clarification of legal rules applicable to PPPs.

The promotion of PPPs requires particular expertise. It is therefore necessary to create an institution whose essential mission will be to identify the opportunities to develop PPPs and provide interested public people with support on the preparation, negotiation and monitoring of PPP contracts.

3. Currently there are several projects under way. Some are being studied and others are in the process of being finalised.

Sources

www.maliactu.net

www.intellivoire.net

View of Bamako and the Niger River in Mali.

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Key statistics

Area1,860 sq.km (2014)

Population1.261 (2014)





Key players

PPP Unit: the body mandated to deal with all matters relating to a PPP referred to it by the Committee. Since it was set up in July 2002 the unit has drafted the PPP legislation and produced the PPP Guidance Manual.

PPP Committee (Committee): makes an assessment of a project submitted to it and gives its recommendations to the relevant contracting authority, develops best practice guidelines in relation to all aspects of PPP, formulates policy in relation to PPP projects and develops PPP awareness in the country.

Contracting Authority: is responsible for identifying, appraising, developing and monitoring a project to be implemented. The contracting authority undertakes or causes to be undertaken a feasibility study for a PPP project and submits the feasibility study to the PPP Committee for its approval. It also prepares a request for proposal on the approval of the feasibility study and, where the terms of the model agreement impact on public finance, seek the approval of the Committee.

Central Procurement Board (CPB): ensures transparency and equity in the bidding procedures, examines and evaluates the bids received, provides recommendations to the contracting authority for entering into negotiations with the preferred bidder and approves the award of the project.

Transaction Adviser: a person or group of persons that either possesses or has access to professional expertise in financial analysis, economic analysis, legal analysis, environmental impact analysis, contract documentation preparation, tender processing, engineering or cost estimating. A transaction adviser assists in bringing a PPP project from the concept stage through public bidding and award to actual execution.

Needs of the region Traditionally, PPP has been applied to the infrastructure sector – in particular in the electricity, telecoms, water, transport and solid waste sectors, and increasingly in the social (health and education) and IT sectors.

MauritiusEversheds

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Public-Private Partnership Act 2004 (PPP Act) provides for the implementation of public-private partnership agreements between contracting authorities and private parties and to establish a set of rules governing public-private procurement.

PPP Process

The PPP Act describes the process for the preparation of the project and the studies and documentation that should support the project.

Feasibility Study

The process begins with a feasibility study undertaken (or caused to be undertaken) by the contracting authority to assess whether the proposed project is feasible as a PPP. The study shall demonstrate comparative advantages in terms of strategic and operational benefits for implementation under a PPP agreement, describe in specific terms the nature of the contracting authority’s functions, the specific functions to be considered in relation to the project and expected inputs and deliverables; the extent to which those functions can lawfully and effectively be performed by a private party in terms of an agreement; and the most appropriate form by which the contracting authority may implement the project under an agreement. The study must demonstrate that the agreement shall be affordable to the contracting authority, provide value for money and transfer appropriate technical, operational or financial risk to the private party. It shall also explain the capacity of the contracting authority to effectively enforce the agreement.

Procurement

The procurement process involves the contracting authority consulting the CPB to obtain its written authorisation to conduct a pre-selection exercise.

The pre-selection document has to be prepared by the contracting authority and includes a public invitation for applicants to apply for pre-selection. All pre-selection documents will be subject to the written approval of the CPB before its issue and publication. The contracting authority has to prepare and submit the request for proposal to the CPB for its written approval. No document pertaining to a request for proposal may be issued to pre-selected bidders or bidders unless approved by the CPB. The CPB is responsible for the evaluation of bids - but it may set up an evaluation committee for this purpose. The award of the contract has to be approved by the CPB.

Unsolicited Proposals

A private promoter submits a project concept and the proposed cost of a detailed feasibility study to the contracting authority. The contracting authority will examine the project concept in line with the relevant sector strategies and investment programme and will make an assessment as to whether the project can be considered for implementation under a PPP arrangement. The contracting authority will submit the project concept together with its assessment to the Committee, which may approve or reject the project concept. The Committee will inform the contracting authority of its decision. If the project is retained the contracting authority will request for certain information on the private promoter and a feasibility study. The Committee will assess the feasibility study and evaluate the technical proposal. If it is accepted the contracting authority will proceed with an invitation to bid. The contracting authority must prepare a Request for Proposal documents to be approved by the CPB before bids are invited. At this stage the private promoter will be requested to submit their technical and financial proposals. The private promoter will be awarded the project if his price is within 10% of the price of the preferred bidder, and if the private promoter is not awarded the contract, the contracting authority will compensate him for the approved cost of the feasibility study. The contracting authority will claim such cost from the successful bidder. The CPB will evaluate bids received and will give its approval for the award of the project to the successful bidder.

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Public-Partnership Agreement

The agreement shall identify the responsibilities of the contracting authority and the private party; specify the relevant financial terms; ensure the management of performance of the private party; provide for the return of any assets to the contracting authority at the termination or expiry of the agreement; provide for the sharing of risks between the parties; provide for the payment of compensation to the private party from a revenue fund or of charges or fees collected by the private party from users or customers of a service provided by it; provide for its duration and contain such other information as may be prescribed. Every agreement must be governed by the laws of Mauritius and disputes shall be settled by arbitration.

An aerial view of Port Louis, Mauritius.

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Key statistics

Area801,590 sq.km (2014)




GDP growth8% (2014)


Number of projects ongoing Between five and ten

Funding Word Bank, Development Finance Institutions and Private Sector

Key players Public Sector

Needs of the region Energy and Power (production, transportation and supply), Transport (roads, railroads and ports), Agriculture, Housing, Health and Education.

Law – Law no. 15/2011 of 10 August – Public-Private Partnerships (PPP), Large-scale Projects (LSP) and Business Concessions (BC) Law – which establishes the guiding rules for the process of contracting, implementing and monitoring undertakings of PPPs, LSPs and BCs.

Regulation

– Decree no. 16/2012 of 4 July – Regulation on PPPs, LSPs and BCs Law

– Decree no. 69/2013 of 20 December – Regulation on PPPs and BCs of Small Dimension.

MozambiqueFCB&A – AG Advogados


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PPP Process

Definitions

According to its legal definition, a PPP is an undertaking in a public domain area (excluding that of mineral and petroleum resources) or in an area of provision of public services, in which, under contract and with financing of the private partner, in full or in part, the private partner agrees to undertake the necessary investment and to operate the respective activity for the efficient provision of public services and goods.

In contrast, an undertaking whose purpose is the prospecting, exploration, extraction and/or use of natural resources or other resources or national property assets falls within the scope of the BC definition.

However, since the legal definition of LSP comprises the undertaking of an investment authorised or contracted by the Government, the value of which exceeds US$358 million, both PPP and BC undertakings may be qualified as LSPs if the respective investment amount exceeds the above-mentioned cap.

Implementing entity

The implementing entity of a PPP, LSP and BC venture shall (i) take the form of a commercial company, (ii) have as corporate purpose the implementation of the respective venture and (iii) be incorporated for a duration not less than that of the contract related to the venture.

PPP procedure

The standard model adopted for the procurement of PPPs is through a public tender. However, for reasons of public interest and provided all legal requirements are met, PPPs may be awarded through limited tender with prior qualification or by a two-round tender.

In duly substantiated cases and as measure of last resort (subject to the prior express authorisation from the Government), the contracting of PPPs may, exceptionally, adopt the form of negotiated procedure or private treaty.

From a contractual point of view, PPP undertakings may adopt one of the following contractual forms:

– Concession contract,

– Assignment of Operation contract, or

– Management contract.

Within Concession contracts, the following types are envisaged:

– Build, operate and Transfer (BOT),

– Design, Build, Operate and Transfer (DBOT),

– Build, Own, Operate and Transfer (BOOT),

– Design, Build, Own, Operate and Transfer (DBOOT),

– Rehabilitate, Operate and Transfer (ROT), or

– Rehabilitate, Own, Operate and Transfer (ROOT).

The duration of the PPP contract is determined taking into consideration its economic and financial attractiveness, the time required for its implementation and the recovery period of the capital invested, without exceeding, in any case, a maximum of:

– 30 years, for concession contracts regarding undertakings to be planned and developed from the ground up,

– 20 years, for contracts of concession or of assignment of operations concerning existing ventures requiring rehabilitation or expansion, or

– 10 years, for management contracts regarding undertakings in operational status.

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The above-mentioned time limits may be subject to extension under certain conditions, associated with the size and complexity of the undertaking or with the need to ensure the compensation of additional investments.

After the above-mentioned deadlines, a public tender for a new contracting of the venture shall take place, in which the entity previously contracted will have a pre-emption right and preference margin of 5%, provided that it has registered good performance in the execution of the previous contract and the new proposal does not contain terms less favorable than the initial contract.

The main contract terms are subject to publication at the Government Official Gazette (Boletim da República) and the Government website. Financial statements and reports regarding the activity of the venture are also subject to publication.

The contracting entity has the right of redemption of the contract, on the basis of reasons of public interest duly substantiated pursuant to the law and the contractual arrangements that have been agreed.

The redemption for reasons not attributable to the private partner give rise to compensation, calculated by taking into account the pending recovery period of the capital invested and the undertaking level of return, without prejudice to the criteria established in the contract.

Main Financial Benefits

The financial benefits to Mozambique flowing from PPPs must be expressly referred to in the relevant contract and include:

– the opportunity of a holding of no less than 5% nor more than 20% in the share capital of the implementing entity (regardless of the involvement of foreign capital) to be allocated for sale, through the stock market and under market terms, preferentially in favor of Mozambican individuals, and

– the opportunity for Mozambican public or private legal persons to participate in the share capital of the concessionaire, under the terms negotiated and agreed upon by the parties, without prejudice to the provisions of the previous paragraph.

For the purposes of the preceding points, it should be noted that the regulation of the Law further establishes that the State reserves the right to negotiate a free carry stake of at least 5% in the share capital of the concessionaire.

Minimum annual value: the State’s financial benefits annual value, including those arising from its share capital on the implementing entity and from tax revenues, cannot, in any event, be less than 35% of the undertaking’s annual profit determined for tax purposes.

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1. N4 Toll Road Rehabilitation

Year: 1995 to present

Value: The contract for the N4 Toll Road is for US$660 million (1996 value) over 30 years, with a total of US$330 million allocated for the initial three-and-a-half years.

Sector: Roads

Details: Part of the Maputo Development Corridor Project. The corridor will run from Johannesburg to Maputo in Mozambique. The contract for the agreement was valued at USD$6 billion over 30 years. The debt investors include South Africa’s four major banks and the Development Bank of Southern Africa.

2. Mphanda-Nkuwa Power Plant

Approximate value of the project is US$3 billion

Project preparation start date: 2006

Expecting project completion date: 2017

Sector: Energy

Details: The plant will be developed in the Tete Province and provide an additional 1,500MW of power for Mozambique. Its Framework Agreement was entered into in 2007 with an estimated project cost of almost US$3 million.

3. Zambeze River and Roads’s PPP

Year: 2010


Sector: Roads

Details: A 30-year concession for the conception, construction, financing, operation and maintenance of a new 16km bridge over the River Zambeze, in the Tete Province, as well as rehabilitation, financing, operation and maintenance of 680km of roads in the region.

The concession contract was signed in 2010 and the bridged was opened in December 2014.

The revenues will come from road taxes and the tolls applying to the two bridges.


1. Market demand: due to Mozambique’s natural gas, coal and other commodity reserves, the country faces the challenge of integrating capital-intensive megaprojects within a brief time window, which does not allow local authorities and companies enough time to provide themselves with the necessary legal, technical and financial means.

2. Capacity building: the country’s specialised and skilled labour is unable to meet demands of the sector (e.g. gas and mining) and the consensus is that further sector growth will most likely exacerbate the lack of adequate educational and training infrastructure even further. As a result, the country’s educational infrastructure is undergoing significant expansion and major rehabilitation, led by the private sector.

3. Politics: after winning the presidential election in October 2014, Filipe Nyusi won the election as Frelimo’s president in March 2015, which grants him a strong mandate to govern. Nyusi has been able to maintain a constructive dialogue with the historical opposition party RENAMO. Yet the Government relation with RENAMO is still a matter pending a definitive solution.

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Niger SCP Yankori


Number of projects ongoing 13 public-private partnership projects have been signed and are ongoing for a total cost of 1,377 billion CFA francs.

Key players

1. For public service delegations

The Public Procurement Regulatory Agency: independent administrative authority specifically responsible for arbitration of disputes regarding performance.

The National Regulatory Council: policy- and decision-making body of the Public Procurement Regulatory Agency.

The General management of public procurement control in charge of controlling the procedure.

Key statistics

Area1,267,000 km²




GDP growth6.9% annual variation (2014)

2. For public-private partnerships

The Prime Minister oversees public-private partnerships. This power gives him a right of veto on the use of a public-private partnership for a project (art.3 of Decree n°2011-559).

The Public-Private Partnership Support Unit (CAPPP): organisation providing support to public administrations in the preparation of partnership contracts. The CAPPP was set up in 2012. The aim of this unit is to examine the compliance of the project with State policies on economic development, environmental standards, sanitation and development of the territory. In this respect, it provides support to technical ministries and public administrations in the development, negotiation and monitoring of public-private partnership projects.

Needs of the region: The Government has prioritised projects in the Construction (17 projects), Energy (2), Transport (6), Education (3), Health (1), Hydraulic (1) and Telecommunication (2) sectors.

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– Constitution of 25 November 2010

– Programme for the Renewal of Niger launched in 2011 by the President of the Republic Mahamadou Issoufou. This programme centres on eight axes and encourages the use of public-private partnerships

– Programme for Economic and Social Development (PDES) for the period from 2012 to 2015 with a Priority Action Plan (PAP)

– An Acceleration Plan 2014-2015, for road, energy and rail infrastructures and the development of basic social sectors has been implemented

– Sustainable Development and Inclusive Growth (SDDCI) “Niger 2035”.


– Directive 04/2005/CM/UEMOA of 9 December 2005 on procedures for award, performance and regulation of public procurements and public service delegations in the West African Economic and Monetary Union

– Directive 05/2005/CM/UEMOA of 9 December 2005 on the oversight and regulation of public procurements and public service delegations in the West African Economic and Monetary Union

– Law 2011-37 of 28 October 2011 on general principles, oversight and regulation of public procurements and public service delegations in Niger.

– Decree 2013-570/PRN/PM of 20 December 2013 on special rules for procurement of work, equipment, supply and services for the needs of defence and national security

– Decree 2013-569/PRN/PM of 20 December 2013 setting out the public procurements and public service delegations code

– Decree 2014-127 /PRN/PM of 26 February 2014 completing the decree 569/PRN/PM of 20 December 2013 setting out the

public procurement and public service delegations code and determining wrongdoings and the relevant penalties in the area of public procurements

– Decree 2011-688/PRN/PM of 29 December 2011 on the code of ethics of public procurements and public service delegations

– Decree 2011-687/PRN/PM of 29 December 2011 on the attribution, composition and functioning of the public procurement regulation authority

– Decree 0037/CAB/PM/ARMP of 21 January 2014 which sets the thresholds governing the awarding and performance of public procurements and public service delegations

– Decree 0036 /CAB/PM/ARMP of 21 January 2014 which sets the rules of signature and approval of public procurement and public service delegations

– Decree 0034 /CAB/PM/ARMP of 21January 2014 which sets out the timelines of public procurement and public service delegations

For Public-Private Partnerships

– Order 2011-07 of 16 September 2011 on the General Regime for Public-Private Partnerships in the Republic of Niger.

– Law 2011-30 of 25 October 2011 ratifying Order 2011-07

– Decree 2011-559/PRN/PM of 9 November 2011 on the conditions for application of Order 2011-07 of 16 September 2011 setting the General Regime for Public-Private Partnership contracts in the Republic of Niger

– Decree 2011-56OIPRNIPM of 9 November 2011 on the organisation and operation of the Public-Private Partnership Support Unit in the Republic of Niger

– Law 2014-02 of 31 March 2014 on the taxation, finance and accounting scheme applicable to public-private partnership contracts

– Statement Document for the five years of implementation of the Renewal Programme (April 2011 December 2015) which,

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specifically, carries out a situational analysis of projects under public-private partnership contracts.

PPP Process


Irrespective of the amount, procedures for the award of public service delegations are subject to the following general principles:

– The economy and efficiency of the acquisition process

– Free access to public procurement

– Equality of treatment of applicants

– Mutual recognition, and

– Procedural transparency.

The selection of the private partner is subject to a competitive procedure preceded by pre-qualification to identify potential contractors offering adequate technical and financial guarantees and having the capacity to ensure the continuity of the public service they are providing.

After pre-qualification, in principle, a tender procedure is implemented.

For public-private partnerships

Minimum investment threshold Only projects with a completion cost equal to or above US$9 million can be carried out under a public-private partnership contract (art.2 Decree 2011-559).

Preliminary recourse to a legal, technical, financial and economic assessment Recourse to a public-private contract only after a legal, technical, financial and economic assessment of the project. The conditions of this assessment are set out in detail in Decree 2011-559.

The assessment should demonstrate the complex character, urgency and legal, technical, financial and economic feasibility of the aforementioned project. The Decree does not stipulate whether or not these conditions are cumulative.

The assessment is divided into four stages:

– initiation of the project

– feasibility study

– assessment of the expert organisation, and

– the opinion on budgetary sustainability of the minister in charge of finances, in the event that the project is financed.

The selection of the co-contracting party – procedure in principle In principle, the awarding of a public-private partnership contract is subject to an obligation of a competitive procedure to guarantee free access, equality of treatment of applicants and procedural objectivity.

The drafting of the Decree is unclear on this subject, but it would appear that the procedure for award in principle should be either an open or restricted call for tenders.

Selection should follow the following stages:

– a call for expression of interest

– a presentation, the content of which is not specified

– pre-qualification

– adjudication

– notification of results

– negotiation of the contract

– signature of the contract.

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The negotiated procedure The delegator may use a procedure of direct negotiation only in the following cases:

– urgency in ensuring production or continuity of completion of infrastructure or public service

– national defence or public security

– activities whose operation is exclusively reserved for holders of invention patents or for services whose performance can only be assigned to a specific delegate

– when no tender has been made or when the call for competitive procedure has been declared fruitless.

Spontaneous offer Spontaneous or unsolicited offers are acceptable under Nigerian law but must be accompanied by a technical, economic and financial feasibility study.

In the event that the project offered by the private operator is selected, that operator will be entitled to participate in the tender procedure. Only patents and industrial property rights shall be protected.


1. Illéla-Bagaroua road

Year: 2015 – ongoing


Sector: Infrastructure

Finance: Wwn funds ATP SA/bank loans Warranty: State of Niger

Details: Development, asphalting and “turnkey” delivery of the Illéla-Bagaroua road (107km), the Dan Daji feeder road (17km), Dan Daji- Dangona road (10km) and associated works (rural tracks 3km, pavements 15km and roadways 5km) by the company L’Africaine des Travaux Publics (ATP SA). On 19 January 2016 the

President of the Republic of Niger launched development and asphalting works on the Illéla-Bagaroua road and its feeder roads. A Public-Private Partnership contract was concluded with the public works company ATP SA from Burkina Faso.

2. Coal-fired power station in Salkadamna



Sector: Energy

Finance: Not yet obtained, ongoing discussions

Details: Construction of a coal-fired power station of 200 MW in the first phase and 600 MW on completion for the operation, development and upgrading of coal in the Salkadamna area through the “Invest in the UEMOA initiative” for the promotion of investment opportunities in the sub-region. This project also includes the construction and operation of a coal mine, a 500km high-voltage line and a factory for coal briquettes for domestic use.

3. Gorou Banda Thermal Power plant in Niamey

Year: 2013 – 2016


Sector: Energy

Finance: Islamic Development Bank (BID) for US$8.5 million.

Details: Project consisting of the construction, operation and maintenance of a thermal power station of 100 MW, in BOOT mode, [Build, Own, Operate, Transfer], on the Gorou Banda site in Niamey. Currently, finance has enabled the setting up of a power station with a power of 80 MW.

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4. Renovation of Niamey airport




Finance: This project does not require any financial contribution or guarantee by the State. All costs will be borne by ARCHITEAM/ FRAPORT Group.

Details: A partnership contract was signed on 2nd March 2015 for a duration of 30 months of works for the renovation of Niamey airport, to bring it up to the standard of major airports around the world.


The conduct of economic policy and activity has been heavily impacted by the management of the security background and the war against Boko Haram.

Sources

www.renaissanceniger.com

www.ppp-niger.ne

www.afd.fr

www.renaissanceniger.com

www.aeroport-niamey.com

www.actuniger.com

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Nigeria AIDAN Partners


Number of projects ongoing 48 ongoing (focus on transport, ports and health sectors); 27 planned, signed and tendered (focus on transport, telecoms, social & health and water & waste sectors).

Funding Federal Budget, World Bank and non-bank sources.

Key players

– Infrastructure Concession Regulatory Commission (ICRC): assists the Federal Government of Nigeria and its ministries, departments and agencies to establish and implement PPPs. It takes custody of all PPP contracts and monitors compliance with their terms.

– PPP Resource Centre: a division of the ICRC which operates as a central knowledge unit.

Key statistics

Area923,770 km² (2014)

Population178.5 (2014)


GDP per capitaUS$3,184.6 (2010-2014)

GDP growth2.35% (July 2015)

– Ministries, Departments and Agencies (MDAs): responsible for the management and procurement of their own infrastructure in accordance with strategic plans that link to the National Planning Commission’s plan.

– Ministry of Finance: ensures and has oversight of cost and revenue forecasting for current and future projects.

– Federal Government: responsible for implementing PPPs within their area in alignment with national PPP guidelines.

– National Council on Public Procurement (NCPP) and the Bureau of Public Procurement (BPP): the two regulatory authorities responsible for monitoring and oversight of public procurement in the country. Bureau of Public Enterprises (BPE): The BPE serves as the secretariat of the National Council on Privatisation (NCP). It is charged with the overall responsibility of implementing the council’s policies on privatisation and commercialisation. The level of its involvement is dependent on the nature of the PPP transaction.

– Ministerial Project Development and Steering Committee (MPDSC): monitors projects being executed, such as the on-going development of the Ibom Deep Seaport & Free Trade Zone in Akwa Ibom State.

– National Planning Commission/equivalent relevant State authorities: approves project concepts for projects of the Federal or State Government, as applicable.

Needs of the region Infrastructure and Energy.

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– Infrastructure Concession Regulatory Commission Act 2005: mandates the ICRC to enable an environment for the successful procurement implementation, operation and sustainability for all concession agreements entered into by the Federal Government.

– The Public Procurement Act 2007: regulates the procurement process for appointing private sector partners to deliver on the procurement of goods and services.

– Regulations: these are usually issued by the Infrastructure ICRC, to govern the PPP process.

– Equivalent State Laws: these are as described in each State’s PPP Policy and may vary from state to state.

PPP Process

– Identification: a project is identified and initiated by a government MDA or private individual/corporate body (Unsolicited Proposal/Project).

– Planning: individual MDAs will identify key projects for delivery, which will need to be approved and incorporated into the National Planning Commission’s National Development Plan to be taken forward.

– Expression of Interest: interested parties can submit a short expression of interest to obtain the Request for Qualification document from MDAs. Once a group of bidders are pre-qualified, one or several bidders’ conferences are subsequently held to provide further background to the project and answer questions from bidders.

– Qualification: a Request for Qualification document will be issued to applicants on an open basis. Firms are shortlisted on their technical and financial capabilities.

– Proposals: shortlisted bidders receive an invitation through a Request for Proposal (REP) document to deliver full technical and financial proposals in line with details of the RFP and any comments on the draft Concession Agreement.

– Bidders’ Conference: a meeting will be held with bidders prior to submission of their detailed proposals to answer any clarification questions submitted prior to or at the conference. This may also involve negotiations with a specified team on the fee terms. All discussions will be documented and issued to shortlisted bidders.

– Evaluation: the technical section of the RFP submission will be evaluated, with the financial proposal evaluated separately. The preferred bidder will be selected in accordance with the RFP’s evaluation requirements. The Outline Business Case is updated by the MDA to form the Full Business Case and submitted to the Federal Executive Council or the State Executive Council/Committee for approval. Subsequently, the contract is awarded.

– Appointment: the preferred bidder’s financial and technical proposals are incorporated into the Concession Agreement and a letter of intent is issued by the MDA in their favour.

– Signature: once specified conditions precedent are met by the preferred bidder, the Concession Agreement will be entered into. On finalisation of the Contract, a relevant officer appointed by the MDA signs the Concession Agreement on behalf of the government. That officer remains responsible for both the project procurement and its implementation.

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1. Onitsha, Baro, Oguta & Lokoja River Ports

Year: 2014

Capital Value: Undisclosed

Sector: Ports

Details: The construction of four new river ports to ensure the viability of the new Onitsha river port which is a vital import link to the rest of the world.

2. Cross River Hospital PPP

Year: 2013


Sector: Health

Details: The International Finance Corporation and Government of Cross River State were advised by Eversheds on the establishment of a 100-bed referral hospital and primary gateway clinic in Calabar, Nigeria in order to improve the quality and efficiency of public health services in the area through a public private partnership. This included the provision of operational, clinical and associated support services, the provision of hard and soft facilities management services, the provision and maintenance of equipment, the provision and maintenance of information management and technology and the provision of pharmaceuticals, materials and consumables. The primary catchment area for the hospital will be the greater Calabar Region (comprising Calabar Municipality, Calabar South and surroundings). The Government will invite proposals from interested persons for the design, construction, equipping and operation of the Hospital under a public private partnership.

3. Lagos Murtala Muhammed Airport PPP

Year: 2007


Sector: Aviation

Details: The provision of a new domestic terminal and ancillary facilities, Murtala Muhammed Airport Two. The project comprises a 20,000m2 area, terminal building, apron and a multi-storey car park.


1. Cost: While partnership with the private sector may provide easier finance, finance is dependent on operating cash flows of the project company, equally dependent on whether the project is expected to provide a return on investment. Therefore, to ease cost, associated costs are largely borne by the users/customers or the Government through subsidies, tolls/fees, etc. This may create subsequent implementation challenges.

2. Funding: This is related to cost and its effects. With respect to the Lagos State railway project, CCECC has completed 90% of the structural work. Construction was initially expected to be completed by 2011 but has been delayed due to funding issues and may be suspended if not resolved.

3. Policy: The long-term nature of these projects in view, delays and/or disruptions may be occasioned by changes in government, policies, currency fluctuations, etc.

4. Risk: Whilst possible to mitigate, there is no unlimited risk bearing, especially as the terms of the agreement are largely dictated by the country representatives and regulators. These are especially with respect to risks beyond private party control, such as exchange rate fluctuations, inflation, economic policy considerations, policy uncertainties, regulatory influences, etc.

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5. Implementation: Some projects may be more politically or socially challenging to introduce and implement than others.This is evidenced by the controversy experienced under the Lekki Epe Expressway/Toll Gate project in Lagos State, whereby there was a degree of public resistance to the tolling and some private individuals proceeded to court to challenge the tolls imposed, thereby disrupting, delaying and in part halting entirely the toll collection process.

Sources

World Bank Database: http://data.worldbank.org

Infrastructure Concession Regulatory Commission: http://www.icrc.gov.ng

Trading Economics: http://www.tradingeconomics.com

Bureau of Statistics: http://www.nigerianstat.gov.ng

Bureau of Public Procurement: http://www.bpp.gov.ng

A view of Lagos, Nigeria’s largest city.

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SenegalCabinet 2S Consulting


Number of projects ongoing:

– Transport infrastructure and services: US$720 million with the construction of the tram line in Dakar and the regional air hub project

– Agriculture: US$685 million with two main projects, namely the development of 3-4 grain passageways and the implementation of 100-150

– Targeted aggregation projects in the HVA and agriculture sectors, habitat and quality of life: US$425 million with two main projects: the public housing offer deceleration programme and the “Business Park”, which is home to the regional head offices and located at the heart of all activity

– Tourism: US$287 million with the main integrated tourism development project

– Education and training: US$245 million, mainly via the university residence Building Project and the “Dakar Campus – reference region” project

– Mines and quarries: US$173 million with the main Falémé iron comprehensive relaunch project

– Industry: US$91.5 million with the main comprehensive industrial Platforms project

– Drinking water and sanitation: US$69 million with the creation of a sea water desalinisation plant

– Health: US$27.5 million with the main “Dakar Medical City” project, and

– Commerce: US$18 million with the main employment-ready export service areas project.

Key statistics

Area196,190 sq.km (2013)





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Key players

For PPP

– the ministry for the promotion of investments and partnerships, funding management and PPP: inform partnership contracts;

– the Ministry of Finance whose approval is required prior to any procurement procedure;

– the infrastructure board: with the authority to regulate and settle disputes, and

– the public-private partnerships support committee (CNAPPP).


– Procurement Contracts Central Management (DCMP), and

– the procurement contracts regulation authority (ARMP).

Needs of the region: Energy, infrastructure.


The Emerging Senegal Plan (ESP)

– The 2035 economic development program. The ESP will be funded by the State, technical and financial partners and the national and international private sector via Public-Private Partnerships (PPP). The ESP comprises a 2012-2018 priority action plan (PAP)

Public service delegation

– Order 04/2005/CM/UEMOA of 9 December 2005 on the procurement process and the implementation and management of procurement contracts and public service delegations in the West African Economic and Monetary Union (UEMOA)

– Order 05/2005/CM/UEMOA of 9 December 2005 on the control and regulation of procurement contracts and public

service delegations in the West African Economic and Monetary Union

– Decree 2014/1212 of 22 September 2014 on the procurement contracts code

– Law 65-51 of 19 July 1965, which contains the code of administrative obligations, modified by law 06-16 of 30 June 2006 and law 2014-09 of 20 February 2014 on partnerships contracts

– Law 90-07 of 26 June 1990 on the organisation and control of Para public sector companies and the control of legal persons under private law, who receive financial assistance from public authorities

– 2007-546 of 25 April 2007 on the organisation and function of the procurement contract regulation authority (ARMP)

– Decree 2005-576 of 22f June 2005, under which the procurement contract transparency and ethics charter was adopted

– Decree 2007-546 of 25 April 2007 on the organisation and function of the procurement contract regulation authority (ARMP)

– Decree 2007-547 of 25 April 2007 on the creation of procurement contract central management (DCMP)

– Decree 2007-1143 of 28 September 2007 on appointing procurement contract regulation authority board members

– Decree 2008-27 of 24 January 2008 on appointing the Managing Director of the procurement contract regulation authority

– Order 011580 of 28 December 2007, which sets the control thresholds for the procurement dossiers

– Order 011583 of 28 December 2007, which sets the lower threshold, below which a tender guarantee is not required

– Order 011584 of 28 December 2007, which sets the threshold above which a performance guarantee is required.

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– Order 011585 of 28 December 2007, issued by the Ministry of Economy and Finance, on orders that may be waived in writing, thereby giving rise to memorandum and invoice payments

– Order 011586 of 28 December 2007 on contracting authorities procurement market cells

– Order 011587 of 28 December 2007, which states that candidates are obliged to respect the provisions of the procurement contracts’ transparency and ethics charter

– Order 011588 of 28 December 2007, which sets the number of procurement contract contracting authority commission members to be appointed and the conditions under which appointments should be made

– Bulletin 0004/PM/CAB/CP of 31 March 2009, which sets out instructions for implementing the price and information application procedure

– Bulletin 0005/PM of 28 December 2007, which governs contracting authorities’ procurement contract cells.

For PPP

– Law 2014-09 of 20 February 2014 on partnership contracts

– Law 2015-03 of 12 February 2015, which amends art. 31 of Law 2014-09 of 20 February 2014 on partnership contracts

– Law 65-51 of 19 July 1965, which contains the code of administrative obligations, modified by Law 06-16 of 30 June 2006 and Law 2014-09 of 20 February 2014 on partnerships contracts

– Decree 2015-386 of 20 March 2015, on the application of Law 2014-09 of 20 February 2014 on partnership contracts.

PPP Process


– The process begins with an open call for tender with a pre-qualification stage, or a two-stage call for tender

– The contracting authority may resort to direct agreement in the limited cases listed.

For PPP

– Partnership contracts may be granted through a call for tender, by means of direct agreement or through negotiations

– The two-stage international call for tender is preceded by a pre-qualification stage

– Spontaneous offers are accepted and form the object of negotiation upon authorisation from the first minister or the body considering a public person, based on the opinion of the CNAPPP and the minister of finance.


Dakar tramway



Funding: Public-private partnership still in negotiation.


Details: building a complete 35km tram system in Dakar. Feasibility study under way.

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Dakar Medical City


Funding: Public-private partnership

Sector: Health

Details: The layout of Dakar Medical City (DMC) aims to provide a world-class health care delivery to patients in the region.

Sea water desalination plant



Funding: Japanese funding worth US$69 million

Sector: Water and sanitation

Details: Building a sea water desalination plant in order to obtain freshwater (drinking water that can also be used for irrigation).Feasibility studies have been carried out.


Despite its political stability and generally good level of infrastructure, the main obstacles with PPP in Senegal are:

Politics: there are a lot of changes in the head of departments and ministries; conducting a process and negotiating a contract is difficult in such conditions.

Pricing

– The cost of investment and production is high so that projects are not always very profitable

– The clearance tax cost is expensive so that the importation of materials needed for the investment is difficult.

Tax and jurisdictional insecurity despite efforts to maintain a good level.

Corruption and fraud which may imply an unfair competition.

Sources

www.senegalbusinessservices.com/healthy-care-sector/emergent-healthy/dakar-medical-city

Aerial view of the city of Dakar, the capital of Senegal, by the coast of Atlantic City.

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South Africa


Number of projects ongoing 70

Key players

National Treasury’s PPP Unit: provides technical assistance for the development of PPPs, recommends treasury approvals, prepares PPP policy, manuals and similar together with building capacity.

Project Development Facility: established by the PPP Unit to source funding for transaction advisory costs and mitigate the impact of PPPs on governmental budgets.

Needs of the region A broad range of infrastructure, with the primary focus on the development of social infrastructure. The current pipeline has a number of potential projects in the airport, retail and health sectors, together with core infrastructure such as waste, water and power, as well as information technology.


Law: Whilst there is no specific law relating to PPPs, there are a number of directly relevant laws which need to be taken into consideration:

– Public Finance Management Act 1 of 1999 (“PFMA”)

– Regulation 16 of the Treasury Regulations promulgated under the PFMA

– Preferential Procurement Policy Framework Act 5 of 2000 (“PPPFA”)

– Local Government: Municipal Systems Act 32 of 2000 (“MSA”)

– Municipal Finance Management Act 56 of 2003 (“MFMA”)

– Local Government/Municipal Supply Chain Policies

– South Africa Constitution

– Labour Relations Act 1995

– Preferential Procurement Policy Framework Act 2000

– Regulatory In accordance with the PFMA, the National Treasury has issued:

– the National Treasury Standardised Public-Private Partnership Provisions

– National Treasury PPP Practice Note Number 01 of 2004 (hereinafter “Standardised PPP Provisions”)

Key statistics

Area1,213,090 sq km (2014)

Population54,001,953 (2014)

GDP (at market prices)US$350.1 billion (2014)



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– National Treasury PPP Manual which contains the following modules:

- Module 1: South African Regulations for PPPs

- Module 2: Code of Good Practice for BEE in PPPs

- Module 3: PPP Inception

- Module 4: PPP Feasibility Study

- Module 5: PPP Procurement

- Module 6: Managing the PPP Agreement

- Module 7: Auditing PPPs

- Module 8: Accounting Treatment for PPPs

- Module 9: Introduction to Project Finance

– Unsolicited Bid Practice Note.

PPP Process

– A Feasibility Study is prepared to determine project viability and whether the proposed PPP is in the best interests of the institution.

– All bid documents are prepared prior to procurement commencing, including the draft PPP agreement.

– A Request for Qualification may be issued to interested parties, who respond to a series of pre-qualification questions. The evaluation of those submissions leads to the qualification of a long-list of bidders.

– A Request for Proposal is issued to bidders, whose submissions are then evaluated.

– The preferred bidder is selected with a value-for-money report prepared separately.

– Negotiations then take place with the preferred bidder to finalise the PPP agreement and the associated management plan.


1. Phalaborwa Hospital

Year: 2015

Capital Value: US$6.6 million

Sector: Health

Details: The development of a new health facility on a DBFOT basis with a duration of 15 years. The contract was awarded to Clinix Phalaborwa Private Hospital (Pty) Ltd.

2. Gautrain Rapid Rail Link

Year: 2006

Capital Value: US$1.7 billion

Sector: Rail

Details: The award of a 20-year DBFOT structured arrangement to the Bombela Consortium, comprising Bombarider, Bouyges and others.

3. City of Johannesburg Broadband Project

Year: 2011


Sector: Telecoms

Details: The award of a 10-year DBOT arrangement to Ericsson SA and CitiConnect, for the rollout of a 900km fibre network and telecommunications operator business to provide services to the City and other customers using the network.

The project was terminated in August 2014, and in early 2015 the City announced that it was taking over the build of the fibre network from Ericsson amid an allegation that the project failed to meet its switch-on date of July 2013.

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1. Lack of highest level policy direction.

2. Lack of consistent political resolve.

3. Mistrust of private sector involvement in infrastructure.

4. Lack of capacity to originate or implement PPPs.

5. Lack of resources dedicated to fostering PPPs.

6. Policy bias toward traditional public procurement.

7. A lack of fiscal imperatives to use PPPs.

8. More severe problems in the municipalities.

Sources

www.thesouthafrican.com

www.icafrica.org

www.oecd.org/mena/investment

www.eib.org/attachments/med/ppp-study-volume

A wind power farm installation in South Africa.

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Number of projects ongoing

– Kinyerezi III: Power generation expansion development plan, structured around hydropower, coal and gas. The project aims to curb the limitations of the country’s power generation market.

– Bus Rapid Transport (DART): Construction of a Bus Rapid Transit (BRT) branded “Dar Rapid Transit (DART) project to put Dar es Salaam city on the world map of modern urban public transportation

– Dar-Chalinze Expressway: Road toll project which involves the building of an expressway running from Dar es Salaam to Chalinze. The 110km is planned to be upgraded to a six carriage way toll road.

Funding Government of Tanzania, World Bank, African Development Bank.

TanzaniaAbenry & Company

Key statistics

Area945,454 sq. km (2014) Inland water covers 61,500 sq. km. Land area is 883,954 sq. km.





Key players

PPP Centre: this is the organ which has been established to replace the PPP Coordination Unit and the PPP Finance Unit under the Public Private Partnership (Amendment) Act No. 3 of 2014. The PPP Centre is constituted within the Office of Prime Minister.

EWURA: has specific roles in power and water defined by the sector acts such as licence and tariff approvals.

SUMATRA: has a role in regulating the marine and surface transport.

Needs of the region Whilst Tanzanian PPPs are designed for all sectors, there is particular focus on road, rail, ports, airports, power and agriculture.


Law: The PPP Act 2010 was amended in December 2014. As a result, the Coordination Unit and the PPP Finance Unit were replaced with PPP Centre which is constituted within the Office of Prime Minister. The Amended Act reads “The Public Private Partnership (Amendment) Act No. 3 of 2014”. The definition of PPPs is “projects undertaken in partnership between the public and private sectors.” It also specifies the main areas to be covered in the PPP Agreement.

Public Procurement Act 2011: governs procurement of PPPs to the extent not addressed in the PPP Act.

PPP Regulations 2011: these set out the PPP process and regulations surrounding project selection, development and bidding undertaken in partnership between the public sector and the private sector.

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Policy: PPP Policy issued in November 2009, PPP Law enacted in August 2010, PPP Regulations issued in June 2011.

PPP Process

The process for processing and implementing PPPs is provided for in regulations that are under development by the Public Procurement Regulatory Authority. Unsolicited proposals will be subject to a formal competitive process through presentation of a feasibility study that explains the financial capacity and ability of the private party in the implementation and management of the proposed project.


1. Eight power-related PPPs

Year: 2001

Capital value: US$316 million

Sector: Energy

Details: Though the Tanzania Electric Supply Company Limited (the country’s electricity distribution company) has reverted back to state management, this programme includes the development of the Songo-Songo Gas to Power Project, which was financed on a BOT basis. The project has an operational period of 20 years and will provide capacity of 305 MW.

2. Dar es Salaam container terminal PPP

Year: 2000

Capital value: US$6.5 million

Sector: Ports

Details: The terminal has seen throughput double in the first five years of its operations following its redevelopment through a rehabilitate-operate-transfer structure. It had an operational period of ten years which was extended to 25 years in 2005.

3. Tanzanian Railways PPP project

Year: 2007


Sector: Rail

Details: A 25-year rehabilitate-operate-transfer project, which has been delivered following the renationalisation of Tanzania’s railways, designed to increase rail capacity.


1. Inadequate enabling environment which includes lack of long-term financing instruments, appropriate risk sharing mechanisms and geographical location.

2. Insufficient capacity in negotiations, procurement, implementation and management of Public Private Partnerships.

3. Inadequate public awareness of benefits of Public Private Partnerships.

4. Inadequate mechanisms for recovery of private investors’ capital as well as impact on national development programmes that depend on the project’s performance.

5. Lack of realistic and comprehensive technical, socio-economic and commercial feasibility analysis which leads to poor project design.

6. Mistrust between public and private sectors which leads to lack of transparency.

7. Low purchasing power of the community.

Sources

National Public Private Partnership (PPP) Policy & www.nbs.go.tz

http://fortuneofafrica.com/tanzania/challenges-facing-ppps-in-tanzania/

Tanzania National Bureau of Statistics, Ministry of Finance (Public Private Partnership Unit) and National Public Private Partnership (PPP) Policy.

http://www.nbs.go.tz



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TunisiaEversheds El Heni


In Tunisia, there was an absence of a law governing PPP in its classic sense until November 2015.

Before that date, PPPs were governed by the law on concessions. It should be noted that before the enactment of the Law of 2008, there were only sectoral laws that regulated concession operations in Tunisia such as in the sanitation sector, electricity, transport and many other fields.

Among the shortcomings of these laws was the fact that they did not define the different tools related to the granting, monitoring and control of the PPP operations as well as the rights of the parties to the concession contract. Added to that, there

were no specialised units to supervise these contracts. Most importantly, what was seen in practice was an unwillingness of the private sector to invest in Tunisia due to the lack of a clear legal framework. These deficiencies led to the adoption of the concession law of 2008.


Key statistics

Area163,610 sq.km (2014)





Number of projects ongoing Unknown

Key players

Concessions Monitoring Unit: advises the Government and submits advisory opinions to the Government. It also plays an important role as support to the preparation, the procurement and the monitoring of concessions.

The General Management of Private Public Partnerships: contributes to the development of the laws on PPPs and to the preparation as well as the negotiation of PPP projects.

The General Management in charge of auditing and monitoring of major projects: plays an important role in determining the cost and the scheme of projects financing.

The Ministry of Development, Investment and International Cooperation: participates in the projects’ approval and the choice of the most adapted procurement mode.

Strategic Council on Private Public Partnerships: The CSPP develops strategies and National Policies in the field of PPP.

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The Law No. 2008-23 of 1 April on Concession regime defines a concession contract as “a contract where a public authority referred to as a “conceding” delegates, for a fixed duration, to a public or private entity, referred to as “concessionaire”, the management of a public service or the use and operation of a public domain or tools, in consideration for remuneration paid by the users under the terms of the contract”

Concession is a category of PPP in which the revenues are provided by the users of the project (such asa tolled highway).

It worth being noted that recently two new decrees were adopted:

Decree 2016-772 of 20 June 2016, which sets the conditions and the procedure of PPP contracts’ awarding.

Decree 2016-771 of 20 June 2016, on the composition and the functions of the Strategic Council on Private Public Partnerships.

This is unlike the more common forms of PPP in which the private party receives regular payment from the state in which the project is carried out.

After the revolution of 2011, there was a new social, economic and political context to Tunisia. There were new challenges such as unemployment, reducing the gaps between the different regions of Tunisia and in general raising the economic growth rate.

For all these reasons, in addition to the political will and the international pressure, a new law governing PPP was submitted. It should be noted that passing a law to govern PPP was a condition precedent required by the world bank in order to grant Tunisia a US$500 million loan to finance a governance and employment creation programme.

The law governing PPP was submitted on 19 October 2012 and it was finally voted on in November 2015 and promulgated officially, as law number 49-2015 dated 27 November 2015. In this law, a private public partnership contract is defined as “a fixed term written contract in which a public entity confines a mission to a private body, called a private partner. The object of the contract is about the design, realisation of entities or equipment or

physical and non-physical infrastructure necessary to respond to the needs of the public service. The PPP contract involves the financing, execution, modification and maintenance of the project and this in return of the payment of a financial compensation by the public entity to the private partner during the period of the contract and in accordance with the conditions set out in that contract. The PPP contract cannot provide for the possibility of delegating the power to manage the public service.”

The law is composed of 42 articles divided into eight sections as follows: general rules; general principles governing PPP contracts; the methods and procedures of granting PPP contracts; the conclusion and execution of the PPP contract; the control of the execution of PPP contract; the termination of PPP contracts; the institutional framework of PPP contracts; and finally transitory provisions.

In this new PPP law, the public entities that are capable of contracting are the State and local communities, as well as public entities and institutions that obtained the authorisation of the relevant supervisory authority to conclude a PPP contract. Articles 5 and 6 of the law provide that the preparation and the conclusion of PPP contracts are subject to the principles of good governance, transparency of procedures and equality of opportunity using the methods of competition and impartiality and non-discrimination between the candidates. Such contracts are also subject to the principle of contractual balance through appropriate risk sharing between the public entity and the private partner.

Furthermore, the law provides for the creation of two supervising authorities for PPP contracts which are the Strategic Council for PPP and the public commission for PPP. However, neither of these authorities have been created yet as additional decrees are required and these have not been drafted There are other aspects of the legislation that require enabling decrees which are also not yet in force.

Therefore, even though progress has been made and a specific PPP law has been enacted, there is still much more required to produce a viable PPP framework.

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PPP Process

Open tender

It is the preferred procurement process in which the most economically advantageous tender is chosen after a competitive tender process.

Competitive dialogue

It may be used when it is impossible for the contracting authority to determine in advance the means, the technical and financial solutions necessary to meet its needs (art.9).

Direct negotiation is possible for exclusively the following reasons (Art.10)

National defence and public safety for ensuring the continuity of public service in emergency cases if it refers to an activity the exploitation of which is exclusively reserved for patent holders.

Spontaneous offer

Spontaneous offers can be issued by a private partner and are acceptable under the new laws (art. 11).

In the event that the project offered by the private operator is selected, this operator will be entitled to participate in the award procedure. In that case a margin of preference is accorded to the operator.


The new law has been criticised for a number of reasons.

1. Firstly, there was significant pressure to make the law more comprehensive, which meant including sectors such as agriculture. Secondly, there is criticism that there is too much focus on the encouragement of the Tunisian private sector, rather than international investors. Thirdly, there is concern about handing public assets and services to the private sector. Many would prefer that they remained with the public sector as they are of vital importance to the State. In this regard, some experts believe that the private operator should not interfere in the management of public service and instead it should be limited to the assistance of the public party in providing the necessary tools.

2. On the other hand, the law was criticised for not taking into consideration the investment code, which is not adopted yet, and which deals with essential matters related to PPP contracts such as privileges.

3. Added to that, some of the consulted stakeholders found that the law is too focused on delivering huge infrastructure projects whereas the small and medium enterprises, which play a crucial role in the Tunisian economy, are not taken into consideration.

4. Last but not least, some stakeholders have said that this law “completely disregards the agriculture sector” and its particularities despite the importance of this sector to the national economy.

5. Moreover, the Deposit and Consignment Office has criticised the law for providing a framework for PPP contracts so close to the law related to concessions. They have argued that the law on PPP should have been much more general than that applicable to concessions in order to deliver a real partnership between the public and private sector. .

6. Furthermore, in relation to article 18 of the law, the Deposit and Consignment Office has said that the meaning of Force Majeure should be specified much more clearly.

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Sources

Law 49/2015 dated 27 November 2015 regarding PPP

Law N° 2008-23 of 1 April 2008 dealing with Concession regime

MANSOUR (C.N) (juge au tribunal administratif), « La réforme du régime juridique des concessions à l’épreuve du partenariat public privé », Infos Juridiques La Revue Du Droit, n° 200/201, Mai 2015, p.9-10

AYAD (I), «Concession de l’aéroport International d’Enfidha Hammamet: Aspects juridiques, in Les perspectives d’évolution du droit d’investissement et de l’arbitrage », organisé par le laboratoire

DRIMAN, les 18 et 19 Octobre 2012 à Tunis

BANQUE EUROPEENNE D’INVESTISSEMENT, Etude du cadre juridique et financier des PPP dans les pays partenaires méditerranéens, Volume1, une approche régionale, p .5-6

A presentation by Mr. Belgacem Ayed, General Director of Infrastructures, Ministry of Development and International Cooperation, Tunisia

Recommandations et propositions de la commission des finances de l’ARP (Tunisie) concernant le projet de loi sur les PPP

OECD, “Les partenariats public-privé en Tunisie: Analyse des cadres juridique et institutionnel” August 2015

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Number of projects ongoing 13 (current focus on social infrastructure)

Key players

Ministry of Finance, Planning and Economic Development: responsible for providing funding and oversight for the PPP Unit, developing policies and guidelines for implementing PPPs, advising the Government on the financial implications of any PPP project, quality assurance on value for money.

PPP Unit: responsible for advising on the appropriate use of PPPs in the National Development Plan, supporting government institutions and adopting a consistent approach to PPP project development.

Contracting agencies: these have a typical set of responsibilities to identify, develop and manage PPP projects.

Cabinet: will provide approval for all PPP projects upon submission of a feasibility study and again before contract award.

Needs of the region

There is a requirement for a wide range of infrastructure, with particular focus on energy, roads, railways, health and water projects.


Policy: Uganda’s PPP Framework Policy was issued in March 2010 by the Ministry of Finance. Its PPP Unit is funded and supervised by the Ministry of Finance, being responsible for supporting and advising government institutions in PPPs. A standardised contract will be used.

Approval from both the Ministry of Finance and the Cabinet is required after a feasibility study has been carried out. The Ministry of Finance is responsible for the financial implications of any PPP project, but contingent liabilities are not mentioned.

Law: Uganda passed the Public Private Partnership Bill 2012 in July 2014, which adopts a simple approach and focuses on establishing a PPP framework which is not overly prescriptive and allows for different structures.

The Public Procurement and Disposal of Public Assets Act 2003 governs the procurement of PPPs and has a specific section on them. Other laws with relevance to PPPs include the Public Finance and Accountability Act 2003, the National Audit Act 2008, the Local Government Act 1997 and the Contract Laws of 1963 and 2008.

UgandaKatende Ssempebwa & Co

Key statistics

Area241,038 km2


GDP$85.104 billion (2016 estimate)

GDP per capita$2,071 (2016 estimate)


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PPP Process

The process will be based on the principles of transparency, competitiveness and fairness. Competitive dialogue can be used to obtain value for money for the project.

Process:

A project team will be appointed to develop a project plan and tender documents and negotiate with the preferred bidder.

The contracting authority prepares a feasibility study and submits it to the Ministry of Finance and Cabinet for approval.

Expression of interest: issued to the market and the receipt of expressions will identify those interested in tendering for the opportunity.

Report For Proposal (RFP): issued to qualified bidders, requiring them to provide a technical and financial submission to confirm how the project will be delivered.

Evaluation: the submissions received from bidders will be evaluated in accordance with the RFP evaluation requirements and scored accordingly. The preferred bidder will be selected as the bidder achieving the highest score in accordance with those requirements.

PPP contract negotiations: a multi-disciplinary team negotiates technical, legal and financial aspects of the PPP contract.

The Ministry of Finance and Cabinet approve contract terms, including financial close, monitoring for project delivery and ongoing management.

Unsolicited proposals are allowed and subject to a competitive tendering process. The proponent may be compensated for proprietary interest or costs in accordance with specific guidelines.


1. Bujagali Hydro Project IPP

Year: 2007


Sector: Energy

Details: The project is much larger than a typical IPP and is projected to provide 250 MW of electricity. It reached financial close in December 2007. It has a 30-year duration and operates on a BOT basis. It was delayed by environmental issues and should have been operational in 2004.

2. Namanve Power Plant PPP

Year: 2008


Sector: Energy

Details: The project closed in September 2008 with an operational period of six years. It was structured on a BOT basis and will generate 50 MW of electricity.

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3. The Kenya-Uganda railroad

Year: 2006


Sector: Rail

Details: The project closed in December 2006 and was restructured in 2011. It has a 25-year duration and is structured on a rehabilitate-operate-transfer basis.

Sources

www.thesouthafrican.com

www.icafrica.org/en/topics-programmes/focal-points/public-private-partnerships

www.oecd.org

www.eastafricanchamber.org

www.eib.org/attachments/med/ppp-study-volume

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Infrastructure Landscape and context

PPPs are “cooperation of some sort of durability between public and private actors in which they jointly develop products and services or products and share risk, cost and resources which are connected with these products.”

The Government of Zimbabwe, taking into account the continuous deterioration in existing public infrastructure due to the more than decade–long economic downturn, has taken a policy position to adopt public-private partnerships under which the private sector would partner with the Government to deliver infrastructure.

There were a number of initiatives in the 1990s to expand the role of the private sector in provision of infrastructure services, but these were largely inconclusive. The most prominent example of the use of PPP-type arrangements in the 1990s was the private

concession that began providing rail services in 1998 on some 385km of track between Bulawayo and Beitbridge.

In 2004, the Ministry of Finance attempted to devise a PPP framework. This was outlined in the Public Private Partnership in Zimbabwe Policy Guidelines of 2004. The guidelines remained exactly that, guidelines, and were never adopted across the board due to the unstable political and economic climate in Zimbabwe, lack of a proper legal framework, lack of institutionalisation of PPPs to give them the necessary legal force, and lack of investor confidence.

In a 2009 Government Report on PPPs in Zimbabwe, it was noted that there was no legislation, policy or institutional framework that pertained specifically to PPPs in Zimbabwe. The concessions that have been implemented to date have all been undertaken within the framework of existing procurement laws. The existing laws that have a direct or indirect bearing on PPPs include the Procurement Act, the Income Tax Act, the Indigenisation and Economic Empowerment Act, the Zimbabwe Investment Authority Act, the Public Finance Management Act and the State Debt Act among many others. There is therefore a need to have a consistent set of laws regulating PPPs and this is what the Joint Ventures Act [Chapter 22:22], gazetted on the 12 of February 2016 which will become effective once determined by the President and still come into operation on a date to be proclaimed by the President aims to do. The Joint Ventures Act is to provide for the implementation of joint venture agreements (defined as an agreement between a contracting authority (being a ministry, government department or public entity) and a counterparty (in relation to an agreement defined as a party to an agreement other than a contracting authority) in terms of which (i) the counterparty

ZimbabweDube, Manikai & Hwacha

Key statistics

Area390,757 km2

Population13.061 million

(2012 Census)

GDP13.49 billion USD (2013)

GDP per capitaUS$953.38 USD (2013)


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undertakes to perform a contracting authority’s function on behalf of the contracting authority for a specified period. In addition, (ii) the counterparty receives a benefit for performing the function by way of compensation from funds appropriated by Parliament; or funds obtained by way of loan by the contracting authority; or user levies; or revenue generated from the project; or any combination of the aforegoing; and the counterparty is liable for the risks from the performance of its function and public resources may be transferred or made available to the counterparty.

The Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET), a five-year economic blueprint, identifies Public-Private Partnerships as one of the financing mechanisms of the plan. Implied in the ZIMASSET is that PPPs should be used in the transport, road infrastructure and upgrading road capacity, power, education, water reticulation, health and dam construction sectors, among many other areas that require improvements.


Zimbabwe does not currently have specific legislation covering the establishment of PPPs. Nonetheless, PPPs are regulated by the 2004 Guidelines, Public-Private Partnership Policy 2010, Public-Private Partnership Guidelines 2010; Institutional Framework: Public-Private Partnerships 2010. These documents form the basis upon which PPPs would be structure though they are not law.

According to the guidelines the following forms of PPPs were identified (please note that the forms given below are examples that have been identified and they are not an exhaustive list of the forms a PPP can take):

– Management Contract/Service Management

– Lease

– Concession

– De-monopolisation and new entry

Joint Ventures Act is yet to come into operation, is aimed at regulating the implementation of joint venture agreements between contracting authorities, which are defined as “any Ministry, Government department or public entity which has entered into or is considering entering into a joint venture agreement” and a counterparty, which, in relation to an agreement means a party to an agreement other than a contracting party.

PPP Process

As stated above, PPPs implemented to date have utilised the PPP Guidelines of 2004, PPP Policy 2010 and PPP Guidelines 2010. The Joint Ventures Act details the tasks and various stages of the life of a PPP and who will be responsible for each process. As stated above, however, the Joint Ventures Act is not yet law. The contracting party would utilise the existing framework, including statutes referred to under Infrastructure, Landscape and Context above.


The current existing examples of PPP projects in Zimbabwe from the transport sector involve the refurbishment of the road infrastructure of the following:

– Beitbridge Bulawayo Railway (BBR) (BOT) – Transport.

– New Limpopo Bridge (NLB) (BOT) – Transport.

– Newlands By-pass (NBP) (BT) – Transport, and

– Plumtree to Mutare road – Transport.

The Zimbabwe Investment Authority (ZIA) has already incorporated a BOOT PPP model, with investors getting some incentives for entering into a PPP scheme, including a five-year tax holiday and a reduced tax rate for the subsequent five years.

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PPPs are a relatively new concept in Zimbabwe with its successful implementation being stifled by:

1. political uncertainty;

2. legal, regulatory and institutional frameworks needed;

3. investor perception of Zimbabwe is poor;

4. no adherence to bilateral Investment Promotion and

5. Protection Agreements (BIPPAs);

6. lack of protection of property rights; and

7. inconsistent application of laws and policies e.g. indigenisation.

Sources

African Development Bank – A transition to Public –Private Partnerships – Zimbabwe Report

Public Private Partnerships: Critical Review and Lessons for Zimbabwe – Public Policy and Administration Research Vol. 5, No. 6, 2015;

Joint Ventures Act [Chapter 22:22]

A dam at Lake Kariba and the Zambezi river in Zimbabwe.

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Cameroon: Ngassam, Fansi & Mouafo, Avocats Associés

Cape Verde: Eva Caldeira Marques

Chad: Cabinet Thomas Dingamgoto

Comoros: Avocat Comores – Cabinet Bahassani

Djibouti: Martinet & Martinet

Egypt: Shahid Law firm

Ethiopia: Fikadu Asfaw and Associates Law Office

Ghana: AB & David

Ivory Coast: Bile-Aka Brizoua-Bi & Associés

Kenya: Muthaura Mugambi Ayugi & Njonjo Advocates

Liberia: The Law Office of Mohamedu F. Jones

Madagascar: HK-Jurifisc

Malawi: Mbendera & Nkhono Associates

Mali: Brysla Conseils

Mauritania: Cabinet Yezid El Yezid

Mauritius: Eversheds

Morocco: CWA

Mozambique: FCB&A – AG Advogados

Namibia: Koep & Partners

Niger: SCP Yankori

Nigeria: AIDAN Partners

Rwanda: K-Solutions & Partners

Senegal: Cabinet 2S + Cabinet Ba & Tandian

Seychelles: Pardiwalla Twomey Lablache

Sierra Leone: Basma & Macaulay

South Africa: Eversheds

Sudan: El Hussein Ahmed Salih

Tanzania: Abenry & Co

Togo: Martial Akakpo & Associés

Tunisia: Eversheds El Heni

Uganda: Katende Ssempebwa & Co

Zimbabwe: Dube, Manikai & Hwacha

Algeria

Angola

Benin

Burkina Faso

Cameroon

Cape Verde

Chad

Comoros

Djibouti

Egypt

Ethiopia

Ghana

Ivory Coast

Kenya

Liberia

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Rwanda

Senegal

Seychelles

Sierra Leone

South Africa

Sudan

Tanzania

Togo

Tunisia

Uganda

Zimbabwe

EALI Map

= Eversheds firm

73


©Eversheds LLP 2016 © Eversheds International 2016. All rights are reserved to their respective owners. Eversheds International is an international legal practice, the members of which are separate and distinct legal entities.

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Eversheds PPP in Africa Guide - Nov 2016

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