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Public and Private Partnerships: Identifying Opportunities

  Nov 27, 2014

The Strathmore Business School Alumni who attended Great Africans’ Getaway , which took place from 14th- 16th November, 2014 engaged in a discourse on Public and Private Partnerships: Identifying Opportunities. This session was facilitated by a panel comprising of Gabriel Negatu- Regional Director, African Development bank, Nandu Hirani- Consultant in the Infrastructure Industry and David Rono, a legal expert on PPPs.

When one hears of public and private partnerships, a few questions come to mind: What is the role of the state? Or better yet, Is the Private sector taking on the role of the state? To demystify this issue Gabriel Negatu was quick to clarify that both the government and the private sector have a big role to play in the development of Kenya. The government cannot do it alone and hence the need to partner with the private sector, however none should infringe on the roles of the other. As the government plays its role, it should equally allow the private sector to conduct its duties at its optimum.

In addition, David Rono was of the opinion, “there are many underdeveloped areas in Kenya and there is nothing wrong in the government partnering with private institutions to be part of the solution.” He further mentioned that Public Private Partnerships (PPPs) provide access to new funding sources of various projects whereby, a private entity assumes responsibility for a particular project and accepts the risks and benefits that come with it.

PPP’s come with benefits such as access to private capital and better work delivery/ improved level of service among many others. Conventional business practice ignores risk quantification. However, risk is inherent in all we do and therefore it is important for PPPs to look at the risks involved and determine who is best placed to manage the risk. “Since PPPs are an agreement between the government and the private sector, both parties should look at the risk that they need to take,” said Nandu.

When planning and developing PPPs the existing legal and regulatory environment of the country must be considered. For example, a particular project agreement should be consistent with the country’s laws and regulation. Private consortia cannot take on the role of regulation because that mandate lies with the government. Regulation should be done in an ethical and transparent way. Unless there is transparency in regulation, there will always be corruption and this eventually compromises on the quality of work output.

At the end of the session, all were in agreement that the government needs to come up with concrete steps on how they can work with the private sector to further develop Kenya.

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