ADVOKS GLOBAL · KENYA
Public Private Partnerships Act
43. Project development of privately-initiated proposals
Edition: 2022-12-31 · In force
43. Project development of privately-initiated proposals
(1)Where the Committee approves a privately-initiated proposal, the proposal shall proceed to the project development phase, during which a private party shall prepare specific project development activities before the project can be approved.(2)The project development phase shall be completed within six months from the date of the approval by the Committee.(3)Despite subsection (2), a contracting authority may apply in writing to the Directorate for the extension of time for the completion of the project development phase, specifying the justification for the application for additional time, and proposing a new timeframe and mitigation measures to prevent any further delays.(4)Where the Directorate is satisfied with the justifications of the contracting authority under subsection (3), it shall grant the application.(5)The project development phase consists of the activities necessary to enable the contracting authority and other appropriate decision-making agencies, under the guidance of the Directorate, to undertake a detailed evaluation of the proposed project before contracting, including the development of—(a)a detailed geographical, temporal and functional scope of the proposed project, including any right of way or land acquisition or human resettlement plan, where applicable;(b)a technical feasibility study, including a technical design and technical specification schedule that is capable of supporting pricing and socio-environmental impact assessments;(c)a financial feasibility study, including a detailed risk assessment, fiscal impact assessment or affordability assessment and a funding and financial plan;(d)a legal feasibility study, including an assessment of legal risks and uncertainties;(e)a social and environmental impact assessment where applicable;(f)an economic feasibility study;(g)private public partnership suitability assessment or value for money assessment;(h)a comprehensive risk matrix;(i)a preliminary private public partnership structure; and(j)a plan for stakeholder outreach to ensure social acceptability of the project.(6)At the request of a private party, the contracting authority may enter into a project development agreement with the private party that shall outline the terms under which the private party will undertake project development activities.(7)A project development agreement between the contracting party and the private party shall provide for the—(a)objectives of the project and project development agreement;(b)responsibilities of the contracting authority and the private party under the agreement;(c)compensation principles specifying that—(i)if the project is eventually awarded to the private party, there shall be no compensation;(ii)if the project is awarded to another private party, the costs of the private party that submitted the proposal for completing the project development phase, shall be paid by the private party, at financial close; and(iii)if the project does not progress beyond the project development phase, there shall be no compensation liability on the part of the Government;(d)modalities for coordination and communication between the contracting authority and the private party;(e)timelines for project development;(f)conditions under which the agreement may be terminated;(g)legal or regulatory obligations of the contracting authority and the private party; and(h)policies related to transparency and disclosure, accountability, confidentiality and conflicts of interest.(8)The Directorate shall develop standardized contract documents for a project development agreement with respect to privately-initiated proposals.(9)All documents resulting from the project development phase shall be evaluated by the contracting authority in accordance with the evaluation criteria specified in section 42 and the Directorate shall make recommendations thereon to the Committee for approval within twenty working days of completing the project development phase.(10)The contracting authority, in co-ordination with the Directorate, may hire external advisors to review and provide an independent opinion regarding the studies conducted by the private party regarding the privately-initiated proposal.(11)The Committee may, on the recommendations of the contracting authority, and any independent reviews or advice that the Committee may solicit in that regard, make a determination that—(a)the project meets the public interest, public private partnership suitability, project feasibility and affordability criteria, and grant approval for the project to be procured under this Act;(b)the project does not meet public private partnership suitability criteria and give guidance on alternative methods by which the project may be implemented; or(c)the project does not meet any of the relevant criteria and should be abandoned.(12)Where the Committee determines that the project should be abandoned under paragraph (11)(c), the contracting authority may elect to restructure the project to meet the evaluation criteria and resubmit the project to the Committee for a fresh determination.(13)The Committee shall render its decision under this section within fourteen days of receiving the report under subsection (9).(14)Following the determination of the Committee, the contracting authority shall publish the feasibility studies and project documentation used to evaluate the project, subject to any applicable disclosure guidelines on public private partnership projects for the time being in force.(15)For the purposes of this section—(a)"public interest" means the proposed project aligns with stated infrastructure needs, policy objectives and priorities of the Government, addresses a defined societal need, and contributes to the country’s socio-economic agenda; and(b)"project feasibility" means the proposed project has been confirmed to be technically, financially, socially, environmentally and legally feasible.