The Public Private Partnerships Act No 14of 2021 - as Plain Text by MWakili

NATIONAL COUNCIL FOR LAW REPORTING SPECIAL TSSTIF l ibr ar y Kenya Gazette Supplement No.

230 (Acts No.

14) REPUBLIC OF KENYA KENYA GAZETTE SUPPLEMENT ACTS, 2021 NAIROBI, 9th December, 2021 CONTENT A ct Page The Public Private Partnerships Act, 2021 267 NATIONAL COUNCIL FOR LAW REPORTING RECE IV ED 07 JAN 2022 RO.

Uox 1U443- 00100, NAIROBI, KENYA TTrl.

2719231 FAX: 2712694 PRINTED AND PUBLISHED BY THE GOVERNMENT PRIIV TER, NAIROBI 267 THE PUBLIC PRIVATE PARTNERSHIPS ACT No.

14 of 2021 Date of Assent: 7th December, 2021 Date of Commencement: 23rd December, 2021 ARRANGEMENT OF SECTIONS Section PART I PRELIM INARY 1 Short title.

2Interpretation.

3Object of the Act.

4Application of Act.

5^Act to prevail.

PART IIPUBLIC PRIVATE PARTNERSHIP COMM ITTEE 6Public Private Partnership Committee.

7Qualification and terms of members.

8Functions and poAvers of the Committee.

9^Vacation of offi ce.

10 Subcommittees.

11^Delegation by the Committee.

12Conduct of the business of the Committee.

13 Code of conduct.

14 Remuneration.

15Directorate.

16 Director-General.

17 Staff of the D irectorate.

18Secondment of staff to the Directorate.

19 Functions of the D irectorate.

PART IIIPUBLIC PRIVATE PARTNERSHIPS 20Project agreements.

21Public private partnership arrangements.

268 2021 No.

14 Public Private Partnerships 22^Duties of contracting authorities.

23^Determination of the duration of public private partnership agreements.

24Execution of project agreements.

25Submission of project lists.

26^National list and priority list of proj ects.

27Pre-qualification procedures.

28Government support measures.

co st s.

29Success fees and recoverable project development PART IVPROJECT IDENTIFICATION AND SELECTION OF PRIVATE PARTIES 30Project identification, selection and prioritisation.

31Project preparation and implementation.

32Feasibility studies.

33Approval of feasibility reports.

34Technical expertise of contracting authority.

35Standards and procedures.

36Limitation of contingent liabilities.

PART VPUBLIC PRIVATE PARTNERSHIPS PROCUREMENT M ETHODS 37 Procurement methods.

Direct Procurement 38Direct procurement.

39Procedure for direct procurement.

Privately-Initiated Proposals 40Privately-Initiated Proposals.

41Due diligence on Privately-Initiated Proposals.

42Evaluation of Privately-Initiated Proposals.

43Project development of Privately-Initiated Proposals.

44^Procurement design.

Restricted Bidding 45- Restricted bidding.

269 2021 Public Private Partnerships No.

14 Competitive Bidding 46Requests for qualification.

47Qualification of private part ies.

48Prequalification committees.

49Disqualification of private parties.

50 Invitations to bid.

51 Submission of bids.

52Competitive dialogue.

53Bids by consort iums.

54Proposal evaluation teams.

55Evaluation of bids and evaluation report s.

56^Non-compliance by bidders.

57^Negotiations.

58Project and risk assessment report s.

59Approval of project and financial risk assessment report s by the Committee.

60Approval of project.

61Execution of project agreements.

62 Cancellation of tenders.

63Ratification of project agreements by Parliament.

PART VIPUBLIC PRIVATE PARTNERSHIP PROJECTS BY COUNTY GOVERNMENTS 64Project agreements by county govern ments.

65^Approval by county assemblies.

66County project lists.

67Part V to apply.

PART VIIPROJECT COMPANIES, DISCLOSURES AND PROJECT AGREEM ENTS 68Project companies.

69Publishing information on execution of project agreements.

70Minimum obligations of part ies to a project agreement.

71Applicable law.

270 2021 No.

14 Public Private Partnerships 72Amendment and variation of project agreements.

73Project management.

74Secondment of employees of contracting authority.

75 Petition Committee.

76 - Secretaiy.

77- Remuneration.

78- Conflict of interest.

79- Offences.

80- D ecree PART VIII FINANCIAL PROVISIONS Fund.

81Public Private Partnership Project Facilitation 82Financial report ing, audit and project performance report s.

PART IX M ISCELLANEOUS PROVISIONS 83 Local content.

84Offences and penalties.

in tenders under this 85Part icipation of State officers or public officers A ct.

etc.

86Inspection of public private part nership premises, 87Application of Part V and Part VI of No.

3 of 2003.

88Annual report.

89Regulations.

PART X SAVINGS AND TRANSITIONAL PROVISIONS 90Interpretation.

91 M embers and Staff.

92Savings.

93Repeal.

First Schedule Provisions as to the conduct of business and affairs of the Committee.

Second SchedulePublic private part nership arrangements.

tobe Third ScheduleMinimum contractual obligations required specified in a proj ect agreement.

r 271 2021 Public Pri vate Partnerships No.

14 THE PUBLIC PRIVATE PARTNERSHIPS ACT, 2021 AN ACT of Parliament to provide for the participation of the private sector in the fi nancing, construction, development, operation or maintenance of infrastructure or development projects through public private partnerships; to streamline the regulatory fr amework for public private partnerships; to r epeal t he Public Private Partnerships Act, 2013; and for connected purp oses ENACTED by the Parliament of Kenya, as follows PART I PRELIM INARY title.

1.

This Act may be cited as the Public Pri vate Short Partnerships Act, 2021.

Interpretation.

2.

In this Act, unless the context otherwise requires affordability means that (a) the fi nancial commitments to be incurred by a contracting authority in terms of a proj ect agreement are sustainable and do not impose an unreasonable burden to the contracting authority and may be met by funds (i) designated within the existing budget of the contracting authority for its function for which the agreement relates; and; (ii) assigned to the contracting authority in accordance with its relevant future budgetary allocation; and (b) the cost of delivering a facility or service in relation to the project by the contracting authority does not impose an unreasonable fi nancial burden on the end users; Cabinet Secretaiy means the Cabinet Secretary responsible for matters relating to fi nance; Committee means the Public Private Partnership Committee established under section 6; concession means a contractual licence formalized by a project agreement, which may be linked to a separate a fee to interest or right over real property, with or without 1 272 2021 No.

14 Public Private Partnerships Government, entitling a person who is granted the licence a to make use of the specified infrastructure or undert ake project and to charge user fees, receive availability t er m payments or both such fees and payments during the of the concession; contracting authority, means (a) at the national government l evel, a state depart ment, agency or state corporation which intends to have its functions undert aken by a private party; or (b) at the county government level, the county government or county corporation which intends to have its functions undert aken by a private party; i ncludes al l 'contracting authoritys property' movable and immovable property belonging to the rights contracting authority and the intellectual propeity vested in the contracting authority; D irectorate means the D irectorate of Public Private Partnerships established under section 15; feasibility study means a study undert aken to explore the technical, financial, legal, social and environmental feasibility of undert aking an infrastructure or development facility as a public private part nership; fi nancial close means the date when all conditions down on precedent required to be met to achieve fi rst draw Senior Debt under a proj ect agreement are met, as specified under a proj ect agreement; Fund means the Public Private Part nership Proj ect Facilitation Fund established under section 81; local contenf means the added value brought to the of Kenyan economy from project-related activities by way the local distribution of accruing benefits including through and procurement of locally available workforce, services supplies and systematic development of national capacity and capabilities; private party means a party that enters into a project agreement with a contracting authority and is responsible for undert aking a project on behalf of the contracting authority under this Act; 273 2021 Public Private Partnerships No.

14 is privately-initiated proposal means a proposal that of a originated by a private party without the involvement contracting authority and may include infonnation that ifitw ere enables the complete evaluation of the proposal as a bid; project means the design, construction, or development or operation of a new infrastructure, asset facility or the rehabilitation, modernization, expansion, asset operation or management of an existing infrastmcture, or facility; project agreement means a contract concluded and between a contracting authority and a private party includes any ancillaiy agreement entered into by the parties in relation to an agreement; project company means a special purpose vehicle company incorporated by a successful bidder for the a purpose of undertaking a project in accordance with project agreement executed by the parties; Public Debt Management Office means the Public of Debt Management Office established by section 62 (1) the Public Finance Management Act, 2012; No.

18 of 20 12.

means a contractual public private partnership' arrangement between a contracting authority and a private party under which a private paity (a) undertakes to perfoiTn a public function or provide a service on behalf of the contracting authority; (b) receives a benefit for performing a public function by way of (i) compensation from a public fund; (ii) charges or fees collected by the private party from users or consumers of a service provided to them; or (iii) a combination of such compensation and such charges or fees; (c) is generally liable for risks arising from the performance of the function in accordance with the terms of the project agreement; and (d) transfers the facility to the contracting authority; 274 2021 No.

14 Public Private Partnerships t ransaction advisor means a person who has the the appropriate skill and experience to assist and advise r el ated contracting authority or the Directorate on matters to a public private partnership; user fee means the rate, toll, fee, or other charge or imposed for the use of all or part of an infrastructure development facility or service; and value for money means that the undertaking of a public function of the contracting authority by a private an et party under a public private partnership results in in benefit accruing to that contracting authority defi ned or risk terms of cost, price, quality, quantity, timeliness transfer.

Object of the 3.

The obj ect of this Act is to A ct.

of (a) prescribe the procedures for the part icipation the private sector in the fi nancing, construction, development, operation or maintenance of infrastructure or development projects through public private part nerships; (b) hannonize the institutional framework for the implementation of public private part nership proj ects; on (c) give effect to Art icle 227 of the Constitution procurement relating to public private part nerships; (d) streamline and rationalize the regulatory, implementation and monitoring mandates of relevant agencies; and (e) provide for a transparent proj ect selection process, clear procurement procedures, reduced regulatory approvals and expanded contractual models in order to promote private sector i nvestment.

Application of 4.

(1) This Act shall apply to every proj ect agreement for the fi nancing, design, construction, rehabilitation, operation, equipping or maintenance of a project or private provision of a public service undert aken as a public part nership.

(2) The provisions of the Public Procurement and No.

33 of 20i 5.

Asset Disposal Act, 2015, shall not apply to a public private part nership.

275 2021 Public Pri vate Partnerships No.

14 (3) Without prejudice to the generality of subsection (2), the provisions of the Public Procurement and Assets Disposal Act, 2015 shall if (a) not apply to a public private partnership project, all the monies for the project are from the private part y; (b) apply if there is counterpart f unding that is, including public funds, for the public private part nership proj ect.

of Act to prevail, 5.

Where there is a conflict between the provisions the this Act and the provisions of any other written law, provisions of this Act shall prevail.

PART IIPUBLIC PRIVATE PARTNERSHIP COMMITTEE Private 6.

(1) There is established the Public Private Public Partnership Part nership Committee which shall consist of Committee.

(a) the Principal Secretary in the State depart ment responsible for matters relating to fi nance, who shall be the chairperson; (b) the Principal Secretary in the State depart ment responsible for matters relating to planning; (c) the Principal Secretaiy in the State Depart ment responsible for matters relating to infrastructure; (d) the Solicitor-General; (e) two persons nominated by the Council of County Governors; (f) three persons, not being public offi cers, appointed by notice in the Gazette by the Cabinet Secretary; and (g) the Director-General, who shall be the secretary.

(2) The Committee shall co-opt the Principal whose Secretary responsible for the contracting authority public private part nership project is the subj ect of discussion at a meeting.

(3) The Cormnittee may co-opt any person or public f or the offi cer whose knowledge or experience is necessaiy public private part nership under discussion.

276 2021 No.

14 Public Private Partnerships (4) A person who is co-opted shall not vote at af or a meeting and shall only be a member of the Committee period not exceeding one year.

(5) The members refemed to under paragraphs (l )(a), (b), (c), (d),(e) and (f) shall attend the Committees officer meetings in person and may designate in writing an to represent them in sub-committees of the Committee.

and 7.

( 1) A person is qualified to be appointed as a Qualification t er msof member of the Committee under section 6(1) (f) if that members.

in person has at least ten years professional experience matters relevant to public private partnerships.

(2) The members appointed under section 6(1) (f)shall hold office for a period of three years and may be eligible for reappointment for one fiirther term.

(3) The persons appointed under section 6 (1) (f) shall be appointed at different times so that the respective expiry dates of their term s of office shall fall at different tim es.

Functions and 8.

(1) The Committee shall be responsible for- powers of the (a) fonnulating policies on public private Committee.

partnerships; overseeing the implementation of public private (b) partnerships contracts; (c) approving standardized public private partnership bid documents; (d) approving feasibility studies; (e) approving privately-initiated proposals; (f ) approving negotiated contract tenns, the cancellation of procurements or termination of project agreements, and the variation of project agreements; (g) monitoring the implementation of this Act, including the sustainability of contingent liabilities that may be incurred by a contracting authority for proj ects approved under the Act; and (h) caiTying out any other function that may be confeiTed on it under this A ct.

277 2021 Public Private Partnerships No.

14 (2) The Committ ee shall have all the powers under necessary for the proper discharge of its fi mctions this A ct.

of 9, (1) The offi ce of an appointed member of the Vacation Committ ee shall become vacant if that member (a) is unable to perform the functions of his or her office by reason of mental or physical infi rmity; (b) is removed from offi ce for breach of the provisions of chapter six of the Constitution; (c) is deregistered by a professional body for professional misconduct; (d) is adj udged bankrupt; (e) is convicted of a criminal offence and sentenced to a term of imprisonment of not less than six months; (f) is convicted of an offence under section 84 of this Act; (g) is absent, without reasonable cause, from three consecutive meetings of the Committ ee; (h) resigns in writing addressed to the Cabinet Secretary; (i) fails to declare his or her interest in any matt er being considered or to be considered by the Committ ee; (j) dies; or (k) is removed from offi ce by the Cabinet Secretary.

(2) A member of the Committ ee may be removed from offi ce on the ground of gross misconduct, or incompetence, conviction for a cognizable offence, violation of the Constitution.

(3) Before a member of the Committ ee is removed from offi ce, that member shall be afforded an opportunity to be heard before such removal.

(4) A person who is aggrieved by the decision to remove that person from offi ce under this section may appeal against the decision to the High Court.

278 2021 Public Private Partnerships No.

14 such Subcommitt ees.

establish Committee 10.

The may proper subcommittees as it may consider necessary for the performance of its functions and exercise of its powers under this A ct.

by 11.

The Committee may, by a resolution either Delegation the Committ ee.

generally or in a particular case, delegate to a subcommittee or to a member, officer, employee or agent of the Directorate, the exercise of any of the powers or performance of any of the functions of the Committee.

Conduct of the 12.

(1) Subject to subsection (2), the business and affairs of the Committee shall be condueted in accordance.

1 < - , , Committee.

With the First Schedule.

(2) Except as provided in this Act, the Committee may regulate its own procedure.

(3) The Committee shall maintain a proper record of in such its meetings of the.

Committee, including minutes, manner as it may determine.

of conduct, 13.

The Cabinet Secretary may make Regulations Code prescribing a code of conduct for Committees members and officers, employees and agents of the Directorate.

14.

There shall be paid to the members of the Remuneration.

Committee such remuneration or allow ances as the Cabinet Secretary may, in consultation with the Salaries and Remuneration Commission, determine.

be Directorate, 15.

(1) There shall be established a directorate to known as the Directorate of Public Private Partnerships.

(2) The Directorate shall be headed by the Directw- General.

as Director- 16.

(1).

A person shall be qualified to be appointed Generai.

the Director-General if that person holds an advanced degree from a university recognized in Kenya and has knowledge and at least ten years professional experience in any of the following fields (a) fi nance; (b) economics; (c) law; (d) engineering; 279 2021 No.

14 Public Private Partnerships (e) project management; or (f) any other related and relevant fi eld, (2) The Director General shall be competitively recruited and appointed by the Public Service Commission.

(3) The Director-General shall hold offi ce for a period a of four years, and may only be reappointed once for of further period of four years, subject to the terms appointment.

staff of the 17.

Subject to section 31 and 37 of the Public Service Commission Act, 2017 the Cabinet Secretary shall, in staff of consultation with the Director General, appoint the the D irectorate.

Secondment of of 18.

(1) The Directorate may request the secondment staf f to the staff from a contracting authority, county govern ment, Directorate.

on county corporation or a development or strategic part ner such terms and for such duration as may, on the consultation with the contracting authority, county govern ment, county corporation or a development or strategic part ner, be needed.

(2) The staff seconded to the Directorate shall be under the deemed to be the staff of the Directorate and fall authority of the Directorate for the duration of the secondment.

Functions of the in 19, (1) The Directorate shall be the lead institution Directorate.

project the implementation of a public private partnership f or under this Act and, in this regard* shall be responsible <a) originating, guiding and co-ordinating the selection, raiding and prioritization of public private part nership projects within the public budget framework; (b) overseeing appraisal and development activities of contracting authorities including providing technical expert ise in the implementation of in-ojects under this Act; <c) guiding and advising contracting authorities in proj ect sto icturi ng,^ procurement and tender evaluations^ (d)^ letuiing contracting authorities in contract ne^ tiations and deal closure; 280 No.

14 2021 Public Private Partnerships (e) on its own motion, ori ginating and leading in project structuri ng and procurement, in liaison with a contracting authori ty; (f) supporting the development of public private partnerships programmes in the country; (g) overseeing contract management fr ameworks for projects under this Act; and (h) undertaking any other activity necessary for the fulfi lment of any of the functions of the Directorate.

.

(2) In the performance of its functions, the Directorate shall (a) establish an open, effi cient and equitable process for the management of the identifi cation, pri ori tiza,tion.

screening, development.

procurement, implementation and monitori ng of proj ects; (b) serve as the national resource centre on public pri vate partnerships; (c) conduct capacity-building for contracting authori ties; (d) create public awareness on public pri vate partnerships; (e) provide advisory and support services to contracting authorities in national and county governments at all stages of a proj ect under this Act; (f) on behalf of contracting authorities, retain transaction advisors and to enter into agreements for that purpose to assist contracting authori ties duri ng project appraisal and implementation; (g) review and approve project proposals and tender evaluation reports; (h) establish a national register of projects implemented under this Act; (i) monitor contingent liabilities and accounting and budgetary issues related to public pri vate partnerships in conj unction with relevant government departments; and 281 2021 Public Private Partnerships No.

14 (j) conduct research and publish findings on public private partnerships in order to ensure the continuous improvement of public private partnership projects.

(3) The Directorate shall issue standard bidding documents for use by contracting authorities.

(4) The Directorate shall prepare fi nancial accounts and inventory of any monies allocated to it, and on any fi nancial support received by it under this Act.

PART IIIPUBLIC PRIVATE PARTNERSHIPS Project 20.

(1) A contracting authority intending to fi nance, agreements.

or operate, equip or maintain an infrastructure facility provide a public service may enter into a project agreement with a qualified private party for the financing, the construction, operation, equipping or maintenance of service in infrastructure facility or provision of the public accordance with the provisions of this Act.

(2) A contracting authority that enters into a project agreement with a private party under subsection (1) may, where it is appropriate, designate its property for the use by a private party, in relation to, and for the duration of, a project on such tenns and conditions as the contracting authority shall consider appropriate.

(3) A contracting authority shall implement the directions of the Directorate at every stage of a project.

(4) Where a project involves more than one one of contracting authority, the Directorate shall designate the contracting authorities to be the lead contracting authority.

private 21.

(1) Subject to the provisions of this Act, a Public pai^ ership contracting authority may enter into a public private p^ ership arrangement with a private party in accordance with the Second Schedule.

(2) Without prejudice to the periods specifi ed under not enter the Second Schedule, a contracting authority shall into a public private partnership arrangement for a period exceeding thiity years.

282 2021 Public Private Partnerships No.

14 Duties of 2t * (1) A contracting authori ty has a duty to ^contra cting nutfi ori ties.

(a) in liaison with die Directorate, identify, screen and pri ori tize projects based on a guidance issued by the ^ rectorate; (b) prepare and ^ipraise each project to ensure its legal, regulatory, social, economic mid conmiercial viability; (c) undertake the tenldwing process in accordance with this Act; (d) provide such tecbnical experti se as Ae Directorate may require to evaluate and appraise a proj ect; (e) monitor the implementation of a project agreement; (f) liaise with all key stakeholders duri ng the project cycle; (g) oversee the management of a project in accordance with the project agreement; (h) submit to the Directorate annual or such other periodic reports on the implementation of project agreements; (i) maintain a record of all docummitati on and agreements entered into relating to the implementation of a project agreement undm this Act; 0 prepare project agreements in accordance with standard documents and other guidance issued bj? the Directorate; (k) ensure there is public partic^iati on on a pr^ ect; and 0 ensure that the tt ansfer of assetsat ti ie expiry early terminati on of a project agrernnent is consistent with ti ie terms of die proj ect agremi^ t where the project agreement invdives a transfer of assets.

(2) In the performance of its duti es undCT subsecticm (1), a contracting authori ty shall report to the Directorate and 283 2021 Public Private Partnerships No.

14 (a) implement the recommendations of the Directorate; (b) comply with the guidelines issued by the Directorate; and (c) submit such information as may be required by the Directorate or Committee.

Determination of 23.

(1) In determining the duration of a publie private take the duration of partnership agreement, a contraeting authority shall into account the following factors Sartners agreements, (a) the provisions of this Act and any other relevant written law; (b) the life span of the teehnology to be employed under the agreement; (c) the investment standards that are required to be maintained by each party to the proj eet agreement throughout the duration of the publie private partnership agreement; (d) the economic and financial viability of the proj ect and; the economic life of the facilities to be provided; (e) the depreciation of the proj ect assets during the life of the public private partnership agreement; and (f) the period required by the parties to the partnership to (i) maintain service delivery standards and investment levels during the life span of the public private partnership agreement; and (ii) recoup the parties investment of (2) The Directorate may issue guidelines in respect the determination of the duration of a public private partnership agreement.

(3) The Directorate may extend the tenure of a project be agreement on such terms and for such period as may approved by the Committee and the Attorn ey-General: Provided that an extension shall not impose an additional fiscal or statutory burden on the contracting authority w the Government.

284 No.

14 2021 Public Private Partnerships i nto Execution of 24.

Where a contracting authority intends to enter that a public private partnership, a person shall not, unless person is the accounting officer of the contracting to that authority, enter into a proj ect agreement in relation project on behalf of the contracting authority.

Submission of 25.

(1) A contracting authority, other than a county of ists.

government or county corporation, shall prepare a list basis projects that it intends to undertake on a priority under this A ct and submit it to the Directorate for approval.

(2) A contracting authority shall not submit a project list unless the projects are part of the national development agenda.

be (3) A project list prepared under this section shall shall supported by appropriate project concept notes which the be prepared in accordance with guidelines issued by Directorate.

(4) The Directorate shall notify the Committee, the Cabinet Secretary and Cabinet, bi-annually, on all projects it approves for implementation under the Act.

in (5) The Directorate may reject any project included f or a proposed project list and shall specify the reasons such refusal in writing.

in (6) Where the Directorate rejects a proposed project a project list, it shall provide the respective contracting authority with the necessary guidance.

an National list and 26.

(1) The Directorate shall establish and maintain up-to-date national list of proj ects that have been approved under sections 25 and 66 of this Act.

projects.

be (2) Subj ect to subsection (1), the national list shall published on the Directorates website and the contracting authoritys website.

(3) The national list shall be maintained in a publicly accessible database hosted by the Directorate.

the (4) The Directorate shall prepare a priority list of projects specified in the National List for implementation under this A ct.

a Prequalification 27.

A contracting authority intending to enter into the Procedures, project agreement with a private party shall, before execution of the project agreement, confirm that the private party has 285- No.

14 Public Private Partnerships 2021 (a) the fi nancial capacity to undertake the project; of (b) the relevant experience in undertaking projects a similar nature; (c) the relevant expertise to undertake the project; and (d) satisfi ed the legal, social and environmental due diligence parameters prescribed by the Directorate.

Govern ment issue 28.

( 1) The Cabinet Secretary may support m easures.

Government support measures for a public private partnership including (a) a binding undertaking; (b) a letter of support; (c) a letter of credit; (d) a credit guarantee, whether partial or full; (e) approval for issuance of partial risk guarantees and political risk insurance; or (f) any other instrument that Cabinet Secretary responsible for matters relating to fi nance may, the advice of the Committee, determine: on Provided that the instrument shall comply with the of the law relating to public fi nance provisions management.

(2) The Cabinet Secretary may only issue Government support measures under this section (a) where it is necessary to support a project to lower premiums factored for the profi ling of political risks; or (b) to underwrite approved commercial risks under a negotiated project agreement.

(3) The Cabinet Secretary may prescribe guidelines for the issuance of Government support measures under this section.

29.

(1) The Directorate shall impose a success fee of ^ project not exceeding one per cent of the total project cost development transaction payable by a private party that achieves fi nancial close on a project.

286 No.

14 2021 Public Private Partnerships (2) Where the Directorate or a contracting authority incurs costs for transaction advisory services offered in support of project preparatory and procurement activities or costs any other recoverable project development costs, such shall be recoverable in foil, without any inflation adjustment, fr om the private party that enters into a proj ect agreement with the contracting authority.

(3) Success fees and recoverable project costs under subsection (2) shall be payable into the Public Private Partnership Project Facilitation Fund.

(4) The Directorate may issue guidelines on the allocation of costs and disbursements on success fees imposed under this section in relation to recoverable project costs.

PART IVPROJECT IDENTIFICATION AND SELECTION OF PRIVATE PARTIES 30.

(1) A contracting authority intending to Project identifi cation, implement a project through a public private partnership under this Act shall, in consultation with the Directorate be responsible for conceptualizing or identifying potential projects and undertaking the preparatory and tendering process of the project.

(2) In conceptualizing, identifying and prioritizing potential projects under this Act, a contracting authority shall consider the strategic and operational benefits of the the public private partnership arrangement compared to development of the facility or,provision of the service by the contracting authority.

(3) Where a contracting authority elects to implement the a project prioritized under section 25, it shall appraise project for viability in accordance with section 32.

(4) The Cabinet Secretary shall, in consultation with the Directorate, make Regulations f or t he conceptualization, i dentification and prioritization of proj ects under this Act.

31.

(1) A contracting authority shall, under the Project preparation and direction of the Directorate, constitute a project and implementation team for overseeing the structuring implementation phases of the project including (a) overseeing the conduct of feasibility studies; 287 No.

14 Public Private Partnerships 2021 (b) preparing the project for procurement; (c) conducting the tender stage of the project; and (d) negotiating project agreements for the project.

(2) A project implementation team constituted under the subsection (1) shall consist of a representative of experts Directorate and such technical, financial and legal and of the contracting authority as the contracting authority the Directorate shall determine.

32.

(1) A contracting authority shall, under the Feasibility study of direction of the Directorate, undertake a feasibility in order the project it intends to implement under this Act to determine thi viability of the proj ect.

(2) The contracting authority shall consider the study following matters when undertaking the feasibility (a) the technical requirements of the project; to (b) the legal requirements to be met by the parties the proj ect; (c) the social, economic and environmental impact of the project; (d) the affordability and value for money proposition in the project; and (e) the projects land requirements and required site preparatory activities necessary for effective and efficient project initiation.

Approval of 33.

(1) A contracting authority intending to implement the a project through public private partnership shall submit feasibility report prepared under section 32 to the Directorate for evaluation.

(2) The Directorate shall submit an evaluation report together with its recommendations to the Committee.

(3) The Committee shall within twenty-one days of receipt of the evaluation report consider the feasibility report in determining whether or not the contracting authority may procure a project under this Act.

34.(1) The Directorate shall assess the technical expertise of the contracting authority to procure the development, preparation, procurement, contract authori ties, A ct.

negotiation and management of a project under this 288 No* 14 2021 Public Private Partnerships (2) Where the Directorate determines that the contracting authority does not have the technical expertise in to procure the project, the contracting authority shall, consultation with the Directorate, appoint a transaction advisor to assist the authority in the preparation, procurement, contract negotiations and fi nancial close phases of a project.

(3) The engagement of a transaction advisor under subsection (2) shall be based on the principles of and disclosure, transparency, equality , cost-effectiveness equal opportunity in accordance with the procedure prescribed by the Cabinet Secretary in Regulations.

(4) The Directorate may procure transaction advisors, in the on a sectoral basis based on the projects contained National List under section 25.

on t he Standards and 35.

(1) The Cabinet Secretary shall.

P'0=edu''es.

recommendation of the Directorate, prescribe the standards and procedures for the identifi cation, selection, feasibility study, pre-tender approval, tendering, negotiation, post tender approval, monitoring and evaluation of projects under this A ct.

(2) Without prejudice to the generality of subsection and (1), the Cabinet Secretary shall prescribe standards procedures (a) on practice elements in the procuring of privately initiated project proposals; (b) on the conduct of competitive tender processes under this Act; (c) on the protocols to be observed in a direct negotiation process between a contracting authority and a private party ; (d) on disclosure requirements at every stage of a proj ect; (e) on standard contractual clauses applicable to the competitive procurement of principal subcontracts for Privately-Initiated Proposals in the interest of fair price discovery and higher value for money for Government; (f) on procedures for benchmarking and market testing; 289 2021 ' No.

14 Public Private Partnerships (g) on timelines and proeedures for every stage of privately-initiated proposals; (h) for public participation and stakeholder engagement during project development stages; (i) on hiring of transaction advisors; (j) on the management of conflicts of interest; (k) on standardised evaluation criteria templates; (1) on feasibility studies; (m) on timelines for project development; and (n) any other relevant matter required for the better implementation of this Part.

f or Limitation of 36.

(1) The Cabinet Secretary shall approve a limit to contingent liabilities that the Committee may assign projects under the Act.

(2) The Committee shall assign contingent liabilities to a proj ect approved under this Act within the approved contingent liability limit.

(3) The Directorate (a) shall notify the Cabinet Secretary of the allocated quantum of the approved contingent liability portfolio at least once every six months; and (b) shall notify the Cabinet Secretary of any requirement for additional contingent liability headroom where the approved limit is exceeded.

(3) The Cabinet Secretary may, on the recommendation of the Committee, approve an increased of the contingent liability headroom to meet the objectives public private partnerships programme of the Government.

(4) The Directorate shall prepare and submit to the Cabinet Secretary an annual report on contingent liabilities assigned during the year in question providing projections the on future contingent liability requirements based on prepared projects portfolio in the national list of proj ects under section 25.

290 No.

14 2021 Public Private Partnerships PART VPUBLIC PRIVATE PARTNERSHIPS PROCUREMENT METHODS Procurement 37.

(1) A contracting authority may procure a public methods, private partnership project under this Aet through (a) direct procurement; (b) privately-initiated proposals; or (c) competitive bidding; (d) restrieted biding a (2) In proeuring a public private partnership projeet, of contracting authority shall be guided by the principles transparency, cost-effectiveness and equal opportunity.

(3) A contracting authority shall use standard bidding doeuments issued by the Directorate in all public private partnership procurements.

(4) The Cabinet Secretary shall prescribe guidelines under for the procurement of a public private partnership this Part.

Direct Procurement Direct 38.

A eontraeting authority may, in consultation with procurement.

the Directorate, use direct procurement if any of the following conditions are satisfied (a) the private party possesses the intellectual property rights to the key approaehes or technologies required for the project; (b) the works or services are only available from a limited number of private parties; in (c) a particular private party has exelusive rights respect of the works or services, and no reasonable alternative or substitute is available; are (d) the contracting authority determines that there operational and strategic advantages and or reasons linked to particular private parties on the basis of national interest, bilateral or international eooperation, or extern al trade; (e) the direct engagement of a private party shall signifieantly lower the cost of delivering the works or serviees on the basis of the projeets 291 No.

14 2021 Public Private Partnerships qualifying for funding on such terms as the Government shall approve without such outcomes beeoming part of the publie debt; (f) there is an urgent need for the works or services, and any other procurement method is impractieal; Provided that the cireumstances giving rise to the urgeney were not foreseeable by the eontraeting authority or the result of dilatory eonduct by the eontraeting authority; (g) the eontraeting authority, having procured goods, equipment, technology or services fr om a private party, determines that additional supplies shall be proeured from that private party for reasons of standardization or beeause of the need f or eompatibility with existing goods, equipment, technology or services, taking into aecount the (i) effectiveness of the original procurement in meeting the needs of the contracting authority; (ii) limited size of the proposed procurement in relation to the original proeurement; and (iii) reasonableness of the price and the unsuitability of altern atives to the goods or serviees in question; (h) the works or services are procured fr om a public entity: Provided that the aequisition price shall be fair and reasonable and compare well with known prices of works or services in the circumstances; or (i) any other reason that may be prescribed by the Cabinet Secretary.

fo r 39.

A eontraeting authority shall adhere to the Procedure following procedures during direet procurement of procurement.

proj eets (a) issue a tender doeument whieh shall be the basis of tender preparation by the contracting authority and subsequent negotiations; (b) appoint an evaluation committee in aeeordanee with the standards and practiee procedures issued 292 No.

14 2021 Public Private Partnerships under this Act for the negotiation of a direct procurement of a proj ect; (c) ensure that appropriate approvals under this Act have been granted; (d) ensure that the resulting proj ect agreement complies with this Act; and (e) any other procedure that may be prescribed by the Cabinet Secretary.

Privately-Initiated Proposals 40.

(1) A private party may submit a privately- Pri vately- initiated proposal to a contracting authority.

initiated proposals.

(2) A contracting authority may consider a privately- initiated proposal submitted under subsection (1) if (a) the proj ect is aligned with national infr astructure priorities and meets a demonstrated societal need; (b) the project provides value for money; (c) the project proposal provides sufficient information for the contracting authority to assess fiscal affordability and the potential contingent liability implications of the proposal; (d) the project can be delivered at a fair market price; (e) the proj ect is supported by all documents listed under subsection (3) for purposes of transparency and accountability; and risk (f) the proj ect supports the efficient transfer of fr om the public sector.

(3) The privately-initiated proposal under subsection (1) shall contain the following information (a) a detailed description of the proposed project, including reference designs, sketches and alignment maps; (b) detailed project needs analysis, including a description of the benefits to society and alignment with Governments infrastructure plan; (c) a description of the environmental and social features of the proposed project; 293 2021 Public Private Partnerships No.

14 (d) a detailed technical description of the project, including a construction schedule and requirements on enabler services; of (e) a detailed description of the financial viability the project, including costs and revenues, preliminary funding and fi nancing plan, supported by relevant fi nancial model in open format; (f) a preliminary operating plan for the proposed proj ect; ri sk (g) a description of the key project risks and the allocation under the project; (h) disclosure of any Government support measures the proposed project may require; (i) a description of non-monetary Govern ment support measures that the project may require; and f or G) aj ustification -why the proj ect is not suitable open competitive procurement.

(4) The contracting authority shall submit the privately-initiated proposal to the Directorate for assessment and approval.

(5) The Cabinet Secretary may, by notice in the Gazette, prescribe when submissions may be made under this section.

(6) A private party shall pay into the Fund a non- refimdable review fee at the time of submitting its calculated privately-initiated proposal under subsection (1), at the rate of zero-point-five per cent of the estimated project cost or fi fty thousand United States dollars, whichever is low er.

not (7) The review fee paid under subsection (6) shall or the create any obligation on the contracting authority Directorate towards the proponent.

(8) The Cabinet Secretary shall, in consultation with the Directorate, make Regulations for the better implementation of this section.

294 2021 Public Private Partnerships No.

14 diligence on 41.

The Directorate, in co-ordination with the Due contracting authority, shall, before conunencing an evaluation of a privately-initiated proposal, conduct due proposals, diligence to confi rm that the private party (a) has not been debarred by any country or any international organization from participating in public private partnerships or similar arrangement; (b) is not corrupt, has not engaged in acts of corruption, and has not been sued or convicted on account of acts of corruption; (c) is not insolvent, under receivership or bankrupt and its affairs are not being administered by a court or judicial offi cer, its business activities have not been suspended, and it is not subject to any current legal proceedings; it (d) is tax-compliant in all jurisdictions in which has local tax presence, and in its home country of registration, and is not at default on payment of social security and employment benefi ts or contributions in its jurisdictions of operation and registration; and (e) has not, and its directors or offi cers have not, been convicted of any criminal offence related to professional conduct within a period of fi ve years preceding the submission of the proposal, and have not otherwise been disqualifi ed pursuant to administrative suspension or debarment proceedings.

the Evaluation of 42.

(1) The Directorate shall, in consultation with contracting authority , in evaluating a privately-initiated proposal with a view to determining its suitability for proposals, project, further development as a public private partnership establish evaluation criteria for the proposal.

(2) The private party shall not be required to submit the additional proposals to the contracting authority or Directorate during the evaluation of the privately-initiated proposal.

(3) The evaluation criteria established under subsection (1) shall include 295 2021 Public Private Partnerships No.

14 (a) public interest criteria; (b) proj ect feasibility criteria; and (c) public private partnership suitability criteria; (d) affordability criteria.

(4) If requested by the Directorate or a contracting authority, the private party shall provide any clarifications or additional information on the privately-initiated proposal inw ritten form.

in (5) The Directorate and contracting authority shall, consultation with relevant government departments, within evaluate the proposal against the evaluation criteria to the ninety days fr om the date the proposal is submitted Directorate.

(6) The Directorate shall prepare a detailed assessment the report on the privately-initiated proposal based on and evaluation criteria established under subsection (1) make recommendations to the Committee within fi ve or working days aft er concluding the evaluation on whether not the project can proceed to the project development phase.

(7) The Committee shall, within fourteen working determine days of receiving the report under subsection (6), the whether or not the proposed project may proceed to the project development phase, and provide guidance on procurement method that shall be applied to the said project.

(8) In making its determination under subsection (7), the Committee shall take into consideration (a) the assessment report submitted under subsection (6); (b) the review and recommendations of the Directorate; and (c) any benchmarking or market testing results.

shall (9) The approval of a privately-initiated proposal not create an obligation on the part of the Directorate, contracting authority or Government toward the private party.

296 2021 No.

14 Public Private Partnerships 43.

(1) Where the Committee approves a privately- Project proj ect initiated proposal, the proposal shall proceed to the development phase, during which a private party shall initiated the proposals, prepare specifi c project development activities before project can be approved.

(2) The project development phase shall be completed the within six months from the date of the approval by Committee.

may (3) Despite subsection (2), a contracting authority of tim e apply in writing to the Directorate for the extension for the completion of the project development phase, additional specifying the justifi cation for the application for time, and proposing a new timeframe and mitigation measures to prevent any further delays.

(4) Where the Directorate is satisfi ed with the justifi cations of the contracting authority under subsection (3), it shall grant the application.

(5) The project development phase consists of the I and activities necessary to enable the contracting authority 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 specifi cation schedule that is capable of supporting pricing and socio- environmental impact assessments; (c) a fi nancial feasibility study, including a detailed risk assessment, fi scal impact assessment or affordability assessment and a funding and fi nancial plan; (d) a legal feasibility study, including an assessment of legal risks and uncertainties; (e) a social and environmental impact assessment where applicable; 297 2021 Public Private Partnerships No.

14 (f) an economic feasibility study; (g) pri vate public partnership suitability assessment or value for money assessment; (h) a comprehensive ri sk matri x; (i) a preliminary pri vate public partnership structure; and (j) a plan for stakeholder outreach to ensure social acceptability of the proj ect.

(6) At the request of a pri vate party, the contracting authori ty may enter into a project development agreement under with the pri vate party that shall outline the terms which the pri vate party will undertake project development activities.

(7) A project development agreement between the f or contracting party and the pri vate party shall provide the (a) obj ectives of the project and project development agreement; (b) responsibilities of the contracting authori ty and the pri vate party under the agreement; (c) compensation pri nciples specifying that (i) if the proj ect is eventually awarded to the pri vate party , there shall be no compensation; (ii) if the proj ect is awarded to another pri vate party , the costs of the pri vate party that submitted the proposal for completing the project development phase, shall be paid by the private party , at fi nancial 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 authori ty and the private party ; (e) timelines for project development; 298 2021 No.

14 Public Private Partnerships (f) conditions under which the agreement may be terminated; (g) l egal or regulatory obligations of the contracting authority and the private party; and (h) policies related to transparency and disclosure, accountability, confidentiality and confl icts of int er est.

(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 proj ect development phase shall be evaluated by the contracting authority in accordance with the evaluation criteria specifi ed 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 and the Directorate, may hire extern al advisors to review 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 or the contracting authority, and any independent reviews make advice that the Committee may solicit in that regard, a determ ination that (a) the proj ect meets the public interest, public private partnership suitability, proj ect f easibility and affordability criteria, and grant approval for the project to be procured under this Act; (b) the proj ect does not meet public private partnership suitability criteria and give guidance on altern ative methods by which the project may be implemented; or (c) the proj ect 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 proj ect to contracting authority may elect to restructure the F 299 2021 No.

14 Public Private Partnerships to the meet the evaluation criteri a and resubmit the proj ect Committee for a fr esh determination.

(13) The Committee shall render its decision under report this section v^^ithin fourteen days of receiving the under subsection (9).

(14) Following the determination of the Committee, studies the contracting authori ty shall publish the feasibility and project documentation used to evaluate the project, public subject to any applicable disclosure guidelines on f orce.

pri vate partnership proj ects for the time being in (15) For the purposes of this section (a) public interest means the proposed project aligns with stated infr astmcture needs, policy obj ectives and priori ties of the Govern ment, addresses a defi ned societal need, and contributes to the countrys socio-economic agenda; and (b) proj ect feasibility means the proposed proj ect has been confi rmed to be technically, fi nancially, socially, environmentally and legally feasible.

44.

(1) Where the Committee determines that the Procurement of pri vately-initiated proposal may be procured in terms with the section 43 (11) (a), the contracting authority shall, assistance of the Directorate, directly negotiate the project proposal with the pri vate party, if (a) the contracting authori ty determines that the proposal shall not generate market interest under competitive procurement; (b) the proposal is anchored on unique elements; or (c) direct negotiations are j ustifi ed for any other reason in the public interest.

(2) For the purposes of subsection (1), a contracting f or the authority shall establish clear and realistic timelines conduct of the direct negotiations on the project: Provided that the contracting authority or authori ties and the pri vate party shall undertake to fi nalise the negotiations within six months.

(3) Where the direct negotiations are not completed within six months, the negotiations shall be terminated.

300 No.

14 2021 Public Private Partnerships (4) Where the contracting authority receives more to the than one privately-initiated proposal with respect same matter and all proposals proceed to the project a development stage, the contracting authority may utilize restricted tendering procedure that limits competitive bidding to the private parties that submitted proposals.

(5) Where a contracting authority determines that the market project should be procured competitively because of interest or the existence of equally competent altern ative to technologies that could deliver higher value for money to the Government, the contracting authority may elect this subject the proj ect to open competitive tender under A ct: Provided that the contracting authority may determine whether or not to reimburse the costs incurred by the private party if (a) the project is awarded to any other bidder; (b) the proj ect achieves financial close; (c) the development costs do not exceed zero-point- five per cent of the estimated project cost; and (d) the development costs are borne by the successful bidder.

an (6) Where the contracting authority determines that a clear open tender is in the public interest, it shall establish and realistic timeline for the preparation of tender documentation and the administration of the bidding process.

(7) Subject to subsection (4), the contracting authority a shall ensure equal bidding conditions when designing procurement strategy under this section.

Restricted Bidding Restricted 45.

(1) A contracting authority may use restricted bidding.

bidding if any of the following conditions are satisfied- (a) competition for contract, because of the complex or specialized nature of the works and services is restricted to prequalified tenderers; (b) the time and cost required to examine and evaluate al arge number of tenders would be 301 2021 Public Private Partnerships No.

14 disproportionate to the value of the works or services to be procured; (c) if there is evidence to the effect that there are only a few known suppliers of the whole market of the works or services; (d) an advertisement is placed, where applicable, on the procuring entity website regarding the intention to procure through limited tender.

(2) A contracting authority may engage in m ann er procurement by means of restricted bidding in such as may be prescribed.

Competitive Bidding Requests fo r 46.

(1) A contracting authority shall, on the approval qualifi cation, of a feasibility report, invite requests for qualifications from qualified bidders with respect to the proposed proj ect.

(2) The Directorate shall prescribe the standards and specify the practice notes on procurement and tender administration regarding the requests for qualification.

(3) A contracting authority shall, in the request under a bidder and subsection (1), specify the eligibility criteria of may require each bidder to provide statements or documents to prove the bidders eligibility.

(4) A contracting authority shall consult the Directorate during the procurement cycle.

(5) Any person who responds to a request for A ct qualifi cation shall comply with the provisions of this and the instructions to bidders contained in the tender documents.

(6) Where the Directorate determines that this section the should not apply to a public private partnership project, and the Directorate shall notify the contracting authority project may proceed to the bidding stage.

(7) The Directorate shall issue guidelines regarding the making of a determination under subsection (6).

of 47.

(1) A private party intending to respond to a Qualifi cation private parties.

request for qualifi cation under section 46 may do so as part of a consortium of private parties.

302 No.

14 2021 Public Private Partnerships (2) A private party or consortium is eligible to or respond to a request for qualification if the party consortium f or (a) satisfies the criteria specifi ed in the request qualifi cation issued by the contracting authority; (b) has the technical and fi nancial capacity to undertake the proposed project; (c) has the legal capacity to enter into a project agreement with the contracting authority; in (d) is not insolvent, in receivership, bankrupt or the process of being wound up; and (e) is not for any reason precluded by the contracting authority from entering into a project agreement with the contracting authority.

a Prequalification 48.

(1) The contracting authority shall, upon issuing notice under section 44, constitute a prequalifi cation committee for the purpose of pre-qualifying bidders.

(2) The contracting authority may, where it considers as the it appropriate, constitute the project appraisal team prequalifi cation committee for purpose of prequalifying bidders under subsection (1).

Disqualifi cation 49.

(1) The prequalifi cation committee constituted of Pri vate parties, under section 48 shall review the requests for qualifi cation a submitted to the contraeting authority and prepare shortlist of qualified bidders.

(2) A bidder shall be disqualified at the prequalification stage if that bidder (a) submits false, inaccurate or incomplete information; (b) colludes, connives or is involved in any corrupt or dishonest practice intended to confer an unfair advantage over other bidders in the award of the tender; (c) fails to meet any of the eligibility criteria specifi ed in the request for qualification; or (d) contravenes the provisions of this Act or any other written law in order to have an unfair advantage over other bidders in the award of the tender.

303 2021 No.

14 Public Pri vate Partnerships (3) A disqualified bidder may object to its petition disqualification under subsection (2) by lodging a within in the prescribed form with the Petition Committee fourteen days of being notified of the disqualification.

(4) The Petition Committee shall hear and determine days an objection under subsection (3) within twenty-eight of the petition being lodged.

i nvitations to 50.

(1) A contracting authority shall, in consultation li st of with the Directorate, aft er the preparation of a short prequalified bidders, prepare tender documents in relation eligible to a project for the purpose of inviting bids from bidders.

(2) The tender documents prepared under subsection (1) shall include the following infonnation (a) general information related to the proj ect necessary for the preparation and submission of bids; (b) specifications of the proj ect including the technical and financial conditions that should be met by bidders; (c) specifications of the fi nal product, level of services, performance indicators and such other requirements as may be necessary including the safety, security and environment preservation requirements to be met by bidders; (d) basic terms of the project agreement including non-negotiable conditions; (e) the criteria and method to be used in evaluating bids; (f) forms and documents that are required to be fi lled and submitted by bidders; (g) the value of the bid security required to be submitted by bidders; (h) the conditions, procedures and administration of bid clarifications; (i) the date, time and place for the submission of tender documents by bidder; (j) instructions regarding pre-bid conferences, where necessary ; 304 No.

14 20; Public Private Partnerships 1on (k) the conditions to be met by any consortiums permissible changes to a consortium arrangement; (1) the procedure to be followed in a competitive dialogue process; and (m) any other matter that may be necessary for the proper conduct of the tender stage of the project.

Submission of 51.

(1) A bidder intending to bid for a project under bids.

this Act shall complete and submit a technical and fi nancial bid.

(2) The bidder shall submit the technical and fi nancial bid in separate sealed envelopes in the manner prescribed by the contracting authority.

Competitive 52.

(1) A contracting authority may, with the approval each of the Directorate, hold a competitive dialogue with technical shortlisted bidder for the purpose of defi ning the or fi nancial aspects of the proj ect.

(2) The contracting authority may require each bidder as to submit a technical and fi nancial non-binding proposal part of the competitive dialogue with the authority.

(3) The competitive dialogue shall be held with each bidder on the basis of equality and transparency.

(4) The discussions held during a competitive dialogue shall not be disclosed to any person by any party to the discussions.

(5) At the end of the competitive dialogue stage, the contracting authority may or (a) alter the project specifi cations, risk matrix structure; and (b) reopen prequalifi cation for the project.

(6) Where the contracting authority reopens prequalifi cation, it shall invite each bidder that participated offer in the competitive dialo^ e to submit a best and fi nal which shall form the basis for the evaluation of the bids and award of the tender.

Bids by 53.

(1) A consortium constituted for the purpose of consortiums.

in the bidding for a project under this Act may submit a bid name of the consortium.

305 2021 Public Private Partnerships No.

14 (2) A bid by a consortium shall be accompanied by a notarised binding agreement executed by the consortiums members.

(3) A consortium shall^ (a) appoint a person fr om among its members to be in the lead consortium member to represent the consortium basis of its dealings with the contracting authority on the capacity that persons technical, financial and experiential to undertake the proj ect; and (b) submit a notice of the appointment of the lead consortium member to the contracting authority.

(4) A member of a consortium shall not, with respect whether to a bid by the consortium, submit a separate bid, or directly or indirectly, or through another consortium, owns through a company which submits a bid if that person i ts a majority of the companys shares or has control over management.

the (5) The contracting authority shall disqualify from bidding process any consortium that submits a bid in contravention of the provisions of this section.

(6) The contracting authority may, where a member of a consortium w ithdraw s fr om the consortium (a) disqualify that consortium fr om participating in the bidding process; or (b) review the terms of a proj ect agreement entered into w ith the consortium.

(7) The contracting authority shall disqualify a consortium from the bidding process if the consortium dismisses its l ead consortium member or the l ead consortium member withdraws from the consortium.

(8) Subsection (7) shall not apply where the consortium replaces the lead consortium member with another person in a manner that ensures that the consort ium remains eligible to part icipate in the bid.

(9) Each member of a consort ium which submits a bid shall be- (a) bound j ointly and severally by the terms of the project agreement; and 306 No.

14 2021 Public Private Partnerships (b) j ointly responsible for the performance of the obligations under the agreement.

(10) The Cabinet Secretary may, in consultation with the Directorate, make Regulations for the better implementation of this section.

Proposal 54.

(1) A contracting authority shall, in consultation evaluation teams.

t eam with the Directorate, constitute a proposal evaluation this A ct.

for the purpose of evaluating bids submitted under (2) The proposal evaluation team shall (a) open and evaluate bids in accordance with the procedure specified in the tender documents and any guidelines issued by the Directorate for that purpose; and (b) evaluate the bids by taking into account the evaluation and award criteria prescribed in the tender documents.

the Evaluation of 55.

(1) The proposal evaluation team shall evaluate bids and in technical and financial bids within twenty-eight days evaluation accordance with the procedure specified in the tender report s.

and documents and guidelines prescribed by the Directorate prepare an evaluation report specifying (a) the evaluation criteria; (b) the manner in which the first-ranked bidder has satisfied the requirements specified in the tender documents in comparison with the other bidders; (c) such other information as the contracting authority shall consider necessary; and (d) the first-ranked and reserve bidder.

(2) The proposal evaluation team shall submit the evaluation report together with its recommendations thereon to the accounting officer of the contracting authority for approval.

the (3) If the accounting officer is not satisfied with recommendations of the evaluation committee, the to the accounting offi cer may return the evaluation report proposal evaluation team with recommendations for the review of the report.

307 2021 No.

14 Public Private Partnerships (4) The contracting authority shall submit than an within evaluation report to the Directorate for no obj ection seven days of conclusion of the evaluation.

56.

(1) A proposal evaluation team shall rej ect a Non-compliance with bybidders, bidders submission where the bidder fails to comply the conditions specifi ed in the tender documents or Regulations made under this Act.

(2) A proposal evaluation team may reject all submissions where the bidders fail to comply with the conditions specifi ed in the tender documents or the Regulations made under this Act.

(3) Where a proposal evaluation team rejects at eam submission under this section, the proposal evaluation out shall submit to the accounting offi cer a report setting the reasons for the rej ection.

of (4) The accounting offi cer shall inform the bidder the bid the decision of the contracting authority to rej ect within fourteen days of receiving the report under subsection (3).

(5) A bidder whose bid has been rej ected under this section shall not be entitled to compensation.

(6) Where all bids have been rej ected under this shall section in a given tender process, the tender process be deemed to have terminated on account of failure by bidders to comply with tender requirements, and the contracting authority shall, in consultation with the Directorate, determine whether to start the tender process afresh.

Negotiations, 57.

(1) A contracting authority shall, in consultation with the Directorate, constitute a negotiating conunittee which shall (a) enter i nto negotiations with the fi rst-ranked bidder in accordance with sections 38, 40 .45 or 46; (b) for negotiations resulting from section 46, request the second-ranked bidder or any number of bidders as the tender documents may have indicated to extend the validity of its or their bids pending the completion of negotiations with the fi rst-ranked bidder; 308 No.

14 2021 Public Private Partnerships (c) appoint a negotiation committee which shall be led by the Directorate: Provided that the contracting authority may, with the permission of the Directorate, be responsible for leading the the negotiations with respect to specific parts of process.

(2) The negotiations between the negotiating committee and the fi rst-ranked bidder may, among other elements (a) cover the technical, commercial, legal, social, environmental, local content and fi nancial terms of the project agreement; and (b) be subject to any limitations that may be expressly set out in the tender documents or in the approvals issued under section 44.

(3) The negotiations and resolutions by the negotiating parties shall not (a) alter the criteria on which tender was awarded; (b) affect the non-negotiable terms and conditions specifi ed in the invitation to tender (c) alter the fi nancial structure of the project; (d) affect the conditions applying to a privately- initiated proposal; and (e) affect the conditions in respect of which there were no reservations raised by the bidder in the bid or proposal.

(4) Despite subsection (3), adjusting bid prices to account for changes in the foreign exchange rate or changes due to inflation shall not be deemed to be price-increasing adj ustments: Provided that the tender documents shall expressly due provide that a change in the exchange rate or a change to inflation shall not be deemed to be a price-increase adj ustment.

(5) The negotiating parties shall not amend the negotiated terms and terms upon which the bid has been evaluated.

(6) Where the negotiations between the negotiating the committee and the fi rst-ranked bidder are unsuccessful, 309 2021 Public Private Partnerships No.

14 with the negotiating committee shall enter into negotiations second-ranked bidder.

(7) The provisions of subsections (2), (3), (4) and (5) shall apply to the negotiations with the second-ranked bidder.

(8) The negotiating committee shall conduct the negotiations in accordance with the guidelines prescribed of by the Directorate, including guidelines on the duration the negotiations between the committee and the bidder.

and ri sk 58.

(1) The negotiating committee shall, upon Project assessm ent the concluding negotiations under section 57, submit to report s.

assessm ent contracting authority a project and financial risk report which shall specify the negotiated terms, the the contingent liability in respect of the project and committees recommendations.

the (2) If the contracting authority is satisfied with recommendations of the negotiating committee, it shall to submit the project and fi nancial risk assessment report the Directorate for approval.

(3) If the Directorate is not satisfi ed with the recommendations of the negotiating committee, it shall the notify the contracting authority in writing and specify reasons thereof (4) Where the contracting authority has been notifi ed fi nancial under subsection (3), it shall refer the project and risk assessment report back to the negotiating committee together with the Directorates notification under the subsection (3) and request the committee to review report.

(5) Subsections (1), and (2) shall apply, with the under necessary modifications, to the review of the report subsection (4).

Approval of 59.

(1) The Directorate shall submit the project and Proj ect and financial risk assessment report and its recommendations thereon to the Committee for approval.

as"sessmlnr*^ by the (2) The Committees shall consider the report reports submitted to it under subsection (1) and if satisfied, the approve the execution of a project agreement between contracting authority and the successful bidder within twenty-eight days after receiving the report under subsection (1).

3 10 2021 No.

14 Public Private Partnerships Approval of 60.

(1) The Committ ee shall notify the eontraeting and authority in writing of the approval of the projeet of the financial risk assessment report within thirty days approval.

(2) On the notification under subsection (1), the the contracting authority shall prepare a final draft of and project agreement between the contracting authority the bidder and submit it to the Att orney-General for f or clearance and if cleared, present it to the bidder execution.

(3) The contracting authority shall notify in writing (a) all the bidders who participated in the tender process of the decision of the Committ ee; and (b) the Cabinet of the Committees approval to enter into a proj ect agreement with the successful bidder.

of 61.

(1) On the approval under section 60, the Execution proj ect contracting authority shall execute the project agreement agreements.

with the successful bidder.

(2) A private party that executes a contract under subsection (1) shall commence the project within twelve months from the date of execution of the contract.

(3) If the private party fails to commence the proj ect authority in accordance with subsection (2), the contracting att ached to shall terminate the contract and no liability shall the contracting authority or the Govern ment.

Cancellation of 62.

(1) A contracting authority may cancel a tender t enders.

process at any time before the execution of the project agreement if it is in the public interest to do so.

(2) Despite subsection (1), a contracting authority shall not cancel a tender unless the Committee and Att orney-General approve the cancellation.

(3) A cancellation under subsection (1) shall be by the notice in writing issued to the bidders and shall specify reasons for the cancellation.

(4) The bidders in a cancelled tender shall not be by the entitled to compensation for any losses occasioned cancellation.

(5) For purposes of this section, public interest is impaired where the following circumstances exist 311 2021 No.

14 Public Private Partnerships (a) the proj ect has been overtaken by operation of law or rendered obsolete as a consequence of substantial technological change or by reason of af orce maj eiire event; (b) there is evidence that the bids are significantly above market prices; (c) material governance i ssues have been demonstrably detected; (d) all evaluated tenders are non-responsive; has (e) civil commotion, hostilities or armed conflict arisen that renders the implementation of the project impractical; or (f) evidence of commission of an offence under the Anti-Corruption and Economic Crimes Act, 2003 or the Proceeds of Crime and Anti-Money No.

3 of 2003.

Laundering Act, 2009.

No.

9 of 2009.

to be 63.

The Cabinet Secretary responsible f or a Agreements ratifi ed by contracting authority that enters into a project agreement Parliament.

with a private party under this Act in respect of the proj ect to exploitation of natural resources shall submit the 71 of Parliament for approval in accordance with Article tothe the Constitution and the relevant written law relating exploitation, conservation or management of the natural resource.

PART VI PUBLIC PRIVATE PARTNERSHIPS BY COUNTY GOVERNM ENTS Proj ect 64.

(1) A county government may enter into a public agreements by to private partnership agreement with a private party county undertake a public private partnership proj ect in accordance govern ments.

w ith th is Part.

(2) A county govenunent that enters into a public shall be private partnership agreement with a private party responsible for the administration of the overall project development cycle.

(3) A county government intending to undertake a proj ect public private partnership project shall subject the section 32.

to a detailed feasibility study in accordance with (4) A county government intending to undertake athe public private partnership proj ect shall liaise with Directorate during each phase of the proj ect.

3 12 2021 Public Private Partnerships No.

14 (5) A county government intending to undertake a written public private partnership project shall obtain the and approval to undertake the project from the Committee to Cabinet Secretary responsible for matters relating (3) fi nance where the feasibility study under subsection shows that the proj ect (a) shall require a government support measure; or (b) exceeds the fi scal ability of the county government to implement the project.

(6) Each county government shall submit to the subseetion Directorate all feasibility studies prepared under (3).

by 65.

(1) Subjeet to section 64 (5), each county Approval government intending to undertake a public private partnership project shall obtain the approval of the respective county assembly before undertaking the projeet.

(2) Where a public private partnership projeet by a county government requires a govern ment support the measure, the county government shall not undertake projeet or enter into a proj ect agreement before obtaining the written approval of the Cabinet Secretary.

project 66.

(1) A eounty govern ment or eounty corporation County li st s.

that i ntends to implement public private partnership projects to projeets under this Act, shall submit a list of the li st of the Direetorate for inclusion in the published national projects under section 26.

(2) A county government or eounty corporation shall of the not submit a proj ect list unless the proj ects are part County Integrated Development Plan.

v to apply, 67.

The provisions of Part V shall apply, with the necessary modifi cations, to public private partnership proj ects by county govern ments.

PART VIIPROJECT COMPANIES, DISCL OSURES AND PROJECT AGREEM ENTS Pro j ect 68.

(1) On the execution of a proj ect agreement, the companies.

a eontracting authority and successful bidder shall establish projeet company in accordance with the Companies Aet, No.

17 of 2015.

2015 for the purpose of undertaking the project.

3 13 2021 Public Private Partnerships No.

14 (2) A proj ect company established under subsection (1> (a) may include a public entity as a minority shareholder in the company; and (b) shall provide such performance security and fulfil such conditions as may be specified in the project agreement and prescribed by the Cabinet Secretary in accordance with Regulations made under this A ct.

(3) The directors of a project company shall not wind the share up the company, alter the legal structure or reduce of the capital of the company without the written approval contracting authority, which approval shall not be unreasonably witliheld.

(4) A majority shareholder of a proj ect company shall or not transfer any shares held in the project company permit the dilution of its majority stake in the project company to a point where the shareholder loses such majority standing before the issuance by the contracting authority of a certificate confirming the contracting authoritys acceptance of the quality of the project undertaken in accordance with the project agreement.

(5) Notwithstanding subsection (4), any party to a project agreement may, with the approval of the Cabinet Secretaiy, restructure the project companys shareholding of a as may be necessary to secure the equity component transaction: Provided that the restructuring of the proj ect companys shareholding shall not (a) alter the overall split between debt and equity approved under the project agreement; and of (b) dilute the majority position of the lead member a consortium within the shareholding structures of the proj ect company.

(6) Notwithstanding the provisions of the Companies the Act, 2015, where the transfer of shares results in transfer of control of a project company to a third party, the transfer shall not be valid unless the shareholder has the applied for, and obtained, the written approval of contracting authority.

3 14 2021 Public Private Partnerships No.

14 (7) A project company shall not pledge its shares except for the purpose of financing the project.

(8) In granting approvals under this section, the Cabinet Secretary shall, on the recommendation of the Committee, do so, but may also decline to issue an that approval if there are reasonable grounds to determine the the requested shareholding alterations would impair assurance of delivery of the public facility or service.

(9) The Cabinet Secretary shall, in consultation with the Directorate, make Regulations for the better implementation of this section.

Publishing 69.

(1) A contracting authority shall, on the execution of a proj ect agreement, publish in at least two newspapers of national circulation and electronic media the results of project the tender and the following information agreements, (a) the nature of the project and key terms of the proj ect agreement; (b) the works to be developed or public services to be performed under the project; (c) the successful bidder; (d) the amount of any public funds committed to the project; (e) the project tariff, if applicable; (f)any government support measures provided to the proj ect; (g) the social and economic benefits of the project; (h) the duration of the proj ect; (i) the expected asset quality when the project is handed back to the contracting authority; and (j) the manner in which the project will be monitored and reported on during the duration of the project.

(2) The Directorate may prescribe the manner in which the contracting authority shall publish the information specified in subsection (1).

(3) The Cabinet Seeretary shall, in consultation with the Directorate, make Regulations for the better implementation of this section.

315 2021 Public Private Partnerships No.

14 Minimum 70.

(1) The parties to a project agreement under this Act shall specify the minimum obligations to be met by the obligations of parties as set out in the Third Schedule.

proj ect (2) Notwithstanding subsection (1), every project agreement, agreement shall make provision for the revenue sharing the mechanisms and thresholds between a private party and Government, where a projects revenue performance meets and exceeds the target return on investment negotiated under a project agreement.

(3) The Cabinet Secretary may make Regulations be specifying the manner in which project agreements shall drawn.

Applicable law.

71.

(1) Proj ect agreements under this Act shall be subject to the provisions of the Laws of Kenya and any be provision in a project agreement to the contrary shall void.

(2) The parties to a project agreement may agree to resolve any disputes arising under the project agreement of through arbitration or any other non-judicial means dispute resolution as may be provided for in the project agreement in accordance with paragraph 18 of the Third Schedule.

Amendment and 72.

(1) A party to a project agreement intending to variation of make any amendment or variation to the agreement in proj ect the relation to the terms and conditions specified therein, agreements.

outputs of a project or any waivers specified in the agreement, may enter into negotiations with the other party on the proposed amendment, variation or waiver: Provided that the amendment, variation or waiver shall and not take effect unless it is approved by the Committee Attorney-General.

(2) An amendment, variation or waiver to a project agreement under subsection (1) shall not be approved amended unless it is demonstrated that the agreement, if so or varied or provision waived, shall ensure (i) the proj ect shall continue to provide value for money; (ii) the proj ect shall continue to be affordable asV ) verified by the Directorate, where such amendment, variation or waiver has fi nancial implications; 316 2021 Public Private Partnerships No.

14 the (iii) the continued transfer of appropriate risks to private party; (iv) the continued provision of effi cient and effective public services; and (v) the continued protection and preservation of the environment.

(3) Any approval under subsection (2) shall be in writing.

project Project 73.

(1) A contracting authority that is party to a with management, agreement shall, together with sector regulators, and a the guidance of the Directorate, establish and implement contract management framework for the project agreement for the purpose of (a) monitoring the implementation of the project agreement; (b) measuring the output of the project; (c) liaising with the other party to the agreement, users of the facility or service and other relevant stakeholders; (d) overseeing the management of the proj ect agreement; (e) preparing bi-annual reports on proj ect implementation; (f) submitting reports on project implementation to the Directorate; (g) implementing the recommendations and guidelines relevant hereto issued under the Act; (h) submitting of such i nformation as may be required by the Directorate with respect to proj ect oversight; and (i) submitting of such infonnation as may be required by the Public Debt Management Offi ce with respect to contingent liability management.

the (2) The project parties shall, in co-ordination with the Directorate, appoint an independent expert to manage terms implementation of the project agreement under such as.

the Directorate shall prescribe.

317 2021 Public Private Partnerships No.

14 (3) The cost of hiri ng an independent expert under to be borne subsection (2) shall form part of the project cost by the private party.

(4) A project agreement involving the performance of party shall a function of a contracting authori ty by a pri vate f or not divest the contracting authmity of the responsibility ensuri ng that the function is.

effectively and efficiently performed.

(5) A project agreement involving the use of a not contracting authori ty s assets by ^ private party shall of divest the contracting authori ty of the responsibility which ensuri ng that the assets are protected against factors may negatively affect die assets including forfeiture, theft , loss and wastage, (6) The Directorate shall monitor and provide necessary ^ idance to contractihg authori ties on the implementation of each project under this-Act.

(7) Where the Directorate determines in accordance with this section and.

section 71 that there has ari sen an the imbalance in the distri bution of benefits, and for puipose of imDmoting the sustained transfer of project- the linked economic benefi ts to the citizens of Kenya, Directorate shall, in consultation with contracting authori ty , initiate the amendment or variation of the prqject agreement in accordance with section 71.

(8) Sector regulatory authori ties sh^ monitor the parties performance of conft acting authori ties and private in the implemwitation of projects under this Act in accordance with the Regulations prescri bed by the Cabinet Secretwy under this Act.

of Secondment of 74.

(1) A contracting authori ty may, on the request the project company, second to the company such ]iunft >er the of employees as may be necessary for the purposes of authori ty.

undertaking a project under this Act.

(2) An employee seconded to the project conqiany be an shall, d^ ng die peri od of secondment, be deemed to the employee of the company and shall be subject only to direction and control ^ the comp^iy.

(3) An employee of the ccmft actmg authori ty the seconded to the project company shall be seconded on 318 No.

14 2021 Public Private Partnerships of same or improved terms of service during th^ period secondment.

Petition 75.

(1) There is established a committee to be known committee, as the Petition Committee which shall hear and determine petitions regarding any decision by the Committee, Directorate or a contracting authority under thi^ Acf.

(2) The Petition Committee shall consist of the following persons appointed by the Cabinet Secretary (a) the chairperson, who shall be a person qualified to be appointed as a judge of the High Court; (b) four other persons with such relevant knowledge and experience as the Cabinet Secretary shall consider appropriate; and (c) two persrms, not being a momb^ of county executive committees, and possessing such relevant knowledge md experience aa the Cabinet Secretary shall consider apftt ^ niate, nominated by the Council of County Cfovemors.

(3) The members of die Petition Committee shali hold f or re office for a term of three years and may be eligible appointment for one further term.

(4) A person who is aggri eved by a ded sion of die Directorate,Committee ora conttacting authori ty regarding a tender process or project agreement may lodge a petition to review die decision with die Petition Comnnttee in the prescri bed form and zQet paymg the prescri bed fee (5) A petition under this section shad be made within seven days fr om the date of die decision of the Directorate, Committee or a contracting authori ty.

(6) The Petition Committee ahall hear and determine the the petitimi within twenty -eight days fr om the date petition was lodged.

(7) A person aggrieved by the decision of die Cmnmittee may, within seven days of die decision, make an ai^hcation for review ta the Committee in the prescri bed form.

(8) A person aggri eved by the decision of the Petition Committee may appeal to die High Court witlnn ft miteen days fr om d&e date of the Committees decision.

319 No.

14 Public Pri vate Part nerships 2021 (9) The Cabinet Secretary may, by Regulations, a provi^ for the procedure for hearing and determming petition and the applicable fees undea* this secti on, Swietary 7(L (l >The Cabinet Secretaiy shall designates public offi cer to serve as the Secretary to the Committee, be <2> A person designated under subsecti mt il) shaft seva a an Advoetrte of the High Court of Kle^ of at least Remuneration.

77, The menders of the Committ eeshall be paid such in salaries and allowances as the Ctibinet Seaetmy shall, consultation with the Salaries and Remuneration Committee, determine.

Confl ict of 78.

A member of thO Committ ee who has a direct or i nterest shall indirect interest in a matter before the Committ ee declare the interest and shall not participate in any proceedings of the Committee on the matter.

Offences.

79.

(1> A person shall not (a) without reasonable cause or lawfi il excuse, obstruct or hinder, assault m* ti ireaten a member of the Committ ee acting under ti iis Act; (b) without justification, fail to provide inRirmation required by the Committee under this Act; (e) without justification, fail to provide information within reasonable time that is required by the Committee under this Act; (d) submit false or misleading informati on to the Committee; (e) miwepresent to or knowingly mislead a member of the Committee acting under this Act; or (f) interfere with or exert undue infl uence on any member of the Committ ee.

{2} A person who contt avenes subsection (1) commits Offence and is liable^ on conviction, to a fi ne not an exceeding fi ve hundred thousand shiHings or to both.

imprisonmmu fora term not exceeding one year, or to Decree, 80.

The Committee ^ all issue a decree sett ing out its be decision in a particular matt er and the decree shall enforceable'm the same manner as a xiecreeof the Court.

320 No.

14 Public Private Partnerships 2021 PART VIIIFINANCIAL PROVISIONS Private 8Ir^l) There is established the Public Private Public Partnerehip Project Facilitation Fund which shall be ^ Partnership Project financing mechanism for purposes of this Act.

Facilitation Fund.

(2) The source of the Fund shall include (a) grants, gift s, donations or other endowments accruing to the Fund; (b) such levies or tariffs as may be imposed on a project; (c) success fees paid by a project company under this Act; (d) appropriations-in-aid; (e) money which may vest in or accrue to the Fund under this Act or any other written law; and (f) money fr om any other source as may be approved by the Cabinet Secretary.

(3) The moneys received into the Fund shall be applied to (a) support contracting authorities in the preparation phase of a project, the tendering process and project appraisal under this Act; (b) support the activities of the Directorate and Committee under this Act; and (c) extend viability gap finance to projects that are desirable but cannot be implemented in the absence of financial support fr om the Government.

(4> The management of the Fund shall be in accordance with Regulations made by the Cabinet Secretary in accordance with the Public Finance Managemait Act, 2012.

No.

18 of 2012.

a Financial 82.

(I) The project company or the private party to of reposing, audit project agreement shall keep and maintain proper books accounts and records in relation to the project.

JJrfjS L (2) The books of account kept and maintained under f or subsection (1) shall, cwi reasonable notice, be open scrutiny by the contracting authority or the Directorate.

321 2021 Public Private Partnerships No.

14 a (3) The Auditor General shall audit the accounts of f or a project company, where there is counterpart fundmg project including public funds.

(4) Where all the monies for a project are provided by shall a private party, the accounts of the project company in be audited annually by a reputable audit firm, appointed consultation with the National Treasury.

(5) The project company or the private party to a project agreement shall submit the audited fi nancial be accounts and any other infonnation as may reasonably within required by the contracting authori ty or Directorate six months aft - the end of each fi nancial year.

(6) The project company shall prepare and submit to the project performance reports and monitoring reports as contracting authority and Directorate within such peri ods may be specifi ed in the project agreement and in any case, at least once in each calendar year.

PART IXMISCELLANEOUS PROVISIONS the Locaicontent.

S3.

(1) The parties to a project agreement shall, in performance of project-related activities (a) give pri ori ty to services provided in Kenya; (b) give pri ority to supplies manufactured in Kenya Where the supplies meet the specifi cations applicable to the related industry; (c) ensure mechanisms for technology transfer locally; (d) optimise opportunities for trade concessions for Kenyan goods and services outside Kenya; (e) promote structured corporate social responsibility programmes; and (f) comply with local content requirements provided under any other wri tten law and policy for the time being in fofee or applicable in Kenya.

(2) The Committee, on the advice of the Directorate, notes on shall issue sUch guidelines, standards and practice t he local content as shall be deemed necessary based on pri ori ty requirements of the Kenyan econmny.

Offences and 84.

(1) A person commits an offence if that person penalties 322 2021 No.

r4 Public Private Partnerships or (a) obstructs or hinders a person carrying out a duty hmction or exercising a power under this Act; 03} knowingly lies to or misleads a person carrying out a 4uty or function or exercising a power under i his Act; (c) delays without justifiable cause the (i) opening or evaluation of tenders beyond the prescribed period; (ii) awarding of a contract beyond the prescribed period; or (iii) payment of contractors beyond the period specified in the project agreement and performance obligations; <d) unduly influences or exerts pressure on any memte r of an evaluation committee, or employee or agent of die Directorate or contracting authority, or the accounting officer to take a particular action which favours or tends to favour a particular party; (e) divulges confidential information relating to any confidential processes under this Act; if) inappropriately influences tender evaluations; (g) commits an act that is expressly prohibited under the terms of a tender document; (h) signs a project agreement or otherwise a tender in contravention of this Act or Regulations made under it; (i) wilfuHy violates any provision of this Act; or (j) commits a fra udulent act.

(2) A person who is convicted of an offence under this sectiim shall be liable upon conviction if die person is a natura l person, to a fine not exceeding two million shillings or in^ ris(mment for a term not exceeding five years, or to bodi; (b) if tho person is a body corpora te, to a fine not excee^ g ten nullion saltings.

<3) In addidon to ^ penalty pres(mbed by subsection (2)- 323 2021 No.

14 Public Private Partnerships (a) a State officer or pubKc officer who is convicted of an of fence under this seqticm shall be liable to disciplinary action; (b) any other person who is not a State officer or public offi cer who is cwivicted of an offence under diis secti tm shall be barred f rom participating in any public pri vate partnership project under diis Act; and (c> a body coiporate shall be debarred by the Government and bmred fr om participating in any public pri vate psartner^ p project under this Act.

<4) If a person or ah employee or agent of a person participating in a tender jwocess under this Act contravenes the provisions of this Act <a> that person, employee or agent shall be disqualified fr rnn enteri ng into any project agreement for the project; or ](b> if the proj ect agreement lias already been entered into with diat person, the cmitract shall be voidable at the option of the Directorate.

(5) The Directorate may lodge a complaint widi the relevant professional body fbf the commencement of disc^ inary proceedings against a perscm who is a member of of a ^ ofessional body who contravenes the provisions t hi sA ct.

<6) The penalties imposed by a professional body shall pursuant to a complaint lodged und^ subsection (3) ^ ly m addition to any penalties that may be inqiosed im^ r this Act.

of <1> A State offi cer or public offi cer shad not.

Participation State officers or under this (fi rectly or indirectiy, participate in aiQf tender public officers in Act tenders under t his Act.

public <2> This section shall apply to a State offi cer of offi cer who uses the of fi cers spouse, child, or business or associate or a company that officer holds shares in, under odierwise confr ds or directs to {mrticipate in a tend^ this Act.

(3) A State offi ce or pubfi c of fi cer who contravenes shall die provisMMi of this section comnnte mi offence and miltiml be liable, on conviction, to a fine n^ exceedij^ two 324 No.

14 Public Private Partnerships 2021 five shillings or to imprisonment for a term not exceeding years, or to both.

of 86.

A private party shall, on the reqluest of a inspection or Public private contracting authority or Directorate, grant td an agent employee of the contracting authority or Directorate, access S fses as to the project premises, site and storage facilities as well in records for the purpose of conducting an inspection accordance with ft e terms of a project agreement.

of 87.

The Offences set out under f art V and the Application Part V and Part out compensation and recovery of improper benefi ts set VI of No.

3 of under Part VI of the Anti-Corruption and Economic Crimes 2003.

Act, 2003, shall apply to this Act with the necessary, modifi cations.

88.

(1) The Directorate shall, not more tihan three Annual report, and months aft er the 30th of June in eaph yeax, prepare submit to the Committee a report on the state of public private partnerships in Kenya.

(2) Notwithstanding the generality nf sidisection (1), the annual report shall detail fi le following (a) the state of public private partnerships in Kenya; (b) the number, tj^es and value of public pnvate partnerships being implemented in Kenya; (c) the contracting authorities implementi ng public private partnerships in Kenya; <d> the Government support measures that have been given by contracting authmities and to whom; (e) the private parties that have been debarred or blacklisted under the Act; (f) the nuiri ber, types and values of public private partnerships^ tenders that have been cancelled; (g) the value of eontingent liabilities, if any.

approved for any public private partnership; (h) the fi nancial reports of projects which have been comjfi eted and are being operated by a private pai1y;and (i) any other information that may be relevant.

(3) The Cabinet Secretary shall submit a copy of the annual report to Pm-liament.

325 2021 No.

14 Public Private Partnerships Regulations, 89.

(1) The Cabinet Secretary may make Regulations of this generally for the better carrying out of the provisions A ct.

(2) The Regulations made under subsection (1) shall include regulations on (a) the execution of the Committees or Directorates flinctions under this A ct; and (b) the financing, construction, operation, equipping and maintenance of infr astructure or development projects under this Act.

(3) For the purpose of Article 94(6) of the Constitution- (a) the purpose and objective of the delegation under this section is to enable the Cabinet Secretaiy to make rules to provide for the better carrying into effect the provisions of this Act; (b) the authority of the Cabinet Secretary to make regulations under this Act shall be limited to bringing into effect the provisions of this Act and fulfilment of the obj ectives specified under this section; Cap.

2.

(c) the principles and standards applicable to the rules made under this section are those set out in No.

23 of 2013.

the Interpretation and General Provisions Act and the Statutoiy Instruments Act, 2013.

PART X SAVINGS AND TRANSITIONAL PROVISIONS 90.

Int his Part, unless the context othei-wise interpretation.

r equires (a) repealed Act means the Public Private Partnerships Act, 2013, repealed under section No.

15 of 20 13.

93; (b) former Committee means the Public Private Partnership Committee existing immediately before the commencement of this Act; (c) former Petition Committee means the Petition Committee existing immediately before the commencement of this Act; and 326 No.

14 2021 Public Private Partnerships (d) former Unit means the Public Private Partnership Unit existing immediately before the commencement of this A ct.

and 91.

(1) A person who, immediately before the Members commencement of this Act was a member of the former be Committee shall, upon the commencement of this Act, deemed to have been appointed, as a member of the Committee, under this Act for the remainder of that persons term.

(2) A person who, immediately before the commencement of this Act was a member of the fomier this Petition Committee shall, upon the commencement of the Act, be deemed to have been appointed as a member of Petition Committee under this Act for the remainder of that persons term.

(3) Every person who, immediately before the commencement of this Act, was a public officer of the be former Unit shall, on the commencement of this Act, deemed to be an officer of the Directorate under the same terms of contract that applied immediately before the commencement of this A ct.

92.

(1) Any Regulations, standards, guidelines.

Savings, procedures or approvals relating to public private partnership projects made or issued by the former Committee or f ora ier Directorate before t he commencement of this Act shall be deemed to have been made or issued under this Act insofar as the Regulations, not standards, guidelines, procedures or approvals are inconsistent with this A ct.

(2) Any petition that had been lodged with the former Petition Committee that had not been heard or determined at the time this Act came into force shall be deemed to have been lodged under this Act and shall be heard and determined as if it had been lodged under this Act.

(3) Any project lists that had been approved by the former Committee or Cabinet before the commencement of this Act shall be deemed to have been approved by the Committee or Cabinet, as the case may be, under this A ct.

(4) Any project agreement that had been entered into by a contracting authority and a private party in accordance 327 2021 No.

14 Public Private Partnerships entered with the repealed Act shall be deemed to have been into under this A ct: of Provided that any petition challenging the validity A ct any proj ect agreement entered into under the repealed shall be heard and determined in accordance w ith the provisions of the repealed Act.

93.

The Public Private Part nerships Act, 2013 is Repeal.

No.

15 of 20 13.

repealed.

328 No.

14 2021 Public Private Partnerships FIRST SCHEDULE [Section 12 (1).] PROVISIONS AS TO THE CONDUCT OF BUSINESS AND AFFAIRS OF THE COMMITTEE 1.

Meetings as the (1) The Committee shall meet at such place in Kenya chairperson may determine and the meetings shall be convened by the chairperson.

(2) The Committee shall have at least four meetings in every fi nancial year and not more than three months shall one elapse between meeting and the next meeting.

(3) Unless three quart ers of the members otherwise agree, at least seven days notice in writing of a meeting shall be given to every member by the Director-General of the Directorate.

at the written (4) The chairperson may, at his or her discretion or Committee and within request made by at least half of the members of the seven days of the request, convene an extraordinary meeting at such time and place that he or she may appoint.

or in his or (5) Meetings shall be presided over by the chairperson her absence by the vice-chairperson.

(6) The members of a Committee shall elect a vice-chairperson from among themselves (a) at the fi rst sitting of the Committee; and the office of the (b) whenever it is necessary to fi ll the vacancy in vice chairperson.

the (7) Where the chairperson or vice-chairperson is absent, to chair the members shall appoint from among themselves, a person meeting of the Committee.

of its (8) The Committee may invite any person to attend any meetings and to part icipate in its deliberations, but such person shall not have a vote in any decision of the Committee.

2.

Conflict of inter est (1) If any person has a personal or fi duciary interest in a proj ect, proposed contract or any matter before the Committee, and is present at a meeting of the Committee at which any matter is the subj ect of after the consideration, that person shall as soon as is practicable and shall not take commencement of the meeting, declare such interest 329 2021 No.

14 Public Private Partnerships on any question part in any consideration or discussion of, or vote touching such matter.

(1) shall be (2) A disclosure of interest made under subparagraph ism ade.

recorded in the minutes of the meeting at which it a conflicts of (3) The Committee shall adopt a code of conduct and affairs of the Comm ittee.

interest policy for the better administration of the 3.

Quorum meeting shall not (1) Subj ect to subparagraph (2), the quorum of the be less than half of the m embers of the Comm ittee.

do not (2) Where the persons present at a meeting of the Committee this A ct or w here constitute the quomm necessary to hold a meeting under the number of by reason of exclusion of a member from a meeting, hold a meeting, the members present falls below the quorum necessary to in question until Committee shall postpone the consideration of the matter there is a quomm.

4.

Voting simple majority A question before the Committee shall be decided by shall, in the case of of the members present and voting and the chairperson an equality of votes, have a casting vote.

5.

R ules of Pr ocedur e and m inutes The Committee shall its business; and (a) determine mles of procedure for the conduct of (b) keep minutes of its proceedings and decisions.

I 330 No.

14 2021 Public Private Partnerships SECOND SCHEDULE [Section 21.] PUBLIC PRIVATE PARTNERSHIP ARRANGEMENTS f or the I.

Management contract where a private party is responsible within well- management and performance of a specified obligation, defined specifications for a specifi ed period of time not exceeding ten and control of all years, and the contracting authority retains ownership facilities and capital assets and properties.

2.

Output performance-based contract where the private paity is of an responsible for the operation, maintenance and management infrastructure facility for a specifi ed period of time not exceeding ten years and the contracting authority retains ownership of the facility and capital assets.

3.

Lease whereby the private party pays the contracting authority or rent or royalties and manages, operates and maintains the facility utilizes the leased property for the purpose of exploration, production and development of minerals and receives fees, charges or benefits from consumers for the provision of the service or sale of products for specifi ed period of time not exceeding thirty years.

i ssues a4.

Brownfi eld Concession where contracting authority contractual licence to the private party to operate, or maintain, rehabilitate upgrade an infrastructure facility and to charge a user fee while paying a concession fee to the contracting authority for a specifi ed period of time not exceeding thirty years.

5.

Build-Own-Operate-Transfer scheme where the private party designs, constructs, fi nances, operates and maintains an infrastructure facility owned by the private party for a specified time period not exceeding thirty years, or such longer period as may be agreed, aft er which the private party transfers the facility to the contracting authority.

6.

Build-Own Operate scheme where the private party designs, fi nances, constructs, operates and maintains the infrastrucUire facility and provides services for a specified period of time.

7.

Build-Operate-and-Transfer scheme where the private part y fi nances, constructs, operates and maintains an infrastructure facility and transfers the facility to the contracting authority at the end of a specifi ed term which shall not exceed thirty years.

8.

Build-Lease-and-Transfer where the contracting authority authorizes the private party to fi nance and construct an infrastructure or development facility and upon its completion lease it to the contracting authority for a specifi ed period not exceeding thirty years and upon the 331 2021 No.

14 Public Pri vate Partnerships transfers from expiry of which the ownership of the facility automatically the private party to the contracting authority.

constm cts an 9.

Build-Transfer-and-Operate where the private party associated w ith the infrastructure facility and assumes the costs and risks construction of the building and upon completion, transfers the ownership of the facility to the contracting authority and continues to operate the a specified period not facility on behalf of the contracting authority for exceeding thirty years.

builds, and 10.

Build Transfer where the private party designs, by the contracting fi nances a public facility in exchange for payments transfer occurs authority over a specifi ed period of time, aft er which period not automatically to the contracting authority for a specifi ed exceeding twenty years.

11.

Develop-Operate-and-Transfer where f avourable conditions private party are external to a proposed infrastructure project by a party the right to integrated into the arrangement by giving that private the investment creates develop adj oining property, and enj oy the benefi ts party transfers the as the parties agree on condition that the private infrastmcture facility to the contracting authority within a period not project and the exceeding thiity years from the commencement of the developed property remain the property of the private party in perpetuity.

party 12.

Rehabilitate-Operate-and-Transfer where the private refurbishes, operates and maintains for a specifi ed period not exceeding 30 years, an existing facility at the expiry of which the private party transfers the facility to the contracting authority.

13.

Rehabilitate-Own-and-Operate where an existing facility is party to refurbish transferred by the contracting authority to the private and the and operate it with no time limitation imposed on ownership private party abides by the conditions of the arrangement during the operation of the facility.

under w hich a 14.

Annuity-based Design, Build, Finance and Operate private party is authorized by a contracting authority to design, fi nance, construct, operate or maintain a public infrastructure facility, in exchange for which the private party receives defi ned annuity payments over a the end of w hich the specified period of time not exceeding 30 years, at automatically.

facility transfers back to the contracting authority authority 15.

Joint Venture partnerships under which a contracting and a private party collaborate in the j oint development of a public facility, and under which the contracting authority contributes by and various designating public assets such as land to the project, under which the government support measures as the case may be, and 332 No.

14 2021 Public Private Partnerships construction and private partner is responsible primarily for financing, maintenance of the public infr astructure facility for a defi ned period of time not exceeding thirty years.

sources 16.

Strategic Partnerships under which a public agency i nvestment strategic private partners to jointly develop a public programme under such terms as they may agree, but under which key project risks including construction, fi nancing and operations are held by a defi ned end date or the private party, and which arrangements may have adjustment over time a defi ned set of parameters that support relationship but not exceeding thirty years.

17.

Land Swap where a contracting authority transfers existing public land or an asset to the private party in consideration of an asset or facility that has been developed by that private party.

333 2021 No.

14 Public Private Partnerships THIRD SCHEDULE [Section 69.] MINIMUM CONTRACTUAL OBLIGATIONS REQUIRED TO BE SPECIFIED IN A PROJECT A GREEM ENT 1.

The nature and scope of works and services that the parties shall carry out and the conditions for their implementation.

2.

The rights of a contracting authority, the project company and where applicable, the lender, in relation to the proj ect including step in rights of lenders.

by a party to the 3.

A description of any property to be contributed project agreement.

relation to the 4.

A description of any utilities to be provided in project and the responsibility thereof 5.

The ownership of the project assets, the obligations of parties site.

related to the handover and receipt of the project 6.

The responsibility for obtaining authorizations, permits, and approvals.

7.

A description of any sharing of revenue between the contracting authority and the private party.

8.

Mutual fi nancial obligations and their relation to the funding bonds and mechanism including the requirements relating to performance guarantees.

9.

The preparation and submission of fi nancial and other reports and the carrying out of fi nancial audits in relation to the project.

10.

The product sale price or the service availability payment on and which the project is based and the rules for its determination as the index ation amendment, either by an increase or decrease, as well rate, if required.

mechanisms to reflect inflation or changes in the interest and 11.

The means of quality assurance and quality control, supervision as well as administrative, fi nancial and technical monitoring of the project operation, utilization, and maintenance.

to vary the 12.

The extent of the right of the contracting authority conditions of the proj ect and other obligations imposed on private party, and the basis and mechanisms of compensation for any loss resulting fi -om such variation order.

and the 13.

The types of insurance to be taken out on the project, i ssued in favour risks of its operation or utilization, executive warranties 334 No.

14 2021 Public Private Partnerships f or th eir of the contracting authority, and provisions and procedures release.

14.

The basis of risk allocation in respect of a change in the law, unforeseeable accidents, ybrce maj eure, or discovery of antiquities, as the case may be, and the resultant compensation.

15.

The duration of the contract.

terminate the 16.

Early termination events under which a party may contract prior to the expiry of the project agreement and the rights of the parties in relation to the termination.

oron 17.

The process of handing over the project on expiry termination of the project agreement by a party to the agreement.

18.

Mechanism for dispute resolution including resolution of disputes resolution mechanism.

by way of arbitration or any other amicable dispute mechanisms for 19.

The events giving rise to compensation and the payment of such compensation or penalties.

20.

Performance securities required when undertaking a proj ect, the value and renewal mechanisms.

21.

Appointment of independent experts.

22.

Local content requirements.

23.

Direct agreements and lenders rights where applicable.

24.

Termination and expiry of the project agreement.

25.

Obligations of, undertakings and warranties by contracting parties.

26.

Cases of emergency step in by either contracting authority or lenders in case of private party default.

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