In September 2013 we issued a projects & construction update on Public Private Partnerships (PPP) in Tanzania. We have further reported on the impact of the Finance Act 2014 (the Finance Act) and the PPP Amendment Bill 2014. As the PPP Amendment Act 2014 (the Amendment Act) has recently been brought into force we are providing you with a further update on the legal position of Tanzanian PPP.
Competitive Tendering for Unsolicited PPP Projects
Both solicited and unsolicited proposals are governed by the Public Private Partnership Act 2010 (the PPP Act) and the Public Procurement Act 2011 (the PP Act). A solicited proposal is one initiated by the public sector. An unsolicited proposal is one initiated by the private sector.
The Finance Act amended the PPP Act and the PP Act. Following the Finance Act, unsolicited proposals were no longer required to be competitively tendered. This law has now been amended once again.
The Amendment Act provides that all PPP projects (both solicited and unsolicited) must be procured through an open and competitive bidding process.
This contrasts with what was previously proposed in the Amendment Bill which exempted unsolicited bids from having to undergo a competitive bidding process.
The Amendment Act further removes the ability of a procuring entity to give an 'advantage' to an unsolicited proposal. As was reported in our updater in January 2014, the PP Act previously allowed for an advantage to be given to an unsolicited proposal during the tender process. This is no longer the case.
New PPP Authorities Established
The Amendment Bill replaces the current Coordination Unit and Finance Unit with the Public Private Partnership Centre (PPP Centre) and the Public Private Partnership Technical Committee (PPP Technical Committee).
The PPP Centre:
- Provides PPP technical assistance to the Government.
- Develops operating guidelines for contracting authorities.
- Assesses proposed PPP projects and forwards those projects it deems appropriate to the Ministry responsible for Finance.
- Submits PPP projects to the PPP Technical Committee once approved by the Ministry responsible for Finance.
The PPP Technical Committee:
Considers and approves PPP proposals made to it by the PPP Centre.
Submits approved PPP proposals to the National Investment Steering Committee for scrutiny.
Approves allocation of funds from the Public Private Partnership Facilitation Fund (the Facilitation Fund) (described below).
Assigns to contracting authorities terms and conditions for utilisation of the Facilitation Fund.
The PPP Technical Committee will be made up of a series of public officials including, inter alios, the permanent secretaries of the ministries of finance and land, the Deputy Attorney General and the Commissioner General of the Tanzania Revenue Authority. The PPP Technical Committee will also include two persons from the private sector. These persons will be selected by the Minister for Investment upon the recommendation of the Tanzania Private Sector Foundation.
The Facilitation Fund
The Amendment Act establishes a facilitation fund, to be known as the PPP Facilitation Fund. Upon approval by the PPP Technical Committee, the Facilitation Fund shall be used to:
a) finance feasibility studies and other project preparation costs as may be required by a contracting authority; and
b) provide resources to assist projects with limited financial viability and high economic benefit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.