Overview On The Public Private Partnership Act Cap 103 R.E. 2018 (PPPA 2018)

The PPPA 2018 incorporates all the amendments made to the PPPA from 2013 to 2018 and applies to Mainland Tanzania. It provides for the institutional framework for the implementation of PPP Agreements between the public sector and private sector entities; it sets rules, guidelines and procedures governing PPP procurement, development and implementation of PPPs and other related matters.

The PPP simply refers to a contractual arrangement between a public sector/contracting authority and private sector/private entity, in which the private entity oversees and performs functions on behalf of the public entity for a certain specified period of time. And through this performance the Private entity assumes substantial financial, technical and operation risks in connection with the performance on behalf of the Public entity as well as receives a benefit for the performance.

Highlights on provisions governing PPP: –

  • Definition of the Small scale PPP Project.
  • Establishment of the PPP centre.
  • Establishment of the PPP Steering Committee.
  • Functions of the PPP Steering Committee.
  • Public funding & other support of PPP projects.
  • Feasibility Study.
  • Vetting of PPP agreements by the Attorney General.
  • Procurement of the PPP projects.
  • Dispute resolution.

Definition of a small-scale PPP project

It is a PPP project approved under the PPPA 2018 of an amount not exceeding twenty (20) million US dollars.

Establishment of the PPP Centre

PPPA 2018 establishes a body corporate with perpetual succession and common seal capable of acquiring and holding property, suing and being sued and which promotes and coordinates all matters relating to PPPs. These projects relating to PPPs are to be undertaken in the productive and social sectors not limited to the following sectors: agriculture, infrastructure, industry and manufacturing, exploration and mining, education, health, environment and waste management, ICT, trade and marketing, sports entertainment and recreation, natural resources and tourism and energy.

Two (2) months prior to the beginning of the budget cycle, the Minister responsible for PPP is required to request from each contracting party submission to the PPP Centre concept note and prefeasibility study of potential PPP projects.

A contracting Authority is required, at the beginning of every budget cycle, to submit to the PPC Centre, concept note and prefeasibility study of potential PPP projects that comply with the national development priorities and is approved by the respective minister. The PPP Centre will analyse the potential PPP project within 21 working days and forward to the PPP Steering Committee.

Projects submitted to the PPP Centre by the Contracting Authority are required to be analysed within thirty (30) working days from the date of receipt and thereafter submit the feasibility study, selection of preferred bidder and PPP agreements to the PPP Steering Committee for approval.

The PPP Centre is a one stop centre and therefore seeks recommendations from the ministries responsible for investment, finance, planning or any other ministry, department or agency.

Establishment of the PPP Steering Committee

It comprises of the following: – Permanent Secretary of the Ministry responsible for PPP (Chairman); Permanent Secretary Prime Minister’s office; Permanent Secretary of the Ministry responsible for lands; the Deputy Attorney General; a representative of authority responsible for national planning; the Executive Director of the Tanzania Investment Centre; the Executive Director of the Tanzania Private Sector Foundation; the Commissioner General of the Tanzania Revenue Authority; the Permanent Secretary of the Ministry responsible for Local Government; two persons from the private sector nominated by the Minister responsible for PPP on recommendation of Tanzania Private Sector Foundation.

The PS of a sector ministry whose project is under deliberation is required to attend meeting s of the PPP Steering Committee. The PPP Steering Committee may also co-opt any other person with knowledge and experience on the subject matter of deliberation.

The PPP Steering committee is required to meet at least 4 times every year, i.e. one every three (3) months. However, the Steering Committee may meet as often as it may be necessary to discharge its functions.

Functions of the PPP Steering Committee

The function of the PPP Steering Committee, among others, is to approve feasibility studies, detailed project report and design, selection of preferred bidder, agreements and amendment to agreements within twenty (21) working days.

Public funding & other support of PPP projects

Where a project requires public funding/government support/determination of matters of policy, the PPP Steering Committee is required to refer the matter to the minister responsible for PPP for determination. The Minister will thereafter, within twenty (21) working days, process the matter in the manner prescribed under the Government Loans, Guarantees and Grants Act if the matter requires public funding; and if the matter requires government support or determination of matters of policy, then make a determination and direct the PPP Steering Committee accordingly. If the Minister would not have determined a matter within 21 working days, then he must notify the Steering Committee with reasons.

The Minister will thereafter notify the general public of all approved projects under the PPPA 2018 through the official Gazette, newspaper of wide circulation /public media.

Feasibility Study in relation done by contracting authorities

A Contracting Authority is required to undertake or cause to be undertaken a feasibility study where it considers that a project may be implemented under PPP agreement for purposes of assessing whether the proposed project is feasible.

A feasibility study, among other things, is required to identify and define the activity which the Government intends to outsource from a private party; assess the projected impact of the intended outsourcing of the activity to a private party on the staff, assets, liabilities and revenues of the government; assess the need for the Government in relation to such activity includes; and demonstrate that the agreement will be affordable to the Contracting Authority, provide value for money and transfer appropriate technical, operational or financial risks to the private party.

Vetting of the PPP agreements

Every agreement intended to be entered into under the PPPA 2018 is required to be submitted to the office of the Attorney General for a legal opinion before it is signed by the Accounting Officer of the relevant Contracting Authority.

Procurement of the PPP Projects

All PPP projects under the PPPA 2018 are required to be procured through an open and competitive bidding process.

The Minister responsible for PPP may exempt procurement of an unsolicited project from competitive bidding process. If the proposal concept for an unsolicited proposal is approved, the private proponent is required to make a commitment to undertake the project by depositing a refundable amount of not exceeding three percent (3%) of the estimated costs of the project.

Dispute resolutions

Any dispute arising during the course of the PPP agreement is required to be resolved through negotiation or in the case of mediation or arbitration, be adjudicated by judicial bodies or other organs established in the United Republic of Tanzania and in accordance with the laws of Tanzania.

Contributing Advisors