New Organ Takes Shape to Manage Public-Private Partnership

The draft directive also identifies four types of bids for the PPP agreements

A bill is underway to establish an autonomous body that will manage the structural and legal framework of the Public-Private Partnership (PPP) agreements, which did not exist in the country before.

The Ministry of Finance & Economic Cooperation (MoFEC) has finalised the first draft of the directive, which also identified the bidding procedures of the partnership and draws the strategic plans for the implementation of the projects.

A team composed of five members was formed by the MoFEC four months ago to draft a directive and other legal frameworks, including manuals, for the implementation of the PPP proclamation, which was legislated by the parliament in February of 2018.

The four-member team was in Bishoftu, Oromia Regional State, to draft the directive and issue the zero drafts mid last week. The experts sample the experience of South Korea, China, UK and the United States while preparing the proclamation.

The directorate, which will function under the MoFEC but will be held accountable by a board formed to manage the PPP agreements, identifies education, health, public services, road and energy, as priority areas where the government would partner with the private sector.

Heads and ministers of MoFEC, National Bank of Ethiopia, Ministry of Water, Irrigation & Electricity, Ministry of Transport, Ministry of Public Enterprises, National Planning Commission, Ministry of Federal & Pastoralist Affairs, are the board members. A representative from MoFEC will chair the board, and the director general of the to be established body will be the secretariat of the council.

The draft of the directive also identifies four types of bids for partnerships between the private sector and the government; an open bid, open discussion, unsolicited bid and negotiation. Except for one of them, the government will be the initiator and entitled to select the area of the projects.

An open bid will have a structure of a conventional bid where the government will conduct research on the areas of investment and announce a bid inviting parties for partnership. The second, an open discussion, is where the government will choose potential candidates and invite them to submit their expression of interest. The third will be through negotiation; the government will choose a prospective company and negotiate with it.

The fourth will be an unsolicited bid, where the private sector studies the area of investment and submit a proposal to MoFEC. After reviewing the proposal, the new body will announce an open bid and give preferential treatment for the company which conducted the research first. If the company did not win the bid, the costs it had incurred for the study and the assessment would be covered by the MoFEC.

“The unsolicited way of availing projects is mainly designed to encourage innovations,” Teshome Tafesse (PhD), head of the study team that will be automatically restructured as the new directorate. “We will announce a bid for PPP by the beginning of the next fiscal year.”

Along with the directorate the Contracting Authority, which represents the public and concludes the agreements with the selected firm and project management team, will be responsible for managing and overseeing the proper implementation of the projects.

Unless otherwise forbidden by law, the proclamation does not give preferential treatment to the local companies. However, the new body is organising a capacity-building team that would assist local companies.

“The new system has the potential of liberalising some areas which were monopolised by the government without any intentions, like telecom and power distribution,” said Bikila Hurisa (PhD), associate professor of Public Management at the AAU and conducted multiple searches on the PPP.

the PPP agreements which were inked before the proclamation will stay intact until the deal expires, however, when the parties want to renew or get a new PPP agreement, the current legal and institutional frameworks will be implemented, according to Tesfaye.

Before being approved by Abraham Tekeste (PhD), minister of Finance & Economic Cooperation, the draft will be provided to the public and stakeholders’ for discussion


Published on Apr 15,2018 [ Vol 18 ,No 938]



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