Tanzania has lagged behind many of its neighbours in the
development of Public Private Partnerships (PPPs)
in the past twenty years. A contributory factor has been the lack
of a robust legal framework with which to implement such projects.
PPPs can play a prominent role in the development of infrastructure
projects and we consider here how the model has been applied in
Recent legislative changes and a visible political push towards
PPP as a model for delivering public services and utilities have
opened the door for PPP opportunities in the coming years and we
summarise the key legislation governing the area below.
The principal act
The principal act governing PPPs in Tanzania is the Public
Private Partnership Act No. 18 of 2010 (Act). Also
applicable are the Public Private Partnership Regulations
(Regulations) passed in 2011.
Application of the Act
The Act came into force in 2010 and it applies to mainland
Objects of the Act
The Act aims to promote private sector participation in the
provision of public services. It is hoped that the Act will
facilitate the transfer of skills and technology from the private
sector to the public sector as well as encourage foreign direct
Features of the Act
The Act established a PPP Coordination Unit
(Coordination Unit) within the Tanzania Investment
Centre to promote and coordinate PPP projects in mainland Tanzania.
The Act also established a PPP Unit in the Ministry of Finance
tasked with assessing proposed PPP projects that involve public
In addition to setting up the two units, the Act sets out:
(a) the responsibilities of each of the contracting parties in
any given project
(b) what is to be contained in every PPP Agreement
(c) penalties for non-adherence to the Act
There are some notable requirements for all PPP agreements. In
particular, they must
(i) provide for remedies in case of breach by either party
(ii) provide for the period of execution
(iii) provide for assistance by the public party to the private
party in obtaining licences and permits necessary for
implementation of the project
(iv) impose financial management duties on the private
contracting party in the form of internal financial controls,
transparency, reporting and accountability
(v) contain obligations on the private party to be liable for
risks arising from the performance of its functions
The Act further states that all disputes arising out of such
agreements shall be resolved by negotiation, mediation or
arbitration and that agreements must be reviewed and approved by
the Attorney General before they can be signed by the relevant
All PPPs are to be monitored by the ministry responsible for the
provision of the particular service.
The Regulations were made pursuant to and to give effect to the
Act. They regulate the manner in which PPP projects shall be
identified, how agreements shall be entered into, the criteria to
be used by the public body in choosing which projects to enter into
and when the contracting authority shall have the right to
terminate the project.
The Structure of the Regulations
Part I: an introduction to the Regulations.
Part II: deals with the procedure by which
projects shall be identified. The Minister responsible for
investment is tasked with identifying projects that may be
implemented by PPP. The Minister is to advertise these projects
through the Government Gazette. Procurement shall be conducted
under the procedures set out in the Act and Regulations, but where
the bid is unsolicited, procurement bids shall be conducted in
accordance with the Public Procurement Act 2011. Part II also
prescribes that feasibility studies shall be conducted in respect
of the project.
Part III: provides for recommendation of the
proposed project by the Coordination Unit. It sets out the mode of
application, factors to be taken into account by the PPP unit and
the powers of the PPP unit.
Part IV: deals with the approval of the project
by the finance unit in the Ministry of Finance. The unit is
empowered to form a committee to consider the feasibility study and
to make recommendations to the Minister.
Part V: provides for the manner in which the
procurement process shall be conducted after approval of the
project by the finance unit.
Part VI: provides for the negotiation,
agreement and entering into an agreement with the winning
Part VII: provides for the circumstances under
which the contracting party shall have the right to terminate the
Part VIII: contains a general provision
providing for the monitoring and evaluation of the project.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Strategically located in the Indian Ocean at the crossroad of international investments, Mauritius has throughout the last decade forged a strong reputation as a premier international financial centre.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”