The PPP Operational Guidelines for mainland Tanzania dated
October 2012 (the Guidelines) provide detailed information
regarding the implementation of PPP projects, essentially the
implementation tool of the Framework. However, it should be noted
that the Guidelines are yet to be approved by the Prime
Minister's office in Tanzania which has initial policy
oversight of the Framework.
The Guidelines provide the following information:
Overview of the PPP project cycle
The various phases can be summarised as:
a. Initial project selection
The minister responsible for investment establishes a list of
potential PPP projects
b. Pre-feasibility study
The Contracting Authority (CA) undertakes a
pre-feasibility study to include financial analysis and local
c. Commissioning of a feasibility study by CA
A study intended to provide an extensive appraisal of the needs of
the locality, financial benefits and likelihood of resistance from
d. Final approval
Approval is sought by the PPP Coordination Unit (PPCU), PPP
Finance Unit (PPFU) and Ministry of Finance (MoF)
e. Procurement and Award of Contract
CA commence and conduct procurement (using international best
practice and standards) and the contract is then signed
CA undertakes / provides a contract management function throughout
the life of the contract
The different types of unsolicited proposals that exist under
the Guidelines and which are open to the CA are set below:
Negotiation and contracting without negotiation
Negotiations are started with the submitter of the unsolicited
proposal in order to conclude the PPP Agreement.
An open tender process is conducted in which the submitter of
the unsolicited proposal has the right to match the winning bid in
order to win the contract.
An open tender process is conducted. In the evaluation of
the submitter of the unsolicited proposal received a bonus
7-10% of points) giving an advantage over other bids.
The procuring authority pays a fee to the submitter of the
proposal to acquire the development rights of the project. An open
tender process is then conducted in which the submitter of the
unsolicited proposal competes on equal terms with the other
Automatic acceptance to BAFO stage
This option applies to multi-stage procurement. The submitter of
unsolicited proposal does not have to pass the preliminary stages
the procedure and is automatically invited to the last stage in
remaining bidders submit their best and final offer (BAFO). This
can be combined with an evaluation bonus for the submitter of the
It is worth noting that several PPP projects have been carried
out in Tanzania prior to drafting of the Guidelines. For example,
the Kilimanjaro International Airport (KIA) PPP Project whereby the
airport and its estate were concessioned for 25 years to
Kilimanjaro Airports Development Company (KADCO) in 1998. There is
some concern surrounding the PPP projects that were structured
without the Guidelines in place and without the fundamental
principle of PPP as the driver.
While the draft Guidelines are welcome, there are still several
challenges to a successful PPP environment in Tanzania. These
include, but are not limited to, the:
i. relative infancy of the sector, and lack of experience
throughout the stakeholder chain
ii. inadequate understanding of the PPP concept from the public
sector at present
iii. inadequate long term financing instruments – the
Tanzanian banking sector is not yet geared up for the scale of the
projects envisaged under PPP, therefore most funding will be
delivered by international banks
iv. inappropriate risk allocation due to a lack of
v. weakness in procurement, implementation, contractual and
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.
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On 4 May 2012, Transport Scotland announced that it intended to award a contract to run ferry services from the Scottish mainland to Orkney and Shetland to Serco Ltd. Shetland Line (1984) Limited ('Shetland Line'), challenged the award following a dispute about the 'standstill period'.
The Procurement Reform (Scotland) Bill was passed by the Scottish Parliament on 13 May and is currently awaiting Royal Assent, before becoming the Procurement Reform (Scotland) Act 2014.
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