- The National Assembly Committee on Finance and National Planning of Kenya has proposed to cap the concession period for investors involved in State-owned build-operate-transfer (BoT) at 30 years.
- The committee chaired by Gladys Wanga revealed the proposal in its report on the proposed amendments to the PPP Act, 2013 to be placed before the Parliament for debate and approval.
The National Assembly Committee on Finance and National Planning of Kenya has proposed to cap the concession period for investors involved in State-owned build-operate-transfer (BoT) at 30 years.
Under a BoT model, a private investor is granted the rights or concession to construct and operate a project over an agreed period of time. The Investors who fund the multibillion-shilling BOT projects, mostly infrastructural projects such as the construction of roads, charge toll fees from the infrastructure users directly for use of the facilities and recover the money. After completing the contract period, the management of the project is transferred to the government. Globally the practice is to grant concessions for a period of 25 to 30 years – which is considered sufficient time for investors to fully recover their initial investments. So far Kenya has no specific legal timelines on the period that investors can operate BoT projects to recoup their funds.
The committee chaired by Gladys Wanga revealed the proposal in its report on the proposed amendments to the PPP Act, 2013 to be placed before the Parliament for debate and approval. The amendment is expected to address gaps in the regulatory framework for public-private-partnership (PPP)-funded projects. There have been concerns that by the time the BOT projects are handed over to the State, aging infrastructure may incur more expenses for maintenance. The country’s first double-decker highway — the Nairobi Expressway, 27.1-kilometre road is nearing completion. The investors are granted 27 years of concession upon completion. Costing Sh59 billion, the project links Jomo Kenyatta International Airport (JKIA) to the James Gichuru junction on Waiyaki Way, easing traffic on the busy Nairobi-Mombasa highway.
