Cabinet okays PPPs policy framework

CABINET has approved the policy framework for equity in public-private partnerships (PPPs) to ensure value for money, safeguard national interest and speed up implementation of essential infrastructure projects.

The adoption of PPPs is bearing fruits especially on infrastructure development and Beitbridge Border Post upgrade is a good example.

Economic experts have applauded Government for accommodating the private sector in infrastructure development through PPPs saying this initiative is vital as it complements Government efforts to implement development projects.

In his Post Cabinet media briefing on Tuesday, Information, Publicity and Broadcasting Services Minister, Dr Jenfan Muswere said the ‘Zimbabwe is Open for Business’ philosophy has seen an increase in private sector players who wish to partner and do business with Government and State-owned public enterprises in the rehabilitation of major roads, the railways and other related infrastructure.

He said the policy framework by the Government will therefore guide private sector participation in PPPs as prescribed under the Zimbabwe Investment and Development Agency (Zida) Act (Chapter 14:38) and the Public Procurement and Disposal of Public Assets Act (Chapter 22:23).

“Cabinet considered and approved the proposed policy framework for Government shareholding/equity in public-private partnerships, which was presented by the Vice President, Dr Gen (Rtd) Constantino Chiwenga,” said Dr Muswere.

“The objective of the policy framework is to ensure value for money and to safeguard the national interest.”

The policy framework provides guidelines for categories of projects, in PPPs for infrastructure development, commercial purposes, PPPs where the Government holds an asset and non-performing public-private partnership projects.

Dr Muswere said public-private partnerships for infrastructure development were social or service projects such as roads, railways and border posts, where the asset remains with the Government.

He said revenue sharing arrangements under this category should be at least 30 percent minimum and the Government should be represented in the management committee.

“Public-private partnerships for commercial purposes are when a commercial Government-owned company enters into a commercial arrangement with a private investor for profit purposes.

“The partnership will be implemented through the establishment of a Special Purpose Vehicle, with the Government having a minimum of 26 percent equity shareholding,” he said.

“In public-private partnerships where the Government holds an asset such as land, a mining claim or national parks, the State’s equity shareholding shall be a minimum of 26 percent.

“A Joint Venture Agreement will be entered into with the private investor.”

Dr Muswere further outlined that non-performing public-private partnerships will be assessed for viability or non-viability, with the viable ones being re-negotiated, while non-viable ones will be recommended for termination.

“Going forward, all public-private partnerships will be guided by the policy framework and a manual subsequently issued,” he said.

Meanwhile, Cabinet yesterday approved the proposed Public-Private-Partnership between the Ministry of Transport and Infrastructural Development and Zwane Enterprises (Private) Limited for the upgrading, construction and tolling of the Old Gwanda Road.

Zwane Enterprises, a Zimbabwe incorporated company, will upgrade and construct the 120-kilometre Old Gwanda Road from Bulawayo, through Matobo to Gwanda. —chronicle