Turning to expanding infrastructure investment and attracting public-private partnerships (PPP)
Amendment of PPP law to stimulate private sector investment
poor Social infrastructure of economic growth As an obstacle It works
The Tanzanian government has established the Tanzania Development Vision 2025 and aims to enter a middle-income country (per capita income of $2025) and achieve a semi-industrialized country by 1, but poor social infrastructure is acting as an obstacle to economic growth.
세계경제포럼(WEF)이 발표한 탄자니아의 2019년 글로벌 경쟁력 순위는 141개국 중 117위로 하위권을 기록했다. 평가 분야 중 인프라 분야는 121위에 그쳐 개선이 많이 필요한 것으로 확인됐다. 인프라 분야의 세부적으로 교통 인프라는 110위, 전기∙수도 인프라는 122위를 기록했다.
Tanzania 정부, P.P.P.P. Project through infra in development Attention high
The need for infrastructure development is increasing not only to achieve economic growth goals, but also to meet the demands of Tanzania's rapid urbanization and rapid population growth. Accordingly, the Tanzanian government has set the construction of infrastructure such as transportation and energy as the government's top priority and has launched the Third Five Years Development Plan 3/, a development strategy to secure the competitiveness of the Tanzanian economy and improve the quality of life of the people. 5~2021/2022, FYDP III) has been established and is being implemented.
FYDP III의 개발 계획 이행을 위해 필요한 자금은 총 114조8000억 탄자니아 실링(약 469억 달러)에 달할 것으로 추산되며, 정부 개발 예산을 통한 자금 조달은 5년의 전체 기간 동안 74조2000억 탄자니아 실링(약 303억 달러), 민간 부문의 총 자금 조달을 40조6000억 탄자니아 실링(약 166억 달러)으로 예상했다.
Tanzania's government debt-to-GDP ratio (40.13%) is lower than the average of sub-Saharan African countries (55.52%) (IMF, as of September 23), but the government budget is insufficient to finance infrastructure development projects that require large-scale investment. Doing it alone has its limitations. In particular, in a situation where external debt repayment pressure is increasing due to the recent strong dollar, building infrastructure through PPP projects not only allows the government to provide public services efficiently and effectively by utilizing the resources and expertise of the private sector, but also provides financial support to the public sector. The Tanzanian government is also very interested in attracting capital through PPP projects because it can lower the burden. According to FYDP III, 9% of the private sector financing, or 51 trillion Tanzanian shillings (approximately $21 billion), is planned to be procured through public private partnership (PPP).
한편, 올해 5월 탄자니아 9개 기관장*과 PPP 분야 글로벌 투자 전문가들이 한자리에 모여 자본투자 유치 경험을 교류하는 5일간의 전략워크숍 개막식에서 카풀릴라(David Kafulila) 탄자니아 재무부 PPP 국장은 탄자니아 정부가 2025/26 회계연도까지 PPP를 통해 21조 탄자니아 실링(약 90억 달러)의 자본 유치가 여전히 달성 가능하다고 밝힌 바 있다.
As of May 2023, there are 5 PPP projects identified, most of which are in the road construction, power generation, and transmission sectors, of which 25 projects are in the feasibility study stage. The four projects currently open to the market are △construction of a 21km highway between Kibaha-Chalinze-Morogoro △Kilimanjaro, Dodoma, and Singida regions. △ Construction of a bus rapid transit system (BRT) and solar power generation project △ Construction of a 4-star hotel and business complex at Julius Nyerere International Airport. In addition, the construction of a 205km-long bridge connecting Dares Salaam and Zanzibar, the construction of Bagamoyo Port, and the Igawa-Tuduma road construction project are being considered.
Note*: Tanzania Electricity Corporation (TANESCO), Rural Energy Agency (REA), Tanzania Petroleum Development Corporation (TPDC), Tanzania Geothermal Development Corporation (TGDC), Tanzania Roads Authority (TANROADS), Tanzania Ports Authority (TPA), Tanzania Airports Authority ( Participating in TAA), Tanzania Railway Corporation (TRC), and Dar Rapid Transit Corporation (DART)
Tanzania PPP law
PPP is an important means for the government to improve public services by attracting private investment. Tanzania's PPP policy (Public Private Partnership Policy) was announced in 2009. The Public Private Partnership Act (PPP Act) was passed in 2010 and has been amended three times in 2014, 2018, and 2023. The PPP Act is a law that provides an institutional framework for the implementation of PPP projects between the public and private sectors. The roles and responsibilities of institutions and parties participating in PPP projects, as well as rules, guidelines, and regulations governing procurement, project development, and implementation of PPPs. It is a law that stipulates the establishment of procedures.
Under the PPP Act, the Contracting Authority (CA) is a government ministry, local government or public enterprise responsible for identifying, evaluating, monitoring the development of PPP projects and submitting project proposals and feasibility studies to the PPP Center for review. Support such as operating guidelines and manuals for the proper functioning and management of the project proposal, implementation report, etc. must be reviewed and submitted to the Public Private Partnership Steering Committee (PPP Committee) for approval.
In Tanzania, the principle is that PPP projects, both government-proposed projects (Solicited Projects) and privately-proposed projects (Unsolicited Projects), are procured through an open competitive bidding process in accordance with the Tanzania Public Procurement Act. However, it was amended in 2023 to allow the Minister to exempt government-proposed projects (Solicited Projects) from the public bidding process for projects that meet the recommendations of the PPP Steering Committee and certain conditions.
In general, the procurement process consists of ① preparation of a memorandum of information, ② preparation of TOR (Terms of Reference) for prequalification, ③ prequalification proposals, ④ preparation of TOR for final selection, and ⑤ technical bidding. (Technical bidding), ⑥ technical bid evaluation, ⑦ financial bid, ⑧ financial bid evaluation, and ⑨ contract preparation. Projects are selected based on the principle of value for money rather than the lowest price, and both domestic and foreign bidders can participate with equal treatment, but the Public Procurement Act (PPRA) requires foreign companies to receive more Give points.
There are additional requirements for PPP projects in the energy sector, which require approval from the regulator, the Energy and Water Regulatory Agency (EWURA), before starting power project procurement. For government proposed projects (Solicited Projects), applications must be made to EWURA before tenders are made public, and for privately proposed projects (Unsolicited Projects), applications must be made before Tanzania Electricity Corporation (TANESCO) begins formal negotiations on the power purchase agreement.
2023년 PPPs In the revised law changed point is?
In July of this year, the Tanzanian government revised the PPP law in an effort to address issues that hinder private sector participation in implementing development projects through PPP. The major amendments are as follows.
|
article |
Before change |
What has been revised |
| Article 4
Pre-feasibility study of potential PPP projects |
Contracting Authorities (CAs) are required to submit concept notes and pre-feasibility studies for potential PPP projects. | Contracting Authorities (CAs) are mandated to submit pre-feasibility studies for potential PPP projects at the beginning of each budget cycle. Must be consistent with national development priorities and require approval by the appropriate Minister. The Minister must deliver the results of the feasibility study to the PPP Center within 7 days for analysis, and the PPP Center must share the results of the analysis with the PPP Steering Committee within 21 days. |
| Article 5
Features of the PPP Center |
The PPP Center must analyze the project submitted by the CA within 30 business days. | Section 5(2) has been amended to specify in detail the functions of the PPP Center to complete analysis of feasibility studies of potential PPP projects submitted by CA, proposals, evaluation reports for bidder selection, and PPP contracts within 30 business days from the date of submission. . |
| Article 7 B
public money |
- |
“Public funding” is defined as government financial support consisting of financial commitments or contingent liabilities associated with a PPP project. |
| Article 9
CA Responsibilities |
CA is not required to submit a performance report to the PPP centre. | CA introduces provisions mandating submission of implementation reports on PPP Center recommendations every three months |
| Article 15
procurement process |
Allowing proponents of Unsolicited Proposals to participate in the project by depositing a refundable amount | Authorizes the Minister, under certain conditions, to exempt Government Solicited Projects from a competitive bidding process
– These conditions include cases of urgency, proprietary or intellectual property rights of private parties, and cases where there is no reasonable alternative. |
| Article 18
SPV establishment |
- |
Prior to concluding the PPP contract, private companies were required to establish a Special Purpose Vehicle (SPV) under the Companies Act, and the SPV would allow public entities to become minority shareholders subject to certain conditions regarding equity contribution and risk-bearing capacity. may be included as a shareholder. |
| Article 22
Dispute Resolution Mechanism |
Allow disputes to be resolved through negotiation, mediation or arbitration within Tanzanian territory and in accordance with Tanzanian law. | If the dispute is not resolved amicably through negotiations, the parties may resolve the dispute pursuant to the Tanzanian Arbitration Act, the International Center for the Settlement of Investment Disputes (ICSID) procedures, or bilateral/multilateral investment protection agreements. |
| Article 23A
Regular performance reports |
A semi-annual performance report on PPP project implementation is required and submitted to the PPP Center and the Minister. | It has been revised to also include the submission of annual reports, and the PPP Center must consolidate these reports and submit them to the PPP Steering Committee before submitting them to the Minister. |
| Article 28A
In case of inconsistency with other laws, the PPP law takes precedence |
- |
PPP development. Introducing provisions clarifying that provisions of the PPP Act shall prevail where inconsistent with other laws relating to procurement and implementation; |
To improve the efficiency and timeliness of the Tanzanian PPP project development environment, the PPP project preparation process was shortened by eliminating the contracting authority (CA)'s obligation to submit a concept note and strengthening the PPP center submission process related to the pre-feasibility study. In Article 15, the law was revised to require the ordering office of a government-proposed project (Solicited Project) to directly procure private businesses. It also eased the burden on the private sector during the procurement phase by removing the obligation for the private sector to deposit a refundable amount not exceeding 3% of the estimated cost of the project to be undertaken.
Article 21 removes the sub-clause that does not allow for the provision of tax incentives to PPP investors, so that PPP investors are entitled to tax benefits, Government guarantees* and capital under the Tanzania Investment Act Cap.38 just like other investors. Provide security support. These incentives aim to encourage greater private sector participation in strategic projects by creating a supportive investment environment.
Note*: Government guarantee only applies to mining and oil projects. These guarantees include unconditional transferability of profits, dividends and loans in freely convertible currency, protection against nationalization or confiscation, and fair and prompt compensation through access to the courts or arbitration to resolve disputes (Articles 28 and 29 of the Tanzania Investment Act article)
Meanwhile, the revision of Article 22 of the PPP Act breaks away from the previous limitation that disputes could be resolved only by Tanzanian domestic law within the existing Tanzanian territory, and is based on the International Center for Settlement of Investment Dispute (ICSID) or bilateral/multilateral investment treaties. It allows for more international cooperation and gives parties the right to decide on dispute resolution mechanisms.
The bill also amends the law to take precedence over other laws where there are inconsistencies on issues related to PPPs, thereby eliminating legal conflicts when interpreting provisions related to PPP projects between the public and private sectors.
implication
Tanzania plans to attract more PPP projects for critical and costly infrastructure projects to ease the government's financing burden and meet growing infrastructure demand. In particular, it is expected that there will be a steady demand for the construction of logistics infrastructure such as roads, ports, and airports, as well as power plants and transmission and distribution, in order to solidify its position as an East African trade hub country by taking advantage of its geographical advantages. In addition, the Tanzanian government announced that it will hire experts in this field and make additional system improvements to secure expertise in public-private partnership projects and attract international investment, so it is expected that PPP projects will become more active in Tanzania's infrastructure development in the future.