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U g anda Investment Forum 2013. April 11, 2013 Sheraton Hotel Kampala. Public Private Partnerships: “Stimulating, Modernizing and Growing Uganda’s Economy” by Hon. Aston Kajara Minister of State for Finance (Privatization). Introduction.

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u g anda investment forum 2013

UgandaInvestment Forum 2013

April 11, 2013

Sheraton Hotel Kampala

Public Private Partnerships:

“Stimulating, Modernizing and Growing Uganda’s Economy”

by

Hon. Aston Kajara

Minister of State for Finance (Privatization)

introduction
Introduction
  • Provision of infrastructure and related services is traditionally a role performed by Government
    • finance, build, maintain and operate
    • procured through works procurement
    • all risks on government
  • Untenable due to inefficiencies, mismanagement, competing needs, limited budgets
  • PPPs - alternative to stimulate, modernize and grow Uganda\'s economy
what are ppps
What are PPPs?
  • Private sector involvement in providing infrastructure related services
  • Emphasis on economic and social infrastructure
  • Long term contracts that stress service delivery rather than asset creation
  • Several Types – Design, Build, Finance, Operate

– Concession

– BOT, etc.

why ppps
Why PPPs?
  • Infrastructure requirements outstrip budget allocation
  • Private sector financing - increased infrastructure investment without Gov\'t borrowing
  • Private sector management and innovation - increased efficiency and productivity
  • Risk sharing – Gov’t remains with residual risks
  • Scope for user charges – less cost to Gov\'t
success factors
Success Factors
  • Service specified in output terms
  • Competitive tender process
  • Optimal risk transfer
  • Institutional framework:
    • political commitment and good governance
    • legal system to assure private sector
    • appropriate capacity in managing a PPP program, project selection and appraisal, negotiations, contracting, etc.
  • Not burdened by uneconomic objectives
the case for uganda
The Case for Uganda?
  • Vision 2040 – To transform the economy to middle income in 30 years
  • National Development Plan designed to incrementally achieve this vision (5 year plan)
  • NDP 2010/11 – 2014/15 recognizes engagement of private sector in service delivery (PPPs) as a key strategy
  • Government commitment to infrastructure dev’t
investment priorities
Investment Priorities
  • Increase stock of physical infrastructure
    • Energy
    • Transport – rail, road and water
    • ICT
    • Tourism, trade and agriculture infrastructure
  • Others
    • Improve quality of Human Resource
    • Promote science and technology
infrastructure funding gap
Infrastructure Funding Gap
  • Infrastructure requirements – approx US$ 30bn

(in the next 5 years)

    • Of which National Core Projects – US$ 8.5bn
    • Approx 50% unfunded
  • Balance social infrastructure, services and Human Resource capacity building
core projects
Core Projects
  • Oil and Gas
    • Oil Refinery
    • EAC Inter-state distribution pipeline
  • Energy – Large Hydros (Isimba, Ayago)
  • Transport
    • BRT for Kampala
    • Water on Lake Victoria
    • Standard Rail Gauge (Malaba – Kampala)
core projects cont d
Core Projects Cont’d…
  • ICT - IT Business Parks
  • Trade and Industrial Development
    • Phosphate industry
    • Iron Ore
    • Science Parks/Technology Incubation Centres
social infrastructure ppps
Social Infrastructure PPPs
  • Education and Sports
    • Public Universities overcrowded, opportunity for PPP
    • Skills Development – private schools
  • Health
    • Health infrastructure and equipment
    • Training
  • Water and sanitation
    • Rural water supply
    • Solid waste management
challenges
Challenges
  • Limited resource envelop so Gov’t has opted to embrace PPPs
  • Capacity constraints to implement PPPs
    • Institutional
    • Resources – local capital
  • Inadequate legal/regulatory framework
  • Public awareness/expectations
  • Ad-hoc selection of projects for PPPs
government interventions
Government Interventions

To provide a conducive environment,

  • PPP Policy has been passed
  • Pipeline of PPP projects has been prepared
  • PPP Bill has been tabled in Parliament
  • PPP Unit or Department – to be established
  • Limited number of ongoing projects
    • Roads (Kampala – Entebbe highway)
    • Energy (Bujagali and Eskom hydro projects)
    • Office Accommodation and Housing
conclusion
Conclusion
  • PPPs can provide a viable mechanism to execute strategic projects for national development.
  • Government wishes to partner with the Private Sector to provide solutions to meet Uganda’s infrastructure and social services needs through PPPs mechanisms.
  • Government is prepared to address the key challenges identified as major hindrances in PPP project implementation.
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