Public Private Partnership Act, 2010 (No. 18 of 2010)

2. Application.

3. Interpretation. PART II ESTABLISHMENT AND ADMINISTRATION OF THE PUBLIC PRIVATE PARTNERSHIP COORDINATION UNIT

4. Co-ordination Unit.

5. Functions of the Co-ordination Unit.

6. Co-ordinator.

7. Finance Unit. PART III PARTICIPATION OF PUBLIC AND PRIVATE PARTY

8. Roles of public and private sector.

9. Responsibilities of contracting authority. No. 18 Public Private Partinership 2010

10. Feasibility study.

11 . Agreement.

12. Land acquisition.

13. Duration and extension of an agreement.

14. Vetting of agreements.

15. Procurement process.

16. Unsolicited bids.

17. Project officers.

18. Signing of agreements.

19. Responsi bilities ofaccounting officers.

20. Amendment of the agreements.

21. Enjoyment of Benefits.

22. Disputes resolution. PART IV MISCELLANEOUS PROVISIONS

23. Monitoring and evaluation.

24. Conflict of interest.

25. Empowerment of the Citizens

26. Duty to take care and exercise due diligence.

27. General penalty.

28. Regulations.

29. Saving provisions. PART V CONSEQUENTIAL AMENDMENTS TO THE TANZANIA INVESTMENT ACT

30. Construction.

31. Amendment of section 6.

32. Amendment of section 11. 2 No. IS Public Private Partinership 2010 THE UNITED REPUBLIC OF TANZANIA No. 18 OF 20 10 I ASSENT, President 25th July, 20 I 0 An Act to provide for the institutional framework for the implementation of public private partnership agreements between the public sector and private sector entities; to set rules, guidelines and procedures governing public private partnership procurement, development and implementation of public private partnerships and to provide for other related matters. ENACTED by Parliament of the United Republic of Tanzania. PART I PRELIMINARY PROVISIONS

1.-(1) This Act may be cited as the Public Private Partnership Act, Short title 2010. and com- mence- (2) This Act shall come into operation on such date as the Minister ment may, by order published in the Gazelle, appoint.

2. This Act shall apply to Mainland Tanzania in respect of Applica- projects undertaken in partnership between the public sector and tion private sector. 3 e F~I No. 18 Public Private Partinership ~010 Interpreta- 3. In this Act, unless the context otherwise requires: tion "accounting officer" means a Permanent Secretary or a Chief Executive ofa Contracting authority and includes accounting officers ofa local government authority; "affordable" in relation to an agreement, means that the contracting party shall meet any financial commitment to be incurred in relation to that agreement; "agreement" means a public private partnership agreement entered into in terms of this Act; "asset" includes an existing asset of a relevant Contracting authority or a new asset to be acquired for the purposes of entering into an agreement; "Co-ordinator" rpeans co-ordinator of the co-ordination Unit appointed under section 6; "Co-ordination Unit" means Public Private Partnership Co-ordination Unit established under section 6; "contingent liability" includes Government guarantee for loanancHoreign currency transfer and step-in function in the event of default by the relevant Contracting authority; "contracting authority" means any Ministry, government department or agency, local government authority or statutory corporation; "Contracting patty" means parties to an agreement entered into under this Act; "Finance, Unit" means the Public Private Partnership Finance Unit established within the Ministry responsible for finance; Caps. "local government authorities" shall have the meaning ascribed to it under 287 the Local Government (District Authorities) Act and the Local and 288 Government (U rban Authorities Act); "Minister".means the Minister responsible for investment; "Ministry" means the Ministry responsible for investment; "private party" in relation to an agreement, means a party to the agreement other than a Contracting authority; "project" means' a project or service to be implemented under an agreement entered into under this Act; "private sector" means a sector other than a public sector including non-profit making non-governmental organisations; 4 , i" , " " No. 18 Public Private Partinership 2010 "public sector" means a government ministry, department or agency, local government authority and any other person acting on behalf of the government ministry, department or agency or local government authority; "request-for proposal" means the specific terms of the project requirements, the procedures for submission of bids, the criteria for the evaluation of bids and includes a model agreement; "sector Ministry" means a ministry responsible for the Contracting authority. PART II ESTABLISHMENT AND ADMINISTRATION OF THE CO-ORDINATION AND FINANCE UNITS

4.-( I) There is established a Co-ordination Unit within the Tanzania Co-ordina- Investment Centre to be an integral part of the Centre. tion Unit (2) The Co-ordination Unit shall deal with promotion and co-ordination of all matters relating to public private partnership projects. (3) The-projects referred to under subsection (2) shall, subject to subsections (4) and (5) be undertaken in productive and non-productive sectors, including but not limited to the following sectors: (a) agriculture; (b) infrastructure; (c) industry and manufacturing; (d) exploration and mining; (e) education; (f) health; (g) environment and waste management; (h) information and communication technology (lCT); (i) trade and marketing; 5 --rTun a \I No. 18 Public Private Partinership 2010 U) sports, entertainment and recreation; (k) natural resources and tourism; and (I) energy. (4) Notwithstanding subsections (2) and (3), the Minister shall have the power to determine and publish in the Gazette projects to be undertaken by any other sector for a particular period of time. (5) The Minister shall prescribe by regulations the scope, type and value of projects which the local government authorities may undertake under this Act. Functions 5. The functions of the Co-ordination Unit shall be to: of the Co- (a) make an assessment ofall projects submitted to it and make ordination recommendations to the Finance Unit. for purposes of Unit ascertaining whether the project: (i) is affordable to the Contracting authority'; (ii) provides value for money; (iii) transfers appropriate technical, operational and optimal financial risks to the contracting parties; (b) examine the request for proposal to ensure conformity with the approved feasibility study; (c) co-ordinate all public private partnership projects; (d) advise the Government on administrative procedures and all matters relating to public private partnership; (e) develop guidelines in relation to all matters relating to public private partnership; • (f) advise the Contracting authority on all matters in relation to public private partnership projects; and (g) develop and promote public private partnership awareness. Co- 6. The Co-ordination Unit shall be headed by a Co-ordinator to be ordinator appointed in accordance with the Public Service Act. Cap. 298 6 I jill ~ ~-,,,,.n No. 18 Public Private Partinership 2010

7.-(1) The Permanent Secretary of the Ministry responsible for Finance finance shall, establishwithinthe organisational structure of that Ministry, Unit the Finance Unit. (2) Where,intermsof section II, theCo-ordination Unit has submitted the project and the feasibility study to the Finance Unit, it shall deal with fiscal riskallocation and other financial matters of all public private partnership under this Act. (3) Without prejudice to the generality of subsection (2), the Finance Unit shall consider and forward to the Minister responsible for finance for approval, all projects and feasibility studies submitted to it for purposes of appraising the Government and, where the project to be undertaken involves public finance, that Minister shall initiate the fund ing process. (4) The projects referred to under subsection (3) shall be dealt with, and approval thereof be given by the Minister responsible for finance within thirty days from the date of reception by the Finance Unit. (5) Where the approval is not given within thirty days the Minister responsible for finance shall within seven days of the expiration of thirty days inform the private party about the reason for delaying to approve the project. PART III PARTICIPATION OF THE PUBLIC AND PRIVATE PARTY

8.-(1) The public sector shall facilitate the implementation of the Roles of public private partnership projects by: public and (a) identifyingprojects; private sector (b) carrying out feasibility studies; (c) monitoringand evaluation; (d) risk sharing; and (e) putting inplaceanappropriate enabling environment, including: (i) favourable policies; (ii) implementation strategies; and (iii) the legal and institutional framework; 7 __• ... -T~ ... n No. 18 Public Private Partinership 2010 (2) The private sector, shall play the role of identifying and implementing public private partnership projects by: (a) carrying out feasibility studies; (b) mobilizing resources; (c) risk sharing; (d) monitoring and evaluation; and (e) providing technical expertise and managerial skills. (3) The public sector and private sector shall, have the duty to prepare a communication strategy for awareness creation and consensus building for acceptance by all stakeholders of public private partnerships and their outcomes benefits and associated costs and risks. Responsi- 9.-(1) The contracting authority shall, for the purposes of bilities of contracting this Act: authority (a) identify, appraise, develop and monitor a project to be implemented under this Act; (b) undertake or cause to be undertaken a feasibility study where it considers that the project is suitable for implementation under an agreement; (c) submit the proposed project together with the feasibility study to the Co-ordination Unit for consideration; and (d) prepare a request for proposal and, where the terms of the agreement involves public finance, seek approval of the Minister responsible for finance. (2) The contracting authority shall make consultation with the relevant regulatory authorities prior to submission offeasibility study ofthe proposed project to the Co-ordination Unit. Feasibility 10.-(1) Every contracting authority shall undertake or cause to be study undertaken a feasibility study where it considers that a project may be implemented under Public Private Partnership agreement for purposes of assessing whether the proposed project is feasible. (2) The feasibility study shall: (a) identify and define the activity which the Government intends to outsource from a private party; 8 No.lS Public Private Partinership . 2010 (b) assess the projected impact of intended outsourcingof the activity to a private party on the staff,assets, liabilitiesand revenues of the Government; (c) assesthe needforthe Government in relation to suchactivity including: . (i) options available totheGovernment to satisfy those needs; (ii) the advantages and disadvantages of each option; (d) demonstrate comparative advantage in terms ofstrategic and operational benefits for implementation under the agreement; (e) describe, in specific terms: (i) the nature of the contracting authority's functions, the specific functions to beconsidered inrelation totheproject and the expected inputsanddeliverables; (ii) the extent to which those functions can lawfully and effectively be performed by a private party in terms of an agreement; (f) demonstrate that the agreement shall: (i) be affordable to the Contracting authority; (ii) providevaluefor money; (iii) transfer appropriate teohnieah.operational or financial risks to the private party; (g) assessthe capacity ofthe contracting authority to effectively implement theagreement, including theability to monitor and regulateprojectimplementation andthe performance ofthe private party in termsof the agreement; and (h) asses the capacity, resources and abilityofthe privateparty to implement the project. (3) Forthepurposes ofsubsection (2), thefeasibility studyshallinclude technical and socio-economic impactanalysis. (4) The assessment under paragraph (c) of subsection (2) shall indicate comparative projections of: (a) the fullcoststotheGovernment ~orthe activity ifthatactivity is not outsourced throughPublic Private Partnership agreement; and - (b) the fullcoststotheGovernment fortheactivity ifthatactivity isoutsourced through a Public Private Partnership agreement. ' 9 No. IS Public Private Partinership 2010 Cap. 191 (5) Wherethe projectwhichis to be undertakenis ofsuch a nature or type for whichan environmental impactassessment is requiredunder Part VI of the Environmental Management Act, to be carried on the contracting authority shall ensure that the environmental impact assessment certificate is obtained bytheprivate party beforeundertaking the project. . . A8n» 11.-(1) Notwithstanding the provisions of any other written laws, a ment contracting authority may enter into an agreement with a private party for the performance of one or moreof the functions afthat contracting authority. . (2) For the purposes of subsection (1), the accounting officer of a contracting authority shall, for the purposes of advising the Minister responsible forcontracting authority, fonn amulti disciplinary negotiating team possessingknowledge, skillsand experience on the subjectmatter ofthe proposedproject. (3) Withoutprejudiceto subsection (2), the negotiapng~ . •. I shall ensure that the agreement is madein writingand-' . (a) specifiesthe responsibilities ofth~con~ting authority and the privateparty; (b) specifiestherelevantfinancial terms; (c) ensures for the management of perform,ance of the privateparty; . . (d) provides for undertaking by the Contl'actirtg~uthority to the privatepartyin obtaining licenCes and ~rmits which may be necessary forthe implementation of~.project; (e) provides forthe returnof assets, ifany, to the Contracting tho authority, at the termination or expiryof agreement; (t) specifiesthe roles and risks undertaken by. either party; (g) provides for the paymentto the private party, by way of compensation from a revenue fund ~f charles, .o~ f~ collectedby the private partyfrom users orcustome.n ()f . the serviceprovided by it; . . (h) specifi~sp"J'ment 9fthe private party to theeohtraeting authority; . (i) provides for remedies in the event of default by either party; 10 l._ No. 18 Public Private Partinership 2010 G) imposes financial management duties on part ofthe private party, including procedures relating to internal financial control, budgeting, transparency, accountability and reporting; (k) provides for the termination ofthe agreement in case of breach of terms and conditions by either party; (I) provides for the conditions for the provision of service, where necessary; (m) provides for the period of execution; and (n) contains such other information as may be necessary. (4) Without prejudice to the provisionsofsubsection (3), the agreement shall contain conditions that ensures that: (a) the private party undertakes to perform a contracting authority's function on behalf of the contracting authority for a specified period; (b) the private party is liable for the risks arising from the performance of its functions; (c) the environmental impact assessment certificate has been issued in respect of the project; (d) government facilities, equipment or other state resources which are necessary for the project and are transferred or made available to the private party on a timely basis; and (e) the public and private assets are clearly specified. (5) Where the contracting authority has, in terms of section 9, submitted the proposed project together with the feasibility study to the Co-ordination Unit, the Co-ordination Unit shall process the project within thirty days and submit the same to the Finance Unit for consideration. (6) Every agreement entered into under this Act shall be governed and construed in accordance with the laws of Mainland Tanzania. (7) The rights, obligation and controlling interests ofthe private party in any project performed under the agreement shall not be transferred or assigned to a third party without the prior written consent ofthe contracting authority. 11 No. IS Public Private Partinership 2010 Land 12. Where the project requires acquisition of land for its acquisition implementation, the acquisition shall be carried out in accordance with Caps. the Land Act, the Village Land Act, the Land Use Planning Act, the 113, I] 4, Land Acquisition Act and any other relevant laws. I 16 and 118 Duration 13.-( 1) The duration of an agreement shall be provided for in the and agreement and shall not be extended unless: . extension of an (a) there is a delay in completion or interruption of operations agreement due to circumstances beyond any party's control; (b) there was an increase in costs arising from requirements of the Co-ordination Unit or contracting authority which were not foreseen or included in the agreement; and (c) the service is required and the contracting authority has no capacity or immediate intention to take over and run the project. (2) A violation of the provisions of subsection (I) by either of the parties to an agreement shall render a defaulting party liable for any pecuniary loss incurred by the other party. Vetting 14. Every agreement intended to be entered into under this Act shall ofagree- be submitted to the Office ofthe Attorney General for a legal opinion. ments Procure- 15.-(1) Where the Minister responsible for finance approves the ment terms of the agreement pursuant to paragraph (d) of subsection (1) of process section 9, the contracting authority shall proceed with the procurement process for a private partner. (2) All public private partnership projects under this Act shall be procured through an open and competitive bidding process in accordance Cap. 410 with the Public Procurement Act. Unsolicited 16.-(1) The private party shall undertake a feasibility study in respect bids of unsolicited project proposals and submit the feasibility study to the relevant contracting authority. (2) The feasibility study undertaken under subsection (1) shall take into consideration technical, financial, social environmental impact, economic or any other relevant issues as may be required under this Act. 12 No. 18 Public Private Partinership 201 (3) Without prejudice to the generality ofsubsection (2), the feasibility study of unsolicited project proposal shall: (a) specify the proposed project activities; (b) prescribe environmental issues; (c) explain the significance and benefits of the proposed project to the government; and (d) explain the financial capacity and ability of the private party in the implementation and management of the proposed project. (4) The Minister responsible for finance shall make regulations prescribing procedures for handling public private partnership project proposals initiated through unsolicited bids under this Act.

17.-(1) As soon as a contracting authority initiates a project that may be a public private partnership, the accounting officer shall appoint a person with appropriate skills and experience, either from within or outside the contracting authority, as a project officer for the project. (2) The project officer shall be responsible for: (a) assisting the accounting officer in monitoring the performance ofthe private party and ensure that the agreement is properly implemented; and (b) any other duties or powers delegated to him by the accounting officer under this Act.

18.-( 1) The agreements entered into under this Act shall be signed Signingc by the accounting officer ofthe relevant contracting authority after it has agree- ments been considered and cleared by the Finance Unit, approved by the Minister responsible for finance and vetted by the Office ofthe Attorney General. (2) The accounting officer shall sign an agreement upon fully satisfying himself that the agreement has complied with the provisions of this Act and any other relevant laws. (3) Any person who contravenes any provision ofthis section commits an offence.

19. The accounting officer who has entered into an agreement shall, Responsil in addition to any other responsibilities under this Act, take all necessary lities of accountir and reasonable steps to ensure that: . officers (a) the outsourced activity is effectively and efficiently carried out in accordance with the agreement; 13 No. 18 Public Private Partinership 2010 (b) any public property which is placed under the control of the private party, in terms of the agreement, is appropriately protected against forfeiture, theft, loss, wastage and misuse; and (c) the Contracting authority has adequate contract management and monitoring capacity. Amend- 20. The agreement may be reviewed and amended. by the parties, ment of provided that: the agree- (a) the Co-ordination Unit and the Finance Unit have approved ments the amendments; (b) the Ministerresponsible for the contracting authority, or as the case may be, the Minister and the Ministerresponsible for finance have consented to the review or amendment; and (c) other relevant stakeholders have been consulted. Enjoyment 21.-(l)A project undertaken ill accordance with the provisions of of this Act which ought to qualify for benefits granted to similar investment benefits under the Tanzania Investment Aet, shall be entitled to such benefits Cap. 38 granted under that Act. (2) The benefits referred to under subsection (I)' shaft not apply to tax incentives. Disputes 22. Any dispute arising during the course of the,agreement shall be resolu- resolved through negotiation, mediation or arbitration. tion PART IV MISCELLANEOUS PROVISIONS Monitoring 23.-(1) All public private partnership projects under this Act shalf-be and monitored by the Ministry, Sector Ministries, GovernmentDepartments; evaluation Agencies or local government authorities unde~ which they are carried out. 14 No. 18 Public Private Partinership 2010 (3) The Ministry, sector ministry, Department, Agency or local government authorityshall,as muchas practicable, involve other relevant stakeholders for better implementation and conduct of monitoring and evaluation. Conflict

24.- (l) Where an officer of the Co-ordination Unit, the Finance of interest Unit or the contracting authority has any pecuniary interest, direct or indirect, in any project,proposed projector other matter,and is involved or participating in a process at which the project, proposed project or othermatter is the subjectof consideration, he shall,as soon as practicable after the commencement of that process, disclose that fact and shall not take part in or be presentat the consideration or discussionof, or involved in any question relating to the project, proposed project or that other matter. (2) Subjectto this subsection, forthe purposes of this sectiona person shall be treated as havingdirect or indirectpecuniaryinterest in a project or other matter, if: (a) he or his nominee is a memberef-a.company or other body, or is the holder of shares or debentures in a company with which the project is.made or proposed to be made or he has a direct or indirect pecuniary interestin the project, proposed project or matter under consideration; or (b) he is a partner or in the employmentof a person with whom the project is made or proposed to be made or who has a direct or indirect pecuniary interest in the project, proposed project or other matter under consideration. (3) In this section a direct or indirect interest of a spouse or any members of the familyof an officerof the eo-ordination Unit,the Finance Unitor the contractingauthorityshall, if known to that officer, be deemed to be a direct or indirect interestofthe officer.ofthe Co-ordination Unit, the Finance Unit or the contracting authority. (4)A person who contravenesthe provisionof this section, commits an offence.

25. Publicprivate partnerships agreements, shallendeavour to provide Empower- opportunityfor empowermentof the citizens of Tanzaniaas providedfor ment of the under the National Economic Empowerment Act. citizens Cap. 386 15 No. 18 Public Private Partinership 2010 Duty to 26. Every public officer performing any functions, discharging any take care duty or exercising any power under this Act or any other written law ;1e1 .xercisc related to a public private partnership shall be under the obligation to take due reasonable care and exercise due diligence in the performance of the functions and discharge of duties and exercise of powers in accordance with the provisions of this Act and any other relevant laws. ,... ,;,:r:J! 27. Any person who commits an offence under this Act to which no ::':::.:Ily specific penalty is prescribed shall be liable to a fine not exceeding five million shillings or to imprisonment for a term not exceeding three years. 28.-{ 1)The Minister shall, in consu Itationwith the Minister responsible .ns for finance, make regulations for better carrying out ofthe provisions of d;j" Act. (2) Without prejudice to subsection (I), the Minister may make regulations prescribing: (a) levying of fees and charges; (b) investment opportunities and promotion; (c) functions of local government authorities under th is Act and clear linkages of roles between the implementing ministries and appropriate bodies at the local government; (d) evaluation, operation and management of projects under this Act; and (e) the manner in which the Empowerment of the citizens of Tanzania may be implemented; and (f) any other matter in the promotion and furtherance of objec- tives of this Act. (3) Notwithstanding the provisions of subsections (1) and (2), the Minister may, in consultation with the Co-ordination Unit, make rules and guidelines for the better implementation of this Act. .iving 29. All existing agreements or memoranda of understanding entered irovision into by any contracting authority with the private party before the com- mencement of this Act, shall not be affected by the coming into force of this Act. 16 No. 18 Public Private Partinership 2010 PART V CONSEQUENTIAL AMENDMENTS TO TilE TANZANIA INVESTMENT ACT

30. This Part shall be read as one with the Tanzania Investment Act, Construc- hereinafter referred to as the "principal Act." tion Cap. 38

31. The principal Act is amended in section 6, by- Amend- ment of (a) inserting after paragraph (b) the following new paragraph: section 6 "( c) promote private sector participation in the provision of public services through public private partnership"; (b) re-numbering paragraphs (c), (d), (e), (f), (g) and (h) as paragraphs (d), (e), (f), (g), (h) and (i) respectively.

32. The principal Act is amended in section 11, by - Amend- ment of (a) inserting in subsection (1), a comma (,) after the designation Section II "Executive Director", and inserting immediately after the comma the designation "the Co-ordinator; and (b) inserting in subsection (3) the words "other than the Co- ordinator" after the word "Centre". Passed in the National Assembly on the 15th July, 2010. DR. THOMAS D. KASHILlLAH, Clerk of the National Assembly 17 ,