PPP Regulations amendment – November 2023

The Public Private Partnership Regulations 2020 have been amended by Public Private Partnership Regulations (Amendment) Regulations 2023 through a Government  Notice published on 16 November 2023. A number of changes have been made including the following:

• Definition of “tender period” – has been amended to include all the time up to “ … the date the contract of award is signed”. (Before this change, the tender period expired on “the closing date for the submission of tenders”.)

• Definition of “fiscal commitment” – this is a new definition. Fiscal commitments now include provision of  “ … minimum revenue guarantee, demand guarantee where demands fall below expected demand due to unforeseeable events, and a letter of support or payment guarantee to the private party.”

• Removal of concept note submission requirement – the Regulations have now been aligned with the recent PPP (Amendment) Act 2023 which removes the obligation to submit concept notes of PPP projects to the Ministry of Finance by Contracting Authorities. The aim of this is to reduce the time spent in obtaining preliminary project approvals.

• Feasibility study to be undertaken after confirmation from PPP Centre – a Contracting Authority will now only conduct a Feasibility Study after the PPP Centre responds to the Pre-Feasibility Study (PFS) and confirms “ … whether to proceed to undertake feasibility study”.

• New requirements for PFS in Solicited PPPs:

1. Solicited PPP PFS must now include, among other things, a concise allocation and assessment of specific risks i.e. “ … market or demand risk, off-taker risk, foreign exchange risk, environmental and social risk, risk of delays in project land or right of way acquisition, financing, design and construction risks, and operations and maintenance risk.”  (Before this change, there was only a generic provision for risk allocation and assessment at the PFS stage.)
2. Also, Solicited PPP PFS must now include an “…assessment of the Contracting Authority’s ability to implement and manage the project”, etc.

• Standard criteria for identification, screening and prioritisation of PPP projects have been introduced.

• New requirements for PFS in Unsolicited PPPs – a Private Proponent of an Unsolicited PPP is now required to:

1. demonstrate its financial capacity through its audited accounts, fundraising history, technical capacity, and project delivery record; and
2. disclose completed similar projects and its litigation history, etc.Climate change responsiveness – now for all PPP projects (Unsolicited and Solicited), the Project Proponent / Contracting Authority is required to demonstrate “climate change responsiveness considerations” by assessing project climate risks and identifying adaptation measures. Climate change risk exposure has also been added as a standard criterion for screening PPP projects.

• PPP feasibility studies must now also include viability analysis and “targeted performance standards”. 

• Primary responsibility to prepare PPP guidelines has been shifted from the Public Procurement Regulatory Authority (PPRA) to the PPP Centre, with the roles being reversed, meaning that the PPRA will now be involved on a consultancy basis.

• Viability Gap funding – eligible PPP projects may be supported through a Viability Gap Funding Scheme under the PPP Facilitation Fund which may fund either of the following:

1. capital made to a project during construction;
2. any other financing arrangements as may be made available to a project in accordance with a project agreement.
3. provide financial incentives depending on the feasibility study or public interest; or

• PPP Facilitation Fund:

1. The objects of the PPP Facilitation Fund have been clarified with specific functions assigned to the PPP Steering Committee and the Executive Director of the PPP Centre (as the Accounting Officer of the Fund).
2. The PPP FacilitationFund will now hold an account and a number of sub-accounts with the Bank of Tanzania to be operated in accordance with the provisions of the Public Finance Act. 
3. Executive Director of the PPP Centre (as the accounting officer of the Fund) now has disclosure obligations of amounts and source of monies held in the PPP Facilitation Fund and supported projects.

• Solicited PPP projects – are now exempted from competitive bidding (in accordance with 2023 amendments to the PPP Act) and will proceed directly to negotiations.

• Approvals and notifications to the PPP Centre of Preferred / Reserve Bidders have been clarified .

• Some of the Tender Board obligations during Pre-qualification and Qualification stages have been shifted to the PPP Centre. For example, the mandate to review RFP documents before they are issued to qualified bidders, previously placed on the tender board, have now been placed on the PPP Centre.

• Some of the obligations of the PPRA in respect of procurement monitoring and performance audits have been shifted to the PPP Centre.

• The requirement to submit a negotiated PPP Agreement to the PPP Centre has been removed.

• PPP Experts Register – PPP Centre shall prepare and maintain a list of pre-qualified PPP Experts whose transaction advisory services may be procured from time to time.

• Public disclosure requirements – contracting authorities are now required to publish, in wide circulating newspaper, major highlights of signed PPP agreements (including financial obligations of both the GoT and the private party) within 30 days of signing.

Please contact us if you have any comments or questions.