Presentation to EACCIA
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1 Reinforcing the capacity of East Africa to identify, develop and promote PPPs for infrastructure Presentation to EACCIA John Kariuki Assistant Director Economic Pillar Kenya Vision 2030 Delivery Secretariat
2 Vision 2030 Overview There are 124 Vision 2030 TRANSFORMATIVE flagships projects that have been identified to be implemented in all sectors and are spread all over the country. Implementation of these flagship projects is key to the realization of Vision 2030 and ultimately the Kenyan Brand. Vision 2030 flagship projects range from the tangible to intangible ones. According to World Bank Report Kenya might attain its Vision 2030 eleven years earlier, in 2020! If growth rate would accelerate to six per cent, Kenya could reach Middle-Income Country status If the country continues to grow at average 3.7% as in the past decade, Vision 2030 will be achieved 7 years later, in 2037
3 Ambitious timelines Only 18 years We are here Medium Term Plan (MTP 11) Millennium Development Goals (MDGs) Vision 2030 achieved: Kenya is a globally competitive industrializing country Implement all Vision 2030 projects
4 In country Out of country PROCESS WAS HIGHLY COLLABORATIVE INVOLVING A DIVERSE GROUP OF KEY LOCAL AND INTERNATIONAL STAKEHOLDERS Description Details Vision 2030 teams Core team from government, private sector and non-profit sector along with technical, operational and national Vision steering committees Core team held in-depth problem solving workshops in key sectors Public sector agencies Private sector firms and investors Provincial forums McKinsey global expert network Interviews held with more than ~100 key stakeholders from government, key institutions and donor bodies to understand context, key initiatives, leverage existing work as well as test and refine solutions Visited ~150 firms, investors, individual farmers and hawkers across major sectors of the economy to understand barriers to growth as well as test and refine solutions Core team members met with ~1,000 stakeholders at 9 provincial forums which included representatives from various organizations in each province Best-practice learnings from McKinsey Global Institute and from key case examples of high-growth countries (e.g., Malaysia, China, India, Morocco) Benchmarking databases and McKinsey sector experts Built local capacity of ~20 core team members Met with ~100 public sector stakeholders, ~150 organizations and ~1 000 stakeholders during provincial forums 4 Foreign investors Met with major foreign investors in key sectors (e.g., tourism, BPO, retail) to understand key barriers to investment and how to make doing business in Kenya easier Feedback from Kenyan diaspora through meetings held by GOK
5 Overview of Vision Overarching Vision A globally competitive and prosperous nation with a high quality of life by 2030 Vision Strategy Plans and implementation Economic To maintain a sustained economic growth of 10% p.a. for most of the next 20 years Social A just and cohesive society enjoying equitable social development in a clean and secure environment Enablers and Macro - Foundations Political An issue-based, people-centered, result-oriented, and accountable democratic political system Cross cutting infrastructural development, STI, Public Sector Reforms and Macroeconomic stability National Value System
6 Hardware and software - So far Vision Flagship Projects are perceived to be HARDWARE the cities, the roads, etc. - But also most crucial is the SOFTWARE the mindset of Kenyans. - We are putting in place 1 st CLASS SYSTEMS for a 3 rd CLASS MENTALITY! Overlapping, littering, pollution, greed, selfishness, poor governance etc., - We have to improve the MINDSET of Kenyans; order, humility, consideration for others
7 REPLICA OF FLYOVER ACROSS GLOBE CINEMA ROUNDABOUT
8 Vision 2030 in Action!
9
10 10
11 Mwingi Market 2010
12 Mwingi Market 2012
13
14 SOCIAL PILLAR
15 Public Private Partnerships-PPPs At its simplest the key argument for the use of PPP is that it will reduce the burden on taxpayers in the delivery of both capital and long-term service contracts by the introduction of private capital, private expertise and competitive business practices to the provision of public services. The private sector is better able to provide services to a higher level of efficiency and effectiveness than the public sector which is typically hindered by its bureaucratic, mechanistic and politicized method of operation. PPPs are NOT JUST about the private sector financing capital projects in return for an income stream, but also about use of private sector skills and management expertise to deliver and operate public projects more efficiently over their lifetime.
16 PPPs CRITICAL SUCCESS FACTORS SUCCESS FACTORS Hong Kong Australia UK Favourable legal framework Commitment and responsibility of public and private sector Strong and good private consortium Stable macro-economic condition Appropriate risk allocation and risk sharing Political support Sound economic policy Available financial market Competitive procurement process (enough potential bidders in process) Good governance Transparency procurement process (process is made open and public) Well organized and committed public agency Thorough and realistic assessment of the cost and benefits Government involvement by providing guarantee Project technical feasibility Multi-benefit objectives Social support Shared authority between public and private sector
17 SAMPLE FLAGSHIP PROJECTS UNDER PPP Project Implementer Sector Estimated (USD mn) Nairobi- Commuter Rail Kenya Railways Transport Railway 400 Molasses Power Generation South Nynza sugar Co. Power Generation 120 Geothermal IPPS Menegai KPLC/GDC Power Generation 1600 Lamu Port development project Kenya Ports Authority/ Kenha/ Transport 2500 KAA/KRC/KPC Nairobi Solid Waste Management City Council of Nairobi Sanitation TBC Mombasa Solid Waste Management City Council of Mombasa Sanitation TBC Nairobi Bulk Water Supply Athi water services board Urban Water 960 Nandi Forest Multipurpose Dam Lake basin develop. authority Power/ Irrigation 532 Arror Multipurpose Dam Kerio Valley dev. Authority Power/ Irrigation 200 Munyu Multipurpose & greater Tana & Athi water rivers Irrigation/Power/wa 330 Kibwazi Irrigation develop. Authority ter supply Multi level car park facility in City Council of Mombasa Facilities 40 Mombasa Multilevel Parking at Likoni Ferry Kenya Ferry Services Facilities 15 Hotel Lake view resort Kisumu Kenya tourism Dev. Co. Facilities 300 Kenyatta University (KU) Hostels Kenyatta University Education 20 PPP Project Mombasa Convention Centre Kenya Tourism Dev. Co. Tourism 200
18 KENYA - INFRASTRUCTURE INVESTMENTS Sector Amount in million USD 1 Energy (power and others) 19,808 2 Ports 4,800 3 Roads 6,046 4 Water and sanitation 4,567 5 Railways 7,248 6 Airports Tourism 2,050 8 ICT 7,850 9 Local Government 2, Housing 2, Public Works 1, Lamu Transport Corridor 3,723 TOTAL REQUIREMENTS 59,176 AVAILABLE FROM GOK ( ) 15,000 FUNDING GAP 44,176
19 PAUN INSTITUTIONAL FRAMEWORK CAPACITY BUILDING (FINANCIAL AND TECHNICAL) - CHAMBER MEMBERS REGULATORY FRAMEWOK GOVERNANCE ENGAGE DEVOLVED STRUCTURES OF THE GOVERNMENT
20 LAPSSET Project Lamu Port Southern Sudan Ethiopia Transport and Economic Corridor Road 1500 km 1M SGR Oil Refinery Oil Pipeline Airports Resort Cities Lamu Port
21 LAPSSET Corridor Growth Areas 21
22 The LAPSSET Corridor Route and The Great Equatorial Land Bridge across Africa
23 THANK YOU
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