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U g anda Investment Forum 2013

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

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  1. 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)

  2. 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

  3. 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.

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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)

  10. Core Projects Cont’d… • ICT - IT Business Parks • Trade and Industrial Development • Phosphate industry • Iron Ore • Science Parks/Technology Incubation Centres

  11. 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

  12. 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

  13. 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

  14. 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.

  15. THANK YOU !

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