The Public Private Partnership Act, 2010

3. Short title and commencement. Application. Interpretation. PA R T II E S T A B L I S H M E N T AN D A D M IN IS T R A T IO N OF 11II* PUBLIC PRIVA TE PAR TNERSHIP C O O R D I N A T IO N UNIT

7. Co-ordination Unit. Functions o f the Co-ordination Unit. Co-ordinator. Finance Unit. PAR T III PA RT I C IP AT IO N OF PUBLIC AN D PR IV AT E P ARTY

9. Roles o f public and private sector. Responsibilities o f contracting authority. 1 No. 18 Public Private P urtinaship 2010

13. Duration and extension o f an agreement.

17. Project officers. 1 8. Signing o f agreements.

19. Responsibilities o f accounting officers.

22. Disputes resolution. PAR T IV M IS C E L L A N E O U S PROVI SIONS

26. Duly to lake care and exercise due diligence.

29. Saving provisions. PAR T V C O N S E Q U E N T I A L A M E N D M E N T S TO Till-; T A N Z A N I A I N V E S T M E N T A C T

32. Construction. Amen dmen t o f section 6. Am en dm en t o f section 11. No. 18 Public Private Purtinaship 2010 Till-: UN IT E D R EPUBLIC 01 TA N Z A N I A NO. 18 ()!•' 2010 i\K<iJ'} I ASSENT. I a k a v a M r i s i i o K i k w t t i - : President 25th July. 2010 An Act to p r o v i d e for the in sti tu t io na l f r a m e w o r k for the i m p l e m e n t a t i o n o f pu b lic pr iv a t e p a r t n e r s h i p a g r e e m e n t s b e t w e e n the pub l ic s e c t o r a nd pr i v a te s e c t o r entities; to set rules, g u i d e l i n e s a nd p r o c e d u r e s g o v e r n i n g p u b li c pr i v a te a nd p a r t n e r s h i p to i m p l e m e n t a t i o n o f pu b lic pr i v a t e p a r t n e r s h i p s a nd p r o c u r e m e n t , d e v e l o p m e n t p r o v i d e for o t h e r re lated matt er s . EN A C T ED b\ Parliament o f the United Republic o f Tanzania. PA RT I PR ELI M I NA R Y PROVIS IONS S hort title mul c o m m e n c e - m en t l .- ( l) This Act may be cited as the Public Private Partnership Act. 2010. (2) This Act shall c ome into operation on such date as the Minister may. by order published in the ( iazette. appoint. No. IS A p p l i c a ­ tion I n t e rp r e t a ­ tion ■v C a ps. 2X7 a n d 2 XX Puh/ic Private Partinaship 2010

2. This Act shall apply to Mainland Tanzania in respect o f projects undertaken in partnership betw een the public sector and private sector.

3. In this Act. unless the context otherwise requires: 'accounting officer" means a Permanent Sec rcl an o r a C 'hie I Executive o f a Contracting authority and includes accounting officers o f a local government authority: ‘affordable" in relation to an agreement, means that the contracting parts' shall meet any financial commit ment to be incurred in relation to that agreement: ■agreement" means a public private partnership agreement entered into in terms o f this Act: ’asset" includes an existing asset o f a relevant Cont racting authority or a new asset to be acquired for the purposes o f entering into an agreement: ’Co-ordinator" means co-ordinator o f the co-ordination Unit appointed under section 6: ’Co-ordination Unit" m eans Public Private Partnership C o ­ ordination Unit established under section 6: ’contingent liability" includes Governme nt guarantee for loan and foreign currency transfer and step-in function in the event o f default by the relevant Contract ing authority: ’contracting authority" means any Ministry, government "department or agency, local government authority or statutory corporation: ^ ’Contract ing party" means parlies to an agreement entered into under this Act: ‘Finance Unit" means the Public Private Partnership Finance Unit established within the Ministry responsible for finance: ’local government authorities" shall have the mea ni ng ascribed to it under the Local Gover nment (District Authorities) Act and the Local Governme nt (Urban Authorities Act): ‘Minister" means the Minister responsible for investment: ’Ministry" means the Ministry responsible for investment: 4 No. 18 Public Private Partinaship 2010 "private party" in relation to an agreement, m eans a party to the agreement other than a Cont racting authority; "project" means a project or service to he impl emented under an agreement entered into under this Act: "private sector" means a sector other than a public sector non-gover nmental non-profit maki ng including organisations; "public sector" means a government ministry, department or agency, local government authority and any other person acting on behalf o f the government ministry, department or agency or local governm ent authority; "request for proposal" means the specific terms o f the project requirements, the procedures for submi ssion o f bids, the criteria for the evaluation o f bids and includes a model agreement; "sector Ministry" means a ministry responsible for the Contracting authority. PART II K S TA B LI S II M EN T A N D A D M IN I S T R A T IO N O f I I IK C O -O R D IN A T I O N AN D FINAN CE UNITS

4.-( 1) There is established a Co-ordination Unit within the Tanzani a Investment Centre to be an integral part o f the Centre. (2) The Co-ordination Unit shall deal with promotion to public private and co-ordination o f all matters relating 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) (b) (c) (d) (c) agriculture; infrastructure: industry and manufacturing: exploration and mining; education; No. IS Public Private Partii 1 ash ip 2010 health; environment and waste management: information and communication technology (1C 1): trade and marketing: sports, entertainment and recreation: natural resources and tourism: and energy. ( f) (g) (h) (i) (j) (k) (1) (4) Not withstanding the Minister shall have the power to determi ne and publish in the Ciazette projects to be undertaken by any other particular period o f time. subsections sector for a (2) and (3). (5) The Minister shall prescribe by regulations the scope, type and value o f projects which the local government authorities mav undertake under this Act. I u n c t i o n s o f the C 'o- o n Jin a lio n I nit The functions o f the Co-ordination Unit shall be to: (a) make an assessment o f all projects submitted to il and make recommendati ons to the Finance Unit for purposes o f ascertaining w hether the project: (i) (ii) (iii) is affordable to the Contracting authority: provides value for money: transfers appropriate technical, operational the financial and optimal contracting parties: request the for proposal to ensure risks to on exami ne conformity with the approved feasibility study: co-ordinate all public private partnership projects: administrative advise the Government procedures and all matters relating to public private partnership: develop guidelines to relating to public private partnership: advise the Contracting authority on all matters in relation to public private partnership projects: and develop and promote public priv ate partnership awareness. ill 1 matters relation in (b) (c) (d) (c) ( 0 (y) 6 No. 18 Public Private Purtinuship 2010

6. The Co-ordination Unit shall he headed bv a Co- ordinator to he appointed in accordance with the Public Service Act. 1 inancc

7.-( 1) The Permanent Secretary o f the Ministry responsible for finance shall, establish within the organisational structure o f that Ministry, the fi nanc e Unit. (2) Where, in terms o f section 11. the Co-ordination Unit has submitted the project and the feasibility study to the fi na nc e Unit, it shall deal with fiscal risk allocation and other financial matters o f all public private partnership under this Act. (3) Without prejudice to the generality o f subsection (2). the Finance Unit shall consider and forward to the Minister responsible for finance for approval, all projects and feasibility studies the Government and. where the project to be undertaken involves public finance, that Minister shall initiate the funding process. for purposes o f appraising submitted to it (4) The projects referred to under subsection (3) shall be thereof be given by the Minister the dale of dealt with, and approval responsible for finance within thirty days from 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 o f thirty days inform the private parly about the reason, for delaying to approve the project. ^ 6 PARI III PA RT I CI PAT IO N OF Till- PUBLIC A N D PR IVATE PARTY K('lcso1 pri\il|k,lUU' se c t o r S.-( I ) The public sector shall facilitate the impl ementation o f the public private partnership projects by: (a) (b) (c) (d) (e) identifying projects: carrying out feasibility studies: monitoring and evaluation: risk sharing; and pulling in environment, includinu: place an appropriate enabling 7 No. 18 Public Private Partinaship 2010 (i) (ii) (iii) favourable policies: impl ementat ion strategies: and the legal and institutional framework: (2) The private sector, shall play the role o f identifying and implementing public private partnership projects by: (a) (b) (c) (d) (c) carrying out feasibility studies; mobi 1 izing rcsourccs; risk sharing; monitoring and evaluation; and providing skills. technical expertise and manage (3) The public sector and private sector shall, have the to prepare a communication strategy for awareness duty by all building creation and consensus stakeholders o f public private partnerships and their outcomes benefits and associated costs and risks. for acceptance R e s p o n s i ­ b ilitie s o f c o n t r a c t ini’ a u th o r ity

9.-(l) The contracting authority shall, for the purposes o f this Act: (a) identify, appraise, develop and m onit or 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; the proposed project to together with the Co-ordination Unit (c) submit the for feasibility study consideration; and : (d) prepare a request for proposal and. where the terms finance, seek o f the agreement approval o f the Minister responsible for finance. involves public (2) The contracting authority shall make consultation with the relevant regulatory authorities prior to submission of feasibility study o f the proposed project to the Co-ordination Unit. 8 No. IS Public Private Partiucishij? 2010 !().-(1) I {very contracting authority shall undertake or eause to he undertaken a feasibility study where it considers that a project may be i mplemented under Public Private Partnership agreement the proposed for purposes o f assessing whether project is feasible. (2) The feasibility study shall: (a) (b) (e) o f the impact projected the activity which identify and define the Government intends to outsource from a private party; intended assess outsourcing o f the activity to a private party on the staff, assets, liabilities and revenues o f the Government: asses the need for the Governme nt in relation to such activity including: options available (i) satisfy those needs; the advantages and disadvantages o f each option; the Gover nme nt (ii) to to (d) demonstrate comparat ive advantage strategic implementation under the agreement: operational and in terms o f for benefits (e) describe, in specific terms: (i) the nature o f the contracting author ity's functions, the specific functions to be considered in relation to the project and the expected inputs and deliverables: (ii) the extent to which those functions can • lawfully and effectively be performed by a private party in terms o f an agreement; ( 0 demonstrate that the agreement shall: (i) (ii) (iii) be affordable to the Contracting authority; provide value for money; transfer appropriate technical, operational or financial risks to the private party; 9 No. 18 Public Private Partiuaship 2010 (ii) (h) to monitor assess the eapaeity o f the contracting authority to effectively implement the agreement , including the ability project implementation and the performance o f the priv ate party in terms o f the agreement : and assess the capacity, resources and ability o f the private party to impl ement the project. regulate and (3) For the purposes o f subsection (2). the Feasibility impact shall socio- economic technical and include study analysis. (4) The assessment under paragraph (c) o f subsection (2) shall indicate comparat ive projections of: (a) (b) activity the full costs to the Gover nment for the activity if that through Public is not outsourced Private Partnership agreement; and the full costs to the Government for the activity if that through a Public is outsourced Private Partnership agreement. activity C ap. I1; I type for which an envir onmental (5) Where the project which is to be undertaken is of such a nature or impact assessment is required under Part VI o f the Environmental Management Act. to be carried on the contracting authority assessment shall certificate is obtained by the private part) before undertaking the project. environmental impact ensure that the A u i e e m e n l l l . - ( l ) Notwithst anding the provisions o f any other written into an laws, a contracting authority may enter agreement with a private party for the performa nc e o f one or more o f the functions o f that contracting authority. (2) For the purposes o f subsection (1). the accounting officer o f a contracting ..authority shall, for the purposes of advising the Minister responsible for contracting authority, form a multi disciplinary negotiating team possessing knowledge, skills and experience on the subject matter o f the proposed project. 10 No. 18 Public Private Parliuaship________________ 2010 (3) Without prejudice to subsection (2). the negotiating team shall ensure that the agreement is made in writing and- (a) (b) (c) (d) (e) ( 0 (g) (h) (i) (j) (k) (1) (m) for undertaking by the responsibilities o f the contracting the roles and risks undertaken by either specifics authority and the private parts" the relevant financial terms: specifies ensures for the manage ment o f perf or mance o f the private party: provides the Contracting authority to the private party in obtaining licences and permits which may be necessary for the implementation o f the project: provides for the return o f assets, if any. to the contracting authority, at the termination or expirv o f the agreement; specifies parly: provides for the payment to the private party, by way o f compensation from a revenue fund of charges or fees collected by the private party from users or customers o f the service provided by it: specifies payment o f the private parly contracting authority: provides for remedies in the event o f default b\ either p a rt s : imposes financial manage ment duties on part o f the private party, including procedures relating to internal budgeting, transparency, accountability and reporting; provides for the termination o f the agreement in case o f breach o f terms and conditions by either party: provides for the conditions for the provision of service, where necessary: provides for the period o f execution: and contains such other neecssarv. information as may be financial control. the to No. 18 Public Private Partinaship 2010 (4) Without prejudice to the pr ovisions o f subsection (3). the agreement shall contain conditions that ensures that: (a) (b) (c) (d) a the private party undertakes contracting authority's function on behalf o f the contracting authority for a specified period; to perform the private parly is liable for the risks arising from the performance o f its functions; the environmental impact assessment certificate has been issued in respect o f the project; government facilities, equi pment or other state resources which are necessary for the project and transferred or made available to the private are party on a timely basis; and (e) the public and private assets arc 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 laws o f in accordance with the governed and construed Mainland Tanzania. (7) flic rights, obligation and controlling interests o f the private party in any project performed under the agreement shall not be transferred or assigned to a third party without the prior written consent o f the contracting authority. Land a c q u is itio n C a ps. I 13. I I I . 116 aiul I IS Where the project requires acquisition o f land for its

12. implementation, in accor dance with the Land Act, the Village Land Act. the Land Use Planning Act, the Land Acquisition Act and any other relevant laws. shall be carried out the acquisition 12 No. 18 D u ratio n anil e x te n s io n o f an a g r e e m e n t Public Private Partinaship 2010

13.-(1) The duration o f an agreement shall be provided for in the agreement and shall not be extended unless: (a) (b) (c) increase there is a delay in completion or interruption o f operations due to circumst ances beyond any party's control; in costs arising from there was an requirements o f the Co-ordination Unit or contracting authority whi ch were not foreseen or included in the agreement; and the the contracting required and is authority has no capacity or immediate intention to take over and run the project. service (2) A violation o f the provisions o f subsection (1) by either o f the parties to an agreement shall render a defaulting party liable for any pecuniary loss incurred by the other party. V e t t i n g o f a g r e e m e n t s P r o c u r e ­ m ent p r o c e ss C a p. 110 I Inso licile cl bids

14. 1 wcry agreement intended to be entered into under this Act shall be submitted to the Officc o f the Attorney Genera! for a legal opinion.

15.-(1) Where the Minister responsible for finance approves the terms o f the agreement pursuant to paragraph (d) o f subsection (1) o f 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 compet itive bidding process in accordance with the Public Procurement Act.

16.-(1) The private party shall undertake a feasibility study in respect o f unsolicited project proposals and submit the feasibility study to the relevant contracting authority. (2) The feasibility study undertaken under subsection (1) shall social take environmental impact, economi c or any other relevant issues as may be required under this Act. consideration technical, financial, into (3) Without prejudice to the generality o f subsection (2). the feasibility study o f unsolicited project proposal shall: No. IS Public Private Partimtshij) 2010 (a) (b) (c) (d) the significance and benefits o f specify the proposed project activities: prescribe environmental issues; explain proposed project to the government: and explain the financial capacity and ability o f the private party and in mana gement o f the proposed project. implementation the the (4) The Minister responsible for finance shall make regulations prescribing procedures for handling public private partnership project proposals initialed through unsolicited bids under this Act. I’m jc c t OllkxTS

17.-(1) As soon as a contracting authority initiates ;i project that may be a public private partnership, the accounting officer shall appoint a person with appropriate skills and experience, either the contracting authority, as a project officer for the project. from within or outside (2) The project officer shall be responsible for: (a) assisting the accounting officer in monitori ng the performance o f the private party and ensure that the agreement is properly implemented: and any other duties or powers delegated to him b\ the accounting officer under this Act. (b) S i g n i n g o f a g r e e m e n t s

18.-(1) The agreement s entered into under this Act shall be signed by the accounting officer o f the relevant contracting authority after it has been considered and cleared by the fina nce Unit, approved by the Minister responsible for finance and vetted by the Office o f the Attorney General. (2) The accounting officer shall sign an agreement upon fully satisfying hims elf that the agreement has c omplied with the provisions o f this Act and any other relevant laws. (3) Any person who contravenes any provision o f this section commits an offence. 14 No. 18 R e sp o n sih i -lilies o f a c c o u n t i n g o fficers Public Private' Partinaship 2010

19. The accounting o n i c e r w ho has entered into an agreement shall, in addition to any other responsibilities under this Act. take all necessary and reasonable steps to ensure that: (a) (b) outsourced the efficiently carried out agreement: activity is effectively in accor dance with and the any public property which is placed under the terms o f the control o f the private party, agreement, is appropriately protected against forfeiture, theft, loss, wastage and misuse: and in (e) the Contracting authority has adequate contract management and monitoring capacity. A m e iu l- m cn l o f the a g r e e m e n t s

20. The agreement may be reviewed and amended by the parlies, provided that: (a) (b) (c) the Co-ordination Unit and the fi na nce Unit have approved the amendment s: the Minister the contracting responsible authority, or as the case may be. the Minister and the Minister have finance responsible consented to the review or a me ndment : and other relevant stakeholders hav e been consulted. for for 1-lnjoN ment o f b en efits ( ap. :>x

21.-(1) A project undertaken in accordance with the provisions o f this Act which ought to qualify for benefits granted to similar investment under the Tanzania Investment Act. shall be entitled to such benefits granted under that Act. (2) The benefits referred to under subsection (1) shall not apply to lax incentives. I )isp u tes reso lu tio n

22. Any dispute arising during the course o f the agreement shall be resolved through negotiation, mediation or arbitration. No. 18 Public Private P arlinasliip 2010 P A R I IV M I S C E L L A N E O U S PR OVI SION S M o n i t o r i n g and e \ a ! t i a t i o n 2 3 . - 0 ) All public private partnership projects under this Act shall be monitored by the Ministry. Sector Ministries. Gover nment Departments. Agencies or local government authorities under which they are carried out. (2) The purpose o f monitoring under subsection (1 ) shall review incorporate coherent oversight and regular to be mecha nisms , that would include: C o n f lic t o f interest (a) measurable performance targets: (b) meaningful incentives and rewards: and (c) effective penalties. (3) The Ministry, sector ministry. Department. Agency or local government authority shall, as much as practicable, involve other relevant stakeholders for better implementation and conduct o f monitori ng and evaluation.

24. (1) Where an officer o f the Co-ordination Unit, the the project, proposed project or other matter is Finance Unit or the contracting authority has any pecuniary interest, direct or indirect, in any project, proposed project or other matter, and is involved or participating in a process at which the subject o f consideration, he shall, as soon as practicable after the co mme ncement of that process, disclose that fact and shall not take part in or be present at the consideration or discussion of. or involved in any question relating to the project, proposed project or that other matter. (2) Subject to this subsection, for the purposes o f this section a person shall be treated as having direct or indirect pecuniary interest in a project or other matter, if: (a) he or his nominee is a m em be r o f a compa ny or other body, or is the holder o f shares or debentures in a company with whi ch the project is made or proposed to be made or he has a direct or indirect pecuniary interest in the project, proposed project or matter under consideration: or 16 No. IS Public Private Partinaship 2010 (b) he is a partner or in the e mployment o f 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 o f a s pouse or any members o f the family o f an officer o f the C o­ ordination Unit, the Finance Unit or the contracting authority shall, if known to that officer, be dee me d to be a direct or indirect interest o f the officer o f the Co-ordination Unit, the Finance Unit or the contracting authority. (4) A person who contravenes the prov ision o f this section, commits an offence. K m p o w e r - m c n t o f th e c i t i / e n s C a p. 3 8 6 shall

25. Public private partnerships agreements, endeavour to provide opportunity for empow e rm ent o f the citizens o f Tanzania as provided the National Economi c Empowerment Act. for under I )n t \ to lake care and e x e r c i s e d u e d ilii’c n e e ( i c n e r a l p c n n l tv

26. Every public officer perf or ming any functions, discharging any duty or exercising any power under this Act or any other written law related to a public private partnership shall be under the obligation to take reasonable care and exercise due diligence in the performance o f the functions and discharge o f duties and exercise o f power s in accordance w ith the provisions o f this Act and any other relevant laws.

27. Any person who commits an offence under this Act to which no specific penalty is prescribed shall be liable to to a imprisonment for a term not exceeding three years. fine not exceeding five million shillings or R e g u la ti o n s

2S.-(1) The Minister shall, in consultation with the Minister responsible for finance, make regulations for better carry ing out o f the provisions o f this Act. 17 No. 18 Public Private Partiiui.shi/) 2010 (2) Without prejudice to subsection (1). the Minister may make regulations prescribing: (a) (b) (c) (d) (e) (f) levying o f fees and charges: investment opportunities and promot ion: functions o f local governme nt authorities under this Act and clear linkages o f roles between the implementing ministries and appropriate bodies at the local government: evaluation. projects under this Act: and the manner in which the Empowerm ent o f the citizens o f Tanzani a may be impl emented: and in any other matter furtherance o f objectives o f this Act. operation and m anageme nt o f the pr omot ion and (3) Notwithstanding the provisions o f subsections (1) and (2). the Co ­ ordination Unit, make rules and guidelines for the better implementat ion o f this Act. in consultation with the Minister may. S;mM"

29. All existing agreements or memoranda o f understanding entered into by any contracting authority with the private party before the co mm encem ent o f this Act. shall not be affected by the coming into force o f this Act. PART V C O N S E Q U E N T I A L A M E N D M E N T S TO TH E T A N Z A N I A IN V E ST M E N T AC T ( onstmcuon

30. This Part shall be read as one with the Tanzania Inv estment Act. hereinafter referred to as the "principal Act." A m e n d m e n t o f se c t i o n 6

31. T h e p r i n c ip a l A c t is a m e n d e d in s e c t i o n 6. b v - (a) inserting alter paragraph (b). the following new paragraph: "(c) promote private sector 18 No. 18 P ublic Private P urtinaship 2010 in participation public scrviccs partnership": the provision o f through public private A m e n d m e n t o f S e c t i o n I I (b) re-numbering paragraphs (c). (d). (e). (I), (g) and (h) as paragraphs (d). (c). (T). (g). (h) and (i) respectively.

32. The principal Act is amen ded in section 11. bv - (a) inserting in subsection (1). a c o m m a (.) alter the designation "1-xecutive Director", and inserting immediately alter the c o m m a the designation "the Co-ordinator: and (b) inserting in subsection (3 ) the words "other than the Co-ordinator" alter the word "Centre". Pas sed in the Na tio n a l A s s e m b l y on the 15 lh Jul v. 2 0 1 0 D r . T h o m a s I). K a s i i i i . i i .a i i . C lerk o f the N a tio n a l A sse m b ly 19