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The Public Private Partnership (Amendment) Act 2018
The highly anticipated Public Private Partnership (Amendment) Act, No. 9 of 2018 (the PPP Amendment Act) was gazetted and came into force in September 2018. Earlier in the year in June 2018, we circulated a briefing analysing the proposed changes to the Public Private Partnership Act, No. 19 of 2010 (as amended in 2013 and 2014) (the PPP Act). The majority of the proposed changes have been incorporated in the final PPP Amendment Act however there have been further amendments in some clauses. This updater will explore:
- the key changes to the PPP Act;
- changes to other related legislation; and
- the impact of the changes to investors.
- PPP agreements will be subject to local arbitration under the arbitration laws of Tanzania. This provision augments the existing governing law provision which provides that the PPP agreement will be governed by Tanzanian law. Therefore, in the event of a dispute, the parties must select a local arbitral forum i.e. the National Construction Council or the Tanzania Institute of Arbitrators;
- exemption from competitive bidding for unsolicited projects subject to fulfilment of specific prescribed conditions. This amendment is likely to encourage more international investors to propose PPP projects;
- removal of the National Steering Investment Committee from approving PPP projects. This has reduced the number of entities involved with reviewing PPP projects hence will increase efficiency in relation to the timelines and required approvals;
- adherence to the Natural Wealth Laws which allows Parliament the right to review the PPP agreement at a later point and to modify it if there are deemed to be any unconscionable terms;
- reduction of the threshold for small scale projects from US $70 million to US $20 million;
- consideration of local content and empowerment of Tanzania citizens in the PPP evaluation;
- and public funding for PPPs to be carried out under the Government Loans, Guarantees and Grants Act, whereas other government support will be at the discretion of the Minister.