Tanzania’s

Municipal
PPPs
 1. BACKGROUND

1. Background

2. PPP Support
Program

3. Initial Muni PPPs

4. Next Steps
 20+ PPPs SO FAR

Plus $3.1b in non-PPP private investment in ICT and a

range of PPP-like arrangements in airport ground
services, health etc

Airports, ports,
water and waste
water

Rail

Source: Private Participation in Infrastructure Database (http://ppi.worldbank.org)

 BUT A MIXED TRACK RECORD
MKUKUTA II (the 2nd five-year development plan) attributed mixed results
from past national PPPs to
• weakness in the legal framework
• unresolved land issues
• inadequate understanding and operationalization of PPP concepts
Key challenges facing PPPs were identified as
• Lack of clarity in legal and institutional frameworks, guidelines and
procedures for the development and implementation of PPPs
• Lack of realistic and comprehensive technical, socio-economic and
commercial feasibility analysis, leading to poor project design and
implementation
• Inadequate enabling environment, including the lack of long-term
financing instruments and risk sharing mechanisms
• Insufficient capacity for negotiating, procuring, managing and
implementing PPPs
A project is yet to be approved under the PPP Act
 2. PPP Support Program

1. Background

2. PPP Support
Program

3. Initial Muni PPPs

4. Next Steps
 Strategic Directions
Aim is to re-launch Tanzania’s PPP program on a sustainable trajectory
• By starting from simpler, low risk PPPs
• That deliver tangible results to communities
• That offer opportunities to local businesses and labor have solid local
backing
More than 10 municipalities engaged in PPP identification
• The process took almost 2 years
• Started from fiscal academies
• Moved onto awareness raising and capacity building
• Municipalities developed project concepts
• That were strengthened and shortlisted
3 batches of local government PPPs are now in preparation under the World
Bank’s £20 million Tanzania PPP Support Program funded by DFID,
 THE PROGAM AT-A-GLANCE
PPPs are different. They build on foundations that take time to build, and evolve as government
priorities and market circumstances change. The Government will strengthen these foundations
while ensuring delivery of public services through value-for-money projects

Activity Areas

Contract management
Procurement
Feasibility
PPPs Project identification

PPP Toolkits and checklists

Manuals and guidelines
tools Standard documents

Training and certification

Capacity

M&E
Hands-on participation
development Knowledge sharing

Enabling PPP laws and regulations

Planning and budgeting
environment Financing mechanisms

Advocacy and Public consultation

Private sector engagement
consultation Communication
 FROM CONCEPT TO PPP
Roles
PPP Center, Contracting World
Node, authorities Bank
Department
Applications
Transaction advisors will help
contracting authorities
procure and negotiate PPPs

04
03

Model documents
Will be prepared where
Studies feasible to simplify and
Will be undertaken to standardize project designs.
convert concepts into This will make PPPs easier
bankable PPP proposals and cheaper to do.
Documents for different
02 types of PPPs will be
01 prepared then released for
others to use

Concepts
Government agencies will identify the To guide, To To provide
projects important to them and what coordinate and originate advisory
they need to deliver. Concepts will be approve. Will and lead support and
refined and new ideas introduced on procure projects share good
transaction they will practices
how PPPs can be used implement
advisors
 LEARNING BY DOING
Support for capacity development and the strengthening of PPP systems will be wrapped
around actual projects to make support more real and engaging

SIGNED PPP AGREEMENTS

Activities will be Training needs will be

results-oriented and identified and met as
very practical. The projects progress. A
focus will be on the complementary training
needs of actual program will be tailored
projects Project-based Training to meet different needs

SKILLS EXPERIENCE
Lessons and insights External advisors will fill
from elsewhere will gaps in capacity and
be adopted and transfer their skills and
adapted to fit local experience. A structured
circumstances approach will be
Good practices Advisory support adopted that
incorporates feedback

IMPROVEMENTS TO
SYSTEMS AND PROCESSES
 3. INITIAL MUNI PPPs

1. Background

2. PPP Support
Program

3. Initial Muni PPPs

4. Next Steps
First Batch of 14 Muni PPPs
Truck Terminal in Mwanza City
Truck Terminal in Mwanza City
Truck Terminal in Mwanza City
Nyegezi Bus Stand in Mwanza City
Nyegezi Bus Stand in Mwanza City
New Market in Arusha City
New Market in Arusha City
City Park in Mbeya City
City Park in Mbeya City
 4. NEXT STEPS

1. Background

2. PPP Support
Program

3. Initial Muni PPPs

4. Next Steps
 Implications of Initial Results
Initial results show promise
• Initial analysis finds the PPPs are economically attractive
• Well established PPP models can be used (eg BOT)
But fiscal affordability is a key challenge
• The PPPs either require a viability gap payment or the
government to make availability payments
• But outside the capital Dar es Salaam, municipalities probably
lack the fiscal capacity to make such financial contributions
• Challenge is exaggerated by the limitation of local
government PPPs to 15 years
Initial aim of relying on user revenue and market demand looks
unlikely to be achievable
 Making LGA PPPs work
More work is needed to make muni PPPs work in Tanzania’s
smaller cities
There is a need to explore
• Standardized and simple designs that lower the cost of
project and make PPPs easier to use
• Streamlining the PPP law and regulations to reduce the
length of the project cycle
• The establishment of viability gap fund and credit
enhancement facilities suited to municipalities
• PPPs for other core infrastructure eg water, waste water,
energy
Must continue to build the capacity in PPPs
• Training program is underway
• Learning-by-doing is central
THANK YOU