JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

SCHOOL OF BUSINESS AND ENTREPRENEURSHIP MASTER OF SCIENCE IN

PROJECT

MANAGEMENT HEPM 3202: ETHICS AND LEGAL ISSUES IN PROJECT

MANAGEMENT

CONTINUOUS ASSESSMENT TEST: MAY-AUGUST 2022

SUBMITTED BY:

HDE314-C004-1859/2021

KARANJA KIMANI NELSON

institutional reforms continue to be made to enhance the role of public private projects in

national development. To this end, in June 2021, Kenya’s parliament enacted The Public

Private Partnerships Act No. 14 of 21. The said Act made several changes to the legal and

institutional frameworks governing the procurement and management of projects under the

Public Private Partnerships arrangements. By reference to the said Act and other authorities;

a) Evaluate the efficacy of the legal and institutional frameworks, strategies and

mechanisms for management of four types of risks in the six stages of

procurement of a project (20 marks)

Political Risk

Political risk is a type of risk faced by both private entities and governments which involves

political decisions, events or conditions that could significantly affect projects or the expected

value from certain projects.

Section 28 of the PPP Bill enumerates government support measures that may be issued

against political risk. These measures are aligned to the Government Support Measures

Policy of October 2018 and provide clarity for interested private parties and implementers of

private projects on what could possibly be available for them.

Political cover under this policy includes

1. Assurance of protection against expropriation and change in law

2. Assurance of protection against civil commotion and unrest

3. Assurance of protection against unprocedural termination of contract

Inadequate bidder Selection Process Risk

Section 37 of the PPP Bill now broadens the scope of engagement with bidders to include
 1. direct procurement;

2. privately-initiated proposals;

3. competitive bidding;

4. restricted biding.

The robust procurement of projects through the above methods may be considered by a

Contracting Authority under specified circumstances. New conditions have been included

such as alignment of the proposal to national infrastructure priorities, assessment of fiscal

affordability and potential contingent liabilities as well as meeting demonstrated societal

needs. The project is also required to demonstrate both value for money and the ability to be

delivered at a fair market price.

These standards as well as environmental and social governance aspects reduces any

ambiguity and removes room for error in sourcing and ensures the bidders/ contractors are

held to high standards

Contract Management Risk

Contract management is the process that allows the procuring party to realise the maximum

value of their contracts while continuously identifying, tracking, and minimising risk

throughout the contract/ project lifecycle.

The PPP act clearly spells out how to manage bidder contracts right from the initiation stage,

execution and termination. The act is devoid unexpected disruptions, errors and omissions.

An example is the efficacy of section 62 which spells out the conditions under which the

contract may be terminated.

increased value for money in public private partnerships

Inaccurate Internal Need Analysis

This risk is mitigated by the act through a clear laid out procedure of project identification

and selection from section 30 of the act. At this stage of the procurement process the risks are

obvious: -

1. Overstatement or Understatement of the need

2. Unrealistic timescales and schedules

3. Inadequate budget

4. Poorly designed requirements

The act mitigates this risk through: -

1. Project identification, selection and prioritisation

2. Project preparation and implementation

3. Feasibility studies

4. Approval of feasibility reports

5. Standards and procedures for identification, selection, feasibility study, pre-tender

approval, tendering, negotiation, post-tender approval, monitoring and evaluation of

projects

b) Discuss the principles, strategies and institutional arrangements for

management of a project (20 marks)

Project oversight mechanisms are included in institutional arrangements for the purpose of

providing policy and strategic guidance to ensure delivery of the project outcomes and

achievement of the project objectives and goals. Project oversight entities normally consist of

stakeholders with a direct interest in the project. Their tasks include providing advice on

workplans and budgets; monitoring the quality of the project as it develops; and providing

advice (and sometimes making decisions) about changes to the project, including

harmonization and alignment with government priorities and policies, regulatory environment

and legislative changes. When functioning well, these entities have a positive impact on

overall project management and implementation.

Project management

This is an important element in institutional arrangements and a crucial determinant of

efficiency in project delivery. It includes mechanisms put in place for the purpose of

coordinating, planning and budgeting; financial management; procurement of works, goods

and services; provision of technical and implementation support; monitoring and evaluation

(M&E); reporting, communication and knowledge management. The structure, roles and

responsibilities adopted for project management will vary depending on the country context

and the nature of the project (complexity and type of goods/services to be delivered).

Coordination mechanisms

This includes mechanisms put in place to facilitate interaction both between project

stakeholders and partners and with other complementary or potentially competing initiatives

being implemented in the same project area. This can also be a means of forging partnerships

and exploring opportunities for scaling up potential project innovations.

This includes institutional mechanisms and structures to govern the delivery of planned

project goods and services to beneficiaries or beneficiary groups. In some projects, delivery

of services is handled exclusively by the public sector and its decentralized structures. In

others, the public sector contracts out delivery of specific services to private-sector or non-

state entities.