The government has unveiled a three-year grand plan to attract 9 billion US dollars (about 21tri/-) capital investments through Public Private Partnership (PPP) for the implementation of long-term strategic projects.
To implement this, the government plans to organise a workshop that would bring together the heads of seven strategic institutions and global investment experts on PPP to exchange experience in attracting capital investments.
Commissioner of Public and Private Partnerships (PPP) in the Ministry of Finance and Planning, Mr David Kafulila said here yesterday that the meeting, scheduled on 2nd to 6th of next month, is part of the strategy to attain the Five-Year Development Plan (FYDP III (2021/22-2025/26) goals.
The total financing of the FYDP III is estimated at 114.8tri/- where the financing through government development budget amounts to 74.2tri/- for the entire period of five years.
This translates to a 25.9 per cent increase of the same budget under FYDP II, which was 59tri/-. Of the total public envelope, an estimated 62tri/- will be mobilised from local sources while 12.2tri/- will be tapped from grants and concessional loans.
The total financing from private sector sources is projected at 40.6tri/- where the private sector will be directly engaged in financing FYDP III through Joint Venture (JV) and PPP projects.
“Putting viable strategies for sourcing 21tri/- through PPP, equivalent to 17 per cent of the total financing of the development plan was of paramount importance,” Mr Kafulila said when addressing editors from various media houses.
Mr Kafulila said the PPP experts who will take part in the workshop are expected to come from the World Bank’s investment arm, the International Finance Corporation (IFC).
He said the workshop will bring together seven public entities namely Tanzania Electric Company (TANESCO), Rural Energy Authority (REA), Tanzania Railway Corporation (TRC), Tanzania Airports Authority (TAA), Tanzania Petroleum Development Corporation (TPDC), Dar Rapid Transit Agency (DART) and Tanzania Ports Authority (TPA).
“The public institutions are supposed to specify how they will implement the projects through the PPP initiative in three years,” he noted.
He added: “The government will hire expertise to make sure that the PPP projects are prepared professionally so as to attract huge global capital investments.”
He said to-date there are four PPP projects in the market and 21 projects which are in feasibility study.
The projects that are in the market are namely Kibaha-Chalinze Expressway, the Bus Rapid Transport (BRT), Five Star Hotel at Julius Nyerere International Airport (JNIA) and the construction of the Business Complex.
Mr Kafulila said PPP is a big global agenda because governments cannot provide their people with all the needs and necessities using their own sources like taxes and loans.
He said according to Moody’s reports, the 40 per cent national debt was sustainable and that the country was doing better compared to its peers in East Africa and most of the Southern Africa countries.
Despite the positive outlook of the economy and the national debt, the PPP initiative will be the best alternative for sourcing capital investments to cater for a huge demand for infrastructures in the future. This will also relieve the people from being taxed more as well as reducing borrowing expensive loans.
“Researches show that the current infrastructures like the central railway will be sufficient to cater for one third of the national infrastructure demands by 2050,” he said.
He therefore insisted on the need to double the infrastructure investments between now and 2050 in order to cater for the rising demand.