PUBLIC-PRIVATE PARTNERSHIP ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Application

   3.   Interpretation

PART II
THE PUBLIC-PRIVATE PARTNERSHIP UNIT, COUNCIL AND TECHNICAL COMMITTEE

   4.   Establishment of the Public-Private Partnership Unit

   5.   Functions of Unit

   6.   Establishment of Public-Private Partnership Council

   7.   Functions of Council

   8.   Composition of Council

   9.   Secretary to Council

   10.   Constitution of Public-Private Partnership Technical Committee

   11.   Functions of Technical Committee

   12.   Proceedings of Technical Committee

   13.   Disclosure of interest

   14.   Conciliation, mediation and arbitration

   15.   Appointment of mediator or arbitrator

   16.   Director, Deputy Director and other public officers

PART III
PROJECT IDENTIFICATION AND FEASIBILITY STUDY

   17.   Participation in project

   18.   Project identification and feasibility study

   19.   Approval by Council

PART IV
COMPETITIVE SELECTION PROCESS AWARD PROCEEDINGS

   20.   Procurement procedure

   21.   Pre selection proceedings

   22.   Request for expression of interest

   23.   Pre-selection criteria

   24.   Participation of Consortia

   25.   Evaluation of pre-selection bids

   26.   Approval of Unit

   27.   Single-stage and two-stage procedures for requesting technical proposals

   28.   Content of request for technical proposals

   29.   Bid securities

   30.   Clarification and modifications

   31.   Evaluation criteria

   32.   Evaluation of technical proposal

   33.   Further demonstration of fulfilment of qualification criteria

   34.   Final negotiations

   35.   Circumstances authorizing award without competitive procedures

   36.   Procedures for negotiation of agreement

   37.   Confidentiality

   38.   Notice of contract award

   39.   Record of selection and award proceedings

   40.   Review procedures

   41.   Organisation of concessionaire

   42.   Unsolicited proposal

PART V
PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS

   43.   Contents and implementation of agreement

   44.   Governing law

   45.   Ownership of assets

   46.   Acquisition of rights related to project side

   47.   Easements

   48.   Financial arrangements

   49.   Security interests

   50.   Assignment of agreement

   51.   Transfer of controlling interest in concessionaire

   52.   Operation of infrastructure facility

   53.   Compensation for specific changes in legislation

   54.   Revision of agreement

   55.   Takeover of project

   56.   Substitution of concessionaire

   57.   Duration and extension of agreement

   58.   Termination of agreement by contracting authority

   59.   Termination of agreement by concessionaire

   60.   Termination of agreement by either party

   61.   Compensation upon termination of agreement

   62.   Management of public private partnerships

   63.   Winding up and transfer measures

PART VI
SETTLEMENT OF DISPUTES AND GENERAL PROVISIONS

   64.   Disputes between contracting authority or concessionaire and concessionaire

   65.   Disputes involving customers or users

   66.   Regulations

   67.   Savings

      SCHEDULE

An Act

to promote and facilitate the implementation of privately financed infrastructure projects and effective delivery of social services by enhancing transparency, fairness and long term sustainability and removing undesirable restrictions on private sector participation in the provision of social sector services and the development and operation of public infrastructure; establish a Public Private Partnership Unit and provide for its functions; establish the Public-Private Partnership Council and provide for its functions; provide for public-private partnerships for the construction and operation of new infrastructure facilities and systems and the maintenance, rehabilitation, modernisation, expansion and operation of existing infrastructure facilities and systems and the provision of social sector services; develop general principles of transparency, economy and fairness in the award of contracts by public authorities through the establishment of specific procedure for the award of infrastructure projects and facilities and provision of social sector services and rules governing public-private inception, procurement, contracting and management of public-private partnerships; provide for the implementation of public-private partnership agreements between contracting authorities and concessionaires; and provide for matters connected with, or incidental to, the foregoing.

[28th August, 2009]

Act 14 of 2009.

PART I
PRELIMINARY

1.    Short title

This Act may be cited as the Public-Private Partnership Act, 2009.

2.   Application

This Act applies to infrastructure projects and facilities, and the provision of social sector services as may be prescribed by the Minister, implemented through the Public-Private Partnership Unit, but does not apply to the following infrastructure projects or infrastructure facilities—

      (a)   projects which are undertaken by any joint venture between any statutory body, Government Ministry or department, statutory body or local authority;

      (b)   projects between any statutory body and any Government Ministry or department;

      (c)   projects which may be taken over by any concessionaire or private sector entity on privatisation or dis-investment by any Government Ministry, department, statutory body, State corporation, local authority or agency; or

      (d)   projects which have been expressly excluded from the provisions of this Act or which are not prescribed by the Minister.

3.   Interpretation

In this Act, unless the context otherwise requires—

“affordable” in relation to an agreement, means a contractual arrangement where a contracting authority is able to meet any financial commitment likely to be incurred under the agreement from its existing or future budgetary funds;

“agreement” means a public-public partnership agreement entered into in accordance with this Act which may incorporate any approvals, licences, permits and authorisations necessary for its implementation;

“asset” includes an existing asset of a relevant contracting authority or a new asset to be acquired for the purposes of entering into an agreement;

“bid” means a tender, an offer, a proposal or price quotation, given in response to an invitation to participate in an infrastructure facility or infrastructure project;

“bidder” means any person, including a group of persons, that participates in selection proceedings relating to a project;

“bidding documents” means the tender solicitation documents or other documents for solicitation of bids, on the basis of which bidders are to prepare their bids;

“bidding consortium” means a situation where a proposal for an infrastructure project or infrastructure facility is made by more than one person, and “bidding consortia” shall be construed accordingly;

“concessionaire” means a person from the private sector who undertakes an infrastructure project or infrastructure facility or the provision of any social sector services under a public private partnership agreement, other than a contracting authority;

“contracting authority” means the public authority that has the power to enter into an agreement for the implementation of an infrastructure project or infrastructure facility or the provision of any social sector services under any law, and includes any Ministry, Government department, local authority or statutory body;

“contingent liability” includes Government’s guarantee for loan and foreign currency transfer and step in function in the event of default by the relevant contracting authority;

“Council” means the Public-Private Partnership Council established under section 6;

“generic risks” means any circumstances that have the potential to adversely affect the development of, or interests of the parties to, an infrastructure project or infrastructure facility or the provision of any social sector services or the interest of a contracting authority, in the nature of construction period risk, finance risk, legal risk and miscellaneous risk, as prescribed by the Minister.

“infrastructure facility” means any physical facility and systems that directly or indirectly provide services to the general public;

“infrastructure project” means the design, construction, development and operation of any new infrastructure facility or the rehabilitation, modernisation, expansion or operation of any existing infrastructure facility;

“local authority” has the meaning assigned to it under the Local Government Act;

“material default” means any failure of a concessionaire to perform any duty under a public-private agreement which affects or will affect the delivery of service to the public, and remains unsatisfied after a reasonable period of time and after the concessionaire has received written notice of the failure from the Unit;

“National Council for Construction” means the Council established under the National Council for Construction Act, 2003;

“preferred bidder” means a bidder, including any bidding consortium, selected as a successful bidder during the competitive, selection process;

“project” means an infrastructure project, an infrastructure facility, or the provision of any social sector service, as the case may be;

“public-private partnership” means investment through private sector participation in an infrastructure project or infrastructure facility;

“public-private partnership agreement” means a contractual arrangement between a contracting authority and a concessionaire, made in accordance with this Act, in which the concessionaire-

      (a)   undertakes to perform or undertake any infrastructure project or infrastructure facility as specified in the First Schedule or as prescribed;

      (b)   undertakes to provide or provides such social sector services as may be prescribed;

      (c)   assumes substantial financial, technical and operational risks in connection with the performance of the institutional function or use of State property; and

      (d)   receives consideration for performing a public function or utilising State property, either by way of-

      (i)   a fee from any revenue fund or a Ministry’s budgetary funds;

      (ii)   user levies collected by the concessionaire from users of customers for a service provided by it; or

      (iii)   a combination of the consideration paid under sub-paragraphs (i) and (ii);

“regulatory agency” means a public authority that is entrusted with the power to issue and enforce the laws governing infrastructure development or the provision of services;

“Technical Committee” means the Public-Private Partnership Technical Committee established under section 10;

“Unit” means the Public-Private Partnership Unit established under section 4;

“unsolicited proposal” means any proposal relating to the implementation of an infrastructure project or infrastructure facility that is not submitted in response to a request or solicitation issued by the Unit or a contracting authority within the context of a competitive selection procedure;

“user levy” means the right or authority granted to a concessionaire by the contracting authority to recover investment and a fair return on investment and includes tolls, fees, tariffs, charges or other benefit whatsoever called;

“value for money” means the carrying out of the institutional function of a contracting authority or the use of State property by a concessionaire, in terms of an agreement, which results in a net benefit to the contracting authority or consumer, defined in terms of cost, price, quality, quantity, risk transfer or a combination thereof; and

“Zambia Development Agency” has the meaning assigned to in the Zambia Development Agency Act, 2006.

PART II
THE PUBLIC-PRIVATE PARTNERSHIP UNIT, COUNCIL AND TECHNICAL COMMITTEE

4.   Establishment of Public-Private Partnership Unit

   (1) There is hereby established the Public-Private Partnership Unit which shall be responsible for the implementation of the provision of this Act.

   (2) The Unit shall be a department in the Ministry responsible for finance and shall be under the control and supervision of the Minister responsible for finance.

   (3) The expenses of the Unit shall be charged upon and issued out of the general revenues of the Republic.

5.   Functions of unit

   (1) The functions of the Unit are to—

      (a)   promote the participation of the private sector in the financing, construction, maintenance and operation of any project irrespective of its cost;

      (b)   advise Government on administrative procedures in relation to project development and on all matters of policy relating to public-private partnership;

      (c)   conceptualise, identify and categorise projects for purposes of this Act and prepare register as may be Prescribed;

      (d)   co-ordinate with contracting authorities in respect of any project;

      (e)   develop technical and best practice guidelines in relation to all aspects of public-private partnerships, standardised bidding documents and public-private partnership agreement provisions for purposes of this Act and as may be prescribed;

      (f)   receive and make an assessment of any proposed project submitted to it and give its recommendations to the contracting authority as to whether the project or facility—

      (i)   is affordable to a contracting authority;

      (ii)   provides value for money; and

      (iii)   presents optimum transfer of technical, operational and financial risks to the concessionaire;

      (g)   examine the request for proposals to ensure conformity with the approval feasibility study and as may be prescribed;

      (h)   monitor the competitive selection process and provide for review of the process if so required, under this Act;

      (i)   monitor progress of implementation of public-private partnerships;

      (j)   facilitate the internal and external auditing of projects and prepare a road map for project development;

      (k)   in liaison with the Zambia Development Agency, facilitate and market investment in public-private partnerships;

      (l)   identify inter-sectoral linkages and facilitate approvals from the Ministry responsible for finance required under this Act;

      (m)   approve terms of reference for consultancy assignments for a project and the consultant selection process for such assignment in liaison with the Technical Committee;

      (n)   determine financial support and approve the allocation of contingent liability for any project, as prescribed by the Minister;

      (o)   monitor issues pertaining to user levies and recommend to the Council, in liaison with the appropriate regulatory agency, mechanisms and procedures for setting, revising and collecting user levies and the settlement of disputes relating to user levies, notwithstanding any other law to the contrary;

      (p)   train, and provide advisory services to, project officers; and

      (q)   promote public-private partnership awareness and advocacy in Zambia.

   (2) The unit shall be responsible for ensuring the proper implementation, management, enforcement and monitoring of any agreement and the reporting by a concessionaire on an agreement.

   (3) The Unit shall exercise and perform such other powers and functions as are conferred or imposed on in by, or under, this Act or any other written law.

6.   Establishment of Public-Private Partnership council

   (1) There is hereby established the Public-Private Partnership Council.

   (2) The provisions of the Second Schedule apply to the Council.

7.   Functions of council

   (1) The functions of the Council are to—

      (a)   formulate policies relating to the public-private partnerships for purposes of this Act;

      (b)   approve projects for purposes of this Act;

      (c)   approve the preliminary award of agreements under this Act;

      (d)   ensure competition, transparency, fairness and equity in the selection process under this Act;

      (e)   make recommendations to the contracting authority on generic risk sharing principles for any project and the grounds for entering into negotiations with a preferred bidder;

      (f)   give directions to any contracting authority, regulatory agency or concessionaire regarding the implementation of any project and the contracting authority, regulatory agency or concessionaire shall comply with the directive, subject to any other written law;

      (g)   set time limits for the clearance of any project and review the time limits periodically;

      (h)   resolve issues relating to the project approval process; and

      (i)   refer any bid received by it to an appropriate contracting authority for examination and evaluation;

   (2) The Council shall approve or reject a project or award of an agreement before it within 21 days of receiving a recommendation on it from the Technical Committee.

   (3) The Council shall, in the performance of its functions under this Act, take into consideration the recommendation of the Technical Committee.

   (4) In the discharge of its functions under this Act, the Council may—

      (a)   commission any study relevant to the determination of the award of any agreement;

      (b)   request any contracting authority, regulatory agency, concessionaire or any other body or person to furnish the Council with information, details, documents and particulars required in connection with or relating to any project;

      (c)   request any professional or technical assistance from any appropriate body or person in Zambia or elsewhere; and

      (d)   inspect, visit, review and monitor any project and its implementation, execution, operation and management.

   (5) The Council may—

      (a)   request the chairperson, supervising officer or chief executive officer of a contracting authority to—

      (i)   produce any records or other document relating to a project; and

      (ii)   answer all relevant questions, on a project as requested by the Council; and

      (b)   examine any record or other document submitted under paragraph (a) and take copies or extracts from them.

   (6) Any person to whom a request is made under subsection (5) who—

      (a)   fails to comply with the request; or

      (b)   refuses to answer or gives any false or misleading answer to any question lawfully put by the Council;

commits an offence and is liable upon conviction, to a fine not exceeding five hundred thousand penalty units or to imprisonment for a term not exceeding five years, or to both.

   (7) Where the Council makes recommendations under paragraph (e) of subsection (1), any change in the terms of the agreement shall be submitted by the contracting authority to the Council for final approval before the signing of the agreement.

   (8) The Council may delegate any of its functions to the Technical Committee.

8.    Composition of Council

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