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Frequently Asked Questions?


What is the institutional arrangement like in PPP implementation?

International experience suggests that identifying and establishing clear and unambiguous institutional functions in relation to... read more

What steps are involved in PPP?

The PPP project cycle covers five distinct phases; project identification, initial viability assessment, project preparation and development, project procurement and the post contract phase.
Minis... read more

Why does the Malawi Government need PPPs?

The Government of Malawi has recognised and publicly acknowledged through the highest office (of State President) that there is a need to explore more private sector involvement in the delivery of ser... read more

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Ppp

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What is a PPP

A Public-Private Partnership (PPP) is a legally enforceable contract in which a Contracting Authority partners with a private sector Partner to build, expand, improve, or develop infrastructure or service in which the Contracting Authority and private sector Partner contribute one or more of know-how, financial support, facilities, logistical support, operational management, investment or other input required for the successful deployment of a product or service, and for which the Contracting Authority and the private sector partner is compensated in accordance with a pre-agreed plan, typically in relation to the risk assumed and the value of the result to be achieved. Usually the private entity performs infrastructure service delivery functions that would otherwise have been provided through traditional public sector procurement and assumes the associated risks through a long term contract (typically ranging from 10 to 50 years). In return, the private entity receives a benefit/financial remuneration according to predefined performance criteria, which may be derived:

  • Entirely from service tariffs or user charges,
  • Entirely from GoM’s budgets, and or
  • A combination of the above

Why PPPs

Benefits of PPPs to the General Public and Government

There is a massive need for Malawi to augment the existing infrastructure, extend public services to those who are currently not receiving them, and improve the quality of services received by all of society. Whereas traditional forms of contracting utilise the private sector for specific services to the government, PPPs are intended not only to provide government with a service, but to do so in a way that improves the long-term sustainability of the service through enhanced efficiency, stronger human and institutional capacity, greater accountability and/or improved technology. PPPs have the potential to offer Malawi the following benefits:

  1. Acceleration of infrastructure provision through mobilisation of private sector capital, Faster implementation of development projects because government would not have to wait until it can afford to address the matter;
  2. Reduced whole life costs, because of private sector efficiencies; Better allocation of risk, because the private sector has experience in handling commercial risks, while government typically does not;
  3. Better incentives to perform, because a failure to perform by the private sector means payment would not be issued, Improved quality of service, again because quality of service would be a key performance indicator (KPI) upon which payment would be based;
  4. Generation of additional revenues as a result of the technical expertise possessed by the private sector and the efficiencies that would result, Strengthened accountability, due to contractual provisions that would link the private operator’s remuneration with performance, and;
  5. Enhanced public management, because government now would have the time to manage, rather than be distracted by operational and service provision requirements.


What We Do

-Facilitate the procurement of private sector investors in public private partnership arrangements and other forms of undertakings relating to public investment projects in Malawi
-Provide technical support to contracting authorities in identification, initiation and development of PPP arrangements
-Implement divestitures in direct or indirect government interests in state-owned enterprises


Key Infrastructure Priorities

  1. agriculture and food security
  2. Energy, industrial development, mining and tourism
  3. Transport infrastructure and inland ports
  4. Education, science and technology
  5. Public health, sanitation, malaria and HIV/AIDS management
  6. Integrated rural development
  7. Greenbelt irrigation and water development
  8. Child development, youth development and empowerment
  9. Climate change, natural resources and environmental management

Models of PPPs

In the implementation of public-private partnership arrangements, the Commission may use any or a combination of the following modes of private sector involvement

  • Build Own Operate Transfer (BOOT); Whereby the private party undertakes to construct, own, and transfer ownership of the infrastructure to government after a considerable duration of operating the enterprise
  • Build Operate Transfer (BOT); Whereby the private party undertakes to construct operate and transfer the infrastructure back to the public sector.
  • Build Own Operate (BOO); Whereby the private party constructs, owns and operates the infrastructure with no option of transferring to government the ownership of such
  • Design Finance Refurbish Operate Transfer (DFROT); The private party designs, finances, refurbishes, and transfers ownership of the infrastructure back to government after operating it for a considerable duration
  • Design Finance Build Operate Transfer (DFBOT); Whereby the private party undertakes the designing, construction, financing, operation and finally transfers the infrastructure to the public party
  • Concession or Leases; Where the public assets are leased or conceded out to the private party

The PPP Feasibility Study

The feasibility study shall

  • demonstrate comparative advantage in terms of strategic and operational benefits for implementation under a public-private partnership agreement;
  • describe in specific terms (i) the nature of the Contracting Authority's functions, the specific functions to be considered in relation to the project, and the expected inputs and deliverables;
    (ii) the extent to which those functions can lawfully and effectively be performed by a Partner in terms of an agreement; and
    (iii) the most appropriate form by which the Contracting Authority may implement the project under an agreement;
  • demonstrate that the agreement shall
    1. (i) be affordable to the Contracting Authority
    2. (ii) deliver value for money; and
    3. (iii)transfer appropriate technical, operational or financial risk to the Partner; and
  • explain the capacity of the Contracting Authority to effectively enforce the agreement, including the ability to monitor and regulate project implementation and the performance of the Partner in terms of the agreement.

Divestiture (Sale of Assets)

The Commission employs the following modes of divestiture

  • public offering of shares;
  • private sale of shares through negotiated or competitive bids;
  • offer for sale of additional shares in a state-owned enterprise to reduce Government share-holding;
  • sale of the assets and business of the state-owned enterprise;
  • re-organization of the state-owned enterprise before the sale of the whole or any part of the enterprise
  • buy outs of a state-owned enterprise by management or employees in that enterprise;

Latest Projects

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