The High Court has delivered a significant ruling on Kenya’s Public-Private Partnerships (PPP) law, declaring certain sections unconstitutional. The court determined that Parliament must approve any PPP projects that create financial obligations for the national government. This landmark decision underscores the necessity for legislative oversight in projects that could potentially burden taxpayers with financial liabilities. However, the court has suspended the effect of its declaration for six months, allowing Parliament time to amend the law accordingly.
The case was initiated following a legal challenge concerning privately initiated proposals related to the Jomo Kenyatta International Airport (JKIA) and the Kenya Electricity Transmission Company (KETRACO) projects. Although both projects had been cancelled by the time the petition was heard, the court emphasized that their cancellation did not address the broader constitutional issues at stake. The court's examination focused on whether the existing PPP framework provides sufficient parliamentary oversight over projects that could expose the national government to financial commitments.
In its ruling, the court held that the government cannot use a PPP arrangement as a means to circumvent parliamentary approval in cases where a project involves public expenditure, government guarantees, borrowing, or other financial liabilities. Specifically, the court declared Sections 59, 60, and 72 of the PPP Act unconstitutional to the extent that they do not mandate parliamentary approval in such circumstances. This decision does not imply that every PPP project requires parliamentary approval; rather, it is necessary only when a project imposes financial obligations on the national government.
The petitioners had also contested provisions related to privately initiated PPP projects, arguing that they could enable government agencies to bypass competitive procurement processes. While the court rejected this aspect of the challenge, it underscored the importance of adhering to constitutional requirements concerning transparency, competition, and value for money in all PPP projects.
The court has provided Parliament with a six-month window to amend the PPP law before the declaration takes effect. This period is intended to ensure that the necessary legislative changes are made to align the law with constitutional standards. The matter is scheduled to return to court on May 11, at which point compliance with the court's directives will be assessed, and further directions will be issued if necessary. This ruling marks a pivotal moment in reinforcing the role of Parliament in overseeing projects that have significant financial implications for the country.
