High Grand Falls Dam project to benefit us through PPP

The High Grand Falls Dam is in the Public Private Partnerships (PPP) language a Privately Initiated Proposal (PIP) to be built under the PPP model at the confluence of rivers Tana and Mutonga, and the main reservoir will cover an area of 165 km². Under this PPP Model, the British contractor will design, build, own, operate for some time to recoup their investment, and then hand over the project to the government in a good state, to continue managing the dam and its infrastructure. 

The dam will cost Kenya shillings Four Hundred and Twenty-Five Billion (KSh425B) and will be the second largest fresh water dam in Africa after the Aswan High dam in Egypt, built on river Nile. The dam will also be the single biggest government undertaking and will cost more than the Standard Gauge Railway (SGR) in Kenya.

The construction of the High Grand Falls hydroelectric power station and project, will harness the energy of Kibuka falls to generate 693 MW of energy. The development is part of the Lamu Port South Sudan Ethiopia Transport Corridor (LAPSSET) development and will create 165km² of man-made lake with 5,600,000,000 m³ of water, and hence provide water for irrigation for 250,000 hectares of land.

It will also mitigate flooding and drought situation in the areas of the project which will in the process increase food production and hence providing food security to the region. 

The project should therefore provide enhanced socio-economic benefits to the people of the two counties and Kenyans at large. These includes domestic water, water for irrigation, energy, roads and supporting infrastructure. It will spur investments and development from the persons who will be compensated and facilitated to move, the land owners in the surroundings and other investors. To the country, the project will increase the energy capacities for increased industrialization and manufacturing, increase the irrigated land in Kenya and fast track the operationalization of the resort cities at Lamu and Isiolo as envisioned in the Kenya Vision 2030. It will open up some marginalized and remote parts of the two counties and hence fast track the achievement of national and international development goals touching on water, energy, infrastructure, food security and poverty alleviation. 

It is good to note that the project will be realized through the application of Public Private Partnerships (PPPs), which is emerging as an important strategy through development financing can be realized across the world.  This reliance on PPPs is borne out of the fact that globally, the public pulse and reliance on the public budget to support such projects has been on a decline because of a variety of reasons. They include the financial and economic recessions that have visited the world including the 1930’s and 40’s as a result of the two World Wars, the 2008 financial crisis and the post Covid-19 related recessions in addition to climate change-induced financial shocks. 

On the other hand, the dwindling public sector capacities to fund development programmes and projects has been met with increased demand for infrastructure and services because of urbanization, high population growth and increased poverty levels. 

It has been estimated that Kenya requires infrastructural investments of over US$ 40 billion per year for the next 10 years, of which only 15 billion is available, leaving an annual deficit of US$ 25 billion. This deficit can only be addressed by ingenious financing mechanisms like the increased utilization of PPPs. Well-structured and arranged PPPs avail innovative finance, technology, managerial expertise, risk identification, costing and minimization, whole life cycle concept (where a developer or contractor factors in the cost of design, finance, construction, operation and maintenance throughout the project cycle, which works to reduce and minimize projects defects and processes that can lead to cost escalation, hence more savings) and efficiency and effectiveness in projects implementation. It reduces the operation & maintenance costs because the developer factors in the O& M during the bidding, designing and financing of such projects. 

PPP projects are keen to achieve agreed project specification, outputs, deliverables and functionality of finished product, which leads to savings and improvement of the life of a project. It maximizes assets utilization in service delivery, which the private sector has in plenty. This is a call to the Kenyan private entities to engage more in PPP because the country has many private equity, insurance firms, cooperatives, high net worth individuals and other private players who can make more money from PPP transactions.

There is need to realize that the private and public sector should always collaborate because they are not in any kind of competition. The citizenry is also increasingly aware of the financing constraints faced by governments and are willing to pay some level of user charges/fees, provided the services offered are up to standards. 

The reliance on PPPs is therefore a welcome move by the government and it should be actively pursued in financing the Bottom-Up Economic Transformation Agenda (BETA) and Kenya Vision 2030 programmes and projects.

PPPs can be utilized in the development of the rural access roads to enable the farm produce to reach the markets on time, alongside industrialization from the farm produce. We can exploit our mining potential, our green energy potential, and urban housing through PPPs. Major slums sit on prime public land which is suitable for land swaps and Tradable Development Rights (TDR), which have been seen to be attractive to private entities.