CHAPTER 46:07
PUBLIC-PRIVATE PARTNERSHIP

ARRANGEMENT OF SECTIONS

   SECTION

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
Objectives of Public-Private Partnerships and Divestiture of State-Owned Enterprises

   3.   Objectives

PART III
THE PUBLIC-PRIVATE PARTNERSHIP COMMISSION

   4.   Establishment of the Commission

   5.   Composition of the Commission

   6.   Tenure of office and vacancies

   7.   Allowances of members

   8.   Authority and functions of the Commission

   9.   Provision of advice

   10.   Proceedings of the Commission

   11.   Committees of the Commission

   12.   Minutes of meetings

   13.   Disclosure of interest

   14.   Co-opted persons

PART IV
SECRETARIAT

   15.   Secretariat of the Commission

   16.   Chief Executive Officer of the Commission

   17.   Other employees

   18.   Disclosure of interest by employees, etc.

   19.   Oath of secrecy

   20.   Prohibition of publication or disclosure of information by unauthorized persons

PART V
PUBLIC-PRIVATE PARTNERSHIP ARRANGEMENTS

   21.   Special purpose vehicle or joint venture

   22.   Public-Private Partnership agreement

   23.   Functions of a Contracting Authority

   24.   Additional powers

   25.   Types of infrastructure facilities and services

PART VI
PROCEDURES FOR AWARDING CONTRACTS

   26.   Feasibility Study for public-private partnership

   27.   Pre-selection of bidders

   28.   Evaluation criteria

   29.   Contract award for public-private partnership

   30.   Register of public-private partnership contracts

   31.   Unsolicited bids

PART VII
DIVESTITURE AND COMMERCIALIZATION

   32.   Divestiture of state-owned enterprises

   33.   Special rights of the Government

   34.   Allotment of shares

   35.   Obligations of shareholders

   36.   Obligations of state-owned enterprises

   37.   Modes of divestiture

   38.   Valuation of state-owned enterprises

   39.   Eligible shares to members

   40.   Sale of shares to Members of Cabinet, etc.

   41.   Established funds

   42.   Purchase of shares by citizens of Malawi

   43.   Shares not to be sold on credit

   44.   Negotiations of sale

   45.   Conversion of private companies to public companies

   46.   Liquidation

   47.   Completion of sale

   48.   Commercialization of specified Government departments

PART VIII
PUBLICATIONS, INFORMATION AND REPORTS

   49.   Publication and records of certain information

   50.   Unauthorized persons not to publish or disclose information

   51.   Annual reports

   52.   Public-private partnership arrangements report

   53.   Progress reports

PART IX
FINANCIAL PROVISIONS

   54.   Use of proceeds

   55.   Funds of the Commission

   56.   Funds for public-private partnership development

   57.   Raising resources for public-private partnership arrangements

   58.   Minister may make available moneys from the Consolidated Fund

   59.   Commission or Contracting Authority to keep record of costs of transactions

   60.   Financial year

   61.   Accounts

   62.   Annual financial report

PART X
MISCELLANEOUS PROVISIONS

   63.   Prohibition against exerting undue influence on officers

   64.   Settlement of disputes

   65.   Falsification of information

   66.   Administrative penalties

   67.   General penalties

   68.   Regulations

   69.   Oversight of public-private partnership arrangements by regulators

   70.   Guidelines, policy directives or objectives

PART XI
TRANSITIONAL PROVISIONS, REPEAL AND SAVINGS

   71.   Saving of existing agreements and arrangements

   72.   Existing public-private partnership arrangements

   73.   Vesting of assets of the Privatization Commission

   74.   Registration of property to be transferred by the Privatization Commission

   75.   Legal proceedings

   76.   Transfer of employees

   77.   Repeal and savings

27 of 2011
G.N. 25/2012

An Act to provide for partnerships between the public sector and private sector for the supply of infrastructure and delivery of services as means of contributing towards sustaining economic growth, social development and infrastructure development; to provide for the development and implementation of public-private partnership arrangements in Malawi for the delivery of infrastruture and services; to provide for the establishment of the Public-Private Partnership Commission; to provide for private sector participation in state-owned enterprises, commercial entities and commercial assets; and to provide for matters connected with or incidental to the foregoing

[1st JULY 2012]

PART I
PRELIMINARY

1.    Short title

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

2.   Interpretation

   In this Act, unless the context otherwise requires—

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

   “bank” has the meaning ascribed thereto in the Banking Act;

   “Chairman” means the Chairman of the Commission as specified under section 5;

   “Chief Executive Officer” means the head of the Secretariat of the Commission appointed under section 15;

   “commercialization” means the re-orgariization of specified Government departments into commercialized enterprises which shall operate as profit making commercial ventures;

   “company” means a company within the meaning of section 2 of the Companies Act;

   “concessionaire” means a Partner assigned through a long-term concession contract with a Contracting Authority, the right to invest and maintain an infrastructure project or provide a service to the public, and be compensated through charging of user fees directly to the public;

   “consultant” means any person employed by the Commission to undertake any work of a specialized nature connected with the work of the Commission and includes banks, public accountants, economists, investment banks, doctors, architects, quantity surveyors, engineers, communication experts, lawyers and valuers;

   “construction” includes building, refurbishment, rehablitation, maintenance, repair, improvement, demolition, extension and replacement;

   “Contracting Authority” means any Ministry, Government Department, Local Authority or state-owned enterprise;

   “direct agreement” means an agreement entered into between a Contracting Authority and a person who has arranged or provided funding for a Partner for the carrying out of a particular public-private partnership arrangement;

   “divestiture” means the disposing of the whole or part of the assets and shares of a state-owned enterprise;

   “Divestiture Proceeds Account” means the account established under section 55;

   “equity” means any financial interest resulting from the purchase of shares for consideration;

   “established fund” includes a pension fund, contributory social security scheme, compensation fund and superannuation fund;

   “financial institution” has the meaning ascribed thereto in the Financial Services Act;

   “immediate family member”, in relation to any person, means that person’s spouse, child, parent, brother, sister, grandchild or grandparent;

   “infrastructure facility” includes an existing asset or an asset to be provided under a public-private partnership arrangement and means physical facilities and systems that directly or indirectly provide services to the public;

   “investor” means an individual, a company, an established fund, a mutual fund, a financial institution or any other institution,entity or commercial venture whether local or foreign, and in any format of enterprise recognized as a legal entity under the laws of Malawi, intending to invest in a state-owned enterprise or in an infrastructure facility under a public-private partnership arrangement, but does not include the Government, a Local Authority or a state-owned enterprise whether foreign or local;

   “Local Authority” means a City, Town, District, or Municipal Council, established under the Local Government Act;

   “market value” means the market value of a state-owned enterprise at the completion of the sale;

   “mutual fund” means an investment fund which purchases shares in a portfolio of companies and subdivides such portfolio into individual units for sale of such units to investors;

   “operation” includes management and maintenance;

   “Partner” in relation to a public-private partnership arrangement, means a party to the arrangement other than a Contracting Authority;

   “property” means all property, movable or immovable, and all estates, interests, easements and rights, whether legal or equitable into or out of property, chooses-in-action, money and good-will;

   “public investments projects” includes projects involving public-private partnership arrangements;

   “public-private partnership arrangement” refers to the arrangement provided for in Part V;

   “public-private partnership” means a contract in which a Contracting Authority partners with a 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;

   “Special Purpose Vehicle” means a Company incorporated for the purpose of implementing a public-private partnership arrangement including for raising finance for public-private partnership projects as anticipated in section 21;

   “specified Government department” means a department specified by the Minister under section 48;

   “state-owned enterprise” means a corporation, board, commission, company, parastatal body or similar body, corporate or unincorporate, in which the Government has direct or indirect ownership, equity or interest and includes partnerships, joint ventures or any other form of business arrangement or organization or any commercial entities or commercial assets howsoever held or created in which the Government has direct or indirect interest but does not include a Government department or a Local Authority;

   “stocks” and “shares” in relation to a state owned enterprise includes loans, stocks, debentures and debenture stock and options on any stocks, shares, loan, debentures or debenture stock and rights; and

   “stock broker” means a person who carries on the business of buying and selling stocks or shares for and on behalf of other persons.

PART II
OBJECTIVES OF PUBLIC-PRIVATE PARTNERSHIPS AND DIVESTITURE OF STATE-OWNED ENTERPRISES

3.   Objectives

   (1) This Act shall facilitate the development andimplementation of public-private partnership arrangements for purposes of efficient delivery of infrastructure and services in order to achieve sustainable economic growth and social development including—

   (a)   to improve the delivery of public infrastructure and therefore access to services in Malawi;

   (b)   to assist in achieving better value for procurement of infrastructure and public expenditure by the Government through efficient and optimal risk identification and transfer to the private sector;

   (c)   to leverage on private sector financing, management, technical know-how and technological innovation for delivary of efficient and affordable infrastructure and services;

   (d)   to encourage participation by resource owners in public-private partnerships and provide assurance for private interests in those partnerships;

   (e)   to encourage competitive and efficient markets for the provision of infrastructure and services in Malawi;

   (f)   to minimize the fiscal burden of providing infrastructure development and service delivery through the public treasury and thereby allowing resources to be freed for social services; and

   (g)   to promote private sector contribution towards the attainment of positive social indicators associated with optimal access to infrastructure and services.

   (2) The objectives of this Act in relation to divestiture of state-owned enterprise shall be—

   (a)   to foster increased efficiency in the economy;

   (b)   to increase competition and reduce monopoly in the economy;

   (c)   to promote participation by the Malawian public in state-owned enterprises; and

   (d)   to raise revenue for the Government through divestiture of state-owned enterprises.

PART III
THE PUBLIC-PRIVATE PARTNERSHIP COMMISSION

4.   Establishment of the Commission

   There is hereby established a body to be known as the Public-Private Partnership Commission (in this Act otherwise referred to as the “Commission”) which shall be a body corporate with perpetual succession and a common seal capable of suing and being sued in its corporate name, and with power, subject to this Act, to do or perform all such acts and things as a body corporate may by law do or perform.

5.   Composition of the Commission

   (1) The Commission shall consist of a Chairman and—

   (a)   four other members appointed by the President by notice published in the Gazette, and

   (b)   the following members ex officio

      (i)   the Secretary to the Treasury;

      (ii)   the Solicitor General and Secretary for Justice;

      (iii)   the Principal Secretary responsible for planning and development; and

      (iv)   the Principal Secretary responsible for industry and trade.

   (2) In appointing members under subsection (1), the President shall have regard to the need for continuity of service on the Commission, so that at least half of the members appointed thereunder shall be re-appointed for the next term of office.

   (3) Members of the Commission appointed under subsection (1) shall be persons who—

   (a)   are citizens resident in Malawi; and

   (b)   possess qualifications, expertise and experience in any of the fields of economics, accountancy, law, engineering, projectfinance, public administration, public-private partnerships, mergers and acquisitions, and business management.

6.   Tenure of office and vacancies

   A member of the Commission shall hold office for a period of three years and shall be eligible for re-appointment, but the office of that member shall become vacant—

   (a)   if the member resigns by giving one month notice, in writing to the President;

   (b)   upon the member’s death;

   (c)   if the member is absent, without the consent in writing of the Chairman, or without valid excuse, from three consecutive meetings of the Commission of which the member has had notice;

   (d)   if the member is convicted of a criminal offence without the option of a fine;

   (e)   if the member becomes an undischarged bankrupt; or

   (f)   if the member participates, directly or indirectly, in a public-private partnership arrangement or acquires shares or other interests in a state-owned enterprise in contravention of this Act.

7.   Allowance of members

   Members of the Commission shall be paid such allowances as the Minister shall determine.

8.   Authority and functions of the Commission

   (1) The Commission shall facilitate the implementation of public-private partnership arrangements and shall be the sole authority to implement the divestiture of direct and indirect interests in state-owned enterprises.

   (2) Without derogation from the generality of subsection (1), the Commission shall—

   (a)   facilitate the procurement of private sector investors in public-private partnership arrangements and other form of undertaking relating to public investments projects in Malawi;

   (b)   implement divestitures in direct or indirect Government ownership of, or interest in, any state-owned enterprise; and

   (c)   provide technical support to Contracting Authorities in the identification, initiation and development of public-private partnership arrangements.

   (3) The functions of the Commission in relation to public-private partnerships shall be—

   (a)   to perform pre-feasibility and viability assessment in conjunction with a Contracting Authority, of a project submitted to it and give its recommendations to the Cabinet through the Minister, as to whether the project—

      (i)   is affordable to the Government, the Contracting Authority and ultimate users;

      (ii)   delivers Value for money; and

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

   (b)   in conjunction with a Contracting Authority, conduct full legal technical and financial feasibility studies on public-private partnership projects;

   (c)   planning, managing the procurement tender process from receipt of expression’s of interest to selection of a prefered Partner and negotiations of the contract with the Partner;

   (d)   appropriate bidding documentation including the draft public-private partnership agreement, confidentiality undertakings, requests for proposal, and ensure that the requests for proposal conforms with the project model approved during the feasibility study stage;

   (e)   to advise the Minister on administrative procedures in relation to public-private partnership projects;

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