Mauritius: The Evolution Of PPPs In Mauritius

New Laws And The Smart City Scheme
Last Updated: 16 September 2016
Article by Fazil Hossenkhan and Shane Mungur

Introduction

Public-private partnerships (PPPs) are a growing trend in many countries, and are fast becoming an efficient mechanism for large energy and infrastructure projects and essential services in Sub-Saharan Africa. This model of project finance resonates well with modern governments where there is a stress on public funds for project development, and where the private sector is wary of fully private-financing, due to project and completion risks.

Mauritius has had a long history of PPP and procurement legislation but has not been very successful in procuring a full-scale project despite having in place the Public Procurement Act 2006 (the Public Procurement Act) and the Public-Private Partnership Act 2004 (the PPP Act) to plug past failures of conventional infrastructure projects developed and operated by the public sector. With the implementation of these acts, the public sector no longer procured assets, but procured services from the private sector.

With the recent introduction of the Build Operate Transfer Project Act 2016 (the BOT Act), Mauritius heralds another major development in the relationship between the state and the private sector. The new BOT Act comes hot on the heels of the Government's ambitious multi-million dollar Smart City Scheme for mixed-use infrastructure, and is poised to bring in modernised, efficient, transparent and competitive public procurement and PPP procedures.

The Smart City Scheme

In its first budget in 2015 (the Budget), a newly elected Mauritian Government laid out the vision for the Smart City Scheme (the Scheme), an ambitious infrastructure programme with a two-fold objective:

  1. the creation of smart cities across the island for mixed use development projects in: general commercial; leisure and residential; industrial; educational; medical; tourism clusters; and technology and innovation clusters. The overall ethos would be innovation, sustainability, efficiency and quality of life in urban development; and
  2. a regeneration programme covering existing towns, including improvement of the infrastructure and enhancing the appearance of sites and buildings across the country.

Following the Budget, amendments were made to the Investment Promotion Act 2000 (the IPA 2000) to introduce the concept of Smart Cities. Consequently, the Investment Promotion (Smart City Scheme) Regulations 2015 were passed, with detailed requirements for ventures seeking to develop a project under the Smart City Scheme.

About thirteen 'greenfield' sites have already been identified, which are predicted to be the new epicentres for business, finance and administration. The projected cost of these thirteen smart cities is about MUR 23.5 billion (approximately USD 660 million). The funding requirement is ambitious, requiring active participation of local and international lending institutions, private equity entrepreneurs and funds. One year on from the Smart City Scheme's announcement, the BOT Act was proclaimed on 5 April 2016 with the objective of providing the legal and regulatory framework to secure public-private partnerships to meet the financing needs of the Smart City Scheme.

The Scope of the BOT Act

The market typically understands a BOT project to be where a private sector party is given the right to build a project and to operate the project for a specified time subject to a 'transfer-back' to a government entity at the end of the contract period.

The BOT Act's scope of application extends beyond the above understanding. It also covers other project delivery methods such as:

  1. where the private sector project company assumes ownership of the project (build, own, operate and transfer), is also responsible for designing the project (design, build, finance, operate and transfer); and
  2. where the project involves the modernisation of existing infrastructure (modernise, own/ operate and transfer).

The BOT Act therefore allows for the greater integration of design, construction and operational skills of the private sector more efficiently that what existed under the PPP Act and the Public Procurement Act.

The BOT Act also allows the relevant governmental entity to have the project operational for a far lesser initial investment than conventional procurement methods; the cost of the project could be amortised over the lifetime of the concession. This was one of the main selling points of the BOT Act when it passed through the National Assembly.

Statutory Mechanisms for a Project Under the BOT Act

The BOT Act does not affect any partnership between Mauritius and a foreign state under a bilateral agreement. Government to Government, arrangements will remain unaffected by the BOT Act and continue to be governed by the PPP Act and Public Procurement Act.

The BOT Act supersedes the provisions of the Public Procurement Act and the PPP Act, although the rules of the Central Procurement Board pertaining to the assessment of bids would still apply. Under the BOT Act, it is also now mandatory for BOT agreements to be tabled before the National Assembly, which was not previously the case.

The starting point to any BOT project remains a governmental initiative. The relevant governmental authority (the Contracting Authority) will appraise and commission feasibility reports, in line with the requirements of the BOT Act on potential BOT projects. The procedure, from commissioning the feasibility report up to concession award and the entry into the BOT project transaction documents is prescribed by the BOT Act.

The BOT Act creates certainty by prescribing the minimum standard set of terms to be covered in the transaction documents which include, among others: (a) the rights and obligations of the contracting authority and private party; (b) the period of execution of the project; and (c) the financial terms and the management of the private party's performance.

Conclusion

The BOT Act is a real innovation in uplifting the procedural rules for project assessment and approval. It provides for efficient, competitive and transparent procurement, and promises to fill in the gaps where the PPP Act has failed. Under the former rules, public procurement was a protracted process, often delayed by challenges and lengthy appeals which meant that a number of viable projects ended up being prematurely aborted. The revamp brought by the new law is expected to accelerate the process and diminish the level of uncertainty and political risk associated with public sector projects.

While the new BOT Act remains to be tested, it is hoped that the improvements brought will help to harness much needed private investment in the Smart City Scheme specifically, and Mauritian infrastructure generally, and be the impetus for renewed growth in the sector.

Originally published by ALN Legal Notes, September 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions