Boost for economy as Joint Venture Act gazetted

Boost for economy as Joint Venture Act gazetted
President Mugabe

President Mugabe

Fidelis Munyoro Chief Court Reporter—
The Joint Venture Act, expected to stimulate economic growth by unlocking value and supporting major investments across all sectors, was gazetted on Friday after being passed by Parliament and receiving President Mugabe’s assent. The Act will provide for the implementation of joint venture agreements between contracting authorities and counter-parties. It will also establish a set of rules governing the public-private procurement process.

A joint venture is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. The Act, will give impetus to the Zim-Asset agenda and demonstrate Government’s commitment to implementing policy, seeks to promote investment by providing guidelines for the implementation of joint venture agreements between Government and the private sector, both domestic and foreign, by establishing rules governing public-private partnerships.

Delivering his State of the Nation Address last year, President Mugabe stressed the importance of joint ventures in resuscitating state-owned enterprises. He said the joint venture approach was part of the 10-point strategic plan to revive the economy.

The Act also created a Joint Venture Unit (JVU) which will be a department of the Ministry of Finance and Economic Development and under direct control and supervision of the permanent secretary.

The JVU will be responsible for considering project proposals submitted to it and assess whether or not they are affordable to the Government or any of its parastatals or enterprises intending to enter such agreements, providing value for money, providing optimum transfer of technical, operational and financial risks to the prospective investor as well as whether they are competitive or not.

The unit will also be responsible for examining requests for project proposals to ensure they conform to approved feasibility studies, advise Government on joint venture projects generally, and develop best practice guidelines in relation to all aspects of joint ventures.

They will also be responsible for assisting the committee to formulate policy in relation to joint venture projects and to develop awareness of joint ventures in Zimbabwe as a vehicle for economic development and delivery of public services.

According to the Act, approval of joint venture agreements will be the preserve of Cabinet after recommendations from the committee. This will ensure transparency and that the Government and the investment partner are not prejudiced.

The Secretary for Finance and Economic Development will chair the Joint Venture Committee (JVC) comprising Secretaries of Industry and Commerce, of Transport and Infrastructural Development, of Energy and Power Development, of Local Government, Public Works and National Housing and of Justice, Legal and Parliamentary Affairs.

A representative of the Attorney General at the level of director and the director of the JVU will complete the committee.

The committee will be responsible for assisting the minister to formulate policy guidelines on joint ventures and to ensure that all projects are consistent with national priorities specified in the relevant policy on joint ventures. It will also be expected to make recommendations to Cabinet as to whether to approve or reject project proposals submitted to it by the JVU.

It also provides that whenever Government or any of its parastatals or enterprises want to enter a joint venture, they are expected to invite applications where appropriate, through public advertisements in the media, undertake or cause to be undertaken a feasibility study where it considers that a project may be implemented under an agreement and submit it to the JVU for its approval.

Joint venture projects covered under the Act include power generation plants and power transmission and distribution networks, roads and bridges, inlands ports and harbours, inland container depots and logistics hubs as well as gas and petroleum infrastructure such as refineries, storage depots and distribution pipelines.

Water supply, treatment and distribution systems, solid waste management works, renewable energy works and educational and health care facilities are also covered under the Act. The other sectors are urban transport systems, housing, information communication technology projects and agriculture and irrigation development are other sectors identified by the Bill.

Categories of Joint Venture Agreements are Build and Transfer (BT), Build, Lease and Transfer (BLT), Build, Operate and Transfer (BOT), Build, Own and Operate (BOO), Build, Own, Operate and Transfer (BOOT) as well as Build, Transfer and Operate (BTO), Contract, Add and Operate (CAO), and Develop, Operate and Transfer (DOT).

The other JVAs are Rehabilitate, Operate and Transfer (ROT), Rehabilitate, Own and Operate, Build, Own, Operate and Maintain Contract, Lease Management Contract, Management Contract, Service Contract, Contract for Services and Supply, Operate and Transfer.

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