International Journal of Innovative Research and Knowledge


Volume-6 Issue-10, October 2021




Title: Political and legal factors influencing the financing BOT projects in Kenya: A Case of the rift Valley Rail Consortium

Author: Dr Stephen Okelo Lucas

Abstract

Build-operate-transfer (BOT) is one among the many types of Public Private Partnership (PPP) arrangements, which is an innovative method of financing public sector infrastructure development and service delivery. Under this model, private sector operators or consortia build and operate new infrastructural assets in accordance with performance standards set by the government. Rift Valley Railways Consortium (Consortium) was established to manage the railways infrastructure in Kenya and Uganda for 25 years. By 2011, the Consortium was operating with a cargo of 1.9 million tonnes out of about 12 million tonnes of cargo arriving at the port of Mombasa. This means about 90 percent of cargo destined for Uganda, Southern Sudan, Rwanda Burundi and other parts of Democratic Republic of Congo is transported by road. Despite many studies on Public private Partnerships, there is no study that has explored Political factor influencing BOT projects in Kenya. The purpose of the study was to establish the extent which political and legal influence financing of BOT Kenya. Co-relational research designs, with a target population of 720 workers. Stratified sampling technique was used to arrange the population in stratum and Fisher’s formula used to determine sample sizes from each category of participants. The study used questionnaire and interview schedule to collect data. Analysis of data was based on the Wald test. Wald test assesses constraints on statistical parameters based on the political, legal factors between the unrestricted estimate and its hypothesized value under the null hypothesis. The results show The Wald Chi-Square test statistic squared ratio of the Estimate to the Standard Error of the respective predictor as 0.8 implying that there is significant influence of political and legal matters of a country and Financing of Investments. There is a chance of 1.8 (1+75/100) times road transport stake holders influencing financing of BOT projects. That there is a likelihood of 1.7(1+11/100) time of Government terminating the contract irrespective of the circumstances around the operation of the contractual terms. A Chi square test gave a p value of 0.2 confirming that there is significant influence between taxation laws and financing of BOT projects. The finding shows absence of good tax laws the government may change taxes during the concessional contract, this implies that if Government increased taxes by 1% financing BOT reducing by 1.8 times (1+77/100). The study recommends the partnership between the government, long distance track vehicle, the buses and the van operators in the financing of BOT infrastructure projects.


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IJIRK DESCRIPTION

ISSN: 2213-1356

Publisher: Scholar Touch Publishers

Area/Scope: Business, Economics & Management; Social Science, Literature, Arts & Humanities; Engineering & Technology; Life Science & Physical Science, Health & Medical Science

Frequency: Monthly

Format: Online & Print

Language: English

Review Process: Double Blinded

Access: Open Access