A key departure from the institutional framework which was in place during the implementation of the first phase of the privatisation programme, between 1992 and in 2002, is the creation of a Commission with a majority membership from the private sector. The new framework also established a Privatisation Appeals Tribunal to which any bidders aggrieved by the Privatisation Process can appeal. This proviso seeks to shorten the dispute resolution period. The 2005 Act entrenches the privatisation process in the law, clearly outlining key steps to be followed during the process, specific documentation and submissions to be made to the Cabinet and approvals which must be obtained from the Cabinet before implementation.
The preparatory process culminates in the approval of the transaction by the Cabinet, followed by a presentation (by the Minister for Finance) of a report on the detailed privatisation proposal approved by the Cabinet to the relevant Committee of Parliament. Once approval is granted, the Commission announces the approved transaction.
After approvals from respective regulatory authorities, the Commission invites interested investors and implements the remaining stages in a competitive manner except in cases where legal rights exist with respect to which specific actions are taken to ensure fair value is realized from the assets to be privatised. On 30th June 2009, following completion of the documentation of its policies, procedures and processes, the Commission became ISO Certified, enhancing clarity in its decision making processes and transparency in its operations.
The programme implemented from 1992 up to 2002 boasts of several institutions, some ailing at the time, which were able to mobilize resources and to deal with historical and governance issues threatening their existence. Following privatization, institutions such as the Kenya Airways and the Kenya Commercial Bank have experienced tremendous growth and made outstanding contribution to the country’s development. Remarkable benefits accrued to most of the 164 enterprises which were partially or fully privatised during that period and to the country.
Nevertheless most of these investments were small in size and were not relying on Government resources hence minimum impact to the Country’s budget and the resources mobilised through the programme. Subsequently, privatization of five more corporations took place between 2003 and the end of 2007 which involved major Government investments such as Kenya Electricity Generating Company, Kenya Re, Telkom Kenya, Kenya Railways and Mumias Sugar Company (second offer).