SOUTH EASTERN KENYA UNIVERSITY HOSTELS PROJECT EASTERN KENYA... · DRAFT Project Information...

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Project Information Memorandum | South Eastern Kenya University Hostels Project

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ARID TO GREEN …………………………………………..……………………….………………………………………………..……………….. TRANSFORMING LIVES

ISO 9001: 2008 CERTIFIED

SOUTH EASTERN KENYAUNIVERSITY HOSTELS PROJECT

PROJECT INFORMATIONMEMORANDUM

NOVEMBER 2017DRAFT


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NOVEMBER 2017DRAFT


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NOVEMBER 2017

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FOREWARD BY THE VICE CHANCELLOR

The South Eastern Kenya University (SEKU) is a publicuniversity that was purposely established to play a leadingrole in the development and expansion of opportunities forhigher education and research with emphasis on agriculture,forestry, mining, energy, water and environmental sciences.

The Vision 2030 which is Kenya’s long-term developmentplan recognises the importance of developing the country’sArid and Semi-Arid lands (ASALS) in promoting sustainabledevelopment. Thus, the University plays a critical role in the

development of these lands through training, research, innovation and entrepreneurship.

The University through SEKU Strategic Plan 2013-2018 targets to admit 11,000 students atthe end of the implementation period. However, a major challenge towards attainment of thistarget is lack of adequate and affordable accommodation facilities for the students. Currently,the University is able to accommodate about 2600 students.

The University recognises the vital complimentary role private partnerships play in theprovision of accommodation facilities to students in its endeavour to achieve its mandate andbecome a world class university as spelt out in its Strategic Plan 2013-2018.

PROF. GEOFFREY M. MULUVI, PhD.

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TABLE OF CONTENTS

1. INTRODUCTION ..............................................................................................................4

1.1 South Eastern Kenya University (SEKU) Hostels Project ...........................................4

1.2 Purpose of this Project Information Memorandum (PIM)............................................4

2. KENYAN CONTEXT .........................................................................................................5

2.1 State of the Kenyan Economy....................................................................................5

2.2 Kenyan Education Sector...........................................................................................7

2.3 PPPs in Kenya...........................................................................................................8

3. OVERVIEW OF THE PROJECT .....................................................................................10

3.1 Introduction to South Eastern Kenya University .......................................................10

3.2 Project Scope ..........................................................................................................10

3.3 The Demand for Hostel Accommodation..................................................................12

3.4 Anticipated Impact ...................................................................................................13

4. PROPOSED PPP SCHEME ...........................................................................................14

5. DISCLAIMER..................................................................................................................15

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1. INTRODUCTION

1.1 South Eastern Kenya University (SEKU) Hostels ProjectSouth Eastern Kenya University (SEKU) is a Public University with its main campus located in KituiCounty in former Eastern Province. The institution (formerly a constituent college of Nairobi University)was established in 1976. The student population has been growing over the years resulting in anincreased demand for hostel accommodation. A Feasibility Study was conducted to determine theviability of building new Hostel facilities to accommodate the projected student growth.

The anticipated SEKU Hostels Project, henceforth “the Project”, is a Public-Private Partnership (PPP).This project is for hostel accommodation and necessary associated facilities at SEKU. SEKU, incoordination with the Transaction Advisor, wishes to procure the Project in a way that is commerciallyattractive to the market and meets the University’s objectives of supplying sufficient hostelaccommodation. This Project Information Memorandum (PIM) forms part the Request for Qualifications(RfQ) document. It has been prepared to inform interested parties as to the Project’s development andproposed project structure.

1.2 Purpose of this Project Information Memorandum (PIM)This project implementation memorandum gives brief about South Eastern Kenya University and theanticipated SEKU hostels project. The document also describes the state of Kenyan economy, socio-economic trends and business climate. The focus of PPPs in Kenya is also emphasized as provision ofclear and transparent process for PPP project development in Kenya. This document provides theanticipated SEKU hostels project overview and scope covering hostel accommodation for 4500undergraduate students and 900 post graduate students, bulk infrastructure such as additional watersupply, electricity connection, road access to the new hostels and additional sewerage systems andother associated facilities such as tuck shops and additional food supply facilities. These facilities areexpected to match total student population forecast of 10% per annum.

As part of the RfQ, the document also outlines the anticipated impact to the local community throughcreation of employment opportunities and provision of market for the local commodities which will bettertheir livelihoods. The Proposed PPP scheme has also been outlined as a 20 year PPP schemeinvolving establishment of a Special Purpose Vehicle (SPV) that will enter into an agreement with SEKUas per the provisions of Kenya PPP Act, 2013.

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2. KENYAN CONTEXT

2.1 State of the KenyanEconomy

Economic Growth

Kenya has established itself as a strongeconomy since independence was achievedmore than 50 years ago. Over the last decade,Kenya has experienced robust growthrecording a Gross Domestic Product (GDP)growth of 5.6% in 2015 and an average GDPgrowth of 5.3% between 2005 and 2015. This isin comparison to sub-Saharan Africa’s twolargest economies, South Africa and Nigeria’saverage GDP growth of 2.9% and 5.7%respectively (The World Bank, 2017).

Figure 1: Kenya, South Africa and Nigeria’s GDP

growth (annual %), 2005 -2015

Source: The World Bank, 2017.

GDP growth has been driven mainly by theexpansion of the mining and quarrying, tourism,financial services, real estate and construction

sectors.1 Growth, particularly in 2015, can beattributed to the increased spending oninfrastructure, improved agriculture output, andenhanced investor confidence.2

The Kenyan economy is mainly dominated bythe agricultural sector. As of 2015, the sectoraccounted for over 25% of the country’s GDPand over 50% of revenue from exports.3 The2007/8 financial crisis reduced demand for itsmain horticulture exports. This coupled with aslowdown in other economic sectors, such asthe tourism industry resulted in growthsignificantly decreasing in 2008 to 0.2%.

Kenya has seen a general reduction in inflationover the period 2005 - 2015, although therehave been periods of volatility, dropping from a

high of 26% in 2008 to relatively stable levelsaround 6-7% over the past few years. Inflation

1 Central Bank of Kenya. 2016. The Kenya Financial SectorStability Report, 2015: Issue No.7. p12.2Ibid.3 Deloitte. 2016. Kenya Economic Outlook 2016: The StoryBehind the Numbers. p15.

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2. KENYAN CONTEXT


Economic Growth











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2. KENYAN CONTEXT


Economic Growth











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for 2016 is predicted to come in at similarlevels, around 7.8%.4

In 2016, Moody’s gave Kenya positive outlookand a B1 sovereign rating amid expectedcontinued strong growth prospects.5

The recent economic data thus show that theKenyan economy is relatively stable at present,with moderate inflation expectations and goodgrowth projections for the future. A soundeconomic environment such as this provides astrong foundation for future investments.

Socio-economic Trends

Kenya's population has been growing at a rapidpace, doubling over the last 25 years. As of2015, the population stood at 46 million with agrowth rate of 2.6% per annum. Approximately74%6 the population lives in rural areas.Increased education levels, particularlyamongst women may delay the childbearingage leading to a slower growth in the populationin the long run.

Figure 2: Kenya's Population Trend, 2000 - 2016


Kenya has been experiencing high rates ofyouth unemployment and underemployment.The informal sector makes up a majority of the

4Kenya National Bureau of Statistics. Leading EconomicIndicators (January 2016)5https://www.moodys.com/research/Moodys-affirms-Kenyas-B1-sovereign-rating-maintains-stable-outlook--PR_343617.6 UNESCO Institute for Statistics. 2017.http://data.uis.unesco.org/#. Accessed: [30/05/2017].

jobs created. Total unemployment in 2016 was11%(Figure 3). The employment to populationratio, i.e. the percentage of the population aged15 years and older that is employed, is 60.1%.7

Figure 3: Kenya's Unemployment Trend, 2000 - 2016


Business Climate

Kenya has taken a number of measures toimprove the business environment. Some of themeasures taken include: streamlining theprocess of getting electricity by introducing theuse of a geographic information system whicheliminates the need to conduct a site visit,thereby reducing the time and interactionsneeded to obtain an electricity connection;registering property at the land registry andcadastre is more transparent therebysimplifying the process; and electronic filingsystems allow for faster payment of taxes fasterfor companies.

Kenya’s “Ease of Doing Business” is ranked 92out of 190 countries globally. Amongst its EastAfrican Community (EAC) peers, Kenya isranked second with a distance-to-frontier (DTF)score of 61.22.8

Figure 4: Kenya versus East African Community"Ease of Doing Business" Ranking, 2017

7 International Labour Organisation. 2017. ILOSTATdatabase. http://www.ilo.org/ilostat. Accessed:[30/05/2017].8 An economy’s distance-to-frontier score is indicated on ascale from 0 to 100, where 0 represents the worstperformance and 100 the frontier

POPULATION

2.5%

2.6%

2.6%

2.7%

2.7%

2.8%

30 32 34 36 38 40 42 44 46 48

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Mill

ions

Population, 2000 - 2015

Population Population Growth

UNEMPLOYMENT

8.6%

10.4%

11.2%

12.2%

11.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Unemployment Rate, 2000 - 2016

47.37

54.48

57.77

58.13

61.22

69.81

Burundi (Rank 157)

Tanzania (Rank 132)

Uganda (Rank 115)

Regional Average (Raank 110)

Kenya (Rank 92)

Rwanda (Rank 56)

0 100

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Student admission to publicuniversities in Kenya is tied to theuniversities’ capacity to absorb newstudents, influenced primarily byteaching space and hostel facilitiesavailable.


2.2 Kenyan EducationSector

The Landscape of Tertiary Education

University education in Kenya began in 1963with just 571 students enrolled in NairobiUniversity College (currently known as theUniversity of Nairobi). The Vision 2030introduces a policy shift for tertiary education inKenya, moving towards greater governmentinvolvement in the universal provision of tertiaryeducation for Kenyan society.

In particular, increased student transition fromsecondary to tertiary education and thecorresponding increase in student enrolmentand the expansion of tertiary educationinstitutions forms a primary means in achievingthe Government of Kenya’s (GoK) goal ofproviding “globally competitive qualityeducation, training and research for sustainabledevelopment”.9

The rapid expansion of tertiary educationamong the youth has been resulted in thepromotion of universities from colleges to full

university status. The total number of publicuniversities in Kenya increased by 30.4% to 30in 2016 after granting charters to seven

9 Kenya Vision 2030 pg. 98

university colleges to full university status.10

Expansion has occurred in all publicuniversities and in private, for-profit providers oftertiary education.

Along with growth in the number of universities,has come huge growth in enrollments. Theenrollment figures for 2014 show that therewere 443 783 students enrolled at alluniversities across Kenya, more than doublethe 2012 enrollment number. Approximately215 000 (48%) of those students were enrolledin private university institutions.

There are current efforts to improve the quantityand quality of hostel accommodation at anumber of Government universities/colleges inthe country. The Kenya Infrastructure Financeand Public-Private Partnership Project (IFPPP)is a World Bank-funded credit facility that seeksto promote increased private investment in theKenyan infrastructure market. With theassistance of the IFPPP, a number of publicuniversities/colleges are looking to address thegrowing shortfall in hostel accommodationthrough a PPP arrangement.

While public universities have made efforts toprovide additional teaching space toaccommodate the increasing number ofstudents, partly due to cost constraints, lessemphasis has been placed on developingadditional hostel facilities. This has created asituation where many students have no optionbut to look for accommodation space outsidethe universities’ premises, generally in poorlydeveloped private accommodation alternatives.

Through the development of adequateresidence facilities at these places of learning,the GoK hopes to improve the successes ofhigher education institutions and meet nationaleducation and development priorities. This is inline with the National Strategic Vision 2030,which obligates universities to meet the

10Kenya National Bureau of Statistics. 2017. EconomicSurvey. p40.

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increasing demand for higher education and toimprove the welfare of students.

National Education Policy Prioritiesin Kenya

Historic underinvestment in education systemsis a feature of most developing countries. Thishas been true in Kenya as well, where thedemand for quality education outstrips supply.Affordability concerns also make the provisionof universal education a national challenge.

Figure 5: Economic Sector Contribution to Kenya's GDP,

2016

Source: Kenya National Bureau of Statistics, 2017.

The Education sector contributed for 4.9% toKenya’s GDP in 2016. The gross recurrentexpenditure for the Ministry of Education isexpected to rise by 13.5 per cent.11 Past budgetcuts have made this an increasingly difficulttask to achieve. Shortages in the number oflecturers also affect growth in quality standardsand leads to growing student to faculty ratios.

Tertiary education is seen as playing animportant role in reaching Kenya’s nationaldevelopment goals. The GoK has madeinvestment in education core to its developmentpolicy over the past two decades. Thegovernment’s Poverty Reduction StrategyPaper (PRSP) advocated six areas of focus forinvestment over the period 2001 to 2004, oneof which was human resource development.


This was followed by the GoK’s EconomicRecovery Strategy (ERS) which detailed thegovernment’s strategy for wealth andemployment creation for the period 2003 to2007. Four pillars supported the implementationof the ERS, one of which was investment in thehuman capital of the most vulnerable membersof society.

These strategies culminated in the creation of along-term blue print for Kenya’s nationaldevelopment path, contained in the GoK’sVision 2030. The aim of Vision 2030 is totransform Kenya into a ‘middle-income countryby providing a high-quality of life to all itscitizens by the year 2030’.12 Identified as coreto the success of the Vision, is the continueddevelopment of the education and trainingsector.

Understanding the current situation thatcharacterizes tertiary education in the country isimportant to inform our understanding of thekinds of intervention and investment that isrequired going forward. Aligning the existingneeds that this project seeks to address, withthe broader national goals for tertiary educationwill ensure that resources are used where theyare most needed.

2.3 PPPs in Kenya

12Kenya Vision 2030

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2.3 PPPs in Kenya

12Kenya Vision 2030

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2.3 PPPs in Kenya

12Kenya Vision 2030

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Infrastructure is fundamental to economicgrowth, with long-lasting effects on theeconomic growth and development potential ofa country. In contrast, a lack of infrastructure isclosely related to high levels of poverty and lowlevels of equality. This is becauseinfrastructure, particularly basic infrastructuremost needed in fragile and developingeconomies, enables countries’ populations tobecome more productive, provides basicservices to households and improves the livingconditions of a nation.13

In order to meet this need, the GoK will have toseek out different modes of financing. PPPsprovide one alternative, where private sectorfinance can be crowded in to nationaldevelopment priorities. A PPP is a long-termcontract between a private party and agovernment agency, for providing a publicasset or service, in which the private partybears significant risk and managementresponsibility.

It is within this context that the GoK hasintroduced PPPs into its national developmentapproach. This began in 2009 with theestablishment of an institutional and regulatoryframework that supported the use of PPPs,which was subsequently reviewed and updateda year later.14 This was followed by an officialGoK PPP Policy statement that articulated theGoK’s commitment to PPPs and aimed toprovide the basis for the enactment oflegislation surrounding the use of PPPs.

Following from the PPP Policy was the passingand coming into effect of the Public PrivatePartnership Act, No. 15 of 2013 (‘PPP Act’),which details the process through which PPPs

13The World Bank (2015). Global Infrastructure Facility Getsto Work. Online:http://www.worldbank.org/en/programs/global-Infrastructure-facility14Kenya PPP Unit Website.http://www.pppunit.go.ke/index.php/home Accessed on 10December 2015

must be undertaken in Kenya. GoK PPPRegulations were produced in 2014 andprovided more detailed operational directionson how PPP projects will be prepared,tendered, approved, and implemented, andwhat the roles and the responsibilities of the

parties involved in PPP transactions are.

Kenya’s PPP Policy focuses on thefollowing parameters:1

Providing a context for PPPs in Kenyaand outlining the potential goals andbenefits of the PPP framework;

Providing the foundation for: theestablishment of institutions to drivethe PPP agenda; the mobilisation ofinternational and domestic privatesector investments; and the supportthat will be provided by GoK to PPPprojects; and

Providing a clear and transparentprocess for PPP project developmentin Kenya.

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SEKU is seeking to engage a privateparty to finance, build and operate

student accommodation on its behalf.

3. OVERVIEW OF THE PROJECT

3.1 Introduction to SouthEastern KenyaUniversity

SEKU is a public university located within KituiCounty, about three hours’ drive andapproximately 143 Kms from Nairobi City.

The University is made up of the main campuslocated within Kitui County, and othersubsidiary campuses such as Machakos TownCampus, Wote Town Campus, Mtito-AndeiCampus and Kitui Town campus.

SEKU was first established in 1976 asUkambani Agricultural Institute (UKAI) and laterbecame a constituent college of NairobiUniversity through the legal notice No. 102dated 15th July, 2008. SEKU became a full-fledged University through award of charter on1st March 2013.

Under the 2008 Order, all rights, liabilities andassets held by or by anybody on behalf ofUKAI, existing at the commencement of the2008 Order were automatically and fullytransferred to the South Eastern University

College.

Following the award of Charter on 1st March2013, SEKU is now a fully-fledged publicuniversity with the mandate to play a leadingrole in the development and expansion of theopportunities for higher education andresearch, with emphasis on agriculture,forestry, mining, energy, water andenvironmental sciences.15

3.2 Project Scope

A detailed feasibility study has been conductedwhich clearly outlined the rationale for SEKU toembark on this project, as well as providing themost feasible site and design option, whichhave been technically, financially andeconomically appraised.

Based on the outcomes of the feasibility studythe Transaction Advisors (TA) recommendedthat the procurement of the project be pursuedas a PPP, as this provides the best value for

15SEKU Strategic Plan, 2015 - 2019

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money for the University.

The project scope is a concise outline of the setof requirements that frame the project. Itpresents a description of the main expectedoutputs to ensure that this project meetsSEKU’s objectives.

The project’s scope for each campus coversthree components –hostel accommodation,bulk infrastructure and associated facilities.

Hostel Accommodation

The hostel accommodation scope relates to thespecific hostel accommodation needs for thegrowing SEKU student population. This is thecore of the project’s scope and outlines thenumber of students for whom hostelaccommodation must be provided, as well asthe necessary accompanying features. Basedon the needs analysis, the requiredaccommodation infrastructure for SEKU is asfollows:

Hostel rooms for 5 400 students (4 500undergraduate; 900 postgraduate),equipped with beds, storagewardrobes, study tables and chairs;

Hostel blocks to be equipped with therequired bathroom and toilet facilities;

Common study rooms for students;

Facilities management offices perblock.

Bulk Infrastructure

The functionality of the hostel accommodationis reliant on certain bulk infrastructure. In mostcases, the existing infrastructure is able to justmeet the needs of the students currentlyresiding in SEKU hostels. Based on anassessment of the existing bulk infrastructure atSEKU, the required supporting infrastructure isas follows:

Additional water supply for the newhostels;

Electricity connection for the newhostels;

Additional sewerage systems tosupport the existing sewer system;

Road access to the new hostels.

The bulk infrastructure improvements areexpected to be standardised regardless of thetechnical design chosen. The enhancements inbulk infrastructure must be ‘fit for purpose’ tosupport the increased student population of 5400.

Associated Facilities

In addition to the essential hostelaccommodation and required supportinginfrastructure, certain facilities may be includedin the scope of the project. This will be toenhance the residential service provided tostudents. The associated facilities may alsohave a commercial element as some of thefacilities will be provided to students at anadditional charge to their accommodation fees.This is an important consideration as it willenhance the commercial viability of the project.

The proposed additional facilities at SEKU havebeen identified as follows:

Additional food supply facilities (e.g. afood court);

A tuck shop in the hostels;

A number of small rental shops.

Based on the TAs analysis,and discussions with SEKUAdministration, it isenvisaged that hostelsdeveloped under this projectwill be designed to provideaccommodation for 5 400additional students oncampus.

4500 bedsfor

undergrads

900 bedsfor

postgrads

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3.3 The Demand for HostelAccommodation

The proposed provision of additional hostelaccommodation for SEKU is premised on aview that the current hostel accommodation isinsufficient for the needs of the current andfuture student population

SEKU Administration, in its proposal to theNational Treasury of Kenya, Proposed StudentHostel under Public Private Partnership atSEKU University (2013), outlined the need foradditional hostel development, with theUniversity requesting an additional 8 000 bed-spaces (1 000 post graduate and 7 000undergraduate).

Currently the University is able toaccommodate about 2600 undergraduate, andTechnical Vocational Education and Training(TVET) students accommodated at the maincampus. The University projects to admit anadditional number of students annually andaccording to the University Strategic Plan, it isexpected that the University shall have 11,000Students in the Main Campus by the end of thestrategic plan period (2013-2018).

As such, there is a need to construct morehostels to meet the demand for the increasednumber of students against the availableaccommodation space.

The proposed hostel accommodation will belocated on SEKU’s main campus, which standson 10 000 acres piece of land within anagricultural neighborhood. It is situated near theMachakos-Kitui Highway and close to the KituiCampus of Kenyatta University.

Over the last five years, from 2011 to 2015, theSEKU student population has risen sharplyalmost five-fold from 1 172 in 2011 to 6996 in2015. Currently, the student population is 8113.This is an average annual growth rate of 66%

(except for 2013 where the student populationgrew by just 7%). The previous, current andfuture student population projections arepresented in the figure below.

Figure 6: Historical, Current and Projected StudentPopulation, Main Campus, 2010 - 2030

Source: SEKU, 2015. Note: green bars represent actualpast enrolment numbers; the brown bar represents currentenrolment number; yellow bars represent studentpopulation projections.

The total student population is forecast togrow by an average of 10% per annum.SEKU Administration projects that thenumber of students will increase fromcurrent levels to a total population of 20 160by the 2025 academic year, and willcontinue to increase to 30 000 studentsenrolled by 2030.

The supply of hostel accommodation forstudents is currently provided through acombination of on-campus provision by SEKUand private hostels that are within the vicinity ofthe university.

SEKU’s current hostel capacity canaccommodate a maximum of 2600 students.Currently, only 1st and 2nd year students areprovided with accommodation. Once students’progress to the third year of study they arerequired to find accommodation off-campus.

SEKU has nine blocks offering accommodationfor students. This translates to 600 roomswhich are fully occupied, and which are built toaccommodate 2 685 students. Due to pressureto provide hostel accommodation to students,SEKU’s hostels are overcrowded, and in reality,

1172

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the University provides accommodation toapproximately 3000 students.

Hostel rooms are spread across nine blocks.The rooms are split into two categories –housing eight or 14 students. The eight bedrooms are approximately 168 square feet, andthe 14 bed rooms are approximately 278square feet; these rooms are not big enough toproperly accommodate the number of studentsthey contain. SEKU is forced to overcrowdrooms due to the lack of alternative hostelaccommodation on campus. There is noadditional accommodation capacity comingonline from SEKU.

Assuming that SEKU is unable to provide anyfurther accommodation, and that private hostelaccommodation grows by 10%, the totalavailable hostel capacity in 2030 will be 16785.This will be substantially below the projectedstudent population in that year of 29 224. Thus,the accommodation gap is expected to be 12439 in 2030 (see the figure below).

Figure 7: SEKU Student Accommodation Gap - Including

Private Sector, Main Campus

Source: TA calculations.

The proposed hostel capacity meets the currentaccommodation gap while making room for abalance of students that are currently living off-campus to move onto campus. It also providesaccommodation capacity for future growth in

student enrolment numbers; the hostel isdesigned to meet a significant proportion, butnot all, of the expected future accommodationsupply gap. It is expected that the developmentof more hostels beyond what will be providedthrough this project will be phased in as thestudent population on campus grows.

3.4 Anticipated Impact

The project is expected to provide bed space to5400 additional students on campus; 4500beds for undergrads and 900 beds for postgrads.

The project is also expected to createemployment opportunities during constructionwhich will lead to increased income andimproved livelihood. To this end local peoplewill be given first priority in employment for non-technical positions. This will also be done incompliance with the Employment Act, 2007 andRegulation of Wages order 2009.

The project will also provide market for buildingmaterials as materials will be sourced fromcertified vendors from the neighborhood.

The negative impacts of vegetation clearing,generation of solid and liquid waste, noise anddust pollution, soil erosion and sedimentationwhich will be countered with; selectivevegetation clearance, waste reduction andrecycling and appropriate pollution reductionmeasures among others are also anticipated.

0

5,000

10,000

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Num

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AccommodationGap

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4. PROPOSED PPP SCHEME

SEKU intends to procure the required worksand services through a 20 year PPP schemewhich will involve the successful bidderestablishing a dedicated special purposevehicle (SPV) that will enter into an agreementwith SEKU, under the provisions of the KenyaPPP Act, 2013.

It is envisaged that the project’s capital costswill be financed by the Project Companythrough a mix of shareholder equity and long-term debt financing. The primary revenuesource for the project will be revenuesgenerated from the hostels, as well as anyancillary facilities.

The figure below provides a simplifiedillustrative schematic of the anticipated projectstructure.

Figure 8: Project Structure

To enhance the commercial viability of theproject, the Government is currently exploringpotential financial support to be provided to theproject, either through an initial capital injectionand/or an annual unitary payment. Where aunitary payment approach is adopted, thepayment mechanism will be based on indexedperiodic payments from the ContractingAuthority over the concession period. Such

payments will be contingent on the availabilityof the contracted service, at agreed uponstandards.The table below provides an indication of theintended allocation of the main responsibilitiesand risks associated with the PPP scheme.

Table 1: PPP Scheme Risks and Responsibilities

A Preliminary Environmental Impact and SocialAssessment (PESIA) study was conducted forthe proposed project. For the purpose ofapplying for an Environmental Impact andSocial Assessment (ESIA) license from theNational Environment Management Authority(NEMA), a detailed Environmental Impact andSocial Assessment Study for the project will becarried by the investing Consortium.

Further details on the project’s scope, structureand risk allocations will be provided in theRequest for Proposals and draft PPP ProjectAgreement which will be provided toprequalified bidders.

Risk category ProjectCompany

ContractingAuthority

Design LandAvailability

Construction Operations &Maintenance

Demand Financing Performance Exchange RateRisk

Inflation Risk Interest RateRisk

Force MajeureRisk

Political Risk

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5. DISCLAIMERThe information provided to Prospective Bidder(s) or any other person, in this Project InformationMemorandum (PIM) and any other information, whether verbal or written, provided by South EasternKenya University (SEKU) or any of its employees or advisors, or on behalf of SEKU, is provided toProspective Bidders on the terms and conditions set out in the RFQ and such other terms andconditions as may be set out from time to time.

The PIM is not an agreement and is neither an offer nor an invitation by SEKU to the ProspectiveBidders or any other person. SEKU, its employees and advisors are not bound by any of the contents ofthis PIM. The purpose of the PIM is to provide interested parties with information that may be useful tothem in preparing their Qualification Documents pursuant to the RFQ. The RFQ includes statementsthat reflect various assumptions and assessments arrived at by SEKU in relation to the Project. Suchassumptions, assessments and statements do not purport to contain all the information that eachProspective Bidder or any other person may require. The PIM may not be appropriate for all persons,and it is not possible for SEKU, its employees or advisors to consider the investment objectives,financial situation and particular needs of each party who reads or uses this PIM. The assumptions,assessments, statements and information contained in the PIM and any other associated documentsmay not be complete, adequate, accurate or correct. Each Prospective Bidder should, therefore,conduct its own investigations and analysis and should check the completeness, adequacy, accuracy,correctness, and reliability of the assumptions, assessments, statements and information contained inthis PIM and obtain independent advice from appropriate sources.

Information provided in the PIM is on a wide range of matters, some of which may depend uponinterpretation of law. The information given is not intended to be an exhaustive account of statutoryrequirements and should not be regarded as a complete or authoritative statement of law. SEKUaccepts no responsibility for the accuracy or otherwise of any opinion or interpretation of law expressedherein.

SEKU, its employees and advisors make no undertaking, assurance, representation or warranty andshall have no liability to any person, including any Prospective Bidder, under any law, statute, rules orregulations, tort, principles of restitution or unjust enrichment or otherwise, for any loss, damages, costor expense that may arise from or be incurred or suffered on account of anything contained in the PIMor other information provided to Prospective Bidders or any other person, including the completeness,adequacy, accuracy, correctness, and reliability of the PIM and any assessment, assumption, statementor information contained therein or deemed to form part of the PIM or arising in any way fromparticipation in the Bidding Process.

SEKU may, in its absolute discretion, but without being under any obligation to do so, amend, update,or supplement the information, assessments or assumptions contained in the PIM. However, SEKU, itsemployees and advisors shall not be liable to any Prospective Bidder (including to the Pre-QualifiedBidders) in respect of any failure to (i) disclose or make available any information, documents or data;(ii) amend, update, or supplement the PIM; or (iii) provide any information regarding any inaccuracy,error, omission, defect or inadequacy in the PIM.

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