THE government in collaboration with the United Nations Capital Development Fund (UNCDF) has launched a national guideline for the establishment and management of project-focused companies with specific development objectives and limited financial risk.

The step is an enhancement of efforts going back to 2021 when the government punlished a ational guideline for seveloping and financing income-generating infrastructure investments as a user guide for local government authorities 

A schematic overview of the 2021 instrument envisaged the institution of municipal bond issuance processes, where the link with the central government as overall guarantor on risk-related matters remained somewhat in abeyance.

Key officials say the guide is now a new reference tool for local government authorities (LGAs) and state-owned enterprises, providing a step-by-step technical guidance on how to establish and manage viable and strategic income-generating infrastructure projects using such companies.

 It will address the current LGAs’ challenge of managing commercial infrastructure investments in relation to governance, operations and financial management, the document affirms in its overview.

 Top Treasury officials as well as Regional Administration and Local Governments in the President’s Office (PO-RALG) accompanies the UNCDF countryi office for the launch here on Satuiday, preceded by a two-day training.

It involved 72 adminustrators from nine regions and 16 municipal or district authorities, with the training conducted by Treasury experts, where PO-RALG .
 permanent secretary Adolf Ndunguru underlined the need for capacity building.

He said that critical capacity building support is needed by local authorities on how to use the guideline to ensure there is sufficient understanding and that the intended objectives are achieved.

 “Since 2017/18, the government has invested a total of 294.96bn/- in 46 strategic projects, 26 of which have been completed,’ he stated, elaborating that most LGAs find it difficult to operate existing strategic investments in a financially self-sustainable manner.

 The key challenges are limited project management guidelines, delays, political interference, inexperienced personnel, limitations in financial management and other weaknesses, he explained..

 The government has introduced the guideline to provide key procedures and standards to be observed by LGAs in setting up and operating project companies at the district level, he specified.

 He described the guide;ine as embracing new government thinking and innovative ways of strengthening local fiscal autonomy, asserting that it should therefore be used by all LGAs, including boards and managements of the companies to be formed.

 The government hopes that the guide will enhance LGAs’ technical capability to manage strategic income-generating investments and result in increased own-sources revenue and improved service delivery, he stated.

 He expressed satisfaction with the UN agency for the collaboration, with technical and financial support in developing the guideline, as well as subsequent training for members of regional secretariats and local authoritieson its practical application.

 Teasury acting permanent secretary John Natu noted that the government has been funding the construction and implementation of investment infrastructure to enhance revenue by disbursing funds, including those for strategic projects.

  “However, experience has shown that LGAs face various challenges in managing these projects, particularly in operational areas and financial management,” he said, affirming the bneed to set up a robust framework for specialized companies to manage and operate projects.

Thisi is among solutions initiated to address these challenges, with a vew to enabling effective project implementation to achieve the desired objectives of the government, he said.

 The government hopes that this guideline will strengthen the technical capacity of LGAs in managing investment projects aimed at increasing revenue, improve the own sources of revenuess and enhance accountability, he elaborated.

 Peter Malika, the UNCDF country director, said that UNCDF has prioritized its support towards attainment of the country’s objectives by working with the government to help build national capacities and investing in local development.

 The Special Purpose Vehicle guide will set standards and empower cities, state-owned enterprises and local authorities to use appropriate governance arrangements to enhance project operations, quality service delivery, increased private sector engagement and boost local development, he added.