Battling the drug menace via PPPs

CAN there be a link between combatting the drug crisis and pursuing development through public-private partnerships (PPPs)? What antidrug programs and projects can be undertaken through PPPs? Who will be the payors of these projects? What PPP modalities can be used?

• Defining the context. In order to establish a link, the drug menace must be viewed as the problem and the context, while PPP should be advanced as a, not the, solution. PPPs should not be viewed as the goal. PPP is a vehicle and is just one of several change strategies.

• Expanding PPP’s limited con­cept. In order for PPP to be a viable strategy to respond to this problem, the concept of PPP must be ex­panded. Anti-illegal drugs-related PPPs should extend beyond infra­structure, should not be confined to private-sector financing, should be open to civil-society participa­tion, and should involve all levels of the government bureaucracy. This is a basic recognition that government alone cannot ad­dress the crisis on a long-term and sustained basis.

Depersonalizing and ‘anti-epalizing’ PPP projects

HAVE you seen government and Public-Private Partnership (PPP) projects that bear the name of the highest government official who signed the contract? What is your impression or reaction to this? If you were the successor chief executive, would you be tempted to discontinue this project or drop the name of the predecessor?

Every time a government or PPP project bears the picture, name, emblem, initials, logo, color or insignia of a politician or elective official, a disturbing message is communicated to the public and political opponents. Intentionally or unintentionally, consciously or unconsciously, the President, legislator, governor, mayor, punong barangay, head of agency is telling us that he or she “owns” the project, and that without him or her, there would not be any such project.

This public-relation scheme, while beneficial for the incumbent, may not augur well for the PPP project, which may last up to 50 years. In 50 years, there could be eight presidents, 16 governors or mayors and 50 heads of state corporations. If the successor is vindictive, has no respect for the sanctity of contracts, feels that s/he has a monopoly over righteousness and noble intentions, then long-term PPP contracts, policies and rules, may be susceptible to unilateral amendments, even rescissions. This “successor, political or regulatory risk” becomes more real if the projects are “personalized.”

Averting PPP ‘turf clashes’

CAN a public-private partnership (PPP) project be undertaken by more than one implementing agency (IA)? How should turf issues be addressed and resolved? Which IA takes precedence? Who should undertake monorail, water, reclamation and bridge PPP projects?

The first State of the Nation Address of President Duterte outlined 10 projects that may be implemented through PPPs, i.e., roads, airports, bridges, tourism-related facilities, harvest facilities, public health, irrigation, rail, ferry systems and public Wi-Fi. Aside from these, this columnist has another list of 10—waste-to-energy/renewable energy, water supply, septage/sewerage, reclamation, rehabilitation centers, monorail, mixed-use land development, markets, terminals and smart city projects.

The question now is who is the appropriate IA. There are three levels of IAs—national, local government and state corporations. All IAs are part of the State who should recognize the indispensable role of the private sector in development. They have their mandates governed by their respective charters and all are duty-bound to serve the people.

Emergency Powers and PPPs. Do they mix?

WHO will public-private partnerships (PPPs) fit into the proposed grant of emergency powers in addressing the traffic crisis? What are the boundaries of the grant of emergency powers to the Executive branch of government? What PPP related laws must be changed to expedite PPPs?

• Amendment of laws, not the Constitution. The inherent limitation to the power of Congress to enact laws is the same restraint for the legislative grant of emergency powers to the President. The 1987 Constitution cannot be amended or revised through ordinary legislation. The proposed grant of extraordinary powers to the Executive Branch must not be inconsistent with the basic law of the land. Thus, the Supreme Court could not be deprived of its judicial power, the right to due process cannot be abrogated and the local autonomy enjoyed by local government units cannot be revoked.
• Enhancement, not abolition of private-sector participation. Another constitutional policy, which must be respected even under a “state of traffic emergency or crisis,” is the recognition of the “indispensable role of the private sector.” Whether as partner, concessionaire, contractor, supplier, funder, designer or operator, the private sector can, and should, participate in addressing the
  traffic crisis.

PPP-in-a-PPP and ‘hybrid’ approaches

CAN a public-private partnership (PPP) project accommodate another PPP arrangement? What are the types of projects that allow this PPP-in-a-PPP approach? If this was the case, must the second PPP project go through another round of competitive process? Must the two PPP projects be pursued under the same modality? Can a completed government project permit a PPP project in the future?

If a PPP is viewed as a change and development strategy, which it should be, PPP-in-a-PPP and the “hybrid” approaches should be encouraged, planned and even anticipated. Such an orientation promotes innovation and project enhancement.

When viewed as project-based, a PPP deals with a project with predetermined targets, deliverables and obligations. If a project only involves water supply, then water distribution is excluded. If a PPP contract only talks about the construction and maintenance of a road project, then the private sector proponent (PSP) cannot lay claim, by virtue of that contract, to land development along the road.

Reading PPP into the Sona

DID President Duterte mention public-private partnerships (PPPs) in his State of the Nation Address (Sona)? Can the programs and projects he enumerated last week be pursued through PPPs? Is PPP a viable option for the priority activities of the current administration?

While there was no mention of PPP in the Sona on July 25, the vision and the context by which PPPs can be effected have been laid out. For PPPs to work and to work in harmony with other change strategies, the “dream” and the values by which this will be achieved must be clarified. The President has sent the message.

At the onset, it must be underlined that PPP is not the end in itself. PPP is one of—not just the only means—many vehicles that may be used by the government to reach its development goals. PPP presupposes that government needs a “partner”. Government cannot realize its vision of society on its own.

No money-out option for govt

ARE implementing agencies (IAs) required to shell out money for public private partnership (PPP) arrangements? What is the appropriate PPP modality for a no cash-out option on the part of the government? Why is this option popular for IAs, particularly local government units (LGUs)? Aside from cash, what can an IA contribute so that it will have a “skin” in the project?

The government has the option to or not to contribute cash; extend subsidy; provide viability gap funding; guarantee, or give equity to a PPP arrangement. Depending on the modality, priority, governing law or viability of the project, the choice partakes of a legal, political, socioeconomic, even a leadership question and challenge.

Under the build-operate-transfer law, the government may provide for a direct government guarantee, subsidy or equity for solicited projects. Depending on the modality, lease payments and grantor payments from the government may be part of its contractual obligations. For the School Infrastructure Project and South Integrated Transport System Project, the government will make such payments to the private-sector proponents (PSPs). The annual budget to be approved by Congress must provide for an appropriation for these payments.