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.

‘Nightmares’ after award of PPP contracts

WHAT happens after a public-private partnership (PPP) contract is signed? Can the private-sector proponent (PSP) immediately construct the facility after issuance of the notice of award? What are the CPs, or conditions precedent, before the PSP can proceed? Which is more difficult—getting the award, being allowed to proceed or implementing the project?

Contrary to what others might say, it is not smooth sailing after an implementing agency (IA) and a PSP seal a PPP contract. After going through a bidding process, which on the average takes 29 months to complete for national projects, there is no assurance that the IA and PSP will have no more headaches. History has taught us that, like in any partnership or project, there are stress points.

• Post-notice of award (NOA)-Pre-notice to proceed (NTP). The PSP cannot immediately undertake the PPP project right after the signing of agreement with the IA and issuance of the NOA. The PSP, with the help of the IA, must comply with the CPs before it obtains the go signal to proceed with the construction and implementation.

Do PPP contracts fall under the PHL Competition Act?

CAN a public-private partnership (PPP) arrangement be considered anticompetitive and punishable under the Philippine Competition Act (PCA)? Are PPP contracts under the jurisdiction of the Philippine Competition Commission (PCC)? Can a winner of a PPP award be in abuse of a dominant position prohibited under the PCA? Does the PCA repeal or amend the build-operate-and-transfer (BOT) law? Must there be prior notice to the PCC before the government awards a PPP contract to a private-sector proponent (PSP)?

Ten days from today, the PCA will mark its first year. On July 21, 2015, the former president signed into law Republic Act 10667. The PCA defines three prohibited acts—anticompetitive agreements, abuse of dominant position and anticompetitive mergers and acquisitions.

Anticompetitive agreements: An anticompetitive agreement is a pact between competitors where competition is substantially prevented, restricted or lessened. A PPP contract between government and the PSP cannot be considered anticompetitive since the implementing agency and the PSP are not competitors, since one has no control over the other, and the PSP secures the award after a competitive process.

PPP is “Bayanihan”

Is relevant to public-private partnerships (PPPs)? Are the objectives of bayanihan and PPPs the same? For PPPs to succeed, what in the spirit and practice of bayanihan can be used? What can we learn from examples of bayanihan? Who is the bayan (country) and bayani (hero) in PPPs?

Typical images of bayanihan show neighbors carrying a nipa (thatched roof) hut, a chain of people passing on buckets of water to douse a fire, or passengers pushing a jeepney out of a flooded street. Bayanihan “Filipinizes” and localizes PPP. It is a Filipino word that means “cooperative undertaking” and “collective participation.” Bayanihan encapsulates PPP in two respects, i.e., as bayan-ihan and bayani-han. Both depict a story, a journey and a purpose, and demonstrate participative leadership.

Bayanihan, as a tradition and practice, demonstrates togetherness and we-ness for a purpose. One person cannot transfer a shanty, put out a house fire or push a vehicle. He or she must work with others. Every mover acts like a partner having a stake or particular role.

The future of PPPs is written on the wall

IS public-private partnership (PPP) the only solution to the infrastructure deficit? Is PPP truly a priority program of the incoming Duterte administration? What is its relevance and importance in achieving the 10-point socioeconomic agenda? Is there a future for the PPPCenter? What could be the role of the PPP Center moving forward?

From all indications, PPP will be a priority program and a key change strategy of the incoming administration. Recent events will show that President-elect Rodrigo R. Duterte is not just paying lip service.

Duterte inks first PPP deal of Davao

Davao City—Before he steps down as city mayor, incoming President Rodrigo R. Duterte signed a landmark contract with the private sector on Tuesday worth about P39 billion.

On the sidelines of the end of the two-day business summit in Davao, the President-elect signed a public-private partnership (PPP) contract with a proponent on port development. This is one of his last acts as mayor of Davao City.

As local chief executive, Duterte—joined by representatives of the City Council and the members of the Davao City PPP Board (DCPPPB)—signed a 50-year joint-venture agreement (JVA) with Mega Harbour Port And Development Inc. This is the first PPP contract entered into by the Davao City under its 2015 amended PPP ordinance.

The Davao Coastline and Port Development Project aims to spur the economic growth of the city. Davao envisions to be the premier socioeconomic and tourism center in Mindanao, as well as in the East Asia-Pacific region. The project will support the city’s plan of becoming the gateway of commerce and trade in the Davao Gulf area, even for the whole of Mindanao region.

The PHL PPP Center: What it is, what it is not and what it ought to be

WHAT is the anatomy of the Public-Private Partnership (PPP) Center of the Philippines? What is its mandate? How critical is its role in development? What types of PPP modalities is it advancing? Is it an implementing agency? Who has control over its actions? 

To date:

(1) PPP Center is a public, not a private, office. Like the Department of Finance and the National Economic and Development Authority (Neda), the PPP Center is a public office. It performs a sovereign or public function. Per Executive Order (EO) 8, Series of 2010, the PPP Center shall assist government agencies in pursuing PPP programs and infrastructure and development projects. Its functions are specialized and highly technical. As a public office, although only created by executive fiat, it serves and is accountable to the public.