PPP Center focused on solicited projects to better align with gov’t priorities
THE head of the PPP Center said the agency plans to focus on solicited projects, which will have been vetted extensively for conformity to government priorities.
“One thing we are trying to implement now is to make sure that we focus on the solicited mode of PPPs (public-private partnerships) because we know that projects take a long time and it takes time to identify the priority infrastructure projects. The government would need to devote resources to developing and studying these projects,” PPP Center of the Philippines Executive Director Cynthia C. Hernandez said in a forum on Wednesday.
This focus is part of a broader effort to take a “harmonized approach in infrastructure development. We want to align it with the government’s infrastructure program. These are projects that the government must identify. PPP projects would then be prioritized, not just (selected) randomly,” she said.
“Project development is key. We need to invest in diligent project studies to establish the technical, financial, economic, and operational viabilities. There should be reasonable risk sharing and commitments and key legal and institutional requirements,” she said.
“When doing a PPP, we hope to have an integrated approach which could reduce the whole-of-life cost. We hope to be more efficient by tapping the private sector’s capacity and technology. We structure projects so risks are allocated to those that can best manage and hopefully result in reduced project cost,” she added.
Ms. Hernandez also noted the need to standardize the process for PPPs in order to empower local government units.
At the end of December, the government had awarded 210 projects worth P2.335 trillion.
The PPP Center currently has 87 projects in the pipeline worth P2.956 trillion, not including projects undergoing study or projects that need to be finalized.
Ms. Hernandez said that the parties implementing PPPs have become more diverse.
“Transportation is still a major sector for PPPs. There’s a lot of airports, roads, and terminals that are in the pipeline to be developed. There’s vertical infrastructure and government property development, IT systems, water supply and sanitation, and tourism,” she added.
She said local water supply and sanitation projects appear to be in demand.
“Emerging sectors would be solid waste management, which is urgently needed,” she added.
The government is also aiming to pass a PPP Act, which she hopes will address bottlenecks, challenges, and ambiguities in the existing Build-Operate-Transfer (BOT) law. It also aims to create a more competitive and enabling environment for PPPS.
The revised implementing rules and regulations (IRR) for the BOT Law, which took effect in October, addressed project bankability and delay concerns.
National Economic and Development Authority (NEDA) Assistant Secretary Roderick M. Planta called for clarity in the institutional frameworks of PPPs.
He also called for third-party evaluations and case studies.
“There are times you transition the IRR and there are loopholes. There should be reviews and studies,” he added.
Aboitiz InfraCapital Vice-President Paul B. Imperial said PPPs constitute “value for money” for the government while “freeing up resources for other government needs.”
“For the private sector we are looking at long-term revenue, but there has to be an understanding of risk allocation,” he added.
He also said that commitments should be “iron-clad.”
“The bid or proposal must stand the test of scrutiny. There should be no shortcuts, the processes should be followed. At the end of the day, it’s the government and private sector that’s answerable to the public, processes and approvals must be followed to a T,” he added.
Mr. Imperial also called for stakeholder management and capacity building.
“It’s key to build relationships. PPPs must support the community, the ecosystems, and the environment. Sometimes it so happens that these considerations are an afterthought,” he said. — Luisa Maria Jacinta C. Jocson