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P P P

Public
Private
Partnership
By Jared Aaron R. Cruz
Public = Government
Private = Non-Govt Companies
Partnership = Mutualism
What is Publicprivate partnership (PPP)
PublicPrivate Partnership describes a government service
or private business venture which is funded and operated
through a partnership of government and one or
more private sector companies. These schemes are
sometimes referred to as PPP, P3 or P
3
.
PPP involves a contract between a public sector authority and a private party

The private party provides a public service or project and assumes substantial financial,
technical and operational risk in the project.

In some types of PPP, the cost of using the service is borne exclusively by the users of the
service and not by the taxpayer. (Express ways)

In other types (notably the private finance initiative), capital investment is made by the
private sector on the strength of a contract with government to provide agreed services
and the cost of providing the service is borne wholly or in part by the government. (MRT-
LRT)

In projects that are aimed at creating public goods like in the infrastructure sector, the
government may provide a capital subsidy in the form of a one-time grant, so as to make it
more attractive to the private investors.

In some other cases, the government may support the project by providing revenue
subsidies, including tax breaks or by providing guaranteed annual revenues for a fixed
period.
PPP in the Philippines
The Philippines boasts of a long experience of public-private partnership
(PPP) initiatives, which serve as a rich basis for future investments.

With its aggressive PPP promotion, the government was and is able to
attract private partners to invest.

Through the partnership, the power crisis in the early 1990s was
addressed.

The partnership likewise helped improve road network quality, transport
linkages and social services. To date, approximately US$ 19.5 billion in
investment has already been generated since its inception.

Today, PPP can be credited in helping realize various development
projects both at the national and local levels across various infrastructure
sectors.
PPP in the Philippines
The Philippines boasts of a long experience of public-private partnership
(PPP) initiatives, which serve as a rich basis for future investments.

With its aggressive PPP promotion, the government was and is able to
attract private partners to invest.

Through the partnership, the power crisis in the early 1990s was
addressed.

The partnership likewise helped improve road network quality, transport
linkages and social services. To date, approximately US$ 19.5 billion in
investment has already been generated since its inception.

Today, PPP can be credited in helping realize various development
projects both at the national and local levels across various infrastructure
sectors.
Overview of the PPP program
The Philippine Government recognizes the essential role of the private
sector as the main engine for national growth and development.

The government is willing, on a case-to-case basis, to protect investors
from certain regulatory risk

Private sector investors will be selected through open competition under
fair and transparent terms.

All interested investors will be given a level playing field with reasonable
returns and appropriate sharing of risks without compromising the
protection of public interests.

Through this program, end-users will be provided with adequate, safe,
efficient, reliable, and reasonably-priced infrastructure services.

The projects under the PPP Program were selected based on the following criteria:
1. Project Readiness/Preparation
a. For 2011 Rollout
i. Feasibility Study to be completed within 2010 to 2011,
ii. Completed Feasibility Study being reconfigured for
PPP, and
iii. Ready to tender in 2011.
b. For Medium-Term Rollout and other PPP Projects
i. Included in the PPP pipeline projects of the
Implementing Agencies, and
ii. Initial preparation on-going, i.e., concept stage, hiring
of consultants for Feasibility Study preparation.

2. Responsiveness to the sectors needs (e.g., part of the transport
network system, water supply/sewerage, electric power capacity, etc); and

3. High Implementability (bankable, no major issues).
PHILIPPINE PUBLIC-PRIVATE
PARTNERSHIP (PPP) CENTER
The PPP Center, equipped with the technical know-how and
extensive experience in project development, provides various
services and assistance to:

implementing agencies (IAs)
government-owned and controlled corporations (GOCCs)
state universities (SUCs) and
local government units (LGUs) as well as to
the private sector

in the development and implementation of critical infrastructure
projects.
ROLE OF PPP CENTER
Project Development

Project Development and Monitoring Facility

Project Facilitation

Project Monitoring

Policy Advocacy

Information Management.

Capacity Building
PPP Process Flow Chart
Under Republic Act 7718 and its IRR, the implementing agency/local government
units (IAs/LGUs) can implement their PPP/BOT projects through any of the following
implementation modes:

Public Bidding (Solicited Mode)
The IA/LGU chooses to procure their priority infrastructure and development
projects through transparent and competitive public bidding process.

Unsolicited Mode
The IA/LGU may accept unsolicited proposal from project proponent to undertake
infrastructure or development projects on a negotiated basis provided that:

1) Project involves new concept or technology and/or is not part of the list of priority
projects;

2) No direct government guarantee, subsidy or equity is required; and

3) The IA/LGU has invited by publication, for three (3) consecutive weeks, in a
newspaper of general circulation, comparative or competitive proposals.

PPP Process Flow Chart
Under Republic Act 7718 and its IRR, the implementing agency/local government
units (IAs/LGUs) can implement their PPP/BOT projects through any of the following
implementation modes:

Public Bidding (Solicited Mode)
The IA/LGU chooses to procure their priority infrastructure and development
projects through transparent and competitive public bidding process.

Unsolicited Mode
The IA/LGU may accept unsolicited proposal from project proponent to undertake
infrastructure or development projects on a negotiated basis provided that:

1) Project involves new concept or technology and/or is not part of the list of priority
projects;

2) No direct government guarantee, subsidy or equity is required; and

3) The IA/LGU has invited by publication, for three (3) consecutive weeks, in a
newspaper of general circulation, comparative or competitive proposals.

DPWH PPP PROJECTS

See pdf file