1. What is a PPP?
PPP is a mode of project
implementation where the government enters into a long-term partnership with
private entities to fund, undertake and deliver public services and accelerate
infrastructure development while at the same ensuring reasonable profit for the
latter’s investment. Its success depends on the terms and conditions for
ensuring quality and quantity of the project as well as risk-sharing.
2. On funding and implementation strategies.
How government projects are normally financed and implemented?
THREE (3) BASIC MODALITIES
Build-Operate-Transfer (BOT) and Variants
·
TRANSFER
IMMEDIATELY
1.
Build and Transfer (BT)
2.
Build-Transfer-and-Operate (BTO)
·
TRANSFER
AFTER COOPN PERIOD
1.
Build-Lease-and-Transfer (BLT)
2.
Build-Operate-Transfer (BOT)
3.
Contract-Add-and-Operate (CAO)
4.
Develop-Operate-and-Transfer (DOT)
5.
Rehabilitate-Operate-and-Transfer (ROT)
·
NO TRANSFER
1.
Build-Own-and-Operate (BOO)
2.
Rehabilitate-Own-and-Operate (ROO)
3.
Other variations: approved by the President
4.
Joint Ventures (JVs)
5.
Concession Agreement
3.
Based on
your basic understanding on PPP as a tool for project implementation. Who are
the normal Implementing/ Procuring Agencies for PPP projects?
·
National Government Agency
·
Government-owned and Controlled Corporation
·
Government Financial Institution
·
Local Government Units
·
Partnerships: PPP/BOT or JV
·
Private Investors
4.
Based on
your understanding, why pursue PPPs in urban plan implementation?
·
To deliver basic public services which require big
financing cost
·
To accelerate infrastructure development in the
country
·
To encourage private sector participation in the
economic development of the country.
5. Based on your understanding, who normally
pays for PPP projects?
Sources of Funding for PPP
Projects
·
Commercial loans
·
Foreign investment
·
Investment bank
·
Bonds and stocks may be floated by LGU
·
Mutual funds
·
Interpersonal loans
·
Supporting resources
·
ODA – Official Development Assistance (grant or loan)
6. Enumerated are the normal possible
projects under PPP for your easy understanding and guidelines. In your own
words, explain each type and please limit answer to a paragraph for each type:
A. Hard Projects – are physical
infrastructure projects like the following:
·
Highways, including expressways, roads, bridges,
interchanges, tunnels, and related facilities;
·
Railways or rail-based projects that may or may not be
packaged with commercial development opportunities;
·
Non-rail based mass transit facilities, navigable
inland waterways and related facilities;
·
Port infrastructures like piers, wharves, quays,
storage, handling, ferry services and related facilities;
·
Airports, air navigation, and related facilities;
·
Power generation, transmission, sub-transmission,
distribution, and related facilities;
·
Telecommunications, backbone network, terrestrial and
satellite facilities and related service facilities;
·
Information technology (IT) and data base
infrastructure, including modernization of IT, geo-spatial resource mapping and
cadastral survey for resource accounting and planning;
·
Irrigation and related facilities;
·
Water supply, sewerage, drainage, and related
facilities;
·
Education and health infrastructure;
·
Land reclamation, dredging and other related
development facilities;
·
Industrial and tourism estates or townships, including
ecotourism projects such as terrestrial and coastal/marine nature parks, among
others and related infrastructure facilities and utilities;
B. Soft Projects – are physical projects
that are necessary in the delivery of services like health, education etc.
Under PPP, these include the following:
·
Government buildings, housing projects;
·
Markets, slaughterhouses, and related facilities;
·
Warehouses and post-harvest facilities;
·
Public fishports and fishponds, including storage and
processing facilities;
·
Environmental and solid waste management related
facilities such as, but not limited to, collection equipment, composting
plants, landfill and tidal barriers, among others; and
·
Climate change mitigation and adaptation infrastructure
projects and related facilities.
C. Bundling – is a combination or a
package of soft and hard projects. For example, reclamation project which is a
hard project combined with a soft project like socialized housing.
7.In your
own understanding from all the readings I sent on PPP as a major tool for urban
plan implementation, what influence the determination of the usual contract
life for a PPP project?
The
contract life of a PPP project depends on the ability of the project proponent
to recover its investment and maintenance and operating expenses which can be
raised by collecting tolls, fees, rentals or other charges from facility users.
8.
Enumerated
are the typical risks in PPP. In your own word, explain each risk (Note: please
limit answer to a paragraph for each risk):
A.
Policy and
Political
Change in political landscape or change in leadership
may mean policy changes as well. Risks in this area may involve government not
honoring contracts. Worst case scenario is when the government nationalizes or
expropriate the project for whatever reason.
B.
Economic
and Fiscal
Currency and interest rates pose a threat to PPP
projects. Weakening of the currency and the increase in interest rates mean an
adjustment to the financial obligation of the implementing agency.
C.
Legal and
Procedures
Change in law or force majeure may threaten the
enforcement of the provisions of the contract.
D.
Environmental
and Spatial
Complying with the environmental and spatial
regulations may mean additional cost to the project especially that during the
implementation stage, the IA is required to prepare and implement the
environmental management plan.
9. In Urban Plan Implementation using PPP as a tool, how
are risks spread between parties?
Normally, risk is allocated to parties that has the most
capacity to cope up, control and mitigate it. In so far as legislation and
government policies are concerned, it is the government that take risks. For
project’s operation, it is the private sector. At the start of project
implementation, risks allocation should be clearly emphasized in the contract.
If risk allocation is not clearly defined, a conflict might arise later.
10. How are risks assessed in terms of certainty and
impact based on a) Likelihood and b) Significance?
Risks are assessed based on the following areas including
market, technical, financial, economic, distributional analyses. There specific
matrices being used to determine the certainly and impact of risks.
