Public-Private Partnership (PPP) arrangements—whether for water, reclamation, power, mass transport systems and land development projects—are never intended to glorify or only serve the interests of the parties who sign the contracts. While benefits may be drawn by the government/implementing agency (IA), the first “P,” and the private sector proponent (PSP), the second “P,” as a consequence of the partnership, the third “P,” the direct and ultimate beneficiary of any PPP project must be the fourth “P”—the people or the public good.
While “PPP for the People” (P4) for some may be over- dramatic, the purpose of this development strategy must be underscored, not dismissed, downplayed and laughed at, and certainly should not be scoffed at. We must be constantly reminded of the “why” so that we may determine not just the “how” but more so the breadth of the formal, legal and moral accountabilities of the parties.
Thus, to future-proof the PPP is to future-proof the purpose of PPP. All PPPs must directly, not just incidentally, contribute to a better quality of life for Filipinos. The people need more services, better services, affordable services and timely services. This must be explicit, defined, measurable, captured in performance indicators and auditable by the communities, the intended beneficiaries.
In his book titled Servant Leadership (1977), Robert Greenleaf defined a new leadership approach. This is the type of leadership that could “future-proof” public-private partnership (PPP) arrangements, since it will ensure, hopefully, adherence to the “true north” of this development strategy. We need servant leaders and servant institutions.
All the stakeholders in a PPP, even the private sector proponent (PSP), must serve the people. If the public good for better quality of life is not the objective, the government will be remiss in its obligation, and the PPP strategy or project will fail sooner or later.
Servant leaders must possess certain traits. Some are highlighted here relative to PPPs.
(1) Take initiative. One of the traits of true servant leaders is initiative. Servants must be proactive and not sit idly by while the communities live in a poor or dismal quality of life. First necessary steps include having a vision, adopting PPP as a strategy, knowing the needs of the people and learning about PPPs.
(2) Focus on the goal. All throughout the process—from conceptualization, selection of PSP, award, construction and project implementation—the stakeholders must not lose sight of the goal.
Does the change in administration following an electoral exercise affect public-private partnership contracts entered into by their predecessors? Are PPP arrangements coterminous with the officials who signed them? Do elections affect the integrity of PPP contracts? Do newly elected officials have the license to unilaterally terminate or amend awarded PPP contracts?
The answer to all of these are no, technically.
Real party to PPP contracts. PPP contracts should remain intact or must be respected by the successor administration, despite changes in leadership and the assumption into offices by new signatories. It is the implementing agency (IA) or government agency, i.e., national government agency (NGA), government-owned and -controlled corporation (GOCC), government instrumentality (GI), government financial institution (GFI) and local government unit, not the signatory, who is the real party to PPP contracts.
The heads of the IAs are just the representatives or agents of and acting for their respective IAs, not for themselves. PPP contracts, especially long-term agreements, and their benefits outlive their leaders.
Classifying the signatories. In terms of manner by which they are installed into office, government signatories are either appointed by the president or elected by their respective constituencies. The secretaries of NGAs, and the presidents, administrators or general managers of GOCCs, GIs and GFIs are presidential appointees. The regional and
provincial governors, city and municipal mayors and punong barangays are elected through popular vote.
Last Wednesday, October 17, candidates vying for national and local positions filed their certificates of candidacy. Soon, they will be covered by prohibitions and bans, which, if convicted, could bar them from voting and running for elective office, and even land them in jail.
This new series is dedicated to those running in the 2019 midterm elections, desirable and otherwise, and most especially, the electorate and students of public-private partnerships (PPPs), who will hold the former accountable.
Of late, I have been asked, can government agencies, i.e., national government agencies, government-owned and -controlled corporations (GOCCs), government instrumentalities and local government units (LGUs), enter into PPP contracts during the so-called public works ban? What activities are being banned and if there are exceptions, especially for PPPs? When will the ban commence and how long will it last? Can PPP funds be expended during the period?
THE phrase “it depends” is becoming more and more a popular response to questions on public-private partnerships. For those who recognize the host of PPP laws, regulations and guidelines, “it depends” is the appropriate initial reply.
The definite answer, however, largely depends on the PPP modality and applicable law. These are: (a) nine variants listed in the build-operate-transfer (BOT) law; (b) joint ventures under the 2013 Guidelines for Government-Owned and -Controlled Corporations, etc., issued by the National Economic and Develop-ment Authority (Neda); (c) 24+ modalities per the Department of the Interior and Local Government Memorandum Circular 120-2016, issued to guide local government units; (d) Special JV Guidelines by the Philippine Reclamation Authority (PRA) and Bases Con-version Development Authority (BCDA); and (e) Special PPP Guidelines of the Metropolitan Manila Development Authority (lease, lease-to-own, real property swap, design-finance-build), and Philippine National Oil Co. (lease and concession).
Here are some of those questions pertaining to unsolicited proposals (UPs) where this trite reply calls for a detailed discussion.
(1) What type of study is required to be submitted as part of a UP? It depends. Under (a), the study must be in the form a feasibility study. Under (b), (c), (d-BCDA) and (e), the supporting document may be a feasibility study, pre-feasibility study or business case. For (d-PRA), it must either be a feasibility or pre-feasibility study.
The MMDA (Metropolitan Manila Development Authority) has a lot on its plate. Its vision statement captures the challenges it faces day in and day out—traffic congestion, climate change, waste management and disaster prevention. The MMDA cannot assume a business-as-usual attitude. Together with and through the 17 political units in Metro Manila, 16 cities and one municipality—they have to think and decide together, and collectively act out-of-the-box.
The MMDA is a public corporation and government instrumentality with corporate powers governed by the Metro Manila Council (MMC). It has broad and integrative powers with the power to issue rules and regulations pursuant to its mandate.
To be responsive and to achieve “decent quality of life for Metro Manilans,” the MMDA has to be proactive, dynamic and not be risk averse. Aside from partnering with the 17, it also has to work with private sector proponents (PSPs) in order to fulfill its “I will Act” rallying slogan. The MMC answered this call for public-private partnership (PPP) when it approved unanimously on August 7 the MMDA Alternative PPP Guidelines presented by the MMDA’s tireless and driven chairman, Hon. Danny D. Lim. The Guidelines offer four additional modalities—lease, lease-to-own, real-property swap and design-finance-build—whereby the PSPs shall be selected either through open bidding or unsolicited proposals. Chairman Lim in this PPP Conversation shares with us his views on MMDA’s PPP and his call for all of us to be part of the solution.
Today’s topic is about an LGU’s authority to give “tax incentives or tax holidays” for its PPP project or a project by another government agency. The build-operate-transfer law (BOT law) also allows this form of direct government subsidy. This can be a form of support or contribution to a joint venture, lease or concession PPP.
Local taxes. Under the 1991 LGC, Congress allocated the taxes provinces, cities, municipalities and barangays can levy. Provinces and cities can, among others, impose real property, franchise, and sand and gravel taxes, while cities and municipalities can impose business taxes.
Tax privileges. Under Section 192 of the same law, there are three forms of local tax privileges. LGUs may grant tax exemptions, incentives or reliefs. Local tax imposed can be withdrawn. The private sector proponent for a water distribution, septage, monorail, expressway, reclamation or fiber optic PPP project can enjoy these contractually and by virtue of an ordinance.