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83 Percent Part 1

83 percent

Part One

Is an 83-percent rating good? If the passing grade is 75, yes, of course. For those who pursue excellence, it could be better. What is this 83 percent? This is the average mark of the Philippine public-private partnership regulatory framework per the recently published report of the World Bank. The Procuring Infrastructure PPP 2018 (2018 PPP Report) “assesses the regulatory frameworks and recognized good practices that govern PPP procurement across 135 economies.” The “aim of this publication is to help countries improve the governance and quality of PPP projects.”

According to the 2018 PPP Report, “Higher scores signify that an economy’s regulatory framework is in greater compliance with internationally recognized good practices in an area. Lower scores indicate that there is considerable room for improvement because of less adherence to international good practices measured” under said report.

The 83 percent is an average of four scores, i.e., Preparation of PPPs, 85 percent; Procurement of PPPs, 76 percent; PPP Contract Management, 88 percent; and Unsolicited proposals (UPs) for PPPs, 83 percent. The Philippines bested all the countries in Southeast Asia. Singapore was the closest with 66 percent (but with no UPs), followed by Indonesia at 63 percent. The others are Vietnam with 60 percent; Timor Leste, 48 percent; Thailand 43 percent (no UPs); Malaysia, 41 percent; Cambodia, 31 percent; Laos, 29 percent (no UPs); and Myanmar, 21 percent. There was no rating for Brunei Darussalam.

  • Preparation of PPPs. Under this, the Philippines was assessed to have a central budgetary authority’s approval, prioritization consistent with public investment priorities, multilevel assessments and draft PPP contracts included in Requests for Proposals. Noticeably absent is the inclusion of assessments in the RFPs. This is our only “No”under this category. The 2018 PPP Report, however, noted that tender documents are not available online.
  • Procurement of PPPs. This is our lowest mark. While we have public procurement notice, set qualifications for evaluation committee members, detailed tender documents and financial models, and while we publish awards, allow foreign companies to participate, require financial models to be submitted and specify the prequalification criteria, among others, there are still gaps. Our PPP procurement allows for discretionary direct negotiations, does not contain standstill periods and our PPP contracts are not published.
  • PPP Contract Management. This is our highest grade. The 2018 Report recognized the presence of the country’s systems to manage the implementation of PPP contracts, to track completion of construction works and to evaluate PPP contract implementation. We provide for dispute-resolution mechanisms, lenders’ step-in rights and grounds for contract termination. We also permit changes in the structure of the stakeholder and regulate the modification or renegotiation of the PPP contract once signed. Actually, we have no “No” under this standard.
  • UPs for PPPs. Our grade here is equivalent to our average. Under this, all are “Yeses.” Yes to regulation of UPs, assessments thereof and evaluation of consistency of UPs, and having a procedure, a competitive procedure and minimum periods.

This columnist’s views and take on these will be discussed next week. Stay tuned.

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