1Bataan. Go PPPs

What is the legacy of PPPs? What is yours?

WHAT is a legacy? What is or what should be the legacy of public-private partnerships (PPPs)? What is yours?

Merriam-Webster defines a legacy as something, such as property or money, that is received from someone who has died. Breaking down this definition, there is a material gift, not to oneself, and the giver must die. Impliedly, there is a beneficiary or recipient who has a relationship with the giver.

This columnist particularly likes the description of a legacy project by Susan Bosak. She describes a legacy as being “about life and living. It’s about learning from the past, living in the present and building for the future”, and there is an “interconnection across time, with a need for those who have come before us and a responsibility to those who come after us”. She continues by saying that legacy “gives you a perspective on what’s important”, and that “it helps us decide the kind of life we want to live and the kind of world we want to live in.”

PRA highlights PPPs and G2G for Legacy Islands on Water

On February 3 the Philippine Reclamation Authority (PRA) marked its 40th founding year with the theme “Grand life begins at 40”. In its 77-day accomplishment report, the new PRA leadership, headed by this columnist, as chairman of the Board, and the General Manager/CEO lawyer Janilo E. Rubiato, highlighted public-private partnerships (PPPs) and government-to-government collaboration (G2GC). These arrangements are aimed at building Legacy Islands on Water (LIoWs).

Since November 16 last year, the PRA has inked three memorandums of understanding with the city of Manila for the 79-hectare port facility of the Manila Harbour Centre, city of Bacoor and municipality of Minglanilla, Cebu; two expressions of collaboration with province of Aklan and city of Puerto Princesa for the implementation of infrastructure development projects through reclamation; and one expression of partnership with the Philippine Economic Zone Authority, to explore opportunities for cooperation in pursuing land-reclamation projects for possible establishment of regional economic zones.

PPPs in a low- or high-trust society

DO we live in a high- or low-trust society? How will public-private partnerships (PPPs) operate in such a society? How does trust or lack thereof shape a PPP policy or project?

The vision embodied in AmBisyon 2040 states that, “By 2040, the Philippines shall be a prosperous, predominantly middle-class society where no one is poor. Our people will enjoy long and healthy lives, are smart and innovative, and will live in a high-trust society.” This statement acknowledges the reality that Filipinos do not currently live in a high-trust society, and that it may take 23 more years before we live in such a society.

In a high-trust society, you believe that if you leave behind your latest cell phone or laptop unattended in a mall, you will find it in the same place or in the lost-and-found station, and whoever sees it will not keep it for himself or herself. In a low-trust society, you know and feel, despite fervent prayers, that most likely, your valuable possession will not be there and, in all likelihood, someone will take it.

Mixing it up! G2G and then PPPs

What is government-to-government (G2G)? What is the difference between a G2G and a Public-Private Partnership (PPP)? How can a G2G support or complement a PPP? What are the benefits of mixing it up?

G2G. A G2G is an arrangement or contract entered into between two administrative agencies (AAs). National government agencies like the Department of Transportation (DOTr), government-owned and -controlled corporations like the Philippine Ports Authority (PPA), government instrumentalities like the Philippine Reclamation Authority (PRA), government financial institutions like the Development Bank of the Philippines (DBP), and local government units like Puerto Princesa City (City) are AAs.

They are governed by their respective charters and have specialized mandates. Between and among themselves, they can collaborate, share resources and bind themselves in a contract for a specific objective or project. There is no specific law that governs the manner by which they should choose their counterpart save in the case of inter-agency procurement. When one AA procures from another AA, this is governed by implementing rules of the Government Procurement Reform Act (GPRA). They can just negotiate.

Think broad: A lease is a PPP

Is a lease a public-private partnership (PPP) modality? What is a lease arrangement? What law governs leases as a PPP? How does the government, as lessor, select the private-sector proponent-lessee?

For those who are of the view that the build-operate-transfer (BOT) law is the only PPP law in the country, the answer to the first question is no. A straight lease is not one of the nine modalities listed under the BOT law. Said law only allows a build-lease-transfer arrangement, whereby the private sector designs, constructs, finances and leases out the facility to the government, and the latter lease rentals. This is the approach used in Phase 1 of the PPP for School Infrastructure Project of the Department of Education.

For those who subscribe to a liberal view of PPP (this columnist included) and consider the BOT law as just one of several PPP laws, a straight lease is a PPP. Under this view, any relationship between government and the private sector for an infrastructure or social service project, regardless of the allocation of functions and risks, is a PPP.

PPP calls for innovation: Are we ready?

Does a public-private partnership (PPP) arrangement require innovation? What does innovation mean? Who must innovate? What will happen to a PPP arrangement if a party or stakeholder fails to innovate?

When PPP is policy-driven and undertaken as a development strategy, the government assumes a “not-business-as-usual” stance. The government breaks away from tradition and challenges the status quo. Prior to PPPs, it is the government, on its own, that designs, constructs, funds and operates projects. PPPs establish a formal relationship between the government and the private-sector proponent (PSP) and redefine their roles.

Borrowing from Moore and Hartley, PPPs transform “what gets produced, how the new products and services get distributed, how the burden of producing the services is borne and what happens to the material conditions in society.” The outcome and impact, and the manner by which the result is achieved are equally important. PPPs are reform initiatives. PPPs are innovation exemplified.

Innovation is needed. A PPP is in itself an innovation. Innovation here does not simply mean being new, radical, unique, creative or different. According to my professor on innovation, Dr. Edna Franco citing West and Farr, there must be “intentional introduction and application within a role, group or organization of ideas, processes or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, group, organization or society.”