Contrasting 2 joint-venture frameworks
Every time this columnist lectures on public-private partnerships (PPPs), he cannot de-emphasize the differences in the frameworks on joint ventures (JVs). A JV is a PPP modality whereby both public- and private-sector proponents (PSPs) contractually agree to a common purpose, contribute, exchange resources, jointly perform functions and proportionately share in governance, revenues, profits, losses and risks. The two types of JVs are contrasted as follows:
- Classes of public entities. JVs, on the part of government, can be entered into between government corporations and instrumentalities, state universities and colleges and government financing institutions (GFIs) and PSPs; and between local government units (LGUs) and PSPs.
- Governing frameworks. GFI-PSP JVs are currently governed by the 2013 Guidelines issued by the National Economic and Development Authority (Neda JV Guidelines), while LGU-PSP JVs are anchored on the 1991 Local Government Code and its implementing rules. However, the “how to” or details—definition, requirements, conditions, form of contributions and procedures—are supplied by LGUs through their respective ordinances. To date, some 90 LGUs already have theirs. The template PPP ordinance annexed to the Department of Interior and Local Government Memorandum Circular 2016-120 (DILG MC) incorporates LGU JVs.