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Mixing it up! G2G and then PPPs

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.

PPP. In a PPP, an AA partners with a private sector proponent (PSP) for an infrastructure or social service project. There is no single law in the Philippines governing the 24 possible PPP modalities. The BOT Law, the Joint Venture Guidelines issued by the National Economic and Development Authority, GPRA, Corporation and Civil Codes and the Memorandum Circular issued by the Department of Interior and Local Government lay down the parameters.

In terms of procedure, an AA in a PPP cannot, unlike in a G2G, choose a PSP through straight negotiations. The selection of the PSP must go through a competitive and transparent process.

G2G and PPP. So for an airport and seaport project on reclaimed land in Puerto Princesa, the DOTr, PPA, PRA and City can pursue a 4-party G2G. They can simply agree among themselves and no bidding is required for them to enter into a Memorandum of Agreement among themselves. The national budget can provide funding for this project or they can secure a loan from the DBP.

They are not precluded from engaging a PSP to design, finance, construct and/or operate the project. However, the implementing agency(ies) can only contract with a PSP who obtains the award either through bidding or an unsolicited proposal where PSPs are allowed to challenge the original proponent. In this case, G2G and PPP are undertaken simultaneously.

G2G then PPP. The other approach is sequential. The project can be funded and procured by the AAs, then the operations, management and maintenance can be done through a PPP. This is the hybrid being advocated by the Secretary of Finance.

Benefits. In any collaboration, each party contributes, shares expertise and benefits from the arrangement. In a resource exchange, turf issues may be avoided since they will consensually cooperate rather than compete for a project. In which case, the project will have a greater chance of being future-proofed.

Whether G2G and/or then PPP, the general public must be the ultimate beneficiary. Governance is people-centered.

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