Dissecting PPP contracts # 5: Grant of rights
By what authority can a private-sector proponent (PSP) in a public-private partnership (PPP) arrangement operate a project that is traditionally government’s? By what right can that PSP charge and collect fees from the consumers or public? What does government get in return under the scheme?
In a PPP, let us say, for water supply, power transmission, public market, toll road or bridge, airport, reclamation or telecommunications, how can the PSP undertake these? In order for the PSP to do these, there must be a “grant of rights”.
Indispensability. No grant, no project. Without this grant, concession, license, or vestiture of authority by government, the PSP cannot supply water, transmit power or operate a public market, charge fees and earn from the project. The PSP, on its own, cannot do these “public” projects without an express grant.
Grantor. The relevant government agency—national government agency, government corporation or instrumentality, regulatory agency or local government unit—which, under its mandate, has the responsibility to pursue or regulate a particular PPP project, must accede and make such grant.
Grantee. In a PPP, the grantee is the winning PSP. After going through competition for the market, the PSP secures the award.