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Monkey wrenches to fast-tracking PPPs

What are the obstacles and pitfalls of public-private partnerships (PPPs)? Why does it take too long to award PPP projects? Why can’t our country be like other countries where government projects are implemented fast? What are the causes of delay in construction?

Every country has its own priorities, leaders, systems, strategies, culture, predominant values, political, social and economic realities, and definitions of and laws on PPPs. Those countries must have something that allows them to pursue PPPs—from prioritization, selection of proponent, award and completion of construction and turnover—at a fast pace. In our country, there are several possible perceived reasons why it takes us so long to award, to get a notice to proceed and to complete construction. And this list is by no means exclusive, and not indisputable.

(1) Turf clashes. A lot of projects can be implemented by more than one government agency. For example, the Department of Transportation, the Light Rail Transit Authority and a provincial government can implement a monorail project in a province. If they do not come to terms, all these three will assert their respective mandates. When jurisdictional issues are not resolved, either there is no project or there are redundant projects or white elephants.

(2) Paralysis-by-analysis. While master plans must come ahead of projects to ensure integrated development, master plans take time to prepare and not all aspects, arguably, are doable. There are some agencies that may have several plans and some features of macro plans are off tangent from micro or local plans. The obvious result is inaction or conflict.

(3) Layers upon layers of pre-award approvals. Depending on the PPP modality, governing law, project cost or amount of government contribution, there are levels of approval. Aside from the implementing agency, the go signal from the National Economic and Development Authority may be required. There could also be instances when positions of implementing agencies do not jive with those of the PPP Center and regulatory agencies. Without these approvals, there is no PPP contract.

(4) Interventions galore post-award. Regulatory approvals may also stall the start-up or implementation of project or provisions of PPP contracts. Provisions for automatic adjustments in rates are not automatic. Disallowances in expenditures may be ordered. Issuance of environmental compliance certificates may not be issued. The effect is a paper award of projects but no project or no project as envisioned.

(5) Penchant for litigation. Despite the law against injunctions, restraining orders are still issued by regular courts. Cases are filed by losing bidders, taxpayers, or members of Congress. Those who are pre-disposed to stonewalling PPP projects also file graft cases against public officers and winning bidders. The resulting outcome—no project or fear of having one.

(6) Protester’s risk. One of the 50 or so risks that could attend a PPP is resistance from civil-society organizations. Some may have legitimate grievances, some may oppose for opposition’s sake, while claiming infallibility or monopoly of righteousness. If not addressed, there could be nonuser of projects or use below expected targets.

If you know of other reasons, let this columnist know. Please send feedback via e-mail to alberto.c.agra@gmail.com.

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