Even in public-private partnerships (PPPs) and budgeting, policy-makers offer an alternative approach to pure or unadulterated strategies. Under a hybrid system, they apply not one, but combine two or more strategies and approaches.
“Hybrid budgeting.” A couple of weeks ago, it was reported that Congress and the Executive branch agreed to mix two systems on budgeting. Under the hybrid budgeting strategy, which is being considered for the 2019 national budget, the cash-based and obligation-based budgeting systems will be both used.
Under the cash-based method, payments should be done within the fiscal year. In contrast, under an obligation-based budgeting system, contracts awarded within the fiscal year can be delivered even after the end of the year. Under hybrid budgeting, it is contemplated that government agencies could have a six-month extension to accomplish a project and disburse the allocated budget.
“Hybrids in PPP.” In PPP, there is a host of possible combinations.
PPP in itself is a hybrid. In a PPP, both the public and private sectors enter into a collaborative and purposive arrangement. While certain projects are pursued either by government or the private-sector proponent (PSP) on their own, PPP projects are accomplished and implemented by both. Law and contract define the extent and breadth of the parties’ functions and obligations.
“Hybrid PPP.” In advancing “Build Build, Build,” the current administration developed its own strategy—the Hybrid PPP. Under this, the government will fund, using its own funds or secured through borrowings or official development assistance, design and build, either through procurement or administration, infrastructure facilities. After turnover or a certain period, the PSP will operate, manage and maintain the facility through the appropriate PPP modality. In this case, the hybrid is sequential, not simultaneous.
Hybrid of components. A typical PPP arrangement grants unto the PSP more than one function. Under a pure PPP, not the hybrid PPP described above, the PSP can fund, design, build, operate, rehabilitate, lease and/or add, even own the project. The more functions the PSP assumes, the more risks it bears.
Hybrid of projects. The trend now in PPPs is to bundle projects into one whereby one project becomes a component of a bigger project. There could be a PPP for waste-to-energy (solid-waste management and energy generation), airport on reclaimed land or public market with a mall and monorail station. In hybrid projects, there are more benefits under one contract with one PSP selected under one procedure.
Hybrid of government agencies. On the public sector side, there could be more than one implementing agency and/or beneficiary. Like the joint venture for the third bridge in Cebu, the PSP partnered with two local government units—Cebu City and municipality of Cordova.
Under the hybrid approach, it is not a bifurcation or an either or but an integration or calibration of choices. Good is combined with good to have a better option. In PPPs, for as long as the public good is served and the PSP selected through a transparent and competitive process, any hybrid is acceptable.