Rigorous screening urged for PPP project proposals

MANILA, Philippines—The government has been urged to use a more rigorous assessment process for selecting big-ticket projects that it would offer to private investors under the Public Private Partnership (PPP) program.

The suggestion was made Wednesday by Forensic Law and Policy Strategies Inc. (Forensic Solutions) as it asked Malacañang and the National Economic and Development Authority to subject proposed infrastructure projects to a process that would convince prospective funders of their viability.

In a statement, the think tank said that “other than the usual rhetoric about PPP, concerned public officials should convince the public and would-be investors that they have done their homework well by baring whether all project proposals have passed [various] types of evaluation.”

Forensic Solutions head Alberto Agra pointed out that only such a public disclosure alone by concerned government officials concerned would prove that these projects pushed by President Aquino under his centerpiece economic policy were “founded on solid fundamentals, and not just hype.”

His comments came on the heels of the Palace’s recent unveiling of infrastructure ventures that it would initially offer to private investors for joint undertaking, from its preliminary list of more than a hundred projects lined up for possible PPP funding.

These were the P21-billion North Luzon Expressway-South Luzon Expressway connector road; the P10.6-billion Ninoy Aquino International Airport Expressway Phase 2; the P7.7-billion Light Railway Transit Line 1; P6.3-billion Metro Rail Transit Line 3; and the P1.6-billion Daang Hari-South Luzon Expressway link road.

Agra urged the administration to review and approve PPP projects on the following criteria: 1) a needs analysis, which defines the government’s goal; 2) an affordability assessment; 3) a value-for-money assessment; 4) preliminary risk assessment; 5) a stakeholder assessment, which identifies the stakeholders, supporters and oppositors; 6) institutional and human resources assessment; 7) a “bankability” assessment covering the financing aspect; 8) a legal viability assessment; 9) market testing; 10) a PPP option recommendation, to find out the best or appropriate PPP option—whether Build-Operate-Transfer or any of its variants including joint venture, concession, lease, service contract, management contract and disposition; and 11) an indicative transaction implementation plan, which spells out the procurement process and detailed implementation plan.

“Contrary to what our officials are saying, PPP is not that simple,” Agra said. “[It] is not a walk in the park. PPP involves a wide range of difficult choices, and so far, the public has yet to know if real policy choices have been made and what the reasons supporting these decisions were, if there are any.”