March 9, 2011

THE national government will still be streamlining the list of around 70 proposed public-private partnership (PPP) projects presented to local and international investors in November, the PPP Center said.

PPP Center executive director Philamer Torio told reporters that the list, which is periodically reviewed, have to be streamlined to include only the projects that are suited for procurement as PPP.

In the long term, Torio said Socioeconomic Planning Secretary Dr. Cayetano Paderanga Jr. already said the projects that will be undertaken as PPPs will come from the programs and policies set through the Medium-Term Philippine Development Plan and the Medium-Term Public Investment Plan.

“We probably will do a review to determine which ones can be done through PPP and which ones will be more suited to other procurement means. It’s [the list] always being reviewed. At the end of the day, we have to find out really whether the process [for certain projects] is PPP,” Torio said at the sidelines of the last day of the Experience-Sharing and Workshop on PPPs organized by the British Embassy, Code: RED, the La Liga Policy Institute and the BusinessMirror.

Torio said some of the PPP projects listed on the brochure distributed to potential local and international investors in November may be more suited to be funded or procured through other means, such as official development assistance and direct private funding.

The list of PPP projects includes those from big-ticket infrastructure projects like airports and road networks down to unique projects like a longganisa-making facility on the list of proposed PPP projects in the agriculture sector.

On Tuesday Infrastructure UK Project director-international Edward Farquharson said at his lecture at the workshop that there are limits to undertaking PPPs and not all projects can be procured through PPPs.

Among the considerations, Farquharson said, is the size of PPP projects. He said PPP projects must be big enough to maximize the investments to be made and small enough to ensure that there will still be competition for the project. Competition is considered a measure of how good a PPP project is.

In the UK, Farquharson said the government even placed a cap on the cost of projects that can be undertaken as a PPP. He said PPP projects usually had an investment cost of around $30 million and above, or P1.2 billion above, to ensure that all the investments on feasibility studies and transactional advisors will be maximized.

Farquharson said, however, that a project being submitted for PPPs cannot also be very expensive because interested parties and lenders could be more limited.  He added that in the event a private-sector partner will not be able to complete the project, a reasonably priced PPP can still be undertaken by another entity, otherwise the risks fall back to the government.

The expert said in the UK, sample PPP projects include those that are aimed to improve the social infrastructure sector, such as in the upgrade of classrooms and public hospitals.