Strengthening Project Preparation Support for Local PPP Projects through PDMF
Atty. Joanne B. Babon, OIC- Director IV, PDMFS
Cherry May R. Manacho, OIC-Chief, Project Management Division
In line with the Duterte Administration’s thrust of regional development, the Public-Private Partnership (PPP) Center has launched its Local PPP Strategy in 2017 which is aimed at providing strengthened support to local government entities in developing and implementing their infrastructure and development projects. The Local PPP Strategy intends to pilot local PPPs in priority sectors and providing enhanced capacity building modules in the short term, replicate pilot local PPPs in the medium term, and acquire expertise and initiate development in the long run.
In support of the Local PPP Strategy, the Project Development and Monitoring Facility (PDMF) was enhanced to make it more accessible to local government entities as a project preparation funding source for their potential PPP projects. This enhancement includes the creation of a Regional PDMF Committee, establishment of a Panel of Consultants for Local PPP Projects, and improvements to the PDMF Guidelines.
Creation of Regional PDMF Committee
To attract more local government entities to tap the PDMF and to infuse more local perspective in their proposed PPP projects at project conceptualization stage, the Regional PDMF Committee was created in 2019 consistent with the functions and membership composition as prescribed under Executive Order (EO) No. 8, as amended by EO 136. The Regional PDMF Committee shall evaluate and approve PDMF applications submitted by local implementing entities such as local government units (LGUs), local water districts (WDs), local state universities and colleges (SUCs), and special economic zones (SEZs). The Regional PDMF Committee was specifically created to be chaired by the National Economic and Development Authority (NEDA) Undersecretary for Regional Development together with the NEDA Regional Directors who are expected to provide valuable on-the-ground inputs to the proposed local PPP projects.
Establishment of Panel of Consultants for Resilient Local PPP Projects
The inherent cost of engaging high caliber international and national consultants from the existing Panel of Project Preparation and Transaction Support Consultants under the PDMF has discouraged local government entities to tap the facility considering their limited budgets. To address this, last year, the PPP Center has set up the Panel of Consultants for Resilient Local PPP Projects which is composed of equally capable international and national consulting firms that are ready to accept relatively smaller scale projects at the local level. The new Panel shall be dedicated to local projects which address climate change impacts and urban resilience which have been observed to be the priority sectors at the local level based on consultations.
Streamlined PDMF Process
To better guide local government entities in the application process as well as in the duration of the consulting services once approved with PDMF support, amendments to streamline the PDMF process were introduced – from application and screening to the evaluation of the PDMF request and management of the consulting contracts. These improvements were incorporated in the PDMF Guidelines as amendments, which were subsequently approved by the PPP Governing Board as recommended by the PDMF Committee in 2019. The amended provisions provide step-by-step approval process, indicative timelines, and standard documentary requirements.
To complement the strategies of the PPP Center, the PDMF has received an additional funding of USD 2.5 million from the Urban Climate Change Resilience Trust Fund (UCCRTF) to support local projects that address climate change and urban resilience.
Approved Local PPP Projects
Complemented by the efforts of relevant units in the PPP Center, several local government entities have expressed interest to utilize the PDMF to develop the full blown studies of their PPP projects. This lead to a number of PDMF applications for local projects received and processed by the PPP Center in the late 2019. Subsequently, the Regional PDMF Committee has approved three (3) local projects during its inaugural meeting in January 2020. This includes the Bislig City Bulk Water Supply and Septage Project by Bislig City Water District, Iloilo City Integrated Solid Waste Management Facility Project by the Iloilo City Government, and Ormoc City Water Supply System Project by Ormoc City Government. The feasibility studies of these projects to be prepared by the PDMF-funded Consultants are expected to be available within 2020.
Given all the enhancements to make PDMF more accessible coupled with the intensified efforts of the PPP Center to assist local government entities in their PPP projects, the Center sees an increase in local entities opting to utilize PPP to deliver their infrastructure needs, and those that will tap the PDMF to fund their pre-investment studies. This is expected to significantly address the infrastructure gap at the local level with more PPP projects delivered through a more localized PDMF.