PPP regulatory framework could be better – WB


THERE is still room for improvement when it comes to the regulatory framework of the public-private partnership (PPP) program in the Philippines even if it is closely aligned with internationally recognized good practices, a World Bank report released on Thursday revealed.

Well designed PPPs implemented in a balanced regulatory environment can bring greater efficiency and sustainability in providing public services such as water, sanitation, energy, transport, telecommunications, health care, and education, according to the WB’s “Benchmarking PPP Procurement 2017.”

Among its great benefits, PPPs can leverage on the management capacity, innovation, and expertise of the private sector while the traditional public sector approach could sometimes be more appropriate, it said.

“The report aims to inform decision-making on the design of PPP procurement policies and regulations by comparing economies to recognized good practices that ensure transparency and encourage fair competition,” said Fernanda Ruiz Nunez, senior economist at the World Bank Group.

The scores used in Benchmarking PPP Procurement 2017 are presented on a scale of 0 to 100.
Economies at the top of the range or scores approaching 100 are considered to have a PPP regulatory framework that closely aligns with internationally recognized good practices. Those at the bottom of the range or scores closer to 0 do not adhere as closely to the international good practices and principles measured by Benchmarking PPP Procurement, and have significant room for improvement.

An economy is scored based on four thematic areas: preparation and procurement of PPPs as well as unsolicited proposals and contract management.

“This benchmarking exercise is the first attempt to collect and present systematic data on PPP procurement on a large scale by providing comparable data on the regulatory frameworks governing the processes,” said Tania Ghossein, senior private sector development specialist at the World Bank Group.

“It analyzes the regulatory framework at the national level, using a highway transport project as a case study for comparison purposes, and presents a picture as of the end of March 2016,” she said.

The Philippines adopted a Build-Operate-Transfer law rather than a PPP law. It scored 96 in preparation, 85 in procurement, 67 in unsolicited proposals, and 84 in contract management.

The report flags potential improvements that can help governments fill the gap in an effort to provide better PPP procurement and enable better infrastructure service delivery to all.

Overall, the report found that practices within the economies surveyed leave considerable room for improvement. “For instance, in only 23 percent of the economies does the regulatory framework actually detail a procedure for ensuring that the identification and prioritization of PPPs is consistent with public investment priorities.”

In the Philippines, procurement authorities must prepare infrastructure or development programs to identify specific priority projects that may be developed as PPPs, it said.

As such, the Philippines must ensure that the list of priority projects is consistent with the Philippine Development Plan, the Provincial Development Plan, and the Physical Framework Plan.

The government must submit the list to the National Economic and Development Authority Board or the Investment Coordination Committee for approval.

Among the surveyed economies, the report noted market assessment was the least commonly required appraisal.

“In the Philippines … the PPP Center and the procuring authority must perform a market-sounding process to determine the interest of private sector operators, taking into account different scenarios for revenue and economic growth in the short, medium, and long terms,” it said.


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