Consistency, Fairness, and Transparency in PPPs Essential to Maximizing Benefits
The NAIA Expressway Phase II project which will be completed this year will greatly ease traffic to and from the Philippines’ premier airport. IFC was transaction adviser to the PPP project.
Policy consistency and fair, transparent implementation of public-private partnership projects from planning to procurement and award are the keys to ensuring maximized benefits for governments, private sector partners, and the public.
These lessons emerged during discussions at the IFC-sponsored PPP Conference “Transforming Economies Through Public-Private Partnerships” held on February 23, 2016 in Manila, the Philippines.
Providing assurances of fairness and transparency attracts more private firms to participate in PPP projects, which results in better outcomes for everyone.
Encouraging more foreign direct investment and foreign expertise also helps promote a healthier rate of competition.
“More participation leads to competition and helps achieve better bids and more equitable terms for the government and the public,” said IFC Director for East Asia and the Pacific Vivek Pathak.
Praising the Philippines as a model for PPPs in Asia-Pacific because of its high level of private sector participation and very effective tapping of private funding for infrastructure, Pathak said that moves to opening up the Philippines economy further—in particular by removing obstacles that deter foreign investment—will help boost participation.
“Limits on foreign ownership in some sectors has discouraged foreign investors to enter the market and should be reevaluated in the context of the Philippines’ growing infrastructure needs,” said Pathak.
Policy consistency can be achieved by turning the PPP Center, which is tasked with facilitating the country’s PPP program and projects, into a permanent institution. The Philippines also needs to respect institutional arrangements and strengthen coordination among government agencies in the post-award period, said Executive Director of the PPP Center Cosette Canilao.
IFC’s PPP team acted as transaction adviser on two PPP projects awarded under President Aquino’s administration. The NAIA Expressway (Phase II) Project for the Department of Public Works and Highways is nearing completion, while the concessionaire of the LRT 1 Cavite Extension and Operations and Maintenance Project signed a $505 million loan agreement on February 12, reaching financial closure in a relatively short period considering the size and complexity of the project.
