THE GOVERNMENT will implement more “hybrid” public-private partnership (PPP) projects next year, under which it initiates project construction using its own funds or official development assistance (ODA), the National Economic and Development Authority (NEDA) said.
Such projects are typically bid out to the private sector in the operations and maintenance (O&M) phase, in order to minimize start-up delays.
“It should be next year, in the middle of next year. We have not determined the appropriate financing yet, but I think there will be (more),” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Thursday when asked when the government will roll out more hybrid PPP projects.
“So the ‘Build, Build, Build’ will be at a high level in 2019,” he added, noting that economic growth may come in “closer to 7%” next year.
So far, the government has two ongoing hybrid PPP projects since deciding to shift away from the pure PPP structure in the latter half of 2016 as it sought to accelerate project implementation.
It includes the construction of a new passenger terminal at the Clark International Airport through the Bases Conversion and Development Authority. The second project is the New Bohol (Panglao) Airport runway and terminal expansion aided by Japan International Cooperation Agency (JICA).
The P9.36-billion Clark International Airport Expansion Project was awarded to the winning bidder late 2017, with the P5.61-billion O&M phase awarded last week. Japan meanwhile signed a P2.1-billion loan agreement on the New Bohol Airport expansion in October. The government has yet to award the O&M concession.
The government said that a traditional PPP project usually takes an average of 29 months from project conceptualization to the awarding of the contract.
Initially, the government wanted to bid out the project’s construction together with the O&M for better coordination between the builder and the O&M provider, but Mr. Pernia said this structure has not yet been adopted.
“It should be done simultaneously. It has not yet been implemented. In fact, the good thing is that before the completion of Clark [International Airport Expansion], an O&M contract is in place,” Mr. Pernia said.
He added that the new approach will be adopted “for the next project.”
The PPP Center said last week that it is currently drafting guidelines for implementing agencies and private-sector stakeholders on hybrid PPPs, and these guidelines are expected to be issued within the first half of 2019.
They said that some private proponents were concerned that O&M PPP structure effectively reduces their participation in key state projects, but the PPP Center said that the hybrid PPP model can be structured to include information technology components in the O&M.
Nevertheless, the PPP Center said that the shift to a hybrid PPP financing mode is achieving the goal of faster project implementation.
“We definitely see improvements in the fast-tracking,” PPP Center Deputy Executive Director Mia Mary G. Sebastian said in a briefing on Wednesday. — Elijah Joseph C. Tubayan

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