UNIVERSITY OF THE EAST -CALOOCAN

Civil Engineering Department

PUBLIC – PRIVATE PARTNERSHIP

SUBMITTED BY

Antonio, Jhon Russel C.

20151164271

SUBMITTED TO:

Engr. Reyman Solas

August 20, 2021

NCE3202 - Construction Methods and Project Management 2021

1. Define Public – Private Partnership.

- Public – Private Partnership is a partnership between 2 parties
(government entity and private parties) that reaching one goal, to
contribute to a societal and often also commercial purpose and to
provide better services and better value for money, increased asset
utilization and an integrated whole-of-life management, etc. PPP
provide better infrastructure solutions than an initiative that is wholly
private. It may also include early completion bonuses that further
increase efficiency.
2. Differentiate the general forms of PPP.
- AVAILABILITY PPP
o This is a form of PPP in which the public authority contracts
with private sector entity to provide a public good, service, or
product at a constant capacity to the implementing agency
(IA) for a given fee (capacity fee) and a separate for usage of
the public good, product or service (usage fee). Fees or tariffs
are regulated by contract to provide for recovery of debt
service, fixed costs of operation and a return on equity.
- CONCESSION PPP
o A form of public-private partnership in which the government
allows the private sector the right to develop, manage, and
charge public users of a public good, infrastructure, or service
a price or tariff set by public regulators and the concession
contract. Tariffs are designed to collect debt payment, cover
fixed operating expenses, and give a return on equity.
3. Explain PPP contractual agreements.
- A PPP is defined as a contract between a public-sector institution and
a private party, where the private party performs a function that is
usually provided by the public-sector and/or uses state property in
terms of the PPP agreement. Public Private Partnerships (PPPs) are a
very broad range of partnership where the public and private sectors
collaborate for some mutual benefit. Concession contracts, where a
private sector company provides a concession on behalf of a public
authority, for which the public pays them (such as a toll road).
4. Lists eligible types of PPP projects.

The Revised IRR of the BOT Law enumerates the list of activities which may be undertaken
under any of the recognized and valid BOT contractual arrangements (PPP modalities). These
include, among others:

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NCE3202 - Construction Methods and Project Management 2021
1. Highways, including expressways, roads, bridges, interchanges, tunnels, and related
facilities;
2. Railways or rail-based projects that may or may not be packaged with commercial
development opportunities;
3. Non-rail based mass transit facilities, navigable inland waterways and related facilities;
4. Port infrastructures like piers, wharves, quays, storage, handling, ferry services and
related facilities;
5. Airports, air navigation, and related facilities;
6. Power generation, transmission, sub-transmission, distribution, and related facilities;
7. Telecommunications, backbone network, terrestrial and satellite facilities and related
service facilities;
8. Information technology (IT) and data base infrastructure, including modernization of IT,
geo-spatial resource mapping and cadastral survey for resource accounting and
planning;
9. Irrigation and related facilities;
10. Water supply, sewerage, drainage, and related facilities;
11. Education and health infrastructure;
12. Land reclamation, dredging and other related development facilities;
13. Industrial and tourism estates or townships, including ecotourism projects such as
terrestrial and coastal/marine nature parks, among others and related infrastructure
facilities and utilities;
14. Government buildings, housing projects;
15. Markets, slaughterhouses, and related facilities;
16. Warehouses and post-harvest facilities;
17. Public fishports and fishponds, including storage and processing facilities;
18. Environmental and solid waste management related facilities such as, but not limited to,
collection equipment, composting plants, landfill and tidal barriers, among others; and
19. Climate change mitigation and adaptation infrastructure projects and related facilities.

5. What are the advantages of PPP?

In general, governments tap public-private partnership (PPP) for the following reasons:

1. PPPs encourage the injection of private sector capital.

o National budget and Official Development Assistance (ODA) are limited and are
subject to government prioritization. Private sector funding, on the other hand,
is readily available. It may be tapped to augment ODA funds and the government
budget to implement critical government projects.
o In the case of big ticket infrastructure projects, PPPs utilize the financial capital
of the private sector. Through it, project construction and service delivery is
accelerated. For example, the NAIA Expressway Phase II project will be financed

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through private sector funding. On top of this, the government has received an
upfront payment of 11 billion pesos even before the actual project construction.
2. PPPs make projects affordable.
o Government spending will be less if the project is undertaken as a PPP, since the
private sector funds their share of the project (including operation and
maintenance) during the duration of the concession. PPP projects consider the
whole of life costing approach (whole lifecycle costing) which ultimately lowers
capital and operating costs.
o All PPP projects undergo a competitive, transparent bidding. PPP project
proponents usually provide the most cost-effective capital goods necessary for
the project.
3. PPPs deliver value for money.
o Value for money (VfM) is achieved when the government obtains the maximum
benefit from the goods and services it both acquires and provides. It is the best
available outcome after taking into account all the benefits, costs, and risks over
the entire project life, which may not necessarily be the lowest cost or price.
o For the PPP for School Infrastructure Project (PSIP) Phase 1, the PPP scheme was
identified as the most optimal financing option available for the government to
address the current classroom backlog in the country. Under this scheme, the
government will be able to deliver the needed classrooms in the shortest time
possible.
4. In PPPs, each risk is allocated to the party who can best manage or absorb it.
o In PPPs, risks are assumed by the party that is best able to manage and assume
the consequences of the risk involved.
o PPPs enable the government to take on fewer risks due to shared risk allocation.
Generally, the private sector takes on the project’s life cycle cost risk, while the
government assumes site risks, legislative and government policy risks, among
others.
5. PPPs force the public sector to focus on outputs and benefits from the start.
o Project preparation activities are more rigorous in public-private partnerships.
This ensures that the project is highly bankable and can stand public scrutiny.
Better project preparation and execution will result in adherence to project
design within the agreed timelines.
o In PPPs, the government focuses on providing quality infrastructure and services
by setting each project’s minimum performance standards and specifications
(MPSS).
6. With PPPs, the quality of service has to be maintained for the entire duration of the
cooperation period.
o In PPPs, project execution will be more rigorous as project ownership belongs to
the project proponents. The public sector only pays when services are delivered
satisfactorily.
o During the implementation stage, an independent consultant is hired to ensure
that both public and private parties adhere to the terms of the contract/

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concession agreement. This is true in the case of projects presently undergoing
construction—the PSIP Phase 1 and the Daang Hari- SLEX Link Road project.
7. PPPs encourage innovation.
o PPPs maximize the use of private sector skills. It utilizes higher levels of private
sector efficiency, specialization, and technology.
o In the case of the PSIP and the Daang Hari-SLEX Link Road projects, private
proponents were given flexibility in coming up with the project design that is
most efficient, taking into consideration the MPSS set by the government.

6. Differentiate solicited and unsolicited proposals.

Solicited proposal
A solicited proposal refers to projects identified by the implementing agency (IA) from the list of
their priority projects.

In a solicited proposal, the IA formally solicits the submission of bids from the public. The
solicitation is done through the publication of an invitation for interested bidders to submit
bids, and selection of the private proponent is done through a public competitive process.

Unsolicited proposal
In an unsolicited proposal, the private sector project proponent submits a project proposal to
an IA without a formal solicitation from the government. An unsolicited proposal may be
accepted for consideration and evaluation by the IA, provided it complies with the following
conditions:

1. It involves a new concept or technology and/or it is not part of the list of priority
projects in the Philippine Investment Program (PIP) [Medium Term Public Investment
Program, Comprehensive and Integrated Infrastructure Program (CIIP)] and the
Provincial/Local Investment Plans;
2. It does not include a Direct Government Guarantee, Equity or Subsidy;
3. It has to go to ICC for the determination of reasonable Financial Internal Rate of Return
(FIRR) and approval to negotiate with the Original Proponent; and
4. After successful negotiation, proceed to publication and request for competitive
proposals according to Swiss Challenge Rules.

Reference/s:

- https://ppp.gov.ph/ppp-program/what-is-ppp/
- http://www.treasury.gov.za/documents/national%20budget/2017/review/Annexure%20E.pdf

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