Which local government unit (LGU) has the most number of awarded public-private partnership (PPP) projects? Is this the same LGU that has the most number of reclamation projects? For this LGU, what PPP modality did it use to develop its infrastructure projects?
The most PPProlific LGU is the City of Manila, led by its PPPeople-driven mayor, former President Joseph E. Estrada. In the past three years, Manila has already awarded 10 PPP contracts. Aside from these, it is currently vetting three more.
What set in motion the proliferation of this development strategy in the capital of the Philippines is its PPP framework. In 2014 the City Council enacted Ordinance 8346, which provides for PPPs through joint ventures (JVs).
What can other LGUs learn from Manila?
-Have a PPP framework. A framework, in ordinance form, ensures stability, consistency, transparency, integrity, accountability, reliability and enforceability of PPPs. Having a single set of rules discourages discriminatory practices and tailor fitting. Without a legal framework, local government units (LGUs) could not adopt out-of-the-box PPP modalities. Stakeholders from the public and private sectors will also be clueless.
-JV-preferred modality. The adoption of a single-PPP modality ordinance, rather than a PPP ordinance that provides for some 24 modalities, is an exercise of the wisdom of the city officials. There is nothing unlawful or disadvantageous with this. While the 1991 Local Government Code empowered LGUs to enter into joint ventures (JV), it did not supply the details—definition, contributions, requirements, procedures and term. Using its ordinance-making power, LGUs can supply these. Manila did so in 2014.
-Follow the ordinance. All must follow ordinances, like laws. Thus, in obeisance with Ordinance 8346, the city officials cannot choose Manila’s JV partner absent any competition, nor can the mayor sign a JV contract without City Council authorization. Officials who disregard ordinances would render themselves liable. The JV contract itself may be assailed.
-Not be risk averse. While all PPP and JV arrangements allocate risks between the city and the proponents, adopting this approach also entails risk. Thus, engaging into this alternative non-traditional strategy is not for the faint hearted. PPPs challenge the norms. Mayor Erap clearly is not risk averse.
-Projects aplenty. LGUs can implement hard and soft projects through PPPs, and can even combine projects into one integrated whole. Reclamation, market redevelopment, water supply, waste-to-energy, information technology, health care and socialized housing are just some of the infrastructure and social services-related activities for PPPs. The 10 awarded projects of Manila are: one dialysis center, four public markets, one automated clearance system, two mixed-used land development and two reclamation projects.
-Follow the process. No matter how advantageous the terms are, if the process is flawed, the project and officials may be questioned. The Manila JV ordinance outlines the process for selecting the proponent compliant with the requirements of PACT—public advantage, accountability, competition and transparency. Unsolicited proposals, recognized in statutes, ordinances, regulations and jurisprudence, have been consistently utilized by Manila.
It is time to relearn, unlearn and learn…and take action. Manila, thank you for leading the way.