Public-Private Partnership for the

People Initiative for Local

Governments (LGU P4)

By: Atty. Alberto Agra

Implementation/ Funding Schemes
Loans/ Grants/
Public-Private ODA/ MDFO
Partnerships

National/ Local
Government
Funds Any 2 or all
of the above
or none of
LGU the above
 PRIVATE SECTOR SUPPORT AND INTERVENTIONS

Public-Private Partnership for the People Initiative for

Local Governments (LGU P4)

5% of GDP 7% of GDP
(2017) (2020)
 PRIVATE SECTOR SUPPORT AND INTERVENTIONS

Its supports the President directives on build, build,

build………

Increase public
spending on
infrastructure of
8.4 trillion pesos
for the next 5
years, the plan to
usher in a golden
age of
infrastructure
 PRIVATE SECTOR SUPPORT AND INTERVENTIONS

Why PPP……..

• access private sector ideas, • risk allocation between

business model and innovation partners
• leverage private sector finance • provide better value for
to bring proven development money
solution to scale when public • serve the people
resources are not sufficient
• accelerates delivery of basic
services and infrastructure
spending
 Definition under
DILG MC 2016-120
At the policy level:
PPP is a developmental, innovative, change and
partnership strategy aimed at promoting the general
welfare, inclusive growth and better quality of life of
Filipinos.

At the project level:

PPP is a contractual arrangement between the
government and the private sector to deliver public
infrastructure and/or public services where each party
assumes specified functions, bears certain risks, provides
contribution, performs particular obligations, and earns
benefits and revenues.
 PRIVATE SECTOR SUPPORT AND INTERVENTIONS

Legal Bases…..

1. Section 20, Article II of 1987 Constitution. Recognize the

indispensable role of private sector as the main engine of
national development
2. RA 7160 Local Government Code. Encourages the role of private
sector in local governance particularly in the deliver of basic
services to ensure the viability of local autonomy as alternative
strategy for sustainable development
3. RA No. 9184 Government Procurement Reform Act. An act
Authorizing the Financing, Construction, Maintenance of
Infrastructure Project by Private Sector
 PPP Cycle
will depend on Not required for
the modality BOT modalities
Sanggunian Enacts follow BOT Law
PPP Code
LCE creates relevant
committees (PBAC/PPP
Project Completion Selection Committee/PPP
Regulatory
Authority/TWG*

• policy regulation,
control,
consultation and
Project Implementation
dialogue
(unsolicited) and Approval
• M&E
• will depend on the
Procurement and
modality selection of PPP partner
• will depend on the and awarding of contract
proposal
(solicited/unsolicited)
Project Identification,
Scoping, Testing,
Appraisal, Negotiation
• Data source:
Solicited proposal
(PPFP/CDP/CLUP/CBMS/LIIC
and others); or unsolicited
proposal
• Conduct of Feasibility
study (consider the
modality)
 Nature of PPPs
Components:
Private Sector o Project
o Design
LGU
o Finance
o Construction
o Operations
o Governance
o Risk-Allocation
Project o Period
o Performance
o Payments
o Liabilities
o Procedures
 Need for a Framework
Authority based on the Constitution and Law,
and confirmed by OP, OES, DOJ and DILG

PPP or JV
Vision/ Framework/
Strategy/ PPP Enabling PPP Projects/
Development
Policy Ordinance/ Structures Contracts
Plan
Code

stability, consistency, transparency, integrity,

accountability, reliability and enforceability
Policy Shift
 P3 to P4
Then Today and Tomorrow

Project-based People-focused
Transactional Transformational
Area-Concentration Area-Deconcentration
Big-Ticket Projects Big and Small Projects
Single-Purpose Projects Bundled Type
Exclusive List of Modalities Inclusive List
Know-how Broad Learning Ecology
Monopolization
 “PPP is not Procurement”
Areas PPP Procurement

Governing Laws BOT Law (RA6957), GPRA or RA9184

Ordinance (NEDA JV
Guidelines)
Objects of Contract Infrastructure or Procurement of
developmental project goods, services and
provided by the infrastructure projects
government, project
for investment activity
Specifications Minimum specification specific
or outputs set by the
government while
PSP may innovate
 “PPP is not Procurement”
Areas PPP Procurement

Sources of funds PSP funds or contribution of Government funds

each parties
Transfer of Depends on the modalities and Solely to the
ownership agreement or arrangement government

Procedures Competitive Open bidding

selection/Competitive
challenge/negotiation (with
unsolicited proposal)
Bidding parameters Highest revenue or concession Lowest purchase
fee, least government burden price or lowest
or subsidy or lowest fee to be rating for services
paid by the end-user or highest
revenue or percentage share in
the measurement of income
 Mandate of LGUs
Local Autonomy

Self-Reliance/
Fiscal Autonomy
More Responsive

Subordinate Liberal View of

Legislation Powers

Bottom-Up Agent of the

Planning People

LGUs as
General Welfare
Corporations

Proprietary Private Sector

Powers Participation
Enactment of PPP Code
 THE PPP/ JV Code

Principles and
Value Drivers Projects
Authorities

Selection Contract
Modalities
Procedures Contents

Governing Contract Accountability

Structures Management Mechanisms
 LGU Structures

Local Chief Vice-

Executive LCE/Sanggunian

PPP-Selection PPP-Regulatory
Committee (7) Authority (9)

Technical
Working
Group
 Composition of Pre-
Qualification Bids and
Awards Committee (PBAC)
• Chairperson – At least a third ranking regular
official of the LGU
• Members:
• Secretary – Legal Officer
• 1 Technical Officer knowledgeable with the
technical requirement of the project duly
designate by the head of LGU (project based)
• 1 Finance Officer (Treasurer or Accountant)
• 1 Officer knowledgeable in
management/operation of the project
• Non-voting members (Observers)
• 2 representative from PS (Contractors’
Associations and facility users or accounting
associations)
• 1 COA
• 1 DILG Field Officer
• *Observers will be notified at lease 2 calendar
days before the pre-bid conference, opening of
bids, evaluation of bids, contract award and
special meetings of the committee. Absence of
observers will not nullify the PBAC proceedings,
provided that they have been duly invited in
writing.
Composition of PPP Selection
Committee (PSC)
 Chairperson – At least a third ranking
officer of the LGU
 Secretary – Legal Officer
 Treasurer
 Local Planning and Development
Coordinator/Officer
 SP/SB representative (through a
resolution)
 2 representatives from CSO/NGOs/POs
(member of LDC)
 Support staff as Secretariat
 * The PSP Selection Committee may
invite provisional non-voting member
from national government agencies
(DILG Field Officer COA and others),
regulatory agencies and private sector
to observe the proceeding of selection
of PSP provided that it has an approval
from the LCE
Role of PPP Selection Committee
all aspects of the pre-selection and selection process:

1. Prepare Feasibility or Project Study and selection/ tender documents;

2. Determine minimum designs, performance standards/ specifications,
economic parameters and reasonable rate of return or tariff-setting
mechanism appropriate to the LGU P4 Modality;
3. Draft or evaluate P4 contract;
4. publication of the invitation to apply for eligibility and submission of
proposals or comparative proposals;
5. Define the eligibility requirements, appropriate form and amount of
proposal securities, and schedules of the selection and challenge
processes; pre-qualification of prospective PSPs, bidders or challengers;
6. conduct of pre-selection conferences and issuance of supplemental
notices; interpretation of the rules regarding the selection process;
7. conduct of the selection or challenge process;
8. evaluate legal, financial and technical aspects of the proposals;
9. prepare resolution of disputes between PSPs and challengers;
10. Define the appeals mechanisms;
11. Recommends for the acceptance of the proposal and/ or for the award
of the contract.
Composition of PPP Regulatory Authority
(PRA)
• Chairperson : LCE or Administrator as designated by LCE
• Vice-Chairperson: Vice Gov/Vice Mayor or SP/SB Member (designated
through a resolution)
• 2 SP/SB Member (2 distinct political parties where the LCE do not
belong and chosen on the basis of proportional representation of
all parties represented in the Sanggunian)
• Legal Officer
• Treasurer
• Local Planning and Development Officer
• 2 representatives from accredited NGOs/POs/CSOs who are member
of LDC (same member of the PSC)
• Support staff as Secretariat
Composition of PPP Regulatory Authority
(PRA)
Note:
• if it is a government-to-government undertaking or joint projects, 1
representative from the partner government will sit in PRA and vote
only on the concerned project
• PRA may appoint Contract Manager to sit in the PRA only compels to
1 vote particularly on the project that he is managing
• 3rd party involvement as advisors or observers with approval from
LCE such as national government organizations, regulatory agencies,
POs, COs and NGOs
• composed of a simple majority of all voting members. The
Chairperson shall vote only in case of a tie.
• May hire a Consultant
 Role of PPP Regulatory Authority (PRA)
tasked with performing contract management functions:

1. Partnership management (i.e., corporate governance, communication and

information sharing, and dispute resolution)
2. Performance or service delivery management (i.e., risk management and
performance management).
3. Contract administration (i.e., variation management, contract maintenance
and financial administration), for all P4 arrangements entered into by the
LGU.
4. Responsible for setting and monitoring the tariff, and administering the
subsidy pursuant to the P4 contract.
5. Approve Contract Management Manual
6. Through the Chairperson will call a Post Award Conference
7. Administrator of documents and correspondence relating to the P4 project
and P4 contract
8. Abide with the Code of Conduct
Role of PPP Regulatory Authority
In the Contract Management Manual:

• The PRA may accept, reject, or order the revision of the contract
management manual at any time during the life of the P4 project,
provided that any revision subsequent to the first acceptance of the
contract management manual at the inception of the P4 project shall
require written notice to the PSP and opportunity to be heard.
• If the contract management manual has not been approved by the PRA
within seven (7) days from its submission as provided in paragraph (b),
the same shall be deemed issued and approved by the PRA for all
purposes.
• The PRA shall evaluate each contract management manual quarterly,
which shall be amended as may be necessary. Any amendment to the
contract management manual shall be effective upon the approval of the
PRA.
• The PRA, all throughout the life of the P4 Contract, shall present, make
available and explain, before and after any material action is taken, all
relevant information regarding the implementation of the P4 Contract,
the submissions of the PSP and actions taken by the PRA, to the Regional
or Local Development Council.
Sub-Committee of PPP Regulatory
Authority (PRA)
• Contract Management Manual Committee:
1. Treasurer
2. Local Planning and Development Coordinator/Officer
3. CSOs/POs/NGOs representative from PRA

• The Committee shall prepare a contract management manual for

each executed P4 contract, which shall serve as a guide to the LGU
and its personnel in ensuring a consistent, high quality contract
monitoring process that is specific for such P4contract.
• The contract management manual in (a) shall be submitted to the
PRA for approval within twenty-one (21) days from the execution of a
P4 contract, provided that, for outstanding P4 contracts concluded
prior to the effectivity of the Code, the contract management manual
shall be submitted to the PRA within one hundred and twenty days
(120) days from the effectivity of the Code and the provisions of the
Code shall apply mutatis mutandis.
Monitoring and Governance Audit
Program (LGU CSO Watch)
• to ensure transparency and accountability, LGU shall encourage
CSOs, POs, NGOs and civic aggrupations to establish a P4
monitoring, evaluation and governance audit body functionally
and fiscally independent from the LGU.
Project Identification, Scoping,
Appraisal and Approval
 Possible Sources of Project

• CBMS

• PPFP/CDP

• CLUP

• LIIC

• National projects

• Unsolicited proposal
 Type and Terms of Project

Type of Projects Project Life

• Infrastructure Project (roads,
• Short term (1 to 2 years)
bridges, monorail, power and
water supply, terminal and • Medium term (10 to 15
others) years)
• Basic Services Project (schools, • Long term (25 to 50 years)
hospital, rehabilitation,
evacuation, housing and other
basic services, market)
• Bundled Type project (market
with mall or terminal, housing
project with market, terminal and
mall)
 30 LGU JV Projects
1. Cavite Province Housing 16. Tiwi Water Supply Improvement
2. Camarines Sur Water 17. Davao Port Development
3. Camarines Sur Wind Power 18. Malabon Socialized Housing
4. Iloilo City Ferry Terminal 19. Manila Dialysis Center
5. Pasay City Reclamation 20. Manila Harrison Plaza
6. Paranaque City Reclamation 21. Manila Quinta Market
7. General Tinio Reservoir 22. Manila Sta. Ana Market
8. Calamba Regional Government 23. Manila San Andres Market
Center 24. Manila Trabajo Market
9. San Juan City Columbarium 25. Manila Sampaloc Market
10. Nueva Ecija Business Hub 26. Manila New Antipolo Market
11. Valenzuela City Center 27. Manila Reclamation
12. Valenzuela City Market 28. Quezon Bulk Water, Hydro Power
13. Bataan Transport Mall and Wind Power
14. Bataan Capitol Redevelopment 29. Cebu-Cordova Bridge
15. Cordova Reclamation 30. San Luis Mini-Hydro
 9 LGU Non-JV PPP Projects
1. Mandaluyong City Marketplace (BT/ BOT)
2. Cebu Property Ventures Development
(Corporatization)
3. Northern Samar Provincial Hospital Pharmacy (Lease,
O&M)
4. Legazpi City Bus Terminal (Lease, BOT)
5. Tarlac City Slaughterhouse (ROT)
6. Tarlac City Common Terminal (DOT)
7. Tarlac City Business Licensing Division Building (BOT)
8. Passi City CityMall (Lease)
9. Batangas Terminal (Lease)
The Modalities
 24+ PPP Modalities
1. Build-Transfer 14. Joint Venture
2. Build-Lease-Transfer 15. Lease or Affermage
3. Build-Operate-Transfer 16. Management Contract
4. Build-Own-Operate 17. Management Contract (No Public
5. Build-Transfer-Operate Funds)
6. Contract-Add-Operate 18. Service Contract
7. Develop-Operate-Transfer 19. Service Contract (No Public
Funds)
8. Rehabilitate-Operate-Transfer
20. Divestment or Disposition
9. Rehabilitate-Own-Operate
21. Corporatization
10. Rehabilitate-Lease-Transfer*
22. Subsidiary with Private Equity
11. Rehabilitate-Transfer*
23. Onerous Donation
12. Rehabilitate-Transfer-Operate*
24. Gratuitous Donation
13. Concession Arrangement
25. Others
Build-Operate-Transfer Modalities
• 9 variants
• Procedures: Open Bidding; Unsolicited
Proposal
• If Unsolicited Proposal: New Technology and
Not Priority Project; No Direct Government
Guarantee
 Build-Operate-Transfer (BOT)
• A contractual arrangement whereby the Project
Proponent undertakes the financing, construction, and
the operation and maintenance of a given
infrastructure or development facility.
• The Project Proponent operates the facility over a fixed
term during which it is allowed to charge facility users
appropriate tolls, fees, rentals, and charges not
exceeding those proposed in its bid or as negotiated
and incorporated in the contract, to enable the Project
Proponent to recover its investment and operating and
maintenance expenses in the project.
• The Project Proponent transfers the facility to the LGU
concerned at the end of the fixed term, which shall not
exceed fifty (50) years.
 Build-Operate-Transfer (BOT)
• In cases where the operation of the infrastructure or
development facility requires a public utility franchise,
the Project Proponent must be Filipino or, if a
corporation, must be duly registered with the
Securities and Exchange Commission (SEC) and owned
up to at least sixty percent (60%) by Filipinos.

• This BOT arrangement shall include a Supply-and-

Operate scheme which is a contractual arrangement
whereby the supplier of equipment and machinery for
a given infrastructure or development facility, if the
interest of the Government so requires, operates the
facility and in the process provides technology transfer
and training to Filipino nationals.
 Build-and-Transfer (BT)
• A contractual arrangement whereby the Project
Proponent undertakes the financing and
construction of a given infrastructure or
development facility and after its completion, turns it
over to the LGU concerned, which shall pay the
Project Proponent on an agreed schedule its total
investment expended on the project, plus a
Reasonable Rate of Return (ROR) thereon.
• This arrangement may be employed in the
construction of any infrastructure or development
projects, including critical facilities which, for security
or strategic reasons, must be operated directly by the
Government.
 Build-Lease-and-Transfer (BLT)
• A contractual arrangement whereby a Project
Proponent undertakes the financing and
Construction of an infrastructure or development
facility, and upon its completion, turns it over to the
LGU concerned on a lease arrangement for a fixed
period, after which ownership of the facility is
automatically transferred to the LGU concerned.
• In the lease part of a BLT arrangement and of any
other arrangements that have lease-transfer
components, the LGU is the lessee and the Project
Proponent is the lessor. During the lease period, the
LGU pays the Project Proponent lease payments.
 Build-Own-and-Operate (BOO)
• A contractual arrangement whereby a Project Proponent
undertakes the financing, Construction, ownership,
operation and maintenance of an infrastructure or
development facility from which the Project Proponent is
allowed to recover its total investment, operating and
maintenance costs plus an ROR thereon by collecting tolls,
fees, rentals or other charges from facility users. Under this
arrangement, the Project Proponent who owns the assets
of the infrastructure or development facility may assign its
operation and maintenance to a Facility Operator.
• All BOO projects shall, upon recommendation of the
Investment Coordination Committee (ICC) of the National
Economic and Development Authority (NEDA), be approved
by the President of the Philippines.
Build-Transfer-and-Operate (BTO)
• A contractual arrangement whereby the LGU
contracts out the Construction of an
infrastructure or development facility to a Project
Proponent such that the Contractor builds the
facility on a turnkey basis, assuming cost
overruns, delays, and specified performance
risks.
• Once the infrastructure or development facility is
commissioned satisfactorily by the Project
Proponent, the legal title for the same is
transferred to the LGU. The Project Proponent,
however, operates the facility on behalf of the
LGU under an agreement.
 Contract-Add-and-Operate (CAO)
• A contractual arrangement whereby the
Project Proponent adds to an existing
infrastructure or development facility, which it
is renting from the Government, and operates
the expanded project over an agreed
Franchise period.
• In this arrangement, there may or may not be
a transfer arrangement with regard to the
added facility provided by the Project
Proponent.
 Develop-Operate-and-Transfer
(DOT)
• A contractual arrangement whereby
favourable conditions external to a new
infrastructure or development facility, which is
to be built by a Project Proponent, are
integrated into the arrangement by giving the
Project Proponent the right to develop
adjoining property, and thus, enjoy some of
the benefits the investment creates such as
higher property or rent values.
Rehabilitate-Operate-and-Transfer
(ROT)
• A contractual arrangement whereby an
existing infrastructure or development facility
is turned over to the Project Proponent to
refurbish, operate and maintain for a
Franchise period, at the expiry of which the
legal title to the same is turned over to the
Government.
 Rehabilitate-Own-and-Operate
(ROO)
• A contractual arrangement whereby an
existing infrastructure or development facility
is turned over to the Project Proponent to
refurbish and operate with no time limitation
imposed on ownership. As long as the
operator is not in violation of its Franchise, it
can continue to operate the facility in
perpetuity.
 Joint Ventures
• Arrangement whereby a private sector entity or a
group of private sector entities on one hand, and an
LGU or a group of LGUs on the other hand, contribute
money, capital, services, assets (including equipment,
land, intellectual property or anything of value), or a
combination of any or all of the foregoing, to
undertake an investment activity.
• It involves a community or pooling of interests in the
performance of an investment activity, and each party
shall have the right to direct and govern the policies in
connection therewith with the intention of sharing
both profits, risks, and losses, subject to agreement by
the parties.
 Concession
• Usually, monopoly (in LGU) and brownfield
• Grant of Exclusive Right or License by LGU
• Private Sector provides financing (Project-
Finance)
• LGU entitled to Concession Fee
• Customer: Public, Rate-payers (not LGU)
• Private Sector charges Tariff; LGU regulates
• Revenues of Private Sector: revenues from
customers – O&M costs – finance costs –
concession fee
 Concession

• Long-term (term longer than financing

term)
• Commercial, O&M, Construction and
Investment-related risk borne by the
Private Sector
• Procedures: Open Bidding; Unsolicited
Proposal; Limited Negotiations (under
the Proposed PPP Code)
 Service/
Management Contracts
• Procurement Contract
• Inputs (not Outputs)
• Project: Proprietary undertaking of the LGU
• Service Contract: particular service
• Management Contract: management service
(Board and Employees still LGU)
• Objective: Operating efficiency
• Private Sector provides service for least cost;
LGU pays
• Short-term
 Service/
Management Contracts
• Revenue of Private Sector: per unit of work
(Service Contract); fixed fee + performance
bonus – managers’ salaries/ expenses
(Management Contract)
• LGU (not Private Sector) provides working
capital, long-term financing, owns assets and
receives net income
• Procedure: Government Procurement Reform
Act
• LGU retains all/ most of risks (Private Sector
may assume risks if bonus payment is
performance-driven)
 Service/
Management Contracts
• Revenue of Private Sector: per unit of work
(Service Contract); fixed fee + performance
bonus – managers’ salaries/ expenses
(Management Contract)
• LGU (not Private Sector) provides working
capital, long-term financing, owns assets and
receives net income
• Procedure: Government Procurement Reform
Act
• LGU retains all/ most of risks (Private Sector
may assume risks if bonus payment is
performance-driven)
 Lease or Affermage
• LGU or Private Sector as Lessor or Lessee
• Objective: Efficient use of/ operate asset
• Lessee-Private Sector runs the business based on
performance targets, retains revenues for
customer tariffs, does not finance investments in
infrastructure assets
• Lease revenue scheme: revenue from customers
– O&M costs – lease fee
• Affermage revenue scheme: (affermage fee x
volume) – O&M costs
• Usually, short or medium term
 Lease or Affermage

• Ownership of property remains with LGU-

Lessor
• Lessor may form an Asset Holding
Company; Lessee may form a Special
Purpose Vehicle
• Commercial and operating risks borne by
Private Sector
• Procedure: Open Bidding; Unsolicited
Proposal (Proposed PPP Code)
 Divestment/ Disposition
• Assets, Real or Personal Property of the LGU
• LGU sells; Private Sector buys
• Transfer of Ownership
• Government earns from purchase price
• Revenues realized at shortest possible time
• LGU will be indemnified from all risks
• Can be single component (outright sale) or
part of a bundle of components (Build-Own-
Operate)
• Procedure: Public Bidding (if BOO, BOT Law)
 Corporatization
• Formation of a Distinct Legal Entity (Subsidiary;
Asset Holding Company)
• Commercial orientation and managerial
independence
• Segregation-Assignment of Assets and Funds
• Prior to Divestment: Principal and Subsidiary
Relationship
• Divestment: Public Bidding, IPO (Proposed PPP
Code)
• Timing: LGU sells outright or operates first
• Gratuitous Donation - A donation made by a PSP to a [Province/ City/
Municipality/ Barangay/ ARMM] whose cause is pure liberality on the
part of the former and does not require from the latter any
additional action other than utilizing the thing donated for the
purpose agreed upon, or impose any obligation, burden, charge or
future services, benefits, or concessions, or other form of grant, in
order to be valid.
• Onerous Donation – A donation made by a PSP to a [Province/ City/
Municipality/ Barangay/ ARMM] which subjects the latter to
obligations, burdens, charges or future services, benefits, or
concessions, or other form of grant, equal or greater in value than
that of the thing donated by the donor-PSP.
• Franchise - Refers to the right or privilege affected with public
interest which is conferred upon a PSP, under such terms and
conditions as the government may impose, in the interest of public
welfare, security and safety.
 Governing Laws/ Rules on Modalities
(Modalities Framework)
PPP Modality Governing Law

BOT Law Variants (9+) BOT Law

Concession Special Laws/ Local Ordinance

Joint Ventures NEDA JV Guidelines/Local Ordinance

Management and Service GPRA/ Local Ordinance

Contract*
Lease/ Affermage/ Donations Civil Code/ Local Ordinance

Divestment/ Disposition Commission on Audit Circular No. 89-296

Corporatization Corporation Code

 Payment Mechanisms
User Chargers (end users)

Usage Payments (Government)

Availability Payments (Government)

Service Performance Payments

Purchase Price Payments

 LGU Support & Contributions

Documentation Contributions Participation Powers

• Franchise • General Funds • Guarantee • Police Power

• Permits • IRA • Subsidy • Eminent
• Clearances • Assets • Equity Domain
• Capital • Viability Gap • Reclassification
• Personnel Funding • Tax-exemption
• Intellectual • Credit
Property Enhancement
• Land
• Anything of
value
 Tariff Schemes

Cash Rate of
Needs Return

Revenue
Price Cap
Cap
Procurement, Selection and
Awarding of Contract
Selection Process
Private Sector Selection
Competitive
Selection
Competitive
Challenge
Limited
Negotiations
 TERMS ON SELECTION PROCESS
• Competitive Challenge or Swiss Challenge - An alternative selection
process wherein third parties or challengers shall be invited to submit
comparative proposals to an unsolicited proposal. Accordingly, the PP*
who submitted the unsolicited proposal, or the original proponent, is
accorded the right to match any superior offers given by a comparative
PP.
• Competitive Negotiations - Refers to a process where the government
negotiates with eligible and qualified PSP and awards the project to that
PSP which offers the best combination of quality and price.
• Competitive Selection or Bidding or Open Competition - Refers to a method
of selection or procurement initiated and solicited by the government
based on a transparent criteria, which is open to participation by any
interested party.

*PP=Project Proponent
TERMS ON SELECTION PROCESS
• Limited Negotiations - Refers to a process whereby the
government with the PP in instances when there is only one
eligible and qualified PP in a competitive selection process,
under Stage 2 of the competitive challenge process, or when
there is a prior completed competitive process.
 And the winner is …
1. Highest Payment to Government: What is in it for
government?
2. Lowest Government Subsidy: What is the cost to
government?
3. Lowest Tariff by End-User: How much will the users
pay?
4. Highest Share in Revenues: How much is
government’s share?
5. Highest Purchase Price: How much is the
government willing to sell?
6. Highest Rated Bid: Who can provide the “best”
service?
7. Lowest Calculated Bid/ Price: Who is the “cheapest?”
 Benefits of PPP
• Respond to the limited funding resources for local infrastructure or
developmental projects
• Minimize utilization of local funds and can be allocated in other basic
needs of the community or priorities
• Improve and fastest the delivery of basic services and general welfare
of the people
• No procurement of necessary equipment and materials using
government funds; fewer disallowances
• Less project risks
• Create more jobs and investments
• Generate more income
sit, listen and go home
THANK YOU