PPP Flashcards by Lynell Sta. Ines

8 financing options for the government

Commercial loans
Foreign investment
Investment bank
Bonds and stocks may be floated by the LGU
Mutual funds
Interpersonal loans
Supporting resources
Official Development Assistance
(C FIB MISO)

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3 basic modalities of PPPs

Build-Operate-Transfer and variants
Joint Ventures
Concession Agreement

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3 kinds of BOTs

a. Transfer immediately
- BT and BTO
b. Transfer after cooperation period
- BLT, BOT, CAO, DOT, ROT
c. No transfer
- BOO, ROO

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The financing and construction of an infrastructure or development facility; facility is turned over to the government after completion

Build-and-Transfer

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The construction, including financing, of an infrastructure facility, and its operation and maintenance; once the facility is commissioned satisfactorily, the title is transferred to the government. However, the private entity operates the facility on behalf of the government

Build-Transfer-and-Operate

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The financing and construction of an infrastructure or development facility; the government leases from the private sector. The ownership is transferred to the government after the lease period.

Build-Lease-and-Transfer

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The financing and construction of an infrastructure facility, and its operation and maintenance. During the operation period, the facility belong to the project proponent, who transfers the facility to the government at the end of the fixed term

Build-Operate-and-Transfer

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An addition to an existing infrastructure facility which it is renting from the government. There may or may not be a transfer arrangement in regard to the facility, but the project proponent operates the expanded project over an agreed franchise period

Contract-Add-and-Operate

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The development of adjoining property is integrated into the agreement for new infrastructure project which is to be built by a private proponent

Develop-Operate-and-Transfer

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The refurbishing, operation, and maintenance of an existing facility, or the purchase of an existing facility from abroad, importing, refurbishing, erecting, and consuming it within the host country. No time limitation imposed on ownership

Rehabilitate-Operate-and-Transfer

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The financing, construction, ownership, operation, and maintenance of an infrastructure or development facility. Ownership is retained by the project proponent

Build-Own-and-Operate

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The refurbishing, operation, and maintenance of an existing facility; private proponent will own the facility. No time limitation imposed on ownership

Rehabilitate-Own-and-Operate

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An arrangement whereby a private sector entity on one hand, and a government entity on the other hand, contribute money, services, assets, or a combination of any or all of the foregoing to undertake an investment activity.

Joint Venture

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2 kinds of joint ventures

Contractual JV and corporate JV

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Included in the coverage of JV (5)

Government-Owned and Controlled Corporations (GOCCs)
Government Instrumentalities with Corporate Powers (GICPs)
Government Corporate Entities (GCEs)
Government Financial Institutions (GFIs)
State Universities and Colleges (SUCs)

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Excluded in the coverage of JV (3)

Government Financial Institutions involved in banking, financial, or portfolio management operations
Government Corporate Entities with the mandate to dispose government assets or properties
LGUs

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GOCC

Government-Owned and Controlled Corporations

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GICP

Government Instrumentalities with Corporate Powers

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GCE

Government Corporate Entities

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GFI

Government Financial Institutions

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Mode of BOT: agency/LGU prepares the project and contract since project is in the list of priority projects of the government

Solicited Mode

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Mode of BOT: private sector prepares the project and contract, which must have new concept/technology, and must not be in the list of priority projects

Unsolicited Mode

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In charge of approval of JV agreements, and given amount

Head of agency/GOCC, regardless of amount

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DOF/DBM clearances are required for the following (3)

National Government undertakings
National Government subsidies
National Government guarantees

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JV mode of selection of private sector partners (2)

1. Open competitive bidding | 2. Negotiated proposal

2 situations wherein there would be negotiated procurement

1. Unsolicited proposal | 2. Failure of bidding

Official Development Assistance: approving authority if total project cost is less than 1 billion

Head of agency and governing boards of GOCCs

Official Development Assistance: approving authority if total project cost is equal to or more than 1 billion

NEDA board thru Investment Coordination Committee

Public-Private Partnership: national projects, approving authority if total project cost is less than or equal to 300 million

Investment Coordination Committee

Public-Private Partnership: national projects, approving authority if total project cost is more than 300 million

NEDA Board thru Investment Coordination Committee

Public-Private Partnership: national projects, approving authority for negotiated projects, regardless of amount

NEDA Board thru Investment Coordination Committee

Public-Private Partnership: approving authority if total project cost is less than 20 million

Municipal Development Council

Public-Private Partnership: approving authority if total project cost is equal or more than 20 million or less than 50 million

Provincial Development Council and Local Sanggunian

Public-Private Partnership: approving authority if total project cost is equal or more than 50 million

City Development Council

Public-Private Partnership: approving authority if total project cost is equal to or more than 50 million to 200 million

Regional Development Council

Public-Private Partnership: approving authority if total project cost is more than 200 million

Investment Coordination Committee

Public-Private Partnership: Thru BOO or thru Contractual Arrangements

Presidential approval

Capital Projects: total project cost is less than 1 billion

Heads of Implementing Agencies or governing boards if GOCCs

The country's economic and planning agency

National Economic and Development Authority

The governing body that sets major development policy directions for the Philippines

NEDA Board

The NEDA Board's research and technical support arm

NEDA Secretariat

How many government agencies are attached to NEDA for the purposes of supervision

7 agencies

Chairman of the NEDA Board

President of the Philippines

Vice chair of the NEDA Board

Socio-economic palanning secretary

DBCC

Development Budget Coordination

SDC

Social Development

CTRM

Tariff and Related Matters

RDCOM

Regional Development Committee

NLUC

National Land Use

7 stages of the NEDA Project Development Cycle

1. Identification 2. Pre-feasibility 3. Feasibility 4. Design and Engineering 5. Implementation 6. Operation 7. Ex-Post Evaluation

A methodological framework designed to assist the government in deciding whether or not a project is in the country's best interest

Project Evaluation

Duration of the Investment Coordination Committee Approval Process, if the requisite documents are complete

6 weeks

PER

Project Evaluation Report

Objective is to analyze the demand for the project's output where the current prices and benefits are established, past prices and trends are determined, and future demand and prices are estimated

Demand-and-Supply or Market Study

Objective is to determine if the program/project is technically feasible, workable, and that its operations and maintenance can be locally sustained

Technical Evaluation

Objective is to assess the financial viability of a project and its ability to meet its debt-service obligations

Financial Evaluation

Choice of discount rate: is generally used since most public sector projects have multiple sources of financing

Weighted Average Cost of Capital (WACC)

Choice of discount rate: average lending rate, average deposit rate, average rate of return on money market instruments, and treasury bill rate

Market Interest Rate

Choice of discount rate: can vary from one owner to another depending on nature of risk, with the rate of return to be paid to company's shareholders

Opportunity Cost of Equity

Choice of discount rate: return to capital being earned in its alternative use

Opportunity Cost of Funds

Choice of discount rate: sources of funds are postponed/displaced investments, reduced private consumption by individual savers, and foreign capital inflows

Economic Opportunity Cost of Capital

Compares cost and benefit streams discounted to the present year

Net Present Value (NPV)

Discount rate at which the present value of benefits equals the present value of costs

Internal Rate of Return (IRR)

Ratio of the present value of benefits to the present value of the costs

Benefit-Cost Ratio (BCR)

The number of years before the discounted cumulative benefits are sufficient to repay the discounted cumulative costs

Payback Period

Alters the amount and timing of the financial gains and losses of various parties involved in a project

Inflation

The value of the inputs and outputs including the effect of general inflation

Nominal price or current price

The value of the inputs and outputs without the effect of general inflation

Real price/constant price

Objective is to ascertain the program/project's desirability in terms of its net contribution to the economic and social welfare of the country as a whole

Economic Evaluation

Costs: Land, detailed engineering and design, preparatory installation work, cost of equipment and raw materials, cost of buildings, engineering and administrative cost during construction, and organization cost

Capital costs

Costs: raw materials and other supplies, energy and fuel, labor, rent and insurance

Operating and maintenance costs

Costs: defined as all those costs incurred on the project prior to the preparation of the feasibility study; not included in the analysis

Sunk costs

A benefit constitutes an increase in output or savings in resource use

Benefits

Applied to correct the distortion in the prevailing exchange rate due to balance of payments disequilibrium and the projection structure

Shadow Exchange Rate (SER)

Used to reflect the true economic value of labor employed in a program/project

Shadow Wage Rate (SWR)

Used to discount the stream of economic costs and benefits to their present values

Social Discount Rate (SDR)

Objective is to determine if the proposed program/project is responsive to national objectives of poverty alleviation, employment generation, and income redistribution

Social Impact Analysis (SIA)

A probability or threat of a liability, loss, or other negative occurrences caused by external or internal vulnerabilities, or the possibility of deviation in the actual project outcome

Risk

An evaluation or analysis of the potential impact of a proposed program/project with a view of deciding whether or not to proceed with the program/project implementation

Feasibility study

For a project passed thru NEDA Investment Coordination Committee, the project proponent has to submit a ___ from the start of the implementation up to the time it is completed

Quarterly report

Within ___ after the completion of the project, a Project Completion Report has to be submitted by the proponent to the NEDA Investment Coordination Committee

6 months