Action for Economic Reforms - Private Sector Participation in Public Infrastructure

Private Sector Participation in Public Infrastructure

Through a multi-stakeholder process, the project aims to come up with reforms for private-public partnerships in public infrastructure (PSP). Initially, the project focused on proposing changes on the seminal BOT Law, the governing framework of PSP in the Philippines. As more problems in PSP were recognized, the project has ventured into other areas of reform. It has done work on transparency in government transactions, community-based infrastructure, and fiscal incentives for infrastructure projects.

The project is a partnership with Ateneo de Manila University’s Economic Policy Reform and Advocacy (EPRA).

Access to Information and Transparency in PSP

There is a felt need for more transparency in the way government does its work and business. This stems from the desire of people to know how the government settles policy questions and to know the implications of those decisions. In a transparent decision-making process, the public is also encouraged to participate in governance and to air their views and concerns regarding policies. Increased transparency is also tied with the goal of weeding out corruption in government. This is because in a more transparent environment, the decision makers are less vulnerable to capture by specific interests as the concerned public is able to register its objections.

During the consultations done by the Multi-stakeholder Team (MST) in Private Sector Participation in Infrastructure (PSP), the need for transparency in the project approval and development process was also a recurring issue raised by the stakeholders.

There was a perceived deficiency in information disclosure and transparency in some areas like the:

terms and conditions of agreement between government and project proponents
basis for project pricing and granting of subsidies and fiscal incentives
amendments to the approved contract during the implementation stage

Information regarding these matters is important to properly appraise how the public interest fare vis-à-vis the interests of the private companies involved in PSP. However, as experience shows, interest groups and concerned individuals are only able to react to PSP contracts that are injurious to the public when the problems have already set in. Only then can they also identify the unscrupulous actions of some government officials who pushed for the contracts.

In response, the MST seeks to advocate for the passage of the Freedom of Information Act . The proposed law delineates the responsibility of government officials to citizens who ask for information regarding government’s transactions. It also penalizes failure to provide the requested information within the timeframe set by the same act.

On January 26 Action for Economic Reforms together with Economic Policy Reform and Advocacy (EPRA) held a forum entitled “Freedom of Information Act: The Need to Push for Its Passage”. The forum was attended by around 80 participants from the civil society organizations, government agencies, media, academe and private individuals. A manifesto was signed by the participants in support of the proposed law.

See also:

Summary of the Proceedings
Complete Transcript of the Proceedings
Paper entitled “Inadequate Transparency and Insufficient Disclosure in Infrastructure Projects with Private Sector Participation: Causes and Effects ”

Related links:
http://newsinfo.inquirer.net/breakingnews/nation/view_article.php?article_id=46117
http://www.i-site.ph/Focus/access-info.html

"Building Up the Philippines: Discussion Series on Philippine Infrastructure Development" an ongoing discussion series.

Infrastructure programs affect the general public and there is a wide range of issues that are related to the various advocacies of civil society groups. Groups that are working to reduce poverty and other socio-economic issues are concerned with the prioritization and social impact of projects; environmentalists with environmental impact, and so forth. Local businessmen are concerned with how they can participate in infrastructure; economists and government finance managers may be concerned with projects’ effects on the fiscal standing of government.

To be able to consolidate and highlight these other issues and concerns, the Economic Policy Reform and Advocacy (EPRA) and Action for Economic Reforms (AER) are holding a series of discussion meetings on infrastructure. This series will allow the participants to extensively discuss and respond to the specific issues relating to infrastructure. It will also allow the creation of an informal group of reformers in government, private sector and civil society who have interest in reforms in infrastructure and their impact on long-term economic growth. See RTD Series .

Public Hearing on the Proposed Amendments to the BOT Law IRR

Action for Economic Reforms together with Economic Policy Reform and Advocacy (EPRA) and the National Economic and Development Authority (NEDA) held a hearing on the proposed amendments to the Build-Operate-Transfer Law -- Implementing Rules and Regulations (BOT Law-IRR) on May 10, 2007 the Garden Ballroom of EDSA Shangri-la Hotel, Ortigas Center, Pasig City.

NEDA presented the proposed amendments to the stakeholders from the business sector, academe, NGOs and government, who in turn were able to share their views and recommendations.

Some issues tackled in the hearing were the following:

Project development capability of government agencies
Oversight function / role of the NEDA Investment Coordinating Committee with regard to BOT Projects
Transparency in BOT transactions and public access to information regarding these projects

For more information, see:

Executive Summary and Proceedings of the May 10 Public Hearing on the BOT Law IRR
Proposed Amendments to the BOT Law IRR

Links to newspaper accounts of the public hearing:

http://www.businessmirror.com.ph/03152007/economy03.html
http://www.businessmirror.com.ph/05142007/headlines02.html
http://www.businessmirror.com.ph/0511&122007/headlines03.html
http://business.inquirer.net/money/columns/view_article.php?article_id=65663