Fight corruption so PPPs can thrive, gov’ts told

Multilateral institutions urged governments to improve the business and investment climates in developing countries by fighting corruption so that public-private partnerships (PPPs) can prosper.

In a statement released following a four-day PPP conference in Switzerland last week, the Asian Development Bank (ADB) said countries like the Philippines must address the problem of corruption and fraud by promoting openness and transparency of public sector budgets and private sector contracts.

"Developing countries must do more to create transparent, accountable business conditions if they are to raise the capital needed to finance critical infrastructure," the ADB statement said.

It added that frameworks which facilitate project selection, development and management must be established.

The Philippines sent a high-level delegation to Geneva for PPP Days, which ran from Feb. 21 to 24. The group included Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr., Finance Secretary Cesar V. Purisima, PPP Center Executive Director Cosette V. Canilao and Health Undersecretary Teodoro J. Herbosa.

In an interview, Ms. Canilao said several investors expressed interest in local PPP projects.

Japanese toll road developer Nexco inquired about the Cavite-Laguna and the C-6 Expressway projects of the Public Works department, Ms. Canilao said.

She added that an American ICT firm also aired interest in government computerization projects.

Ms. Canilao told BusinessWorld: "From the time that the program was adopted as one of government’s key infrastructure agenda last year, [investors] saw the development and the united front and think that we really have our act together now."

She added, however, that they also highlighted current efforts to further improve policy and guidelines for the PPP programs.

Philip Erquiga, director-general of ADB’s private sector operations department, said PPPs are facing new challenges due to the global economic slowdown, increased regulation and the reluctance of some banks to provide funding.

Clive Harris, manager for PPP at the World Bank Institute was also quoted in the statement as saying: "[Developing countries] need to prepare for the possibility of sources of financing drying up while creating the optimal business conditions for delivery of their infrastructure programs."

According to the Private Participation in Infrastructure (PPI) database of the World Bank, the number of developing countries with new infrastructure projects in the first half of 2011 was the lowest since the early 1990s.

PPI investments, excluding those in India and Brazil, have fallen by 34% compared with the same period in 2010.

Meanwhile, the multilateral organizations highlighted the important role PPPs play in achieving the Millennium Development Goals (MDGs), a seven-point agenda which the international community agreed to address by 2015.

These include eradicating hunger and poverty, promoting universal primary education, reducing child mortality, improving maternal health, intensifying the fight against HIV/AIDS and other diseases, and promoting environmental sustainability.

In the Philippines, several PPP projects aimed at addressing some of the MDGs are being eyed for rollout this year.

These include the P10.4-billion schoolbuilding PPP project of the Education department and the P900-million Vaccine Self-Sufficiency Project of the Health department, among others.

The schoolbuilding project is set for bidding by June. PPP Center also announced that the deadline for submission of bids for the vaccine project is in July.

original source: