Thursday, May 16, 2024

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The Subic Joint Venture Agreement should not proceed because not all public-private partnerships (PPPs) are the same.


The Stratbase ADR Institute has consistently advocated for teamwork among different parties, taking a comprehensive approach to issues that affect the nation and local communities. One illustration of this collaboration is the use of public-private partnerships (PPPs).

It is encouraging to see this administration recognizing the importance of PPPs and actively engaging in projects across various sectors through them. The government should take charge in identifying the needs of the people and determining how to meet them. However, the government may not have sufficient financial and technical resources for long-term, high-impact, and sector-specific initiatives.fic projects.

This is the reason partnerships with private companies are crucial. They bring to the table their access to capital, established track record, and technical know-how in the day-to-day running of the project. By nature, private companies are efficiency driven and transparent because of their responsibility to stockholders and are required to adhere to empirical and measurable performance indicators on a given period.

It is necessary to emphasize that PPPs should only be established based on pure merit.

Now, let’s discuss the topic of a 13-year-old partnership agreement between the Subic Bay Metropolitan Authority (SBMA) and Harbour Center Port Terminals, Inc. (HCPTI), which falls under the category of a public-private partnership (PPP). The SBMA is responsible for overseeing the operations in the Subic Freeport Zone.

In the latter part of 2009, Harbour Center offered a proposal without being asked to handle logistics operations in Subic. After just three months, in February 2010, a Joint Venture Agreement (JVA) was signed by SBMA and HCPTI. This gave HCPTI the sole responsibility to run, improve, and oversee the Naval Supply Depot and the Boton, Bravo, Alava, and Rivera Wharfs/Ports in Subic.

The SBMA had only three months to assess the proposal and decide if it was in their best interest. There were no other competing offers from other parties. Furthermore, the deal was granted during a period when government contracts were not supposed to be given out due to the upcoming May 2010 elections.

Two years ago, the Supreme Court ruled that the SBMA must still adhere to the agreement. This decision was met with backlash from numerous individuals.ff

Is this request suggesting that our judges no longer value regulations that promote openness in conducting government deals? It is crucial to maintain transparency and responsibility in the procurement process. However, the JVA with HCPTI appears to go against these principles by promoting secrecy and a lack of accountability.

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The individuals they are expected to assist.

The restriction on government contracts during election periods serves a purpose – it ensures that the procurement process remains impartial to political influence. This can be observed through the initiation of new projects with the aim of influencing public opinion during national and local elections.

These are not just recommendations. There are consequences for breaking them. The Office of the Government Corporate Counsel and the National Economic and Development Authority (NEDA) both determined that violating these guidelines was enough reason to criticize the SBMA for the JVA. The lack of transparency in the agreement was significant enough for NEDA to declare it invalid in 2011. This is also why subsequent Subic administrations have chosen not to revive and enforce it.

The recent ruling by the Supreme Court will have negative effects on other private companies currently functioning in Subic. It undermines their efforts and progress over several years, putting their businesses at risk. This also endangers the significant investments made and the employment of thousands of individuals from Zambales, Tarlac, Pampanga, Bataan, and other areas where employees are recruited from. Additionally, it could harm Subic’s reputation as a leading global hub for logistics and transportation.

The ruling has caused confusion and doubt for both regular citizens and investors. How are we supposed to interpret a decision that forces the government to proceed with a deal that has been deemed unfair and harmful to the very people it is meant to benefit?

This is happening at a crucial moment as the economy is recovering from the effects of the pandemic, supply chains are starting to stabilize, and individuals are still facing difficulties in dealing with the expensive cost of goods.

Public-private partnerships (PPPs) are a beneficial way of achieving goals, increasing opportunities in a specific area, and enhancing the overall well-being of residents. However, not all private partners are suitable for PPPs. The selected partner must have the ability to successfully complete the project and meet its objectives without causing harm to existing systems or jeopardizing the sustainability of current conditions.

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We are hopeful that our campaign was a success.f

As SBMA officials contemplate their next steps, they should keep this in mind.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.