But a PPP contract is more than a business deal. At its core, it is also an agreement of trust.
There are at least three dimensions of trust in every PPP.
Mutual trust
First is trust between the government and the private partner. PPPs are typically long-term relationships.
Unlike an ordinary procurement where the government purchases goods, services, or infrastructure, a PPP may involve financing, designing, constructing, operating, and maintaining a public facility or providing a public service for decades. Neither party can anticipate every circumstance that may arise during such a long contractual relationship.
Thus, while the contract must be clear and comprehensive, its successful implementation also requires transparency, predictability, cooperation, good faith, trust, and respect for agreed risk allocation.
The PPP Code expressly requires equitable risk allocation and sufficient value for money and mandates that PPP projects promote sustainability and advance public welfare.
It also requires PPP contracts to clearly define the scope of accountability of both the implementing agency and the private partner.
Entrusted responsibility
Second is the trust placed by the government in the private partner. The private partner may be entrusted with public assets, public funds, government-contributed resources, or the delivery of services traditionally associated with the government.
Profit is legitimate and essential to a sustainable PPP, but the private partner must recognize that its contractual rights are accompanied by responsibilities to users and the public.
People’s trust
Third, and most important, is public trust. The government enters into a PPP not merely as a contracting party but as the representative and steward of the public interest.
The PPP Code declares that the state must protect the public interest through affordable, accessible, and efficient public services.
Transparency, accountability, monitoring, and audit therefore extend beyond the interests of the two contracting parties. PPP projects are subject to government auditing requirements, while the PPP Center is tasked with coordinating and monitoring PPP projects.
This distinguishes a PPP from a purely private commercial transaction. The ultimate stakeholders are the people.
Beyond the contract
A well-drafted PPP contract consequently does not merely answer the question: What are the rights and obligations of the parties? It must also answer: How will the parties preserve each other’s trust and, ultimately, the trust of the public?
Contracts establish obligations. Partnerships build relationships. Successful PPPs require both.
A PPP contract should therefore be understood not only as an allocation of risks, rights, revenues, and responsibilities, but as a long-term covenant of trust, accountability, and public service. —Ed: Corrie S. Narisma
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