One often-overlooked risk is Protester’s Risk or that risk that public opposition, organized protests, or sustained stakeholder resistance may delay, disrupt, alter, or even derail an awarded PPP project.
Protester risk, a political and social risk, becomes particularly significant when a PPP involves tariffs, tolls, fares, user fees, or other charges imposed on the public.
A private partner may have relied on an approved financial model and contractual rate-adjustment mechanism when it invested substantial capital.
Who bears the risk?
Years later, however, regulators or government agencies may refuse, defer, reduce, or modify scheduled rate adjustments because of public opposition, affordability concerns, political pressure, or changes in policy.
This creates a difficult question: Who should bear the consequences when a contractually contemplated rate adjustment becomes politically or socially unacceptable?
The private partner may argue that it invested on the strength of the agreed contractual framework. The government, on the other hand, cannot disregard its regulatory responsibilities or the public interest.
The people, who ultimately pay the tariffs or fees, should likewise not be treated merely as passive end-users of the project.
Protester’s risk therefore cannot be addressed solely through contractual risk allocation. It must also be mitigated through people’s participation and transparency throughout the PPP life cycle.
Building public trust
Before a project is approved, affected communities and stakeholders should be adequately informed about its objectives, costs, benefits, tariff structure, rate-adjustment formula, government undertakings, and long-term implications.
Public consultations should be meaningful rather than ceremonial. Relevant project information should be disclosed in understandable language so that people know not only what infrastructure or service they will receive, but also what they may eventually be required to pay.
Transparency must continue after the award. Rate adjustments should be supported by publicly understandable computations and explanations.
Regulators should clearly disclose why an adjustment is approved, modified, deferred, or rejected. Mechanisms for grievances, consultations, and stakeholder dialogue should also be institutionalized.
Dialogue, not silence
A PPP contract binds the government and the private partner, but its consequences often extend far beyond its signatories. People’s participation builds legitimacy; transparency builds trust.
Both reduce the likelihood that legitimate public concerns will surface only after billions have been invested.
The best way to manage a protester's risk is not to silence the protest. It is to reduce the reasons for protest through early participation, continuing dialogue, accountability, and transparency. —Ed: Corrie S. Narisma
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