Draft PPP policy proposes an autonomous Public Private Partnership Agency under MoF

The meet-the-people program is for all Bhutan citizens, not just those who have wealth and power or those who support the People’s Democratic Party (PDP), the Prime Minister Tshering Tobgay emphasized during the question hour session of the National Assembly on 19th May. He also said it’s very important to meet the fellow countrymen from the humble background.

There were 82 meetings so far held under the program that started in August 2013, aiming to get feedback from the country’s nationals directly and to redress policies and programs through their opinion. According to the government over one thousand people have attended.

A member of parliament (MP) MP Dorji Wangdi from Panbang constituency criticized the government, pointing out that the system was benefiting only the People’s Democratic Party (PDP) supporters and not the general public. Lyonchhen denied his remark, saying meet-the-people was not for the party’s supporters as the party knew them very well. “Further we can meet the supporters whenever we need or want. It doesn’t have to be through the program. You should know one doesn’t hold the PDP logo. Supporters of Druk Phuensum Tshogpa (DPT) also attend the program and they are, of course, treated the same as others. People don’t even have to show their ID”, he added.

The prime minister continued the government didn’t have to see prosperous people as they were able to deal with their problems on their own. The main reason for conducting the program is to hear the voice of people from the vulnerable who are in need of help. “This scheme is for the person who doesn’t know where to share his problems”. He added that, as elected member, meeting with people is one of the most important works for the cabinet. It’s also one of the principles of democracy.

According to the government’s announcement, letters were sent to concerned agencies for 60% of the grievances made at the meet-the-people meeting. Remaining 40% was found to be Kidu issues which fell under the prerogative of His Majesty the Druk Gyalpo.

The Ramjar-Khamdang representative Sonam D Dorjee, who’s also a PDP member said, “I have also attended the program. There were other parties’ supporters and the government was helping them too. So we should not think that program is only for PDP supporter”. This remark, Lyonchhen pointed out, also backed the government’s view and the opposition members were more than welcomed to attend the meeting to see who comes and what’s discussed.

The prime minister added if there was any doubt regarding the program the government would share the list of people who haTenzing Lamsang/Thimphu

A key component of the draft Public Private Partnership policy (see page 1 main story) is the Public Private Partnership Agency (PPPA) to be established under the Ministry of Finance (MoF).

PPPA will enhance the government’s ability to manage the PPP program effectively. It will provide cross-sectoral support with a mandate spanning across all sectors prescribed in the scope of the PPP policy.

It will be set-up as an autonomous Agency under an executive order of the Lhengye Zhuntshog, operating under the MoF. The PPPA will initially rely on budget appropriation from the government, as well as support from donors and multilateral, where possible.

Once PPPA is operational, fully staffed and firmly established, it will be encouraged to raise revenues through advisory and training fee from the institutions it is supporting.

Function of PPPA

PPA will address capacity and institutional issues for the development of a strong PPP market by providing ensuring consistency in policy and practice and coherence across the programs, provide technical assistance to institutions at the various stages of the project cycle and provide quality assurance and oversight to the review of feasibility studies and bidding documents.

It will also address capacity and institutional issues for the development of a strong PPP market by providing skills and expertise that are not usually available in the public sector, capacity building of all stakeholders and a focal point responsible for developing common standards promoting consistency in how PPPs are developed and delivering confidence to stakeholders.

It will also ensure coordination among Institutions for educated and efficient decision making, be an institutional champion for promoting the PPP program, proactively engaged in advocacy and outreach and be a knowledge center best practices.

Project Committee

Each implementing institution will set-up a working level project committee.  The project committee will consist of staff from the Institution,PPPA, National Land Commission and relevant Ministries or agencies for sectoral inputs that is assisted by a Transaction Advisor. It will be responsible for quality control and time management of all deliverables of the advisor, for onward submission to the PPP Steering Committee for its consideration and approval. The project committee will be chaired by the implementing Institution and will have final authority. The role of other allied agencies will be advisory in nature.

PPP Steering committee

The PPP Steering Committee (PSC) will guide and supervise the activities of the PPPA and the project committees of the implementing agencies. The members of the PSC will be Secretary of Finance, Secretary of GNHC,  Secretary of National Land Commission and Secretary of the concerned sectoral Ministry identified and appointed by the government.

It will also provide inter-institutional and inter-sectoral coordination for PPP projects and approve various important decisions on the recommendation and advice of the PPPA and project committee.

These decisions are appointment of appointment of Transaction Advisors, appointment of project ‘Preferred Bidder’, approval of request for proposal documents, feasibility study and signing of the final negotiated project PPP Agreement.

The PPP Steering Committee on the advice of the PPPA or project committee will make various recommendations to the Lhengye Zhuntshog for its approval. These recommendations will be on suitable projects for inclusion in the list of approved PPP projects after approval of GNHC, PPP rules and regulations, guidelines and standard agreements developed by the PPPA, in-principle approval for financial assistance to qualifying projects prior to bidding process, final approval of Financial Assistance on selection of preferred bidder and approval for any material amendments to a PPP agreement after the awarding of tender.

The GNHC will also review and approve the PPP rules and regulations, guidelines and standard agreements prepared by PPPA before submission to the Lhengye Zhuntshog for final approval.

Project life cycle

Once a project has been identified as a potential PPP project, the PPPA in partnership with the institution will draft a brief Project Information Note (PIN) that sets out the project in sufficient detail for the consideration of the PPP Steering Committee (as the first filter) and then submit it to the GNHC for approval in the PPP Program.

First and foremost each project must comply with the principles and goals of the GNH and must contribute to the national good. The PIN will describe the basis for identifying the project and the justification for selecting it as a potential project. The criteria for preparing a PIN will be elaborated in the rules and regulations.

Once a project has been selected to be explored as a PPP, the government will appoint a Transaction Advisor for it upon the PPP Steering Committee’s approval. The Transaction Advisor would do all of the detailed financial, technical, and legal work required to implement the PPP as described in the PIN.  In some cases the PPPA may act as the surrogate transaction advisor in accordance with the applicable guidelines.

The government will establish a Project Development Fund (PDF) to finance the appointment of the Transaction Advisors, when it deems it as appropriate, based on the size of the emerging PPP program. The PDF will operate according to standard operating procedures and guidelines issued by PPPA.

PPPA will develop rules, regulations and guidelines wherever may be required for each step of the procurement life cycle.

The PPPA shall provide the relevant Institution with technical assistance in the monitoring of PPP Agreements

Amendments to PPP agreements

Amendments to the PPP agreement will be exceptions and not the norm. Stringent criteria will be spelt out in the guidelines to justify amendments.

The prior written approval of the PPP Steering Committee supported by PPPA is required for any material amendments to a PPP agreement including any material variations to the outputs therein or waivers contemplated or provided for in a PPP agreement.

The PPP Steering Committee will recommend to Lhengye Zhuntshoga material amendment only if it is satisfied that the PPP agreement, if so amended, will continue to provide technical, operational, financial and environmental risk transfer to the private partner of a substantially similar nature and extent as the existing PPP agreement. e attended the program.

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