- It is a general rule which governs all tenders and bids for government projects that negotiations are not allowed. This rule shall apply to PPP tenders also. Otherwise it will undermine government's policy on transparency and even-handedness. The PPP procurement process has been designed to allow public agencies to gather private sector feedback in a transparent manner before calling for tenders. In particular, the Market Sounding and Market Feedback phases provide the opportunity for interested PPP partners to give their comments on the features of the PPP proposal before government agencies issue the final invitation to bid for the project.
Are there plans to look into standardization of Public Private Partnership (PPP) contracts so as to reduce tendering costs?There cannot be a standardisation of the whole PPP contract because a lot depends on the nature of each project. However, wherever feasible, standardisation will be applied to the relevant sections.
How are Public-Private Partnership (PPP) tenders awarded?The government procurement regime is one of transparency, fairness and openness. Similar to conventional procurement, the government will award the tender to the Public-Private Partnership (PPP) provider who can provide the best value for money to the government. To determine value for money, the government will evaluate Public-Private Partnership (PPP) tender proposals not only in terms of price, but also in terms of design, quality, and reliability of the prospective contractor.
How is Public-Private Partnership (PPP) different from privatisation?
Services that are privatised are those that can be effectively and appropriately provided by the private sector and where Government's role is that of a regulator.
PPP is appropriate for those services that are provided by the government. PPP is therefore a means of sourcing for government.
The public will continue to obtain the same service from the government.
How long does it take to go through the Public-Private Partnership (PPP) process?The length of the procurement period depends on the scale of the project and the level of expertise within the project team. It can range from 12 months in relatively simple projects to about 2 years for more complicated ones.
How much does it cost the private sector to go through the Public-Private Partnership (PPP) process? Will government refund bidding cost to unsuccessful bidder?The cost of Public-Private Partnership (PPP) procurement incurred by the private sector depends on the size and complexity of the project, the level and availability of in-house skills and experience. The procurement costs, however, need to be seen in the context of the overall value of the project and the length of the contract. Unless there are exceptional circumstances, the Singapore government will not refund bidding costs to unsuccessful bidders. The government is mindful of the need to keep down the cost of bidding and will employ various measures, eg, shortlisting the more promising bidders so that fewer bidders need to go through the whole process and take on the cost of making the full bid.
How will issues on design/aesthetics and upgrading be addressed in a Public-Private Partnership (PPP) project?Public agencies will focus on purchasing services, defining and monitoring performance specifications in a PPP project. These specifications can include other design requirements such as aesthetics if they are deemed essential for the project. However, the public agency will avoid over-specifying the design requirements so as to give the private sector room to innovate and/or offer a more cost effective alternative proposal. In a PPP project, the provider needs to factor in the whole lifecycle cost of designing, building, maintaining the facility for the contract duration. Therefore, the PPP provider needs to consider any upgrading works required and include it in the tender bid. The government makes regular payment streams for the services delivered accordingly to service specifications. The integration of design-build-maintain provides the PPP provider the economies of scale and incentives to build for maintainability in the long term. Performance targets, benchmarking and service level review points will need to be specified in a PPP contract to ensure service levels are met. The PPP provider will suffer reductions in unitary payments if the performance targets are not met.
How will land ownership be transferred from the Government to the private sector under PPP?In some PPP projects, the private sector will own the facilities and the land which the facilities sit on. In such cases, the private sector will lease the land from the Government, or other land owners where applicable, to develop the facilities to deliver services to the public sector over the PPP contract life. However, not all PPP projects need involve land ownership by the PPP provider. In some cases, the Government will choose to retain ownership of land and the facilities (upon completion). The private sector PPP provider will still be engaged to maintain and operate the facilities but the title to the land and properties will remain within the public sector. The PPP provider then does not need to raise financing to pay for the purchase of the land. The specific arrangements on the ownership of the land and buildings thereon will have to be determined on a case by case basis depending on the nature of the PPP project.
How will Public-Private Partnership (PPP) impact the end users?Public-Private Partnership (PPP) will be able to help us deliver services to the public at the best value for money. This means that the users can benefit from the efficiencies of both the public and private sectors. Users can also look forward to more innovative designs or service delivery modes as private sector innovation is introduced into the delivery of public services. When the private sector is engaged to deliver services to the public on behalf of Government, the public agency will ensure that service continuity is not adversely affected. The public agency will also ultimately be accountable for the services that are delivered by our private contractors. Hence, the public can be assured that proper mechanisms will be put in place to monitor the performance of private sector providers to ensure that the public's needs are met.
How will the Public-Private Partnership (PPP) procurement method impact the local construction industry?
The main difference between a PPP and a conventional project is that the private sector will raise financing and lead in the turn-key project. The private sector will take on a bigger role from the onset and exert more decisive influence during the process which will result in more innovations in design, specification, financing, construction method and management.
Because a variety of capabilities is involved beyond just construction, PPP projects overseas are often handled by consortiums, where there is room for various parties, including construction firms. These companies can be brought together to perform a useful role.
PPP will create new business opportunities for interested firms to develop multi-disciplinary skills and form partnerships and consortiums. We can also expect new expertise to develop (eg. life-cycle costing & designs, integrated design and construction methods to suit future needs in relation to service delivery, operation and maintenance of the facilities, and better risk management). Such new skills and expertise will also be useful when firms venture overseas.