5. Public Private Partnership

Public-Private Partnership was introduced in 2003, mainly to introduce greater market discipline, attract foreign investment, create innovation and improve value for money, as an alternative to the need for financing.

Public services are relatively well organised and public-private partnerships offer further improvements. The first public-private partnership project to be completed was the Tuas Water desalination plant. PPP projects span a variety of sectors, from sports facilities to student accommodation, water remediation, incineration services and information systems.

On August 5, 2004, the Ministry of Finance – MOF launched a public consultation for the definition of the procedures of the Public Private Partnership ¹, resulting in the definition of the Reference Manual, the second revision of which was released in 2012 ².

PPP projects in Singapore are initiated exclusively by the government ³, the main partnership model is the Design- Build -Finance-Operate (DBFO) model, where the PPP project proponent secures its own financing to build, maintain and operate the facilities and meet the needs of the public sector. The private partner will be paid based on the services provided, to specified performance standards, over the life of the contract, to ensure optimal use of capital resources in government projects as well as greater certainty about future government cash flows. The approach, therefore, also transfers financial risks to the private sector, which will carry out the necessary due diligence to ensure the financial sustainability of the project.

According to the PPP Manual (section 3.2), the procurement procedure is as follows: Invitation to Expression of Interest; Pre -qualification of bidders; Request for proposals from selected bidders; Market feedback period; Opening of the Final Tender; Closing of the tender; Award of the contract and Financial Closing.

Section 3.1.11 clearly identifies selective tendering (with pre -selection) as the recommended method for PPP procurement.

The implementation of Public Private Partnership in Singapore has both success and failure, with some glaring cases of failed projects, however a study conducted by researchers from Nanyang Technological University University finds that of 38 publicly known PPP projects initiated between 2000 and 2019, 80% were successfully completed ⁴.