Diagram 1 - Project
Governance Structure
T
here are several challenges in dealing
with brownfield development projects via
PPP related to land ownership, financial
impediment, public acceptance and interdepartment co-ordination.
Land Ownership
One of fundamental elements in signing
a concession agreement with the Federal
Government is that the subjected land in the
concession agreement must be owned by the
Federal Government under the name of the
Federal Land Commissioner. The issue arises
when some of the subjected lands are owned by
other entity such as by a State Government or
private body. The ownership of these lands must
be firstly transferred to the Federal Government
before the agreement can be effective.
In one rationalization of STP project5, there
were several lands which were initially owned by
private developers but such lands were reserved by
the Government for sewerage purpose. The issue
happened when the proponent company planned
to build a new pumping station as part of the
rationalization work scope but due to the ownership
of some lands by private bodies, the proponent had
to come up with solutions which were more costly
than constructing the pumping station.
Financial Impediment
Some PPP approaches such as B.L.M.T and O
& M contracts demand the Government pay
the concession company availability charges
or deferred payment to the concessionaire
throug hou t the c onc e s sion p erio d in
consideration of the public works done by the
concessionaire. The choice of PPP approaches is
limited sinc