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PPP 2.0 in Taiwan

The ECCT’s Project & Procurement committee hosted a lunch featuring guest speaker Dr Lee Chien-hsien, Director-General of the Department for the Promotion of Private Participation under the Ministry of Finance (MOF).


The speaker began with an evolution of Taiwan’s Act for Promotion of Private Participation in Infrastructure Projects (PPIP Act), which was enacted in the year 2000. The initial act covered various types of infrastructure, including transportation facilities and common conduits, environmental pollution prevention, water supply and sanitation facilities. A year later, the act was amended to include agriculture facilities and water conservancy facilities in the public infrastructure list and in 2015 it was amended again to include government office buildings. Further amendments were made in 2018 to meet practical needs. Authorities are now working on a new round of additional amendments aimed at reducing public expenditure in public procurement projects and increasing private participation in government procurement projects.


According to statistics cited by Lee, a total of 1,779 PPP contracts have been signed worth NT$1,810,600,000,000 over the past 20 years. In Taiwan, there are several ways that private institutions can participate in PPP projects: Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), Rehabilitate-Operate-Transfer (ROT), Build-Own-Operate (BOO), or Operate-Transfer (OT). According to statistics cited by Lee, of the PPP projects implemented to date, the highest number (51.55% of projects) were conducted on an OT basis. However, in terms of value, BOT projects have accounted for the largest share (34.18% of total spending).


Some of the obstacles that have deterred investors from participation in PPP projects in the past have included limited options, restrictive qualifications and unfair risk allocation. In addition, during the implementation process, investors have had to deal with changes to government policy, delays of fulfilment of government obligations, contract disputes with private partners and force majeure events.


Among the major goals of the next round of amendments to the PPIP Act are to refer and adapt national PPP participation experience, diversify ways of participation, expand the categories of public infrastructure, Increase the flexibility of projects, strengthen the rigorousness of the bid process, simplify procedures and accelerate the dispute resolution process.


According to Lee, Taiwan is trying to take the concepts of the government purchase public service scheme and government-pay mechanism into account and embody them into the legal framework of the PPIP Act rather than simply transplanting another country’s existing system.

The speaker concluded with a short briefing of the forthcoming Taiwan PPIP Investment Convention, which will be held in Taipei on 7 August 2020. The purpose of the convention is to introduce new PPP projects to potential investors with a view towards attracting private funds into public infrastructure projects, reducing the government’s financial burden, improving the quality of public service, revitalising the economy and actively promoting and matching up business opportunities for private participation in infrastructure.

Projects that will be introduced at the convention cover areas including the circular economy, domestic tourism, long-term care services and parking. The convention will introduce a total of 72 proposals from government agencies with an estimated value of more than NT$180 billion in investment opportunities. In addition to an introduction to the various projects, the convention will provide legal consulting services.

For today's presentation power point, please refer to PPP 2.0 in Taiwan (PPT)