House OKs PPP bill

MANILA, Philippines – The House of Representatives has approved on second reading a bill seeking to institutionalize the public-private partnership (PPP) program in infrastructure and development projects.

House Bill 6331, or the proposed “Public-Partnership Act” was endorsed for plenary approval by the committees on appropriations; public works and highways; and ways and means.

Speaker Feliciano Belmonte Jr. said the bill seeks to amend Republic Act 7718, otherwise known as “An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects By the Private Sector, and For Other Purposes,” to further strengthen the basic legal framework in undertaking PPP projects.

“The approval of the bill is a welcome development in light of our efforts in Congress to come up with a new law that will build from the experiences of the government in areas involving build-operate-transfer (BOT) projects. Our proposed reforms intend to sustain the gains of the Aquino administration’s PPP Program as it continues to move forward with its infrastructure projects,” Belmonte said.

He said the country holds the distinction as one of the first developing countries to have created a legal and regulatory framework for BOT projects.

In 1990, he said Congress enacted RA 6957, the first BOT law in Asia, which was further amended by RA 7718 to provide for an increased number of variants of BOT contractual arrangements.

“The BOT law has significantly increased private investment in infrastructure in the country by promoting private sector participation. Two decades after the passage of RA 7718, however, there is a need to further amend the law in order to keep the policy environment attuned to the present business landscape,” he said.

The bill refers to PPP as a contractual arrangement between the implementing agency and the project proponent for the financing, design, construction, operation, and maintenance, or any combination thereof, of an infrastructure facility, in which the project proponent bears significant risk, management responsibility, or both.

It provides that PPP projects may be undertaken through any of the following contractual arrangements: build-and-transfer; build-lease-and-transfer; build-own-and-operate; build-operate-and-transfer; build-transfer-and-operate; contract-add-and-operate; develop-operate-and-transfer; joint venture; operations and maintenance contract; rehabilitate-operate-and-transfer; and supply-and-operate. Other variations may be allowed upon prior approval by the Investment Coordinating Committee (ICC).   – Paolo Romero

Priority projects that will be implemented under the Act shall be consistent with the Philippine Development Plan or its equivalent at the local level.

The implementing agencies shall submit their list of PPP projects or any update thereto to the PPP Center for Information. Each proposed PPP project to be implemented shall be subject to the approval of the approving body.

The PPP center shall ensure that Congress and the general public are provided with adequate, timely and relevant information pertaining to these priority projects. The release of proprietary information, which shall be defined in the IRR of the Act, is not contrary to existing laws.

The bill also contains provisions pertaining to: unsolicited proposals; public bidding of projects; private legal assistance; contract termination; issuance of administrative franchise, license or permit; expansion or extension of an existing infrastructure facility; prohibition on the issuance of Temporary Restraining Order or injunction; investment incentives; projects of national significance; exemption from payment of transfer taxes; institutionalization of PPP Center; PPP Governing Board; PPP Center executive director; mandatory inclusion of alternative dispute resolution mechanisms in PPP contracts; penal provision; risk sharing and funding of contingent liabilities; miscellaneous provisions; Joint Congressional Oversight Committee; transitory provision and implementing rules and regulations.