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Government seeks changes to BOT Law for PPP

Louise Maureen Simeon - The Philippine Star
Government seeks changes to BOT Law for PPP
In a statement, the National Economic and Development Authority (NEDA) and the PPP Center said President Duterte has ordered the changes in the IRR of the BOT Law, which was enacted in 1990.
STAR / File

MANILA, Philippines — The government will pursue amendments to the implementing rules and regulations or IRR of the Build-Operate-Transfer (BOT) Law to ensure that public-private partnership (PPP) projects implemented will not be disadvantageous to Filipinos.

In a statement, the National Economic and Development Authority (NEDA) and the PPP Center said President Duterte has ordered the changes in the IRR of the BOT Law, which was enacted in 1990.

The BOT scheme is a contractual arrangement where the contractor undertakes the construction, including financing, of a given infrastructure facility, and the operation and its maintenance.

The contractor operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals and charges sufficient to enable the contractor to recover its operating and maintenance expenses and its investment in the project, plus a reasonable rate of return.

The contractor transfers the facility to the government agency or local government unit concerned at the end of the fixed term, which shall not exceed 50 years.

The amendment in the IRR will be led by Socioeconomic Planning Secretary Karl Chua through the BOT IRR Committee.

Chua said the changes in the IRR aims to facilitate the development of well-structured PPPs that deliver high quality services to the people and protect the public from excessive payments and undue guarantees arising from PPP projects.

It also targets to promote the interests of Filipinos, who ultimately pay for the costs and returns of private proponents of PPP projects.

Chua maintained that PPPs can stimulate the economy, bring back jobs, and address the needs of the people.

“It is the government’s job, on behalf of the Filipino people, to ensure that private sector interests are aligned to the public’s interests, with the overall goal of providing the best services to the people,” he said.

Chua argued that PPPs with unwarranted guarantees, contingent liabilities, and other onerous contract provisions take up the government’s already-limited fiscal space and hamper the country’s development.

“As PPPs are paid for by the public, the IRR should enable the provision of quality infrastructure and services that are delivered in a timely and cost-effective manner,” PPP Center executive director Ferdinand Pecson said.

Finance chief and NEDA-Investment Coordination Committee chair Carlos Dominguez, for his part, maintained that there is a need for transparent and expeditious processes in evaluating PPPs to arrive at their real cost to the government, consumers, and taxpayers.

The BOT IRR Committee will begin its stakeholder consultations next month. It aims to approve and publish the amended BOT IRR by the first quarter of 2022.

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