House targets review of bid rules in PPP law

The House of Representatives is eyeing a review of the law governing the Public Private Partnership program as it questioned the announcement of the Department of Transportation (DOTr) inviting bidders for the development, operations and maintenance of five unbundled airport projects. 

Speaker Pantaleon D. Alvarez pointed out that based on the DOTr announcement, the winning bidders won’t have to spend much to maintain and develop the five airport projects namely Bacolod-Silay, Davao, Iloilo, Laguindingan, and New Bohol (Panglao) using government funds.

According to the Public Private Partnership Center website, “Republic Act (RA) 6957 as amended by RA 7718 (commonly known as the Build-Operate-Transfer Law) and its Implementing Rules and Regulations (IRR) is the legal framework when the government enters into PPP”.

Notwithstanding this, Alvarez said that under the scheme, it would grant winning bidders the exclusive right to operate and maintain the airport for 30 and even up to 35 years, which is much longer than the 25 year franchise granted by Congress.

Alvarez also said that the winning bidders must secure a franchise from Congress to legally operate the airports, brushing aside the contention of the DOTr that under the BOT law the grant of such franchise is deemed automatic.

Article XII, Section 11 of the 1987 Constitution provides that “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years.”

Besides, Alvarez said the longer period granted to winning bidders would practically tie the hands of the government.

He explained that when it becomes necessary to expand or add additional runways before the expiration of the 35 year contract, the winning bidder can hinder the expansion.

To avert this situation Alvarez insisted that winning bidders would be required to obtain legislative franchise to operate and maintain these airports.

He vowed that the House, under his leadership, will exert all efforts to protect the interest of the government and the Filipino people.