Bill needed to strengthen PPP, says Recto

By Weng C. Ocfemia

The Public Private Partnership (PPP) Act, according to Sen. Ralph G. Recto, will protect the interest of the government by putting safeguards in contracts so that the government is not shortchange and will not be left holding the bag alone in problematic joint ventures. 

In a privilege speech, Recto explained that if infrastructure projects “crawl”, the fix is not always engineering or financial in nature. The remedy can sometimes be legislative.

This is the reason why the PPP needs this bill, the senator said, to shield the public from higher fees and tolls when government-instigated bidding wars, for example, jack up premium payments which in the end will be passed on to end users for them to be recouped.

“As I speak the amount of our Contingent Liabilities arising from PPP projects is a whopping P81.1 billion. Of this, some P13.7 billion is already due and demandable. In one scenario, the probability of occurrence for P34 billion worth guarantees is “in the realm of the possible”, he added.

Thus, this cannot be discounted: that the P33.66 billion government collected in premium and concession payments will be cancelled when contingent liabilities become assumed obligations.

This bill, will ensure transparency so that contingent liabilities programmed should not become assumed ones, Recto said, adding, risks must be shared.

He said the urgent issues bugging PPP implementation are also addressed in this bill.

First, is that all real properties which are actually, directly and exclusively used for activities deemed as Projects of National Significance shall be exempt from any and all real property taxes levied under Republic Act 7160.

It also waives taxes associated with the transfer of ownership of a PPP infrastructure project to the government. These include Capital Gains Tax, Documentary Stamp Tax, Donor’s Tax, and all national taxes and fees.

Second, it prohibits the issuance of Temporary Restraining Orders or Injunctions.

No TRO or preliminary mandatory injunction shall be issued by any court, except the Supreme Court, against any implementing agency, its officials or employees, or any person or entity acting under the government direction, to restrain, prohibit or compel acts such as:

Bidding, rebidding or declaration of failure of bidding of PPP projects, either national or local;

Qualification or disqualification of bidders and awarding of PPP contract;

Acquisition, clearance, development of the right-of-way, site or location of any PPP project;

Corollary to this is the mandatory inclusion of Alternative Dispute Resolution in PPP contracts.

Third is on the matter of securing administrative franchise, license or permit.

The regulator or licensing authority shall automatically issue the project proponent an administrative franchise, license, permit, or any other form of authorization required for the implementation of a PPP project.

If a regulator fails to act on an application supported by complete documents within 30 working days, the same shall be deemed granted.

To avoid the situation when the ribbon-cutting ceremony for a completed project has been done but it cannot be opened or operated yet because someone forgot to cut the layers of red tape tying down a permit.

These projects and others under the PPP ambit can be implemented through an assortment of PPP contractual arrangements, such as: 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, Operate and Maintain, Rehabilitate-Operate-and-Transfer, and the classic Joint Venture.

If the PPP regime has more plan offerings than your cellphone service provider then it is to broaden the options investors can choose from and government can offer, Recto said

The bill embeds Freedom of Information rules in all PPP dealings. Copies of all PPP contracts are deemed accessible public documents.