The Market Monitor Minding the Nation's Business
The House committee on public works and highways has created a technical working group (TWG) that will consolidate several bills seeking to institutionalize and strengthen the Public-Private Partnership (PPP) program.
The panel, chaired by Rep. Celso Lobregat (1st District, Zamboanga City), tasked the TWG to harmonize the following bills: HBs 163, 348, 1346 and 1944 seeking to institutionalize and strengthen the PPP authored, respectively, by Rep. Feliciano Belmonte Jr. (4th District, Quezon City), Deputy Speaker and Marikina City Second District Rep. Romero Quimbo, Reps. Romeo Acop (2nd District, Antipolo City) and Vilma Santos-Recto(6th District, Batangas); HB 778 creating the PPP Authority by Rep. Joey Salceda (2nd District, Albay); HB 1944 authorizing PPPs by Santos-Recto; and HB 2727 encouraging more PPP projects and creating the PPP Guaranty Fund by Rep. Gary Alejano (Partylist, MAGDALO).
Lobregat highlighted the provision of the 1987 Constitution which states: “It is the declared policy of the State to recognize the indispensable role of the private sector as the main engine for national growth and development, create an enabling environment for PPP, and provide the most appropriate incentives to mobilize private resources for the purpose of financing, design, construction, operation and maintenance of infrastructure projects and services normally financed and undertaken by the government.”
Such incentives, aside from financial ones as provided by law, shall include provision of liberalized government regulations and procedures in support of the private proponent, Lobregat said.
The former Zamboanga City mayor echoed Budget Secretary Benjamin Diokno’s statement that the next six years would be the “Golden Age” of public infrastructure, which will only become possible with the passage of legislation on the PPP.
In his explanatory note, Belmonte said his bill seeks to further encourage and strengthen private sector participation in government infrastructure projects.
The former Speaker and Quezon City mayor said the landmark Build-Operate-Transfer (BOT) law, which was amended by Republic Act No. 7718 in 1994, has paved the way for a significant increase in private investment in infrastructure development in the country.
Belmonte, however, stressed the need to further amend the law to make it more responsive to the current economic environment.
Quimbo said his HB 348 contains proposals on how to institutionalize and strengthen the PPP such as prohibiting the issuance by courts of temporary restraining orders (TROs) and preliminary mandatory injunction against all PPP projects, except the Supreme Court but with a validity period of only six months; prohibiting regulatory bodies from entering into any PPP contract that they regulate; and requiring public disclosure of PPP contracts.
Quimbo also proposed the expansion of the PPP coverage by including Joint Venture and Operation and Maintenance contracts; removal of the 50 percent cap on government participation, except for Joint Venture projects; and increase in the threshold amount of PPP projects to be approved by the approving bodies.
Meanwhile, Acop said his HB 1346 seeks to strengthen the PPP by addressing various issues relating to the legal framework of the law on instituting ample protection to the investments infused by the private sector and on the responsibilities of the participating institutions involved in the project cycle.
Acop noted that following the enactment of the BOT-PPP law, private sector participation in the government infrastructure projects, especially in the power and transport sectors, has increased significantly.
On the contrary, the program’s momentum has slowed down because of the legal and procedural problems in the implementation of the projects as well as corruption and abuse of discretion on the part of public officials of concerned agencies involved in the transactions, according to Acop, chairman of the House committee on public order and safety, .
Salceda said his HB 778 aims to further enhance and reinforce transparency in transactions, efficiency in the performance of project obligations, and putting additional thrust and impetus to the PPP program through a more robust cooperation between the public and private sectors.
Salceda, a former financial analyst and investment banker, further said the proposed establishment of a PPP Authority, which will be the policy-making body of the government for BOT, Private Sector Participation (PSP), or Public-Private Partnership (PPP) projects.
Salceda, senior vice chairman of the committee on appropriations, said under his bill, all national and local projects must be submitted to the BOT Authority or PPP Authority for approval, except those that require national government guarantee or undertaking, in which case the project shall be recommended by the BOT Board to the President for approval.
Meanwhile, in the explanatory note of her HB 1944, Santos-Recto said her proposal seeks to expand the coverage of the BOT law and provide more incentives to the private sector, which partners with the government in infrastructure projects.
Among the salient features of her measure are the automatic approval by the Regional Development Council of PPP projects which have satisfactorily complied with the requirements, and the classification of infrastructure projects with a direct economic impact.
Santos-Recto, chairperson of the House committee on civil service and professional regulation, also noted that enhancing the PPP will help address the huge backlog in the country’s infrastructure.
Alejano said his HB 2727 introduces the so-called “Projects of National Significance,” a classification of infrastructure projects which, when classified as such, will provide exemption from real property tax, restrictions on imposable local taxes, and automatic grant of business permits, among others.
Alejano said the bill also aims to protect the said projects from temporary restraining orders (TROs), preliminary injunctions and preliminary mandatory injunctions.
The bill seeks the creation of a Public-Private Partnership (PPP) Guaranty Fund for the compensation of private companies, which partner with the government in undertaking infrastructure projects, in the event the government fails to comply with its obligations.