TO empower local government units (LGUs) to implement their own public-private partnership (PPP) ventures, a vice chairman of the House Committee on Local Government is seeking an overhaul of the build-operate-transfer (BOT) law.

In his unnumbered House bill, Nacionalista Party Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur introduced amendments to the BOT law, which aim to institutionalize the PPP mode of financing government projects for both national government and LGU projects.

These BOT amendments, Villafuerte said, should “accelerate” public infrastructure development by strengthening the PPP institutional framework; provide financial and technical support through the Project Development and Monitoring Facility; and optimize project risks and obtain government support.

These should also expand PPP contractual arrangements; provide for transparent and competitive bidding; set standard contents and implementation of PPP projects for transparency, consistency and predictability; and grant incentives to PPP projects, he added.

“PPPs could be viable sources of financing to help the government fill the infrastructure gap at the local level should LGUs be armed with enough knowledge and expertise on how to effectively carry out this funding arrangement,” said Villafuerte, who is also the vice chairman of the House Committee on Appropriations.

“Although our country is one of the pioneers in private-sector participation in major infrastructure projects in Asia with the enactment of the BOT law, we have yet to fully utilize the advantages of the PPP as shown by our status as among the laggards in the region in terms of public infrastructure,” he added.

According to the lawmaker, the government needs to ensure that all LGUs can take advantage of the opportunities available to them in implementing their own PPPs, especially now that the Duterte administration has committed to dramatically increase spending on infrastructure over the next five years.

The lawmaker, citing President Duterte’s economic team, said the administration plans to spend P8 trillion on public infrastructure between now and 2022 to sustain high and inclusive growth and usher in what Budget Secretary Benjamin E. Diokno has described as the “golden age of Philippine infrastructure.”

“We need to arm our LGUs with the technical expertise to properly prepare, monitor and implement PPP projects at the local level. Our LGUs can be able partners, rather than obstacles, to the Duterte administration’s infra-led growth agenda if we provide them with the tools they need to implement infrastructure projects in partnership with the private sector,” said Villafuerte.

Also, the lawmaker, citing a report by the Asian Development Bank (ADB), said many LGUs encounter snags in implementing PPP projects related to infrastructure, power generation and bulk water supply in their respective communities because of the lack of technical and financial resources to carry out these initiatives.

Villafuerte said amendments to the BOT law must be institutionalized prior to the planned switch to federalism, so LGUs would be ready and capable of assuming greater fiscal and political autonomy to chart their respective growth and development agendas once the new form of government is in place.

He added that empowering LGUs in implementing PPP projects should be part of the preparatory measures that the national government should prioritize in paving the way for the switch to a federal system of government.

Federalism, he said, “will empower LGUs to decide for themselves and craft their own development agendas customized in accordance to their respective resources, problems, development paths and potentials for growth.”

Under a federal system, LGUs would be able to retain a huge chunk of their respective incomes and turn over only a portion to the federal government, he added.

08 January 2017
By Jovee Marie de la Cruz