24 July 2012, Business World Online


REVISED IMPLEMENTING rules and regulations (IRR) governing the Build-Operate-Transfer (BOT) Law have been issued by the Aquino administration in a bid to provide more impetus to its signature public-private partnership (PPP) program.

The amended IRR for Republic Act (RA) 6957, published in a newspaper last week, details changes that include a new coordinating agency, an expanded list of eligible projects, revised review and approval schedules, and more detailed rules on unsolicited proposals.

Cosette V. Canilao, executive director of the PPP Center — now the agency mandated to coordinate and monitor projects implemented under the BOT law — said the amended IRR primarily clarified how unsolicited proposals from the private sector would be accepted and processed.

“That’s what the new IRR really addresses, the mechanics and clarification on how to treat unsolicited proposals,” she said.

Ms. Canilao explained that the old IRR, adopted in 1994, contained provisions on unsolicited offers that are “not as clear as what we have right now”.

“The private sector has been clamoring that there are no clear rules on how to treat the unsolicited proposals… so as much as we can we tried to address that in the revised IRR,” she explained.

Rule 10, which deals with unsolicited proposals, has expanded sections dealing with issues such as incentives and government undertakings: among others it declares that the grant of usufruct or right of way will be considered a direct subsidy or equity unless appropriate compensation is received by the state. It also specifically declares that all relocation/resettlement costs will be shouldered by the proponent.

A provision under Rule 13 on incentives and government undertakings, meanwhile, specifically limits the latter to not more than 50% of the project cost, and states that it be based on an approved risk allocation matrix that will be issued by the approving body.

Rule 13 also adds perks available under the Renewable Energy Act of 2008 and the Tourism Act of 2009.

The process and schedule for the evaluation and acceptance of unsolicited proposals has also been extensively detailed. Its provisions include more time — 120 calendar days from 30 previously — for agencies/local governments to decide and a shorter 80-day period (from 90) for the conclusion of preliminary negotiations.

Schedules for other stages of the process have also been shortened, among them a decision needing to be made in three days instead of seven from the time of the submission of a recommendation to award, issuance of a notice to award within 20 days instead of 30, and a shorter period for compliance with notice of award requirements.

The new IRR also guarantees that proponents get agreed upon tolls, fees, rentals and other charges stipulated in a contract, with the government committed to ensure that any difference arising from regulatory action will be recovered via measures consistent with applicable laws.

A new provision under the rule on contract approval and implementation also provides for accession/divestiture of a project. It states that divestiture/accession should be made after lock-in periods stipulated, and that the new proponent should have equal or better qualifications.

Among the eligible types of projects, meanwhile, the amended IRR adds “climate change mitigation and adaptation infrastructure projects and related facilities” and, under industrial and tourism estates, “ecotourism projects such as terrestrial ad coastal/marine nature parks, among others.”

According to the PPP Center, the latest IRR amendment is the third since the law was implemented. Previous changes were done in 1999 and in 2006.


PPP projects move forward

TWO PUBLIC-PRIVATE partnership projects have moved forward, with the Cavite-Laguna Expressway (CALA) obtaining Investment Coordination Committee-Cabinet Committee (ICC-CabCom) approval and financial and technical proposals having been submitted for the construction of school buildings nationwide.

The CALA project was approved by the ICC-CabCom during a meeting on July 12, the National Economic and Development (NEDA) yesterday said in a statement.

The four-lane, 47-kilometer highway will connect the end of the Cavite Expressway in Kawit town to the Mamplasan Interchange of the South Luzon Expressway in Laguna. A portion of the estimated P43.319-billion cost could be funded through official development assistance from Japan.

The project, proposed by the Transportation department, is now up for approval by the NEDA Board chaired by President Benigno S. C. Aquino III. A timetable was not indicated by the NEDA.

The ICC-CabCom, composed of the heads of implementing agencies/departments and headed by the Socioeconomic Planning secretary, evaluates the fiscal and monetary implications of national projects.

The Department of Education (DepEd), meanwhile, yesterday announced that two of the six prequalified bidders for the Public-Private Partnership for School Infrastructure Project (PSIP) had submitted technical and financial proposals last July 18.

It identified the two as the BF Corp.-Riverbanks Development Corp. consortium and the Citicore Holdings Investment, Inc.-Megawide Construction Corp., Inc. group.

The DepEd plans to award the P10-billion school building project, which involves the construction of 9,301 classrooms, next month. Construction is expected to start within the year.

“With all systems go under the PSIP scheme, I am confident that we will be able to achieve zero backlog in classrooms by 2013,” Education Secretary Armin A. Luistro was quoted as saying in the statement.

So far, only the P1.96-billion Daang Hari-South Luzon Expressway Link Road has been awarded by the government. Bidders have been invited to prequalify for the P59.2-billion LRT Line 1 Cavite extension and the NAIA Expressway Phase II projects.

The NEDA, meanwhile, also said that the ICC-CabCom had approved the Bicol International Airport Project, which is expected to replace the existing Legazpi Airport.

The proposed P4.799-billion facility — mentioned in Mr. Aquino’s State of the Nation Address yesterday, will be built to handle international traffic, the NEDA said.

Other approvals were for the:

• restructuring of the nationwide Bridge Construction/Replacement Project;

• change in scope, increase in cost and extension of the Saudi Fund for Development-Assisted Mindanao Roads Improvement Project to December 2015 from January 2012;

• extension of the loan validity for the Laguindingan Airport Development Project from the Korean Export-Import Bank to June 28, 2014 from June 28 this year; and

• extension and reallocation of the Support for Strategic Local Development and Investment Project of the Land Bank of the Philippines to June 30, 2014 from June 30 this year.