The Public Private Partnership (PPP) Center is proposing to remove the cap or floor cost of PPP projects that require approval from the inter-agency Investment Coordination Committee (ICC).

In the 2022 Economic Journalists Association of the Philippines (EJAP) Infrastructure Forum co-presented by Metro Pacific Investments Corp. (MPIC) and PLDT Inc. on Monday, PPP Center Executive Director Ma. Cynthia Hernandez said they are currently drafting amendments to the Build Operate Transfer (BOT) law.

One of the provisions that will be amended is the P300 million amount that sets the cap for ICC submission and the floor for National Economic and Development Authority (Neda) Board approval upon recommendation of the ICC.

“Actually, if you were to ask me, I would rather not have the cap in the law but in the IRR [Implementing Rules and Regulations] so that it’s easier to amend. But it actually depends on what the legislators want,” Hernandez said.

If the cap or floor will be removed from the law, Hernandez said, the ICC, an interagency committee under the Neda Board, could be given the authority to adjust the amount “as they see fit” giving agencies more flexibility to undertake PPPs.

“It’s currently at P300 million, so that’s in the law. At the moment, because of movements in prices, P300 million is not a huge project anymore. So it limits certain implementing agencies,” Hernandez said.

Apart from the amount, Hernandez said there is a need to address ambiguities in the implementation of PPPs by local government units (LGUs). Removing ambiguities will encourage and facilitate LGU participation in PPP projects.

Hernandez also said this will also ensure that PPPs undertaken by LGUs are viable and sustainable over a number of years or the duration of some PPP projects.

She added that another aspect that could be improved upon in the existing law might include provisions pertaining to joint ventures that are included in the BOT law. There must be clearer guidelines on how Government Owned and Controlled Corporations (GOCCs) or even LGUs undertake joint ventures with the private sector.

“We want to make sure everything is transparent and economically viable and for these to be safe investments for government resources,” Hernandez said.

As of August 31 this year, Hernandez reported that a total of 199 projects have been awarded amounting to P2.32 trillion.

These include 88 projects worth P2.16 trillion being implemented nationwide and 111 projects worth P164 billion being implemented locally.

A total of 74 projects amounting to P2.26 trillion are currently in the pipeline. This includes 53 projects worth P2.19 trillion intended for national projects and 21 projects worth P72 billion for local projects.

Of the 53 national PPP projects, about 38 are in transportation; six are in health; five are in vertical infrastructure; two are IT systems; and one each is for water supply and sanitation as well as tourism.

Out of the 21 local PPPs, six are in water supply and sanitation; four in vertical infrastructure; two each are in solid waste management, agriculture or food security, transportation, tourism, and renewable energy; and one IT system.

BY CAI ORDINARIO
OCTOBER 12, 2022