‘Excessive payments’ spark BOT change move


THE Philippine government is eyeing to amend the implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) Law in a bid to protect the public from “excessive payments and undue guarantees” arising from projects under the Public-Private Partnership (PPP).

Socioeconomic Planning Secretary Karl Kendrick T. Chua, who was designated chairman of the BOT IRR Committee by President Duterte, said PPPs have the potential to help stimulate the economy, bring back jobs and address people’s needs.

“However, it is the government’s job, on behalf of the Filipino people, to ensure that private sector interests are aligned to the public’s interests, with the overall goal of providing the best services to the people,” Chua said in a statement.

Chua pointed out that  PPPs with unwarranted guarantees, contingent liabilities, and other onerous contract provisions take up the government’s already-limited fiscal space and hamper the country’s development. These resources could have been used to build other infrastructure or provide social services for the people.

Apart from protecting the public from excessive payments,    the amendments also aim to facilitate the development of well-structured PPPs that deliver high-quality services to the people and promote the interests of Filipinos, who ultimately pay for the costs and returns of private proponents of PPP projects.

The BOT IRR Committee aims to approve and publish the amended BOT IRR by the first quarter of 2022.

The BOT IRR committee is composed of the National Economic and Development Authority, the Departments of Finance, Agriculture, Energy, Environment and Natural Resources, Information and Communications, Interior and Local Government, Public Works and Highways, Trade and Industry, and Transportation, and the PPP Center.

For his part, PPP Center Executive Director Ferdinand A. Pecson said the IRR should enable the provision of quality infrastructure and services that are delivered in a timely and cost-effective manner given that PPPs are paid by the public.

Finance Secretary and Investment Coordination Committee Chairman Carlos G. Dominguez III also stressed the need for transparent and expeditious processes in evaluating PPPs to arrive at their real cost to the government, consumers, and taxpayers.

He stressed the importance of promoting competition, avoiding conflicts-of-interest situations, and ensuring that parties of PPP contracts are capable of delivering on their commitments and running their facilities efficiently for the benefit of the public.

The BOT IRR Committee held its first meeting on October 26, 2021, and will begin its stakeholder consultations with the public, investors, civil society, and other partners in December 2021. 

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