The House Committee on Public Works and Highways on Wednesday approved a Duterte administration’s priority bill institutionalizing the private and public partnership (PPP) program.
Albay Rep. Joey Salceda, one of the principal authors of the unnumbered substitute bill, said the measure aims to foster competitiveness, efficiency, and ease of doing business, while supporting the private sector without endangering the country’s fiscal strength.
The substitute bill or the proposed Public-Private Partnership (PPP) Rationalization Act is a consolidation of House Bills 77, 1244, 4873, 5452 and 6575 authored by Salceda, Camarines Sur Rep. Luis Raymund Villafuerte, Cagayan de Oro Rep. Rufus Rodriguez, Bataan Rep. Geraldine Roman and AAMBIS-OWA Rep. Sharon Garin.
Under the substitute bill, implementing agencies would include development plans, strategies, and investment programs in the identified priority PPP projects. This ensures that PPPs are aligned with the national and local development objectives of the government.
Salceda explained that a project would be considered as a priority based on the following principles: a) effectiveness in meeting government objectives, b) value for money, c) accountability and transparency, d) consumer rights, e) affordability, f) public access, and g) safety and security.
Salceda said blended finance, co-financing, and green finance are set as policy objectives that can guide the framework-setting for PPP screening.
The bill refers to blended finance as to the strategic use of combined concessional funds from development institutions or partners and commercial funds from lenders and private investors to provide financing for PPP projects.
It refers to co-financing as collaborative financing of the same PPP project by two or more banks or other lending institutions, while green finance refers to investments that create environmental benefits in support of green growth, low-carbon, and sustainable development.
Empower
The bill also empowers the PPP Center as an approving body, an institutional strength not present under the present system.
It said national PPP projects costing up to P5 billion shall be approved by the PPP Center unless overturned by the Investment Coordination Committee of the National Economic and Development Authority (ICC-Neda) within 30 days from the date of approval.
It added projects costing more than P5 billion shall be approved by the Neda Board upon prior recommendation by the ICC-Neda. The bill, however, allows the Neda to adjust thresholds based on evolving socioeconomic circumstances.
To promote local autonomy, local PPP projects shall be approved by the local Sanggunians, regardless of the project cost. Provided, that local PPP projects involving government undertakings using national government funds shall require the approval of the PPP Center for projects up to P5 billion in project cost and by the ICC-Neda for projects with project cost of above P5 billion.
In approving PPP projects, the measure said, the approving body shall assess all PPP projects based on its overall feasibility analysis and accord paramount importance on the affordability of user fees and efficiency in public service.
To ensure that all risks associated with PPP projects are managed and mitigated accordingly, the bill also said all PPP contracts to be entered into by the implementing agency shall adhere to the principles stipulated under the Generic Preferred Risk Allocation Matrix (GPRAM) issued by the ICC-Neda.
Moreover, Salceda said the implementing agency shall set the financial bid parameters to determine the most advantageous bid.
“The criteria are all consistently guided by two key considerations: the end user pays the lowest viable fee and the government is safeguarded from being financially disadvantaged,” he added.
Approval
Meanwhile, the bill said the appropriate approving body shall act on the project within 30 working days upon satisfactory compliance by the concerned implementing agency with the requirements of the appropriate approving body.
It said failure of the appropriate approving body to act on the project within the specified period shall be deemed an approval thereof and the concerned implementing agency may proceed with the procurement of the PPP project.
Salceda said the bill also provides protest mechanism for national and local projects.