Thursday, May 23, 2024

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debates The Senate and House have approved the bicameral report on the PPP after lengthy discussions.


On Wednesday, the Senate and House of Representatives approved the report from the Bicameral Conference Committee, which resolved differences in a bill aiming to increase private sector involvement in state infrastructure projects. This decision came after a period of back-and-forth discussions.

The report was initially ratified by the House after midnight, but the approval was later retracted around 5 p.m. when Bukidnon Rep. Laarni Lavin Roque requested a reconsideration in the plenary session without giving a reason. The House then added more members to the committee.

The report was approved once more on Wednesday evening.

Jose Ma. Clemente S. Salceda, the representative for Albay, who advocated for the measure’s approval, did not respond immediately to a Viber message requesting a comment.

In the evening, the Senate reappointed its members to the committee with two houses, and then quickly approved the report shortly afterwards.

According to a copy of the bicameral report, the proposed PPP Code aims to guarantee an “open, fair, transparent, and competitive” process for selecting private investments in PPP projects.

The proposed legislation aims to alleviate obstacles and difficulties in the PPP procedure and enhance the structure for unsolicited project proposals.

According to a statement from Mr. Salceda, senators and congressmen have reached a consensus to convert the PPP law into a code during a conference. This will ensure that any future revisions will be done through the code instead of being scattered.

The suggested code will encompass all agreements between a government agency and its business partner for funding, planning, building, running, and upkeeping infrastructure or development endeavors and services.

Public-private partnership (PPP) initiatives may also receive funding from the government or through official development assistance (ODA) provided by foreign governments.

ODAs will include blended finance, where the partner government, bilateral or multilateral agency or international or multilateral lending institution can mobilize financing from private or commercial institutions for a loan or grant.

The suggested code will also encompass joint ventures, agreements for toll construction, operation and maintenance, and lease agreements.

This will not be applicable to government procurement projects that fall under the Government Procurement Reform Act, contracts for management and services, selling or transferring of assets, converting into a corporation, creating subsidiary companies with private sector investments, donations that come with or without payment, and agreements for joint ventures that are solely for commercial purposes.

When creating a PPP project, an agency needs to take into account the project’s legal, technical, financial, and commercial viability. They also need to consider the project’s value for money, the best way to allocate risks, the affordability of fees and tariffs, its ability to withstand climate changes and be sustainable, as well as any potential social and environmental concerns.

According to the legislation, large-scale PPP projects exceeding P15 billion in cost will require approval from the Investment Coordination Committee of the National Economic and Development Authority (NEDA). Projects with a lower cost can be approved by the head of the agency.

The authorization of local PPP projects is required by the respective local councils.

The leader of a PPP project agency will establish a committee to oversee the pre-qualification, bidding, and award processes for solicited proposals and the comparative bidding process for unsolicited proposals. The agency head will also review the final contract.

The proposed legislation also aims to establish a PPP governing board responsible for overseeing policies pertaining to public-private partnerships.

The NEDA secretary will lead the board, with the Finance secretary serving as vice chairman.

The Commission on Audit plans to release guidelines for auditing PPP projects.

The Senate gave their approval for the PPP bill on September 25, while the House passed a similar measure in December 2022.

As of September 1st, there were 104 Public-Private Partnership (PPP) projects in progress, with a total value of approximately P2.521 trillion (equivalent to $44.3 billion). The Department of Finance reports that there are currently 180 projects being carried out, with a combined value of P2.639 trillion. This information was provided by Beatriz Marie D. Cruz and John Victor D. Ordoñez.