Gov't may scrap unsolicited proposals for BOT projects

The Estrada Administration is considering the policy of shifting back to government-initiated public sector projects and tapping multilateral funding agencies for funds.

After a review of public-funded projects under the build-operate-transfer (BOT) scheme, the Presidential Committee on Flagship Programs and Projects (PCFPP) said it noted huge discrepancies in unsolicited proposals that were accepted and the actual projects that materialized.

As a result, the PCFPP said government is now encouraging local governments and national line agencies to front-load the expense of developing project proposals and conducting pre-feasibility studies themselves before bidding out the contract to private contractors.

PCFPP chairman Robert Aventajado told reporters that a good number of unsolicited proposals have been accepted but have not been implemented especially at the local government level.

Aventajado said LGUs are being swayed by private proponents who submit unsolicited proposals and then bail out midway through the implementation of the project.

"We are studying if there is a need to shift policy altogether from private sector-initiated projects to government-developed projects that would be bid out later," Aventajado said.

According to Aventajado, there is just too many unsolicited proposals especially at the LGU level that have not moved since they were accepted and approved for implementation.

Because government has little funds to spare on project proposals and feasibility studies, Aventajado said the strategy is to attract private groups to conduct and finance these preliminary works.

Otherwise, Aventajado said, there are multilateral fund facilities that government can tap to initiate the project and prepare them for bidding to the private sector.

The Asian Development Bank, Aventajado said, has a $3-million facility open to LGUs that want to undertake feasibility studies for projects that will be developed into BOT projects. The US Agency for International Development (USAID) has a similar facility for national line agencies worth $1 million.

Aventajado said government is also looking for ways to expedite the implementation of key projects by accepting variants in the BOT scheme and the procedure for accepting unsolicited proposals.

Aventajado cited the Metro Manila Solid Waste Management Project as a case in point where the government accepted 17 unsolicited proposals which were, in effect, the bids of the 17 private sector proponents.

Whichever proposal the PCFPP accepts, he said, will be the one that will be implemented and will replace the San Mateo landfill which will be shut down this year.

"We did it this way because the government doesn't want to be responsible for looking for a site and for securing social acceptability," he said. "We want the proponent to take care of these two critical aspects."

Since the project proposal will be site-specific, Aventajado said each proponent has to submit individual proposals and the government will pick the best one among the lot.

Under the usual procedure, government accepts one unsolicited proposal for a specific project and this is later subjected to the so-called Swiss challenge which allows other private groups to match or top the proposal.

The original proponent, however, has the right to match or improve on the bid made by the challengers.