Neda pushes PPP Act to replace BOT Law

MANILA, Philippines - The Public-Private Partnership (PPP) Center of the Philippines is pushing for stricter mechanisms for unsolicited proposals in a pending measure that will replace the existing and outmoded Build Operate Transfer (BOT) Law, saying that this would help make the regulatory environment more attuned to the current business landscape.

The Aquino administration through the National Economic and Development Authority (NEDA) proposed the creation of the so-called Public-Private Partnership Act in place of the BOT Law. It filed last year amendments to the existing BOT Law.

In an interview yesterday, PPP Center executive director Cosette Canilao expressed hopes that Congress would approve the amendments before the 2013 elections.

“We’re hoping that both Houses of Congress will work on the amendments before the elections. The amendments will update the law to the current business environment,” she said.

The government is particularly pushing for two major amendments such as the inclusion of joint ventures in PPP contracts and stricter mechanisms for unsolicited proposals.

A PPP is a contractual arrangement between government and the private sector to deliver public infrastructure and public services. It is being pushed by the Aquino administration so that it would have more funds for public health and education.

For unsolicited proposals, Canilao said the proponent must offer new technology for the government to accept its proposal.

Canilao said that the proponent must also be issued an “original proponent status” by the concerned government agency for its proposal to be accepted.

The review of the unsolicited proposal mechanism stemmed from the North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) Connector Road Project.

Metro Pacific has submitted an unsolicited proposal to link NLEX and SLEX, a blueprint which the government is still studying.

In 2011, Finance Secretary Cesar Purisima said that the administration would stick to solicited proposals instead of unsolicited proposals, which are more prone to “sweetheart deals.”

The government was caught in a legal battle with the Philippine International Air Terminals Co. (Piatco) in connection with NAIA-3. Piatco was the consortium that submitted a winning proposal to build the terminal against AEDC, a Chinese-Filipino consortium that submitted an unsolicited proposal for the project.

In 2004, the Supreme Court nullified the Piatco contract, citing onerous provisions.

Canilao said that should the government accept unsolicited proposals for priority projects, it would have to make sure that even those that would be submitting counter proposals under a Swiss Challenge mechanism of the BOT Law would be subject to scrutiny.