Proposed BOT Law changes to boost PPP governance

MANILA, Philippines — The proposed amendments to the Build-Operate-Transfer (BOT) Law — of which nine are pending at the House of Representatives — would improve the governance and competition for projects pursued under the public-private partnership (PPP) mode of project delivery, the PPP Center said.

PPP Center executive director Ferdinand Pecson said the reforms put forward through these bills would weigh heavily on removing conflicts of interest in PPP projects as well as providing for the speedy resolution of conflicts. In the past, several projects have been stalled due to protracted negotiations and disputes.

Jeffrey Manalo, director of the center’s policy formulation, project evaluation and monitoring service, said these bills are now being discussed and harmonized by the technical working group (TWG) of the House committee on public works. Harmonization of the bill is seen to be completed before the first half of 2018.

“Some of the issues that have been discussed is the separation of regulatory function to the granting of concessions because of conflict of interest. So removing conflict of interest will improve governance,” said Pecson.

Other reforms contained in the bills under harmonization would be the institutionalization of the PPP Center, along with the established procedures for processing PPP contracts. The center was created through an executive order in 2010 which can be repealed through the same.

“We would like that policy making in so far as PPP is concerned would be done by permanent institutions instead of institutions that are created via executive order,” said Pecson.

The amount of time it takes to roll out projects would also be reduced once an alternative dispute resolution is in place, said Pecson.

“We can reduce the amount of time in getting projects started. The alternative dispute resolution being enshrined in the act and also defining more clearly how complaints by losing bidders would be addressed in a more timely way. In the past the issues were the projects would not forward,” he said.

On the competition side, the proposals provide for the replacement of the right of the original proponent of unsolicited proposals to merely match the counter offer of third party contenders in a Swiss challenge with the requirement to put forward the “best and final offer” to win the project.

“So one area that we would like to improve on is the case of unsolicited proposals. So increasing the Swiss challenge period and replacing the right to match with best and final offer which would actually enhance value for the government because it would not be just be looking at what the original proponent can match but making them compete on the best and final offer,” said Pecson.