Competition body eyes early review of PPP projects
MANILA, Philippines – The Philippine Competition Commission (PCC) will start flagging anti-competitive practices in Public-Private Partnership (PPP) projects as early as the initial phase of the bidding process.
On Friday, July 20, the PCC signed a memorandum of agreement with the PPP Center that would allow the competition body to review proposals from the private sector for business partnerships with government.
"What happens is, [sometimes] at the end of the day, a project is approved by a government agency and then we come in and say, 'That's not allowed because it is anti-competitive and we have to do something about it.' That will delay the project, we don't want that to happen," PCC Chairman Arsenio Balisacan said.
Government agencies will craft guidelines on how to share information on project proposals. The proposals will be reviewed by the PCC early on to avoid delays in implementation.
"We want to flag right in the early stage so the parties can be informed about it. [So that] they can do something about it when they present their bids or design of contracts," he said.
The Philippine Competition Act, which created the PCC, was signed into law on July 2015. It gives the PCC the authority to fine and penalize cartels, price-fixers, bid-riggers and other economic saboteurs in the market to ensure a level playing field.
In the case of public-private partnerships, the PCC can come in to ensure that a certain service is not monopolized by a proponent, and that services rendered by the government are low-cost but still of good quality.
Asked whether past proponents have violated competition policies, PPP Center Executive Director Ferdinand Pecson said they anticipate this problem to rise from certain future projects – particularly the unsolicited proposals. (EXPLAINER: Not all projects are eligible for a Swiss challenge)
Under the country's build-operate-transfer (BOT) and procurement laws, the government deals with unsolicited proposals through the Swiss Challenge. This is when the government invites private groups to make competing offers, while giving the original proponent the right to match them.
"If there is only one private party and the government, then we lose the benefit of value for money. It's no different from buying a piece of item, say a watch. We want to be able to compare offers from different suppliers," Pecson said.
Pecson added that rules are currently in place in the legal framework for unsolicited proposals, but the PCC can improve on how violations could be dealt with, particularly in the earlier stages.
Balisacan sees this as a gain, as the government expects acceleration in project rollouts in the coming years due to the Duterte administration's "Build, Build, Build" infrastructure program.
"We aim to advance the process of the culture of competition. But more importantly, [we aim] to support the government's thrust Build Build Build program which we expect to intensify the partnership between the private and public sectors," Balisacan said.
The government is set to subject an unsolicited proposal from Chinese-led Bangon Marawi Consortium to Swiss Challenge. Its rehabilitation proposal for Marawi was chosen by the government. – Rappler.com