Modernize, enhance public-private partnership law – senator

Rappler.com
Modernize, enhance public-private partnership law – senator
‘We must learn from successful and failed projects in the past, as well as global best practices in PPP,’ Senator Sonny Angara says

MANILA, Philippines – Senator Juan Edgardo “Sonny” Angara filed a bill to promote and authorize public-private partnerships (PPPs) for the financing, construction, operation, and maintenance of infrastructure facilities and services.

Angara’s Senate Bill No. 2672 or the PPP Act provides for more liberalized government regulations and procedures to better address the needs and concerns of PPP investors.

A number of services in utilities, transportation, property development, and information technology are provided through contractual arrangements such as the build-operate-transfer (BOT) in the past decades.

Despite this, Angara said the full potential for the synergy of the public and private sectors in improving and expanding the country’s infrastructure has not been fully taken advantage of.

Angara, chairman of the Senate ways and means committee, noted that the government has traditionally been in charge of providing and financing infrastructure in the country, but investment requirements had exceeded the capacities of the government, prompting the public sector to enable private participation in infrastructure development.

“For the country to build on its recent economic gains and to ensure the proper investment environment in our country, the private sector must be further encouraged to make investments through a modernized and enhanced PPP law,” said Angara.

Hastening infrastructure development

Angara’s bill pushes for the automatic grant of administrative franchise, license or permit in favor of the winning bidder, subject to the compliance with the requirements of the regulator and payment of appropriate taxes and fees.

SB 2672 also aims to protect public interest by ensuring fair and reasonable pricing; timely delivery of quality infrastructure, goods and services; and requiring full public disclosure of all PPP transactions.

“We must be more transparent and competitive in the process of selecting our private sector partners. We must learn from successful and failed projects in the past, as well as global best practices in PPP,” Angara said.

The bill also proposes the prioritization of “projects of national significance.” The President may classify projects of national significance such as energy; toll road; mass transit; water; sewerage, following the certification and recommendation by the Investment Coordination Committee, and prior consultation with the Department of Interior and Local Government.

Angara also proposed that real properties which are directly used for such projects shall be exempt from any and all real property taxes.

All local taxes, fees, and charges imposed by a province, city or municipality on the project proponent shall also not exceed 50% of 1% of gross sales or receipts of the preceding calendar year.

Institutionalizing PPP Center

Institutionalizing the PPP Center to serve as a link between the government and the private sector is also being pushed by the bill.

PPP Center will also be tasked to assist implementing agencies in identifying; developing; promoting; facilitating; monitoring; and evaluating PPP projects.

The bill also tasks PPP Center to report to the Office of the President and Congress on the implementation of the PPP programs and projects of the government at the end of each year.

PPP Center is created by virtue of Executive Order No. 8 series of 2010, as amended by Executive Order No. 136 series of 2013, and is mandated to facilitate the implementation of the country’s PPP program and projects. It also serves as the central coordinating and monitoring agency for all PPP projects in the Philippines.

The National Economic and Development Authority (NEDA) Board, chaired by President Benigno Aquino III, approves PPP projects.

Thus, Angara hopes, through his proposed measure more potential private investors would help the government fast-track and improve the construction of public infrastructure and services to boost the growth of the Philippine economy.

The current administration’s goal is to increase infrastructure spending to at least 5.1% in 2016 – or before Aquino’s term ends.

In particular, investors are most cautious about the energy sector and the infrastructure projects under the PPP scheme, as these require massive funds and profit is often being hinged on government policies, said Frederic Neumann, co-head of the Hongkong and Shanghai Banking Corporation (HSBC) Asian Economic Research. – Rappler.com

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