The proposed Public-Private Partnership (PPP) Act was approved on third and final reading on Monday, Dec. 12, by the House of Representatives.
The measure, embodied in House Bill (HB) No. 6527, gained the chamber’s final approval with 254-3 votes from the House members.
This was one of 13 priority bills identified by the administration of President Ferdinand “Bongbong” Marcos Jr. that was passed during the one-day plenary session last Monday.
It was likewise included in the Common Legislative Agenda (CLA) of the Legislative-Executive Advisory Council (LEDAC), which the Chief Executive first convened in October 2022.
The bill defines PPP as a “contractual arrangement between the implementing agency and the private proponent for the financing, designing, constructing, operating and maintaining, or any combination thereof, of infrastructure or development projects which are typically provided for by the public sector, where each party shares in the associated risks.”
PPP projects may also be financed partly from direct government appropriations or official development assistance (ODA) of foreign governments or institutions.
Such PPP projects may be undertaken through various modes, such as Build-Lease-Transfer (BLT), Build-Own-and Operate (BOO), Build-Operate and Transfer (BOT), Build and Transfer (BT), Build-Transfer and Operate (BTO), Contract-Add-and-Operate (CAO), and Develop-Operate-and-Transfer (DOT).
Other modes of undertaking PPP projects include Joint Venture (JV), Lease Agreements, Operate-and-Maintain (OM), Rehabilitate-Own-and-Operate (ROO), Rehabilitate-Operate-and-Transfer (ROT), and such other variations as may be approved by the appropriate approving body or authorities.
“Implementing agencies, in accordance with their respective mandates or charters, are hereby authorized to undertake PPP projects with a private proponent in accordance with the provisions of this Act,” the bill said.
In undertaking PPP projects, the private proponent is allowed to recover its investments and earn reasonable profit by authorizing it to charge and collect reasonable tools, fares, fees, rentals, or othercharges subject to appropriate regulations.
On the other hand, the implementing agency may instead make regular payments to the private proponent in exchange for delivering an asset or service in accordance with the contract. Other non-monetary payments may also be allowed.
Deputy Speaker and Davao City 3rd district Rep. Isidro Ungab presided over Monday’s session that led to the HB 6527’s approval. Over 60 lawmakers authored the House measure.
According to the bill, the PPP undertaken in accordance with its provisions, shall be entitled to various incentives under applicable laws and existing policies of the government.
Once a PPP contract is executed and upon application by the private proponent, “the regulator shall automatically grant in favor of the private proponent a franchise to operate and maintain the facility including the collection of tolls, fares, fees, rentals, and other charges.”
It also said that if the implementing agency fails to implement the initial rates for tolls, fares, fees, rentals, and other charges and adjustments stipulated in the PPP contract, the private proponent shall be allowed to recover the difference through measures consistent with the PPP contract and applicable laws, rules, and regulations.