The Department of Finance (DOF) welcomed yesterday the passage on second reading of Senate Bill No. 2233 also known as the Public-Private Partnership (PPP) Act.
The PPP Act is a priority measure which seeks to consolidate all legal frameworks and create a unified system for investors to refer to when engaging in PPP projects.
“The DOF, together with the National Economic and Development Authority (NEDA) and the PPP Center, will continue to work with Congress to establish a stable and predictable PPP policy environment to pave the way for high-quality and cost-effective infrastructure in the country,” finance secretary Benjamin Diokno said in a statement.
To facilitate a more effective and streamlined approval process, the PPP Act will increase the approval threshold for projects that need the NEDA Board’s approval to P15 billion.
Furthermore, it removes the limiting provision of the ‘first-in-time’ approach of unsolicited proposals. This will allow the government to review proposals for the same project simultaneously and choose the best candidate to be awarded the project.
The Act also provides for safeguards such as the creation of a Risk Management Fund for Contingent Liabilities, as well as the mandatory inclusion of dispute avoidance and alternative dispute resolution mechanisms for quicker and more efficient rulings.
There is also a penal provision that is applicable to both private individuals or public employees to ensure accountability.
PPPs are contractual arrangements between the implementing agency and the private proponent for the financing, designing, constructing, operating and maintaining, or any combination thereof, of public infrastructure or development projects. These projects may be undertaken through various modes, such as build-operate-and-transfer and joint ventures.
The government has identified 197 priority Infrastructure Flagship Projects amounting to approximately $155 billion, at least 39 of which shall be financed through PPPs.
