lgu ppps: drafting the local ppp code...mar 08, 2018 · botlaw variants bot law and irr joint...
TRANSCRIPT
Presentation Outline
The PPP Center, Its Role and Mandate
The Philippine PPP Program
Guiding Principles in the Development of LGU PPP Codes
Salient Features of LGU PPP Codes
Ways Forward for LGUs
The PPP Program and the Center’s roles through the years
1986-1992• BOT Law
(RA 6957)
1992-1998• Amended
BOT Law (RA 7718)
• BOT Center under Office of the President –Coordinating Council of the Philippine Assistance Program (CCPAP)
1998-2001• Renamed
BOT program to PSP program
• Coordinating Council for PrivateSector Participation (CCPSP)under the Office of the President
2001-2010• Revert to
BOT Program
• BOT Center under DTI
2010- 2016• PPP
Program
• Renamed PPP Center and attached to NEDA
2016-present• PPP
Program
• PPP Center attached to NEDA
The PPP Center’s Mandate
Executive Order No. 8 dated 9 September 2010SECTION 2. Powers and Functions of the PPP CenterThe PPP Center shall cover all the PPP programs and projectsincluding all the variants or Arrangements under the BOT Lawand Joint Venture Agreements xxx
PPP Governing Board Policy Circular No. 07-2015 dated 25 August 2015PPP Monitoring Framework and ProtocolsIll. Scope. This policy is intended to cover all PPP projects,including all variants and arrangements under the Build-Operate-and-Transfer (BOT) Law and its RevisedImplementing Rules and Regulations (IRR) and JointVenture Agreements, among others, undertaken bygovernment entities such as National Government Agencies(NGAs), Government-Owned or Controlled Corporations(GOCCs), Local Government Units (LGUs), and othergovernment instrumentalities.
The PPP Center
Policy reforms to enhance
enabling environment
2 Prepare
3 Approve
4 Procure
5 Implement
1 Identify
Capacity building of implementing
and oversight agencies
Projects under
BOT Law &
Joint Ventures
Policy, Capacity and Projects
PPP Center to directly report to the PPP Governing Board chaired by NEDA, vice-chaired by DOF with the following members: DTI, DBM, OES, DOJ, and NCC
PPP Project Pipeline (as of March 7, 2018)
30PROJECTS
PHP 388.45 Billion**
AwardedPHP 323.06 Billion*
16
Under ProcurementPHP 0.298 Billion
1
4For Evaluation & Approval
Under Development
Under Review by the IAPHP 65.09 Billion
2
7
*Projects started from 2010 onwards
**Amount does not include 12 other projects with no estimated costs yet
Private Sector Participation in Government Projects
Public sector owns and operates assets
Public-Private Partnership (PPP)
Private sector owns and operates assets
*RA 6957 as amended by RA 7718 and its IRR covers the different BOT contractual arrangements and excludes Joint Venture Agreements
• Utility• Restructuring• Corporatization• Decentralization
• Build-Operate-and-Transfer (BOT)*
• Joint Venture Agreements
• Full Divestiture/Privatization
Private Sector Engagement HighLow
PPPs in the Philippines
Contractual arrangement between government and the private partner for the provision of a public asset or service
It is a long term contract (e.g. 20 -30 years which shall not exceed 50 years)
Role of private partner: finance, design, construct, operate, and/or maintain government facilities
Risk is borne by the party who can best manage it
The facility is turned over to government at the end of concession period
Legal Framework for LGU PPPs
PPP Modality Governing Framework
BOT Law Variants BOT Law and IRR
Joint Ventures LGC/2013 NEDA Guidelines/Local Ordinances
Concessions Special Laws/LocalOrdinances
Management and Service Contracts
GPRA
Lease and Affermage Civil Code/Public Act/LGC/Local Ordinances
Divestment/Disposition Commission on Audit Circular No. 89-296
Corporatization/Subsidiary Corporation Code
LGU P4 is a policy-level and project-level approach of promoting the general welfare, inclusive growth and better quality of life for the Filipinos.
Build-Operate-and-Transfer (BOT) Law and its revised IRR
Contractual Arrangements/Modalities:1. Build-and-Transfer (BT)2. Build-Lease-and-Transfer (BLT)3. Build-Operate-and-Transfer (BOT)4. Build-Own-and-Operate (BOO)5. Build-Transfer-and-Operate (BTO)6. Contract-Add-and-Operate (CAO)7. Develop-Operate-and-Transfer (DOT)8. Rehabilitate-Operate-and-Transfer (ROT)9. Rehabilitate-Own-and-Operate (ROO)10. Other variations of any of the above
An act authorizing the financing, construction,operation and maintenance of infrastructureprojects by the private sector and for otherpurposes
Build-Operate-and-Transfer (BOT) Law and its revised IRR
Government Project CompanyConcession
Agreement
DurationRisks Rewards Turnover
A concession agreement under a specificcontractual arrangement is signed betweenthe government and the private partner forthe provision of a public asset or service
A project company is formed by or among the private sector proponents
Lenders
Investors
Construction
OperatorRoles
Joint Venture Agreements (JVAs)
Own Local Government PPP Code/JV Ordinance- Department of Interior and Local Government issued MC No. 2016-120 or the
Guidelines for the Implementation of Public-Private Partnership for the PeopleInitiative for Local Governments (LGU P4). The MC encourages LGUs toadopt an LGU P4 Code where one of the suggested modalities is JV.
RA 7160 Local Government CodeJoint Venture Agreements- Section 22 Corporate Powers “Every LGU, as a corporation, shall have the
following powers xxx (5) to enter into contracts; xxx”- Section 35. Local government units may enter into joint ventures and such
other cooperative arrangements with people's and non-governmentalorganizations to engage in the delivery of certain basic services, xxx”
NEDA Joint Venture Guidelines (2008 or 2013)Executive Order No. 423 s. 2005- Section 8 “the NEDA, in consultation with the GPPB, shall issue guidelines
regarding joint venture agreements with the private entities with the objective ofpromoting transparency, competitiveness and accountability in governmenttransactions, and, where applicable, complying with the requirements of anopen and competitive public bidding”
- LGUs not covered by the guidelines with respect to its local autonomy. However,LGUs are not precluded from adopting the process stipulated in the guidelines.
Joint Venture Agreements (JVAs)
Jointly undertakes (directs and governs) an infrastructure or development projects
(with end view of eventually transfer to either
private sector or to government)
Joint Venture
Private SectorGovernment
Pools money/capital, services, and/or assets
Shares risks & rewards
Corporate JV:max of 50% OCS
LGU PPP Code Guiding Principles
*Based on DILG MC 2016-120
Pro-People Pro-Accountability Pro-Change
Pro-Value Pro-Learning Pro-Innovation
Pro-Rule of Law Pro-Justice Pro-
Participation
Pro-decentralization
Pro-People
PPP Projects must be aligned with the development plans. PPP projects must be socio-economically viable. User-fees shall be affordable.The body regulating user fees and delivery of public service shall
not have a conflict of interest. Repayment schemes must be anchored on pay for performance
and be limited by a reasonable rate of return. PPP contracts shall have clearly defined indicators and expected
levels of performance. Additionally these shall define how thoseindicators shall be measured.
Pro-Accountability
The LGU shall set up a Project Management Team that willbe responsible for getting the project through the variousphases – development, approval, procurement,implementation. This includes defining, assigning, trackingand reporting of all project tasks.
Projects must undergo appraisal and approval. Appraisal must be done by a body that is independent of
the body that developed the project.Approving body and authorities are clearly defined
A unit responsible for ensuring that provisions of the contractare being implemented shall be established.Contracts shall be made available to the public.
Pro-Change
PPP projects shall be designed and structured in a way thatcaptures lessons learned from similar projects and frombest practices.
Implementation bottlenecks and issues shall be analyzedso that future projects can benefit from lessons learned.
Pro-Value
The project should be an answer to a public need andshould provide the optimum technical solution amongalternatives.
Risks shall be allocated optimally to achieve best value formoney.
Parameters for bidding shall be established by the LGU. The choice of private partner shall be done through a
competitive process with sufficient timelines to be providedto allow bidders to provide competitive offers.
Pro-Learning
The LGU shall invest in capacity building and learningactivities in areas of project development, appraisal,procurement and monitoring.
Pro-Innovation
Innovation shall be encouraged through output-basedproject specifications that focus on outcomes expected fromthe private partner and not on the means to be employed todeliver those outcomes.
Pro-Rule of Law
Laws and relevant rules and regulations must always befollowed through the various phases – development,approval, procurement, implementation.
PPP projects must not fall under the pitfalls of governmentcontracts- corruption, clientism, complacency, conflict ofinterest and concealment.
Pro-Justice
LGUs shall also advance human rights, climate and genderjustice and prioritize the needs of the marginalized in theimplementation of its PPP projects.
LGU Public-Private Partnership (PPP) Code
Identifies the legal framework and PPP modalities thatthe LGU can utilize for its PPP projects.
Establishes the procedures, timelines, andrequirements that the LGU and potential PrivateSector Partners will need to follow in theimplementation of local PPP projects.
Promotes consistency, reliability and transparencyamong LGUs in dealing with the Private Sector.
LGU PPP Code General Sections*
*Based on draft PPP Center PPP Code for LGUs and DILG MC 2016-120 Annex 1
Policy Declaration
Guiding Principles and
ObjectivesModalities
Projects Governance Structures
Project Approvals
Selection Procedures
Standard Contract
Provisions
Contract Management
and Monitoring
Final Provisions
Policy Declaration
• Enumerates the legal basis of the LGU in enacting aLocal PPP ordinance as provided by relevantPhilippine laws and issuances.
Go to Example
Guiding Principles and Objectives
• Defines the values that the LGU will uphold throughthe PPP Code which can be rooted from the LGU’slocal thrust, mission and vision in partnering with thePrivate Sector.
• Outlines the LGU’s purpose and overall goal inenacting a PPP Code
Go to Example
Definition of Terms
• Provides for uniform understanding of the termsused in the PPP Code.
• Aids in the interpretation of the PPP Code andgives clarity to unique terms as well as wordswhich might have alternative definitions.
Go to Example
Modalities
Key considerations• Include modalities and contractual arrangements
that the LGU can utilize for its PPP projects
Go to Example
Projects
• Identifies the infrastructure and developmentalprojects that the LGU considers as eligible for PPP
• Eligible projects are suggested to be based onpriority sectors within the region, province and thecity/municipal level
Go to Example
Governance Structures
• Outline the composition and roles of a PPP coreteam that will handle PPP projects of the LGU
• Roles include the development of PPP projectstudies/FS, evaluation of unsolicited proposalscoming from potential Private Sector partners etc.
• Contract management duties to ensure smoothimplementation of PPP project
• Spearheads the safekeeping of alldocumentations to aid in the project’s knowledgetransfer
• Focal point of external and internal coordinationon all things concerning the PPP projects of theLGU.
PPP Unit*
Go to Example
Project Approvals
• Determines the approval or confirmation processthat the PPP projects, depending on the modality,will need to go through.
Go to Example
Selection Procedures
• Prescribes the procedures that the LGU will followin the selection of Private Sector partners for itsPPP projects
• LGUs are encouraged to subscribe to proceduresset forth by existing laws and may formulate generalguidelines and timelines for modalities withissuances that do not cover LGUs (i.e. NEDA JointVenture Guidelines)
Go to Example
Standard Contract Provisions
• Stipulates the minimum required standard contractprovisions that PPP contracts should have.
• Can act as a safeguard of the LGU in ensuring that thePPP contracts cover the basic legal relationship, roles,and responsibilities of both parties
Go to Example
Contract Management and Monitoring
• Establishes procedures and mechanisms in managingPPP Contracts and monitoring PPP projects of the LGU
• The PPP Governing Board issued Policy Circular No.07-2015 on PPP Monitoring Framework and Protocolswhich aims to:
• identify the roles and responsibilities of the keyparties involved in monitoring the implementation ofPPP project
• define the protocols for generating, processing, andsharing information for monitoring the implementationof PPP projects
• document information on lessons learned and bestpractices during project implementation that can beused in planning, evaluating, and implementing futurePPP projects
Go to Example
Final Provisions
• Stipulates additional considerations of the LGU in the enactment of its PPP Code
• May include the following, as necessary: Appropriations Fiscal oversight Adherence to existing PPP Governing Board
Policy Circulars Alternative Dispute Resolution Implementing Rules Confirmation of Executed PPP Contracts and
Procedures Commenced Application of other PPP Laws and Regulations Repealing Clause Separability Clause Effectivity
Key Next Steps
• Revisit modalities that are applicable to the LGU’s PPP agenda
• Review available templates and resource materials relevant to PPPs
• Draft LGU PPP Code and submit for review• Draft supplementary executive orders (designation of
members to the PPP Unit and Contract ManagementTeam, and appropriate timelines for the selectionprocedures)
• Local Sanggunian to deliberate on the proposed LGU PPP Code supported by ample public consultation
PPP Codes into PPP Projects
LGU PPP Code PPP Project/sCebu City, Cebu JV Ordinance Waste to EnergyBaguio City, Benguet DILG P4 SanitationQuezon City, Metro Manila Various
referencesWaste to Energy
Valenzuela City, Metro Manila
JV Ordinance Public Market, Town Center, Public
HousingGeneral Santos City, South Cotabato
Variousreferences
Public Market
Los Baños, Laguna DILG P4 Public MarketZamboanga City, Zamboanga del Sur
DILG P4 Multiple Projects
PPP Codes into PPP Projects
LGU PPP Code PPP Project/sTacloban City, Leyte JV Ordinance ReclamationSto. Tomas, Batangas Draft PPP
CodeWater Supply
Muntinlupa City, Metro Manila
Draft JV Ordinance
Multi-level Parking, Public Market
City of San Fernando,Pampanga
Various References
Slaughterhouse, Town Center
City of San Jose del Monte, Bulacan
DILG P4 Slaughterhouse/Integrated Transport
Terminal
www.ppp.gov.ph
PPPCenter.Philippines
@PPP_Ph
Public-private-partnership-Center-of-the-philippines
PPPPinas
For further information, please visit:
For inquiries, kindly e-mail:
THANK YOU!
Pro-People
Reference:BOT Law IRR Section 2.3 List of Priority Projects
Concerned Agencies/LGUs are tasked to prepare their infrastructure ordevelopment programs and to identify specific priority projects that may befinanced, constructed, operated and maintained by the private sector…
The List of Priority Projects shall be consistent with the Philippine DevelopmentPlan (PDP), and Provincial Development and Physical Framework Plan (PDPFP).
The Public Investment Program (PIP), and the Comprehensive IntegratedInfrastructure Program (CIIP) shall be deemed as the list of National PriorityProjects. The Provincial Development Investment Programs (PDIPs)/ LocalDevelopment Investments Programs (LDIP) shall be deemed as the List of LocalPriority Projects.
Back to Pro-People
Pro-People
Suggested reference:PPP Governing Board Policy Circular 03-2015: Institutionalization of
Best Practices in the Public-Private Partnership (PPP) Process
Back to Pro-
People
Pro-Accountability
Example:
The LGU PPP Implementing Office shall be led by the Department Head ofthe Sectoral Office concerned. For purposes of PPP implementation, the LocalChief Executive (LCE) shall designate representatives from the following Officesto provide support:
Office of the LCE; Legal; Planning and Development; Accounting and Finance; Engineering; Environment; and Social Welfare and Development
Go to Roles of PPP IO
Pro-Accountability
Development Phasea) Prepare and conduct pre-investment activities
such as pre-feasibility studies, business case,feasibility studies, among others;
Approval Phasea) Prepare the necessary documents that may be
required by the approving body, includingcoordination with the local Sanggunian for theneeded resolution, ordinance, endorsement ofthe project, and authority to the LCE for theproject;
b) Submit to the LCE the project for endorsementto the appropriate approving body pursuant tothe LGU’s Public-Private Partnership Code
Procurement Phase
a) Assist the Prequalification, Bids and AwardsCommittee (PBAC) in preparing tenderdocuments including pre-qualification andbidding documents and draft contract;
b) Assist the PBAC in the conduct of pre-qualification, bidding, evaluation of bids andrecommendation for award;
b) Facilitate the compliance of all the requisitepermits and approval prior to implementation;and
c) Facilitate the conduct of PPP project investor’sforum and ensure the widest dissemination ofinformation relative thereto.
Implementation Phasea) Monitor and evaluate the implementation of PPP
project; andb) Prepare and submit reports to PPP Committee
on the implementation of the PPP projects;c) Submit the original signed copy of PPP contract
and other project-related documents to theApproving Body and the PPP Center within five(5) calendar days after signing thereof; and
d) Prepare status and implementation reports ofPPP Projects and submit the same to the PPPCenter. The reports shall be in accordance withthe format, contents and other guidelinesprescribed by the PPP Center.
The LGU PPP Implementing Office shall perform the following functions:
Back to Pro-Accountability
Pro-Change
Suggested reference:PPP Governing Board Policy Circular 07-2015: PPP Monitoring
Framework and Protocols
Implementation
Selection of Project
Proponent
Review and Approval
Identification and Preparation
1
2
3
4Pre-Construction Construction O&M Asset Transfer
Establishment of systems and protocols in tracking and documenting projects delivery
Creation of a central database for PPP project documents
Institutionalization of Project Steering Group (PSG), Technical Working Group (TWG), and EDC Subcommittee on PPP Projects Execution
Regular issuance of Project Monitoring Reports (monthly for projects implemented from 2010-onward; quarterly for projects implemented before 2010)
Back to Pro-Change
Pro-Value
Risk Allocation Principle“Allocating the risk to the party which can better manage it, can reduce
the project’s overall cost to government”
Suggested Reference:Investment Coordination Committee-Cabinet Committee (ICC-CC) adopted
Generic Preferred Risk Allocation Matrix (GPRAM)
Back to Pro-Value
Pro-Learning
Example:DILG MC 2016-120 Annex 1 Sec. 38 Capability Building Program
The LGU may also utilize the PPP Center’s resources for projectdevelopment, capacity building, knowledge management and projectmonitoring
Back to Pro-Learning
Pro-Participation
Suggested reference:
PPP Governing Board Policy Circular 10-2016: Public Consultation and
Engagement for PPP Projects
Back to Pro-Participation
Policy Declaration
Sec. 20, Art. II of the 1987 Constitution“Section 20. The State recognizes the indispensable role of the private sector, encourages privateenterprise, and provides incentives to needed investments.”
“It is the declared policy of the State to recognize the indispensable role of the private sector asthe main engine for national growth and development and provide the most appropriate favorableincentives to mobilize private resources for the purpose.”
R.A. No. 7160 or the Local Government Code (LGC)Art. 400 of the LGC IRR-Financing, Construction, Maintenance and Management of Infrastructure Projects by the PrivateSector under BOT Law mechanism.
R.A. No. 6957 as amended by R.A. No. 7718 (Amended BOT Law) 2nd par., Section 1.2 of theBOT Law IRR:“For LGU projects, concerned LGUs may formulate additional guidelines/procedures not in conflictwith this Act and these Implementing Rules and Regulations and pertinent provisions of R.A. No.7160 (Local Government Code of 1991) and its implementing rules and regulations.”
EXAMPLES:
Back to Policy Declaration