PUBLIC WORKS BOOSTER: Philippine infrastructure build-up is expected to get a huge boost. That would be thanks in part to the freshly-minted Public-Private Partnership (PPP) Code, also known as Republic Act 11966, a new law that came into effect on December 23, 2023. President Ferdinand Marcos Jr. signed the measure into law on December 5, 2023.
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$46.18 BILLION PPP PROJECTS IN THE PIPELINE: What are PPPs? In general, a public-private partnership is a partnership between the public sector and the private sector for the purpose of delivering a project or a service traditionally provided by the public sector. Essentially, it's a government project bankrolled by private money. There are currently 181 PPP projects worth Php2.6 trillion ($46.18 billion) being implemented in the country.
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1,393 EIFFEL TOWERS: Of the total, 121 Philippine PPP projects are at the national level and 60 are local PPPs, according to the Manila-based PPP Centre. The $46 billion earmarked so far by private investors for PPPs is about 1,400 times bigger than what it originally took to build the Eiffel Tower in Paris (about $33 million in today’s money, according to one estimate). The 330-metre tower is Europe's most prominent monument.
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PROJECTS COVERED BY NEW LAW: Everything from public markets, transport terminals, expressways, airports, power (renewable energy) projects, bridges, among others. A view of the Manila Skyway, one of the longest elevated bridges in the world.
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WHAT’S NEW WITH RA 11966: The new code, which kicks in on December 23, 2023, amends the rules on unsolicited proposals submitted by the private sector for a PPP project to the government. In particular, the comparative challenge period for unsolicited proposals has been extended to 90 days to one year from only 60 days previously.
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COMPARATIVE CHALLENGE, WHAT IT MEANS: Under a comparative challenge, the original proponent would have the right to match offers by other firms for the project. The new PPP Code provides a longer “comparative challenge period” for unsolicited proposals. “We made it more competitive to protect public interest ,” explained PPP Centre Executive Director Jeffrey Manalo. “The idea was 90 days will be short enough for a public market or a transport terminal, but it is definitely not enough for a Php100-billion airport project.” Photo shows the inauguration of Kalayaan Bridge lilnking Ortigas Centre and Bonifacio Global City, two major suburbs of Manila.
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FLEXIBLE: The new law provides more flexibility of up to one year (12 months) to determine the appropriate challenge period. Manalo said that, 60 days (under previous legislation) is not be enough to come up with a competing proposal. “The extension makes it more competitive,” he said.
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COLLABORATION: The PPP Code aims to establish a stable and predictable environment for collaboration between the public and private sectors. It intends to address infrastructure gaps and free up resources for other government proje
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UNIFICATION OF LEGAL FRAMEWORKS: The new law unifies the fragmented PPP legal frameworks in the country under a single governing law. The PPP Governing Board (PPPGB) is tasked with crafting the implementing rules and regulations (IRR) of the PPP Code within 90 calendar days of its effectivity. CCTV monitors show the flow of traffic at North Luzon Expressway (NLEX) tollgates. The Php23. 2-billion NLEX-SLEX Connector Road is a joint project by the Philippine Government and Manila North Tollways Corp (MNTC) under a PPP deal.
Image Credit: Twitter | @NLEXexpressways
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BEST PRACTICES: The new law incorporates best practices accumulated over decades of experience with the Build-Operate-Transfer Law. This is expected to result in better infrastructure projects and enhanced risk mitigation during implementation. Map shows the route of the South Luzon Expressway II, a PPP project. Most Philippine road users still use cash for road tollcharges, though an increasing number use RFID chips.
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PROACTIVE MEASURES: In anticipation of the implementing rules and regulations (IRR) issuance, the PPPGB, chaired by Secretary Arsenio Balisacan of the National Economic Development Authority (NEDA), approved interim guidelines on December 21. These guidelines provide critical guidance to prevent delays in ongoing PPP projects due to the new law.
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INTERIM GUIDELINES: The interim guidelines offer clarity on applicable rules for projects after the PPP Code becomes effective but before the promulgation of the IRR. They will remain valid until superseded by subsequent guidelines or the IRR's effectivity.
Image Credit: Department of Public Works and Highliways (DPWH)
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PRIVATELY FUNDED: The implementing rules and regulations (IRR) of the new code are expected to be issued by March 23, 2024 and to take effect by early second quarter in 2024. A drone shot shows a night-time view of the Cebu-Cordova Link Expressway (CCLEX) connecting the islands of Cebu and Mactan, in central Philippines, a showpiece for a PPP project in the Asian country.
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SUSTAINABLE BRIDGE POWER: The Php60-million ($1.07 million) on-grid and hybrid solar farm has emerged at the base of the 8.9-km Cebu-Cordova Link Expressway, which was opened in April 2022. Its mission: to infuse life into the bridge, ensuring the sustainable legacy of what is currently the nation's longest and Cebu's most recent landmark.
Image Credit: CCLEX Corp.
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