The interagency Investment Coordination Committee (ICC) is requiring firms pitching infrastructure projects to submit latest financial documents showing they can carry out public-private partnership (PPP) projects despite the challenges of the COVID-19 pandemic.
“The latest audited financial statements need to be submitted for determining financial capability to provide equity in terms of the proponent’s net worth,” the ICC’s updated checklist for unsolicited PPP proposals dated July 16 said.
National Economic and Development Authority (Neda) Undersecretary Jonathan Uy last Friday said the updated checklist reflected what was required in the Build-Operate-Transfer (BOT) Law and its implementing rules and regulations (IRR), which mandated assessment of project proponents’ financial, legal, and technical capability.
Presidential adviser on flagship programs and projects Secretary Vivencio Dizon confirmed to the Inquirer that this updated requirement would ensure that PPP proponents could implement their proposal once they are able to hurdle the offer of another bidder in a Swiss challenge.
But despite the ill effects of the pandemic on businesses’ financials, Dizon said there remained private-sector interest to participate in the Duterte administration’s ambitious “Build, Build, Build” program.
“There’s still a lot of interest, especially since these are long-term projects, and the financing options are still very good,” Dizon said.
Dizon added the government remained “very willing to provide reasonable terms, given the present challenges.”
To sweeten deals and attract more participation, the government wanted to revisit PPP project terms and possibly grant private sector proponents lengthier contracts to allow them to recoup their investments in consideration of the economic impact of the pandemic.
The government was also amenable to temporarily deferring its revenue share from PPPs until these projects’ operations normalized.
The updated checklist for unsolicited PPP projects also required submission of the terms of any proposed joint and several (or solidary) liability undertaking, for projects to be undertaken by a consortium of firms.
Citing the BOT Law’s guidelines, the ICC said, “[if] a proponent is a consortium, the members or participants thereof shall be disclosed during the pre-qualification stage and shall undergo pre-qualification.” They should also “execute an undertaking in favor of the agency/LGU [local government unit] that if awarded the contract, they shall bind themselves jointly and severally liable for the obligations of the project proponent under the contract,” the ICC said.
Late last year, a checklist of documentary requirements for unsolicited PPP proposals was issued to avoid a repeat of past incidents when incomplete submissions prompted the interagency body defer or reject projects, like Megawide Corp.’s offer to rehabilitate the Ninoy Aquino International Airport (Naia).