Question & AnswerQ&A (Republic Act No. 7718)
The State recognizes the indispensable role of the private sector as the main engine for national growth and development and aims to mobilize private resources for financing, constructing, operating, and maintaining infrastructure and development projects, providing appropriate incentives including minimum government regulations and specific government support.
These are infrastructure or development projects normally financed and operated by the public sector but now wholly or partly implemented by the private sector. Examples include power plants, highways, ports, airports, telecommunications, housing, government buildings, tourism projects, markets, and other related projects authorized by the appropriate agency.
A BOT arrangement involves the project proponent financing, constructing, operating, and maintaining an infrastructure facility for a fixed term (not exceeding 50 years), during which it collects tolls or fees to recover costs. At the end of the term, the facility is transferred to the government.
The facility operator must be Filipino or, if a corporation, must be duly registered and owned at least 60% by Filipinos.
Unsolicited proposals are projects involving new concepts or technologies not on the priority list that may be accepted by government agencies or local government units on a negotiated basis, provided no direct government guarantee, subsidy, or equity is required and competitive proposals have been solicited without alternative submissions.
Public bidding must be advertised in at least two national and one local newspaper for three consecutive weeks. It follows a two-envelope/two-stage system: one for technical proposals and another for financial proposals, with contracts awarded to the lowest and most favorable compliant bidder.
If the government revokes, cancels, or terminates the project without fault by the proponent, the government must compensate the proponent for actual expenses plus a reasonable rate of return not exceeding the contract terms, with insurance provided for government interests.
The Toll Regulatory Board, attached to the Department of Public Works and Highways and chaired by its Secretary, regulates toll rates and oversees toll-related issues concerning infrastructure projects.
Projects exceeding one billion pesos are entitled to incentives under the Omnibus Investments Code upon registration with the Board of Investments.
The Coordinating Council of the Philippine Assistance Program (CCPAP) is responsible for coordination and monitoring, with regional and local government units required to submit periodic status reports to CCPAP.