QuestionsQuestions (Republic Act No. 6957)
To recognize the indispensable role of the private sector as the main engine for national growth and development and to provide the most appropriate favorable incentives to mobilize private resources for infrastructure development.
A contract where the contractor finances and constructs an infrastructure facility, operates and maintains it for a fixed term while charging tolls/fees/rentals/charges to recover costs plus a reasonable return, and transfers the facility to the concerned government agency or LGU at the end of the fixed term, not exceeding 50 years.
A contract where the contractor finances and constructs the infrastructure facility and then turns it over after completion to the concerned government agency or LGU, which pays the contractor its total investment plus a reasonable rate of return.
When the infrastructure project includes critical facilities which, for security or strategic reasons, must be operated directly by the Government.
The ownership structure of the contractor must comply with the Constitution (i.e., foreign participation and ownership rules consistent with franchise requirements).
The citizenship of each stockholder in the corporate investors is the basis for computing Filipino equity in the BOT corporation.
Filipino labor must be employed or hired in construction phases where Filipino skills are available.
Financing of a foreign or foreign-controlled contractor from Philippine government financing institutions shall not exceed 20% of the total cost of the infrastructure facility/project.
Financing from foreign sources shall not require a guarantee by the Government or by government-owned or controlled corporations.
A contractual arrangement where the supplier of equipment and machinery operates the facility (if the interest of the Government so requires), including technology transfer and training to Filipino nationals.
All government infrastructure agencies, including government-owned and controlled corporations and local government units, may enter into such contracts with duly prequalified private contractors.
Agencies must give wide publicity (including publication in national newspapers once every 6 months and official notification of registered contractors). Lists of national projects must be part of medium-term infrastructure programs and must be approved by Congress. Local projects must be submitted to local development councils for confirmation/approval.
After project approval, the head of the agency/LGU must publish a notice inviting prequalified contractors: once every week for 3 consecutive weeks in at least two newspapers of general circulation and at least one local newspaper circulated in the project area.
By awarding the contract to the lowest complying bidder based on the present value of its proposed tolls, fees, rentals, and charges over the fixed term, subject to minimum design and performance standards.
By awarding the contract to the lowest complying bidder based on the present value of its proposed amortization payment schedule, subject to minimum design and performance standards; and a Filipino constructor with an equally advantageous bid must be given preference.
Repayment is through authorization to charge and collect tolls/fees/rentals/charges not exceeding those proposed in the bid and contract, within a fixed term not exceeding 50 years. The agency/LGU must approve the fairness and equity of the charges, except that tolls for national highways/roads/bridges/public thoroughfares require approval by the Toll Regulatory Board.
Tolls/fees/rentals/charges may be adjusted during the franchise lifetime using a formula related to official government price indices, which must be defined before bidding (in bidding documents) and incorporated into the contract.