Question & AnswerQ&A (Republic Act No. 6957)
The State recognizes the indispensable role of the private sector as the main engine for national growth and development and aims to provide appropriate incentives to mobilize private resources for this purpose.
It is a contractual arrangement where a contractor constructs, finances, operates, and maintains an infrastructure facility, charges users tolls or fees to recover costs and profit, and transfers the facility to the government after a fixed term not exceeding fifty years.
Foreign constructors must employ Filipino labor where Filipino skills are available, government financing for foreign or foreign-controlled contractors may not exceed 20% of project cost, and financing from foreign sources shall not require a government guarantee.
After project approval, the head of the infrastructure agency or local government unit must publish notices inviting prequalified contractors to participate in public bidding. Contracts are awarded to the lowest complying bidder based on bid criteria for build-operate-transfer or build-and-transfer arrangements.
The government infrastructure agency or local government unit concerned approves the fees, except tolls for national highways, roads, bridges, and public thoroughfares which are approved by the Toll Regulatory Board.
The term shall not exceed fifty (50) years as proposed in the bid and incorporated in the contract.
The government shall compensate the contractor for actual expenses incurred plus a reasonable rate of return up to the rate stated in the bidding documents, with insurance coverage for the government's interest.
It is attached to the Department of Public Works and Highways and chaired by its Secretary; it approves tolls for national highways and regulates related charges.
Contractors must construct, operate, and maintain the facility according to approved plans, specifications, and standards, ensuring maintenance and repair throughout the contract duration.
A committee composed of representatives from the Department of Public Works and Highways, Department of Finance, Department of Local Government, National Economic and Development Authority, and accredited private construction industry organizations.