Question & AnswerQ&A (EXECUTIVE ORDER NO. 298)
The APT is authorized to enter into alternative and/or intermediate modes of privatization, including joint ventures, B-O-T schemes, management contracts, lease-purchase agreements, and securitization, to conserve, manage, rehabilitate, and dispose of assets transferred to it for privatization.
The alternative modes of privatization authorized are: (1) Joint Venture; (2) B-O-T (Build-Operate-Transfer) Schemes; (3) Management Contract; (4) Lease-Purchase; and (5) Securitization.
Joint Venture refers to an arrangement where the APT-held asset carries on a specific business enterprise with another person or entity for mutual benefit, using combined resources through either a joint venture corporation or separate personalities, before the final privatization or referral to the proper government agency.
The B-O-T scheme involves finding proponents who undertake infrastructure and/or development projects using APT-held assets under arrangements provided by Republic Act No. 6957, as amended, which are then implemented by the proper government agency following Proclamation No. 50.
A management contract is an agreement whereby a corporation undertakes the management or operation of all or substantially all of the business of an APT-held asset. It may also be called a service contract or operating agreement.
Lease-purchase allows the lessee of an APT-held asset to have the right to purchase the asset during or at the end of the lease period, with the price and terms of purchase clearly stated to validate the purchase option.
Securitization involves changing or modifying the form of the APT-held asset, such as converting physical assets into equities or certificates of participation, subject to the provisions of Section 2 of Republic Act No. 7886.
Yes, the exercise of this authority is subject to pertinent laws and regulations, ensuring legal compliance when engaging in alternative or intermediate modes of privatization.
All contracts and obligations created through these modes will be handled by a special committee, created by the President pursuant to Republic Act No. 7886, after the expiration of the APT's term.