Private Sector Infrastructure Projects Act

Build-Operate-and-Transfer (BOT) Scheme:
- Contractor undertakes construction, financing, operation, and maintenance of an infrastructure facility.
- Operates facility over a fixed term (max 50 years) and collects tolls, fees, rentals to recover costs plus reasonable returns.
- Transfers facility to government/local unit at term end.
- Financing can be from foreign/domestic sources; foreign financing from Philippine government institutions capped at 20%.
- Ownership and citizenship rules for contractors based on the Constitution.
- Filipino labor utilization required where Filipino skills are available.
- No government guarantee required for foreign financing.
- Includes supply-and-operate arrangements with technology transfer and training.
Build-and-Transfer (BAT) Scheme:
- Contractor finances and constructs infrastructure, then issues turnover to government/local unit.
- Government pays total investment plus reasonable return.
- Applicable for any infrastructure, including those needing direct government operation for security reasons.

Government infrastructure agencies, including GOCCs and local governments, authorized to contract prequalified private contractors.
Contracts cover financing, construction, operation, and maintenance under BOT or BAT schemes.

Infrastructure agencies must include priority projects suitable for private sector participation in programs.
Obligation to publicly announce eligible projects every six months in national newspapers and notify registered contractors.
National projects must be part of medium-term programs approved by Congress.
Local projects require local development council confirmation/approval.

Upon project approval, agencies/local governments must publish bidding notices for three consecutive weeks in at least two national and one local newspaper.
BOT Contracts: Awarded to lowest complying bidder based on present value of proposed tolls, fees, rentals, charges.
- Automatically grants franchise to operate, maintain, and collect fees.
BAT Contracts: Awarded to lowest complying bidder based on present value of amortization payment schedule.
- Filipino constructors given preference if bids are equally advantageous.
Contracts submitted to Congress for information.

Contractors entitled to reasonable return covering investment and operational costs per approved bid and contract terms.
BOT Scheme: Contractor authorized to charge reasonable tolls/fees not exceeding bid proposal; government or Toll Regulatory Board approval required.
- Toll collection fixed term not exceeding 50 years.
- Contractor responsible for maintenance according to standards during franchise.
BAT Scheme: Repayment through government amortization payments as proposed and contracted.
For land reclamation or industrial estates, repayment may include a portion of the land or estate granted, subject to constitutional ownership rules.

Government must compensate contractors for expenses plus reasonable returns if contracts revoked, cancelled, or terminated without contractor fault.
Government interests insured by GSIS or accredited insurance entities; insurance cost included in bidding terms.
Toll and fee adjustments governed by pre-defined formula linked to official government price indices included in contract.

Contractors must construct, operate, and maintain projects per approved plans, specifications, and costs.
Government infrastructure agencies maintain technical supervision.

A multi-agency committee including DPWH, DOF, DLG, NEDA, and private sector representatives responsible for formulating rules and regulations.
Rules cover bid evaluation, audit provisions by COA, and contract cancellation conditions.

The Act takes effect 15 days after publication in two newspapers of general circulation.