House eyes review of PPP law amid questions over DOTr airport project deals- Alvarez

January 27, 2017

House Speaker Pantaleon Alvarez  said in a statement Friday the House of Representatives is eyeing a review of the law on the Public Private Partnership program amid concerns upcoming airport project deals are disadvantageous to the government.

According to the Public Private Partnership Center website, “Republic Act (RA) 6957 as amended by RA 7718 (commonly known as the Build-Operate-Transfer Law) and its Implementing Rules and Regulations (IRR) is the legal framework when the government enters into PPP”.

“That’s why we said we should revisit the PPP because it seems this is not to the advantage of government,” Alvarez said in a radio interview.

Alvarez was referring to the announcement of the Department of Transportation  (DOTr) inviting bidders for the development, operations and maintenance of five unbundled airport projects, namely  Bacolod-Silay, Davao, Iloilo, Laguindingan, and New Bohol (Panglao) under the PPP scheme.

Alvarez pointed out that winning bidders won’t have to spend much to maintain and develop these airports built using government funds, especially those which are still relatively new.

The investment to operate and maintain (these facilities) are not that big. This is just cosmetics. Sometimes this is maintenance of comfort rooms or the terminal would be re-arranged,” said Alvarez.

Alvarez said under the scheme would grant winning bidders the exclusive right to operate and maintain the airport for 30 and even up to 35 years, which is longer than the 25 year franchise granted by Congress.

Alvarez also reiterated the winning bidders must secure a franchise from Congress to  operate the airports, brushing aside the contention of the DOTr that under the BOT law the grant of such franchise is deemed automatic.

“If this is in the BOT Law, perhaps this is an unconstitutional provision. Congress can only give franchise lasting 25 years,” said Alvarez.

Article XII, Section 11 of the 1987 Constitution provides that “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years.”

Alvarez said a longer period granted to winning bidders would practically tie the hands of the government.

He explained when it becomes necessary to expand or add additional runways before the 35-year contract, the winning bidder can hinder the expansion.

To avert this situation Alvarez insisted winning bidders would be required to obtain legislative franchise to operate and maintain these airports. DMS