Gov’t auctions to be limited to single rebidding — NEDA

THE GOVERNMENT will only allow a maximum of one rebidding in the procurement process, and will shorten the bidding period in public-private partnership (PPP) projects, to reduce delays in the administration’s infrastructure buildup, the National Economic and Development Authority (NEDA) said.

Socioeconomic Planning Secretary Ernesto M. Pernia said during a BusinessWorld roundtable on Friday that the government will do away with multiple rebiddings in an effort to halve the current 30-month procurement process before the project breaks ground.

“Well, the plan is to bring it down to 15 months, so cut it into half,” said Mr. Pernia.

“We just need to shorten the bidding period, instead of giving them six months, we can cut it down to three months. And instead of allowing so many rebiddings… maybe we will just cut it to one rebidding at the most, if the rebidding is really warranted,” he said.

“Because sometimes for flimsy reasons, the losing bidder questions the winning bidder, and that delays (projects).” he added.

The government has not been to keen on PPPs due to the “bad experience” of the previous administration, as big-ticket projects were bogged down due to conflicts in the negotiations between participating firms, such as the LRT- MRT common station dispute that started in 2014 between the Ayala group and the SM group — which has just been resolved this year.

But conflicts were not exclusive between participating bidders, but also with the government.

Megawide Construction Corp. abandoned its PPP contract for the P8.69 billion modernization project of the Philippine Orthopedic Center ( POC) after the Health department took “too long,” and that it “had failed to convince” the board of the National Kidney and Transplant Institute to allow the use of the land where POC stands.

Due to this, economic managers moved to do away with the PPP as the primary financing tool by introducing its so-called “hybrid PPP,” where projects are initiated by either the government funding or Official Development Assistance ( ODA), and reserving the PPP component for the operations and maintenance concessions.

The bidding for the operations and maintenance stage will be initiated during the construction phase, according to Mr. Pernia.

But despite the shift of the financing scheme, the government will inevitably still be faced by right-of-way issues in land acquisition for projects.

Mr. Pernia said that the government will be capitalizing on Republic Act 10752 or An Act Facilitating the Acquisition of Right- Of-Way Site or Location for National Government Infrastructure Projects to be able to clear the sites even before the construction starts, as well as Republic Act 8975 or the Act to Ensure the Expeditious Implementation and Completion of Government Infrastructure Projects by Prohibiting Lower Courts from Issuing Temporary Restraining Orders (TROs).

“There’s already a law that allows government to pay market price to the owner of the land. The problem before was the government would try to really minimize what to pay. But now, it will be sold at market price. And also the other way even before construction starts, acquisition of right of way should already be in the works,” he said.

“And also TROs will now be minimized. TROs cannot be issued on projects with national significance. But then it’s just the Supreme Court,” he added.

Moreover in the PPP process, Mr. Pernia said that the government will be moving away from the practice of seeking premiums offered by bidders. “We don’t want the demands for sovereign guarantee, and subsidies. And then no conditions. The policy is were going to make the users not burdened by high fees,” said Mr. Pernia.

“You can be sure that the fees, charges will be more bearable to consumers. The private ( sector), they really want to recover their investment,” he added.

Still, Mr. Pernia acknowledges the need for private sector cooperation in government projects, given its expertise in engineering and design.

“So the mechanism is that the government finances, and once the projects are about to start construction, its going to be bid out to private sector contractors. Actually, any project financed by the government, construction is going to be private sector. So there’s going to be a lot of private sector activity,” he said. —