JV deal: Is it beneficial to Iloilo City?
ILOILO City – The city government is expected to enter into a joint venture ( JV) agreement with the Cebu Landmasters Inc. ( CLI) for the implementation of the proposed 300- hectare land reclamation project.
This public-private partnership ( PPP), with an estimated cost of P50 billion, is seen to further boost the city’s economic growth, create employment and attract more investors and businesses.
It will also complement i ts “smart city” goal by becoming a“globally competitive business hub of technologically advanced manufacturing and state-ofthe-art commercial centers.”
How should the city government and CLI carry out the project? Is the deal beneficial to the city?
The newly-enacted Republic Act 11966, or the Public- Private Partnership (PPP) Code of the Philippines, outlined guidelines on how the implementing agency and project proponent carry out such projects.
It took effect on Dec. 23, 2023. Its implementing rules and regulations ( IRR) will take effect on April 7, 2024, after complying with the publication requirement.
Under t he PPP Code, the implementing agency shall consider significant issues and concerns in the implementation of the project.
These include the legal, technical, economic, financial, and commercial feasibility of the project, as well as value for money, climate resilience and sustainability; and social and environmental safeguards.
The development of such a project shall commence only after the conduct of stakeholder consultation, the law provides.
The implementing agency shall secure first the approval of their respective city or town council and the local development councils.
The agency is also authorized to“identify, develop, assess, evaluate, approve, negotiate, award, and undertake” the publicpartnership projects.
The approval by the National Economic and Development Authority (NEDA) is necessary for the proposed project worth more than P15 billion.
How will the private entity earn from the venture?
Under the law, the private partner may recover its investment and earn “reasonable profit” through revenue-based schemes such as collections from users, reasonable tolls, fares, fees, and rentals, among other charges as stipulated in the agreement.
At the end of the PPP under the joint venture contract, all properties covered by such agreement shall be transferred or reverted to the implementing agency.
If the government decides to divest its interest in the joint venture “in the best interest of the public,” the PPP contracts may allow the private sector to take over the undertaking of the project in its entirety.
Likewise, t he private partner may also divest i ts ownership, rights, or interests in a PPP project subject to the approval of the implementing agency and after the lock-in period.
The implementing agency may also divest i ts ownership, rights, or interests in the projects subject to the approval of the state governing bodies and existing laws.
Except for the Supreme Court, the l aw prohibits lower courts from issuing res training orders, preliminary injunctions, or similar provisional remedies against the implementing agency or the PPP Center to restrain, prohibit, or compel them during the evaluation of unsolicited proposals, bidding, awarding of contract, or construction, among others.
The implementing agency is also mandated to adopt a full public disclosure of all its transactions involving public interest and keep an open, fair, transparent, and
competitive selection i n securing private investment in PPP projects.
Iloilo City’s proposed reclamation project will i nvolve t wo major si t e developments, according to Metro Iloilo- Guimaras Economic Development Council (MIGEDC).
The first site is from the historic Fort San Pedro in the downtown area that will span up to the Iloilo Fishing Port Complex in the Molo district.
The other site is at the coastal area in Barangay Bito-on, Jaro district, which is filled with food enterprises that will complement the city’ s gastronomic culture and fresh seafood abundance./