Lawmaker seeks change to BOT Law
Camarines Sur Rep. Luis Raymund Villafuerte has filed a bill that seeks to amend the Build- Operate- Transfer (BOT) Law to allow local government units ( LGUs) to implement their own public- private partnership ( PPP) programs.
He said the bill would institutionalize the PPP mode of financing for both national government and LGU projects.
“Although our country is one of the pioneers in private sector participation in major infrastructure projects in Asia with the enactment of the BOT Law, we have yet to fully utilize the advantages of the PPP as shown by our status as among the laggards in the region in terms of public infrastructure,” he said.
“This is why we need to introduce amendments to the BOT Law. We need to ensure that our LGUs can take advantage of the opportunities available to them in implementing their own PPPs, especially now that the Duterte administration has committed to dramatically increase spending on infrastructure over the next five years,” he said.
Villafuerte noted that the administration plans to spend P8 trillion on public infrastructure between now and 2022 to sustain high growth and spared its benefits among all sectors.
His proposed changes in the BOT law include strengthening the PPP institutional framework, providing financial and technical support, mandating transparent and competitive bidding, setting project standards, and granting incentives for PPP projects.
“PPPs could be viable sources of financing to help the government fill the infrastructure gap at the local level should LGUs be armed with enough knowledge and expertise on how to effectively carry out this funding arrangement,” the former Camarines Sur governor said. “We need to arm our LGUs with the technical expertise to properly prepare, monitor and implement PPP projects. Our LGUs can be able partners, rather than obstacles, to the Duterte administration’s infraled growth agenda if we provide them with the tools they need to implement infrastructure projects in partnership with the private sector,” he said.
Villafuerte cited a report by the Asian Development Bank (ADB), which noted that many LGUs encounter snags in implementing PPP projects related to infrastructure, power generation and bulk water supply in their respective communities because of the lack of technical and financial resources.
He quoted the report: “The lack of guidelines for LGUs forming joint ventures with the private sector has been the source of uncertainties for LGUs interested in that particular form of PPP, which does not fall under the ambit of the Build- Operate- Transfer Law, as amended.”
The report further stated that LGUs could enact their own PPP codes to include fiscal and non-fiscal provisions to better attract investors.
Villafuerte, who is vice chairman of the House Committee on Local Government, said empowering LGUs in implementing PPP projects should be part of the preparatory measures that the national government should prioritize in paving the way for the switch to a federal system of government.
“Federalism will empower LGUs to decide for themselves and craft their own development agendas customized in accordance to their respective resources, problems, development paths and potentials for growth,” he said.
He said under a federal system, LGUs would be able to retain a huge chunk of their respective incomes and turn over only a portion to the federal government.
“This setup will lead to genuine industrial and agricultural growth because LGUs would by then have more powers to manage their funds and resources, instead of merely waiting for so-called ‘Imperial Manila’ to give the go-signal on how to spend their share of government revenues,” he added.
Speaker Pantaleon Alvarez has said the House would start working on the proposed shift to the federal system during the first quarter of this year.