Congress franchise eyed for PPP, BOT proponents

A bill filed by Speaker Pantaleon Alvarez requires proponents of projects under the build-operatetransfer (BOT) law and the public-private partnership (PPP) program to seek franchises from Congress.

Under House Bill 5270, which seeks to amend Republic Act 6957, operators of toll roads, water distribution concessions, airports and rail facilities, among other infrastructure projects, would need to apply for franchises from the legislature.

Legislative franchises emanate from the House of Representatives.

Previous administrations have awarded to private companies the operation of public utilities and infrastructure.

The most recent award was to Light Rail Manila Corp., a joint venture between Ayala Corp. and Metro Pacific Investments Corp. The joint venture firm operates Light Rail Transit (LRT) line 1, which runs from Taft Avenue in Pasay City to Roosevelt Avenue in Quezon City through Rizal Avenue and EDSA- Monumento in Manila and Caloocan City.

Previously, the government awarded the operation and maintenance of North Luzon Expressway to a Lopez company.

The private firms will have to seek franchises from Congress if the Alvarez bill is passed into law.

Alvarez said RA 6957 automatically grants the winning project proponent a franchise to “operate and maintain the facility, including the collection of tolls, fees, rentals, and charges.”

“This arrangement, however, has been suspected of serving private interest instead of that of the general public,” he said.

His bill removes the automatic grant of franchise. Instead it requires a project proponent to first secure a legislative franchise for public utilities from Congress for it to qualify as a bidder and in order to operate and maintain such facilities, including the collection of fees.

In the case of a BOT arrangement, the bill provides that the contract shall be awarded to the proponent who, having satisfied the minimum requirements, has submitted the bid that is most advantageous to the government and provides the most favorable terms for the project.

However, when a Filipino contractor submits an equally advantageous bid, with exactly the same price and technical specifications as those of a foreign contractor, the former shall be given preference.

The legislative franchises for public utilities shall be subject to amendment, alteration or repeal by Congress, when the common good requires it.

The Alvarez measure limits the term of such franchises to 25-years, subject to a renewal.

Earlier, Alvarez warned the Department of Transportation (DOTr) not to push through with the intended bidding for the development, operation, and maintenance of five unbundled airport projects.

These are the BacolodSilay, Davao, Iloilo, Laguindingan, and New Bohol (Panglao) airports, whose operation and maintenance the DOtr plans to award to private firms under the PPP program.

Alvarez claimed that the DOTr privatization plan “looks disadvantageous to the government.”

He has also asked the DOTr to build the LRT-metro rail transit common station at its old site near SM-City NorthEdsa Annex instead of its new location in between SM City-North and the Ayalas’ Trinoma Mall.