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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

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SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILLNO.__ 52°70

Introduced by REPRESENTATIVE PANTALEON D. ALVAREZ

EXPLANATORY NOTE

This bill seeks the amendment of Republic Act (R.A.) No. 6957, as
amended by R.A. 7718, otherwise known as, “An act authorizing the
financing, construction, operation and maintenance of infrastructure
projects by the private sector and for other purposes.”

Presently, Sec. 5. of R.A. 6957, as amended, 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 suspect of serving private interests
instead of that of the general public.

As an additional safeguard in order to protect the Filipino people,
this 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 construct,
“operate and maintain the facility, including the collection of tolls, fees,
rentals, and charges...”

Entities presently operating and maintaining public utilities shall be
given one (1) year from the effectivity of this law to secure a legislative


franchise for public utilities from Congress in order to continue their
operations. Further, there shall be a limit to the validity period of said
franchise. It shall only be valid for a period of twenty-five (25) years subject
to renewal.

In view of the foregoing, approval of this bill is highly and earnestly
recommended.

P. LEON D. AREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.__§2'20

Introduced by REPRESENTATIVE PANTALEON D. ALVAREZ

AN ACT FURTHER AMENDING REPUBLIC ACT. NO. 6957, AS
AMENDED BY R.A 7718, OTHERWISE KNOWN AS “AN ACT
AUTHORIZING THE FINANCING, CONSTRUCTION, OPERATION
AND MAINTENANCE OF INFRASTRUCTURE PROJECTS BY THE
PRIVATE SECTOR, AND FOR OTHER PURPOSES”

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 5 of Republic Act No. 6957, as amended by R.A.
7718, is hereby further amended to read as follows:

“SEC. 5. Public Bidding of Projects. - THE PROJECT
PROPONENT MUST FIRST SECURE A _ LEGISLATIVE
FRANCHISE FOR PUBLIC UTILITIES FROM CONGRESS IN
ORDER TO QUALIFY AS A BIDDER AND IN ORDER TO
CONSTRUCT operate and maintain the facility, including the
collection of tolls, fees, rentals, and charges in accordance with
Section 5 hereof.

Upon approval of the projects mentioned in Section 4 of
this Act, the head of the infrastructure agency or local


government unit concerned shall forthwith cause to be
published, once every week for three (3) consecutive weeks, in
at least two (2) newspapers of general circulation and in at least
one (1) local newspaper which is circulated in the region,
province, city or municipality in which the project is to be
constructed, a notice inviting all prospective infrastructure or
development project proponents to participate in a competitive
public bidding for the projects so approved.

“In the case of a build-operate-and-transfer arrangement,
the contract shall be awarded to the bidder who, having
satisfied the minimum financial, technical, organizational and
legal standards required by this Act, has submitted the BID
THAT IS MOST ADVANTAGEOUS TO THE GOVERNMENT
and PROVIDES THE most favorable terms for the project,
based on the present value of its proposed tolls, fees, rentals
and charges over a fixed term for the facility to be constructed,
rehabilitated, operated and maintained according to the
prescribed minimum design and performance standards, plans
and specifications.

ALL EXISTING OPERATORS MUST OBTAIN SAID
FRANCHISE FOR PUBLIC UTILITIES FROM CONGRESS
WITHIN ONE (1) YEAR FROM THE TIME THIS LAW TAKES
EFFECT. OTHERWISE, THE FRANCHISES THEY PRESENTLY
HOLD SHALL EXPIRE AND CEASE TO HAVE ANY LEGAL
EFFECT.

FURTHER, SAID LEGISLATIVE FRANCHISE SHALL BE
FOR A PERIOD OF TWENTY-FIVE (25) YEARS ONLY
SUBJECT TO A RENEWAL.

THE ABOVEMENTIONED LEGISLATIVE FRANCHISES
SHALL BE SUBJECT TO AMENDMENT, ALTERATION, OR
REPEAL BY THE CONGRESS WHEN THE COMMON GOOD
REQUIRES AS PROVIDED FOR IN SECTION 11 OF ARTICLE
XII OF THE 1987 CONSTITUTION.


“In the case of build-and-transfer or build-lease-and-
transfer arrangement, the contract shall be awarded to the BID
THAT IS MOST ADVANTAGEOUS TO THE GOVERNMENT
AND PROVIDES THE MOST ADVANTAGEOUS TERMS
based on the present value of its proposed schedule of
amortization payments for the facility to be constructed
according to the prescribed minimum design and performance
standards, plans, and specifications: Provided, however, That a
Filipino contractor who submits an equally advantageous bid
with exactly the same price and technical specifications as those
of a foreign contractor shall be given preference.

“Tn all cases, a consortium that participates in a bid must
present proof that the members of the consortium have bound
themselves jointly and severally to assume responsibility for
any project. The withdrawal of any member of the consortium
prior to the implementation of the project could be a ground for
the cancellation of the contract.

“The public bidding must be conducted under a two-
envelope/ two-stage system: the first envelope to contain the
technical proposal and the second envelope to contain the
financial proposal. The procedures for this system shall be
outlined in the implementing rules and regulations of this Act.

“A copy of each contract involving a project entered into
under this Act shall forthwith be submitted to Congress for its
information.”

THE ABOVE REQUIREMENTS SHALL ONLY APPLY
FOR PROPONENTS SEEKING TO BID, OPERATE, AND
MAINTAIN PUBLIC UTLITIES THROUGH THIS ACT.

SEC. 2. If any part of provision of this Act be considered as invalid or
unconstitutional, the remaining parts not affected shall remain valid and in
full effect.


SEC. 3. All laws, decrees, orders, issuances, rules and regulations or parts
thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,