Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila\

FIFTEENTH CONGRESS
First Regular Session

House Bill No,__ 4151

Introduced by Representative Feliciano Belmonte, Jr. and
Representative Neptali M. Gonzales I

EXPLANATORY NOTE

The Philippines stands out as one of the developing countries that have created
an explicit legal and regulatory framework for Bullt-Operate-and Transfer (BOT)
projects. In 1990, the Philippine Congress enacted the first BOT law in Asia, Republic
Act No. 6957 and in 1994, Republic Act No. 7718 amended R.A. 6957 by increasing the
number of variants of BOT contractual arrangements. The BOT law was enacted
pursuant to the State Policy enunciated in the Constitution "The State recognizes the
indispensible role of the private sector, encourages private enterprise, and provides
incentives to needed investment" (Section 19, Article II, Philippine Constitution),

The BOT law has significantly increased private investment in infrastructure in
the Philippines by expanding private sector participation. This was driven by general
factors such as high indebtedness and stringent budget constraints limiting the public
sector's ability to meet increasing infrastructure needs.

Consistent with the President's thrust in the propagation of Public-Private
Partnership (PPP) projects, this bill seeks to further amend the BOT law. It aims to
broaden and tighten the legal and policy framework for the purpose, to enunciate a
clear-cut policy on government support, adhere to best practices on risk allocation,
handle unsolicited proposals for projects and the creation of a Special Fund to defray
the cost of compensation to project proponents in the event that the government agency
or GOCC fails to comply with its obligations, among others.

In view of the foregoing, immediate passage of this bill is earnestly sought.

Mabe.

FELICIANO BELMONTE, JR.

NEPTALI M. GONZALES II


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

HBNo. 4192

Introduced by Representative Feliciano R. Belmonte, Jr. and

Representative Neptali M. Gonzales II

AN ACT FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 6957,
AS AMENDED BY REPUBLIC ACT 7718, ENTITLED “ AN ACT AUTHORIZING
THE FINANCING, CONSTRUCTION, OPERATION AND MAINTENANCE OF
INFRASTRUCTURE PROJECTS BY THE PRIVATE SECTOR, AND FOR OTHER
PURPOSES,” APPROPRIATING FUNDS FOR THE SAID PURPOSE, AND FOR

OTHER PURPOSES

Be it enacted by the House of Representatives and Senate in Congress
SECTION 1. Amendment. - Sec. 4-A of Republic Act 6957, as amended by
Republic Act 7718, is hereby amended to read as follows:

“SEC. 4-A. Unsolicited Proposals. — Unsolicited proposals for projects
may be submitted. The goverment agency. GOCC or local government

unit concemed may either:

(1) Use the unsolicited proposal as the basis for Public Bidding as

provided in Section 5 of this Act. If a final award to a winning
bidder is made on the basis of the unsolicited proposal within
one (1) year from the submission thereof, as determined by

NEDA, the original proponent of the unsolicited proposal may be
reimbursed for costs incurred in its preparation, including, but
not limited to, the cost of any feasibility studies undertaken,

Provided: such reimbursement : (1) shall be in the amount to be
determined by NEDA, but not exceeding three percent (3%) of
the total project cost. excluding any project costs which will be
borne by the government, such as. but not limited to, the cost of
Right-of-Way acquisitions; and (2) shall be paid in full by the
winning bidder as a requirement for the award of the project:

(2) Accept the unsolicited proposal on a negotiated basis: Provided,

That,_all the following conditions are met: (1) such projects
involve a new concept in technology and/or are not part of the
list_of priority projects, (2) no direct goverment guarantee,
subsidy or equity or any form of payment or security from the
government is required as provided in the immediatel
succeeding section, and (3) the government agency or local
government_unit_has_invited by publication, for three (3)
consecutive weeks. in_a newspaper of general circulation,

comparative or competitive proposals and no other proposal is

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received for a period to be determined by NEDA, bit not to
exceed one (1) year: Provided, further, That_in the event
another _proponent_submits a proposal lower in price, the
original proponent shall have the right to match that price within
thirty (30) working days; or

(8) Reject the proposal.”

SECTION 2. A new section is hereby added after Section 4-A of the same Act
and numbered as Section 4-B, to read as follows:

“SEC. 4-B. Prohibition Against Government Guarantees or Payments. —
Notwithstanding any agreement to the contrary, the project proponent of
an unsolicited proposal accepted by the government on a negotiated basis
in accordance with Section 4-A(2) above shall not, at anytime, be entitled
to any form of payment or security from the government, including, but not
limited to, cost sharing, credit enhancement, direct or indirect government
guarantee, subsidy or equity.”

SECTION 3. A new section is hereby added after Section 10 of the same Act
and numbered as Section 10-A, to read as follows:

“SEC. 10-A. Projects of National Significance. - Upon the certification
and recommendation of NEDA, the President may classify certain projects
undertaken under this Act as Projects of National Significance, which shall
be entitled to the following incentives:

a. All real properties which are actually and directly used for the
project shall be exempt from any and all real property taxes levied
under Republic Act No. 7160

b. The total of all local taxes imposed by a province, city or
municipality in Metro Manila pursuant to Republic Act No. 7160 on
the project proponent shall not exceed fifty percent (50%) of one
percent (1%) of gross sales or receipts of the preceding calendar
year;

c. The necessary business permits, including any renewals thereof,
shall be deemed to have been automatically granted or issued to
the winning project proponent upon tender of the required taxes
and fees to the appropriate local government unit.

For purposes of this section, in order for a project to qualify as a Project of
National Significance, the following conditions must occur:

1. The total cost of the project is at least PhP 5
billion, -00; and

2. The project is located in or affects at least two (2) provinces.”

SECTION 4. Sections 11, 12, 13, 14, and 15 of the same Act are hereby
renumbered as Sections 12, 13, 14, 15 and 16, respectively.

SECTION 5. A new section to be numbered as Section 11 is hereby added to
read as follows:


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“SEC. 11. Prohibition ‘on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. —
No court, except the Supreme Court, shall issue any temporary restraining
order, preliminary injunction or preliminary mandatory injunction against
the government, or any of its subdivisions, officials or any person or entity,
whether public or private, acting under the government's direction, to
restrain, prohibit or compel the following acts with regard to Projects of
National Significance under the immediately preceding section:

a. Acquisition, clearance and development of the right-of-way and/or
site or location;

b. Bidding or awarding;

c. Commencement, prosecution, execution, implementation and
operation;

d. Termination or rescission of the contract; and

e, The undertaking or authorization of any other lawful activity

Necessary or in connection with the execution or implementation of
the project.

This prohibition shall apply in all cases, disputes or controversies instituted
by a private party, including, but not limited to, cases filed by bidders or
those claiming to have rights through such bidders involving projects of
national significance. This prohibition shall not apply when the matter is of
extreme urgency involving a constitutional issue, such that unless a
temporary restraining order is issued, grave injustice and irreparable injury
will arise. The applicant shall file a bond, in an amount to be fixed by the
court, which bond shall accrue in favor of the government if the court
should finally decide that the applicant was not entitled to the relief sought.

Any temporary restraining order, preliminary injunction or preliminary
mandatory injunction issued in violation of this section is void and of no
force and effect.”

SECTION 6. Special Fund. - A Special Fund is hereby created to defray the
cost of compensation to project proponents which enter into BOT contracts, concession
agreements or other contractual agreements with any national government agency or
GOCC pursuant to the provisions of Republic Act No. 6957, as amended, in the event
that the government agency or GOCC fails to comply, or is prevented from complying,
with its obligations under the aforementioned contracts or agreements as a result of any
act of another agency or branch of government; Provided, no compensation shall be
paid out of the Special Fund if the contract or agreement has been determined to be
unlawful or unconstitutional by a final judgment of a court of competent jurisdiction

For the initial year of implementation of this Act, the sum of

pesos (PhP. .00) is hereby appropriated for the

[Special Fund] and charged against [source]. Thereafter, the [Special Fund] may be

replenished or increased by such amount as may be deemed necessary in the General
Appropriations Act.

SECTION 7. Repealing Clause. — All laws or parts of any law, including
Republic Act Nos. 7160 and 8975, orders, rules and regulations or parts thereof
inconsistent with the provisions of this Act are hereby repealed or amended accordingly.

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SECTION 8. Separability Clause. — If any provision of this Act is held invalid,
the other provisions not affected thereby shall continue in operation.

SECTION 9. Effectivity Clause. — This Act shall take effect fifteen (15) days
after its publication in at least two (2) newspapers of general circulation

Approved,