Neda sets requirements for OK of revisions in joint-venture proposals

Economy

Written by Cai U. Ordinario / Reporter

Wednesday, 21 July 2010 20:32

THE proposed revisions of the Philippine Constructors Association (PCA) to joint-venture (JV) guidelines will need the approval of the Infrastructure Committee (Infracom), which originally drafted these, and the Investment Coordination Committee (ICC). But Rolando G. Tungpalan, deputy director general for investment programming of the National Economic and Development Authority said the Neda was not averse to proposed changes in any policy or JV guidelines. All government policies should be updated from time to time and a proposal like the PCA’s is a welcome development. The Neda is the secretariat of interagency committees like Infracom and the ICC, he said. “It [proposal] will likely go through Infra. If there is a need to revise, we will revise. We will review because [as in] every policy issuance, it is good practice to review,” Tungpalan said. Rueven S. Reinosio, Neda assistant director general for infrastructure, regulation and contract review services, said that while Infracom has not yet received the proposal from PCA, it is part of governance practice that proposals go through Infracom and then ICC to reach the Neda Board. Even without the letter containing the proposal, Reinoso said. Infracom is already in the process of reviewing JV guidelines as well as the build-operate-transfer law and the implementing rules and regulations. Earlier, PCA Executive Director Manolito Madrasto said PCA sought the revision of the Swiss-Challenge provision in the guidelines and pushed for the evaluation of JV projects by the Neda ICC. A Swiss Challenge is a process by which other private groups could still come forward to make an offer to match the bid of the proponent. Based on Annex C of JV guidelines, which contains provisions on competitive challenge or Swiss challenge, parties are only given 30 days to complete and submit a proposal to the government. Madrasto said international standards state that a Swiss Challenge allows parties to submit proposals for simple projects within a minimum of 180 days. For proposals on complicated projects, Swiss Challenges even take as long as a year. The PCA official said projections are crucial to creating a proposal; the final cost and proposal will hinge on careful inflation projections. Apart from the Swiss Challenge provision, Madrasto said a thorough evaluation by the Neda ICC would also be crucial to transparency. The committee’s mandate includes evaluating and approving big-ticket government projects. In the initial JV guidelines drafted and approved by the Neda, all JV-funded projects would have to go through the ICC. However, in the version approved by the Neda Board under then-President Arroyo, JV-funded projects were not required to go through the ICC. Madrasto said this has become a major concern for the PCA and other private-sector entities because under the setup, there was a lot of room for abuse and misuse.