SENATOR JOEL VILLANUEVA (JV): Mr. President, the gentleman from Sorsogon, Senator Chiz Escudero is seeking the floor. I move that he be recognized, Mr. President.
SENATOR SHERWIN GATCHALIAN (SG): We recognize Senator Escudero.
SENATOR CHIZ ESCUDERO (CHIZ): Thank you, Mr. President. Just a few points if the distinguished sponsor will allow.
SENATOR JV EJERCITO (JE): Certainly, Mr. President. Anything from Senator Escudero, I’m sure this will help improve and refine this measure, your Honor.
CHIZ: Mr. President, for the information of the technical staff behind or on the side of Senator JV, we will include it in the proposed amendments, would suffice, an answer like that would suffice. But to abbreviate the proceedings, number one, Mr. President, your Honor, how will the IA (implementing agencies) decide if there are two proponents in an unsolicited proposal? The only thing I saw in the bill stated, whatever is more advantageous to the government and the public, but that was not decided upon. That was not clarified nor defined. Mentioned was made of a bonus point system but neither is that clear. So, what is the definition of “advantageous” to the government and the public? How will the IA decide who among two proponents in an unsolicited will be given the unsolicited proponent status?
JE: Your Honor, Mr. President, let me just give an example for, example a PNOC would want to have an LNG facility the choices would be land-based or sea-based but it will be the implementing agency that would know and will have the expertise to access which will be good, ‘no, for such a venture, Your Honor.
CHIZ: Mr. President, what if they are similar? So may I suggest Mr. President, your Honor, for the technical committee to kindly consider a definition of what advantageous to the government and the public would mean on top of and more than the bonus points system made mention of. Number two, second point Mr. President, your Honor on solicited bids, it said that in so far as solicited bids it will be through public bidding and it can make or go through a two-tier bidding process. That’s clearly not in the government procurement law. What public bidding is being considered or referred to here?
JE: Your Honor, Mr. President, this law, this act would provide the bidding framework, ‘no, for, and there would be a, the practice is that the two-staged bidding is market practice to with—
CHIZ: Mr. President, your Honor, Section 9 does not state that. It said it says it may have two-tier bidding. So, it’s discretionary and it’s not mandated neither is it clear; and number two, Mr. President, your Honor, while I’m at it, neither does it make mention if you are going to award it to the highest bidder or to the lowest bidder. And what exactly are we bidding? If you remember Mr. President, your Honor, during the time of former President Aquino, they bid out the right to construct a solicited project. Meaning to say, on top of the cost of the project, the proponent would have to bid for the right to construct it, and at that time the highest bidder won. In this case, what is the intention of the bill? Highest bidder, lowest bidder. Most advantageous to the government, most advantageous to the public. How will that be determined?
JE: Your Honor, Mr. President, part of the bid parameter will be set by the approving body that’s why we are also encouraging that it will always be inter-agency—
CHIZ: Mr. President, Your Honor—
JE: —inter-agency review so that we make sure that all bases will be covered, your Honor, Mr. President.
CHIZ: Mr. President, your Honor, may I suggest that it be clarified and included in the bill as a policy. Simply because, Mr. President, prior to the term of former President Aquino, it was unheard of to bid out the right to construct a public works project via solicited proposal by the government. It was only done during his time. Now, it’s about time we clarify it, can the government do that? Under what circumstances can the government do that and if you say you are going to do a public bidding, what are the parameters of the public bidding? The implementing agency, GOCC, and or LGU cannot be left to their own vices with respect to how to go about it. We either allow it, don’t allow it, or allow it under circumstances so it is clarified, Mr. President, your Honor, by way of policy on the part of the government. Bearing in mind that the intention is to encourage the private sector to invest in public infrastructure projects. So, we should make it easier for them instead of making it more difficult for them. Last point Mr. President, second to the last point, Mr. President, your Honor
JE: Yes, your Honor, Mr. President.
CHIZ: Is on the JVs (joint ventures) because the bill covers, basically, unsolicited and solicited JVs. On JVs how will an implementing agency, GOCC or LGU decide how to enter in, which company to enter in to a JV with? What will be the parameters? Public bidding was not mentioned, negotiated arrangements were not mentioned. Neither was competitive selection process mentioned. Was preventing a secretary, a head of an agency from going into a JV with his friends in so far as government properties owned by the department is concerned. What would be the parameters of this?
JE: Yes, your Honor, Mr. President, we can clarify and a joint venture is one of the processes under this, or one of the modalities and if it becomes— Well, it is a modality then it is a type of PPP so the parameters of this act will apply, your Honor.
CHIZ: So, the implementing agency will decide if it’s advantageous to the government or not. What if there are two proponents so far as a JV is concerned? How will the implementing agency decide the spin between these two proponents for a JV?
JE: Your Honor, Mr. President, again if it will be PPP, we will still encourage that the NEDA-ICC will be the proper approving body.
CHIZ: That is not the case, Mr. President. In the proposed amendments if at all with respect to LGUs and with respect to certain threshold amounts it will not go through the NEDA board or NEDA-ICC anymore. So, may I suggest again Mr. President, your Honor the proper time for this to be clarified because this will arise. A time will come when there will be two companies or proponents buying for a JV with an implementing agency, GOCC or LGU and guidelines must be set up in this law, in order to provide mechanisms in which a decision can be made. Because the last thing we want, Mr. President, your Honor, is for the rules not to be clear enough and to open the doors for litigations which will cause further delay instead of facilitating PPP projects.
JE: Yes, your Honor. I agree with your proposal, your Honor, that this has to be clarified so at least while the intention is really not to delay any more, so that we will of course accept any that, any amendments that come from you. Anything, the parameters will be there and it will be defined, your Honor.
CHIZ: And on the last point, Mr. President, Your Honor. The transitory clause, may I suggest and remind the technical committee, to kindly be sensitive not only to vested rights but also to the constitutional provision on the imperilment of obligations of contracts. Because it is stated there that all existing and or ongoing PPP projects will be subject to Section 7 of the bill, which should not be the case unless the option is being given to the PPP proponents.
JE: Yes, we will make sure, your Honor, Mr. President. This will be clarified, your Honor.
CHIZ: Thank you, Mr. President. Thank you, your Honor. I appreciate your candid answers and for entertaining the questions and suggestions of this representation. Thank you, Mr. President. Thank you, your Honor.
JE: Thank you also Senator Escudero.