ADB: LGUs lack technical, financial know-how in PPP implementation

To fill in the infrastructure gap at the local government level, Manila-based multilateral lender Asian Development Bank (ADB) has recommended coming up with specific guidelines that will cover local public-private partnership (PPP) projects.

In a report titled “Philippines: Public-Private Partnerships by Local Government Units,” the ADB noted LGUs have already been tapping PPP  arrangements to build infrastructure as early as 1991, the first of which was the commercial building used as a public market in Mandaluyong City.

A number of LGUs pursued big PPP projects not only in infrastructure but also in power generation and bulk water supply in the subsequent years, but some of these initiatives “met many obstacles along the way,” the ADB noted.

Major impediment

According to the report, “lack of technical and financial resources for project preparation, monitoring, and implementation has always been cited and continues to be a major impediment to LGUs undertaking PPP projects.”

“These needs have to be addressed simultaneously and comprehensively by technical assistance and financing facilities,” it said.

The ADB said LGUs should come up with guidelines on doing local PPPs through joint ventures.

“The lack of guidelines for LGUs forming joint ventures with the private sector has been the source of uncertainties for LGUs interested in that particular form of PPP, which does not fall under the ambit of the Build-Operate-Transfer Law, as amended,” the ADB said.

The Manila-based multilateral firm added LGUs can also enact their own PPP code or omnibus ordinance covering all applicable PPP modes.

Local PPP codes may include fiscal and nonfiscal provisions to better attract investors, it said.

Legal front

On the legal framework, the ADB recommended the following: Clarification of an approval authority for LGU PPP projects costing above P200 million; establishing a deadline for the confirmation of LGU PPP projects; streamlining National Economic and Development Authority-Investment Coordination Committee (ICC) and Regional Development Council review processes, including ICC forms tailored for LGUs; and clarifying the audit scope of national and local PPP projects done through joint venture arrangements.

The ADB also pointed out that a transparent regulatory body must be set up.

“Having a competent, independent, and transparent regulatory body in the sectors where PPPs are being welcomed is very important to protect the interests of all concerned—the customers, private investors, and government entities involved,” it said.

source:  Inquirer

Big business buys into QC land value audit

QUEZON City Mayor Herbert Bautista welcomed the participation of big businesses in the consultation of the proposed revised schedule of fair market values of land within the city.

He tasked the city council’s committee on ways and means to comply with the recommendation of the Commission on Audit and Department of Finance to update the city’s obsolete land and property values.

Among those who took part in last Thursday’s consultations at the city hall were SM Prime Holdings and Megaworld Corp.

“Quezon City is merely complying with the provisions of Republic Act 7160 and adjusting the schedule of the fair market values based on real-estate market realities, and to support various urban and social developmental projects of the administration,” city administrator Aldrin Cuña told the Manila Standard.

Cuna said the big businesses posed no objection to the proposed adjustment of property values.

Still, SM Prime Holdings and Megaworld Corp. urged the city government to grant tax incentives to small players or businesses with small capitals.

Fe Wong, tax officer of SM Prime Holdings, the parent company of the SM Group, said they are not objecting to the proposed legislation. 

“Yes we support it. We will submit our position paper later,” she said.

“We are definitely very supportive of this measure,” Megaworld corporate advisory and compliance division manager John Joseph Sy added. “We have always been supportive of the endeavors of the city government as long as it is beneficial to us and to the interests of our clientele, tenants, and buyers.”

Megaworld owns and developed  the 17-hectare Eastwood City, the commercial and residential property in Bagumbayan area.

Trade organizations such as the Association of Filipino Franchisers Inc. said they will look into the proposed adjustments.

“Yes, we support it. As much as we want to oppose it, we would appreciate having no increase, but the city government was able to explain that it has been a long time since the last increase,” said Rafael Canare, executive director of AFFI.

Canare appealed to Bautista to provide small businesses with tax incentives since they would expect an increase in leasing fees to be imposed by property owners, such as malls and commercial buildings affected by the adjustment of real property tax.  

SOURCE:  Manila Standard