irr ra 7718

7/24/2019 IRR RA 7718

http://slidepdf.com/reader/full/irr-ra-7718 1/36

REVISED IMPLEMENTING RULES AND REGULATIONS OF R.A. NO. 6957, "AN ACTAUTHORIZING THE FINANCING, CONSTRUCTION, OPERATION AND MAINTENANCE

OF INFRASTRUCTURE PROJECTS BY THE PRIVATE SECTOR AND FOR OTHER PURPOSES", AS AMENDED BY R.A. NO. 771

INTRODUCTION

Pursuant to Section 11 of R.A. No. 6957, as amended by R.A. No. 7718, the folloin!Re"ised #m$lementin! Rules and Re!ulations are hereby $rescribed to carry out the$ro"isions of said Act.

RULE 1 ! PRELIMINARY PROVISIONS

SECTION 1.1 ! POLICY

#t is the declared $olicy of the State to reco!ni%e the indis$ensable role of the $ri"ate sectoras the main en!ine for national !roth and de"elo$ment and $ro"ide the most a$$ro$riate

incenti"es to mobili%e $ri"ate resources for the $ur$ose of financin! the &onstruction,o$eration and maintenance of infrastructure and de"elo$ment $ro'ects normally financedand underta(en by the )o"ernment.

#n line ith the fore!oin!, these Re"ised #RR see( to identify s$ecific incenti"es, su$$ort andunderta(in!s, financial or otherise, that may be !ranted to Pro'ect Pro$onents, $ro"ide aclimate of minimum )o"ernment re!ulations, allo reasonable returns on in"estments madeby Pro'ect Pro$onents, $ro"ide $rocedures that ill assure trans$arency andcom$etiti"eness in the biddin! and aard of $ro'ects, ensure that &ontractual Arran!ementsreflect a$$ro$riate sharin! of ris(s beteen the )o"ernment and the Pro'ect Pro$onent,assure close coordination beteen national !o"ernment and *ocal )o"ernment +nits*)+s-, and ensure strict com$liance by the )o"ernment and the Pro'ect Pro$onent of their

res$ecti"e obli!ations and underta(in!s and the monitorin! thereof, in connection ith orrelati"e to Pri"ate Sector #nfrastructure or e"elo$ment Pro'ects to be underta(en underthis Act and these Re"ised #RR.

SECTION 1. # COVERAGE

/hese #m$lementin! Rules and Re!ulations #RR- shall co"er all Pri"ate Sector #nfrastructureor e"elo$ment Pro'ects, as hereunder defined, underta(en by A!encies0*)+s inaccordance ith such contractual arran!ement or scheme authori%ed under and $ursuant toR.A. No. 6957, as amended by R.A. No. 7718.

or *)+ $ro'ects, concerned *)+s may formulate additional !uidelines0$rocedures not in

conflict ith this Act and these #m$lementin! Rules and Re!ulations and $ertinent $ro"isionsof R.A. No. 7162 *ocal )o"ernment &ode of 1991- and its im$lementin! rules andre!ulations.

SECTION 1.$ ! DEFINITION OF TERMS

or $ur$oses of these #m$lementin! Rules and Re!ulations, the terms and $hraseshereunder shall be understood as follos3

a. A%& 4 shall mean Re$ublic Act No. 6957, as amended by Re$ublic Act No. 7718.

b. A'()%* 4 Refers to any de$artment, bureau, office, commission, authority or a!ency of the national !o"ernment, includin! )o"ernment4ned and0or 4&ontrolled &or$orations)&&s-, )o"ernment inancial #nstitutions )#s-, and State +ni"ersities and &olle!esS+&s- authori%ed by la or their res$ecti"e charters to contract for or underta(e#nfrastructure or e"elo$ment Pro'ects.

c. A+-&/0&) 4 /he re!ular, $eriodic re$ayment of $rinci$al and $ayment of interest of adebt for a definite $eriod of time, at the maturity of hich the entire indebtedness is $aid infull.

#RR RA 7718 Page | 1

7/24/2019 IRR RA 7718


7/24/2019 IRR RA 7718


"i. C)&-0%&!033!0)3!(-0&( 8CAO 4 A contractual arran!ement hereby thePro'ect Pro$onent adds to an e:istin! infrastructure facility hich it is rentin!from the )o"ernment and o$erates the e:$anded $ro'ect o"er an a!reedranchise $eriod. /here may or may not be a transfer arran!ement ith re!ard tothe added facility $ro"ided by the Pro'ect Pro$onent.

"ii. D(2(!(-0&(!0)3!&-0)(- 8DOT 4 A contractual arran!ement herebyfa"orable conditions e:ternal to a ne infrastructure $ro'ect hich is to be builtby a Pro'ect Pro$onent are inte!rated into the arran!ement by !i"in! that entitythe ri!ht to de"elo$ ad'oinin! $ro$erty, and thus, en'oy some of the benefits thein"estment creates such as hi!her $ro$erty or rent "alues.

"iii. R(;0<&0&(!(-0&(!0)3!&-0)(- 8ROT 4 A contractual arran!ementhereby an e:istin! facility is turned o"er to the Pro'ect Pro$onent to refurbish,o$erate and maintain for a ranchise $eriod, at the e:$iry of hich the le!al titleto the facility is turned o"er to the )o"ernment. /he term is also used to describethe $urchase of an e:istin! facility from abroad, im$ortin!, refurbishin!, erectin!and consumin! it ithin the host country.

i:. R(;0<&0&(!:)!0)3!(-0&( 8ROO 4 A contractual arran!ement herebyan e:istin! facility is turned o"er to the Pro'ect Pro$onent to refurbish ando$erate ith no time limitation im$osed on onershi$. As lon! as the o$erator isnot in "iolation of its ranchise, it can continue to o$erate the facility in$er$etuity.

!. C)&-4%&) 4 Refers to ne construction, rehabilitation, im$ro"ement, e:$ansion,alteration, and related or(s and acti"ities includin! the necessary desi!n, su$$ly,installation, testin! and commissionin! of e<ui$ment, systems, $lants, materials, labor andser"ices and related items needed to build or rehabilitate an infrastructure or de"elo$mentfacility.

h. C)&-0%&- 4 Refers to any entity accredited under Phili$$ine las, or that should beaccredited under Phili$$ine las in accordance ith Section 5.; a."- hereof, hich may ormay not be the Pro'ect Pro$onent and hich shall underta(e the actual &onstruction and0orsu$$ly of e<ui$ment for the $ro'ect.

i. D(2(+()& P-'-0+ 4 Refers to national, re!ional or local !o"ernment $lans or$ro!rams included in, but not limited to, the Phili$$ine e"elo$ment Plan PP-, and thePro"incial e"elo$ment and Physical rameor( Plan PPP-.

'. D-(%& G2(-)+()& G40-0)&(( 4 Refers to an a!reement hereby the )o"ernment orany of its A!encies0*)+s !uarantees to assume res$onsibility for the re$ayment of debtdirectly incurred by the Pro'ect Pro$onent in im$lementin! the $ro'ect in case of a loan

default.

(. F0%&* O(-0&- 4 Refers to the entity hich may or may not be the Pro'ect Pro$onent,and hich is res$onsible for all as$ects of o$eration and maintenance of the infrastructureor de"elo$ment facility, includin! but not limited to the collection of tolls, fees, rentals orchar!es from facility users> $ro"ided, that the facility o$erator must be re!istered ith theSecurities and :chan!e &ommission S&- before commencement of o$eration andmaintenance of the infrastructure or de"elo$ment facility> $ro"ided further, that in case thefacility re<uires a $ublic utility franchise, the acility $erator shall, no later than thecommencement of o$eration of the facility, com$ly ith the nationality and onershi$re<uirements under the &onstitution and other a$$licable las and 'uris$rudence.

l. F-0)%;( 4 Refers to a certificate, $ermit or other form of authori%ation re<uired to beobtained by a acility $erator from a Re!ulator $rior to o$eratin! a Public +tility Pro'ect.

m. G2(-)+()& U)3(-&0=)' 4 Refers to any form of contribution and0or su$$ort$ro"ided under Section 1. of these Re"ised #RR, hich the )o"ernment or any of itsA!encies0*)+s may e:tend to a Pro'ect Pro$onent.

n. H(03 A'()%*>LGU 4 Shall be defined as3 i- the head of the a!ency or body, fornational !o"ernment a!encies N)As- and the constitutional commissions or offices, and


7/24/2019 IRR RA 7718


branches of !o"ernment> ii- the )o"ernin! oard or its authori%ed official0mana!in!head0&hief :ecuti"e fficer of )&&s, )#s, or S+&s> or iii- the San!!unian or itsauthori%ed official or the local chief e:ecuti"e, for *)+s.

o. ICC 4 Refers to the #n"estment &oordination &ommittee of the National conomic ande"elo$ment Authority NA- oard.

$. I)2(&+()& I)%()&2( 4 Refers to any form of contribution and0or su$$ort, hich the)o"ernment or any of its A!encies0*)+s includin! )&&s may e:tend to the Pro'ectPro$onent in accordance ith Section 1. of these Re"ised #RR.

<. IRR 4 Shall mean these Re"ised #m$lementin! Rules and Re!ulations.

r.. L& P--&* P-?(%& 4 Refers to the list of Pri"ate Sector #nfrastructure ore"elo$ment Pro'ects in accordance ith Section ..

s. L%0 G2(-)+()& U)& 8LGU 4 Refer to $ro"incial, city, munici$al and0or baran!ay!o"ernment entities.

t. N('&0&(3 C)&-0%& 4 Refer to contracts entered into by the )o"ernment in cases

$rescribed under Rule 9.

u. PBAC 4 Refers to the Pre4<ualifications, ids, and Aards &ommittee established inaccordance ith Rule of these Re"ised #RR.

". P-20&( S(%&- I)-0&-4%&4-( - D(2(+()& P-?(%& 4 /he !eneral descri$tion of #nfrastructure or e"elo$ment Pro'ects normally financed, and o$erated by the $ublic sectorbut hich ill no be holly or $artly financed, constructed and o$erated by the $ri"atesector, includin! but not limited to, $oer $lants, hi!hays, $orts, air$orts, canals, dams,hydro$oer $ro'ects, ater su$$ly, irri!ation, telecommunications, railroad and railays,trans$ort systems, land reclamation $ro'ects, industrial estates or tonshi$s, housin!,!o"ernment buildin!s, tourism $ro'ects, $ublic mar(ets, slau!hterhouses, arehouses, solid

aste mana!ement, information technolo!y netor(s and database infrastructure,education and health facilities, seera!e, draina!e, dred!in!, and other infrastructure andde"elo$ment $ro'ects as may otherise be authori%ed by the a$$ro$riate A!ency0*)+$ursuant to the Act or these Re"ised #RR. Such $ro'ects shall be underta(en throu!h&ontractual Arran!ements as defined herein, includin! such other "ariations as may bea$$ro"ed by the President of the Phili$$ines.

or the construction sta!e of these infrastructure $ro'ects, the $ro'ect $ro$onent may obtainfinancin! from forei!n and0or domestic sources and0or en!a!e the ser"ices of a forei!nand0or ili$ino contractor3 $ro"ided, that, in case an infrastructure or a de"elo$mentfacility?s o$eration re<uires a $ublic utility franchise, the facility o$erator must be a ili$inoor if a cor$oration, it must be duly re!istered ith the Securities and :chan!e &ommissionS&- and oned u$ to at least si:ty $ercent 62=- by ili$inos3 $ro"ided, further, that in

the case of forei!n contractors, ili$ino labor shall be em$loyed or hired in the different$hases of construction here ili$ino s(ills are a"ailable3 $ro"ided, finally, that $ro'ectshich ould ha"e difficulty in sourcin! funds may be financed $artly from direct !o"ernmenta$$ro$riations and0or from fficial e"elo$ment Assistance A- of forei!n !o"ernmentsor institutions not e:ceedin! fifty $ercent 52=- of the $ro'ect cost, and the balance to be$ro"ided by the $ro'ect $ro$onent.

. P-?(%& C& 4 Refers to the total cost to be e:$ended to $lan, de"elo$ and construct the$ro'ect to com$letion sta!e includin! but not limited to cost of feasibility studies en!ineerin!and desi!n, &onstruction, e<ui$ment, land and ri!ht4of4ay, ta:es im$osed on said cost,and de"elo$ment cost.

:. P-?(%& L0) 4 Refers to all loans and0or credit facilities e:tended by financialinstitutions, multi4lateral lenders, e:$ort credit a!encies, and all other third $arty lenders tothe $ro'ect com$any and0or Pro'ect Pro$onent for the de"elo$ment and0or o$eration of the$ro'ect. orei!n loans0forei!n currency loans to be incurred by the $ro'ect com$any shall bein accordance ith $re"ailin! Bangko Sentral ng Pilipinas SP- re!ulations.

y. P-?(%& P-)()& 4 Refers to the $ri"ate sector entity hich shall ha"e contractualres$onsibility for the $ro'ect and hich shall ha"e an ade<uate trac( record in the concernedindustry as ell as technical ca$ability and financial base consistin! of e<uity and firm


7/24/2019 IRR RA 7718


commitments from re$utable financial institutions to $ro"ide, u$on aard, sufficient creditlines to co"er the total estimated cost of the $ro'ect to im$lement the said $ro'ect.

%. P4<% U&&* P-?(%& 4 Refers to $ro'ects or facilities that $ro"ide $ublic ser"ices asdefined under the &ommonealth Act No. 1;6 Public Ser"ice *a-, as amended, and forhich a ranchise is re<uired.

a.a. R(0)0<( R0&( R(&4-) ! Refers to the rate of return that a Pro'ect Pro$onentshall be entitled to, as determined by the #&& ta(in! into account, amon! others, the$re"ailin! cost of ca$ital e<uity and borroin!s- in the domestic and international mar(ets,ris(s bein! assumed by the Pro'ect Pro$onent and the le"el of )o"ernment +nderta(in!se:tended for the $ro'ect> $ro"ided, further, that in the case of Ne!otiated &ontracts, suchrate of return shall be determined by the #&& $rior to ne!otiation and0or call for $ro$osals>$ro"ided further, that for Ne!otiated &ontracts for $ublic utilities $ro'ects hich aremono$olies, the rate of return on rate base shall be determined by e:istin! las, hich inno case shall e:ceed tel"e $er centum 1=-, as $ro"ided by the Act.

b.b. R('40&- 4 Refers to the a!ency, body or commission em$oered by la to fi: therates of a $ro"ider of a $articular $ublic ser"ice as defined by the &ommonealth Act No.

1;6 Public Ser"ice *a-, as amended, and for hich a ranchise is re<uired to o$erate thesame.

c.c. S%&(3 P-?(%& @ Refer to $ro'ects identified by an A!ency0*)+ as $art of the list of $riority $ro'ects in accordance ith Section ..

d.d. U)%&(3 P-0 4 Refer to $ro'ect $ro$osals submitted by the $ri"ate sector,not in res$onse to a formal solicitation or re<uest issued by an A!ency0*)+ and not $art of the list of $riority $ro'ects as identified by A!ency0*)+, to underta(e #nfrastructure ore"elo$ment Pro'ects hich may be entered into by A!ency0*)+ sub'ect to there<uirements0conditions $rescribed under Rule 12.

RULE ! GENERAL PROVISIONS

SECTION .1 ! AUTHORIZED CONTRACTING GOVERNMENT AGENCIES>UNITS

All concerned de$artments, bureaus, offices, commissions, authorities, or a!encies of thenational !o"ernment, includin! )&&s, )#s, S+&s, and *)+s authori%ed by la or by theirres$ecti"e charters to underta(e #nfrastructure or e"elo$ment $ro'ect are authori%ed toenter into contractual arran!ements under this Act and these Re"ised #RR.

SECTION . ! ELIGIBLE TYPES OF PROJECTS

/he &onstruction, rehabilitation, im$ro"ement, betterment, e:$ansion, moderni%ation,

o$eration, financin! and maintenance of the folloin! ty$es of $ro'ects hich are normallyfinanced and o$erated by the $ublic sector hich ill no be holly or $artly financed,constructed and o$erated by the $ri"ate sector, includin! other infrastructure andde"elo$ment $ro'ects as may be authori%ed by the a$$ro$riate a!encies, may be $ro$osedunder the $ro"isions of the Act and these Re"ised #RR3

a. i!hays, includin! e:$ressay, roads, brid!es, interchan!es, tunnels, and relatedfacilities>

b. Railays or rail4based $ro'ects that may or may not be $ac(a!ed ith commercialde"elo$ment o$$ortunities>

c. Non4rail based mass transit facilities, na"i!able inland aterays and related facilities>

d. Port infrastructures li(e $iers, har"es, <uays, stora!e, handlin!, ferry ser"ices andrelated facilities>

e. Air$orts, air na"i!ation, and related facilities>

f. Poer !eneration, transmission, sub4transmission, distribution, and related facilities>


7/24/2019 IRR RA 7718


!. /elecommunications, bac(bone netor(, terrestrial and satellite facilities and relatedser"ice facilities>

h. #nformation technolo!y #/- and data base infrastructure, includin! moderni%ation of #/,!eo4s$atial resource ma$$in! and cadastral sur"ey for resource accountin! and $lannin!>

i. #rri!ation and related facilities>

'. Bater su$$ly, seera!e, draina!e, and related facilities>

(. ducation and health infrastructure>

l. *and reclamation, dred!in! and other related de"elo$ment facilities>

m. #ndustrial and tourism estates or tonshi$s, includin! ecotourism $ro'ects such asterrestrial and coastal0marine nature $ar(s, amon! others and related infrastructurefacilities and utilities>

n. )o"ernment buildin!s, housin! $ro'ects>

o. Car(ets, slau!hterhouses, and related facilities>

$. Barehouses and $ost4har"est facilities>

<. Public fish $orts and fish$onds, includin! stora!e and $rocessin! facilities>

r. n"ironmental and solid aste mana!ement related facilities such as but not limited tocollection e<ui$ment, com$ostin! $lants, landfill and tidal barriers, amon! others> and

s. &limate chan!e miti!ation and ada$tation infrastructure $ro'ects and related facilities.

SECTION .$ ! LIST OF PRIORITY PROJECTS&oncerned A!encies0*)+s are tas(ed to $re$are their infrastructure or de"elo$ment$ro!rams and to identify s$ecific $riority $ro'ects that may be financed, constructed,o$erated and maintained by the $ri"ate sector throu!h the &ontractual Arran!ements orschemes authori%ed under these Re"ised #RR and to submit for the a$$ro"al by theA$$ro"in! ody, as s$ecified in Section .6. /he *ist of Priority Pro'ects shall be consistentith the Phili$$ine e"elo$ment Plan PP-, and Pro"incial e"elo$ment and Physicalrameor( Plan PPP-.

/he Public #n"estment Pro!ram P#P- and the &om$rehensi"e and #nte!rated #nfrastructurePro!ram &##P- shall be deemed as the list of National Priority Pro'ects. /he Pro"inciale"elo$ment #n"estment Pro!rams P#Ps-0*ocal e"elo$ment #n"estment Pro!rams

*#Ps- shall be deemed as the *ist of *ocal Priority Pro'ects. /he P#P, &##P and P#P0*#Pshall be u$dated $eriodically.

Any u$dates to the lists of Priority Pro'ects, local and national, shall be submitted to the PPP&enter ithin fi"e 5- days from a$$ro"al of the A$$ro"in! ody for information and for$ostin! in the PPP &enter ebsite.

SECTION .@ ! PUBLICATION AND NOTICE

All A!encies0*)+s shall $ro"ide ide $ublicity of the *ist of Priority Pro'ects $ro$osed forim$lementation under the &ontractual Arran!ements or schemes as authori%ed under theAct and these Re"ised #RR to (ee$ interested0concerned $arties informed thereof. or this$ur$ose, all A!encies0*)+s shall cause their res$ecti"e *ist of Priority Pro'ects to be$ublished at least once e"ery si: 6- months in a national nes$a$er of !eneral circulation,and here a$$licable, international nes$a$ers of !eneral circulation. Said *ist should alsobe $osted continuously in the ebsites of the PPP &enter and the concerned A!ency0*)+, if a"ailable.

SECTION .5 ! ALLOABLE MODES OF IMPLEMENTATION


7/24/2019 IRR RA 7718


Pro'ects may be im$lemented throu!h $ublic biddin! or direct ne!otiation. /he directne!otiation mode is sub'ect to conditions s$ecified in Rules 9 and 12 hereof.

SECTION .6 ! APPROVAL OF PROJECTS

/he a$$ro"al of $ro'ects $ro$osed under this Act shall be in accordance ith the folloin!3

a. N0&)0 P-?(%& 4 /he $ro'ects must be $art of the A!encyDs de"elo$ment $ro!rams,and shall be a$$ro"ed as follos3

i. $ro'ects costin! u$ to PhP 22 million, shall be submitted to #&& for a$$ro"al>ii. $ro'ects costin! more than PhP 22 million, shall be submitted to the NA

oard for a$$ro"al u$on the recommendation of #&&.> andiii. re!ardless of amount, ne!otiated $ro'ects shall be submitted to the NA

oard for a$$ro"al u$on recommendation by the #&&.

b. L%0 P-?(%& 4 *ocal $ro'ects to be im$lemented by the *)+s shall be submitted by theconcerned *)+ for confirmation, as follos3

i. to the munici$al de"elo$ment council for $ro'ects costin! u$ to PhP 2 million>

ii. to the $ro"incial de"elo$ment council for those costin! abo"e PhP 2 million u$ toPhP 52 million>

iii. to the city de"elo$ment council for those costin! u$ to PhP 52 million>i". to the re!ional de"elo$ment council or, in the case of Cetro Canila $ro'ects, theRe!ional e"elo$ment &ouncil for Cetro$olitan Canila, for those costin! abo"e PhP52 million u$ to PhP 22 million> and". to the #&& for those costin! abo"e PhP 22 million.

inal a$$ro"al of $ro'ects classified under b.i to b.i" of this section is "ested on the *ocalSan!!unians $er $ro"isions of the *ocal )o"ernment &ode.

SECTION .7 ! DETAILED GUIDELINES FOR THE APPROVAL OF PROJECTS

/he A$$ro"in! ody shall, from time to time, $rescribe or re"ise detailed !uidelines on the$rocess and $rocedures for the a$$ro"al of $ro'ects as ell as the re<uirements to besubmitted in su$$ort thereof, $ro"ided that the same are consistent ith the Act and theseRe"ised #RR.

SECTION . ! APPROVAL OF CONTRACTS/he ead of the A!ency0*)+ shall re"ie and a$$ro"e the raft &ontract hich shall bebased on the $arameters, terms and conditions set forth by the A$$ro"in! ody.

Prior to a$$ro"al of the ead of A!ency0*)+, the draft contract shall under!o re"ie by theffice of the )o"ernment &or$orate &ounsel )&&-, the ffice of the Solicitor4)eneral

S)- or any other entity $rescribed by la0issuances as the statutory counsel of )&&sand *)+s as $ro"ided in Section ;.; of these Re"ised #RR. or $ro'ects of national!o"ernment a!encies, local $ro'ects hich ill in"ol"e funds of the national !o"ernment,and local $ro'ects re<uirin! #&& re"ie0a$$ro"al, the draft contract must also be re"ieedby the e$artment of inance - before the ead of A!ency0*)+ a$$ro"es the same.

/he $rescribed statutory counsel, and if necessary, the , shall issue an o$inion on thedraft contract ithin ten 12- days u$on recei$t thereof.

or solicited $ro'ects, chan!es in the terms and conditions of the draft contract after itsa$$ro"al by the ead of A!ency0*)+ may be alloed $rior to submission of bids $ro"idedthat the ead of A!ency0*)+ shall secure a$$ro"al of the a$$ro$riate A$$ro"in! ody for

any of the folloin! chan!es3

a. &han!es hich reduce the ser"ice le"els to the $ublic>

b. &han!es hich reduce the economic internal rate of return belo the hurdle rateused in the ori!inal analysis of the $ro'ect>

c. &han!es hich increase the total !o"ernment subsidy to a $ro'ect by at least fi"e$ercent 5=- of the total $ro'ect cost> and


7/24/2019 IRR RA 7718


d. &han!es in the ris( $rofile hich are detrimental to the best interest of the!o"ernment.

/he concerned A!ency0*)+ shall inform in ritin! the concerned statutory counsel as$ro"ided in this section of such chan!es.

&han!es to the terms and conditions of the draft contract after bid submission and $rior tocontract e:ecution shall not be alloed e:ce$t for chan!es to contract terms affected ordecided by the innin! bidderDs bid.

or unsolicited $ro'ects, in accordance ith Section 12.9 of these Re"ised #RR, chan!es tothe draft contract as a!reed u$on by A!ency0*)+ and the ori!inal $ro$onent and asa$$ro"ed by the ead of A!ency0*)+ shall not be alloed, e:ce$t for chan!es to contractterms affected or decided by the innin! bidderDs bid durin! the solicitation of com$arati"e$ro$osals and matchin! by the ori!inal $ro$onent.

/he ead of the A!ency0*)+ shall be res$onsible for com$liance ith this $olicy.

SECTION .9 ! PRESIDENTIAL APPROVAL, HEN REUIRED

Pro'ects underta(en throu!h the uild4n4and4$erate - scheme or throu!h&ontractual Arran!ements or schemes other than those defined under Section of the Actshall re<uire Presidential a$$ro"al. or this $ur$ose, the ead of A!ency0*)+ shall submitthe $ro$osed $ro'ect to the NA oard throu!h the #&& hich shall e"aluate the $ro$osaland forard its recommendations to the President. oe"er, such $ro'ects shall be deemedto ha"e been a$$ro"ed by the President hen a$$ro"ed at a NA oard meetin! $residedo"er by the President.

SECTION .1 ! DEADLINE FOR APPROVAL OF SOLICITED PROJECTS

/he A$$ro"in! ody shall act on the $ro'ect ithin thirty 2- or(in! days u$onsatisfactory com$liance by the concerned A!ency0*)+ ith the re<uirements of theA$$ro"in! ody. ailure of the A$$ro"in! ody to act on the $ro'ect ithin the s$ecified$eriod shall be deemed an a$$ro"al thereof and the concerned A!ency0*)+ may $roceedith the solicitation of $ro$osals. +$on a$$ro"al, the A!ency0*)+ must $ublish thein"itation to $re4<ualify and to bid ithin si: 6- months unless otherise $ro"ided ore:tended by the A$$ro"in! ody.

RULE $ ! THE BOT PRE!UALIFICATION, BIDS, AND AARDS COMMITTEE

SECTION $.1 ! COMPOSITION

/he ead of the A!ency0*)+ shall create a / Pre4<ualification, ids and Aards&ommittee PA&-. /he ead of A!ency0*)+ shall determine the a$$ro$riate com$osition of the PA&, $ro"ided it includes the folloin! amon! its members3

a. At least a third ran(in! re!ular official of the A!ency0*)+ 4 &hairman

b. A le!al officer 4 Cember4Secretary

c. ne 1- technical officer (noled!eable ith the technical as$ects or re<uirements of the$ro'ect, duly desi!nated by the ead of A!ency0*)+ concerned on a $ro'ect4to4$ro'ect basis4 Cember $ro"isional-

d. ne 1- technical officer (noled!eable ith as$ects or re<uirements of the $ro'ect froma concerned re!ulatory body, hen a$$licable, to be in"ited by the A!ency0*)+ concernedon a $ro'ect4to4$ro'ect basis. 4 Cember $ro"isional and non4"otin!-

e. An officer (noled!eable in finance 4 Cember

f. An officer (noled!eable in mana!ement0o$eration of the $ro'ect 4 Cember


7/24/2019 IRR RA 7718


!. /o - re$resentati"es from the $ri"ate sector3 one from duly reco!ni%ed &ontractorsassociations> and the other from either the facility users, or duly reco!ni%ed accountin!associations. 4 bser"ers non4"otin!-

h. A re$resentati"e from the &ommission on Audit 4 bser"er non4"otin!-

i. ne 1- re$resentati"e from the PPP &enter for national $ro'ects, in accordance ithSection .6 a- 4 bser"er non4"otin!-

'. ne 1- re$resentati"e from the local #*) office, for *)+ $ro'ects 4 bser"er non4"otin!-

bser"ers ill be notified at least to - calendar days before the folloin! sta!es3 $re4bidconference, o$enin! of bids, e"aluation of bids, contract aard, and s$ecial meetin!s of thePA&. /he absence of obser"ers ill not nullify the PA& $roceedin!s, $ro"ided that theyha"e been duly in"ited in ritin!.

SECTION $. ! RESPONSIBILITY OF THE PBAC

/he PA& herein created shall be res$onsible for all as$ects of the $re4biddin! and biddin!$rocess in the case of solicited $ro$osals, and for the com$arati"e biddin! $rocessotherise (non as the ESiss &hallen!eE-, in the case of +nsolicited Pro$osals, includin!,amon! others, the $re$aration of the biddin!0tender documents, $ublication of the in"itationto $re4<ualify and bid, $re4<ualification of $ros$ecti"e bidders, conduct of $re4bidconferences and issuance of su$$lemental notices, inter$retation of the rules re!ardin! thebiddin!, the conduct of biddin!, e"aluation of bids, resolution of dis$utes beteen bidders,and recommendation for the acce$tance of the bid and0or for the aard of the $ro'ect.

SECTION $.$ ! UORUM

A <uorum of the PA& shall be com$osed of a sim$le ma'ority of all "otin! members of the

&ommittee. /he &hairman shall "ote only in case of a tie.

RULE @ ! BID>TENDER DOCUMENTS

SECTION @.1 ! BID>TENDER DOCUMENTS

/he A!ency0*)+ concerned shall $re$are the bid0tender documents, hich shall include thefolloin!3

a. E#nstructions to iddersF>

b. ECinimum esi!n, Performance Standards0S$ecifications, and conomic ParametersF

such as discount rate, inflation factor and forei!n e:chan!e rate, here a$$licable, amon!others>

c. Eraft &ontractF as a$$ro"ed in accordance ith Section .8- reflectin! the contractualarran!ement under hich the $ro'ect shall be underta(en, and the res$ecti"e underta(in!sof the contractin! $arties, amon! others, and usin! the model contracts $ro"ided byNA0PPP &enter as reference>

d. Eid ormF reflectin! the re<uired information to $ro$erly e"aluate the bid $ro$osal> e.forms of bid and $erformance securities>

f. re<uirements and timelines0milestones of concerned A!encies in !rantin! of franchise, if

a$$licable> and

!. other documents as may be deemed necessary by the A!ency0*)+ concerned.

SECTION @. ! INSTRUCTIONS TO BIDDERS


7/24/2019 IRR RA 7718


/he instructions to bidders, hich establish the rules of the biddin!, shall be clear,com$rehensi"e and fair to all bidders and shall, as far as necessary and $racticable, includethe folloin! information3

a. )eneral descri$tion and ob'ecti"es of the $ro'ect, includin! a statement that the $ro'ectshall be $ro$osed under Re$ublic Act No. 6957, as amended by Re$ublic Act No. 7718 and

these Re"ised #RR>

b. &ontractual arran!ement under hich the $ro'ect shall be underta(en>

c. id submission $rocedures and re<uirements, hich shall include information on themanner of bid submission, the number of co$ies of bid $ro$osal to be submitted, here thebids are to be submitted, the deadline for the submission of bids, $ermissible mode of transmission of bid $ro$osals, etc.>

d. #n"estment #ncenti"es and )o"ernment +nderta(in!s under Rule 1>

e. id security and bid security "alidity $eriod> f. Cilestones>

!. Cethod and criteria for the e"aluation of the technical com$onent of the bids> h.Parameters and criteria for e"aluation of financial com$onent of the bids>

Any one or more of the folloin! criteria may be used in the e"aluation of the financialcom$onent of the bid for determinin! the most ad"anta!eous bid for the )o"ernment3

i. *oest $ro$osed toll, fee, rental or char!e at the start of $ro'ect o$eration, if a$re4a!reed $arametric tariff ad'ustment formula is $rescribed in the biddocument>

ii. *oest $resent "alue of !o"ernment subsidy to be $ro"ided for the $eriodco"ered by the contract>

iii. i!hest $resent "alue of $ro$osed $ayments to )o"ernment, such as3 concessionfees, lease0rental $ayments, fi:ed0!uaranteed $ayments, and0or "ariable$ayments0$ercenta!e shares of re"enue for the $eriod co"ered by the contract>or

i". Any other a$$ro$riate financial bid $arameter as may be a$$ro"ed by theA$$ro"in! ody.

i. Cinimum amount of e<uity as $rescribed by the A$$ro"in! ody>

'. ormula and a$$ro$riate indices to be used in the ad'ustments of tolls0fees0rentals0char!es, hen a$$licable. Said formula shall ta(e into account the

reasonableness of the same to users of the $ro'ect0facility under biddin!>

(. Re<uirements of concerned re!ulatory bodies, such as, but not limited to3 thee$artment of n"ironment and Natural Resources NR-, for the issuance of ann"ironmental &om$liance &ertificate &&-> National Bater Resources oard NBR-, forthe issuance of the Bater Permit> the P&A, for the re!istration re<uirements of &ontractors> and, the /oll Re!ulatory oard /R-, for the re"ie of toll rates andad'ustment formula>

l. Re<uirements and timelines0milestones of concerned A!encies in !rantin! of franchise, if a$$licable>

m. &urrent rules and re!ulations of the SP>

n. Re"enue sharin! arran!ements, if any>

o. :$ected commissionin! date> and

$. Nationality and onershi$ re<uirements as, re<uired by la.SECTION @.$ ! MINIMUM DESIGNS, PERFORMANCE STANDARDS>SPECIFICATIONS

AND ECONOMIC PARAMETERS

#RR RA 7718 Page | 10

7/24/2019 IRR RA 7718


Cinimum desi!n and $erformance standards0s$ecifications, includin! a$$ro$riateen"ironmental standards as $rescribed by the NR, shall be clearly defined and shall refermore to the desired <uantity and <uality of the out$uts of the facility and should state thatnon4conformity ith any of these minimum re<uirements shall render the bids as non4res$onsi"e. *i(eise, for the $ur$ose of e"aluatin! bids, the folloin! economic $arameters,

amon! others, shall be $rescribed3

a. iscount rate, forei!n e:chan!e rate and inflation factor as $rescribed by the A$$ro"in!ody, if a$$licable>

b. Ca:imum $eriod of $ro'ect &onstruction>

c. i:ed term for $ro'ect o$eration and collection of the $ro$osed tolls0fees0rentals0char!es,if a$$licable>

d. ormula and $rice indices to be used in the ad'ustments of tolls0fees0rentals0char!es, if a$$licable>

e. Cinimum $eriod of re$ayment under the schemes contem$lated in Section 1.16, if a$$licable>

f. Re"enue Share of the #m$lementin! A!ency0*)+, if a$$licable> and

!. Cinimum amount of e<uity as $rescribed by the A$$ro"in! ody.

SECTION @.@ ! DRAFT CONTRACT

/he ead of the A!ency0*)+ shall be res$onsible in ensurin! the consistency of the draftcontract ith the $arameters, terms and conditions as a$$ro"ed by the A$$ro"in! ody.

/he draft contract should clearly define the basic and le!al relationshi$ beteen the $artiesand their ri!hts and res$onsibilities includin! the s$ecific )o"ernment +nderta(in!s to be$ro"ided by the A!ency0*)+ relati"e to the $ro'ect. /he draft contract shall ha"e thefolloin! mandatory terms or conditions3

a. s$ecific contractual arran!ement, term, and sco$e of or(>

b. $ro'ect technical s$ecifications and system features>

c. im$lementation milestones includin! those for securin! other a$$ro"als, $ro'ectcom$letion date>

d. cost reco"ery scheme "ia $ro$osed tolls, fees, rentals and char!es, as the case may be>

e. li<uidated dama!es as contem$lated under Section 1.1;> f. $erformance and arrantybonds contem$lated under Sections 1.8 and 1.9>

!. minimum insurance co"era!e as may be re<uired for the $ro'ect, such as &ontractorsD allris(, motor "ehicle, or(menDs com$ensation, third $arty liability, or com$rehensi"e !eneralliability insurance>

h. acce$tance tests and $rocedures> i. arranty $eriod and $rocedures after transfer->

'. !rounds for and effects of contract termination includin! modes for settlin! dis$utes>

(. the manner and $rocedures for the resolution of arranty a!ainst corru$tion, and

l. com$liance ith all other a$$licable las, rules, and re!ulations.

#n accordance ith Section .8, $rior to a$$ro"al of the draft contract by the ead of A!ency0*)+, the ffice of the )o"ernment &or$orate &ounsel )&&-, the ffice of theSolicitor4)eneral S)- or any other entity $rescribed by la0issuances as the statutorycounsel of )&&s and *)+s, and if necessary, the e$artment of inance - shall issue

#RR RA 7718 Page | 11

7/24/2019 IRR RA 7718


an o$inion on the draft contract ithin ten 12- days u$on recei$t by the corres$ondin!counsel of the draft contract as submitted by the A!ency0*)+.

RULE 5 ! UALIFICATION OF BIDDERS

SECTION 5.1 ! HO MAY PARTICIPATE

Any indi"idual, $artnershi$, cor$oration or firm, hether local or forei!n, includin! consortiaof local, forei!n or local and forei!n firms, sub'ect to the limits herein set, may $artici$ateor a$$ly for $re4 or simultaneous <ualification for $ro'ects co"ered under the $ro"isions of the Act and these Re"ised #RR.

SECTION 5. ! PUBLICATION OF INVITATION TO PRE!UALIFY AND BID

/he $ublication of #n"itation to Pre4<ualify and id for a $articular $ro'ect shall not be madeunless the A$$ro"in! ody has a$$ro"ed the $arameters, terms and conditions for the$ro'ect hich shall ser"e as basis for the draft contract as $ro"ided in Section ;.;.

/he ead of the A!ency0*)+ concerned shall, after obtainin! a$$ro"al for the $ro'ect,forthith cause to be $ublished, once e"ery ee( for three - consecuti"e ee(s, in atleast to - nes$a$ers of !eneral circulation and in at least one 1- local nes$a$er of !eneral circulation in the re!ion, $ro"ince, city or munici$ality in hich the $ro'ects are tobe im$lemented, a notice in"itin! all $ros$ecti"e infrastructure or de"elo$ment Pro'ectPro$onents to $re4<ualify and bid for the $ro'ects so a$$ro"ed. Said in"itation should alsobe $osted continuously in the ebsite of the A!ency0*)+ concerned, if a"ailable, and thePPP &enter durin! the $eriod stated abo"e. #f the total $ro'ect cost amounts to at least PhP522 million, the in"itation may also be $ublished in at least one 1- international $ublication.*i(eise, the A!ency0*)+ concerned shall issue official notification of the same to Pro'ectPro$onents re!istered ith them.

/he $ublished #n"itation to Pre4<ualify and id shall contain information, amon! others,hether the &ontractor to be em$loyed to underta(e the &onstruction or(s needs to be$re4identified for $re4<ualification $ur$oses or not.

or chan!es in the information contained in the $ublished in"itation to Pre4<ualify and toid, the A!ency0*)+ may cause the in"itation reflectin! said chan!es to be $ublished anein accordance ith this section.

SECTION 5.$ ! PERIOD TO PREPARE PRE!UALIFICATION DOCUMENTS

/he A!ency0*)+ concerned shall allo $ros$ecti"e bidders at least fifteen 15- calendardays from the last date of $ublication of the #n"itation to Pre4<ualify and id to $re$aretheir res$ecti"e $re4<ualification documents. #n any e"ent, the deadline for submission of

$re4<ualification statements shall be indicated in the $ublished #n"itation to Pre4<ualify andid.

SECTION 5.@ ! PRE!UALIFICATION REUIREMENTS

/o $re4<ualify, a $ros$ecti"e Pro'ect Pro$onent must com$ly ith the folloin!re<uirements3

a. *e!al Re<uirements

i. or $ro'ects to be im$lemented under a contractual arran!ement hich re<uires a$ublic utility ranchise for its o$eration, and here the $ro'ect $ro$onent and acility

$erator are one and the same entity, the $ros$ecti"e Pro'ect Pro$onent must beili$inos or, if cor$orations, must be duly re!istered ith the Securities and :chan!e&ommission S&- and oned u$ to at least si:ty $ercent 62=- by ili$inos, or, if aconsortium of local, forei!n, or local and forei!n firms, ili$inos must ha"e at leastsi:ty $ercent 62=- interest in said consortium.

ii. or $ro'ects to be im$lemented throu!h a contractual arran!ement re<uirin! a$ublic utility ranchise for its o$eration but here the Pro'ect Pro$onent and acility$erator may be to se$arate and inde$endent entities, the acility $erator must

#RR RA 7718 Page | 12

7/24/2019 IRR RA 7718


be a ili$ino or, if a cor$oration, must be duly re!istered ith the Securities and:chan!e &ommission S&- and oned u$ to at least si:ty $ercent 62=- byili$inos.

iii. or $ro'ects that do not re<uire a $ublic utility ranchise for its o$eration, the$ros$ecti"e Pro'ect Pro$onent or the acility $erator may be ili$ino or forei!n4

oned.

i". #n case the $ros$ecti"e Pro'ect Pro$onent is a consortium, the members or$artici$ants thereof shall be disclosed durin! the $re4<ualification sta!e and shallunder!o $re4 <ualification. urther, the members or $artici$ants thereof shall e:ecutean underta(in! in fa"or of the A!ency0*)+ that if aarded the contract, they shallbind themsel"es to be 'ointly and se"erally liable for the obli!ations of the Pro'ectPro$onent under the contract.

oe"er, if members of the consortium or!ani%e themsel"es as a cor$orationre!istered under Phili$$ine las, such cor$oration shall e:ecute such an underta(in!bindin! itself to be liable for the obli!ations of the Pro'ect Pro$onent under thecontract, hich shall substitute or be in lieu of the underta(in! submitted by the

members or $artici$ants of the consortium.

". or $ur$oses of $re4<ualification, the &ontractor $ro$osed to be en!a!ed by thePro'ect Pro$onent to underta(e the &onstruction of the $ro'ect must be duly licensedand accredited by the P&A, in the case of a ili$ino &ontractor, or by an e<ui"alentaccreditation institution in the &ontractorDs country of ori!in, in the case of a forei!n&ontractor. nce the Pro'ect Pro$onent is aarded the $ro'ect, such forei!n&ontractor must secure a license and accreditation from the P&A.

b. :$erience or /rac( Record 4 /he $ros$ecti"e Pro'ect Pro$onent must $ossess ade<uatee:$erience in terms of the folloin!3

i. irm :$erience 4 y itself or throu!h the member4firms in case of a consortium orthrou!h a &ontractors- hich the $ros$ecti"e Pro'ect Pro$onent may en!a!e for the$ro'ect, the $ros$ecti"e Pro'ect Pro$onent and0or its &ontractors- must ha"esuccessfully underta(en a $ro'ects- similar or related to the sub'ectinfrastructure0de"elo$ment $ro'ect to be bid. /he indi"idual firms and0or their&ontractors- may indi"idually s$eciali%e on any or se"eral $hases of the $ro'ects-.A consortium $ro$onent shall be e"aluated based on the indi"idual or collecti"ee:$erience of the member4firms of the consortium and of the &ontractors- that ithas en!a!ed for the $ro'ect.

or $ur$oses of the abo"e, consortia shall submit as $art of their $re4<ualificationstatement a business $lan hich shall, amon! others, identify their members, thee<uity interest0contribution of each member to the consortium, their $ros$ecti"e

&ontractors-, if the e:$erience of their &ontractors- are necessary for thedetermination of the ca$acity of the consortium to underta(e the $ro'ect, and thedescri$tion of the res$ecti"e roles said members and &ontractors, if necessary, shall$lay or underta(e in the $ro'ect, includin! as to hich members- isare- the$ros$ecti"e facility o$erators-, if a$$licable. #f undecided on a s$ecific &ontractor,the $ros$ecti"e Pro'ect Pro$onent may submit a short list of &ontractors from amon!hich it ill select the final &ontractor. Short listed &ontractors are re<uired tosubmit a statement indicatin! illin!ness to $artici$ate in the $ro'ect and ca$acity tounderta(e the re<uirements of the $ro'ect.

ii. Gey Personnel :$erience 4 /he (ey $ersonnel of the $ros$ecti"e Pro'ectPro$onent and0or its &ontractors- must ha"e sufficient e:$erience in the rele"ant

as$ect of schemes similar or related to the sub'ect $ro'ect, as s$ecified by theA!ency0*)+.

c. inancial &a$ability 4 /he $ros$ecti"e Pro'ect Pro$onent must ha"e ade<uate ca$ability tosustain the financin! re<uirements for the detailed en!ineerin! desi!n, &onstruction and0oro$eration and maintenance $hases of the $ro'ect, as the case may be.

/he A!ency0*)+ concerned shall determine on a $ro'ect4to4$ro'ect basis, and before $re4<ualification, the minimum amount of e<uity needed.

#RR RA 7718 Page | 13

7/24/2019 IRR RA 7718


or $ur$oses of $re4<ualification, this ca$ability shall be measured in terms of $roof of theability of the $ros$ecti"e Pro'ect Pro$onent and0or the consortium to $ro"ide3

i. <uitya- a minimum amount of e<uity to the $ro'ect measured in terms of the net

orth of the com$any, or in the case of consortia, the net orth of the lead memberor the combined net orth of members, or

b- a set4aside de$osit e<ui"alent to the minimum e<uity re<uired

ii. ebtA letter testimonial from a domestic uni"ersal0commercial ban( or an

international ban( ith a subsidiary0branch in the Phili$$ines or any international ban(reco!ni%ed by the SP attestin! that the $ros$ecti"e Pro'ect Pro$onent and0or members of the consortium are ban(in! ith them, and that they are in !ood financial standin! and0orare <ualified to obtain credit accommodations from such ban(s to finance the $ro'ect.

/he A!ency0*)+, throu!h its PA&, shall com$lete the e"aluation of the $re4<ualification documents of the $ros$ecti"e Pro'ect Pro$onents ithin tenty 2- calendardays.

SECTION 5.5 ! PRE!UALIFIED AND DISUALIFIED PROPONENTS

/he A!ency0*)+, throu!h its PA&, shall, ithin a $eriod of tenty 2- calendar days afterthe deadline set for the submission of the $re4<ualification documents, determine hichamon! $ros$ecti"e $ro$onents are H$re4<ualifiedH or Hdis<ualifiedF. Accordin!ly, the PA&shall duly inform the $ros$ecti"e Pro'ect Pro$onents ho ha"e been $re4<ualified ithin fi"e5- calendar days after a$$ro"al thereof. is<ualified $ro$onents shall li(eise be informedstatin! therein the !rounds for their dis<ualification ithin the same $eriod. /hose

dis<ualified may a$$eal the dis<ualification ithin fifteen 15- or(in! days from recei$t of the notice of dis<ualification to the ead of A!ency in the case of national $ro'ects, or theead of the #*) unit concerned or his authori%ed re$resentati"e , in the case of local$ro'ects.

/he biddin! $rocess ill be sus$ended hile the a$$eal is bein! e"aluated. /he ead of A!ency or ead of the #*) unit concerned or his authori%ed re$resentati"e, as the casemay be, shall act on the a$$eal ithin forty4fi"e ;5- or(in! days from recei$t of thea$$eal and u$on filin! of a non4refundable a$$eal fee in an amount e<ui"alent to no lessthan one4half of one $ercent 2.5 =- of the Pro'ect &ost as a$$ro"ed by the A$$ro"in!ody. /he decision of the ead of A!ency of ead of the #*) unit concerned or hisauthori%ed re$resentati"e on the a$$eal shall be final and immediately e:ecutory.

SECTION 5.6 ! ISSUANCE OF TENDER DOCUMENTS

/he A!ency0*)+ concerned shall ma(e a"ailable the related bid documents to all $re4<ualified bidders u$on com$letion of $re4<ualification e"aluation and issuance of notice of $re4<ualification0dis<ualification to $ro"ide res$ecti"e bidders am$le time to e:amine thesame and to $re$are their res$ecti"e bids $rior to the date of o$enin! of bids.

SECTION 5.7 ! SIMULTANEOUS OR SINGLE!STAGE UALIFICATION AND BIDDING

#n the e:i!ency of ser"ice, the A!ency0*)+ ead may o$t to do a simultaneous <ualificationinstead of a $re4<ualification of $ro$onents. #n case of simultaneous <ualification, the$ublication of the in"itation, folloin! the re<uirements in Section 5., shall be for the

submission of <ualification re<uirements and bid $ro$osals. /he bidders shall be as(ed tosubmit their $ro$osal in three en"elo$es> the first en"elo$e 4 the <ualification documentscorres$ondin! to the re<uirements so stated in Section 5.; herein> the second en"elo$e 4the technical $ro$osal> and the third en"elo$e 4 the financial $ro$osal. /he re<uirements forbid submission are co"ered under Rule 7 of these Re"ised #RR. /he $eriod for the$re$aration of the <ualification documents shall be subsumed under the time allotted for bid$re$aration.

SECTION 5. ! CHANGES TO PRE!UALIFICATION AND TENDER DOCUMENTS

#RR RA 7718 Page | 14

7/24/2019 IRR RA 7718


#f chan!es to $re4<ualification and tender documents are made $rior to $re4<ualification of $ros$ecti"e bidders, the A!ency0*)+ shall issue a bid bulletin to all bidders ho had$urchased the tender0bid documents informin! them of such chan!es, and afford themreasonable time ithin hich to consider the same in the $re$aration of theirsubmission0bids. Such issuance shall be duly ac(noled!ed by each bidder $rior to the

submission of his $re4<ualification documents0bid and shall be so indicated in hissubmission0bid. /his shall be obser"ed under the sin!le4sta!e biddin! $rocess simultaneous<ualification- as ell as in the to4sta!e biddin! $rocess.

urther, if chan!es to $re4<ualification and tender documents are made after the $re4<ualification sta!e, the bid bulletin shall be issued only to all $re4<ualified bidders.

Pro"ided that, consistent ith Section .8 of these Re"ised #RR, the ead of A!ency0*)+shall secure a$$ro"al by the a$$ro$riate A$$ro"in! ody $rior to the issuance of the bidbulletin for any of the folloin! material chan!es in the information contained in thedocuments obtained by $ros$ecti"e bidders for sin!le4sta!e and to4sta!e biddin! $rocess3

a. &han!es hich reduce the ser"ice le"els to the $ublic>

b. &han!es hich reduce the economic internal rate of return belo the hurdle rate used inthe ori!inal analysis of the $ro'ect>

c. &han!es hich increase the total !o"ernment subsidy to a $ro'ect by at least fi"e $ercent5=- of the total $ro'ect cost> and

d. &han!es in the ris( $rofile hich are detrimental to the best interest of the !o"ernment.

/he concerned A!ency0*)+ shall inform in ritin! the concerned statutory counsel as$ro"ided in Section .8 of these Re"ised #RR of such chan!es.

SECTION 5.9 ! ACCEPTANCE OF CRITERIA AND AIVER OF RIGHTS TO ENJOIN

PROJECT

All $ros$ecti"e bidders shall be re<uired to submit, as $art of their <ualification documents,a statement sti$ulatin! that the bidder i- has acce$ted the <ualification criteria establishedby the PA& of the A!ency0*)+ concerned, and ii- ai"es any ri!ht it may ha"e to see(and obtain a rit of in'unction or $rohibition or restrainin! order a!ainst the concernedA!ency0*)+ or its PA& to $re"ent or restrain the <ualification $rocess or any $roceedin!srelated thereto, the holdin! of a biddin! or any $roceedin!s related thereto, the ne!otiationof and aard of the contract to a successful bidder, and the carryin! out of the aarded

contract. Such ai"er shall, hoe"er, be ithout $re'udice to the ri!ht of a dis<ualified orlosin! bidder to <uestion the lafulness of its dis<ualification or the re'ection of its bid bya$$ro$riate administrati"e or 'udicial $rocesses not in"ol"in! the issuance of a rit of in'unction or $rohibition or restrainin! order.

RULE 6 ! SUPPLEMENTAL NOTICES AND PRE!BID CONFERENCES

SECTION 6.1 ! RESPONSIBILITY OF BIDDER

/he $ros$ecti"e bidder shall be solely res$onsible for ha"in! ta(en all the necessary ste$s tocarefully e:amine and ac<uaint himself ith the re<uirements and terms and conditions of

the biddin! documents ith res$ect to the cost, duration, and e:ecution0o$eration of the$ro'ect as it affects the $re$aration and submission of his bid. /he A!ency0*)+ concernedshall not assume any res$onsibility re!ardin! erroneous inter$retations or conclusions bythe $ros$ecti"e bidder out of data furnished or indicated in the biddin! documents.

SECTION 6. ! SUPPLEMENTAL NOTICES

#f a bidder is in doubt as to the meanin! of any data or re<uirements or any $art of thebiddin! documents, ritten re<uest may be submitted to the A!ency0*)+ concerned for an

#RR RA 7718 Page | 15

7/24/2019 IRR RA 7718


inter$retation of the same, alloin! sufficient time for the concerned A!ency0*)+ to re$lybefore the submission of his0her bid. Any substanti"e inter$retation !i"en by the concernedA!ency0*)+ shall be issued in the form of a Su$$lemental Notice, and furnished to all$ros$ecti"e bidders. /he A!ency0*)+ concerned may also issue Su$$lemental Notices to all$ros$ecti"e bidders at any time for $ur$oses of clarifyin! any $ro"isions of the biddin!documents $ro"ided that the same is issued ithin a reasonable $eriod to allo all bidders

to consider the same in the $re$aration of their bids. Recei$t of all Su$$lemental Noticesshall be duly ac(noled!ed by each bidder $rior to the submission of his bid and shall be soindicated in the bid.

SECTION 6.$ ! PRE!BID CONFERENCE

or $ro'ects costin! less than PhP 22 million, a $re4bid conference shall also be conductedby the concerned A!ency0*)+ at least thirty 2- calendar days before the deadline for thesubmission of bids to clarify any $ro"isions, re<uirements and0or terms and conditions of the biddin! documents and0or any other matter that the $ros$ecti"e bidders may raise. or$ro'ects costin! PhP 22 million and abo"e, the $re4bid conference shall be conducted nolater than si:ty 62- calendar days before the submission of bids.

Nothin! stated at the $re4bid conference shall modify any $ro"isions or terms and conditionsof the biddin! documents unless such is made as a ritten amendment thereto by theconcerned A!ency0*)+. Any amendments shall be issued by the A!ency0*)+ concerned toall bidders ithin a reasonable time to allo them to consider the same in the $re$aration of their bids and shall be duly ac(noled!ed by each bidder $rior to the submission of his bidand shall be so indicated in his bid. A summary of the $re4bid conference $roceedin!s shallalso be issued to all $ros$ecti"e bidders by the A!ency0*)+ concerned. Attendance to the$re4bid conference by $ros$ecti"e bidders shall not be mandatory.

RULE 7 ! SUBMISSION, RECEIPT AND OPENING OF BIDS

SECTION 7.1 ! REUIREMENTS FOR BID SUBMISSION

idders shall be re<uired to submit their bids on or before the deadline sti$ulated in the E#nstructions to iddersF. or $re4<ualified bidders, their bids shall be submitted in at leastto - se$arate sealed en"elo$es, the first bein! the technical $ro$osal and the second thefinancial $ro$osal. #n case of simultaneous <ualification, at least three - en"elo$es shall besubmitted. /he first en"elo$e shall be the <ualification re<uirements, the second thetechnical $ro$osal and the third the financial $ro$osal. All en"elo$es shall bear the name of the bidder and $ro'ect to be bid out in ca$ital letters and addressed to the PA& of theconcerned A!ency0*)+. /hey shall be mar(ed Ho Not $en efore date and time of o$enin! of bids-H. /he en"elo$es shall be a$$ro$riately labeled as IualificationRe<uirements, /echnical Pro$osal and inancial Pro$osal.

a. /he EIualification Re<uirementsF shall contain re<uirements as stated in Section 5.;

b. /he H/echnical Pro$osalH shall contain the folloin! re<uirements, as may be deemednecessary by the concerned A!ency0*)+3

i. Acce$tance0&om$liance statements ith re!ard to all terms and conditions in the tenderdocuments includin! those ith re!ard to financial $arameters and any chan!es hich eremade thereto by the A!ency0*)+ $rior to bid submission.

ii. $erational feasibility of the $ro'ect, hich shall indicate the $ro$osed or!ani%ation,methods and $rocedures for the o$eration and maintenance of the $ro'ect under biddin!>

iii. /echnical soundness0$reliminary en!ineerin! desi!n, includin! $ro$osed $ro'ect timeline>

i". Preliminary en"ironmental assessment, hich shall indicate the $robable ad"erse effectsof the $ro'ect on the en"ironment and the corres$ondin! miti!atin! measures to beado$ted>

". Pro'ect &ost>

#RR RA 7718 Page | 16

7/24/2019 IRR RA 7718


"i. id Security. /he A!ency0*)+ shall determine hich form of id Security it ill re<uirehich may be in cash, certified chec(, mana!er?s chec(, letter of credit, or ban(draft0!uarantee issued by a re$utable local0forei!n ban(, or a surety bond callable ondemand issued by the )o"ernment Ser"ice #nsurance System )S#S- or an entity dulyre!istered and reco!ni%ed by the ffice of the #nsurance &ommissioner and acce$table tothe A!ency0*)+, or any combination thereof $ayable to the A!ency0*)+ concerned based

on the total Pro'ect &ost as indicated by the $ros$ecti"e Pro'ect Pro$onent- in accordanceith the folloin! schedules3

PRJ&/ &S/

as estimated by the A!ency0*)+ or

$ro$osed by the Pro'ect Pro$onent-

RI+#R # S&+R#/K

less than PhP 5.2 billion .2= of the Pro'ect &ost

PhP 5.2 billion to less than PhP 12.2

billion

1.5= of the Pro'ect &ost or PhP 122

million, hiche"er is hi!her

PhP 12.2 billion and more 1.2= of the Pro'ect &ost or PhP 152

million, hiche"er is hi!her

/he A!ency0*)+ shall determine hether the id Security shall be issued by a local ban(,an international ban(, or both. #n case the bid security is issued by an international ban(,said security has to be confirmed and "alidated by its local branch in the Phili$$ines or by aban( that is duly re!istered and authori%ed by the SP.

/he $ostin! of the bid security is for the $ur$ose of !uaranteein! that the $ro$osed contractaardee shall enter into contract ith the concerned A!ency ithin the time $rescribedtherefor.

ids and bid securities shall be "alid for a $eriod to be $rescribed by the A!ency0*)+concerned in the biddin! documents but in no case beyond one hundred and ei!hty 182-calendar days from the date of o$enin! of bids, sub'ect to Section 11.7. /he actual amountof bid security to be $osted by the bidders ill be fi:ed by the concerned A!ency0*)+ $riorto biddin!. Said actual amount shall not be less than the amount $rescribed in the abo"eschedule.

"ii. ther documents as may be re<uired by the concerned A!ency0*)+ to su$$ort thebidder?s technical $ro$osal.

c. /he Hinancial Pro$osalH shall contain the folloin!, as the case may be3

i. Pro$osed Pro'ect &ost, o$eration and maintenance cost, and all other related costs>

ii. Pro'ect financin! scheme, hich may include the amount of e<uity to be infused, debt tobe obtained for the $ro'ect, and sources of financin!> and

iii. inancial bid corres$ondin! to the $arameters set by the A!ency0*)+ in accordance ithSection ;. h-.

SECTION 7. ! SUBMISSION OF LATE BIDS

ids submitted after the deadline for submission $rescribed in the E#nstructions to iddersF

shall be considered late and shall be returned uno$ened.

SECTION 7.$ ! OPENING OF THE ENVELOPE FOR UALIFICATION OF BIDDER

At the date and time sti$ulated in the E#nstructions to iddersF, the PA& shall o$en theen"elo$e and ascertain hether the same is com$lete in terms of the information re<uiredunder Section 5.;. Such information shall be recorded at the time, includin! the names and

#RR RA 7718 Page | 17

7/24/2019 IRR RA 7718


addresses of re<uired itnesses. All bidders or their re$resentati"es $resent at the o$enin!of the first en"elo$es shall si!n a re!ister of the o$enin! of the <ualification en"elo$e.

SECTION 7.@ ! EVALUATION OF UALIFICATION REUIREMENTS

/he <ualification documents ill first be e"aluated $rior to the o$enin! of the technical

$ro$osal. /he A!ency0*)+ shall inform bidders hether they are <ualified or dis<ualified,and for the latter, the reasons for dis<ualification, ithin ten 12- calendar days. nly<ualified bidders shall be alloed to $artici$ate in the bid e"aluation. is<ualified biddersshall be informed of the !rounds of dis<ualification and their technical and financial$ro$osals returned uno$ened.

SECTION 7.5 ! REJECTION OF BIDS

#ncom$lete information on any of the en"elo$es and0or non4com$liance ith the bid securityre<uirements $rescribed in Section 7.1 b- shall be !rounds for automatic re'ection of bids.

SECTION 7.6 ! OPENING OF THE ENVELOPE FOR THE TECHNICAL PROPOSAL

At the date and time of bid o$enin!, as sti$ulated in the E#nstructions to iddersF, the PA&shall o$en only the technical $ro$osal and ascertain hether the same is com$lete in termsof the data0information re<uired under Section 7.1 b- abo"e and hether the same isaccom$anied by the re<uired bid security in the $rescribed form, amount and $eriod of "alidity. Such information shall be recorded at the time, includin! the names and addressesof re<uired itnesses. All bidders or their re$resentati"es $resent at the o$enin! of the firsten"elo$es shall si!n a re!ister of the bid o$enin!.

SECTION 7.7 ! OPENING OF THE ENVELOPE FOR THE FINANCIAL PROPOSAL

nly those bidders hose technical $ro$osal $assed the e"aluation criteria as $rescribedunder Section 8.1 hereof shall ha"e their financial $ro$osal o$ened for further e"aluation.

/hose ho failed the e"aluation of the technical $ro$osal shall not be considered further,and the PA& shall return their financial $ro$osals uno$ened to!ether ith the reasons fortheir dis<ualification from the biddin!.

nce the bidders ho ha"e <ualified for the e"aluation of the financial $ro$osal ha"e beendetermined, the PA& shall notify said bidders of the date, time and $lace of the o$enin! of the en"elo$es for the financial $ro$osal. /he o$enin! thereof shall follo the same$rocedures $rescribed for the o$enin! of the $re"ious en"elo$es.

SECTION 7. ! ITHDRAAL AND>OR MODIFICATION OF BIDS

Bithdraal and0or modification of bids may be alloed u$on ritten notice by the bidderconcerned to the A!ency0*)+ $rior to the time and date set for the o$enin! of bids o$enin!

of first en"elo$es- as s$ecified in the E#nstructions to iddersF. No bids shall be modified orithdran after the time $rescribed to o$en bids. id modifications recei"ed after said$eriod shall be considered late and ill be returned uno$ened. Bithdraal of bids after thebid o$enin! date shall cause the forfeiture of the bidder?s bid security.

RULE ! EVALUATION OF BIDS

SECTION .1 ! THE FIRST ENVELOPE EVALUATION

/he e"aluation of bids shall be underta(en in to - sta!es, in accordance ith the$rocedures described belo.

/he first en"elo$e e"aluation shall in"ol"e the assessment of the technical, o$erational,en"ironmental and financin! "iability of the $ro$osal as contained in the bidders? firsten"elo$es "is4L4"is the $rescribed re<uirements and criteria0minimum standards and basic$arameters $rescribed in the biddin! documents. nly those bids that ha"e beendetermined to ha"e $ositi"ely $assed the first sta!e of e"aluation shall be <ualified andconsidered for the second sta!e of e"aluation.

#RR RA 7718 Page | 18

7/24/2019 IRR RA 7718


/he A!ency0*)+ concerned shall e"aluate the technical $ro$osals of the bidder inaccordance ith the folloin! criteria3

a. /echnical soundness $reliminary en!ineerin! desi!n- 4 /he basic en!ineerin! desi!n of the $ro'ect should conform to the minimum desi!n and $erformance standards ands$ecifications set by the A!ency0*)+ concerned as $rescribed in the biddin! documents.

/he en!ineerin! sur"eys, $lans and estimates should be underta(en ithin M04 2= of thefinal <uantities. /he &onstruction methods and schedules should also be $resented andshon to be feasible or HdoableH.

b. $erational feasibility 4 /he $ro$osed or!ani%ation, methods, and $rocedures foro$eratin! and maintainin! the com$leted facility must be ell defined, should conform tothe $rescribed $erformance standards, and should be shon to be or(able. Bherefeasible, it should $ro"ide for the transfer of technolo!y used in e"ery $hase of the $ro'ect.

c. n"ironmental Standards 4 /he $ro$osed desi!n and the technolo!y of the $ro'ect to beused must be in accordance ith the en"ironmental standards set forth by the e$artmentof n"ironment and Natural Resources NR-, as indicated in the bid documents. Anyad"erse effects on the en"ironment as a conse<uence of the $ro'ect as $ro$osed by the

$ros$ecti"e Pro'ect Pro$onent must be $ro$erly identified, includin! the corres$ondin!correcti"e0miti!atin! measures to be ado$ted.

d. Pro'ect inancin! 4 /he $ro$osed financin! $lan should $ositi"ely sho that the samecould ade<uately meet the &onstruction cost as ell as the o$eratin! and maintenance costsre<uirements of the $ro'ect. /he A!ency0*)+ concerned shall assess the financin! $ro$osalsof the bidders if the same matches and ade<uately meets the cost re<uirements of the$ro'ect under biddin!.

/he PA& of the A!ency0*)+ concerned shall com$lete the e"aluation of the technical$ro$osal ithin tenty 2- calendar days from the date the bids are o$ened.

SECTION . ! THE SECOND ENVELOPE EVALUATION

/he second en"elo$e e"aluation shall in"ol"e the assessment and com$arison of thefinancial $ro$osals of the bidders, based on the $arameters stated in Section ;. h-. /hesecond sta!e e"aluation shall be com$leted by the PA& of the concerned A!ency0*)+ithin fifteen 15- calendar days from the date the first sta!e e"aluation shall ha"e beencom$leted.

#n the case of / and */ schemes, a ili$ino Pro'ect Pro$onent ho submits an e<uallyad"anta!eous bid ith e:actly the same $rice and technical s$ecifications as that of aforei!n Pro'ect Pro$onent shall be !i"en $reference.

SECTION .$ ! RIGHT TO REJECT ALL BIDS

/he A!ency0*)+ concerned reser"es the ri!ht to re'ect any or all bids, ai"e any minordefects therein and acce$t the offer it deems most ad"anta!eous to the )o"ernment.

RULE 9 ! NEGOTIATED CONTRACT

SECTION 9.1 ! DIRECT NEGOTIATION

irect ne!otiation shall be resorted to hen there is only one com$lyin! bidder left asdefined hereunder3

a. #f, after ad"ertisement, only one $ros$ecti"e Pro'ect Pro$onent a$$lies for $re4<ualification and it meets the $re4<ualification re<uirements, after hich, it is re<uired tosubmit a bid0$ro$osal hich is subse<uently found by the A!ency0*)+ to be com$lyin!>

b. #f, after ad"ertisement, more than one $ros$ecti"e Pro'ect Pro$onent a$$lied for $re4<ualification but only one meets the $re4<ualification re<uirements, after hich it submits abid $ro$osal that is found by the A!ency0*)+ to be com$lyin!>

#RR RA 7718 Page | 19

7/24/2019 IRR RA 7718


c. #f, after $re4<ualification of more than one $ros$ecti"e Pro'ect Pro$onent, only onesubmits a bid hich is found by the A!ency0*)+ to be com$lyin!>

d. #f, after $re4<ualification, more than one $ros$ecti"e Pro'ect Pro$onent submit bids butonly one is found by the A!ency0*)+ to be com$lyin!>

#n such e"ents, hoe"er, any dis<ualified bidder may a$$eal the dis<ualification of theconcerned A!ency0*)+ to the ead of A!ency, in case of national $ro'ects, or to the ead of the #*) unit concerned or his authori%ed re$resentati"e, in case of local $ro'ects, ithinfifteen 15- or(in! days from recei$t of the notice of dis<ualification. /he ead of A!encyor the ead of the #*) unit concerned or his authori%ed re$resentati"e shall act on thea$$eal ithin forty4fi"e ;5- or(in! days from recei$t thereof. /he decision of the ead of A!ency or the ead of the #*) unit concerned or his authori%ed re$resentati"e shall befinal and immediately e:ecutory.

SECTION 9. ! UNSOLICITED PROPOSALS

+nsolicited Pro$osals may be acce$ted by an A!ency0*)+ on a ne!otiated basis, sub'ect tothe conditions $ro"ided under Rule 12.

SECTION 9.$ ! CONDITIONS FOR NEGOTIATED PROJECTS

#n the instances here ne!otiated $ro'ects are alloed, the #&& shall determine theReasonable Rate of Return $rior to the ne!otiation in the case of solicited $ro$osals asreferred to under Section 9.1 of these Re"ised #RR. /he sco$e of ne!otiation, in the case of solicited $ro$osals referred to under Section 9.1 of these Re"ised #RR, shall be limited to thefinancial $ro$osal of the $ro$onent and com$liance ith the #&&4determined ReasonableRate of Return. irect ne!otiation should not result in a hi!her subsidy, or hi!her user fee,or loer amount of !o"ernment re"enue, or lon!er concession $eriod.

SECTION 9.@ ! FINANCIAL AND TECHNICAL EVALUATION OF NEGOTIATED

CONTRACTS

#n so far as a$$licable, the same rules $ro"ided for the e"aluation of the technical andfinancial as$ects of bid $ro$osals shall be a$$lied in the e"aluation of Ne!otiated &ontractsauthori%ed in the Act and these Re"ised #RR.

RULE 1 ! UNSOLICITED PROPOSALS

SECTION 1.1 ! REUISITES FOR UNSOLICITED PROPOSALS

Any A!ency0*)+ may acce$t +nsolicited Pro$osals on a ne!otiated basis $ro"ided that allthe folloin! conditions are met3

a. the $ro'ect in"ol"es a ne conce$t or technolo!y as determined by the A!ency0*)+and0or is not $art of the *ist of Priority Pro'ects>

b. no irect )o"ernment )uarantee, subsidy or e<uity is re<uired> and

c. the A!ency0*)+ concerned has in"ited by $ublication, for three - consecuti"e ee(s, ina nes$a$er of !eneral circulation, com$arati"e or com$etiti"e $ro$osals and no other$ro$osal is recei"ed for a $eriod of si:ty 62- or(in! days.

#f no com$arati"e or com$etiti"e $ro$osal or no com$lyin! bid is recei"ed by theA!ency0*)+, the ori!inal $ro$onent shall immediately be aarded the contract. #n the e"entthat a com$arati"e $ro$onent submits a $rice $ro$osal better than that submitted by theori!inal $ro$onent, the latter shall ha"e the ri!ht to match such $rice $ro$osal ithin thirty2- or(in! days from recei$t of a notification from the A!ency0*)+ of the result of thecom$arati"e or com$etiti"e bid. Should the ori!inal $ro$onent fail to match the $rice$ro$osal of the com$arati"e $ro$onent ithin the s$ecified $eriod, the contract shall beaarded to the com$arati"e $ro$onent. n the other hand, if the ori!inal $ro$onentmatches the $rice $ro$osal of the com$arati"e $ro$onent ithin the s$ecified $eriod, the$ro'ect shall immediately be aarded to the ori!inal $ro$onent.

SECTION 1. ! NE TECHNOLOGY

#RR RA 7718 Page | 20

7/24/2019 IRR RA 7718


/he Pro'ect Pro$onent $ro$osin! a $ro'ect in"ol"in! a ne conce$t or technolo!y shallincor$orate in its $ro$osal information re!ardin! said ne conce$t or technolo!y hich itshould ha"e directly, or throu!h any of its (ey members, successfully im$lemented at ascale similar to the $ro$osed $ro'ect. /he information disclosed must be in sufficient detailso as to allo the A!ency0*)+ to $ro$erly e"aluate the ne conce$t or technolo!y.

Additionally, the ne technolo!y must $ossess at least one of the folloin! attributes3

a. A reco!ni%ed $rocess, desi!n, methodolo!y or en!ineerin! conce$t hich hasdemonstrated its ability to si!nificantly reduce im$lementation of &onstruction costs,accelerate $ro'ect e:ecution, im$ro"e safety, enhance $ro'ect $erformance, e:tendeconomic life, reduce costs of facility maintenance and o$erations, or reduce ne!ati"een"ironmental im$act or social0economic disturbances or disru$tions either durin! the$ro'ect im$lementation0&onstruction $hase or the o$eration $hase>

b. A $rocess for hich the Pro'ect Pro$onent or any member of the $ro$onent consortium$ossesses e:clusi"e ri!hts, either orld4ide or re!ionally> or

c. A desi!n, methodolo!y or en!ineerin! conce$t for hich the $ro$onent or a member of

the $ro$onent consortium or association $ossesses intellectual $ro$erty ri!hts.

SECTION 1.$ ! PROJECTS INELIGIBLE FOR UNSOLICITED PROPOSALS

Pro'ects included in the E*ist of Priority Pro'ectsF, as defined under Section ., shall not beeli!ible to be acce$ted as +nsolicited Pro$osals, unless in"ol"in! a ne conce$t ortechnolo!y. #n addition, any com$onent of an a$$ro"ed $ro'ect shall not be eli!ible for any+nsolicited Pro$osal.

SECTION 1.@ ! INVESTMENT INCENTIVES AND GOVERNMENT UNDERTAINGSFOR UNSOLICITED PROPOSALS

As a !eneral rule, the )o"ernment may !rant #n"estment #ncenti"es to +nsolicitedPro$osals as enumerated under Rule 1.

/he !rant of usufruct of !o"ernment assets, includin! amon! others, ri!ht4of4ay, to Pro'ectPro$onents shall be considered as direct subsidy or e<uity unless !o"ernment recei"esa$$ro$riate com$ensation $ursuant to e:istin! las, rules and re!ulations, and !uidelines.

All costs related to relocation and resettlement in connection ith the $ro'ect shall beshouldered by the Pro'ect Pro$onent.

/he standards for "aluation of !o"ernment assets, includin! amon! others, ri!ht4of4ay,and of relocation and resettlement shall be $ursuant to Re$ublic Act No.897; and othere:istin! las, rules and re!ulations, and !uidelines. /he a$$raisal or "aluation shall be

underta(en by a third4$arty or an inde$endent institution or indi"iduals duly accredited toconduct the a$$raisal of the $ro$erty0asset.

SECTION 1.5 ! SUBMISSION OF A COMPLETE UNSOLICITED PROPOSAL

or an unsolicited $ro$osal to be considered by the A!ency0*)+, the $ro$onent has tosubmit a com$lete $ro$osal, hich shall include a co"er letter, feasibility study hich shouldindicate rele"ant assum$tions, com$any $rofile, the draft contract ad"erted to in Section ;.;abo"e, and other documents that are needed e"en if $ro$rietary in nature. /he co"er lettershall indicate the basic information on the +nsolicited Pro$osal such as its e:$ected out$utand outcome, im$lementation $eriod, and !eneral descri$tion of the ne conce$t ortechnolo!y, amon! others, and shall include the com$any $rofile of the unsolicited

$ro$onent. /he feasibility study, draft contract, and other documents that are needed e"enif $ro$rietary in nature shall be submitted in a sealed en"elo$e. /he A!ency0*)+ shallac(noled!e recei$t of the $ro$osal ithin se"en 7- calendar days and ad"ise the$ro$onent hether the $ro$osal is com$lete or incom$lete ithin thirty 2- calendar daysfrom submission thereof. #f incom$lete, the A!ency0*)+ shall return to the $ro$onent itssubmission indicatin! hat information is lac(in! or necessary and the A!ency0*)+ mayentertain thereafter other same or similar $ro'ect $ro$osal.

#RR RA 7718 Page | 21

7/24/2019 IRR RA 7718


SECTION 1.6 ! TREATMENT OF MORE THAN ONE PROPOSAL FOR THE SAME OR SIMILAR PROJECT

#n the case here the A!ency0*)+ recei"es more than one +nsolicited Pro$osal in"ol"in!the same or similar $ro'ect $rior to acce$tance of the $ro$osal as the Eori!inal $ro$onentF,the A!ency0*)+ may re'ect all such $ro$osals or instead, bid out the $ro'ect as a solicited

$ro$osal. therise, the A!ency0*)+ shall e"aluate the $ro$osals usin! a first in timea$$roach. +nder this a$$roach, the first com$lete $ro$osal is e"aluated and decided u$on./he second com$lete $ro$osal ill only be entertained if the first one is re'ected. therise,the second $ro$osal ill be considered only if there is a failure in the ne!otiation of the first$ro$osal or durin! the Ein"itation for com$arati"e $ro$osalsF as defined under Section12.11.

+nder the first in time a$$roach, the ead of A!ency0*)+ shall ac(noled!e the submissionof other unsolicited $ro$onent for the same or similar $ro'ect conce$t, and ad"ise theunsolicited $ro$onent on e:istence of similar $ro'ect conce$t and its ran(0$osition based ondate of submission of unsolicited $ro$osals. #f a contract is aarded to a $ro$onent, theuno$ened en"elo$e0s shall be returned to the res$ecti"e $ro$onents.

SECTION 1.7 ! EVALUATION AND ACCEPTANCE OF UNSOLICITED PROPOSALS

/he A!ency0*)+ is tas(ed ith the e"aluation of the $ro$osal. /he A!ency0*)+ shall3 1-a$$raise the merits of the $ro'ect> - <ualify the $ro$onent based on the $ro"isions of Rule5 hereof> - assess the a$$ro$riateness of the contractual arran!ement and reasonablenessof the ris( allocation> ;- recommend a reasonable Rate of Return RR-> and, 5- inform the#&& and the PPP &enter of its recei$t of an +nsolicited Pro$osal. /he A!ency0*)+ shalle"aluate the $ro$osal, <ualify the $ro$onent, and ad"ise hether it acce$ts or re'ects the$ro$osal ithin one hundred and tenty 12- calendar days u$on recei$t of the com$lete$ro$osal. /he A!ency0*)+ shall indicate in its letter of acce$tance the confirmation of the$ro$onent as Eori!inal $ro$onentF. #n case of acce$tance, the A!ency0*)+ shall endorse theunsolicited $ro$osal and submit all $ertinent documentation to the #&&0A$$ro"in! ody. At

this $oint, the A!ency0*)+ ill no lon!er entertain other similar $ro$osals unless the $artiesare unable to a!ree durin! the $eriod for ne!otiations s$ecified in Section 12.8 belo, or theori!inal $ro$onent is unable to com$ly ith the $arameters set by the A$$ro"in! ody, oruntil the solicitation of com$arati"e $ro$osals has been com$leted.

SECTION 1. ! ICC DETERMINATION OF REASONABLE RATE OF RETURN 8ROR

AND PARAMETERS AND APPROVAL OF THE UNSOLICITED PROJECT PRIOR TO

NEGOTIATION ITH THE ORIGINAL PROPONENT

Bithin fi"e 5- calendar days u$on issuance of the letter of acce$tance by the A!ency0*)+to the $ro$onent, the ead of A!ency0*)+ shall endorse to the #&& the $ro$osed unsolicited$ro'ect. Pursuant to Section o- of the Act, the #&& shall determine the reasonable RR onin"estments and o$eratin! and maintenance cost based on the reasonable RR

recommended by the A!ency0*)+.

Bithin thirty 2- or(in! days u$on recei$t of endorsement, results of due dili!encee"aluation conducted and submission of com$lete documentation from the ead of A!ency0*)+, the A$$ro"in! ody shall act on the unsolicited $ro'ect u$on recommendationby the #&& of the $ro'ect includin! the determination of the reasonable RR and other$arameters for ne!otiation. /he A$$ro"in! ody shall formally ad"ise the A!ency0*)+,thereafter, that such determination is final and e:ecutory.

Bithin se"en 7- calendar days u$on recei$t of the A!ency0*)+ of the formal ad"ise of the#&&0A$$ro"in! ody, the A!ency0*)+ shall inform in ritin! the ori!inal $ro$onent of themechanics of the ne!otiation includin! the commencement date and the authori%ed

re$resentati"es- of the A!ency0*)+. Ne!otiations shall focus on the $ro'ect sco$e,im$lementation arran!ements, reasonable RR and other $arameters determined by#&&0A$$ro"in! ody, and the terms and conditions of the draft contract for the +nsolicitedPro$osal, amon! others. /he A!ency0*)+ and the ori!inal $ro$onent shall concludene!otiations ithin a $eriod of ei!hty 82- calendar days from recei$t by the $ro$onent of ritten notice from the A!ency0*)+ to commence ne!otiation. /he A!ency0*)+ and theori!inal $ro$onent shall ne!otiate in !ood faith and endea"or to com$lete the ne!otiationithin the ei!hty 82-4calendar day $eriod> $ro"ided, that should there be irreconcilabledifferences durin! the ne!otiation $eriod, the A!ency0*)+ shall ha"e the o$tion to re'ect the

#RR RA 7718 Page | 22

7/24/2019 IRR RA 7718


$ro$osal by ad"isin! the ori!inal $ro$onent in ritin! statin! the !rounds for re'ection andthereafter may acce$t a ne +nsolicited Pro$osal, or bid out the $ro'ect as a solicited$ro$osal, or underta(e the $ro'ect on its on. #f ne!otiation is successful, the ead of A!ency0*)+ and the authori%ed si!natory of the ori!inal $ro$onent shall issue a si!nedcertification that an a!reement has been reached by both $arties. Said certification shallalso state that the A!ency0*)+ shall commence the acti"ities for the solicitation of

com$arati"e $ro$osals. /he A!ency0*)+ shall, ithin se"en 7- calendar days after theei!hty 82-4calendar day ne!otiation $eriod, submit a re$ort to the #&& and the A$$ro"in!ody of the result of its ne!otiation ith the ori!inal $ro$onent for a$$ro"al0"alidation.

/he a$$ro"al by the A$$ro"in! ody of the unsolicited $ro'ect under this section shall be"alid only for a $eriod of ei!hteen 18- months from the issuance of the a$$ro"al unless thein"itation for com$arati"e $ro$osals has been issued.

SECTION 1.9 ! APPROVAL OF UNSOLICITED CONTRACTS BY THE HEAD OFAGENCY>LGU

/he ead of A!ency0*)+ shall re"ie and a$$ro"e the draft contract hich shall be basedon the $arameters, terms and conditions set forth by the A$$ro"in! ody.

Prior to a$$ro"al of the ead of A!ency0*)+, the draft contract shall under!o re"ie by theffice of the )o"ernment &or$orate &ounsel )&&-, the ffice of the Solicitor4)eneralS)- or any other entity $rescribed by la0issuances as the statutory counsel of )&&sand *)+s. /he $rescribed statutory counsel, and if necessary, the , shall issue ano$inion on the draft contract ithin ten 12- days u$on their recei$t of the draft contract assubmitted by the A!ency0*)+.

&han!es to the draft contract as a!reed u$on by A!ency0*)+ and the ori!inal $ro$onentand as a$$ro"ed by the ead of A!ency0*)+ shall not be alloed, e:ce$t for chan!es tocontract terms affected or decided by the innin! bidderDs bid durin! the solicitation of com$arati"e $ro$osals and matchin! by the ori!inal $ro$onent.

SECTION 1.1 ! TENDER DOCUMENTS

/he <ualification and tender documents shall be $re$ared alon! the lines s$ecified underRules ; and 5 hereof. /he draft contract as a!reed u$on by the A!ency0*)+ and the ori!inal$ro$onent and as a$$ro"ed by the ead of A!ency0*)+, hich shall be $art of the tenderdocuments, ill be considered final and non4ne!otiable by the com$arati"e $ro$onents.Pro$rietary information shall, hoe"er, be res$ected, $rotected and treated ith utmostconfidentiality. As such, it shall not form $art of the biddin!0tender and related documents.

SECTION 1.11 ! INVITATION FOR COMPARATIVE PROPOSALS

Bithin se"en 7- calendar days u$on issuance of the certification of a successful ne!otiationreferred to in Section 12.8, the A!ency0*)+ PA& shall $ublish the in"itation for

com$arati"e $ro$osals after recei$t of the notification from the ri!inal Pro$onent that thelatter acce$ts all the terms and conditions. /he in"itation for com$arati"e or com$etiti"e$ro$osals should be $ublished at least once e"ery ee( for three - consecuti"e ee(s inat least one 1- nes$a$er of !eneral circulation. Said in"itation should also be $ostedcontinuously in the ebsite of the A!ency0*)+ concerned, if a"ailable, durin! the $eriodstated abo"e. or $ro'ects costin! at least PhP 522 million, the in"itation may also be$ublished at least once 1- in at least one 1- international $ublication. #t shall indicate thetime, hich should not be earlier than the last date of $ublication, and $lace heretender0biddin! documents could be obtained. #t shall li(eise e:$licitly s$ecify a time of si:ty 62- or(in! days rec(oned from the date of issuance of the tender0biddin!documents u$on hich $ro$osals shall be recei"ed. eyond said deadline, no $ro$osals shallbe acce$ted. A $re4bid conference shall be conducted thirty 2- or(in! days after the

issuance of the tender0biddin! documents.

SECTION 1.1 ! POSTING OF BID BOND BY ORIGINAL PROPONENT

/he ori!inal $ro$onent shall be re<uired at the date of the first day of the $ublication of the Ein"itation for com$arati"e $ro$osalsF to submit a bid bond e<ual to the amount and in the

#RR RA 7718 Page | 23

7/24/2019 IRR RA 7718


form re<uired of the com$arati"e $ro$onents, folloin! the re<uirements of Section 7.1b-"i-.

SECTION 1.1$ ! UALIFICATION OF COMPARATIVE PROPONENTS

/he e"aluation criteria used for <ualifyin! the ori!inal $ro$onent should be the same criteria

used in the E/erm of ReferenceF for the com$arati"e $ro$onents.

SECTION 1.1@ ! SUBMISSION OF PROPOSAL

/he bidders are re<uired to submit the $ro$osal in three en"elo$es at the time and $laces$ecified in the /ender ocuments. /he first en"elo$e shall contain the <ualificationdocuments, the second en"elo$e the technical $ro$osal as re<uired under Section 7.1 b-,and the third en"elo$e the financial $ro$osal as re<uired under Section 7.1 c-.

SECTION 1.15 ! EVALUATION OF COMPARATIVE PROPOSALS

Pro$osals shall be e"aluated in three sta!es3 Sta!e 1, <ualification documents> Sta!e , thetechnical $ro$osal> and Sta!e , the financial $ro$osal. nly those bids hich $ass the first

sta!e ill be considered for the second sta!e and similarly, only those hich $ass thesecond sta!e ill be considered for the third sta!e e"aluation. /he A!ency0*)+ ill returnto the dis<ualified bidders the remainin! en"elo$es uno$ened, to!ether ith a lettere:$lainin! hy they ere dis<ualified. /he criteria for e"aluation ill follo Rule 5 for the<ualification of bidders and Rule 8 for the technical and financial $ro$osals. /he time framesunder Rules 5 and 8 shall li(eise be folloed.

SECTION 1.16 ! DISCLOSURE OF THE PRICE PROPOSAL

/he decision to disclose the $rice or financial $ro$osal of the ori!inal $ro$onent in the/ender ocuments shall be mutually a!reed u$on beteen the A!ency0*)+ and the ori!inal$ro$onent. #f the ori!inal $ro$onentDs $rice $ro$osal as not disclosed in the /ender

ocuments, it should be re"ealed u$on the o$enin! of the financial $ro$osals of thecom$arati"e $ro$onents.

SECTION 1.17 ! FAILURE OF A INNING COMPARATIVE PROPONENT TO ENTER

INTO CONTRACT

#n the e"ent of refusal, inability or failure of the innin! com$arati"e $ro$onent to enterinto contract ith the A!ency0*)+ ithin the s$ecified time in the /ender ocuments, its bidsecurity shall be forfeited in fa"or of the A!ency0*)+. #n such an e"ent, the A!ency0*)+concerned shall consider for aard the bidder ith the ne:t4ran(ed com$lyin! com$arati"ebid hich is better than the offer of the ori!inal $ro$onent. /he ori!inal $ro$onent shalla!ain be !i"en the ri!ht to match the com$arati"e $ro$onentDs bid. #f no other com$arati"ebid is determined to be better than the offer of the ori!inal $ro$onent, the $ro'ect shall

immediately be aarded to the ori!inal $ro$onent.

RULE 11 ! AARD AND SIGNING OF CONTRACT

SECTION 11.1 ! RECOMMENDATION TO AARD

Bithin three - calendar days from the date the financial e"aluation shall ha"e beencom$leted, the A!ency0*)+ PA& ill submit to the ead of A!ency0*)+ a recommendationof aard. /he PA& ill $re$are and submit a detailed e"aluation0assessment re$ort on itsdecision re!ardin! the e"aluation of the bids and e:$lain in clear terms the basis of itsrecommendations.

SECTION 11. ! DECISION TO AARD

Bithin three - calendar days from the submission by PA& of the recommendation toaard, the ead of A!ency0*)+ shall decide on the aard. /he a$$ro"al shall be manifestedby si!nin! and issuin! the ENotice of AardF to the innin! Pro'ect Pro$onent ithin fi"e 5-calendar days from a$$ro"al thereof.

#RR RA 7718 Page | 24

7/24/2019 IRR RA 7718


All unsuccessful bidders shall be informed in ritin! of the decision of the A!ency0*)+ toaard the $ro'ect to the innin! Pro'ect Pro$onent. Such decision shall be made a"ailableto the $ublic hen re<uested.

SECTION 11.$ ! NOTICE OF AARD

/he ENotice of AardF, hich is issued by the ead of A!ency0*)+, shall indicate, amon!others, that the innin! Pro'ect Pro$onent must submit ithin tenty 2- calendar daysfrom official recei$t of the ENotice of AardF the folloin!3

a. $rescribed $erformance security>

b. $roof of commitment of the re<uired e<uity contribution, as s$ecified by the A!ency0*)+3

i. in the case here the Pro'ect Pro$onent is a cor$oration 4 e.!., treasurerDs affida"itattestin! to actual $aid4u$ ca$ital, subscri$tion a!reements- beteen a shareholders- of the Pro'ect Pro$onent and the Pro'ect Pro$onent itself co"erin! said e<uity contribution, orshareholders a!reement beteen and amon!st to - or more shareholders of the Pro'ectPro$onent underta(in! to contribute0subscribe the re<uired e<uity contribution> or

ii. in the case of a consortium 4 an underta(in! of the members thereof to infuse there<uired e<uity contribution to the consortium.

c. $roof of firm commitments from re$utable financial institution to $ro"ide sufficient creditlines to co"er the total estimated cost of the $ro'ect>

d. in the case of a consortium, the a!reement indicatin! that the members are 'ointly andse"erally liable for the obli!ations of the Pro'ect Pro$onent under the contract> or

e. in case a s$ecial $ur$ose com$any SP&- is formed for $ur$oses of underta(in! the$ro'ect, $roof of re!istration in accordance ith Phili$$ine las.

f. such other conditions im$osed by the A!ency0*)+.

ailure to submit the re<uirements ithin the $rescribed tenty 2-4calendar day$eriod ill result in confiscation of the bid security. Bithin fi"e 5- calendar days u$onrecei$t of the fore!oin! re<uirements for aard, the ead of A!ency0*)+ shall determineand notify the innin! bidder of its com$liance of all the conditions stated in the said notice.

SECTION 11.@ ! PUBLIC DISSEMINATION OF BIDDING RESULTS

/he PA& shall $ost the notice of aard and0or biddin! results in the P#*)PS, ebsites of PPP &enter and of the A!ency0*)+, if any, ithin se"en 7- calendar days from the issuanceof Notice of Aard.

SECTION 11.5 ! FORMATION OF SPECIAL PURPOSE COMPANY 8SPC

/he concerned A!ency0*)+ may re<uire the innin! Pro'ect Pro$onent to incor$orate iththe Securities and :chan!e &ommission S&- in accordance ith a$$licable Phili$$inelas. /he cor$oration that ill be created shall assume and accede to all the ri!hts andobli!ations of the innin! Pro'ect Pro$onent, Pro"ided, that3

a. the innin! Pro'ect Pro$onent subscribes to and $ays for a si!nificant0$rinci$alshareholdin! or controllin! interest in the cor$oration, sub'ect to the nationality andonershi$ re<uirements under the &onstitution and other a$$licable las. /he re<uired le"elof share onershi$ may be indicated in the tender documents or determined as a condition

$rior to contract aard>

b. in the case of a consortium, all members thereof shall $resent $roof of contractual orother le!ally bindin! ties to or relationshi$s ith the cor$oration for the de"elo$ment andim$lementation of the $ro'ect in accordance ith their submitted business $lan, e.!., forfacility oners0de"elo$ers0e<uity in"estors 4 subscri$tion to and $ayment for a si!nificantnumber of shares in the cor$oration> for &ontractors or o$erators 4 bindin! a$$ointment andunderta(in! to be the &ontractor0o$erator or duly si!ned en!ineerin!, $rocurement and

#RR RA 7718 Page | 25

7/24/2019 IRR RA 7718


&onstruction P&- contract0o$eration and maintenance a!reement> for financial institutions4 letter of firm commitment to raise or $ro"ide financin! to the $ro'ect>

c. an accession underta(in! is e:ecuted by the cor$oration and the innin! $ro$onent infa"or of the A!ency0*)+ ma(in! the cor$oration $rinci$ally liable for the $erformance of theinnin! Pro'ect Pro$onentDs obli!ations under the Notice of Aard and0or the contract.

SECTION 11.6 ! ITHDRAAL>SUBSTITUTION OF A MEMBER

Sub'ect to the a$$ro"al of the A!ency0*)+, any member of the consortium, or ashareholder of the SP& created ho as a member of such consortium-, or its $re4<ualified&ontractors may ithdra as such $rior to aard of the $ro'ect or any time durin! thecontract term, $ro"ided that, the remainin! members or shareholders are still le!ally,technically, and financially ca$able of successfully carryin! out the im$lementation0o$erationof the $ro'ect. /he A!ency0*)+ shall ha"e the discretion to allo substitution of members orshareholders after $re4<ualification> $ro"ided that, the substitute has e<ual or better<ualifications than the ithdrain! member or shareholder> $ro"ided further, that theA!ency0*)+ shall underta(e necessary $rocedure to determine the <ualification of thesubstitute.

A ithdraal made in "iolation of this section shall be a !round for dis<ualification orcancellation of the contract, as the case may be, and forfeiture of the $ro$onent?s bid or$erformance security.

/he A!ency0*)+ shall inform in ritin! the PPP &enter of such chan!es for monitorin!$ur$oses.

SECTION 11.7 ! VALIDITY OF BIDS>RETURN OF BID SECURITY

/he e:ecution of the contract shall be made ithin the $eriod of the "alidity of the bidsecurity. /he re<uired bid security shall be "alid for a reasonable $eriod but in no casebeyond one hundred ei!hty 182- calendar days folloin! the o$enin! of the bids. id

securities shall be returned to the unsuccessful bidders as soon as the contract is si!ned bythe innin! bidder.

SECTION 11. ! ETENSION OF VALIDITY OF BIDS

Bhen an e:tension of "alidity of bids is considered necessary, those ho submitted bidsshall be re<uested in ritin! to e:tend the "alidity of their bids before the e:$iration date.oe"er, bidders shall not be alloed to modify or re"ise the $rice or other substance of their bids.

idders shall ha"e the ri!ht to refuse to !rant such an e:tension ithout forfeitin! their bidsecurity, but those ho are illin! to e:tend the "alidity of their bids should be re<uired to$ro"ide a suitable e:tension of bid security.

SECTION 11.9 ! FAILURE OF BIDDING

#n the case of solicited bids, hen no com$lyin! bids are recei"ed or in case of failure toe:ecute the contract ith a <ualified and contractin! bidder due to the refusal of the latter,the biddin! shall be declared a failure. #n such cases, the $ro'ect shall be sub'ected to a re4biddin!.

RULE 1 ! CONTRACT APPROVAL AND IMPLEMENTATION

SECTION 1.1 ! EECUTION>APPROVAL OF THE CONTRACT

/he authori%ed si!natoryies- of the innin! bidder and the ead of A!ency0*)+ shalle:ecute and si!n the contract for the $ro'ect as a$$ro"ed in accordance ith Section .8,ithin fi"e 5- calendar days from recei$t by the innin! bidder of the notice from theA!ency0*)+ that all conditions stated in the Notice of Aard ha"e been com$lied ith.

&onsistent ith Article 1159 of the Ne &i"il &ode, the contract is the la beteen the$arties and the $arties shall $erform their res$ecti"e $restations, obli!ations, andunderta(in!s thereunder ith utmost !ood faith ith the end in "ie of attainin! the

#RR RA 7718 Page | 26

7/24/2019 IRR RA 7718


ob'ecti"e hereof. An ori!inal si!ned co$y of the contract shall be submitted to the A$$ro"in!ody and the PPP &enter ithin fi"e 5- calendar days after si!nin! thereof by theA!ency0*)+.

#n the e"ent of refusal, inability or failure of the innin! bidder to enter into contract iththe )o"ernment ithin the time $ro"ided therefor, the A!ency0*)+ concerned shall forfeit

its bid security. #n such an e"ent, the A!ency0*)+ concerned shall consider the bidder iththe ne:t ran(ed com$lyin! bid. #f the same shall li(eise refuse or fail to enter into contractith the )o"ernment, its bid security shall li(eise be forfeited and the A!ency0*)+concerned shall consider the ne:t ran(ed com$lyin! bid, and so on until a contract shallha"e been entered into. #n the e"ent that the concerned A!ency0*)+ is unable to e:ecutethe contract ith any of the com$lyin! bidders, a failure of biddin! ill be declared and the$ro'ect may be sub'ected to a re4biddin!.

SECTION 1. ! OTHER APPROVALS FOR CONTRACT

/he Pro'ect Pro$onent shall, as may be re<uired under the e:istin! las, rules andre!ulations secure any and all other a$$ro"als for the contract or the im$lementation

thereof from !o"ernment a!encies or bodies includin! the Re!ulator in the case of Public+tility Pro'ects. /his includes securin! the necessary and a$$ro$riate en"ironmentalclearances from the NR $rior to actual $ro'ect &onstruction. /he NR shall act on theen"ironmental clearance of the $ro'ect ithin the time frame $rescribed in and folloin! the!uidelines of NR Administrati"e rder No. 9647 and subse<uent !uidelines as may beissued from time to time. /he A!ency0*)+ may $ro"ide the necessary assistance to thePro'ect Pro$onent in securin! all the re<uired clearances. /he contract shall $ro"idemilestones in securin! such other a$$ro"als re<uired for the im$lementation of the contract.

SECTION 1.$ ! GRANT OF FRANCHISE

Sub'ect to the $ro"isions of the &onstitution and other e:istin! las, rules and re!ulations,

once a contract is e:ecuted by the Pro'ect Pro$onent and the A!ency0*)+, a $resum$tionarises that the $ublic interest ill be ser"ed by the im$lementation of the $ro'ect co"eredthereby, and immediately u$on a$$lication by the Pro'ect Pro$onent, the Re!ulator shallautomatically !rant in fa"or of the Pro'ect Pro$onent a ranchise to o$erate the facility andcollect the tolls, fees, rentals, and other char!es sti$ulated under the contract.

Pro"ided that, if the final a$$ro"al of the franchise by the re!ulator shall result in a decreasein the amount of tolls, fees, rentals, and other char!es sti$ulated under the contract, the!o"ernment shall ensure that the Pro'ect Pro$onent reco"ers the difference beteen theamount sti$ulated under the contract0$arametric formulae and the amount a$$ro"ed by there!ulator or a$$ro$riate re!ulatory body throu!h measures consistent ith the &onstitutionand other a$$licable las.

SECTION 1.@ ! CONTRACT EFFECTIVITY

/he contract shall be effecti"e u$on si!nin! thereof by the ead of A!ency0*)+, unlessanother date is sti$ulated therein.

SECTION 1.5 ! NOTICE TO COMMENCE

/he concerned A!ency0*)+, hen deemed necessary, shall issue the ENotice to &ommence#m$lementationF of the $ro'ect to the $ro$onent ithin a reasonable $eriod to bedetermined by the A!ency0*)+s and stated in the contract.

SECTION 1.6 ! PREPARATION AND APPROVAL OF DETAILED ENGINEERING

DESIGN

Bhere the $ro'ect in"ol"es desi!n, the Pro'ect Pro$onent shall be res$onsible for the$re$aration of the detailed en!ineerin! desi!ns and $lans based on the $rescribed minimumdesi!n and $erformance standards and s$ecifications and shall submit the same to theA!ency0*)+ concerned.

/he A!ency0*)+ concerned shall re"ie the detailed en!ineerin! desi!ns and $lans$re$ared by the Pro'ect Pro$onent in terms of its com$liance ith the $rescribed standards

#RR RA 7718 Page | 27

7/24/2019 IRR RA 7718


and s$ecifications, and if found acce$table, shall a$$ro"e the same for incor$oration in thecontract to be si!ned by the Pro'ect Pro$onent and the A!ency0*)+. /his a$$ro"al by theA!ency0*)+ concerned notithstandin!, the Pro'ect Pro$onent shall be solely res$onsiblefor the inte!rity of its detailed en!ineerin! desi!ns and $lans. /he a$$ro"al thereof by theA!ency0*)+ concerned does not diminish this res$onsibility, nor does it transfer any $art of such res$onsibility to the A!ency0*)+ concerned.

#n the case of local $ro'ects, the *)+ concerned shall ensure that the technical desi!ns,$lans, s$ecifications, and related as$ects necessary for the $ro'ectDs &onstruction, o$erationand maintenance shall be based on rele"ant local and national $olicies, standards and!uidelines. Coreo"er, the *)+ shall consult ith a$$ro$riate national re!ulatory bodiesre!ardin! national $olicies, standards, and !uidelines in !rantin! the necessary ranchise.

SECTION 1.7 ! PROJECT CONSTRUCTION

/he Pro'ect Pro$onent shall build the facility in accordance ith the desi!n and $erformancestandards and s$ecifications $rescribed in the a$$ro"ed detailed en!ineerin! desi!n. or this&onstruction sta!e, the Pro'ect Pro$onent may en!a!e the ser"ices of forei!n and0or ili$ino

&ontractors that com$ly ith the re<uirements as $rescribed under Section 5.; a- and b-.#n the case of forei!n &ontractors, ili$ino labor shall be em$loyed in the different $hases of the &onstruction or(s here ili$ino s(ills are a"ailable. irin! of labor shall be sub'ect toe:istin! labor las, rules and re!ulations.

SECTION 1. ! PERFORMANCE SECURITY FOR CONSTRUCTION ORS

/o !uarantee the faithful $erformance by the Pro'ect Pro$onent of its obli!ations under thecontract, includin! the $rosecution of the &onstruction or(s related to the $ro'ect, thePro'ect Pro$onent shall $ost a $erformance !uarantee in fa"or of the A!ency0*)+concerned, ithin the $eriod and in the form and amount sti$ulated in the Notice of Aard./he A!ency0*)+ shall determine hich form of $erformance security it ill re<uire hich

may be in cash, ban( draft or !uarantee confirmed by a local ban( in the case of forei!nbidders bonded by a forei!n ban(-, letter of credit issued by a re$utable ban(, surety bondcallable on demand issued by the )S#S or by surety or insurance com$anies duly accreditedby the ffice of the #nsurance &ommissioner, or a combination thereof, in accordance iththe folloin! schedules3

a. &ash, irre"ocable letter of credit, ban( draft 4 a minimum of to $ercent =- of the total Pro'ect &ost.

b. an( )uarantee 4 a minimum of fi"e $ercent 5=- of the total Pro'ect &ost.

c. Surety ond 4 a minimum of ten $ercent 12=- of the total Pro'ect &ost.

The performance guarantee shall be valid up to acceptance by the Agency/LGU of the facility.

SECTION 1.9 ! PERFORMANCE SECURITY FOR OPERATIONS

or $ro'ects here the $ro$onent or other third $arties shall o$erate the $ro'ect, theA!ency0*)+ shall determine hether the Pro'ect Pro$onent ill $ost a $erformance securityfor o$erations, simultaneously ith the acce$tance of the facility. /he $erformance securityfor o$erations ill be issued to !uarantee the $ro$er o$eration of the $ro'ect in accordanceith the o$eratin! $arameters and s$ecifications under the contract. /he A!ency0*)+ shalldetermine the amount but the form shall be in accordance ith the $recedin! section. /his$erformance security for o$erations shall be "alid ninety 92- calendar days after the turn4o"er of the facility, as contem$lated in Section 1., or as may be $ro"ided in the contracthiche"er is lon!er.

SECTION 1.1 ! REVIE OF PROJECT CONSTRUCTION, OPERATION ANDMAINTENANCE

#RR RA 7718 Page | 28

7/24/2019 IRR RA 7718


/he A!ency0*)+ may ins$ect and chec(, from time to time, the $ro'ect to determinehether the $ro'ect is constructed, o$erated and maintained in accordance ith thea$$ro"ed $lans, s$ecifications, standards and costs under the contract.

#n the e"ent that the A!ency0*)+ concerned shall find any de"iation from or non4com$liance ith the a$$ro"ed $lans, s$ecifications and standards, it shall brin! the same to

the attention of the Pro'ect Pro$onent for the necessary correcti"e actions. ailure of thePro'ect Pro$onent to correct the de"iation ithin the time $rescribed by the A!ency0*)+may be a !round for the rescission0 termination of the contract, in accordance ith Section1.1 b- of these Re"ised #RR. Such technical su$er"ision by the A!ency0*)+ concernedshall not diminish the sin!ular res$onsibility of the Pro'ect Pro$onent for the $ro$er&onstruction, o$eration, and maintenance of the facility, nor does it transfer any $art of thatres$onsibility to the A!ency0*)+.

SECTION 1.11 ! CONTRACT VARIATION

A contract "ariation may be alloed by the ead of the A!ency0*)+, Pro"ided, that3

a. /here is no im$act on the basic $arameters, terms and conditions as a$$ro"ed bythe A$$ro"in! ody> or

b. /here is no increase in the a!reed fees, tolls and char!es or a decrease in theA!ency0*)+Ds re"enue or $rofit share deri"ed from the $ro'ect, e:ce$t as may bealloed under a $arametric formula in the contract itself> or

c. /here is no reduction in the sco$e of or(s or $erformance standards, orfundamental chan!e in the contractual arran!ement nor e:tension in the contractterm, e:ce$t in cases of breach on the $art of the A!ency0*)+ of its obli!ations

under the contract> or

d. /here is no additional )o"ernment +nderta(in!, or increase in the financiale:$osure of the )o"ernment under the $ro'ect.

+$on due dili!ence and recommendation of the ead or A!ency0*)+, contract "ariations notco"ered by abo"e shall under!o a$$ro"al by the A$$ro"in! ody in terms of the im$acts on!o"ernment underta(in!s0e:$osure, $erformance standards and ser"ice char!es. ailure tosecure clearance0a$$ro"al of the ead of A!ency0*)+ or A$$ro"in! ody as $ro"ided in thissection shall render the contract "ariation "oid.

/he A!ency0*)+ shall re$ort to the A$$ro"in! ody and the PPP &enter on any contract

"ariations includin! those a$$ro"ed by the ead of A!ency0*)+.

SECTION 1.1 ! MILESTONES

/he Pro'ect Pro$onent shall e:ecute the $ro'ect in accordance ith $re4determinedmilestones. ailure by the Pro'ect Pro$onent to com$ly ith these milestones may result tocontract rescission and forfeiture of the $erformance security of the $ro$onent, inaccordance ith Section 1.1 b- hereof.

SECTION 1.1$ ! RELEASE OF PERFORMANCE SECURITY

a. Performance Security for &onstruction Bor(s

+$on com$letion of construction or(s, the A!ency0*)+ shall issue a E&ertificate of &om$letion.F Bithin a $eriod of no more than one 1- year after its issuance, theA!ency0*)+ shall issue a E&ertificate of Acce$tanceF u$on final acce$tance that the$ro'ect had been com$leted in accordance ith the a!reed standards ands$ecifications.

/he Performance Security for &onstruction Bor(s shall be released by theA!ency0*)+ concerned after the issuance of the H&ertificate of Acce$tanceH of the

#RR RA 7718 Page | 29

7/24/2019 IRR RA 7718


&onstruction or(s $ro"ided that there are no claims filed a!ainst the Pro'ectPro$onent or its &ontractor.

As may be a!reed u$on in the contract, a $ortion of the Performance Security shallbe released u$on com$liance ith corres$ondin! milestones.

b. Performance Security for $erations

/he Performance Security for $erations shall be released by the A!ency0*)+concerned on the transfer date of the facility, $ro"ided that there are no claims fileda!ainst the Pro'ect Pro$onent and its &ontractor.

SECTION 1.1@ ! LIUIDATED DAMAGES

Bhere the Pro'ect Pro$onent fails to satisfactorily com$lete the or( on or beforecom$letion date, includin! any e:tension or !race $eriod duly !ranted, or meet theo$eratin! $erformance standard as $rescribed in the contract, the Pro'ect Pro$onent shall$ay the A!ency0*)+ concerned li<uidated dama!es, as s$ecified in the contract as an

indemnity and not by ay of $enalty. /he $erformance security for construction or(s or foro$erations, as the case may be, may be a$$lied to anser for any li<uidated dama!es dueto the A!ency0*)+.

urin! the &onstruction $eriod, the amount of li<uidated dama!es due for e"ery calendarday of delay beyond the com$l etion date ill be determined by the A!ency0*)+ based onthe formula in the contract. urin! the o$eration $eriod, the amount of li<uidated dama!es,hich ill be determined by the A!ency0*)+, shall be based on the $rinci$le of faircom$ensation for dama!es hich the A!ency0*)+ ill sustain as a result of the Pro'ectPro$onentDs failure to meet its obli!ations.

/he im$osition and collection of li<uidated dama!es shall be ithout $re'udice to the ri!ht of

the A!ency0*)+ concerned to rescind the contract and $roceed ith the $rocedures$rescribed under Section 1.1 b-.

SECTION 1.15 ! REPAIR AND MAINTENANCE COSTS

/he Pro'ect Pro$onent shall, ithin the contract term and the arranty $eriod $rescribedunder Section 1., underta(e the necessary and a$$ro$riate re$air and maintenance of the $ro'ect, in accordance ith the desi!n and $erformance standards, and other terms$rescribed in the a$$ro"ed contract, in order to ensure that the facility o$erates at thedesired le"el of ser"ice. or this $ur$ose, and here a$$licable, a $ortion of the $ro'ect?sre"enues e<ui"alent to the cost of the $ro'ect?s re$air and maintenance, as indicated in thePro'ect Pro$onent?s bid $ro$osal shall be set aside and reser"ed e:clusi"ely for re$air andmaintenance costs of the $ro'ect. or facility, an escro account may be established for the

$ur$ose.

SECTION 1.16 ! REPAYMENT SCHEMES

1.16.1 )eneral &lassification

/he re$ayment schemes for the $ro'ects shall de$end on the contractual arran!ement asfollos or as may be a$$ro"ed by the A$$ro"in! ody3

a. or $ro'ects underta(en throu!h /, &A, /, R/, and R arran!ements, thePro'ect Pro$onents may be re$aid by authori%in! it to collect reasonable tolls, fees, andchar!es for a fi:ed term. #n the case of /, &A, /, R/ arran!ements, such term shall

in no case e:ceed fifty 52- years. oe"er, for and R arran!ements, the Pro'ectPro$onent, u$on reneal of its ranchise or contract ith the A!ency or *)+, may bealloed to continue collectin! toll, fees, char!es and rentals for the o$eration of the facilityor the $ro"ision of the ser"ice.

b. or $ro'ects underta(en throu!h / arran!ement 4 the Pro'ect Pro$onent may be re$aidby either of the folloin! to o$tions3 irst $tion 4 the A!ency0*)+ $ro"ides Amorti%ationas may be a$$ro$riate and reasonable. /olls, fees, rentals and char!es that the Pro'ectPro$onent may collect hile o$eratin! the facility on behalf of the A!ency0*)+ may be

#RR RA 7718 Page | 30

7/24/2019 IRR RA 7718


a$$lied directly to the Amorti%ation. Coreo"er, the acility o$erator may be re$aid by theA!ency0*)+ throu!h a mana!ement fee as may be incor$orated in the mana!ementcontract entered beteen the A!ency0*)+ and the Pro'ect Pro$onent> Second $tion 4 thePro'ect Pro$onent may be alloed to directly collect tolls, fees, rentals and char!es for afi:ed term.

c. or $ro'ects underta(en throu!h / and */ arran!ements 4 the Pro'ect Pro$onent maybe re$aid by the A!ency0*)+ throu!h Amorti%ation as may be a$$ro$riate and reasonable.

d. Bhere a$$licable, the $ro$onent may li(eise be re$aid in the form of a share in there"enue of the $ro'ect or other non4monetary $ayments, such as, but not limited to the!rant of commercial de"elo$ment ri!hts or the !rant of a $ortion or $ercenta!e of thereclaimed land, sub'ect to constitutional re<uirements.

e. or $ro'ects underta(en throu!h arran!ements not enumerated under this Act and #RRbut a$$ro"ed0authori%ed by the NA oard, the Pro'ect Pro$onent may be re$aid throu!hany schemes as recommended by the #&& and a$$ro"ed0authori%ed by the NA oard.

1.16. /olls, fees, rentals and char!es

/he $ro$osed tolls, fees, and char!es shall be considered by the A!ency0*)+ in thee"aluation of the bid, ta(in! into account the reasonableness thereof to the end4users of thefacility. /he tolls, fees, char!es and rentals that a Pro'ect Pro$onent may char!e for the useof the facility shall be those as a$$ro"ed by the A$$ro"in! ody, resultin! from the biddin!,and incor$orated in the contract, hich, shall be u$held, ado$ted, accorded utmost ei!ht,or reco!ni%ed by the Re!ulator.

1.16. Remittance of arnin!s or ther Amounts ue to a orei!n Pro'ect Pro$onent

/he remittance of earnin!s and other amounts due to a forei!n $ro$onent under thecontract shall be in accordance ith $ertinent las, rules and re!ulations es$ecially those

issued by the SP.

SECTION 1.17 ! REVENUE SHARING

/he A!ency0*)+ concerned may share in the re"enue from the o$eration of the Pro'ectPro$onent in the form of either a fi:ed fee or a certain $ercenta!e of the !ross re"enue or acombination of both, $ro"ided that the same is indicated in the biddin! documents andincluded in the contract.

SECTION 1.1 ! ADJUSTMENTS OF TOLLS>FEES>RENTALS>CHARGES

/he tolls, fees, rentals and char!es may be sub'ect to ad'ustment durin! the life of thecontract, based on the $re4determined formula $rescribed in the E#nstructions to iddersF

and the a$$ro"ed contract. or this $ur$ose, $rior to biddin!, the concerned A!ency0*)+shall secure either the ad"ice of the Re!ulator or the a$$ro"al of the A$$ro"in! body orboth, as the case maybe, for such formula. /he monitorin! of the consistency of the$ro$osed ad'ustments of tolls, fees, rentals and char!es ith the $rescribed rate of return,if any, shall be underta(en by the a$$ro$riate re!ulatory body or #m$lementin!A!ency0*)+.

Price indices shall be based on the official issuances by the National Statistics ffice NS-,SP, e$artment of *abor and m$loyment *- and other sources authori%ed by theA!ency0*)+ concerned $rior to biddin!.

/he !o"ernment shall ensure that the $ro'ect $ro$onent reco"ers the difference beteen

the amount of tolls, fees, rentals and other char!es as sti$ulated or com$uted based on thecontract and0or a$$ro"ed $arametric formulae and the amount a$$ro"ed by the Re!ulatoror a$$ro$riate re!ulatory body throu!h measures consistent ith a$$licable las and theconstitution.

SECTION 1.19 ! AUDIT OF COLLECTIONS

All re"enues, share and0or recei$ts $ertainin! to or accruin! to the A!ency0*)+ deri"edfrom any $ro'ect $ro$osed under the Act and these Re"ised #RR, includin! e:$enditures or

#RR RA 7718 Page | 31

7/24/2019 IRR RA 7718


use of funds and $ro$erty, oned or held in trust by, or $ertainin! to the )o"ernment, shallbe sub'ect to e:amination audit by the &ommission on Audit &A-, includin! i- ensurin!that such re"enues, share and0or recei$ts are fully and $ro$erly accounted for and remittedto the A!ency0*)+, and ii- determinin! if the mandated return on rate base is com$liedith, in the case of ne!otiated contracts and Public +tility Pro'ects hich are naturalmono$olies.

All re"enues and recei$ts $ertainin! to or accruin! to the Pro'ect Pro$onent shall be treatedas $ri"ate funds includin! interest or yield thereon, hich may be remitted directly to thePro'ect Pro$onent, as may be sti$ulated in the contract.

SECTION 1. ! ACCESSION>DIVESTITURE

Sub'ect to the a$$ro"al of the A$$ro"in! ody u$on due dili!ence and recommendation bythe ead of A!ency0*)+, a $ro'ect $ro$onent may di"est or accede its onershi$ and0orri!hts to a $ro'ect $ro"ided that, the di"estiture or accession shall be after the holdin! orloc(4in $eriod hich shall be determined by the A!ency0*)+ and indicated in the contract,and $ro"ided that, the ne $ro'ect $ro$onent has e<ual or better <ualifications as ith the$re"ious $ro'ect $ro$onent.

A di"estment0accession made in "iolation of this section shall be a !round fordis<ualification of the $ro$onent or cancellation of the contract, as the case may be, andforfeiture of the $ro$onent?s bid or $erformance security.

/he A!ency0*)+ shall inform in ritin! the PPP &enter the chan!e in onershi$ formonitorin! $ur$oses.

SECTION 1.1 ! CONTRACT TERMINATION>RESCISSION

/he contract may be terminated0rescinded in the folloin! e"ents3

a. #f the A!ency0*)+ concerned fails to com$ly ith any ma'or obli!ation $rescribed in thea$$ro"ed contract, and such failure is not remediable or if remediable shall remainunremedied for an unreasonable len!th of time, the Pro'ect Pro$onent may, ith $rior noticeto the concerned A!ency0*)+, s$ecifyin! the turn4o"er date, terminate the contract. #n suchan e"ent, the Pro'ect Pro$onent shall be reasonably com$ensated by the )o"ernment fore<ui"alent or $ro$ortionate contract cost, as defined in the contract sub'ect to c- belo.

b. #f the Pro'ect Pro$onent refuses or fails to $erform any of the $ro"isions of the a$$ro"edcontract ith such dili!ence as ill ensure the $ro'ect?s com$letion, o$eration andmaintenance in accordance ith the $rescribed technical and $erformance standards orotherise fails to satisfy any of the contract $ro"isions includin! com$liance ith the

$rescribed0a!reed milestone acti"ities, or commits any substantial breach of the a$$ro"edcontract, the A!ency0*)+ shall notify the Pro'ect Pro$onent in ritin! of the same and if notcorrected ithin the time s$ecified, the A!ency0*)+ concerned may rescind the contract. #nsuch an e"ent, the A!ency0*)+ concerned may either3

i. /a(e o"er the facility> orii. Allo the Pro'ect Pro$onent?s lenders0creditors0ban(s to e:ercise their ri!hts andinterests under the loan and collateral documents ith res$ect to the $ro'ect.

#n any case, the A!ency0*)+ concerned shall li(eise forfeit the $erformance security of thedefaultin! Pro'ect Pro$onent.

c. #n the e"ent that the $ro'ect0contract is3 a- re"o(ed, cancelled, or terminated by i- theA!ency0*)+ in accordance ith the contract throu!h no fault of the Pro'ect Pro$onent or ii-by mutual a!reement, or b- re"o(ed or canceled by a court by final 'ud!ment throu!h nofault of the Pro'ect Pro$onent, the A!ency0*)+ shall com$ensate the said Pro'ect Pro$onentfor its actual e:$enses incurred in the $ro'ect $lus a Reasonable Rate of Return thereon note:ceedin! that stated in the contract, as of the date of contract termination, $ro"ided thatthe interest of the )o"ernment in these instances shall be duly insured ith the )S#S or anyother insurance entity duly accredited by the ffice of the #nsurance &ommissioner, $ro"ided

#RR RA 7718 Page | 32

7/24/2019 IRR RA 7718


further that the cost of the insurance co"era!e shall be included in the terms and conditionsof the a$$ro"ed contract.

#n the cases referred to in a- and c- abo"e, an inde$endent a$$raiser, mutually acce$tableto the A!ency0*)+ and the Pro'ect Pro$onent, shall determine the amount to be $aid to thePro'ect Pro$onent, hich determination shall be made ithin a $eriod not more than one

hundred ei!hty 182- calendar days from contract rescission or termination. /he amountdetermined by the inde$endent a$$raiser shall be bindin! to both the Pro'ect Pro$onent andthe A!ency0*)+.

#n cases of emer!ency or hen the $ublic interest so re<uires, the A!ency0*)+ mayimmediately ta(e4o"er the facility $rior to the determination of said amount and $aymentthereof to the Pro'ect Pro$onent. +nless otherise a!reed u$on by the A!ency0*)+ and thePro'ect Pro$onent, the amount fi:ed by said inde$endent a$$raiser shall be $aid by theA!ency0*)+ not later than ninety 92- calendar days from said inde$endent a$$raiserDsad"ice of such determination, sub'ect to the enactment of a la or ordinance, as the casemay be, a$$ro$riatin! such amount, if re<uired.

SECTION 1. ! VENUE FOR LITIGATION

/he "enue for the resolution of dis$utes, arbitration or liti!ation shall be as mutually a!reedu$on by the $arties to the contract. #n default thereof, the "enue shall be in the Phili$$ines.

SECTION 1.$ ! EPIRING BOT>PPP CONTRACTS AND TRANSFER OF AND

ARRANTY OVER THE FACILITY

+nder &ontractual Arran!ements in"ol"in! transfer of the facility to the A!ency0*)+, thetransfer or turno"er ill necessarily include the transfer of full le!al onershi$ o"er the$ro'ect, all documents, $ro$erty ri!hts, source codes, e<ui$ment, amon! others, hich arerelated to the $ro'ect in fa"or of the A!ency0*)+, sub'ect to any e:istin! liens as may bea!reed u$on in the contract. /he facility, u$on transfer to A!ency0*)+, shall be o$erable

and in !ood condition. /he $erformance indicators for the $ro'ect0facility and fre<uency of monitorin! the indicators shall be sti$ulated in the contract. A third4$arty shall becommissioned to assess the residual "alue of the facility u$on transfer or turno"er of thefacility to the A!ency0*)+. /he Pro'ect Pro$onent shall $ro"ide arranty that the facilitymeets the $ro'ect technical s$ecifications0a!reed system features, $erformance standardsand ser"ices in connection thereith for a $eriod not less than one 1- year from theturno"er of the facility. or this $ur$ose, the Pro'ect Pro$onent shall $ut u$ a arrantysecurity in a form to be s$ecified by the concerned A!ency0*)+ hich may be in cash, letterof credit, or ban( draft0!uarantee issued by a re$utable local0forei!n ban(, or a surety bondissued by the )S#S or an entity duly re!istered and reco!ni%ed by the ffice of the#nsurance &ommissioner, callable on demand and acce$table to the A!ency0*)+, or anycombination thereof $ayable to the A!ency0*)+ concerned, the amount of hich shall bedetermined by the A!ency0*)+ and shall be sti$ulated in the contract. /he arranty

security shall be made effecti"e immediately u$on transfer of full le!al onershi$ o"er the$ro'ect in fa"or of the A!ency0*)+, as described abo"e.

RULE 1$ ! INVESTMENT INCENTIVES AND GOVERNMENT UNDERTAINGS

SECTION 1$.1 ! SOURCES OF FINANCING

#n the &onstruction of $ro'ects authori%ed under the Act and these Re"ised #RR, the Pro'ectPro$onent may obtain the re<uired financin! for the &onstruction of the $ro'ect from forei!nand0or domestic sources.

SECTION 1$. ! INVESTMENT INCENTIVES

/he folloin! #n"estment #ncenti"es ill be made a"ailable to Pro'ect Pro$onents3

b. Pro'ects underta(en throu!h &ontractual Arran!ements authori%ed under these Re"ised#RR costin! PhP 1.2 billion or less may, u$on re!istration ith #, a"ail of incenti"es$ro"ided for under the mnibus #n"estment &ode sub'ect to inclusion of the $ro'ect acti"ityor sector in the current #n"estment Priorities Plan #PP- of # and com$liance of the $ro'ect

#RR RA 7718 Page | 33

7/24/2019 IRR RA 7718


ith the criteria, as may be set by the # in its re"ie thereof under 6, such as, butnot limited to economic and consumer benefit, technical and financial soundness.

c. Pro'ects underta(en throu!h &ontractual Arran!ements authori%ed under these Re"ised#RR shall also be entitled to other incenti"es, as $ro"ided under e:istin! las, such as, but

not limited to incenti"es under R.A. 951, otherise (non as the EReneable ner!y Act of 228F, R.A. 959, otherise (non as E/he /ourism Act of 229F, and R.A. 7156, otherise(non as the ECini4ydroelectric Poer #ncenti"es ActH.

d. *)+s may $ro"ide additional ta: incenti"es, e:em$tions, or reliefs, sub'ect to the$ro"isions of the *ocal )o"ernment &ode *)&- of 1991 and other $ertinent las.

SECTION 1$.$ ! GOVERNMENT UNDERTAINGS

Sub'ect to e:istin! las, $olicies, rules and re!ulations, the )o"ernment may $ro"ide anyform of su$$ort or contribution to solicited $ro'ects, such as, but not limited, to the

folloin!

a. &ost Sharin! 4 /his shall refer to the A!ency0*)+ concerned bearin! a $ortion of ca$ital e:$enses associated ith the establishment of an infrastructure de"elo$mentfacility, such as, the $ro"ision of access infrastructure, ri!ht4of4ay, transfer of onershi$ o"er, or usufruct, or $ossession of land, buildin! or any other real or$ersonal $ro$erty for direct use in the $ro'ect and0or any $artial financin! of the$ro'ect, or com$onents thereof, Pro"ided, that such shall not e:ceed fifty $ercent52=- of the Pro'ect &ost, and the balance to be $ro"ided by the Pro'ect Pro$onent.Such !o"ernment share may be financed from direct !o"ernment a$$ro$riationsand0or from fficial e"elo$ment Assistance A- of forei!n !o"ernment orinstitutions.

b. &redit nhancements 4 /his shall refer to su$$ort to a de"elo$ment facility by thePro'ect Pro$onent and0or A!ency0*)+ concerned, the $ro"ision of hich iscontin!ent u$on the occurrence of certain e"ents and0or ris(s, as sti$ulated in thecontract. &redit enhancements are allocated to the $arty that is best able to mana!eand assume the conse<uences of the ris( in"ol"ed. &redit enhancements mayinclude, but are not limited to, !o"ernment !uarantees on the $erformance, or theobli!ation of the A!ency0*)+ under its contract ith the Pro'ect Pro$onent.

c. irect )o"ernment Subsidy 4 /his shall refer to an a!reement hereby the)o"ernment, or any of its A!encies0*)+s ill3 a- defray, $ay for or shoulder a$ortion of the Pro'ect &ost or the e:$enses and costs in o$eratin! or maintainin! the$ro'ect> b- contribute any $ro$erty or assets to the $ro'ect> c- in the case of *)+s,

ai"e or !rant s$ecial rates on real $ro$erty ta:es on the $ro'ect durin! the term of the contractual arran!ement> and0or d- ai"e char!es or fees relati"e to business$ermits or licenses that are to be obtained for the &onstruction of the $ro'ect, allithout recei"in! $ayment or "alue from the Pro'ect Pro$onent and0or acilityo$erator for such $ayment, contribution or su$$ort.

d. irect )o"ernment <uity 4 /his shall refer to the subscri$tion by the )o"ernment orany of its a!encies or *ocal )o"ernment +nits of shares of stoc( or other securitiescon"ertible to shares of stoc( of the $ro'ect com$any, hether such subscri$tion illbe $aid by the money or assets.

e. Performance +nderta(in! 4 /his shall refer to an underta(in! of a de$artment,bureau, office, commission, authority, a!ency, )&&, or *)+ in assumin!res$onsibility for the $erformance of the A!encyDs0*)+Ds obli!ations under thecontractual arran!ement includin! the $ayment of monetary obli!ations, in case of default. /hese underta(in!s may be sub'ect to $ayment of ris( $remium to the)o"ernment or *)+, or any other authori%ed a!ency.

f. *e!al Assistance 4 /his shall refer to the e:tension of re$resentation by !o"ernmentlayers to a Pro'ect Pro$onent but only in cases, hearin!s, or in<uiries here theA!ency0*)+ and Pro'ect Pro$onent are $arty4defendants0res$ondents therein

#RR RA 7718 Page | 34

7/24/2019 IRR RA 7718


includin! the ado$tion by such !o"ernment layers of $ositions and strate!iesconsistent ith u$holdin! the "alidity of the a$$ro"ed contractual arran!ement.

!. Security Assistance 4 /his shall refer to the de$loyment of !o"ernment securityforces, either from the Phili$$ine National Police PNP- or the Armed orces of thePhili$$ines AP- in the "icinity of the $ro'ect site to $ro"ide security durin! the

im$lementation of the $ro'ect u$ to com$letion.

/he A!ency0*)+ may offer any one or more )o"ernment +nderta(in!s relati"e to a $ro'ect,hich shall be $re4cleared in $rinci$le, in ritin!, by the de$artment, bureau, office,commission, authority, a!ency, )&&, or *)+ or any other !o"ernment entity that ill !rantthe same as mandated by la> $ro"ided that the total !o"ernment underta(in!s shall note:ceed fifty $ercent 52=- of the total $ro'ect cost.

/he !o"ernment underta(in!s shall be based on the a$$ro"ed ris( allocation matri: hichshall be issued by the A$$ro"in! ody0#&&.

RULE 1@ ! COORDINATION AND MONITORING OF PROJECTS

SECTION [email protected] ! THE PPP CENTER

/he PPP &enter shall be res$onsible for the coordination and monitorin! of $ro'ectsim$lemented under &ontractual Arran!ements or schemes authori%ed under these Re"ised#RR. Pro'ect monitorin! ill be underta(en to ensure that the $ro'ect com$lies ith theseRe"ised #RR, includin! the $ro$onentDs re<uired en"ironmental clearances from the NR.or this $ur$ose, concerned A!encies0*)+s shall $eriodically submit to the PPP &enterinformation on the status of $ro'ects im$lemented by them. #n addition, all concernedA!encies0*)+s shall submit to the PPP &enter a co$y of all +nsolicited Pro$osals that they

recei"e and all other related documents. /he PPP &enter is also hereby mandated to !uidethe A!ency0*)+ in the $re$aration and de"elo$ment of the $ro'ect.

At the end of e"ery calendar year, PPP &enter shall re$ort to the #&&, President, and the&on!ress on the $ro!ress of all $ro'ects im$lemented under these Re"ised #RR.

SECTION 1@. ! TIMELINES

All timelines shall be contained in a flo chart herein attached as Anne: A. /he PPP &entershall monitor the com$liance of the A!encies0*)+s ith the timelines $rescribed in theseRe"ised #RR.

SECTION 1@.$ ! PPP UNITS

ach concerned A!ency0*)+ may create a PPP +nit headed by a senior official of theA!ency0*)+ and shall desi!nate a senior official as PPP Pro'ect e"elo$ment fficer P-,ho shall be res$onsible for $lannin!, o"erseein!, and monitorin! $ro'ects of A!encies0*)+sauthori%ed under the Act and these Re"ised #RR. /he PPP +nit may also include asmembers, amon! others, technical and le!al $ersonnel ho are (noled!eable on thetechnical and le!al as$ects, res$ecti"ely, of the PPP $ro'ects that may be im$lemented$ursuant to the Act and this #RR.

SECTION 1@.@ ! INFORMING CONGRESS

A re$ort re!ardin! the salient features or a co$y of each contract, in"ol"in! a $ro'ectentered into under the $ro"isions of these Re"ised #RR, shall be submitted to &on!ress bythe PPP &enter, co$y the #&&, for its information.

RULE 15 ! FINAL PROVISIONS

SECTION 15.1 ! IRR COMMITTEE

#RR RA 7718 Page | 35

7/24/2019 IRR RA 7718


/he &ommittee constituted $ursuant to Section 11 of R.A. 6957, as amended by R.A. 7718,may be recon"ened by its &hairman at his instance, or u$on the recommendation of anymembers of the &ommittee, formulate and $rescribe amendments to these Re"ised #RR,consistent ith the letter and s$irit of the Act. No amendments to these Re"ised #RR may beado$ted and $rescribed by the &ommittee ithout due $ublic consultation0hearin! and$ublication.

SECTION 15. ! EFFECTIVITY OF THESE REVISED IRR OR AMENDMENTS THERETO

Amendments to these Re"ised #RR or amendments thereto shall, after due $ublic hearin!,become effecti"e fifteen 15- days after its com$lete $ublication in at least one 1-nes$a$er of !eneral circulation.

SECTION 15.$ ! TRANSITORY PROVISION

+$on effecti"ity of these re"ised #RR, all PPP $ro'ects, includin! those $resently bein!$rocessed and0or re"ieed but not yet a$$ro"ed by the A$$ro"in! ody shall hereafter be$rocessed and0or re"ieed in accordance ith these re"ised #RR.

Pro'ects under im$lementation shall be !o"erned by the contract $ro"isions entered into bythe concerned $arties.

SECTION 15.@ ! REPEALING CLAUSE

Any issuance, e:ecuti"e order, administrati"e order, $roclamation, charter, rule or re!ulationand0or $arts thereof contrary to or inconsistent ith the $ro"isions of this #RR is herebyre$ealed, modified or amended accordin!ly.

SECTION 15.5 ! SEPARABILITY CLAUSE

#n the e"ent any of the $ro"isions of these Re"ised #RR is declared "oid or unenforceable by

final 'ud!ment of a court of com$etent 'urisdiction, the other $ro"isions unaffected therebyshall remain in full force and effect.

irr ra 7718

Documents