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With amended PPP rules, gov’t shielded from arbitration


The federal government and implementing companies of infrastructure tasks to be collectively rolled out with the personal sector can not be haled into courtroom as soon as disputes come up.

“Acts and decisions of regulators shall not be subject to arbitration,” learn Part 12.22, on dispute decision between contracting events, below the revised implementing guidelines and laws (IRR) of the Construct-Function-Switch (BOT) legislation revealed final week.

The Basis for Financial Freedom (FEF) and the Makati Enterprise Membership (MBC) earlier opposed scrapping arbitration as a method to settle disputes arising from public-private partnership (PPP) tasks. For one, the FEF had argued that arbitration was an internationally accepted normal component in long-term contracts.

As for personal companies, the revised pointers said that “resolution of disputes between the contracting parties, whether through arbitration or litigation, shall be as mutually agreed upon by the parties to the contract, subject to applicable laws, rules and regulations.” Dispute decision can solely be made throughout the Philippines, the IRR mentioned.

The FEF and the MBC had additionally opposed the then-proposal to ban “onerous and one-sided” provisions in PPP contracts, which the amended IRR outlined as “if the cost of the project outweighs the advantages the government and the public will receive from the project.”

These appeals from economists and massive enterprise fell on deaf ears, because the revised IRR retained what was contained within the earlier draft.

The 72-page revised BOT legislation IRR was accepted and signed by Socioeconomic Planning Secretary Karl Kendrick Chua, who as head of the state planning company Nationwide Financial and Growth Authority (Neda) chaired the committee tasked by President Duterte to revisit the principles on PPP tasks.

The Duterte administration had shunned PPPs, particularly unsolicited tasks, because it needed to keep away from supposedly disadvantageous provisions equivalent to authorities ensures, subsidies, in addition to materials antagonistic authorities motion (Maga) clauses.

Included within the present pipeline of flagship infrastructure tasks below the “Build, Build, Build” program are 20 big-ticket unsolicited PPPs with undertaking value totaling P1.5 trillion.

—Ben O. de Vera INQ

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