'.

REPUBLIC OF THE PHILIPPINESSANGG UNIANG l' ANLUNGSOIl

City of Paranaque

ORIlI NANCE NO. -.l1 - 0 6Series of 20 13

PRO PONENT: CO UN. CA RLITO n, ANT IPUESTO

AN ORIlINANCE PURS UING A l'IJIlLlC-PRI VATE pA RTN ERSfIIP (1'1'1')AI' I' ROACII TOWARIlS IlEVELOI'M ENT, PROVIDI NG FOR T HE PROCEIlURE~

FO R SE~crING T HE PRI VAT E SECT OR PROPONENT, AIlOPT ING ACONT RA T.¥.~~AGEMENT FRAME WORK, ANIl I'ROVIIlING APPRO PRIAT IONSANIl FOR T~ I' URI'OSES

Chapter I. Ilasic Principles and Ilcfinitions ~SECTION 1. Short Til/e. - This Ordinance shall be known and cited as the ." City of ParanaqueIntegrated pr p Code" .

Sec. 2. Declaration (ifPo/icy . - (a) It is hereby declared as a policy that City of Paranaquc shalladvance the public good and general welfare, promote the interest of the community and the Citywithin the framework of sustainable and integrated development, and effect ive constructiveengagement and meaningful people' s participation in local governance; (b) PPPs shall bepursued by the City consistent with and in furtherance of the vision and mission of the Citywhich state that:

1Vision: "A prime habitat city of the Metro South with quality education, cultural, social

j ustice, and a healthy environment sustained by an economically competitive and soundgovernance. synergized by capable, participative and God-fearing citizenry. "

Sec. 3. Operative Principles. - The accomplishment of the stated policy shall be guided by theollowing principles:

Mission : "Paranaque City shall establish effective support f acilities f or livablecommunity to provide a business-friendly environment f or investors and empower the citizenry tobecome active partners in developing the city as the residential and business haven in the MetroSouth. ..

The City, pursuant to Sections 1, 2 and 5, Article X or the 1987 Constitution, is a terri to~'1

and political subdivision which enjoys local autonomy and fiscal autonomy. Under Section 3,Article X of the 1987 Constitution. local autonomy means a more responsive and accounta~\local government structure instituted through a system of decentralization. Fiscal autonomymeans that local governments have the power to create their own sources of revenue in ~

addition to their equitable share in the national taxes released by the national government. aswell as the power to allocate their resources in accordance with their own priorities.

(b) The general welfare and the public good shall always be promoted and that transparency,public accountability and social accountability mechanisms and approaches , shall beintegrated in PPPs from inception to implementation.~

(c) The City exists and operates in its governmental and proprietary capacities thereby makingthe City an agent of and is therefore accountable to the State and its community. The ro Of(jthe City both as a regulator of a business and as implementer of a oprieta erta(\,must be clearly dCIine~ ,/

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, ,,, No. 2 13 - 0UOrdilllllllX No. • .-\;<0; OKDI 'Iri .4.'lriCL.Pl'RSlTlriG A Pl "OU( '·PRI\ ",H[ P"R"'l'l:R"~IIIP (PPP) .\ PPRO.4.CII TO WARDSm :n:tOP\ IF.:"'IT. PROVml'C H)~ Tl 1ti1>MOCEDI"RE ."OR Sr.U:UI'G nil': PRI\ 'ATE SECTOR PROPO ,r.'lriT• .4.DOPTI:orr;G.4. CO'lriTRACT~1.4.S.4.GBI[:"'IT F \~KK. axu PRO\"lDl'G APPROJ'JUATIO,\;S A.'Ir,P FOR OTlIUl rtRPOSt:S

(d) The City must develop int a If-reliant community, and as such. is in a better position toaddress and resolve matters t at arc local in scope . The City is under the supervision of thePresident and under the control of Co ngress.

(e) Under Sect ion 18 of the of Republic Act No. 7160 of the Local Government Code of 1991(199 1 LGC), the City may acquire , develop, lease. encumber, alienate, or otherwise disposeof real or personal property held by them in their proprietary capacity and to apply theirresources and assets for productive , developmental, or welfare purposes.

(0 Under Section 22 (c) of the 1991 LGC, no contract may be entered into by the Mayor onbehalf of the City without prior authorization by the Sanggunian Panlungsod . Theparticipation of the Sanggunian is indispensable in the adoption and implementation ofa PPP~arrangement. ~

(g) Under Section 22 (d) of the 1991 LGC. the City enjoys full autonomy in the exercise of its ~proprietary functions and shall exercise the powers expressly granted, those necessarilyimplied therefrom, as well as powers necessary. appropriate. or incidenta l for its efficient andeffective governance. those not otherwise prohibited by law and those which are essential tothe promotion of the general welfare.

(h) Under Section 25 (b) of the 1991 LOC, the City may collaborate or cooperate with otherlocal governments, national governm ent agencies, government-owned and controlledcorporations, government instrumentalities and government corporate entities for theimplementation oflocal projects.

(i) Under the chaner of the City, Sections 16, 17, 19 and 129 of 1991 LOC and other statutes,the City has been given the responsibility and mandate to exercise, devolved and delegatedpowers.

(j) The City. under Section 106 of 1991 LGC. is mandated to draw up and implement acomprehensive multi-sectoral development plan. PPPs shall be pursued by the City consistentwith its infrastructure, development. investment, environmental and governance frameworkembodied in relevant policies. plans , ordinances and codes.

IV·_~

( The City. as a partner in a PPP arrangement, may provide equity, subsidy or guarantee anduse local funds; and the usage thereof for a PPP project shall be considered for public use andpurpose.

(m)The City, under Section 3 (I) of the 1991 LOC, is duty-bound to ensure the activeparticipation of the private sector in local governance.

(I) Under Sections 34, 35 and 36 of the 1991 LGC and in the exerc ise of its powers, the Citymay enter into joint ventures and such other cooperative arrangements with people's and non­governmental organizations to engage in the delivery of certain basic services, capabilif ­building and livelihood projects, and to develop local enterprises designed to improveproductivity and income. diversity agriculture. spur rural industrialization. prom.:-:-",,~

ecological balance. and enhance the economic and social well-being of the people; provideassistance, financial or otherwise. to such people 's and non-governmental organizations foreconomic. socially-oriented. environmental. or cultural projects to be implemented within its Jterritorial jurisdiction.

(n) The right of the people to information on matters of public concern is guaran d underSection 7, Article III of the 1987 Constitution. Furthermore, it is the policy of the State toallow full public disclosure of all its transact ions involving public interest such as PPPs er '\

Section 28,::- e 1987 Constitution. (\ \

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.1 3 -0 6Page No.3Ordinance No_ - AS OROI~.4..!'\~,[ Pl'RSU :\"C .4. Pl'BLlC·P KI\ '.\Tt PARD;E:R.'IIJ P IFPP) .%. PPRO., CII TOWARDSDlX t LO P\I f.., --r. PROVml~G 1'0 1i: n n : PROC[Dl'RE fOR Sf:I .HTI'\C TH E: PRIVAT E SF.CTOR PROPO'\ t:'\T . ADOPTl"'iG• covnucr ","X' G<>,.--r '." UR"-"o PROHO"G .PP ROPR,mo" ' ' 0FOROTllU Pl Rl'OSES

(0) The people's right to effective and reasonable participation and public trust provision underSection 16, Artic le XIII and Section I, Artic le XI. respectively, of the 1987

(p) Constitution guarant ee and empower civil society groups to have effective and meaningfulparticipation in the regulation and management of PPP projects.

Sec. 4. Rationale for PPP. - PPPs shall be promoted to provide more, better, affordable andtimely services to the community. In pursuing PPPs, the City sha ll be guided by the followingreasons and dri vers:

(a) PPPs shall be undertaken in furtherance of the City development and physical frameworkplan.

(b) PPP is an essential pan of the overall infrastructure reform policy of the City. Byencouraging performance-based management of the delivery of public services applyingcommercial principles and incentives whenever possible. by introducing competition in andfor the market, and by involving users and stakeholders in the decision-making process,infrastructure and regulatory reform shall be achieved.

(c) PPPs should be adopted to address a pressing and urgent or critical publ ic need . Under theprinciple of "AdditionaJity" , the increased economic benefits to consumer welfare of having 1needed public services and infrastructure accessible now because of the PPP, rather thanhaving to wait until the City could provide the public services much later. PPP would alsoencourage the accelerated implementation of local projects. ~

(d) PPPs can be adopted to avoid costs and public borrowing. By contracting with the privatesector to undertake a new infrastructure project, scarce City capital budgets can be directed toother priori ty sectors such as social serv ices, educat ion, and health care.

e) PPPs allow for technology trans fer, and improved efficiency and quali ty of service. Thesecould be valuable contribution of the private sector in local governance.

PPPs should be feasible and affo rdable. demonstrating the need for the project. broad levelproject costs estimation, and indicative commercial viability. The assessment of affordabilityshall be the cornerstone for all PPP projects. both to the City and the general publ ic.

(g) PPP Projects should be bankable. High participation costs. unreasonable risk transfer orlengthy and complex contract negotiations must be avoided. A cost reco very pricing policyattractive to the private sector must be in place; provided that the same will not bedisadvantageous to government and public interest.

(i) PPP Projects must provide econom ic and social benefits and should be evaluated on thisbasi s rather than on purely financial considerations. The City remains responsible forservices provided to the public. without necessarily being responsible for correspondinginvestment. ~ •

(j) PPP Projects must give consideration for empowerment of Filipino citizens as a strategy foreconomic growth and sustainability and must thus provide for the participation of localinvestors 10 the furthest extent practicable given the nature of the project. The City shal",I~"T

ensure the hiri empl oyment of local labor in the PPP venture.

(h) PPP Projects should provide value-for-money and good. economic value as far as practicab]including allocation of risks to the party best ab le to control, manage, mit igate or insure theserisks, and maximization of the benefits of private sector efficie ncy, expertise, flexibil ity andinnovation. --',,;;:::'

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P" ,No,4 J 3 - D6Ordinance No, • AS ORDI:"iAS<;r rl'RSlIISG A PI :BU C·PRIYAT E PARTI' ERSIIIP (PPPJ APPROACII TOWARDS()}:\'HOPi\1ENT. PH()\"IDISG F R nE PHOn:D1:Hf. WI( SELECl ISG 1 Hi: PRIVAn: SE(" OR PROro'iEl'IiT. APOPTIN GA CO :'loT RACf :\IANAGE:'o IENT r ' WO RK, A/'IiD PROYIDISG APPROPRIATIOSS A:"rO D . 'O R OTIIER Pl;RPOS ES

(k) Procurement of PPP Projects must be competitive and must be undertaken through opencompetiti ve bidding . Competition must be legitimate, fair and honest. In the field ofgovernment contract law, competition requires, not only bidding upon a common standard, acommon basis, upon the same thing, the same subject matter, the same undertaking, but alsothat it be legitimate, fair and honest; and not designed to injure or defraud the government.Where competi tive bidding cannot be applied, a compet itive process ensuring bothtransparency and economically efficient outcome must be employed.

(I ) The regulation of the PPP shall be pursuant to the PPP contract and exercised by theappropriate regulatory authority. A duly executed and legal PPP Contract shall respected and~not impaired, and shall be binding on the successor administration pursuant to the provisionon corporate success ion. ,

(m)To provide efficient public service, the City must ensure. through stronger performancemanagement and guidance, proper implementation of PPP contracts that will result in valuefor money. on-time delivery of quality services to the public. achievement of governmentpolicy goals, all within sustainable and integrated development.

Sec. 5. Definition of Terms. - As used in this Code. the following teoos shall mean:

1Build-Lease-and-Transf er (BLT) - A contractual arrangement whereby a PSP isauthorized to finance and construct an infrastructure or developmen t facility andupon its completion. turns it over to the City on a lease arrangement for a fixedperiod, after which ownership of the facility is automatically transferred to theCity,

(i) Build-and-Transfer (BT) - A contractual arrangement whereby the Private SectorProponent (PSP) undertakes the financing and construction of a giveninfrastructure or development facility. and after its completion. turns it over to theCity. which shall pay the PSP. on an agreed schedule, its total investmentexpended on the project. plus a Reasonable Rate of Return thereon.

(a) Build-Operate-Transfer Law Scheme - Under Republic Act No, 6957 as amended by RA No.7718. the following are the BOT variants:

Build-Operate-and-Transf er (BOT) - A contractual arrangement whereby the PSPundertakes the construction. including financing, of a given infrastructure facility.and the operation and maintenance thereof. The PSP operates the facility over afixed term, during which it is allowed to charge facility users appropriate tolls.fees, rentals, and charges not exceeding those proposed in its bid. or as negotiatedand incorporated in the contract, to enable the PSP to recover its investment, andits operating and maintenance expenses in the project. The PSP transfers thefacility to the City at the end of the fixed term which shall not exceed fifty ( )years. This build. operate and transfer contractual arrangement shall includesupply-and-operate scheme, which is a contractual arrangement whereby thsupplier of equipment and machinery for a given infrastructure facilit y, if ...-..-=-;=:­interest of the City so requires, operates the facility. providing. in the process.technology transfer and training to Filipino nationals.

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,13 - 06Page No. SOrdinance No, • A~ ORDI ~A;<rr.~ Pl ·RSU....C A FrOLlC·PRI VATE PARThERSIIIP (PPPI APPRo.\OI TOWARP Sm :nI.OP\I[:-"T . PRO\'IDI'G ~llR Til PROCEDl H•. lOR !ti1.U.rTI'G TIl E PRI\'.4.H S[(:TOR PROPO' £ ....T. AOOPTI'GA CO :'loT RACf U-\:\.\ GUI E:'\IT I'llA' ORK. .-\.,\P PROHUI:"IoG APPROPRlATlO:'liS"....P . "ON.0 111[1( p i HrOS[S

(iv)

(v)

(vi)

Build-Own-and-Operate (BOO) - A contractual arrangement whereby a PSP isauthorized to finance, construct, own, operate and maintain an infrastructure ordevelopment facility from which the PSP is allowed to recover its totalinvestment. operating and maintenance costs plus a reasonable return thereon bycollecting tolls, fees, rentals or other charges from facility users. Under thisproject, the proponent who owns the assets of the facility may assign its operationand maintenance to a facility operator. The divestiture or disposition of the assetor facility shall be subject to relevant rules of the Commission on Audit.

Build-Transf er-and-Operate (BTO) - A contractual arrangement whereby the City"<.contracts out the construction of an infrastructure facility to a PSP such that thecontractor builds the facility on a turnkey basis, assuming cost overruns, delays, ~and specified performance risks. Once the facility is commissioned satisfactori ly,title is transfe rred to the City. The PSP, however, operates the facility on behalf ofthe City under an agreement.

Contract-Add-and-Operate (CA D) • A contractual arrangement whereby the PSPadds to an existing infrastructure facility which it is renting from the City andoperates the expanded project over an agreed franchise period . There may or maynot be a transfer arrangement with regard to the added facility provided by thePSP.

(vii) Develop-Operate-and-Transfer (DOT) - A contractual arrangement wherebyfavorable conditions external to a new infrastructure projec t to be built by a PSPare integrated into the arrangement by giving that entity the right to developadjoining property, and thus, enjoy some of the benefits the investment creates,such as higher property or rent values.

(viii) Rehabilitate-Operate-and-Transf er (ROT) - A contractual arrangement wherebyan existing facility is turned over to the PSP to refurbish, operate and maintain fora franchise period, at the expiry of which the legal title to the facility is turnedover to the City.

Rehabilitate-Own-and-Operate (ROO) - A contractual arrangement whereby anexisting facility is turned over to the PSP to refurbish and operate, with no timelimitation imposed on ownership. As long as the operator is not in violation of itsfranchise, it can continue to operate the facility in perpetuity.

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(b) Competitive Challenge - An alternat ive selection process wherein third parties or challengersshall be invited to submit comparative proposals to an unsolicited proposal. According ly, thePSP who submitted the unsolicited proposal , or the original proponent, is accorded the rightto match any superior otTers given by a comparative PSP.

(c) Competitive Selection or Bidding or Open Competttton : Refers to a method of selection orprocurement initiated and solicited by the City, based on a transparent criteria, which is op~ Jto participation by an y interested party. ~ ~~

(d) Concession - A contractual arrangement whereby the financing and construction of a new Ifacility and! or rehabilitation of an existing facility is undertaken by the PSP after turnover ythereof to it, and includes the operation, mainte nance, management and improvement, if any,of the facility for a fixed term during which the PSP generally provides service directly tofacility users and is allowed to charge and collect the approved tolls, fees, tariffs, rentals orcharges from them. The City may receive a concess ion or franchise fee during the term of thecontract and! or other considerat ion for the transfer, operation or use of any facility. Th- - ---- \1may be a transfer o f ownership of the asse t or facility after the conees J n peri ended0\subject to rul the Commission on Audit.

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P,, <No.6 .1 3 - 06Ordinance No. __ • AS OKDIS .<\S("}; r l ;RSl il"Ii (; A PI :BLlC-PRI\'An : PARTNERSIIIP (1'1'1') AI'PROACII TOWARDSOnH OPI'tU:ST, PRO\'IIHS C; m " THi'PROCJ:nnu: FOR SEU:CT ISG ru t PIUVAn: SH-mR PROPOS ENT. ADOPTI'C;A COSTRACT U.\.:"IAGEME:"ro"T F RI(, AND PROVIDISG APPRO PRUTIO:,\S AND FOR OTHER Pl:RPOSt:S

(e) Corporatization - Refers to transformation of a public entity or quasi-municipal corporationestab lished by the City into one that has the structure and attrib utes of a private corporation ,such as a board of directors , officers, and shareholders, and having it registered with theSecurities and Exchange Commission as a stock corporation. The process involves theestablishment of a distinct legal identity for the company under which the City ' s role isclearly identified as owner; segregation of the company' s assets. finances. and operationsfrom other provincial operations; and development of a commercial orientation andmanagerial independence while remaining accountable to the government or electorate.

(f) Cost Sharing - This shall refer to the provincial portion of capital expenses associated withthe establishment of an infrastructure development facility such as the provision of accessinfrastructure. right-of-way, and any partial financ ing of the project.

(g) Credit Enhancement - This shall refer to direct and indirect support to a development facilityby the PSP and/or City, the provision of which is contingent upon the occurrence of certainevents and/or risks. as stipulated in the PPP contract. Credit enhancements are allocated tothe party that is best able to manage and assume the consequences of the risk involved.Credit enhancements may include but are not limited to government guarantees on theperformance or the obligation of the City under its contract with the PSP, subject to existinglaws on indirect guarantees. Indirect Guarantees shall refer to an agreement whereby the Cityassumes full or partial responsibi lity for or assists in mainta ining the financial standing of thePSP or project company in order that the PSP/ project company avoids default ing on theproject loans, subject to fulfillment of the PSP/ project company of its undertakings andobligations under the PPP contract.

(h) Development Proj ects - Projects normally financed and operated by the City. but which willnow be wholly or partly financed , constructed and operated by the PSP; projects that willadvance and promote the general welfare; and other infrastructure and development projectsas may be authorized by the City.

1(i) Direct City Equity - Refers to the subscription by the City of shares of stock or other

securities convertible to shares of stock of the special purpose vehicle or single-purpo seproject company, whether such subscription will be paid by money or assets.

(k) Direct City Subsidy - Refers to an agreement whereby the City shall: (a) defray, payorshoulder a portion of the PPP project cost or the expenses and costs in operating andmaintaining the project; (b) condone or postpone any payments due from the PSP; (c)contribute any property or assets to the project; (d) waive or grant special rates on realproperty taxes on the project during the tenn of the contractual arrangement; and/ or (e)waive charge s or fees relative to the business permits or licenses that arc to be obtained forthe construction of the project, all without receiving payment or value from the PSP... oroperator for such payment , contribution or support.

Q) Direct City Guarantee - Refers to an agreement whereby the City guarantees to assumeresponsibility for the repayment of debt directly incurred by the PSP in implementing theproject in case of a loan default.

(I) Divestment or Disposition » Refers to the manner or scheme 0 taking away, depriving,;,~;:::

withdrawing of title to a property owned by the City and vesting ownership thereof to a PSP.

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Page No. 7 .1 3 -0 6Ordinance No. • AN ORDINANCE Pl :RSl;JN(i A PLJBU C·PRIVATt: PART~t:ltSIl Il' (PPP) APPROACH TOWARPSDE:\'E:LOP.\IE:\T, PKm'IDINd WR THE PROCt: Dl IRE . "UK St:U:ClT'I;G TI lE PKIVATt: SECI "OR PKOrO'l . :r-.:T. AUOf"'f1'1GA CONTRACT MANAGEMENt I\tI:WORK, A:"iD PRO\'IDI:"iG APPROPRIA nONS AND FOR OTHER PURPOSES

(m)Feasibi/ity Study ( - A study prepared by the City in a competitive selection or a PSPwhen submitting an unsolicited proposal, containing a needs analysis, atTordabilityassessment, value for money assessment, preliminary risk assessment, stakeholderassessment, human resource assessment, bankabil ity assessment, legal viability assessment,PPP mode selection, market testing if relev ant, indi cative transaction implem entation plan,and draft ppp contract. The study shall be supported by the results of the appropriate"willingness-and-ability-to-pay" survey.

l) Lease or AfJermage - A contractual arrangement providing for operation, maintenance, andmanagement services by the PSP, including working capital and! or improvements to anxisting infrastructure or development facility leased by the PSP from the City for a fixed

term. Under a lease, the PSP retains revenue collected from customers and makes a specifiedlease payment to the City. Under an affcrmage, the parties share revenue from customerswherein the PSP pays the contracting authority an affermage fee. which varies according todemand and customer tariffs, and retains the remaining revenue. The City may provide apurchase option at the end of the lease period subject to rules of the Commission on Audit.

(r) Negotiated Proj ects - Refer to instances where the desired projec t is the result of anunsolicited proposal from a PSP or, where the City has failed to identify an eligible privatesector partner for a desired PPP activity when there is only one qual ified bidder Aftersubjecting the same to a competitive selection or bidding.~

(s) New Technology - Refers to having at least one of the following attributes:

(0) Franchise - Refers to the right or privilege affected with public interest which is conferredupon a PSP, under such tenus and conditions as the City may impose, in the interest of pub lic~

we lfare, security and safety. "'-~

(0) Joint Venture (J V) - A contractual arrangement whereby a PSP or a group of private sector _~ ....entities on one hand, and the City on the other hand, contribute money! capital, services, ~assets (including equipment, land, intellectual property or anything of value), or acombination of any or al l of the foregoing. The City shall be a minority equ ity or shareholderwhile the PSP shall be majority equity or shareholder. Each party shall be entitled todividends, income and revenues and will bear the corresponding losses and obligations inproport ion to its share. Parties to a JV share risks to jointly undertake an investment activityin order to accomplish a specific, limited or special goal or purpose with the end view offacilitating private sector initiative in a particular industry or sector, and eventuallytransferring ownership of the investment activity to the PSP under competitive marketconditions. It involves a community or pooling of interests in the performance of the service.function, business or activity, with each party having a right to direct and govern the policyin connection therewith, and with a view of sharing both profits and losses, subject toagreement by the parties.

(q) Management Contract w A contractual arrangement involving the management or provisionby the PSP of operation and maintenance or related services to an existing infrastructure ordevelopment facility owned or operated by the City. The project proponent may collect tolls!fees! rentals and charges which shall be turned over to the City and shall be compensated inthe form of a fixed fee and! or performance-based management or service fee during thecontract term.

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P" , No' J3 -0 6Ordinance No. • AS ORDlSASCE Pl lRSnSG A l'l'HUe ·PRIVATE PARTl\ERSItIP (PPP) APPROACH TOWARDSDH'EI.OI'MENT. movnuvc fOR rue PROCEDlIRE fUR Sf:U:CTII'IiG TIlE PRIVATE SH'TOR PROPo.'EST. ADOPTISGA CO:"!iTRAC I' MANAGE\IEN 'I' -~\IEWORK, ASD PROVIDING APPROPRIATIOSS A:"I'D FOR CUllER PURPOSES

b. A process for which reject proponent or any member of the proponent joint venturelconsortium possesses exclusive rights, either world-wide or regionally; or

c. A design, methodology or engineering concept for which the proponent or a member of theproponent consortium or association possesses intellectual property rights.

(t) Private Sector Proponent (PSP) - Refers to the private sector entity which shall havecontractual responsibility for the project and which shall have an adequate track record in theconcerned industry, as well as technical capability and financial base consisting of equity andfinn commitments from reputable financial institutions, to provide, upon award. sufficientcredit lines to cover the total estimated cost of the project to implement the said project.

(u) Public-Private Partnerships (PPP) - PPP is a form of legally enforceable contract betweenthe City and a PSP, requiring new investments from the PSP and transferring key risks to thePSP in which payments are made in exchange for performance, for the purpose of deliveringa service provided or intended to be provided by the City. PPP shall also include dispositionsof an asset, facility, project owned, or entity created by the City to a PSP; procurement of aservice; assumption by a PSP of a proprietary function of the City; grant of a concession orfranchise to a PSP by the City; or usage by the PSP of public property owned or possessed bythe City.

(v) PPP Contract - Whenever appropriate and relevant, the PPP Contract shall contain thePreambulatory Clauses or Whereas Clauses, Party Clause, Rules of Interpretation, Nature ofthe PPP. Term of the Project, Contract Objective, Performance Bonds, Key PerformanceIndicators, Risk Allocation, Rights, Payment to PSP, Tariff Scheme, Subsidy or SupportMechanism, Insurance Requirements. Delay Provisions, Force Majeure. GovernmentalAction, Government and Public Sector Entity (PSE) Warranties, PSP Warranties, Change inthe Law, Regulatory Regime, Variations. Termination, Indemnification, Intellectual

roperty, Claims, Financial security, Dispute Resolution, Step-in Rights. Changes in theComposition of the PSPI Service Provider, Partnership Management, Compliance with allLaws and Existing Contracts, Personnel, Conditions Precedent, among others.

(w)Reasonable Rate ofReturn (RROR) - Refers to the rate of return that a PSP shall be entitledto, as determined by the PPP Regulatory Authority taking into account, among others, the fit,.prevailing cost of capital (equity and borrowings) in the domestic and international markets, . ,. ,risks being assumed by the PSP and the level of City undertakings and contributions '1 ~

extended for the project.

(x) Service Contract - A contractual arrangement whereby the PSP shall provide a particularservice to the City involving the City's proprietary authority or to entities or corporationcreated by the City. The PSP shall be entitled to be paid a fee per unit of work done duringthe term of the contract. ~

(y) Unsolicited Proposal - Refers to project proposals submitted by a PSP to the City toundertake a Development Projects without a formal solicitation issued by the City.

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(z) Value fo r Money (VjM) - Refers to the concept that over the whole-life of a project finance-PPP project, government's total expenditures (i.e., its payments to the private sector~

adjusted for the risks that have been transferred to the private sector, will be less, on aN~et

Present Value (NPV) basis, than if the government will perform the services itself. V --_considers monetary and non-monetary factors such as: (i) risk transfer; (ii) reduced whole lifecosts; (iii) speed of implementation; and (iv) quality and reliability of service.

Page No. 9 1 3 - 0 6Ordinance No. ' - AN ORDlNAl\CE . PURSl 'II\G A Pt BLlC.PKI\'ATE PA RTN ~:RSIII P (PPP J APPROACH TOWARDSIH:n:tOp~n:NT. PROYIDI:\G m il THJI'P ROCE Dl1RE ron SE:I.ECT I!IOG TilE PRIVATE SECTO R PROPO~ENT. ADOPTINGA CO:'llTRACT ,\ IANAGB IEN1' rile )l:\\:ORK, ANI> PROVIDING APPROPRIATlO,\S AND HlROTIlt:R PI:RPOSES

(aa) Viability Gap Funding (VGF) - Refers to an explicit subsidy that is performance-driven(i.e., based on private party achieving measurable outputs) and targeted to socio­economically disadvantaged users or groups of users; or any financial support in the Conn ofgrants or assistance, one time or deferred, to infrastructure projects undertaken through PPPswith a view to make them commercially viable.

Sec. 6. Rules of Interpretation. - This Code and the provi sions hereof shall be liberallyinterpreted to accom plish the policy and objectives set forth in Sections 2, 3 and 4 hereof. "<.Sec. 7. Authorities. - (a) This Code is being adopted pursuant to the City's constitutional and '\statutory authorit ies enumerated under Section 3 hereof; and when not inconsistent with the ~relevant laws aforementioned, shall govern the adoption and implementat ion of the PPPModalities.

(b) In pursuing BOT and its Variants, the City shall comply with Republic Act No. 6957 asamended by RA No. 7718 (BOT Law) and its Implementing Rules and Regulations.

(c) In entering into Management and Service Contracts, the City shall comply with Republic Act9184 or the Government Procurement Reform Act (GPRA) and its Implementing Rules andRegulations.

(d) For Dispositions, Commission on Audit Circular No. 89-296 (January 27, 1989) shall govern .

(e) For Corporatization, the incorporation of the corporation must be done in accordance with theCorporation Code of the Philippines.

Chapter 2. PPP Projects and PPP Modalities

(g) For Leases and Affermages, the Law on Leases of the Civil Code of Philippi nes may beeferred to.

Sec. 8. PPP Projects. - (a) The City, through the appropriate and viable PPP mode, mayundertake Development Projects, includ ing but not limited to, power plants, highways, ports,airports, canals, dams, hydropo wer projects, water supply, sewerage, irrigation,telecommunications, railroad and railways, transport systems, land reclamation projects,industrial estates or townships, hous ing, government buildings, tourism projects, public markets,slaughterhouses, warehouses, solid waste management, information technology networks anddatabase infrastructure, education and health facilities, social services, sewerage, drainage,dredging, prisons, and hospitals. The City can also undertake PPPs for any of the devolvedactivities under Section 17 of the 1991 LGC.

(1) For Joint Ventures, the Law on Partnerships of the Civil Code of the Philippines shall beapplicable.

(b) The determination of the appropriateness and viability of the PPP mode shall be specified,explained and justified in the feasibility study weighing all the relevant value drivers and reasonsfor pursuing a PPP project. ~ I.

Sec. 9. List of Priority Proj ects. - The City shall identify specific priority projects that max ~undertaken under any of the PPP Modalities defined under Sec. 10 hereof.

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' ..,No. 1O 13 - 06Ordinance No. __ - AN ORDI."I/AN(~t: PIR"Ur"riG A PlJ8UC·PRIVATE PART:'IiF.RSIII P U'PPj Af'PRO,\CII TO WARDS1H:\'E1 _0P~lt:NT. PRm -IP I:'IiG mR I-I E PROCEDl IRE FOR SELECTI:'IiG TIl E PRIVATE SECTO R PROPO:'liENT. AIKl PTI:'IiGA Co:'H RACT ,"lA NAG B It:NT . "RA. ·WORK. A:'IiD PROVIDI:'IiG APPR OP RIATIO NS AND r OR OT IIER PI:RPOSES

Sec. to. PPP Modalities. - In u deany of the following 16 PPP Molaw:

aking a specific PPP Project. the City may adopt and pursueities and provide for other modalities not inconsistent with

(a) Build-and-Transfer (BT);(b) Build-Lease-and-Transfer (BLT);(e) Build-Operate-and-Transfer (BOT);(d) Build-Own-and -Operate (BOO);(e) Build-Transfer-and -Operate (BTO);(f) Contrac t-Add-and-Operate (CAO);(g) Develop-Operate-and-Transfer (DOT);(h) Rehabilitate -Operate-and -Transfer (ROT);(i) Rehabilitate -Own -and-Operate (ROO);ti ) Concession Arrangement;(k) Joint Venture (JV);(I) Lease nr Affe rmage;(m)Management Contract;(n) Service Contrac t;(0) Divestmen t or Disposition; and(p) Corporatization.

Sec. I I. General Requirements. - These are the general requirements for the City in entering intoPPPs:

(a) Undertaki ng a PPP for a Development Project must be premised on any or all of the reasonsand drivers mentioned in Sect ion 4 hereof.

(b) The list of projects to be implemented by the City under any of the BOT variants shall besubmitted for confirmation to the City Deve lopment Council for projects costing below TwoHundred Million Pesos and those above Two Hundred Mill ion Pesos to the InvestmentCoordina tion Conunittee of the National Economic Development Authority. i(c) Projects included in the List of Priori ty Projec ts shall not be eligible for unsolicited proposalsunder any of the BOT variants, unless involving a new concept or technology; provided, that forany of the other PPP Modal ities, unsolicited proposals may be accepted even if the projec t isincluded in the List of Priority Projects or whether the same features a new concept ortechnology or not.

(d) The prohibition for extend ing Direct City Guarantee, Direct City Subsidy and Direct CityEquity only applies to unsolicited proposals for BOT variants under Republic Act No. 6957 asame nded by RA No. 7718.

(e) For BOT variants that wil l be subjected to bidding. Concession Arrangements, Leases orAffermage, Management and Serv ice Contracts, and Joint Ventures, the City may provide DirectCity Guarantee, Direct City Subsidy, Direct City Equity, or Viability Gap Funding; provided,that the City can use a portion of its general fund , its development fund comprising 20% of itannual share in the Interna l Revenue Allotment, and! or its equitable share in the proceeds of theutiliza tion and development of the national wealth found within its territory for this purpqse;prov ided further, that any amount used for subsidy or equity for a PPP project shall be deem~ .zfor development purposes and fo; the direct benefits of the inhabitants pursuant to Sections~'\':S:

and 294 of the 1991 LGC respectively . -

PPP Modalities, the City may provide Cred it Enhancements an

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(f) For allschemes.

P",No lI 13 - 0 6Ordinance No. __ - ,\ :'\; ORIW'liA. :'oiCE PlTRSl 'l:'Io G A Pl:BLlC·PRI\lAn: p.un~U(SIlll' (PPP) APPROACH TOWARDSDF:\'HOPMEl'T . PRO\"IDI:\G FO~ rn PROCEDl 'RE FOR SF.U:CTING TIn: PRI\'ATE SH~"OR PR.OI'O:'lO J:ST. A,[)OPTISGA CO 'lriTRAC'T :'oIA:'IlAGE!\I ENT FR.U1 RI(.,AND PROVlDlSG APP ROPRlATlO:"iS AND FOR OTHER Pl 'RP OSES

(g) Offic ial Development Assistance (ODA) as defined in R.A. 8182, otherwise known as thea DA Act of 1996, as amended by R.A. 8555, may be availed of for PPP projects where there isdifficulty in sourcing funds; provided, that a DA financing shall not exceed 50% of the projectcost, with the balance to be provided by the PSP .

(h) Any subsidy to the constituents that will be extended by the City must he targeted,transparent and effic iently administered.

(i) Each PPP Modality adopted for a specific PPP project must specifically provide and adopt a '-e-

tariff-mechanism such as but not limited to cash-needs, price cap, revenue cap, rate of return, .....0hybrid of the foregoing, or any other appropriate scheme. ~

(j ) For negotiated contracts for BOT variants for public utility projects which are monopolies, therate of return on rate base shall be determined by existing laws, which in no case shall exceedtwelve per centum [12%].

(k) In case of a project requiring a franchise or license to operate, the winning PSP shallautomatically be granted by the City the franchise or license or permit to operate and maintainthe facility, including the collection of tolls, fees, rentals, and other charges in accordance withthe schedules stipulated in the approved PPP contract. The original franchise period as stipulatedin the contract agreement may be extended. as may be authorized by the City, provided that thetotal franchise period shall not exceed fifty (50) years.

(I) The City shall have the option to form or allow the formation of a special purpose vehicle orsingle-purpose project company to implement the PPP project as may be appropriate under thechosen PPP Modality.

(m) In parti cipating in PPPs, the City may, subject to Sections 16, 17, 18, 19 and 20 of the 1991LGC, exercise police power, perform devolved powers, power to apply and generate resources,expropriate and reclassi fy and enact or integrate zoning ordinances.

n) The City shall prescribe and impose Procurement Ethics to be followed by the City and allidders based on the principles of honesty, integrity, probity, diligence. fairness, trust. respect

consistency for all PSPs and bidders.

Sec. 12. Government-to-Government Joint PPP Undertakings. - The City by mutual agreementin a Government-to-Government arrangement with other local governments. nationalgovernment agencies, government-own ed and -controlled corporations, governmentinstrumentalities and government corporate entities, may implement PPP Projects for projectslocated within the City's territory or those projects that will benefit the City and its communityeven if the project site is outside the City' s territory; provided, that the collaborating or partnergovernment entity jointly undertakes with the City the selection of the PSP using the appropriatePPP Modality.

Chapter 3. PPP Procedures and PPP Contract

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Sec. 13. PPP Procedures. - The following procedures shall apply: (a) For BOT variants, the Citymust comply with the procedure set forth in Republic Act No. 6957 as amended by RA No. 77,18and its Implementing Rul es and Regul ations. ~ ~

(b) For Management and Service Contracts, the City shall comply with Republic Act No. 9~or the Go vernment Procurement Reform Act and its Implem ent ing Rules and Reg ulations. \ J~

I

',«No",13 - 06Ordinance No. • A~ OKDI:oriA:orin:m :\,u.()p\U::'IoT , PROUPI'lriG mit TiltA COSTR-\CT \1.-\!'IiAGB IE.'\,T I:R.~I[

tR.~B:'IlG A I'tIBlIC·PRIVAn: PART:'IlHL~IIIP (1'1'1') APPRO,\CH TOWA H,USOCt Dl Rt: FOR SEU:CTI\G TIlE PRI\ 'ATF.SHTOR PROPO\tST. ADOPTI'G

RK. A:"iD PRO\l DlSC APPROP RlATIO:'liS " S O fOR OTH ER PllRPOSES

(c) For Concessions, Joint Ventures. and Leases or Affermage, the procedures specified hereinshall govern.

(d) For Divestment or Disposition of a property. Commission on Audit Circular No. 89-296(January 27. 1989) shall be applicable.

(e) For the Divestiture of a subsidiary or corporation incorporated by the City under~Corporatization, the sale may be pursued via a public offering or through a public auction orother relevant schemes under Commission on Audit Circular No. 89-296 (January 27. 1989).

(I) If the City opts to select a PSP using either Competitive Selection or Competitive Challenge. ~the City in the Competitive Selection and the PSP in the Competitive Challenge approach mustprepare and submit a Feasibility Study. The costs of preparing the Feasibility Study may bereimbursed by the winning PSP to the City under the Competitive Selection mode.

(g) All recommendations of the PPP Selection Committee shall be submitted to the Mayor forconsideration and approval.

(h) All PP P contracts must be signed by the Mayor with prior authorization by theSanggunian Panl ungsod including his authority to negotiate.

(i) During the consideration of the PPP Contract by the Sanggunian Panlungsod, a publicconsultation shall be conducted explaining the PPP Project. PPP Contract, accountabilitymechanisms built into the PPP arrangem ent, the benefits and costs of the PPP Project, amongothe r relevant matters.

Gl After the signing of the PPP Contract by the Mayor, the PPP-SC shall issue the Notice ofAward to the PSP .

Sec. 14. PPP Selection Committee. - (a) The re is hereby created a PPP Selection Commi ttee(PPP.SC) for purposes of selecting a PSP for a specific PPP Proj ect. The PPP-SC shall becomposed of the following:

(i) Chairperson - At least a third ranking officer of the City;I J

(i i) Secretary - City Legal Officer;

(iii)The City Treasurer;

(iv)The City Planning and Development Officer;

(v) One (I) representative from and selected by the Sanggunian Panlungsod who isnot the same representative in the PPP-RA; and

(vi)Two (2) representatives from and chosen by the accredited civil society groups, people'sand non-governmental organizations who are members of the City Development Council.

A quorum of the PPP-SC shall be composed of a simple majority of all voting members. TheChairperson shall vote only in case of a tie. '

The PPP-SC with the approval of the Mayor may invite provisional non-voting mem rs fro~the national government agencies, regulatory agencies, National Economic Developme':'nt;:""~Autho rity, Department of Interior and Local Governments, and the private sector to observe inthe proceedings of . PPP-SC; and form a support staff composed of empl ees and staff of theCity .

13 - 0 6Page No. IJOrdmence No. __ • AN ORDINANCE Pl TR.'n;IJ'';G A PlIBUC·P RIVATE PART:"iERSIIlP (PPP) APPROACH TOWARDSDEVELOP.\I ENT. PRO\'IDI~G F~ II PROCEDl TR E: I'OR SEU ':CfI:\C TI lE PRIVATE SECTOR PROPO:'IlE~T. ADOPTI~G

A CONTRACT MASAGUIENT ..-I(U I 'ORK-AS D PROVIDING APPROPltlATIONS AS P m R ot utn Pl' RPOSES

(b) The PPP-SC shall be responsible for all aspects of the pre-select ion and selection process,including, among others. the preparat ion of the Feasibility Study and selection! tenderdocuments; determination of the minimum designs, performance standards! specifications,economic parameters and reasonable rate of return or tariff-setting mechanism appropriate to thePPP Modality; drafting or evaluation of the PPP contract; publication of the invitation to applyfor eligibility and submission of proposals or comparative proposals; defining the eligibilityrequirements, appropriate form and amount of proposal securities, and schedules of the selectionand challenge processes; pre-qualification of prospective PSPs, bidders or challengers; conduct">.of pre-selection conferences and issuance of supplemental notices; interpretation of the rulesregarding the selection process; conduct of the selection or challenge process; evaluation of the ~ <,

legal, financial and technical aspects of the proposals; resolution of disputes between PSPs and ~challengers; defining the appeals mechanisms; and recommendation for the acceptance of theproposal and! or for the award of the contract.

Sec. 15. Competitive Selection. - (a) The Competitive Selection procedure shall consists of thefollowing steps: advertisement, issuance of instructions and tender documents, conduct of pre­bid conferences, eligibility screening of prospect ive bidders, receipt and opening of bids, postingof proposal securities, evaluation of bids, post-qualification, and award of contract.

(b) The Mayor shall approve the tender documents and the draft PPP Contract before they areissued to the prospective PSPs! bidders.

Sec. 16. Limited Negotiations. - Where the City has failed to identify an eligible PSP for adesired PPP activity when there is only one qualified bidder after subjecting the same to acompetitive selection or bidding or where the desired PPP project is the subject of an unsolicitedproposal from a PSP, Limited Negotiations may take place. The negotiations will cover all thetechnical and financial aspects of the PPP project or activity; provided, that the minimumdesigns, performance standards! specifications and economic parameters stated in the FeasibilityStudy and Terms of Reference for the Competi tive Selection are complied with. The Mayor afterbeing authorized by the Sanggunian shall approve the terms of the Limited Negotiations prior tothe award of the contract to the PSP.

Sec. 17. Competitive Challenge. - The Competitive Challenge process shall be divided into three(3) Stages, described as:

tage One/ Unsolicited Proposal - The steps are:

{i) A PSP submits an unsolicited proposal accompanied by a Feasibility Study to the City fora projected PPP Project.

ii) The PPP-SC shall make an initial evaluation of the proposal and determination of theeligibility of the PSP.

(iii)Upon completion of the initial evaluation. the Mayor, upon recommendat ion of the PPP­SC, shall either issue a certificate of acceptance or non-acceptance of the preposal forpurposes of detailed negotiations.

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(iv)If there are more than one unsolicited proposal submitted for the same PPP Project, theMayor, upon recommendation of the PPP-SC, may reject all proposals and purs_ ,"""",;,,,­competitive selection, or accept the unsolicited proposal that is complete and provides thegreater advantage and benefits to the community and revenues to the City.

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..... No l< 13-0 6Ordinance No. • A' ORDI:\ ,\.'n: PI 'RSlT\ (; A Pt 'BLlC. PRI\·,H F. rARr."'o ER"iJIIP iFF") APPRO-4.CII TO\\-.4.RDSDE\·[lO''' t:.~O\"lDl'G FOR't~~[DI·Rr. FOR s n .t:cnSG TI LE PRI\o'ATE SECTOR PROPO' r.~T•.4.DOPTISGA CO' TRUT " " AGE".-T FR." EU"' " PROH " "G APPROP. LHlO" " " FOR OTIlER PlKPOSES

Stage Two! Detailed Negotiations - The steps are :

(i) The parties shall negotiate and agree on the tcnns and conditions of the PPP Projectconcerning its technical and financial aspects.

(ii) Once negotiations are successful , the Parties shall issue a joint cert ification stating that an~agreement has been reached and specifying the el igibility of the PSP and the technicaland financial aspects of the PPP Project as agreed upon .

(iii)The issuance of the certification commences the activities for the solicitation for ~comparative proposals.

(iv)However, should negotiations not result to an agreement acceptable to both parties, theCity shall have the option to reject the proposal by informing the PSP in writi ng statingthe grounds for rejection and thereafter may accept a new propo sal from other PSPs,decide to pursue the proposed act ivity through other PPP Modalities or subjec t the PPPProject to a Competitive Select ion.

Stage Three! Competitive or Swi ss Challenge - The steps are :

(i) The PPP·SC shall prepare the tender documents. The eligibility criteria used indetermining the eligibility of the private sector entity shal l be the same as those stated inthe tender documents. Proprietary information shall, however. be respected and protected.and treated with confidentiality. As SUCh. it shall not form pan of the tender and relateddocuments.

(ii) The Mayor shall app rove all tender documents including the draft contract before thepublication of the invitation for comparative proposal s.

(iii)The PPP -SC shall publi sh the invitation for comparative proposals.

(iv)The PSP or Original Proponent shal l post the proposal security at the date of the first dayof the publication of the invitation for comparative proposals in the amount and formstated in the tender documents.

1

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(v) In the evaluation of proposals, the best offer shall be determined to include the originalproposal of the PSP. If the City determines that an otTer made by a comparative PSP orchallenger other than the negot iated term s with original proponent is superior or moreadvantageous to the City than the original propo sal , the PSP who submitted the originalproposal shall be given the right to match such superior or more advantageous offer.Should no matching offer is received within 45 days from the date of publication of theproposal , the PPP Project shal l be awarded to the comparative PSP submitting the most Iadvantageous proposal. If a matching offer is received with in the prescribed period. thePPP Project shall be awarded to the original proponent. lf no comparative proposal isreceived by the City, the PPP Project shal l be immediately awarded to the ,-originalproponent. ~

Sec. 18. Schedules and Timelines. - The City shall have the authority to adopt and prescribe eappropriate schedules and time1 ines for each PSP selection process: provided, that the periods ~

reasonable and will not undermine free competition, transparency and acco untability.

P"" No. 1, 13 - 0 6Urdinancc No. - ..\' ()KIlI~'\M_·.: PI KSII:'li( ; " 1> 1 ~IU .lC- P 'UVi\Tt: p..\ Kr 'lrri U {SIIIP WI''') M 'I'ROACII '10WAIWSIlt:n:I,O I''1 t: :'H. PRO\'Illl'(; H>R '~,II ~ J'.li.on:m 'IU : lOK s U.t:CTI'C; 1 m : PRIVAT E SECroR "ROI'O:"ElIrril-, AI)()!'T I :'IiG, (m!R'C\'IA,.\C;",,,,,1 IIU''''''O''" I'RO'lIll'" ' I' I'ROI'RI'!")" ," " lOR (H ilER PIReO""

Sec. 19. PPP Contract. ~ (a) The PPP Contract shall be signed by the Mayor on behalf of theCity with the priority authorization and/or ratification by the Sangguniang Panlungsod. and theduly authorized representative of the PSI' .

(b) The direct and ultimate beneficiary of any PPP Contract shall be the constituents of the C it~

of which every Contract shall require the PSI' to upfront Twenty Five Million (Php25,000,000.00) Pesos for the socialized housing project for the informal settlers of the City or ~50% of the I% of project cost whichever is higher. The money shall be held entrustindependently for land acquisition and/or socialized housing project. The projectimplementation shall be done by Special Board composed of representatives of SangguniangPanlungsod to be elected from among themselves at one ( I) Councilor per District who is notsitting at the PPP-SC and PPP-RA. the City Engineer. City Plannin g Office r and City HousingBoard Officer . The Chairman of the Board shall be elected from among themselves.

(c) The principal PPP Contract shall describe the PPP Project. the rights. functions, obligationsand responsibilities of and risks assumed by each of the contracting party. dispute mechanismsand all other provisions enumerated under Sect ion 5 (v) hereof.

(d) The other ancillary contrac ts may include insurance contracts; loan agreements; bonds:guarantee arrangements; equity arrangements: operations and maintenance contracts; andengineering. procuremen t and construction (ErC) contracts.

,City Lega l Officer ;

(v) City Treasurer;

(ii) Vice-Chairperson - Vice-Mayor

(iii) One ( I) Counci lor to be elected among themselves for every district of the Cityprovided that the elected Councilor is not sitting at the same time as member ofppp-sc

(iv)

0) Chairperson - The Mayor or the City Admin istrator if so designated by theMayor;

c. 2 1. Composition of the 1'1'1' Regulatory Authority: - (a) The membership of the PPP-RAhall be composed of the following:

Chapter 4. Regulation and Contract l\fanagcmcnf

Sec. 20. PPP Regulatory Authority 's Mandate. - The PPP Regulatory Authority (PPP-RA)created under this Code shall be tasked with performing contract management functions, such aspartnership management (i.e., co rporate governance . communicat ion and information sharing,and dispute resolution), performan ce or service delivery management {i.c., risk management andperformance management), and contract administration (i.e., variat ion management. contractmaintenance and financial administrat ion), for all PPP arrangements entered into by the City.Aside from these, the PPP-RA shall be responsible for setting and monitoring the tari ff. andadministering the subsidy pursuant to the PPP contract.

(vi) City Planning and Development Officer; and

(vii)

· .

Pag,No. 16 .1. 3..- 0 6Ordinance No. __ • AN ORDINANCr. PI '1JS1 'I!lriG A Pl lBLlC·PRIVAH : PARTJlri ERSIII P (PPP) APrROACII TOWA IWSI)EVEI.OI'~IEln. PRO\'IDISG FOR THE PR,OCE[)(TRt: FOR St:U<-'"ING u n: PRIVAn : SE('"OK PROPO'\E!'Iri l . ADOPTINGA CONT RALi J\L4. NAGHU:NT )'"RAMt:\\ ltk ND PROVIDING APPROPRIAnONS AND FOR ornea Pl :RPOS E$

(b) For projects covered by government-to-government jo int PPP undertakings, thecollaborating or partner government entity shall have one (1) representative in the ppp.RA, provided that such representative shall only sit in meetings of the PPP-RA. orportions thereof, and have a vote only on matters directly affecting the PPP projectcovered by such jo int PPP undertaking. For this purpose, government-to-governmentjo int PPP undertakings means such mutual agreement entered into by the City with other~local governments. national government agencies, government-owned and -controlled \:corporations , government instrumentalities and government corporate entities, for theimplementation of PPP projects that will benefit the City and its community even if theproject site is outside the City's territory.

(c) The PPP-RA may appoint a contract manager for a PPP project depending on the PPPcontract value, complexity and associated risks. The contract manager shall have thenecessary management skills and technical knowledge of the goods, services or works tobe provided under the PPP contract. The PPP-RA shall determine the manner and sourceof payment for the contract manager' s compensation, provided that if a regular employeeof the City is appointed as contract manager. he/she shall not receive additionalcompensation for such appointment.

(d) A quorum of the PPP-RA shall be composed ofa simple majority of all voting members.The Chairperson shall vote only in case of a tic.

(e) The PPP-RA with the approval of the Mayor may invite third party experts to attend itsmeetings to act as advisors and observers. Such third party experts may represent nationalgovernment agencies. regulatory agencies, the National Economic DevelopmentAuthority, the PPP Center, the Department of Interior and Local Governments , privatesector, non-governmental organizations and civic groups.

(f) The PPP-RA may form a support staff composed of employees and personnel of the City.The PPP-RA may also engage consultants hired pursuant to law.

Sec. 22. Contract Managemen t Manual. - (a) The City Legal Officer, City Treasurer and CityPlanning and Development Officer and one of the civil society representatives of the PPP-RA.acting as the PPP-RA Manual Committee (PPP-RA-MC). shall jointly prepare a contractmanagement manual for each executed PPP contract, which shall serve as a guide to the City andits personnel in ensuring a consistent, high quality contract monitoring process that is specific forsuch PPP contract.

The PPP-RA may accept. reject, or order the revision of the contract management manualat any time during the life of the PPP project, provided that any revision subsequent tothe first acceptance of the contract management manual at the inception of the PPPproject shall require written notice to the PSP and opportunity to be heard.

(e)

(b) The contract management manual in (a) shall be submitted to the PPP-RA for approvalwithin twenty-one (21 ) days from the execution of a PPP contract. provided that, foroutstanding PPP contracts concluded prior to the effectivity of this Code, the contractmanagement manual shall be submitted to the PPP-RA within one hundred and twentydays (120) days from the effectivity of this Code and the provisions of this Cede shallapply mutatis mutandis.

16

If the contract management manual has not been approved by the PPP-RA within sev6i'''''""'''(7) days from its submission as provided in paragraph (b). the same shall be deemedissued and appr by the PPP~RA for all purposes.

(d)

t 3 - 0 6Pege No. 11Ordinance No, __ - AS ORUI:"IiASCE PVR.Sl1I:"liG A Pl;RUC-PIUVATE PAKThlCRSIIIP (PPP) APPROA CII TOWA IWSntvr tm-stt xr . PR(}\ 'IIlI:'liG FOR TIlE P K . ra r FOR SEl.ECl ISG l Ht: PRJ\',\ n : SECl'OR PHOPO,\;DiT, AIlOPTINGA COSTRACT :'o1ANAGE:\IESTFRAMEWO D PROVIDISG APPROPRIA nONS ASD FOR OTIIER PURPOSES

(e) The PPP-RA shall evaluate e contract management manual quarterly. which shall beamended as may be necessary . Any amendment to the contract management manual shallbe effective upon the approval of the PPP-RA.

(f) The PPP-RA, all throughout the life of the PPP Contract, shall present. make availableand explain, before and after any material action is taken, all relevant information~regarding the implementation of the PPP Contract, the submissions of the PSP andactions taken by the PPP-RA, to the City Development Council.

Sec . 23. Contents oj the Contract Management Manual. - Each contract managem ent manual ~shall include the following information:

(a) a description of the PPP project and its history;

(b) a summary of the key terms of the PPP contract;

(c) roles and responsibilities of each member of the PPP-RA and other City personnel andcontractors, as applicable, who are involved in the PPP project;

(d) roles and responsibilities of key personnel of the PSP;

(e) details of the post-award conference ;

(f) partnership management procedures;

(g) performance or service delivery management;

(h) contract administration; and

(i) project closeout procedures.

Sec. 24. Post-Award Conf erence. - (a) Immediately after the PPP contract is awarded, the PPP­RA Chairperson shall call a post-award conference to ensure that the City and PSP have a clearand mutual understanding of the terms and conditions of the PPP contract, and to determine theresponsibilities of parties. Notice of the post-award conference shall be sent by the PPP·RAChairperson at least five (5) working days before the scheduled date thereof.

(b) The post -award conference shall be attended by the members of the PPP-RA, suchemployees and contractors of the City that who be involved in the management of thePPP contract, and key personnel of the PSP.

(c) The PPp·RA Chairperson shall preside at the post-award conference, and shall appoint asecretary of the conference from the City personnel present.

(d) The minutes of the conference shall be sent to each participant within five (5) days of theadjournment of the conference.

i

Sec. 25. Personnel and Training Requirements. - (a) The contract management manual sha'identify the City personnel involved in contract management, the specific roles anresponsibilities of each, and the skills and technical knowledge required to perform their~~functions.

(b) Independent contractors may be engaged in the absence of the qualified city personnel,provided that, except in the case of contract managers engaged in accordance witSection S(c), cO.!J1raCtors may only be engaged for a period not exceedi e (3jj.)"ear$from the effect~~.~ate of the PPP contract. Such contractor shall:

__-?---:;;2~",,--_1~7_ ~?---t:r

1 3 - 0 6PageNo. 1&Qrdill3l\l,X No. - .-\..'\ ORDI'" ....Ct: I'lJl-" l T'G " Pl' BUC·.,RI\ "ATE P,ARThI:R.'iIll P (PPPI APPR()\ CII TOWAIUlSDE\ '[LO"'IE'...'T. PRo\·IDI G FOR r u e PJU)n:m "R[ FOR Sn .ECTI '\G TI l E PRI\ 'AH SECT OR PROPO,\r. , ,,• .4.00PTI'GA CO....TR4.CT U ' ....AGB IE rr ."RUt ... .-\.'D PRO\'IDI....G APPRu r RU.-no xs .' ....D fO R OTIIEMPl'RPOS ES

(i) derstudies: and

(ii) provide a training program for City personnel in his field of specialization, withsuch training being done regularly duri ng reg ular office hours.

(e) During the contract life, the City personnel shall undergo such continuous training oncontract monitoring to ensure that the City is equipped to monitor reliably the PSP'sperfo rmance ove r the entire life of the PPP contract.

Sec. 26. Partnership Management, - Each contract management manual shall identify processes~to ensure accountability and manage the relationship between the City and the PSP, and shall ~~describe: ~

(a) each pun y' s governance structure, including the overall system of institutional structures,operating rules, compliance mechanisms and accountability procedures;

(b) guidelines on communication and inform ation sharing between the City and the PSP.including reporting requi rements, frequency and purpose of regular meetings. record­keeping of all exchanges, and the acceptable modes of correspondence between them;and

(c) the process for resolv ing disputes between the parties. identifying. among others , thedifferent leve ls of dispute resolution, offices and offic ials invo lved. timetable forresolving such disputes, and possible actions to compel a party to adequately comply withcontractual term s.

\

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solicit end user feedbac k;

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requirements and standards to be used to monitor PSP performance;

procedures and guidelines for measuring customer satisfaction and mechan isms to t

~

(ii)

(iii)

a perfo rmance manageme nt plan and perfo rmance mon itoring system that will be used bythe City to moni tor affo rdability, serv ice delivery. value for money. quality, andperformance improvement, which shall in all cases include:

(i) a timetable and start and end date for each performance component, includingmilestones with accompanying timeframes, depe ndencies. required or desire \outcomes, and acceptable performance levels; ... '-\.

an identification of risks under the PPP contract, the timetable for resolving such riskswhen they arise. contingency plans that ensure immediate resumption of services in theevent of an interruption of service delivery by the PSP, and penalties for failing orrefusing to resolve them, provided that a separate risk mitigation plan shall be developedand periodically reviewed and updated throughout the life of the contract for contrac tswith significant risks;

clear and dem onstrable key performance indicators that demonstrate evidence of poor ,satisfactory or non-performance by the PSP. taking into consideration the cost and valueobtained, performance and customer satisfaction, delivery improvement. del iverycapability, benefits realized and relat ionship strength and responsiveness;

b)

(a)

Sec. 27. Perf ormance or Service Delivery . - The contract management manual shall identifymeasures to ensure that the services or goods provided by the PSP are in accordance with the /standards and prices agreed in the PPP contract. Such measure shall include:

..... No " t 3 - 06Ordinance No. __ • A"Ii ORPI 'lriA 'lriC[ Pl"RSU'G .4. r\"81.IC.PRI\"AT[ PARr.\ER"iJIIP (PPP) .4- ' PNO.4- 0 1 TOWARDSDE\ILOr\ Ii:."T.fROHDl'G mNIy p OC[Ol'RE tUR St:U:CTI 'lriG TIlE PRIVATI: SH.IOR PROPO,"[ 'lriT . AOOPTI' CA covraecr 'I.",'lriAGBIE'\ri"r . -RA. rw il K.,,' ..' 0 PRO\'InI'lriG APP ROP Rl4.TIO'S A'\riD f-OR OTHER rt"RPOSlS

(iv)

(v)

(vi)

(vii)

submission of reg ar, accurate and timely reports by the PSP, City personnel orthe contract manager, as app licable, to the PPP-RA detai ling perfo rmancemonitoring effo rts and the types of information that should be included in suchreports;

City access to PSP records to allow its personnel to verify the information that thePSP reports to them and to ensure that funds are expended properly;

random inspections of PSP record s and on-s ite monitoring visits; and ~regular meetings with the PSP to review progress, discuss problems and consider ~ .necessary changes; and ,

(d) a performance review and corrective actions system that apply to non-compliance orbreach of contract, and penalties for non-performance and bonuses for good performance.

Sec . 28. Contract Administration. - The contract management manual shall lay down a contractadministration system, which shall include:

(a) systems and procedures for variation management. the roles and respon sibilities of Citypersonnel. and reportorial requirements for each event of proposed or successful contrac tvaria tion;

(b) a system for contract maintenance, identifying key contract deliverablcs and schedules, aswell as trigger events; and

(c) systems and procedure for financial adm inistration, including an estimate of the resourcesthat the City will devote thereto, systems and procedures to make and receive financialpayments. and rules for keeping record s of financial transactions in accordance with therequirements of the contract.

/

Sec. 29. Closeout Procedures. - Formal, written closeout procedures shall be included in contractmanagement plan to ensure tha t all goods and services have been delivered satisfactorily, allpropert ies are disposed accordingly. all City properties are returned. and all amounts due underthe PPP contract have been paid .

Sec. 30. Post-Contract Review. - A post-contract review shall be conducted at the end of acontract period, which shall include a post-contract analysis, evaluatio n and reporting of the PPPproject, the PSP 's performance, and the City's contract management system. The post-contracteview shall likewise include a financial audit of the enti re PPP projec t and determination ofssons learned. City pol icies and procedures shall be updated where requi red. Notwithstandinge requirement herein, if the PPP contract is subject to renewal or extension. the post-contract

re iew shall be conducted with in a reasonable time before the deadl ine for such renewal orextension .

Sec. 31. Document Control. - The PPP-RA shall act as the administrator of documents andcorrespondence relating to the PPP project and PPP contract. The contract manageme t mshall:

(a) identify the documents and correspondences that must be retained by the P P-RA;

(b) require that all such documents be kept in both electronic and pape r format duringcontract life or such longer period as may be required under applicable law; and

1

\- (c)lay down theaccess by the

prot I for document storage,es and the pub lic.

19

logging, accoun , Y. disc:JcIOSllrea;;;:~,

Chapter 5. ACCO~il ity, In formation, Ed ucation and Mo nitoring

Pog' No.20 :1 3 - 0 5Ord..inwoce No, __ • A~ ORDl' .':o C[ UlSll:"G .4. r r8UC·PRI\""U. PARThlR,SHIP (, p r) .4. PPR0 4.CII TOW ARDSDE\Llor"IE1'llT. PRO\lOl'liG.-oR Ti l ' KOCEDl'R t: tUR su.rcnvc TIl E PRI\'ATF.SECTOR PROPO'F.!'o"T, ..U>OPTI'liCA CO"iTRU."T MA:'IiAGBI£.ST t-R.t, ORK.A.'O PRO'"IDI."C APPROPRI,\TIO'S A'D FOR otura PlKPOSES

Sec . 32. Code a/ Conduct. - Before commencing their functions, eac h member of the PPP~SC

and PPP-RA and the contract manager shall sign a Code of Conduct. which shall guide eachmember in the performance of their duties as such.

Such Code of Co nduct shall require each member to, among others:

(a) act at all times in accordance with relevant legislat ion and regulations;

(h) act at all times with fidelit y. honesty, integri ty and in the best interests of the City and itsconstituents;

(c) recognize the public' s right to access to information in accordance with law;

(d) not misuse his or her position and privileges of a member of the PPP-SC and PPP-RA.whether or not such will prejudice the interest of the public, the PSP. or any third person;

(e) to take the utmost care in ensurin g reasonable protection of the records of each PPPproject. and to not disc lose any confi dential and proprietary information to personswithout a need to know such info rmation, or in violation of any non-disclosurerequirements under law or contract;

(f) carry out his or her duties with the skill and care expected from a person of knowledgeand experience, and to exercise prudent j udgment;

(g) forthwith report to the approp riate authorities any act of negligence, fraud, corrupt ion,misuse of government funds. failure or refusal to perform dut ies, or any other act whichmay constitute an crim e or offense. or which is prejudicial to the public interest, in theselection of the PSP and implementa tion ofa PPP contract;

(h) forthwith declare any personal or business interest tha t he or she. or any of his or herrelat ives within the fourth degree of affinity or consanguinity, may have in any businessof a PSP, in which case, the official or represen tative shall no longer be a member of thePPP- SC and PPP-RA;

i) forthwith declare any conflict of interest. insofar as the PPP Project concerned, that he orshe may have or will have , in which case. the official or representative sha ll not longer bea member of the PPP-SC and PPP-RA;

G) not vote or act in a particular way on any matter in consideration of any ofTer, promise,gift or present, from a member of the public, government, a political party. social groupor non-governmental organization. or any stakeholder or potential stakeholder;

(k)

(\)

not receive any gift or anything else of value which is or may be viewed as aimed atinfluencing or directing his or her vote or act ions; and~.

to disc lose immediately to the PPP- SC or PPP-RA as the case may be. any attempinducement that may be construed as aimed at influencing or directing his or her acts asmember of the PPP-S C and PPP-RA.

20

.",No21 '1 3 - 0 6Ordinance No. _ '_ • A~ O k Dl'l;A:"oCE PU lSl T\C A Pl "811C·PRI\'ATE " .4.ROERSIIIP IPP") ArPHO.-\CH TOWARDSDEnlOp:\I E:"I-r. FROYlDl;.iG FOR JIIJ:..rROCEDrRt: m R SULCTI'G TilE pRI\',-\TEsrcros PROro" El'H . ADOPlT'lriCA <.-O,\TlU ,CT '1"".-\GBIE'\'- f-a4.)d:\\{»u.:. A.'O r ROnOI'\C APP ROPRlATlO,\S A.'Ir;O . "OR Onl t:K Pl "Rrosr.s

Sec. 33. Disciplinary Action. - Violation of this Code and the Code of Conduct insofar asprovincial elective officials are concerned shall constitute a ground for disciplinary action oramount to loss of confidence under the 199 1 LGC and relevant laws, and with regards localappointive officials, such violation shall render them administratively liable. Officials may alsobe rendered criminally liable under applicable laws and ordinances. Representatives of the PSPshall be held liable for damages, offenses and crimes depending on the nature of theirparticipation and involvement in the unlawful act or omission.

Sec. 34. Liability. - The City and its officials, in undertaking a PPP project, selecting a PSP andimplementing a PPP contract, shall not be exempt from liability for death or injury to persons ordamage to property.

Sec. 35. Social Accountability . - The City shall ensure, promote and eliminate all obstac les tosocial accountability and allow and enhance constructive engagement between citizens' groups,academe, consumers, rate-payers, general public, City, national government agencies, regulatoryagencies, and PSP.

Sec. 36. Transparency and Right 10 Information. - The PPP Contract, feasibility studies, biddingdocuments, terms of reference, results of the PSP selection process, Code of Conduct, ContractManagement Manual, minutes of the post-award conference, PPP-RA, and PPP-RA-MC, andother relevant documents and instruments shall be posted in two conspicuous places of the Cityand uploaded in a dedicated website of the PPP-RA which can be freely accessed by the public.The City shall also implement a strategic communication plan addressed to all stakeholders.

Sec. 37. Capability-Building Program. - (a) The City shall design and implement a continuingeducation and capacity-building program on PPPs for its officials, and the members of the PPP­SC and PPP-RA.

,

(b) The City shall also undertake a comprehensive and sustained education and governancecampaign aimed at informing all stakeholders and civil society organizations about PPPsventures of the City and allowing them to participate in the overall PPP program of the City. Theprogram shall include strategic and annual evaluation and planning sessions, workshops,seminars, focus-group discussions on PPPs, market opportunities, projects, management ofcontracts and regulation of PPPs and other PPP-related topics.

(c) The City may tap consultants to assist them in implementing PPPs and in building capabilityfor PPPs.

ec. 38. Monitoring and Governance Audit Program. - The City, in order to ensure transparencya d accountability, shall encourage civil society organizations, people's and non-governmentalor ization and civic aggrupations to establish a PPP monitoring, evaluation and governanceau body functionally and fiscally independent from the City and other government institutions.

Sec. 39. Technical and Financial Assistance. - The Department of Interior and LocalGovernment, Department of Finance, Department of Budget and Management, NationalEconomic and Development Authority and the PPP Center shall extend technical and financialassistance to the City and such assistance shall be embodied in a memorandwn of understandingor agreement.

Chapter 6. Fina l Provisions

Sec. 40. Appropriations. - To carry out the provisions of this Code, the amount of Five Hun~

Thousand (Php 500,000.00) Pesos shall be appropriated, to be taken from any available sav·f.,"n;;g*'''''of the City. Thereafter, such sum shall be included in the annual budge f the City. Thedisbursement of the ds under this ordinance shall be done in accordan with .s 109Commission on Au ' CGA) rules and regulations.

21

1 3 - 0 6"'No_22Ordinance: No • ,,-_, ORDI:'Iii."-....ce FI"R.Sn"'G "-'- FI"Bue ·PRIVATi: U R-r'UlS IIIF I......) A""RO_-\CH TOWARDSDE\"l LOF' IE:..'T. PRO\"IDI:'IiiG FOR Till PROC[DI "R[ HJ R SlUCTI"liG 11n: PRI\'AT£ srCTOR PROPO"'[:,\T. ADOpn:'\GACO~'1iTlUcr \I A:'Iii AGBI£.' T I'-IUM£WORK, .cvn PRO\ 'IDI'C APPROPRIATlO :'liiS A:'\IiD I-URonn:R Pl -RPOSES

Sec. 41. Implementing Rules, - While this Code and the provisions hereof are already operativeupon the Code's effectivity, the Mayor may issue the appropriate and relevant rules andregulation for the proper implementation of the Code or its provisions. including the issuance ofrelevant mechanisms to insure competition. manuals. guidelines, sample contracts and biddocuments, PPP indexes and comparators. and performance scorecards.

Sec, 42, Application of Laws and Regulations . - This Code shall apply to all existing PPPs andthose PPP projects which not have been awarded. Whenever relevant and appropriate asdetennined by the Mayor and in the absence of a specific provision to the contrary. uponrecommendation of the PPP-SC and PPP-RA as the case may be. the provisions of Republic ActNo. 6957 as amended by R.A. No. 7718 or the BOT Law, R.A. 9184 or the Government ~ ,Procuremen t Reform Act. Executive Order No. 301 (26 July 1987), Commission on Audit ~

Circular No. 89-296 (January 27, 1989), and their applicable rules and regulations, and the Joint '::::Venture Guidelines adopted by the National Economic Development Authority shall apply in asuppletory manner. All relevant laws and contracts shall be deemed read into PPP contracts.

Sec. 43. Separability Clause . - If, for any reaso n. any section or provision of this Code or anypart thereof. or the application of such section. provision or portion is declared invalid orunconstitutional. the remainde r thereof shall not be affected by such declaration.

Sec. 44. Repealing Clause. - All ordinances and resoluti ons or parts thereof inconsistent with theprovisions of this Code are hereby repealed or modified accordingly.

Sec. 45. Effectivity. - This Code shall take elTect fifteen (15) days after compliance withrequirement of posting and/o r publication. - ;""-'

ENACTED this 18'" day of April, 20 13 at Paranaque City

CERTI ( ED TRUE AND CORRECT:

~""",~A~~. ;I~NO C. SANDIL., ity Council Secretary

ORED BY:

110 ARLITO D. ANTIPUESTO..-.n, Counc ilor

{absent) C L­ERIC L. ot.rvAR EZCity Councilor

RO . LLEP.NAYA~.Co~ncilo~

JASON P. WEBB ICity Councilor

CONC URRED BY:

(absent)FLORENCIO C. BERNABE IIICity Councilor

(absent)EDWIN R. IIENZONCity Councilor

22

:1 3 - 06Page No. 23Ordinance No. • AN OKDlNA~ ' [ I'lR'i l'lNG A PUBLlC·PRI VATE PARThf:RSIIIP (PPP) APP ROACH TO WARDSDF.VF.tOP.\lt:NT. PRO\ 'IIJI:'IIG mR T : p~On:m ;Rt: I-'OR St:U :CflSG r ue PRI\'ATf: srcro u PIUWO:'llt:NT. AUO..-nSGA COSTRACT l'tIASAGUIEi'IoT . "RAME ) AS D PROVlDll"lG APPROPRIATIOSS AS O FOR OTIIER PL:RPOSES

. ALLANIGUElor

(sick leavCONCHITA S. BUSTAMANTECity Co uncilor

;"';'i,,'.INCIONG

(official business)TEODORO C. VIRATA, JR.

- -+-;", President

LIC

IA N.AMURAO

i; 4/'2 11'P '7-'i]BAES, J R.ilor

RICA DCity C u

(sick leave)JOHN RYAN G. YLLANACity Councilor

MARIE CAMILL ANANSALASK President

AI'I'ROVED BY:

FLORENCIO M. BEI6lAilE, JR.City Mayor

"'-c._ _ .--"23