2013-06-26

NPM 060-2013

Requesting Entity: Philippine Economic Zone Authority (PEZA)

Issues Concern: Lease Concession Agreement

 

Details

Whether the privatization of the distribution systems of PEZA in the public economic zones through a lease concession agreement is subject to the provisions of Republic Act (RA) No. 9184 and its revised Implementing Rules and Regulations (IRR).

Since the Lease Concession Agreement x x x involves the operation, maintenance and improvement of the distribution system x x x subject to revenue sharing, turn-key agreement, and distribution of assets to PEZA, including the residual value of fully depreciated assets, upon expiration or termination of the contract, without expenditure of public funds on the part of PEZA, we are of the considered view that the relationship, transaction or endeavor is not covered by RA 9184 and its IRR.

Accordingly, it is advisable to look into the applicability of the RA 6957, as amended by RA 7718, otherwise known as the BOT Law, and Executive Order (EO) No. 423, Series of 2005, relative to the JV Guidelines, inasmuch as the privatization of PEZA’s distribution system in Mactan Economic Zones through a Lease Concession Agreement may be most appropriately conducted following PPP-related laws, rules, and regulations, such as BOT Law or JV Guidelines.