Unsolicited PPP projects exempt from PCC review

UNSOLICITED public-private partnership (PPP) projects may now be carried out even without the review of the Philippine Competition Commission (PCC) under the agency’s new protocols.

In Memorandum Circular 20-002, the PCC provided guidelines for exempting from mandatory merger notification unsolicited PPP projects implemented through the Build-Operate-Transfer law. The new procedure for such will take effect on July 11.

Under the rules, implementing agencies may apply in behalf of the original proponent and prospective bidders for a certificate of project exemption with the PCC.

The application should be made any time from the commencement of negotiations with the original proponent but prior to the release of a certificate of successful negotiation.

As such, the PCC will be given time to come up with inputs to the project documents, such as tender papers, feasibility study, draft proposal, project proposal and eligibility documents. The agency is expected to study how the
project may affect competition in the relevant markets.

Upon adoption of the PCC’s inputs in the final project documents, the PCC shall issue a certificate of project exemption in favor of the prospective winning proponent.

However, if the implementing agency fails to consider the PCC’s inputs, or if the winning proponent does not execute the required undertakings, the PCC can conduct a full merger review of the transaction.

To ensure competition safeguards are followed, the antitrust agency will monitor the project and may initiate a motu proprio review if the winning project proponent violates any of its undertakings to the PCC.

The memorandum on unsolicited PPP projects complements the PCC’s exemption rules for solicited PPP projects issued in July of last year. Both rules are enabled by the memorandum of agreement between the PCC and the PPP Center.

Prior to the issuance of the circular, joint ventures of private entities formed for an unsolicited PPP project that meet the compulsory notification thresholds had to undergo full review by the PCC only after the implementing agency awards the project.

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