CITY MARKET REDEVELOPMENT OVERTAKEN BY NEW LAW

January 6, 2024 Metro BLISTT

BAGUIO CITY

The status of the Baguio City public market redevelopment remains uncertain as it has been
overtaken by the enactment of Republic Act No. 11966 (PublicPrivate Partnership Code of the
Philippines) and its interim guidelines. As of recent updates from the city’s executive department,
the 4.5 billion project has passed the first two stages (submission of proposals and detailed negotiations) of the Competitive Challenge Process for PPP Projects under the Baguio City P4 Code (Ordinance 61-2017) and was about to undergo the third stage (Swiss Challenge) where other
interested parties are invited to submit their counter-proposals.

SM Prime Holdings, Inc. currently holds the Original Proponent Status (OPS) for the public market redevelopment project. However, with RA 11966 and its interim guidelines taking effect on December 23, 2023 and subsequently rendering the Baguio City P4 Code “inoperative”, the
City Government of Baguio has yet to carefully study its next step for this high impact project as
guided by the said interim guidelines and by the advice of the Public-Private Partnership Center.
The interim guidelines shall take effect while awaiting the Implement Rules and Regulations
(IRR) of the new law.

Rule 4.4 of the PPP Code’s interim guidelines states that the implementing agency (the city
government in the case of the public market redevelopment project) may either revoke the OPS based on any of the six grounds indicated therein or carry on with the negotiation with the original proponent and, if successful, may reconfirm the OPS of the original proponent. The reconfirmation of the OPS is then followed by the so-called comparative challenge (with a period of 90 days to one year) where the original proponent would have the right to match offers by other proponents for the project.

During a special session on January 4, 2024, Atty. Althea Alberto, City Legal Officer, said that
unsolicited proposals in the local level that had been given an OPS and had undergone successful
negotiation such as the city market redevelopment project will have to be submitted to the City
Development Council (CDC) for verification then to the local legislative body for approval before the conduct of a comparative challenge. This is in accordance with the recently enacted PPP Code, she said. Alberto assured the city council members that, under the PPP Code, all PPP projects would require the approval or confirmation of the local legislative body before the commencement of the comparative challenge.

This stage, according to her, includes the setting of parameters, terms, and conditions which the city council may participate in. She stressed that the new law repeals all local ordinances that are inconsistent with the PPP Code. In effect, the P4 Committee created by virtue of the city’s P4 ordinance becomes non-existent and shall be replaced by a pre-qualification, bids, and awards committee (PBAC) and/or a PPP unit for every PPP project or for each category of projects. “The implementation of the new law is advantageous on the part of the city because both the executive department and the legislative body have opportunities to review projects. It also gives more leeway to the city government in negotiating for terms that are favorable to the city,” Alberto said.

Councilor Peter Fianza said there is a need to study certain aspects of the law and its interim
guidelines, particularly Rule 4.4 of the latter, before the city government takes a step further in
processing pending unsolicited proposals. Other city projects in the pipeline affected by the enactment of RA 11966 are the following: intermodal terminal project with a project cost of P1.025 billion; Baguio Transport Solutions/Elevated Monorail and Electric Bus System (P11.6 billion); Development and Improvement of Asin Hydropower Plants (P810 million); Smart Urban Mobility Project (P2.53 billion); Baguio Center Terminal/MixedUse Building and Cultural Center (P698 million); and Mixed-use Integrated Infrastructure for Socialized Housing and Permaculture Community (at least P1.5 billion).

Jordan G. Habbiling/SP