Joint Venture Agreement Philippine Procurement

Joint Venture Agreement Philippine Procurement

Local PPP regulations are not uniform, but similar. Some distinctions relate to whether the Regulation expressly allows Incorporated joint ventures (in addition to contractual joint ventures) and unsolicited proposals for joint venture agreements. Several regulations contain a G2G clause that allows local government entities to cooperate on projects in the territory of an EMA. Apart from the detailed display, PPP regulations should provide for a tender-oriented tendering procedure for the selection of a qualified joint venture partner. Negotiated contracts may be admissible, but under certain conditions. As a guideline, the Ministry of the Interior and Local Government has previously issued a memorandum circular inviting LGUs to adopt a public-private partnership code. Under this proposed code, a joint venture agreement is defined as an agreement where the parties contribute assets such as money, capital, services, personnel, equipment and intellectual property. For financing, LGU can derive its contribution from the internal allocation of revenues, the collection of property tax, the Development Fund and the proceeds of the exploitation and development of national heritage. LGU may enter into financing agreements such as loans, official development aid, issue securities and provide credit improvements, the proceeds of which may be allocated to joint activity. The assets contributed by LGU may include the good, the franchise, the concession, the usufruct, the right of way.

LGU`s contribution is subject to an independent evaluation by third parties. The proposed code also proposes provisions on the protection of minorities for LGUs. Notwithstanding the terms under which LGU is a minority partner, LGU may obtain LGU`s written consent in the event of the assignment, sale or transfer of assets, purchases or expenses exceeding a certain threshold and other activities that may affect LGU`s rights in the joint venture and project. Further detailed guidance on the mutual obligations of the parties to a joint venture will be provided. While PPP regulations may not fully adopt the proposed code, it gives potential proponents an overview of how to structure joint venture agreements if there may be a gap in the relevant PPP regulation. Section 35 of the Local Government Code authorizes LGUs to establish joint ventures to provide basic capacity-building and livelihood services and projects and, in general, to promote the economic and social well-being of its constituents. Projects eligible under Joint Undertaking Agreements include waste management facilities, water supply facilities, waste to energy projects, business centres, socialised/low-cost housing, health centres, energy projects and transit systems. Power is exercised by the local chief executive, with the agreement of the local legislature or the Sanggunian. With regard to the implementation of Article 35 of the Local Government Code, LGUs has adopted its own PPP regulations, which contain specific provisions regarding joint venture agreements. Of particular interest is LGUs` power to conclude joint venture agreements. The National Authority for The Economy and Development has issued guidelines for the implementation of joint venture agreements between private bodies and the various government authorities and instruments.

These guidelines ensure that partnerships between government and the private sector are entered into through a competitive process. . . .


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