02 - Slide Deck - Stakeholder Consultation For LGUs

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STAKEHOLDER CONSULTATION

Implementing Rules and Regulations (IRR) of


Republic Act No. 11966 (PPP Code of the Philippines)
Proposed policies

Local Government Units


February 07, 2024
Timeline of the PPP Code and its IRR

Milestones Timeline
Signing of the PPP Code December 5

Publication of the PPP Code December 8

Effectivity of the PPP Code


December 23
(15 calendar days after publication)

Start of 90-day period for the IRR December 24

End of 90 Days and publication of the IRR in the Official Gazette March 23

Effectivity of the IRR


April 7
(15 calendar days after publication)

2
Outline of discussion

1 Scope and coverage 11 Award and execution of PPP Projects


2 Repealing clause 12 PPP Risk Management Fund
3 Transitory provisions 13 Monitoring of PPP Projects
4 PPP Institutions (PPPGB, PPPC, PDMF, PPP Unit) 14 Regulation of tariff
5 Consolidated list of investment and infrastructure 15 General provisions
plans (“The Consolidated Plans”) and list of PPP
projects (“The List”)
6 Evaluation and approval of PPP Projects
7 Unsolicited Proposals
8 Procurement of PPP Projects
9 Review and approval of PPP contracts
10 Protest mechanism

3
Outline of discussion – Part 1

1 Scope and coverage


2 Repealing clause
3 Transitory provisions
4 Consolidated list of investment and
infrastructure plans (“The Consolidated Plans”)
and list of PPP projects (“The List”)
5 PPP institutions (PPPGB, PPPC, PDMF, PPP Unit)

4
(1) Scope and coverage – Section 4 of the PPP Code
PPP Code SHALL COVER the following: PPP Code EXCLUDES the following:
a. ALL contractual arrangements between IA and Private a. infrastructure projects undertaken through RA 9184
Partner to finance, design, construct, operate, and
maintain, or any combination or variation thereof, b. joint venture and lease agreements involving purely
infrastructure or development projects and services, which commercial arrangements that neither provide nor
are typically provided for by the public sector, where each include public infrastructure or development services
party shares in the associated risks
c. management contracts
b. Joint Ventures (JVs) as defined in the Code
c. Toll operation agreements (TOAs) d. service contracts

d. Lease agreements with provision of working capital and/or e. divestments or dispositions


improvements to an existing land or facility owned by the
government for a period of time covering more than 1 year f. Corporatization

e. Lease agreements when such lease is a component of a g. incorporation of subsidiaries with private sector equity
PPP project
f. all other contractual arrangements which possess h. onerous donations
characteristics or elements of a PPP as defined under the
Code i. gratuitous donations

5
(1) Scope and coverage – Proposed IRR provision

“For avoidance of doubt, Eligible Types of PPP Projects


any infrastructure project Transport and
Land Airports, air Power
where the government is a traffic Port
Highways transportation navigation, and generation and
contracting party and which management infrastructure related facilities distribution
systems projects
has a component that
delivers public service shall Energy Information Irrigation and Water supply,
Telecommunications Educational
be considered as a PPP, and efficiency and technology related sewerage, and
infrastructure infrastructure
conservation (IT) networks facilities drainage
shall therefore follow the
rules of the Code and this Land Industrial and Urban
Heritage
IRR. Health Government preservation and
reclamation and tourism redevelopment
infrastructure flood control buildings and housing
adaptive reuse
estates projects
For purposes of this IRR,
infrastructure projects that Warehouses and Public fish Agri-fishery Prisons and Environmental
Markets and
post-harvest ports and industrial other security- and solid waste
fall under Section (x) of this slaughterhouses
facilities fishponds hubs related facilities management
IRR (Eligible Types of PPP
Projects) are to be Climate change Other Related facilities may include
adaptation and
considered projects that disaster risk
infrastructure commercial spaces within the
deliver public service.” reduction projects project scope.

6
(1) Scope and coverage – Proposed IRR provision

No separate approval for the contractual arrangement shall be required

“All PPP contractual arrangements under the Code and this IRR shall be part of the
proposed parameters, terms, and conditions (PTCs) to be approved by the appropriate
Approving Body.
The Code and this IRR shall also cover the following contractual arrangements:
a. Joint Ventures as defined in the Code and this IRR;
b. Toll operation agreements or supplemental toll operation agreements, or any contractual arrangements involving
the construction, operation, and maintenance, or a combination or variation thereof, of toll facilities in accordance
with Presidential Decree (PD) No. 1112 series of 1977, PD No. 1113, series of 1977, and PD No. 1894, series of 1983;
c. Lease agreements providing for the rehabilitation, operation, and/or maintenance, including the provision of
working capital and/or improvements to, by the Private Partner of an existing land or facility owned by the
government for a fixed period of time covering more than one (1) year;
d. Lease agreements, when such lease is a component of a PPP Project, as defined under the Code and this IRR; and
e. All other contractual arrangements which possess characteristics or elements of a PPP as defined under the Code.”

7
(1) Scope and coverage – Proposed IRR provision

Project Cost definition - Section 3(bb) of the PPP Code


(bb) Project Cost refers to the total cost to be expended to plan, develop, and construct the project to completion stage,
including cost of feasibility studies, engineering and design, construction, equipment, land/right-of-way (ROW), taxes
imposed on said cost, and development cost. For avoidance of doubt,
interests and other financing
costs incurred during construction shall be considered as part of the Project Cost.
For Operations and Maintenance (0 & M) PPP Projects without initial capital expenditures, the present value of costs
incurred in delivering the contracted service, including any reinvestment requirements, shall be considered as the
Project Cost;

For O&M PPP Projects without initial capital expenditures, the government borrowing
rate shall be the discount rate used in determining the present value of costs incurred in
delivering the contracted service, including any reinvestment requirements.

8
(2) Repealing clause – Section 37 of the PPP Code
• Refer to Section 37 for a complete list of specific laws and
decrees repealed or modified.
• Provisions on identification, evaluation, approval, procurement,
and/or implementation of PPP Projects including leases and
Joint Ventures in UP Charter, PD No. 1113, s. 1977 and PD No.
1894, s. 1983 are amended.
• All executive orders and laws, decrees, orders, codes, issuances,
rules and regulations, and ordinances or any part thereof
inconsistent with or contrary to the Code, are repealed or
modified accordingly.
• References to BOT Law are amended to now refer to the PPP
Code.
Upon effectivity of this Code, no other JV guidelines, PPP guidelines,
codes, or ordinances, whatsoever may be enacted, issued and/or used
by any government entity to enter into PPPs, except those that are
enacted, issued, and/or used in accordance with this Code and its IRR.

9
(2) Repealing clause – Proposed IRR provision

Local PPP and JV codes or ordinances, or any part thereof which are inconsistent
with or contrary to the PPP Code are rendered inoperable. Following the principle
that every law must be interpreted and brought in accordance with other laws as to
form a uniform system of jurisprudence, and that the PPP Code comprehensively
covers all rules and procedures covered in all stages of PPP project development,
approval, procurement, and implementation, the language used in the PPP Code
renders it irreconcilable with the rules and procedures found in existing local PPP
codes and other local issuances.

10
(3) Transitory provisions – Proposed IRR provision

GENERAL The enactment of the PPP Code shall not affect or alter the PTCs of PPP projects that
RULE have already been approved by the appropriate Approving Body prior to the effectivity
of the PPP Code. The same principle of recognizing approved project terms shall be
applicable to (a) Local PPP Projects processed and/or approved under local PPP or JV
codes and ordinances, and (b) PPP projects of GOCCs processed and/or approved
under their respective charters or NEDA JV Guidelines.

1 Existing PPP projects with executed contracts prior to the effectivity of the PPP Code

All existing contracts shall be governed by the agreements entered into by the
concerned parties. The provisions of the PPP Code shall be applied suppletorily to the
extent that such application does not infringe upon established rights and obligations
of the parties under the existing contracts.

11
(3) Transitory provisions – Proposed IRR provision

2 PPP Projects with a Winning Bidder but no 3 Solicited PPP Projects which have published an
executed contracts Invitation to Bid prior to the effectivity of the Code

All PPP Projects issued with a Notice of Award (NOA) but Solicited PPP Projects which have commenced bidding
without any executed contracts before the effectivity of before the effectivity of the Code shall be governed by
the Code shall be governed by the rules under the PPP the rules under the PPP Code and this IRR, except for the
Code and this IRR, except for the rules provided under the bidding rules or any amendments thereto issued by SBAC,
instructions to bidders and the conditions stated in the PBAC, JVSC, or the applicable bidding committee. In case
NOA that was issued prior to the effectivity of the law. of gaps in the rules of the bidding process, the respective
bidding committee may use the provisions of the PPP
The composition of the Special Bids and Awards Code as reference.
Committees (SBAC), Pre-qualification Bids and Awards
Committee (PBAC), Joint Venture Selection Committees The composition of the SBAC, PBAC, JVSC, and all other
(JVSC), and all other applicable bidding committees of the applicable bidding committees of the projects covered
projects covered under this section, created before the under this section, created before the effectivity of the
effectivity of the Code, shall remain the same and effective. Code, shall remain the same and effective.

12
(3) Transitory provisions – Proposed IRR provision

4 Unsolicited PPP Projects which have commenced 5 Solicited and Unsolicited Projects pursuant to the BOT
comparative challenge prior to the effectivity of the Law which are already approved for bidding or
PPP Code comparative challenge but pending publication of
applicable invitation prior to the effectivity of the PPP
Unsolicited PPP Projects which have commenced comparative Code
challenge before the effectivity of the Code shall be governed by
the rules under the PPP Code and this IRR, except for the
Projects which have secured the approvals necessary to
comparative challenge rules or any amendments thereto issued by
SBAC, PBAC, JVSC, or the applicable bidding committee. In case of publish an Invitation to Bid or invitation for comparative
gaps in the rules of the comparative challenge process, the challenge but have not yet published the applicable
respective bidding committee may use the provisions of the PPP invitation shall proceed with its publication.
Code as reference.
The rules under the PPP Code and this IRR shall be applied
For avoidance of doubt, the prequalification rules and requirements, for the bidding process or the comparative challenge
which were used to pre-qualify the Original Proponent before the process, and all succeeding stages.
effectivity of the Code and this IRR, shall apply to all challengers.

The Original Proponent Status conferred to the Original Proponent


and the issued Certificate of Successful Negotiation shall remain
effective.

13
(3) Transitory provisions – Proposed IRR provision

6 Solicited Projects pursuant to the BOT Law pending approval of the appropriate Approving Body prior to
the effectivity of the PPP Code

Solicited Projects pursuant to the BOT Law, pending Upon securing the approval of the appropriate Approving
approval of the appropriate Approving Body, shall mean Body, the PPP Code and its IRR shall be applied to the
those PPP Projects that have been submitted to the bidding process and the succeeding stages, based on the
appropriate Approving Body prior to the effectivity of the approved parameters, terms, and conditions.
PPP Code. This does not include PPP Projects pursuant to
the BOT Law that have been returned by the appropriate Such solicited projects which fail to secure the approval of
Approving Body, and have not yet been resubmitted to the the appropriate approving body may be resubmitted in
appropriate Approving Body. accordance with the approval rules under the PPP Code
and this IRR.
Such projects shall be continuously and expeditiously
processed in accordance with the approval rules in effect
at the time the project was submitted to the appropriate
Approving Body.

14
(3) Transitory provisions – Proposed IRR provision

7 Unsolicited Projects pursuant to the BOT Law pending approval of the appropriate Approving
Body prior to the effectivity of the PPP Code (1/2)

Unsolicited Projects pursuant to the BOT Law, and


pending approval of the appropriate Approving Body, Original Proponents shall notify the Implementing
shall mean those PPP Projects that have been granted an Agency in writing within thirty (30) calendar days
OPS and submitted to the appropriate Approving Body
after the effectivity of this IRR of its decision on
prior to the effectivity of the PPP Code. This does not
whether to proceed with the approval process
include PPP Projects pursuant to the BOT Law that have
been returned by the appropriate Approving Body and pursuant to BOT Law or resubmit the Project under
have not yet been resubmitted to the appropriate the PPP Code.
Approving Body.

For such projects, the Original Proponent shall have the


option to proceed with the approval process pursuant to
BOT Law or resubmit the Project under the PPP Code.

15
(3) Transitory provisions – Proposed IRR provision
7 Unsolicited Projects pursuant to the BOT Law pending approval of the appropriate Approving Body
prior to the effectivity of the PPP Code (2/2)
A. Approval Process Pursuant to BOT Law Upon securing the approval of negotiated PTCs by the appropriate
Approving Body, the PPP Code and its IRR shall apply in the
Should the Original Proponent decide to proceed with the comparative challenge process and the succeeding stages based on
approval process pursuant to the BOT law, such projects shall be the approved negotiated PTCs.
continuously and expeditiously processed in accordance with
the approval rules in effect at the time the project was Such projects which fail to secure the approval of the appropriate
submitted to the appropriate Approving Body. For avoidance of approving body shall be returned to the IA concerned and may be
doubt, the approval process shall refer to the approval of the resubmitted in accordance with the approval rules under the PPP
PTCs for negotiation, the negotiation process under the BOT Law Code and this IRR.
and its Revised 2022 IRR, and the approval of the negotiated
PTCs by the appropriate Approving Body. B. Approval Process Pursuant to PPP Code and its IRR

Unsolicited proposals which are in the negotiation process upon Should the Original Proponent decide to resubmit under the Code,
the effectivity of the Code and this IRR, or fail to reach successful its submission shall be processed in accordance with the rules
negotiation after having secured the approval of the PTCs for stated in the PPP Code and this IRR, starting from the
negotiation, shall proceed in accordance with PPPGB Resolution completeness check by the PPP Center. The OPS that was
No. 2023-06-02 or the Guidelines on the Negotiation Process for previously conferred to the Original Proponent shall remain
Unsolicited Proposals under the Revised 2022 IRR of the BOT effective.
Law.

16
(3) Transitory provisions – Proposed IRR provision

8 Non-BOT Law PPP Projects pending approval of the relevant approving authorities
prior to the effectivity of the PPP Code

For non-BOT Law PPP projects (e.g., JVs of GOCCs, JVs of LGUs, Toll Operation Agreements
or STOA), pending approval of the relevant approving authorities, the rules and
procedures under the PPP Code shall apply.

17
(4) PPP institutions; The PPP Center
PPP Code institutionalizes the PPP Center, with additional
functions: (Section 24 of the PPP Code) Proposed IRR provision:
i. Act as procurement agent upon the request of the IA The PPP Center may act as a
ii. Review PPP contracts of national PPP projects prior to procurement agent upon request by
execution to ensure compliance with required PTCs the IA, and under the following
iii. Require the submission of PPP project documents in all stages circumstances:
of the PPP process, notwithstanding the confidentiality
clauses stipulated 1. If the PPP Project is complex and
iv. Issue non-policy matter opinions relating to PPPs the IA lacks capacity to procure
v. Manage and administer the RMF such project; and
vi. Advise and assist IAs and oversight agencies in developing and
periodically updating an organizational development plan 2. If the PPP Project is considered
that will enable them to competently perform their functions pioneering.
under this Code; and recommend to the DBM the standards
of training, qualification, and compensation for necessary The PPPGB may issue supplemental
personnel under these organizational development plans guidelines to operationalize such
function of the PPP Center.
18
(4) PPP institutions – Sections 25 and 26 of the PPP Code

The PPP Code strengthens enabling institutions for PPPs.

Project Development and


PPP Governing Board
Monitoring Facility (PDMF)
provision of additional members of the Board:
expansion on the use of PDMF for other
(1) PPP Center; (2) DILG; (3) DENR; (4) CHED
critical services

19
(4) PPP Units – Proposed IRR provision
1. IAs may form a dedicated PPP unit, responsible in 4. In the case of an LGU that does not have a
planning, overseeing, implementing, and monitoring legal officer, it shall seek legal advice from
the PPP projects to be implemented. either an external legal advisor or the legal
officer of the next higher level of LGU, if
2. In lieu of a dedicated PPP unit, IAs shall, at the applicable, to assist its PPP Unit on legal
minimum, establish a committee or a group to serve matters.
as focal persons for PPP projects.
5. The PPP Center shall provide technical
3. The PPP unit shall, at the minimum, be composed of assistance and capacity development for
a. a senior official the PPP units to effectively discharge their
b. a technical personnel for project roles and responsibilities.
development
c. a technical personnel for planning
d. a technical personnel for contract
procurement and management
e. a finance personnel
f. a legal personnel

20
(5) Consolidated investment programs – Proposed IRR provision

The following shall be considered as 1. Government entities concerned shall submit all
The Consolidated Investment Programs to be official plans to NEDA, within 30 cds from
considered by all IAs: effectivity of the IRR.

a. Public Investment Program (PIP) 2. The submitted official plans shall be


b. Three-Year Rolling Infrastructure Program (TRIP) continuously posted in the websites of NEDA
c. Local Development Investment Programs and PPP Center.
(LDIPs)
d. Regional Development Investment Plans (RDIPs) 3. Updates to the plans shall be submitted to NEDA
e. Official sector master plans within 7 cds from approval by the IA.

21
(5) The List of PPP Projects – Proposed IRR provision
Submission and updating of The List
Preparation 1. IA shall submit the List of PPP Projects to the NEDA, PPPC, RDC, LDC,
1. Only projects that are included in the The and local Sanggunian*, within 30 cds from effectivity of the IRR.
Consolidated Plans shall be included in the List of
PPP Projects. 2. IA may update The List at any time by submitting within 7 cds from
approval of the Head of IA.
2. IAs shall prepare The List which shall include the
3. PPP Center and IA shall post such lists in their websites or any official
following information:
digital platforms.
a. name and brief description of the project, as
listed in The Consolidated Plans Rules on delisting of projects from The List
b. Project Cost, as defined under the Code 1. IA may delist projects from The List through a written notice to the
c. project location (region, city/municipality) NEDA, PPPC, *RDC, LDC, and local Sanggunian which shall include a
d. status of the project (under implementation, justification.
under procurement, for approval, ongoing
negotiation, etc.) 2. Any of the following may be a ground for the automatic delisting of
e. development costs such as the conduct of projects in The List:
i. if the allowable period for procurement has lapsed (solicited)
feasibility study, business case, and surveys,
ii. if there is a failure of bidding (solicited)
for the last three years iii. if there is failure of negotiation (unsolicited)
iv. if the OPS expired and the project has not yet reached
3. Unsolicited proposals shall also be included in comparative challenge process (unsolicited)
The List once received by the PPP Center. v. if the IA revoked the OPS (unsolicited)
vi. If the project has been terminated or discontinued 22
22
OPEN FORUM
Outline of discussion – Part 2

6 Evaluation and approval of PPP Projects


7 Unsolicited Proposals
8 Procurement of PPP Projects
9 Review and approval of PPP contracts
10 Protest mechanism

24
(6) Evaluation and approval of PPP Projects – Proposed IRR provision
Guidelines, forms, and templates to be used by the IA and the appropriate Approving Body in reviewing and
approving PPP Projects
a. Guidelines for approval to be prepared by Approval guidelines shall cover the following:
a. ICC for national projects
b. PPP GB for local projects, including guidelines 1. Review and approval of PPP Projects submitted for
for LDC confirmation and RDC endorsement approval of the appropriate Approving Body
2. Review and approval of proposed changes to approved
b. The guidelines shall clearly define the: PTCs prior to bid submission
i. Documentary requirements that will promote 3. Guidelines for cases where the appropriate Approving
ease of doing business Body requires PTCs outside of the negotiated PTCs
ii. Timelines that will ensure expeditious processing 4. Determination of RROR in cases of single complying and
of PPP projects responsive bids in solicited projects
iii. Actions required from entities involved 5. Review and approval of proposed contract variation,
expansion, or extension of an existing PPP Project
c. Guidelines, forms, and templates may be reviewed and
requiring the approval of the appropriate Approving Body
updated as may be necessary.
6. Guidelines for cases where the appropriate Approving
d. Appropriate Approving Body may request capacity Body failed, within 120 calendar days from receipt of
development assistance from the PPP Center in their complete requirements, to render its decision on a PPP
review of proposed PPP Projects for approval Project submitted for its approval

25
(6) Evaluation and approval of PPP Projects – Proposed IRR provision
Minimum PTCs required to be submitted to the appropriate Approving Body
(both national and local PPP Projects)

Rights and obligations of


Contractual the IA and the Private
Scope Contract term Proponent, and penalties Risk allocation
arrangement to be imposed for failure
to deliver

Performance
Government Investment Contingent
standards and Bid parameter
undertakings recovery scheme liabilities
targets

Proposed public Proposed period for


Revenue share for comparative
Ceiling for debt- bidding process
the government, challenge process
to-equity ratio (single stage or two-stage)
if any (for solicited) (for unsolicited)

26
(6) Evaluation and approval of PPP Projects (Local)
Uphold local autonomy while ensuring harmonized investment programming between LGUs and the national government

GENERAL RULES - applicable to all local PPP projects:


LDC Execom to do the ff w/in
If complete, AB to do the ff in 120 cds:
30 cds:
IA to submit the ff to LDC: Assigned
(i) letter requesting for LDC secretariat of AB to (i) Assess merits of the proposed USP
(i) review if the project is
confirmation; and (ii) Establish that unsolicited track for
aligned and consistent with conduct
S local development plans; completeness
the project is better than solicited E
(ii) PTC forms and other (iii) Establish the legal, technical, and
(ii) review the proposed check of submitted
documentary requirements financial qualifications of the proponent
project and identify concerns documents
to be issued by the PPPGB (iv) Decide whether to approve or
to aid the decision of the AB;
disapprove the project
(iii) Submit confirmation to AB

*LDC confirmation can either be: In cases where the appropriate Approving Body failed to render a decision on the
PPP Project submitted for its approval, the PPP Center shall issue a notice to the
1. Confirmation that the proposed project is aligned Approving Body that the project has been deemed approved and that the project
with the development plans shall now proceed to procurement within a prescribed number of days from
2. Confirmation with conditions for consideration of issuance of the notice from PPP Center.
the appropriate Approving Body
The proposed PTCs, as submitted, shall guide the procurement of the project
LDCs may utilize its Executive Committee to expedite deemed approved without prejudice to the penal sanctions under Section 32 of
the review and confirmation process. the Code. 27
(6) Evaluation and approval of PPP Projects (Local)
ADDITIONAL ENDORSEMENTS, AS APPLICABLE:
Projects requiring additional clearance Additional clearance required Applicable timeline
1. Local projects requiring government ICC approval of the required GU, 60 cds – ICC approval of the
undertakings (GU) or Availability Payments upon endorsement of RDC requested GU
(AP) using national government funds
30 cds – RDC endorsement
2. Local projects affecting (1) national projects Endorsement of by the respective 30 cds – RDC endorsement
in The Consolidated Investment Programs RDC(s)
and (2) national projects in The List
Requirements to be • RDCs shall only review the alignment of the project with The Consolidated Investment
submitted to the RDC: Programs and The List, not the requested Government Undertaking.
1. Letter request for • RDCs shall utilize its standing Infrastructure Committee to expedite the review and
endorsement endorsement process.
2. Project documents • In case the RDC does not endorse the project, the LGU or LUC may resubmit the project
such as FS and with appropriate modifications within 7 cds, and the RDC is given a fresh period of 30
proposed PTCs cds to approve or reject the request.
• Meetings of the RDC shall be held once a month.
• Failure of the RDC to render a final decision on the request within 30 cds shall be
deemed an approval of the request.
• ICC disapproval of the GU or AP shall not be construed as a disapproval of the project. 28
(6) PPP Projects to be implemented by an NGA and an LGU

PPP Projects that encompass or extend beyond jurisdictional boundaries,


or where bundling of similar projects can benefit from economies of scale
and can increase the viability of a proposed PPP Project, may be jointly
implemented by all Implementing Agencies concerned under a single
PPP contract.

In such cases, all the Implementing Agencies concerned shall secure the
required approvals of all Approving Bodies concerned pursuant to the
provisions of this Code.

29
(7) Unsolicited Proposals – Proposed IRR provision
Processing unsolicited proposals prior to approval
What the law provides: STEP 1: Private Proponent shall submit the unsolicited
PPP Center to determine completeness of the proposal and the proposal to the PPP Center.
appropriate approving body within 10 calendar days from receipt
No Unsolicited Proposal shall be deemed submitted
i. If complete, PPP Center to endorse the proposal to the IA unless processed by the PPP Center for completeness
ii. If incomplete, PPP Center to return the proposal to the Private
check and determination of appropriate Approving
Proponent
Body.
PPPC shall issue a complete list of requirements and descriptions of
each, which shall include, but are not limited to, the following: STEP 2: PPP Center shall issue acknowledgement on the
day of receipt.
i. Complete feasibility study;
ii. Traceable economic model;
iii.Traceable financial model; Proposals submitted outside of business hours shall be
iv.Minimum PTCs that will provide sufficient information for the IA to considered submitted the next working day.
decide;
v. Valuation report of the usufruct; STEP 3: PPP Center shall determine completeness and
vi.Certification that there are no prohibited GUs; and appropriate approving body within 10 calendar days
vii.Project site plan.
from receipt.
PPP Center shall also issue detailed guidelines on the specific
procedures in the submission of USPs, including the use of a digital
A
platform to facilitate efficient processing.
30
(7) Unsolicited Proposals – Proposed IRR provision
Processing unsolicited proposals prior to approval A

If incomplete, PPP
What the law provides: If complete, PPP Center shall endorse the proposal to the
Center shall return
appropriate IA, copy furnished the Private Proponent. the proposal to the
a. IA shall be given 90 Private Proponent.
calendar days to conduct
detailed evaluation, and The decision of the
IA to conduct detailed evaluation within 90 calendar days
decide whether to accept PPP Center to return
from endorsement by the PPP Center.
or reject the proposal the proposal shall be
final and non-
b. If the IA fails to act on the 1. If IA decides to accept the proposal, proceed to appealable.
proposal 90 calendar Negotiation. The letter of acceptance by the IA shall include
days after the end of the the mechanics and commencement date of the
detailed evaluation, Negotiation.
proposal shall be deemed 2. If IA decides to reject the proposal, such shall be returned
approved, without to the Private Proponent with corresponding justification.
prejudice to the 3. If the proposal is deemed approved due to inaction of the
provisions under Section IA, the next step is to proceed to negotiation stage. If the IA
32 of the Code fails to act during the negotiation period, such shall be
considered a failure of negotiation.
31
(7) Unsolicited Proposals – Proposed IRR provision

In cases of similar proposals:

i. Similar USPs shall be submitted to the PPP Center for determination of


completeness
ii. Similar USPs may be received up to the 10th day from the receipt of the first USP
iii. IA shall conduct detailed evaluation of all complete USPs until the 90th day of the
last USP endorsed by the PPPC.

In case the IA fails to act on multiple similar proposals, the first submitted proposal
shall be deemed approved, without prejudice to the provisions under Section 32 of
the Code, to proceed to negotiation stage.

32
(7) Unsolicited Proposals – Proposed IRR provision

Negotiation
What the law provides:
a. Negotiation shall be conducted within a period of 80 cds,
a. Negotiation but not less than 30 cds. It may be extended by the IA up
o Conducted after acceptance to a maximum of 150 cds.
of unsolicited proposal within a
period not more than 150 b. The IA shall invite the following as part of the Negotiation
calendar days; successful Committee
negotiation results to grant of i. One team lead officially designated by the Head of IA
OPS ii. One legal officer
iii. One officer knowledgeable in finance
b. Validity of OPS iv. One officer knowledgeable in the technical aspects
o Period not exceeding one (1) and/or management and operations of the project
year from conferment
c. The PPPGB shall issue specific guidelines on the conduct
of negotiations.

33
(7) Unsolicited Proposals – Proposed IRR provision
Negotiation IN CASE OF FAILURE OF NEGOTIATION
IN CASE OF SUCCESSFUL NEGOTIATION
1. The IA shall reject the proposal in writing, within 7 cds
from the lapse of the negotiation period or declaration
1. The IA shall grant the Private Proponent an Original
of the failure of negotiation.
Proponent Status (OPS) which shall be valid for 1 year
from conferment.
2. The IA shall inform the PPP Center of such failure of
negotiation, for monitoring purposes. The IA shall then
2. The IA and the Private Proponent shall submit the
have the option to accept a new unsolicited proposal,
complete set of requirements for approval, including the
or bid out the project through the solicited track.
negotiated PTCs, to the appropriate Approving Body,
within 30 cds from end of negotiation. ORIGINAL PROPONENT STATUS

3. For projects whose approving body is the Head of IA: 1. OPS shall automatically expire/become invalid after 1
After successful negotiation, the Head of IA shall confirm year from grant of IA
the completeness of the requirements and approve the 2. Once expired, the IA shall write a letter to the Private
negotiated PTCs. Once approved, the Head of IA shall Proponent regarding the expiration of the OPS. The
grant the OPS for the Private Proponent. The IA shall letter is in no way a pre-requisite before OPS shall be
provide the PPP Center with the complete set of deemed invalid or expired.
requirements, for monitoring purposes. 3. Counting of the 1-year period for OPS shall stop once
the comparative challenge process has commenced.
34
(7) Unsolicited Proposals – Proposed IRR provision
The IA shall, within 7 cds upon approval by the appropriate Approving
Body, publish an invitation for the submission of comparative
What the law provides: proposals. Such publication shall be the start of the period for
comparative challenge.
a. Not less than 90 days and
not exceeding 1 year, as Publication of
Submission
proposed by the IA and START
Invitation for Posting of
and receipt of
Comparative bid bond
approved by the Proposals the proposal
appropriate Approving
Body
b. Right-to-match
mechanism (30 calendar Opening and Right-to-match
evaluation of Award and
days) comparative
(30 cds)
Execution
END
This is on top of the 90
proposals days for the challenge.

35
(7) Unsolicited Proposals – Proposed IRR provision

Government share in the upside of the Unsolicited Project

a. IA may negotiate the inclusion of the following as part of the project’s PTCs:

i. Setting a pre-determined rate of return based on prevailing market conditions, risks to be


assumed by the private partner, and duration of the project
ii. Sharing by the private partner with the government of revenues, net revenues, earnings before
interest and taxes, net income, or the like if there is an upside
iii. Implementing a graduated share in cases where government already has a share in the project
revenues, net revenues, earnings before interest and taxes, net income, or the like even
without upside
iv. Setting a period for monitoring the returns
v. Setting a period for remitting the share of the government in the upside

b. The Approving Body may also require the above as part of the PTCs it shall approve.

36
(7) Unsolicited Proposals – Proposed IRR provision
Reimbursement of development costs
• The development cost to be reimbursed by the Private Proponent
What the law provides: submitting an unsolicited proposal included in The List shall be
documented by the following:
In case the Implementing Agency a. COA-certified copies of invoices and proofs of payment for services
has already incurred any provided to the project;
development cost for projects b. Contract of Consulting Services or similar contractual agreement/s
subject of an Unsolicited Proposal, covering the services paid;
the Private Proponent shall c. Copies of outputs (e.g., FS, business case, survey) for the services
reimburse the Implementing paid;
Agency of such documented d. COA-certified copies of official receipt for other expenses incurred
development costs: Provided, That for the project; and
such reimbursement shall be in an e. COA-certified certificate of taxes withheld and proof of tax
amount not exceeding 6% of the remittances to the BIR.
Project Cost, excluding the cost of
ROW acquisition. • The reimbursement amount shall be included in the bidding documents for
the comparative challenge, to be reimbursed by the winning bidder as a
condition for award.

37
(8) Procurement of PPP Projects – Proposed IRR provision
Composition of PBAC for LOCAL IAs, applicable for both solicited and unsolicited
To be created by the Head of IA:
MINIMUM members Non-voting members
a. Chairperson – the Administrator or at least a third ranking a. A technical officer from the regulatory body
permanent official concerned
b. Treasurer or accountant of the local IA
b. A representative from the PPP Center, if PPP
c. Planning and Development Coordinator or Engineer of the
Center is not the procuring entity
local IA
d. Legal officer*
e. A representative from the local Sanggunian Observers
f. 2 representatives from the local development councils a. A representative from COA
b. A representative from DILG Regional Office or
The Chairperson shall appoint any of the other voting members Field Unit
as the Secretary of the PBAC.
c. A representative from NEDA Regional Office
*In case the local IA does not have a legal officer, the IA shall d. A representative from an association related to
seek legal advice from either an external legal advisor or the the project
legal officer of the next higher level of LGU to assist the PBAC. e. A representative from the facility users or an
accounting association
38
(8) Procurement of PPP Projects – Proposed IRR provision

Roles and responsibilities of the PBAC


The PBAC shall be responsible for all aspects of pre-bidding General rules:
and bidding process including, among others:
• A quorum of the PBAC shall be composed of a
a. preparation of the tender documents simple majority of all voting members, including the
b. publication of the Invitation to Pre-qualify and Bid Chairperson.
c. pre-qualification of prospective bidders
d. conduct of pre-bid conferences and issuance of • The IA may constitute more than one PBAC, as
supplemental notices determined by the Head of IA.
e. interpretation of the rules regarding the bidding
f. conduct of bidding • The Head of IA may include other members to the
g. evaluation of bids PBAC, through an issuance of a formal office order.
h. resolution of disputes between bidders
i. recommendation for the acceptance of the bid • For solicited proposals, the bidding shall commence
and for the award of the PPP contract within 20 cds from the issuance of Notice of
Approval.

39
(8) Procurement of PPP Projects – Proposed IRR provision
Rules for non-voting members and observers
a. Non-voting members may be consulted or be allowed to d. The absence of non-voting members and
give advice or opinions to the voting members of the PBAC. observers shall not nullify the PBAC proceedings:
Provided, That they have been duly invited in
b. Observers cannot influence or attempt to influence the writing.
votes/actions of the voting members of the PBAC.
e. Non-voting members shall be allowed to submit
c. Observers shall not be placed in a conflicted situation and, their written advice / opinions to the PBAC.
if placed in such a situation, shall immediately inhibit and
notify the IA in writing. f. Non-voting members shall be allowed to access to
or be provided with all pertinent documents free
d. Non-voting members and observers shall be notified at of charge upon their request.
least 7 cds before the following stages: pre-bid conference,
opening of bids, evaluation of bids, contract award, and g. Non-voting members other than the statutory
special meetings of the PBAC. Failure of the PBAC to do so counsel of the IA shall be required to enter into a
shall be subject to the penal provisions of the Code. confidentiality agreement with the IA.

40
(8) Procurement of PPP Projects – Proposed IRR provision
Tender documents Participation fees for pre-qualification and bid submission shall be
indicated in the ITPB; shall be a percentage of the Project Cost.
Contents, among others: Such percentage may be updated by the PPPGB.
a. Instruction to Bidders/Comparative Proponents Pre-qualification
b. draft PPP contract • Requirements to pre-qualify shall include legal requirements,
c. Bid Form experience or track record, and financial capability
d. forms of bid and performance securities • PBAC shall give prospective bidders sufficient time to prepare
their pre-qualification documents, provided that it shall be
Invitation to Pre-qualify and Bid (ITPB)/Invitation for atleast 15 cds
Comparative Proposals shall be published in 2
newspapers of general circulation and in a local Qualification of bidders
newspaper in which the PPP project shall be • any individual, partnership, corporation, or firm, whether local
implemented. or foreign, including consortia of local, foreign, or both local
and foreign firms, or cooperatives may participate or apply for
pre- or simultaneous qualification
Disclosure of tender documents - Without prejudice to rules
on publication of tender documents to commence bidding, For unsolicited proposals:
the IA may disclose the tender documents to the public for
the entirety of the bidding process. However, such Bid Bond by the Original Proponent – to be submitted on the first
documents shall be considered as public documents after day of the publication of the Invitation for Comparative Proposals
contract signing. in an amount indicated in such invitation
41
(9) Review and approval of PPP contracts
Required clearances prior to approval of the final draft contract by the Head of IA:

National PPP Projects: Local PPP Projects:

a. PPP Center – for compliance with the a. Statutory counsel – for compliance
approved PTCs with applicable laws, rules, and
regulations
b. Statutory counsel – for compliance
with applicable laws, rules, and b. DOF – if there is a national
regulations government undertaking

c. DOF – for national government


undertakings

"If the executed PPP contract contains provision/s which are contrary with the approved PTCs and are
grossly disadvantageous to the government, the contract shall be null and void, without prejudice to the
provisions under Section 32 of this Code."

42
(9) Review and approval of PPP contracts – Proposed IRR provision
Applicable for all projects
• The PBAC shall not proceed with
The draft contract to be released to bidders shall also be sent to reviewing bodies the bid submission date unless the
for comments within 7 cds from issuance to bidders PPP contract is approved by the
Head of the IA.

Reviewing bodies shall have 20 cds to review and provide comments. • Any government undertaking not
approved by the appropriate
Approving Body and not cleared by
IA shall submit the final draft contract to concerned oversight agencies for review, the DOF shall not be binding.
30 cds before bid submission. Oversight agencies are given 20 cds to review.
• In no case shall the Head of the
Final letter of the concerned oversight agencies shall be considered as their Implementing Agency sign the
clearance of the contract, for consideration of the Head of IA. The unfavorable contract if it contains provisions
comments/clearance made by the appropriate statutory counsel shall not be that are inconsistent or in conflict
deemed a prima facie evidence/claim, sufficient to sustain a judgment in favor of with the final PTCs approved by the
Approving Body.
the issue it supports.
• Contracts of PPP Projects with
Head of IA shall review and approve the final draft PPP contract to be released to Availability Payments sourced
bidders. Such release shall be 5 cds before bid submission from GAA shall also be reviewed
by the DOF.

43
(10) Protest Mechanism – Proposed IRR provision
For national PPP projects

Motion for Reconsideration Appeal to Department


Appeal to Head of IA
What the law provides: to PBAC
(within 3 cds from receipt of
Secretary, if applicable
(filed within 3 cds from (within 3 cds from receipt of
decision on MR; 15 cds for IA
receipt of notice; 5 cds for decision on appeal; 15 cds for
• Mechanism for protest shall PBAC to decide)
to decide)
Secretary to decide)
be resolved in the most
expeditious manner which For local PPP projects
shall not exceed 45 cds
Motion for Reconsideration
• In no case shall a motion for Appeal to Local Chief Executive
to PBAC (within 3 cds from receipt of decision on MR;
reconsideration or an appeal (filed within 3 cds from receipt of 30 cds for LCE to decide)
from any decision by the notice; 7 cds for PBAC to decide)
PBAC, Head of IA, or
Department Secretary stay or a. Amount of appeal fees for appeals to Head of IA or Department Secretary or to the
delay the bidding process. LCE* – to be set by the PBAC, provided that it shall be within 0.1% to 0.75% of the
• No award shall however be Project Cost
made until a decision on any b. PPPGB may update the amount of appeal fees, if it deemed necessary
pending appeal is rendered. c. No party shall be allowed a second motion for reconsideration for the decision of the
PBAC
d. Any motion for reconsideration or appeals shall not stay or delay the bidding process
e. No award shall be made until a decision on any pending appeal is rendered

44
Evaluation and approval of PPP Projects (Process Flow for Solicited)
Projects shall be approved within 120 cds from receipt of complete requirements. Failure to render a decision within the required
period shall be deemed an approval of the PPP project, without prejudice to the provisions under Section 32 (Administrative, Civil,
and Penal Sanctions) of the Code.

Endorsement of the ICC approval of the Endorsement of the END


Regional Development national government Local Development
Council, if applicable undertaking, if applicable Council
(30 calendar days) (60 calendar days) (30 calendar days) No
(only applicable for local PPP projects)
Approval of the
Development stage appropriate
START (est. 8 months) Approving Body
Approved?

(max of 120 calendar days)

Yes

Award and Bid proper2 Issuance of Publication of


Pre-qualification
END contract (single-stage or tender
(PQ) stage1
invitation to pre-
execution two-stage3) documents qualify and bid

Validity of bids and bid securities – (Procurement process proposed to be max 1 year)
180 cds from the opening of bids Notes:
1. Composed of (1) preparation of PQ documents by the prospective bidders (at least 20 cds from publication), (2) PQ by the PBAC (20 cds from
last day of submission), and (3) notification to pre-qualified and disqualified bidders (7 cds)
2. Composed of (1) pre-bid conference (15 or 30 cds depending on the Project Cost), (2) bid submission, (3) opening and evaluation of the
qualifications of bidders, (4) opening and evaluation of technical proposals, and (5) opening and evaluation of financial proposals
3. For single-stage bidding process – simultaneous evaluation of technical and financial proposals within 45 cds from bid opening
Unsolicited Proposals (Process Flow)
IA to inform in writing
Return the submission the Private Proponent
Reject
No to the Private END of its rejection
PPP Center to Proponent (3 cds)
conduct
START completeness check Is the Accept or
(Private Proponent submission reject the
submits a USP to and determination complete? proposal? END
the PPP Center) of Approving Body
(10 cds)
PPP Center to
IA to conduct
endorse to Accept
Yes detailed evaluation
appropriate IA
Comparative (90 cds)
(10 cds)
challenge process
(min. 90 cds;
Conduct of
max 1 year) Yes Approved? negotiation
(max 150 cds)
No IA to inform in writing
Right to Match, if the Private Proponent
applicable of failed negotiation
(30 cds)
END and return the
No
submission to the
(only applicable for local PPP projects) Private Proponent
Is the
Award and contract ICC approval of
Endorsement negotiation
the national
execution Endorsement
government of the RDC, if successful?
of the LDC undertaking, if applicable
(30 cds) applicable (30 cds)
(60 cds)
END
IA to confer the
Projects shall be approved within 120 cds from receipt of Approval of the appropriate Original Proponent
complete requirements. Failure to render a decision within the Yes
required period shall be deemed an approval of the PPP project,
Approving Body status to the Private
without prejudice to the provisions under Section 32 (120 cds)
(Administrative, Civil, and Penal Sanctions) of the Code. Proponent
OPEN FORUM
Outline of discussion – Part 3

11 Award and execution of PPP projects


12 PPP Risk Management Fund
13 Regulation of tariff
14 Monitoring of PPP Projects
15 General provisions

48
(11) Award and Execution of PPP Projects – Proposed IRR Provision

• The PBAC of the IA shall submit a recommendation Documentary requirements to be submitted:


to award, including a detailed evaluation or
assessment report, within 7 cds from date of 1. Prescribed performance security
completion of the financial evaluation. 2. Proof of commitment of the required equity
contribution
3. Proof of firm commitments from reputable financial
• The Head of the IA shall decide on the award within
institution
7 cds from the submission of the PBAC of the 4. If the Private Partner is already an SPC or JVC, proof
recommendation to award of registration in accordance with Philippine laws.
Otherwise, an undertaking to be incorporated shall
• PBAC shall post the NOA and/or bidding results be a condition precedent to execution of PPP
within 7 cds from the issuance, in the website or contract.
digital platforms of the PPP Center and the IA. 5. Other conditions imposed by the IA

• The winning bidder shall submit documentary Failure to comply with the conditions precedent for the
execution of the PPP contract within the prescribed
requirements within 20 cds from official receipt of
period, or as specified or extended by the appropriate
the NOA. Approving Authority, will result in forfeiture of the
proposal security and revocation of NOA.
49
(11) Award and Execution of PPP Projects – Proposed IRR Provision
Formation of a Special Purpose Company (SPC) or a Withdrawal or substitution of a member
JV Company (JVC)
• In case of withdrawals, the remaining
• IA may require the winning bidder to incorporate members or shareholders shall still be
with SEC, subject to existing laws and regulations. legally, technically, and financially capable
• The SPC or JVC that will be created shall assume all
the rights and obligations of the winning Private • A withdrawal made in violation of the IRR
Proponent. shall be a ground for disqualification or
• The winning Private Proponent shall subscribe to and cancellation of the contract, as the case
pay for a significant/principal shareholding or may be, and forfeiture of the winning
controlling interest in the SPC or JVC. Private Proponent’s bid or performance
• In the case of a consortium, all members shall security.
present proof of contractual or other legally binding
ties to or relationships with the SPC or JVC for the • The IA shall inform in writing the PPP Center
development and implementation of the project in of such changes within 5 cds for monitoring
accordance with their submitted business plan purposes.

50
(11) Award and Execution of PPP Projects – Proposed IRR Provision

Validity of Bids Execution of the PPP contract

• 180 cds from opening of the bid • IA and winning bidder shall execute and sign the
contract within 5 cds from receipt of the notice by
the winning bidder.
• Bid securities shall be returned to the
• An original signed copy of the PPP contract shall
winning bidder and unsuccessful bidders be submitted to the Approving Body and the PPP
as soon as the PPP contract is signed by Center within 5 cds after signing thereof by the IA.
the winning bidder.
Failure to enter into contract
• Extension of validity of bids may be
allowed, provided that bidders shall not • If IA is unable to execute the PPP contract with a
be allowed to modify or revise the price failure of bidding, consider next most responsive
or any other substantial aspects of their bidder.
bids. • If Private Proponent refuses to enter into a
contract, its bid security shall be forfeited in favor
of the IA.

51
(12) PPP Risk Management Fund (RMF) – Proposed IRR provision
What the law provides: Coverage
• Facility for the payment of contingent
• Coverage of the RMF shall start 20 cds upon the confirmation of the IA’s first
liabilities arising from PPPs
payment of contribution.
• To be funded from (1) general • CLs from events specified in a PPP contract that occurred prior to the
appropriations, (2) income from coverage date shall not be covered by the fund, except for exceptional and
existing PPP projects, and (3) other urgent circumstances as identified by the DBCC in the guidelines it shall issue.
sources as may be determined by the
Development Budget Coordination Rules and procedures
Committee (DBCC)
The PPP Center, in coordination with NEDA, DOF, and DBM, shall issue guidelines on the
RMF, for approval of the DBCC, which shall include:
• Institutionalization of the Inter-Agency
Technical Working Group on
1. Opening of the fund;
Continent Liabilities under the DBCC
2. Procedures for the application, evaluation, and approval of the use of the fund; and
3. Payment of contribution and release of funds.
For local PPP projects: (1) LGUs may
access the PPP RMF of the national
a. RMF shall be required for all IAs, but they shall not be precluded from utilizing other
government subject to payment of
source of payment for CLs, subject to approval by the Approving Body as part of the
contributions, or (2) LGUs may establish a
similar fund subject to PPP Governing PTCs.
Board guidelines. b. For existing contracts where the IA wishes to tap the RMF, the IA shall inform the DBCC
in writing that it intends to pay contribution for the project to be eligible for the fund.

52
(13) Regulation of tariff – Proposed IRR provision
The PPP Code establishes a predictable tariff regime that safeguards public interest

All regulatory bodies charged with approval of initial tolls, All regulatory bodies shall include the following minimum
fares, fees, rentals, and other charges and adjustments provisions in the formulation of their policy documents:
thereof shall:
i. Regulatory approvals shall be made prior to the
1. Publish guidelines and frameworks for tariff rate approval of the PPP Project;
consultations, review, and approval within 180 ii. During the implementation period of the PPP
calendar days after the effectivity of the IRR, with Project, the Private Partner shall have the right to
provisions mandating that regulatory approvals be file the application for tolls, fares, fees, rentals,
made prior to the approval of a PPP Project and other charges and adjustments thereof;
iii. Procedure of approval of initial, adjusted, or
2. In the absence of an appropriate regulatory body, periodic increase of rates;
initial tariff rates shall be as stipulated in the contract iv. Publication and Hearing of initial, adjusted, or
periodic increase of such rates;
3. IAs of local PPP projects may opt to establish a local v. Framework, rules, and/or parametric formula that
shall be followed in setting the initial tariff rates
rate setting body, subject to approval by the local
and adjustments thereof;
Sanggunian
vi. Decision and Order; and
vii. Appeal Process.

53
(14) Monitoring of PPP Projects – Proposed IRR provision

Project Monitoring and Framework and Protocols

• As provided in Section 16 of the PPP Code, the PPP Governing Board shall set the
framework for monitoring the compliance of the parties with PPP contracts, for
reporting of the progress of PPP Projects and their expected benefits and outcomes,
and for the appropriate penalties for the non-compliance of parties to such
requirements.

• The framework shall be applicable to both national and local PPP projects.

54
(15) General Provisions – Proposed IRR provision

a. Unless expressly provided to the contrary, references to any statute, law, decree,
regulation, document, or agreement made in this IRR shall be deemed to include
references to such statute, law, decree, regulation, document, or agreement, as
amended, supplemented, novated, varied, or replaced from time to time: Provided,
That there is no impairment of the obligation of contract.

b. In computing a period indicated in the Code and this IRR, the first day shall be
excluded and the last day included, pursuant to Article 13 of the RA No. 386 or the Civil
Code of the Philippines.

c. In case the deadline for each activity falls on a non-working day (i.e. Saturday and
Sunday), legal holiday, or special non-working holiday, or other nonworking days duly
declared by the President, Governor, Mayor or other Government Official authorized to
make such declaration, the deadline shall be the next working day.

55
OPEN FORUM
Call for inputs to the PPP Code IRR

For inputs, comments, and


suggestions to the IRR of the PPP Code,
kindly scan the QR code or
follow the link

http://bit.ly/PPPCodeinquiry
57
For further information, please visit:
www.ppp.gov.ph
For inquiries, kindly e-mail:
PPP Code IRR Committee Secretariat
PPPCode@ppp.gov.ph

Public-private-partnership-
Center-of-the-Philippines

58

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