December 8, 2022

If the ordinance on public-partnership were thoroughly examined, the ongoing negotiations with SM Prime Holdings, Inc. (SMPHI) on the development of the Baguio City public market should no longer proceed with stage 2, or the Swiss challenge.

This was underscored last March by the Public-Private Partnership Center – an attached agency of the National Economic Development Authority, when it responded to a city council resolution inquiring on whether the award of original proponent status (OPS) to SMPHI is in accordance with the PPP Ordinance.

In his letter addressed to secretary to the Sanggunian, Brenner Bengwayan, PPP Center Executive Director Ferdinand Pecson said based on the PPP Ordinance, the recommendation to proceed with the award of an OPS should have stemmed from the P4 Selection Committee (P4-SC), not from the ad hoc committee formed by Mayor Benjamin Magalong.

Pecson said while the PPP Ordinance does not preclude the mayor from forming an ad hoc committee to evaluate unsolicited proposals, the ordinance explicitly vests said function upon the selection committee.

The city government started accepting unsolicited proposals on the development of the market in February 2020. Companies that submitted their proposals were Robinsons Land Corporation (RLC) and SMPHI.

On Aug. 20, 2020, the P4-SC submitted a memorandum to the mayor recommending acceptance of RLC’s offer. Unsatisfied with the recommendations of the P4-SC, the mayor formed an ad hoc committee on Sept. 24, 2020 to assist in evaluating the proposal of both companies.

On Oct. 14, 2020 the ad hoc committee submitted the result of its evaluation and on the same day the mayor issued a memorandum disapproving the P4-SC’s recommendation then proceeded with the issuance of letters of acceptance to SMPHI and rejection to RLC.

“It is the PPP Center’s opinion, that for an OPS to be granted on the basis of which proposal provides the greater advantage and benefits, then the P4-SC has to evaluate the two proposals accordingly and provide in its recommendation such comparison. Only then could the mayor use an ad hoc committee to review such an evaluation by the P4-SC,” Pecson said.

Pecson added apart from PPP, the city government could explore competitive bidding so that it can come up with its own terms and conditions for the project. “Proponents could then compete on the basis of lowest lease payments to be incurred by the city government for a given set of project parameters, terms, and conditions that is best for the city.”

Pecson said if the city opts for a competitive bidding, it should first declare a failure of negotiations with SMPHI.

The city government is on the first stage of negotiations, which is a part of the 19-step process prescribed by the PPP Ordinance in handling unsolicited project proposals.

There are 34 terms of negotiations the city has crafted as talking points between the city government and SMPHI. – Rimaliza A. Opiña