The Supreme Court (SC), again, has demonstrated its role and power over public-private partnerships (PPPs). The SC can declare contractual terms valid or invalid; find selection procedures flawed or proper; determine presence or absence of legal requirements; ascertain compliance or violation of the public’s rights; and resolve whether PPP laws and guidelines are constitutional or otherwise.
■ Breathes life into PPPs. Just two weeks ago, the SC, in the case of Osmeña v. DOTC, affirmed the award, under build-operate-transfer (BOT) law, to GMR-Megawide for the Mactan-Cebu International Airport (MCIA). The SC held that the concerns on conflict of interest, financial health and track record of the proponent were adequately addressed by the government.
In 2012 the privatization of the Angat Hydro-Electric Power Plant by the Power Sector Assets and Liabilities Management Corp. (PSALM) to a 100-percent foreign corporation was held to be proper. Power generation is not considered a public-utility operation which would limit participation of foreign investors.
- Ends PPPs. The SC, on the other hand, can put an end to the life of a PPP-awarded contract. In 2002 the SC said the Public Estates Authority cannot transfer, under a joint venture, to a private corporation any kind of alienable land of the public domain or
submerged areas.
In another landmark decision concerning the airport terminal, Agan v. Piatco (2004), the SC ruled against material deviations—giving the proponent more benefits and the government absorbing more risks and obligations than what was subjected to bidding.
n Molding PPPs. In several instances, the SC defined the requirements of PPPs. The SC, in the PSALM case, affirmed the policy that ordinary citizens can question awarded PPP contracts, since bidding is of transcendental
importance.
The breadth of authority of the government’s Bids and Awards Committee was also explained in the MCIA case. The government is granted broad discretion, as a rule, in choosing among the bidders who can offer the most advantageous terms and that courts will not interfere.
The SC also upheld the contractual provision, which allows the increase in user fees, since this is permitted under the
BOT law.
On right to information, the SC directed PSALM to allow requesting private citizens access to the documents relating to the company profile of the winning bidder.
On the completion of an already-commenced process, the SC, in SM Land v. BCDA (2014), ruled against respondent when it aborted an unsolicited proposal process undertaken under existing regulations.
For local governments, the cases of GSIS v. Province of Tarlac (2003) and Land Bank of the Philippines v. Cacayuran (2013) are instructive.
The SC ruled that when there is a perfected contract executed by the former governor, the succeeding governor cannot revoke the same without the consent of the other party.
In the other case, the SC asserted that the 1991 Local Government Code requires the enactment of an ordinance approving all the terms of an agreement.
The SC can, thus, determine the fate of PPPs. It can sustain, define, mold, breathe life, or write finis to PPPs.