‘Building islands on water’ through PPPs

  • November 21, 2016

‘Building islands on water’ through PPPs

CAN land reclamation be pursued through public-private partnerships (PPPs)? What are the roles of the Philippine Reclamation Authority (PRA), other government-owned and -controlled corporations (GOCCs) and government instrumentalities (GIs), local government units (LGUs) and private-sector proponents (PSPs)?

Classification of reclaimed land. Simply put, reclamation is “building islands on water”. The lands reclaimed from foreshore and submerged areas form part of the public domain and therefore owned by the state. These islands can only be disposed pursuant to a presidential proclamation classifying these as alienable and disposable. A special patent will be issued thereafter confirming the grant by the state of a parcel of public land in favor of the grantee.

PRA’s mandate. The PRA, established in 1977, primarily serves as the clearinghouse for all reclamation projects in the country. It is a self-liquidating infrastructure development authority focused on reclamation. Per the Supreme Court, PRA is not an end-user of reclaimed land.

Inclusive list of reclaiming authorities. The authority to reclaim is not exclusive to the PRA. Under the 1991 Local Government Code, LGUs, such as provinces and cities can reclaim. Municipalities also could, in collaboration with or with the consent of the province. Others—GOCCs/GIs, like the National Housing Authority (NHA) and Laguna Lake Development Authority (LLDA)—can also reclaim under their respective charters. LGUs and GOCCs/GIs, like the NHA and LLDA, are end-users.

Options for government. The PRA, other GOCCs/GIs and LGUs can reclaim, procure infrastructure from developers or contractors, or partner with PSPs in PPPs. In procurement, the Government Procurement Reform Act must be followed. The reclaimed land becomes government property. For PPPs, the build-operate-transfer (BOT) law, joint-venture (JV) guidelines issued by the National Economic and Development Authority (Neda) for GOCCs/GIs, and LGU JV ordinances must be followed.

Lease and disposition to PSPs. All reclaimed lands, whether undertaken by the PRA, LGUs and other GOCCs/GIs, by themselves or through PPPs with PSPs, are titled under the name of the PRA. The PRA can lease the land to private corporations, Filipino individuals and government agencies. However, under current case law, it, not being an end-user, cannot sell the reclaimed land to private corporations. It can only dispose, pursuant to the relevant presidential proclamation and under a special patent, to Filipino individuals and GOCCs/GIs. These individuals and GOCCs/GIs, in turn, can sell or lease to private corporations.

PSPs who partner with LGUs and GOCCs/GIs, like the NHA and LLDA, can be entitled to a share of the reclaimed land as payment for financing the reclamation and dredging and introducing technology and innovation under the relevant BOT law-variant or JV arrangement. In this case, the PRA, being the title owner, transfers the title to the end-user-LGU or -GOCC/GI who then effects the transfer to the PSP, which is a corporation, as partner or coventurer.

The reclaimed land is apportioned between the government as owner, while the PSP gets a share as developer. The PRA regulates, endorses to the Neda Board under Executive Order 146, effects the titling and is entitled to a share from the government portion of the reclaimed land.

Reclamation has a transformative purpose and this purpose is the pursuit of better quality of life for Filipinos. New land means new development, new communities, new roads, new airports and additional utilities aimed at alleviating poverty, easing traffic, providing access and creating business opportunities, while promoting human rights and climate justice.

The Columnist is now the Chairman of the Board of the Philippine Reclamation Authority.

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