Newsletter
PCC ANNOUNCED THE OPERA-TION GUIDELINES FOR REVIEW OF UNSOLICITED PROPOSALS
The Public Construction Committee (PCC) an-nounced certain Operation Guidelines for Re-view of Applications (the "Guidelines") under Article 46 of the Law for Promotion of Partici-pation in Infrastructure Project ("BOT Law") on 1 March 2002. According to the Guidelines, except for the model of OT, a private enterprise may initiate an infrastructure project by submit-ting an unsolicited proposal in accordance with Article 46 of the BOT Law.
Unsolicited proposals for privately planned and financed projects are divided into two categories: (1) those for which the private applicant will acquire by itself the land needed; or (2) those for which the private applicant will seek the gov-ernment's provision of government-owned fa-cilities and land (Article 4). Different consid-erations and treatments are applied to these two categories.
As the private applicant will acquire the land needed for the project by obtaining its title, a leasehold interest or superficies, the govern-ment's review would focus on whether such projects are in line with the government's policy. The private applicant can submit the required documents in accordance with Arti-cle 46 of the BOT Law to the agency-in-charge for approval.
Upon receiving the application, the govern-ment agency-in-charge should complete its review within 6 months, which may be ex-tended for another 6 months (Article 11). If the application is approved, the private appli-cant should carry out the project within the given period and sign an investment contract with the government agency-in-charge. No prior publication of the unsolicited proposal is required.
As the provision of government-owned facili-ties and land is required, in addition to con-sistency with the government's policy, there are other considerations: whether optimal utilization of these public resources will be achieved, and whether the project is in the public's best interest. Therefore, the review process should be open, transparent and competitive. The review process is conducted in two phases.
A.Phase I Review (Article 7)
In Phase I, the applicant should first submit to the agency-in-charge for review its prelimi-nary plan with the basic information about the investors, description of the nature of the pro-ject, as well as matters requiring assistance from the government. The agency-in-charge will form a selection committee with partici-pation of outside experts and advisors to con-duct the review.
The agency-in-charge should post a brief de-scription of the preliminary plan on its web site for purposes of information transparency. Within 15 days after the plan is posted, any one may propose another plan for the same site but for different uses, i.e., a different type of infrastructure. The agency-in-charge should review all the preliminary plans thus filed but only choose one applicant for further review in Phase II. If no applicant passes the preliminary review in Phase I, the agency-in-charge should notify each applicant of the reasons.
If any applicant passes the preliminary review, the agency-in-charge should post the result of the preliminary review on its web site, notify the applicant of any conditions attached to the approval and the scope of the subsequent plan that the applicant needs to prepare for the Phase II review in accordance with Article 46 of the BOT Law.
B.Phase II Review (Article 8)
The required documents for Phase II review are the same as those mentioned for category 1 application, except that the review must be conducted by the selection committee. After the selection committee approves the appli-cant's plan, the agency-in-charge should dis-cuss with the applicant on the contents of the information to be published to solicit other investors. The period of solicitation may be up to 45 days after the public notice is issued. If some other investors submit proposals dur-ing this period, the selection committee should review them based on the published criteria. If more than one applicant are found qualified, the selection committee may select the best applicant and at its option, the second-best applicant. The review period should be com-pleted within 6 months and may be extended for another 6 months, if necessary (Article 11).
In light of the efforts made in developing the unsolicited proposal and to protect the legitimate interest of the first applicant, when selecting the best applicant, the first applicant may be granted a right of first refusal or other competitive ad-vantages as decided by the selection committee and announced in the notice for soliciting other private investors (Article 13).