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Author Topic: Rationale of Joint Venture Agreement of Salcon and Provincial Gov't of Bohol  (Read 352 times)

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RATIONALE
Published by bohol.gov.ph in September 2000

Bohol as a province envisions itself to become a prime eco-cultural tourism destination and a strong agro-industrial province and as a Local Government Unit it seeks to be a dynamic and responsive organization that provides a responsible, participatory, informative and self-reliant governance led by pro-active, innovative and committed leaders and staff equipped with new capabilities to inspire entrepreneurial efforts among different sectors and to effectively deliver quality services to all stakeholders primarily the Boholano people. To be able to attain such visions, we should take initiatives to provide the necessary infrastructure to create a healthy environment for development. Water and Electric Power Supply are primary considerations in establishing investments. It is in this context that the provincial government has considered the move to invite the private sector to a joint venture project for the Provincial Electric System (PES) and Provincial Waterworks System (PWS).

Situationer. At present, the PES and PWS are burdened by the following problems:
Limited source of water supply and service area
Water quality which is below world health standards
Old equipment and electric posts of PES
Inadequate funds to conduct major rehabilitation, upgrading and expansion
Systems loses in excess of industry standards
Cumbersome bureaucratic government processes

Legal Basis. The Local Government Code of 1991(Republic Act No. 7160) contains several provisions which gives Local Government Units (LGUs) legal authority to tap private resources in the performance of certain government and proprietary functions, especially in the delivery of public services. It also gives LGUs the power to enter into any contract including joint venture agreement.


OBJECTIVES
To rehabilitate, upgrade and expand the coverage areas of the power and water systems, without depleting the provincial government’s financial resources, to the prejudice of its other basic services
To improve the quality of services, owing to the high standards set by private utility companies
To augment the provincial government’s financial resources by way of the freed-up IRA
To retain a stake in both systems, maintained at 30% of total equity
To earn a corresponding share in the profits, without the day-to-day costs of operation



BENEFITS

For the Tagbilaranons and Prospective Consumers:
Assurance of reliable, safe and sustainable power distribution and water supply systems meeting world standards
Safety net on pricing: with the provincial government’s continued stake in the joint venture, changes in the rate structure will continue to be scrutinized by the Sangguniang Panlalawigan


For the Province of Bohol and the Boholanos in general:
Because of more efficient and reliable power and water systems, Bohol will attract more investors , thereby providing more job opportunities and improving living conditions
At the same time, Bohol will be able to accelerate the attainment of its vision of becoming a prime eco-cultural tourist destination and strong agro-industrial province
In providing clean, potable, good quality water, we will improve the health and well-being of Boholanos
We will develop more reliable, safe and sustainable sources of water supply that will meet future demand not only in Tagbilaran City but in other municipalities as well
Because of the freed-up provincial government’s funds, financial resources will be more equitably distributed to support projects beneficial to all Boholanos
Technical expertise of local workers will be enhanced though technology transfer from the JV partner
Because of reduced systems losses, consumers will not have to bear the burden of pass-on rates

For the Provincial Government:
The provincial government can now focus its resources and effort on providing basic essential services, which are less likely to attract private sector investment to a broader base of constituents
The cash to be received from the private investor as a result of the JV will be used to fund projects like acquisition of heavy equipment, hospital facilities and livelihood fund to benefit all Boholanos.
Romans 10:9-10
"If you declare with your mouth, “Jesus is Lord,” and believe in your heart that God raised him from the dead, you will be saved. For it is with your heart that you believe and are justified, and it is with your mouth that you profess your faith and are saved."

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