CASH FLOW - A financial statement showing the cash generated and disbursed by a project. Net cash flow is reported profit plus (i) depreciation, (ii) depletion and capital expenditures, and (iii) amortization. This is a measure of the company's liquidity, and alternatively can be looked at as consisting of net income (earnings) plus noncash expenditures (such as depreciation charges).
CONSTRUCTION - Refers to new construction, rehabilitation, improvement, expansion, alteration, and related works and activities including the necessary supply of equipment, materials, labor and services and related items needed to build or rehabilitate an infrastructure or development facility.
CONTRACTOR - Refers to any entity accredited under Philippine laws which may or may not be the project proponent and which shall undertake the actual construction and/or supply of equipment for the project.
CONTRACTUAL ARRANGEMENT - Refers to any of the following contractual arrangements or schemes, as well as other variations thereof as may be approved/authorized by the President, by which infrastructure and/or development projects may be undertaken pursuant to the provisions of the IRR of RA 6957 as amended by RA 7718.
BUILD-AND-TRANSFER (BT) - A contractual arrangement whereby the project proponent undertakes the financing and construction of a given infrastructure or development facility and after its completion turns it over to the government agency or local government unit concerned, which shall pay the proponent on an agreed schedule its total investment expended on the project, plus a reasonable rate of return thereon. This arrangement may be employed in the construction of any infrastructure or development projects, including critical facilities which, for security or strategic reasons, must be operated directly by the Government.
BUILD-LEASE-AND-TRANSFER (BLT) - A contractual arrangement whereby a project proponent is authorized to finance and construct an infrastructure or development facility and upon its completion turns it over to the government agency or. Local government unit concerned on a lease arrangement for a fixed period after which ownership of the facility is automatically transferred to the government agency or local government unit concerned.
BUILD-OPERATE-AND-TRANSFER (BOT) - A contractual arrangement whereby the project proponent undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof.The project proponent operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the project proponent to recover its investment, and operating and maintenance expenses in the project. The project proponent transfers the facility to the government agency or local government unit concerned at the end of the fixed term which shall not exceed 50 years. This shall include a supply-and-operate situation which is a contractual arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if the interest of the Government so requires, operates the facility providing in the process technology transfer and training to Filipino nationals.
BUILD-OWN-AND-OPERATE (BOO) - A contractual arrangement whereby a project proponent is authorized to finance, contract, own, operate and maintain an infrastructure or development facility, in which the proponent is allowed to recover its total investment, operating and maintenance costs plus a reasonable return by collecting tolls, fees, rentals or other charges from facility users. Under this project, the proponent which owns the assets of the facility may assign its operation and maintenance to a facility operator.
BUILD-TRANSFER-AND-OPERATE (BTO) - A contractual arrangement whereby an Agency/LOU contracts out the building of an infrastructure facility to a private entity such that the contractor builds the facility on a mm-key basis, assuming cost overruns, delays, and specified performance risks. Once the facility is commissioned satisfactorily, title is transferred to the implementing agency. The private entity, however, operates the facility on behalf of the implementing agency under an agreement.
CONTRACT-ADD-AND-OPERATE (CAO) - A contractual arrangement whereby the project proponent adds to an existing infrastructure facility which it is renting from the Government and operates the expanded project over an agreed franchise period. There may or may not be a transfer arrangement as regards the added facility provided by the project proponent.
DEVELOP-OPERATE-AND-TRANSFER (DOT) - A contractual arrangement whereby favorable conditions external to a new infrastructure project to be built by the project proponent are integrated into the arrangement by giving the same the right to develop adjoining property, and thus, enjoys some of the benefits the investment creates such as higher property or rent values.
REHABILITATE-OPERATE-AND-TRANSFER (ROT) - A contractual arrangement whereby an existing facility is turned over to the private sector to refurbish, operate and maintain for a franchise period, at the expiry of which the facility is turned over to the Government. The term is also used to describe the purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the host country.
REHABILITATE-OWN-AND-OPERATE (ROO) - A contractual arrangement whereby an existing facility is turned over to the private sector to refurbish and operate with no time limitation imposed on ownership. As long as the operator is not in violation of its franchise, it can continue to operate the facility in perpetuity.
DEVELOPMENT PROGRAM - Refers to national, regional or local government plans or programs included in, but not limited to, the Medium-Term Philippine Development Plan, the Regional Development Plans and Local Development Plans.
DIRECT GOVERNMENT GUARANTEE - Refers to an agreement whereby the Government or any of its Agencies/LGUs assume responsibility for the repayment of debt directly incurred by the project proponent in implementing the project in case of a loan default.
ECONOMIC INTERNAL RATE OF RETURN (EIRR) - The rate at which the present value of the net economic benefits from a project over a specific period of operation equals the economic project costs. The project's EIRR is generally compared with a hurdle rate as a consideration to continue developing and/or implementing the project.
FACILITY OPERATOR - Refers to a company registered with the Securities and Exchange Commission, which may or may not be the project proponent, and which is responsible for all aspects of operation and maintenance of the infrastructure or development facility, including but not limited to the collection of tolls, fees, rentals or charges from facility users.
FINANCIAL INTERNAL RATE OF RETURN (FIRR) - The rate at which the net cash inflows of a project are discounted so that their total net present value is equal to the total project cost. A project's FIRR is generally compared with a hurdle rate, sometimes determined as the long term cost of capital, as a consideration to continue pursuing the project.
GOVERNMENT UNDERTAKINGS - Refers to any form of contribution and/or support provided under Rule 13 of the IRR of RA 6957 as amended, e.g. cost sharing, credit enhancements, which the Government may extend to the project proponents under any of the contractual arrangements authorized under the IRR.
ICC - Refers to the Investment Coordination Committee of the National Economic and Development Authority (NEDA) Board.
IRR - Shall mean the Implementing Rules and Regulations of Republic Act No. 6957, as amended by Republic Act No. 7718.
LIST OF PRIORITY PROJECTS - Refers to the list of private sector infrastructure or development projects approved in accordance with Sections 2.6 and 2.7 of the IRR.
LOCAL GOVERNMENT UNITS (LGU) - Refers to provincial, city and/or municipal government entities.
NEGOTIATED CONTRACT - Refers to contracts entered into by the Government for convenience even if broader tendering would have been possible. This type of contract may be resorted to only in cases prescribed under Rule 10 of the IRR.
NET PRESENT VALUE (NPV) - The difference between the net cost inflows of a project discounted at a given rate less the cost of the project. The decision rate for the NPV criterion is to accept projects with NPV greater than or equal to zero.
PREQUALIFICATION, BIDS AND AWARDS COMMITTEE (PBAC) - The PBAC for LGUs has the following members:
• City or municipal Local Chief Executive or Governor as Chairman
• The Chairman of the appropriations committee of the sanggunian concerned
• A representative of the minority party in the sanggunian concerned, if any, or if there be none, one chosen by said sanggunian from among its members
• The local treasurer
• Two representatives of non-governmental organizations that are represented in the local development council concerned, to be chosen by the organizations themselves
• Any practicing certified public accountant from the private sector, to be designated by the local chapter of the Philippine Institute of Certified Public Accountants, if any
• Representatives of the Commission on Audit shall observe the proceedings of such committee and shall certify that the rules and procedures for prequalification, bids and awards have been complied with. The PBAC can have as many as 10 members.
PRIVATE SECTOR INFRASTRUCTURE OR DEVELOPMENT PROJECTS - The general description of infrastructure or development projects normally financed and operated by the public sector but which will now be wholly or partly implemented by the private sector, including but not limited to, power plants, highways, ports, airports, canals, dams, hydropower projects, water supply, irrigation, telecommunications, railroad and railways, transport systems, land reclamation projects, industrial estates or townships, housing, government buildings, tourism projects, public markets, slaughterhouses, warehouses, solid waste management, information technology networks and database infrastructure, education and health facilities, sewerage, drainage, dredging, and other infrastructure and development projects as may otherwise be authorized by the appropriate agency. Such projects shall be undertaken through contractual arrangements as defined herein, including on variations that may be approved by the President of the Philippines.
PROJECT PROPONENT - Refers to the private sector entity with contracted responsibility for the project and which has an adequate base to implement said project consisting of equity and firm commitments from reputable financial institutions to provide, upon award, sufficient credit lines to cover the total estimated project cost.
PUBLIC UTILITY PROJECTS - Refers to projects including public roads and thoroughfares, railways and urban rail mass transit, electricity and gas distribution systems, city and municipal water distribution and sewerage systems, and telecommunication systems serving the general public, and such other public services as defined under the Public Services Act, as amended.
UNSOLICITED PROPOSALS - Refers to such private sector infrastructure or development projects which may be entered into by an Agency/LGU subject to the requirements/conditions prescribed in Rule