On August 20, 2020, Pamana Water Corporation (“Pamana”) submitted an unsolicited Joint Venture (JV) proposal to Dagupan City Water District (DCWD) for the financing, development, rehabilitation, expansion, operation and maintenance of the water distribution system in the area of jurisdiction of Dagupan City.
The DCWD is continuously exploring possible options and opportunities to further enhance and improve its services for its concessionaires, potential customers, stakeholders and District personnel (regardless of status), which includes looking into potential partnership with a Private Entity for DCWD’s financing, development, rehabilitation, expansion, operation and maintenance of the water distribution system. In addition, the ongoing economic challenges brought about by the COVID-19 pandemic have been a threat for DCWD’s continuous implementation of projects and programs.
The 2013 Revised NEDA Guidelines and Procedures for Entering into Joint Venture Agreements between Government and Private Entities dated 3 May 2013 issued by the National Economic and Development Authority pursuant to Section8 (Joint Venture Agreements) of Executive Order No. 423 dated 30 April 2005, provides the guidelines for a Negotiated JV which is through the submission of an unsolicited proposal by an eligible proponent.
Relative to this, the DCWD has received two (2) other unsolicited proposals submitted by Manila Water Philippine Ventures (“Manila Water”) and PrimeWater Infrastructure Corp. (“PrimeWater”) respectively. However, both proposals were rejected due to the following reasons:
1. Manila Water’s JV proposal was not accepted during the Stage I and did not reach the detailed negotiation since during this process Manila Water was facing a national issue regarding their operations and services which constrained the DCWD to not accept the proposal; and
2. PrimeWater’s JV proposal was accepted and the discussion proceeded with Stage II – Detailed Negotiation. However, the proposal was rejected due to unsuccessful negotiations between the JV-SC and PrimeWater.
Likewise, entering into a JVA has been a trend for Local Water Districts (LWDs) in order to continue the financing, development, rehabilitation, expansion, operation and maintenance of the water distribution system of LWDs without the need to take out loans.
Hence, the DCWD Board of Directors (BOD) issued Board Resolution No. 051-20 dated August 25, 2020, adopting the General Manager’s (GM) recommendation for the creation and composition of the JV-SC and TWG to conduct the review and evaluation of the unsolicited proposal submitted by Pamana.
The results of the negotiated terms and conditions between DCWD and PAMANA yielded the accepted terms in line with the CAPEX, Tariff rates, JV Share, Employees’ Status, Compensations and Other Packages and DCWD Loans among others.
Further, the following activities were conducted in compliance with the NEDA JV Guidelines:
| INCLUSIVE DATES | SCHEDULE | SUBJECT |
|---|---|---|
| 8/25/2020 – 9/11/2020 | 9/9/2020
9/10/2020 9/11/2020 |
|
| 9/12/2020 – 9/24/2020 | 9/15/2020
9/16/2020 9/17/2020 9/23/2020 9/24/2020
09/25/2020 |
Detailed Negotiation Detailed Negotiation Detailed Negotiation Preparation and Submission of Initial Report of JV-SC and TWG’s for the result of the detailed negotiation and the JV Agreement draft Presentation of JV-SC and TWG’s submitted initial report and discussions on the JV Agreement draft |
| 10/02/2020 | 10/02/2020 | The following documents were issued:
|
| 10/06/2020 and 10/07/2020 | 10/07/2020 | Preparation of tender documents for publication of invitation to apply for eligibility and submission of comparative proposal |
| 10/08/2020 | 10/08/2020 | Review and approval of the submitted tender documents for publication
Issuance of Board Resolution No. 075-20 approving the tender documents, including the JVA draft, submitted by the JV-SC for publication Authorization of the JV-SC to publish the approved tender documents and comply with the Stage III – Competitive Challenge procedure. |
| 10/09/2020 to 10/16/2020 | 10/16/2020 | Publication Period and Purchase of Eligibility Documents:
The approved Invitation to Apply for Eligibility and to Submit a Comparative Proposal (IAESP) was published in conspicuous places in the office, in the official website of DCWD and advertised once in a newspaper of general nationwide circulation, and posted continuously for the said period, starting on date of advertisement, |
| 10/17/2020 | 10/17/2020 | The competitive challenge procedure was already completed and there is/are no challenger/s, the JV-SC recommends to the BOD to issue the Notice of Award to Pamana, being the original proponent. |
| 10/20/2020 | 10/20/2020 | Awarding of the JV Contract to PAMANA |
| 10/21/2020 | 10/21/2020 | Preparation of Pertinent Documents for Submission to OGCC :
Section VIII.11 of Annex A of the 2013 NEDA Revised JV Guidelines require that “Prior to the execution of the JV Agreement, the OGCC, DOJ, or other entity prescribed by law/issuances as the statutory counsel of GOCCs, GCEs and GICPs, shall issue the corresponding Counsel’s Opinion.” |
| 10/22/2020 | 10/22/2020 | Continuation of Preparation of Pertinent Documents for Submission to OGCC: Compliance with Section VIII.11 of Annex A of the 2013 NEDA Revised JV Guidelines. |
| 10/23/2020 | 10/23/2020 | Revision of the JV Agreement Draft:
Receipt of NOA Compliance with Section VIII.11 of Annex A of the 2013 NEDA Revised JV Guidelines. Receipt of NOA : Duly received by Authorized Representative/s of Pamana |
| 10/26/2020 | 10/26/2020 | Final Filing and Preparation of JV Agreement Draft and Other Pertinent Documents :
Compliance with Section VIII.11 of Annex A of the 2013 NEDA Revised JV Guidelines. |
| 11/06/2020 | 11/06/2020 | Receipt of NEDA Observation and Opinion:
As required by the JV Guidelines, the JV-SC submitted copies of the approved and published tender documents to NEDA, DOF and GCG on October 9, 2020 which was reviewed by the said agencies. |
| 11/09/2020 | 11/09/2020 | Letter Reply to NEDA:
The JV-SC submitted its response to NEDA providing assurance for the compliance to the requirements and conditions set. |
| 11/20/2020 | 11/20/2020 | Submission of Performance Security :
Pamana, within the prescribed period, submitted the requirements and conditions precedent to the execution of the proposed JV Agreement as stated in the NOA. |
| 11/24/2020 | 11/24/2020 | NEDA Acknowledgement of the JV-SC Reply:
NEDA acknowledged and recognized the JV-SC’s commitment to comply with the requirements and conditions, including submitting copies of the signed JV Agreement upon execution. |
| 11/27/2020 | 11/27/2020 | Receipt of OGCC Contract Review and Opinion:
The DCWD received the electronic and printed copies of the OGCC |
| 11/28/2020 – 11/30/2020 | 11/28/2020 – 11/30/2020 | Final Revision of JVA based on OGCC Contract Review and Opinion and Final Revision of JV Business Plan |
Overall, the ongoing procedure for the proposed JVA between DCWD and PAMANA is a possible fusion of two business enterprise with a common goal of improving and enhancing the overall operations of the District for the benefit and welfare of its concessionaires, potential customers, employees (regardless of status) and stakeholders among others.
