Supporting Legal Framework for PPP 2.0 Gradually Put into Effect: Act for Promotion of Private Participation in Infrastructure Projects to be Submitted to the Executive Yuan for Approval.
Amendments to the Act for Promotion of Private Participation in Infrastructure Projects, known as the PPP 2.0, were passed at the end of the previous year (2022). After six months of tireless effort by the Ministry of Finance (MOF), related regulations have been gradually promulgated and enforced in the first half of this year (2023). These include three subsidiary pieces of legislation on the mediation and resolution of disputes arising out of the performance of PPP projects, as well as the Regulations for Policy Evaluation of Government Acquisition of Public Services with Compensation. The final step, the "Enforcement Rules of Act for Promotion of Private Participation in Infrastructure Projects," is set to be submitted to the Executive Yuan for approval in July.
According to the MOF, when disputes over the performance of PPP contracts arose in the past, the coordinating committee established by the contracting parties, namely the sponsoring agency in charge and the private contractor entity, would handle the disputes according to the provisions of the contract. However, in some cases, disputes could not arrive at a consensus due to both parties holding firm positions. In order to effectively address this problem, from July 1, 2023, both parties can also apply for mediation with the Ministry of Finance. The mediation fees range from NT$100,000 to NT$280,000, and the sponsoring agency cannot reject the mediation request from the private contractor entity to ensure the protection of its rights. The mediation process shall also last no longer than 9 months. The MOF, from its position as a competent authority, hopes that the mediation mechanism can provide a new channel for respective sponsoring agencies and private organizations to handle contractual disputes with greater trust, so that the smooth resolution of disputes can be achieved without interruption of public services. For details on the mediation mechanism and application requirements, please refer to the following website (https://ppp.mof.gov.tw/WWW/ref.aspx?mid=3ACC054DF0C4C7C5).
Furthermore, the Ministry pointed out that the Regulations for Policy Evaluation of Government Acquisition of Public Services with Compensation has also been promulgated and implemented on June 20, 2023. The MOF will serve as the evaluation agency and will prioritize conducting policy evaluations for existing projects in public construction categories such as "transportation infrastructure and shared pipelines," "environmental pollution prevention facilities," "sewer systems, water supply, and hydraulic engineering facilities," and others. This will assist the sponsoring agencies in promoting PPP projects through the compensated acquisition of the public services model in the future.
Regarding the implementation details of the Act for Promotion of Private Participation in Infrastructure Projects, the draft of the "Enforcement Rules of Act for Promotion of Private Participation in Infrastructure Projects" is currently undergoing regulatory notice procedures; this draft aligns with the addition of 20 articles in the Act for Promotion of Private Participation in Infrastructure Projects, and has undergone practical review and revision of more than 50 articles in the Enforcement Rules. These stipulate that certain procedures such as feasibility evaluations and public hearings can be omitted when re-soliciting bids for the same project as well as provide preferential conditions for the original applicant of a privately self-planned project, streamline the performance evaluation process and frequency for contract performance cases, and introduce a mechanism for public access. The amended legislation also includes provisions for negotiating the scope of compensation amounts with the applicant in case the sponsoring agency declines to sign a contract due to policy changes or considerations not in the public’s interest. Furthermore, this amendment aims to enhance rigorous checks in handling PPP projects, offering flexibility for private contractor entities in development and operations while enhancing operational efficiency for administrative agencies. The current regulatory notice procedure is underway until July 11, 2023 and is expected to be submitted to the Executive Yuan for approval by the end of July.
Press Contact: Ching Chuang (Section Head), Tzu-Wen Chen (Section Head)
Tel: (02)2322-8218
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=ed955b0237394eddbdba6783a7b5a7ce