TSG NPM 005-2003

Requesting Entity: National Transmission Commission (TransCo)

Issues Concern: Leyte-Cebu Interconnection Uprating Project Re-bidding Under Turn Key Contract with Financing



Confirmation on the following clarifications made by the National Economic Development Authority (NEDA), through Deputy Director Ruben Reinoso, to wit;

The Eligibility Requirements on Filipino ownership and interest can be waived for prospective foreign bidders using foreign financing for the project, in accordance with the waiver provision of E.O. 40.

Waiver of Nationality Requirement:

For the procurement of goods, civil works, and consulting services, if the project to be procured is funded by an IFI, the provisions of the relevant loan or grant agreement shall govern, and those of E.O. 40 and its IRR would apply suppletorily. As such, if the said loan or grant agreement does not provide for any nationality requirement, the eligibility requirements in E.O. 40 and its IRR regarding Filipino ownership and interest may be waived.

Import, Duties, Taxes, and other Fees should be included in the calculation of the bid regardless of the nature of the foreign financing, since TransCo is not tax exempt and will eventually pay for the taxes and duties

Inclusion of Import Duties, Taxes and other Fees in the Calculation of the Bid:

E.O. 40 and its IRR are silent on whether or not the bidder should include the cost of import duties, taxes and other fees in its bid/ price proposal. However, considering that the transactions of TransCo are not tax exempt, the bid or price proposals of bidders should include the costs relating to duties, taxes, imposts and similar fees. For this purpose, it would be the duty of the Government agency concerned to provide in its Instruction to Bidders (ITB) such details as that requiring bidders to quote their prices inclusive of taxes.

In the determination of the Net Financial Contracting Capacity (NFCC) of a joint venture or consortium bidder, the negative NFCC of any member/partner should not be included in the computation of the collective NFCC of the joint venture/ consortium as long as there is member/ partner, which can fully satisfy the NFCC requirements. In any event, all member partners will be jointly and severally liable to the full execution of the contract.

Collective Compliance in the Computation of the NFCC:

The computation of the NFCC is couched on collective compliance, so that compliance of one member or partner could satisfy this requirement. The negative NFCC of any member/partner in a joint venture agreement need not be included in the computation of the collective NFCC of the joint venture or consortium as long as there is a member or partner that can satisfy the NFCC requirement.