Rationale
Proclamation No. 216 (s.2017) was issued on 23 March 2017 declaring a state of Martial Law and suspending the privilege of the writ of Habeas Corpus in the whole of Mindanao. Subsequently, on 13 December 2017, Joint Congress Resolution No. 13 was issued extending the state of Martial Law in the whole of Mindanao from the period of 01 January 2018 to 31 December 2018.

In the aftermath of weeks of armed conflict, the City of Marawi and other localities surrounding the city sustained severe public infrastructure and utilities damage, as well as loss of private properties, displacing thousands of families and destroying livelihood and businesses.

Administrative Order (AO) No. 3 dated 28 June 2017 created Task Force Bangon Marawi to ensure a unified and comprehensive effort on the part of the National Government for the recovery, reconstruction and rehabilitation of the City of Marawi and other affected localities. The Task Force Bangon Marawi was mandated to conduct a post-conflict needs assessment of Marawi City and, based thereon, develop and implement a Bangon Marawi Comprehensive Rehabilitation and Recovery Program (CRRP) for the City of Marawi and other affected localities.

AO No. 9 (s. 2017) amended AO No. 3 by reorganizing the composition of the Task Force Bangon Marawi and designating the Housing and Urban Development Coordinating Council (HUDCC) as Chairperson of the Task Force Bangon Marawi. Under Executive Order (EO) No. 20 (s. 2001), the HUDCC exercises the administrative supervision over the National Housing Authority (NHA), which remains attached to it for purposes of policy and program coordination. Pursuant to Section 6(e) of Presidential Decree (PD) No. 757 (s.1975), the NHA is authorized to develop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public and private entities.

On 05 February 2018, the President signed EO No. 49 (s.2018) exempting the NHA from the National Economic and Development Authority (NEDA) Guidelines on Joint Venture Agreements to expedite the implementation of recovery, reconstruction and rehabilitation projects in the most affected areas in Marawi City.

Section 2 of EO No. 49 mandates that all JVAs to be entered into by NHA pursuant thereto must comply with these Guidelines formulated and issued by the NHA under the supervision of the HUDCC, and in consultation with NEDA, the Public-Private Partnership Center (PPPC), and the Department of Budget and Management (DBM).

These Guidelines shall (a) apply only to recovery, reconstruction and rehabilitation projects for the most affected areas of Marawi City; (b) promote efficiency, transparency, competitiveness and accountability in covered transactions; (c) require the participation of agencies with mandates directly relevant to the project in the JVA selection and contracting process; and (d) be consistent with all applicable laws, rules and regulations.

Principles
The NHA may enter into a joint venture agreement with a private sector entity (PSE) consistent with the following principles:

1. The JV activity shall involve the recovery, reconstruction and rehabilitation of Marawi City. The minimum scope of work is provided in Annex A, which may be further amended by the NHA.

2. The JV activity shall provide a master development plan, that includes the following, but not limited to, land use, urban design standards and guidelines, enviromental protection guidelines, implementation plan and city management structure for Marawi City to ensure the promotion of a vibrant community and healthy business environment.

3. The JVA activity shall, to the extent possible, require minimal government subsidy or guarantees in the JV except for the provision of public access roads, right of way, government permits necessary for the immediate implementation of the JV activity, and others as may be deemed necessary and required.

4. The JV activity may allow take-over by the private sector partner of the government’s share in the JV Activity subject to divestment procedures and other requirements under relevant laws.

Purpose
These Guidelines are issued for the following objectives:

1. To prescribe the rules, regulations, guidelines and procedures in entering into JV Agreements with PSEs for projects/undertakings for the development, construction and rehabilitation of Marawi City;

2. To encourage participation of PSEs possessing expertise and technical capabilities in property, facilities and projects development, and in operations and management, in the development, construction and rehabilitation of Marawi City; and

3. To ensure that all JV agreements by the NHA are entered into through fair, objective and transparent processes and procedures that promote accountability in the NHA transactions.

Coverage

These guidelines shall apply to all unsolicited proposals submitted to HUDCC, as Chairman of the Task Force Bangon Marawi, related to the development, construction and rehabilitation of Marawi City.

General Guidelines

1. The Selection Committee

The Bangon Marawi Selection Committee (BMSC) shall have seven (7) members and composed as follows:

a. Chairperson – Secretary General of HUDCC;
b. Co-Chairperson – General Manager of NHA;
c. Member, Deputy Secretary General of HUDCC;
d. Member, Assistant Secretary of DOF;
e. Member, Head of Operations, NHA;
f. Member, Assistant Secretary of DENR;
g. Member, Assistance Secretary of DPWH;
h. Non-voting Member, one (1) from the Public Private Partnership Center (PPP Center);
i. Observers, one (1) each from the City of Marawi, the affected locality, as applicable, and the Commission on Audit (COA)

2. The Technical Working Group

The Bangon Marawi Technical Working Group (BMTWG) shall have fourteen (14) members and composed as follows:

a. Chairperson – Deputy Secretary General from HUDCC;
b. Vice Chairperson – Bases Conversion and Development Authority (BCDA);
c. Member – two (2) from the NHA Legal and Finance;
d. Member – one (1) from the HUDCC;
e. Member – one (1) from the DOF;
f. Member – one (1) from thr DENR;
g. Member – one (1) from the Office of Civil Defense (OCD);
h. Member – one (1) from the DPWH;
i. Member – one (1) from the DILG;
J. Member – one (1) from the PPP Center;
k. Member – one (1) from the Mindanao Development Authority;
l. Member – one (1) from the Local Government Unit of Marawi City;
m. Member – one (1) from thr Provincial Government of Lanao Del Sur; and
n. Observer – one (1) from COA

3. The NHA, as recommended by the BMSC, may opt to enter into a JV contractual agreement (unincorporated JV) or form a separate JV Company (incorporated JV) depending on which JV mode will provide the most efficient and viable financial arrangement for the JV partners. In either case, the JV agreement should clearly state the NHA’s intent to undertake a specific activity that is responsive to the CRRP.

4. In case of an incorporated JV, the JV Company shall be formed by the NHA and the private sector partner under the following parameters:

a. The JV Company shall be incorporated and registered as a stock corporation in accordance with the provisions of Batas Pambansa Bilang 68, otherwise known as the Corporation Code of the Philippines, as amended, and the prevailing and applicable rules and regulations promulgated by the Securities and Exchange Commission (SEC);

b. Ownership and nationality requirements under the Constitution and other pertinent laws shall be complied with; provided, that NHA’s equity contribution in the JV Company shall be no more than fifty percent (50%) of the outstanding capital stock of the JV Company. NHA’s contribution may be through assets (including equipment, land, utility franchise, development rights, leasehold rights, intellectual property, cash or anything of value), which shall be subject to a third party independent valuation. For as long as the NHA is involved in the JV undertaking, the private sector partner shall not sell/transfer its interest in the JV Company without the express of written consent of the NHA and HUDCC;

c. The NHA and HUDCC shall be represented in the Board of the JV Company;

d. The JV Company shall be permitted to derive income from the activities authorized under the JV Agreement during the term thereof. The NHA and the private sector partner shall be entitled to receive dividends from the net profits that would constitute a portion of the unrestricted retained earnings of the JV Company in each year in accordance with the JV Agreement; and

e. The JV Company shall stipulate a fixed term of existence of fifty (50) years, which may be extended for another fifty (50) years, by an amendment of the articles of incorporation, pursuant to the Corporation Code of the Philippines, as amended. The NHA’s continued participation in the JV Company shall be determined by the attainment of the goals and objectives of the recovery, reconstruction and rehabilitation of the City of Marawi and other affected localities. After attaining such goals and objectives, the NHA may divest its interest in the JV Company based on existing laws, rules and regulations. Further, the withdrawal of NHA’s capital contribution before the expiration of the said period is likewise encouraged; provided, that the divestment is made through competitive selection, initial public offering, or any other means that promote competition, fairness and transparency.

f. In drafting the incorporation documents of the JV Company and other contracts governing the relationship between the NHA and the private sector partner, the parties should consider the following guidelines, among others: (1) clearly defined business objectives; (2) specified degree of participation and the management roles of each party in the JV activity; (3) defined contribution of capital and ownership rights to property; (4) specified division of the profits, risks and losses; (5) identified dispute mechanism to avoid management impasses that may produce deadlock or litigation; (6) specified termination/liquidation of the JV Company and indicate buy-out provisions; (7) specified confidentiality terms; and (8) stipulated indemnification mechanisms.

5. The above parameters and other provisions pertaining to incorporated JVs shall also govern unincorporated JVs to the extent applicable.

6. In all cases, full divestment should be undertaken in accordance with all the related laws, rules and regulations, guidelines, legal issuances, as may be applicable with the disposition of government assets and properties.

(ANNEX A)
Minimum Scope of Work

1. Debris Management;
2. Site Development Plan;
3. Area of development shall cover 250 hectares of the Most Affected Area (MAA) by the Marawi siege;
4. Concrete Road infrastructures (per lane, per kilometer, including street and traffic lights) with provision for bike and pedestrian lanes;
5. Provision for underground utilities such as water, power and telecommunications;
6. Both sides of the Agus River and Lake Lanao waterfront on the Marawi side shall be allocated for parks and recreational sites (minimum setback of 50 meters on each side);
7. Vertical Development shall be based on classifications provided for by the National Building Code;
8. Centralized Waste Water Treatment Facility or Centralized Sewage Treatment Plant that will meet the demand of at least 60,000 population and with the discharge meeting DENR standards (Note: Must be included in conceptual plan.);
9. Twenty four (24) units of 1,000 sqm lot area barangay complex covering a 2-storey barangay hall, with 500 sqm floor area, with provisions for health center, multi-purpose hall and two (2) classroom Madrasah with a total floor area of 100 sqm in each of the barangay complex to be built;
10. Twenty two (22) two-storey elementary and high school buildings with 20 classrooms each based on Dep-Ed standards;
11. Meetings, Incentives, Conferences and Events (MICE) Convention Hall with 5,000 seating capacity to be located in the areas fronting the lake;
12. Two (2) hectare Memorial Site with museum located in the areas fronting the lake;
13. Preservation of at least three (3) historical/heritage sites (Bato Mosque and two other sites);
14. Port facilities;
15. Multi-modal transport hub; and
16. Two-storey Grand Padian or Central Market with 5,000 sqm floor area per floor or a total of 10,000 sqm floor area in a 2-hectare lot.