FRONTIERS FINAL, MAY 16, 2013. inc references, 2nd copy.docx

7/27/2019 FRONTIERS FINAL, MAY 16, 2013. inc references, 2nd copy.docx

1/38

1

FRONTIERS 3/May 16 /12

Frontiers of Philippine Public Administration

REGULATORY POLICY-MAKING AND CONTRACT MANAGEMENT: LTFRB, PPP & BRT

Romeo B. Ocampo*

Introduction

On this 60th

birth anniversary of the U.P. National College of Public Administration, it is fitting

to talk about relatively unexplored areas of our discipline, both old and new, for our greater

edification. I refer here to a crucial phase of regulatory administration and to government

contracting with private parties, particularly in the public transportation sector. In this paper, I will

discuss rule-making in the Land Transportation Franchising and Regulatory Board (LTFRB), contract

management in the context of Public-Private Partnerships (PPPs), and the institutional challenges

of Bus Rapid Transit (BRT) systems as a radical innovation in public mass transport.**

I approach these topics from an institutionalist perspective of government processes and

structures. This was a dominant perspective of public administration and political science, though

it was discredited for being narrowly legalistic Of late, it has undergone a sort of rediscovery by

other disciplines as well as PA, and received renewed interest as neo-institutionalism in

economics, sociology, and political science (Scott 1995). As we all know, there has been a

continuing effort to promote development and change, and there has also emerged a desire tosustain whatever progress is attained. The institutional approach fits the bill (Paul 1990).

Institutions are establishment(s) of relative permanence that contribute to stability and

acceptance (legitimacy) in the wider community, though some authors would rather argue that

their hallmark is their capacity for automatic maintenance and self-restoration (Scott 1995: 8).

Institutions are supported by three pillars, according to Scott. The regulative pillar consists

of the rulemaking, monitoring, and sanctioning processes intended to constrain and regularize

behavior. The normative pillar provides the goals, values, and standards for evaluating an

-------------*Former Dean and Professor, U.P. NCPAG; Consultant, U.P. National Center for Transportation

Studies (NCTS); Vice President, STRIDE Consulting, Inc.; and President, U.P. Public Administration

Foundation (UPPAF).

**My observations are based partly on the work I have done with the NCTS and STRIDE. I

thank my colleagues in these groups, as well as those in NCPAG, for the research opportunities

they have given me.


2/38

2

agents performance, while the cognitive one supplies the perceptual basis of and belief system

about the relationships between means and ends, causes and consequences. While rational action

in the regulative pillar is judged on such instrumental relationships, in the normative pillar it is

based on criterion of appropriateness. (Ibid.: 37-39). These pillars may reinforce or contradict

each other, so that traditional norms of what is proper may support or trump instrumental logic.

Regulations are probably the oldest tools of government. They include the most direct,

coercive, and sometimes very elaborate means of the conduct of conduct of people as subjects of

government. By comparison, other functions like planning are more indirect, permissive (often

merely indicative in liberal regimes), and operate more on the environment to influence human

behavior. Regulations rely primarily on the legal authority of government, while other functions

bank on the treasure, information, or other state resources (Hood 1983). Thus, regulations have a

close affinity with law, particularly administrative law as the branch for implementing more basic

statutes, policies, and plans.

With the growing recognition that law is not all there is to government, however, the

regulatory toolkit has grown (Freiberg 2010) and may combine legal and non-legal (and even non-

state) means to achieve state goals. Based on knowledge ofpeoples interests, information, and

inclination to resist or comply with rules, regulators may employ technical mandates, economic

incentives, environmental provisions, and other carrots and sticks. Recent advances in science

and technology, particularly Information and Communication Technologies (ICTs) have made it

possible for government to govern more distant people and places. But they have also made it

possible to enable people to participate more actively in government processes, including

regulatory rule-making (Coglianese 2004).

In the Philippines as elsewhere, the career of government regulation and contract

management has reflected the problems and responses that arise as the institutional framework

evolves with the growth in scale and complexity of the country. Contrary to this trend, recent

reform movements have sought to reduce the scope and size of government , enhance those of the

private/business sector and civil society, and yet reinvent government into something more

effective, transparent, and accountable to an empowered people. Privatization and deregulation

of governmental have been among the strategies used for this purpose. But these policies have

stalled, and there have been efforts to re-regulate or simply come up with better, reconfigured

regulations to deal with social problems that cannot be left to the private sector alone to solve.

The regulation of monopolies, externalities, and public goods provision call for good rules andsound systems of policy-making and administration.

Regulatory agencies exercise quasi-legislative and quasi-judicial powers delegated by the

legislative and judicial branches of government in acknowledgement of the fact that they are not

competent to make or interpret the detailed rules that are required by the increasingly complex

and specialized functions that the executive branch is called upon to perform. Congress has


3/38


4/38

4

behavior of citizens or specified stakeholders. I am concerned here with more basic guidelines that

invite citizen participation in rulemaking and has both internal and external consequences.

Our system of government emulates the American system in basic respects, but not its

regulatory model. This model has developed meta-rules for rulemaking that were first enacted in

the Administrative Procedures Act (APA) of 1946, which provided for a notice-and-comment

requirement for public comment on proposed agency rules (Jacobini 1991: 25-26). This American

invention has been elaborated into a series of interagency and expert peer reviews as well as

public consultations, all designed to better inform proposed regulations and prevent arbitrariness

and abuse in rulemaking and the exercise of administrative discretion.

Our own scholars recognized the need for Congressional standards to guide administrative

quasi-legislation . but what they referred to were substantive standards (e.g. such constitutional

principles as public interest) and not the primarily procedural types of rules embodied in the

APA. (Portugal & Lim 1955: 318-319). Perhaps the contemporary requirement for new statutes

to be followed by the promulgation of Implementing Rules and Regulations (IRRs) is another

approximation of meta-rules, but I know of no general, government-wide guidelines for their

elaboration or revision.(See Villemajor-Mendoza 2006: 84-85; Revised Administrative Code of

1987: Secs. 27 & Ch. 2 )..

The quasi-judicial function of Philippine regulatory agencies has been emphasized to the

neglect of their quasi-legislative role, although in practice they do issue or amend rules. On the

other hand, the concern that emerged in the U.S. was the effort of some reformers to judicialize

what was characterized as the informal rulemaking in the APA process). It was informal

in the sense that it represented departures from the legal strictures of the courts (Jacobini 1991:41-43; Woll 1963: 25-27, 186-187)**, and the American Bar Association wanted to restore the

judicial model (Heady 1959: 92-94; see Rakoff 2000 for subsequent developments).

Another Philippine deviation from the American regulatory system was from its reputation

as being an independent fourth branch. In the Philippines, regulatory agencies have had no

standard form of relationships with regular departments, no set institutional model (Carino

2006: 7) but some have been integral units of the departments, which may be the primary

regulatory authority in their policy jurisdictions. Historically, though, these may have evolved

from more independent origins (Portugal & Lim 1955.: 319-322)

-----------------

*Professors Portugal and Lim mentioned consultative practices of rulemaking in the Office of

the Insurance Commissioner and the Court of Tax Appeals, but did not say whether they were

regular practices (Ibid.: 329; Portugal 1958: 165).

**(See next page).


5/38

5

The Department of Transportation and Communications (DOTC) is the primary policy-making,

planning, regulatory, and administrative authority for the sector, while the LTFRB and themotor

vehicle registration agency, the Land Transportation Office (LTO), have been subordinate units

subject to the DOTCs policy directions. The LTFRBs and LTOs antecedents go back to the start of

the 20th century. Their evolution was marked by the creation of a Public Service Commission

(PSC) by legislation that defined public transportation as a public utility for the first time (Regala

1933: 469) and placed all modes of transport under the PSC. After nearly five decades, in 1972,

the government replaced the PSC with more specialized boards, organized a separate

Department of Public Works, Transportation and Communications, and transferred transport

regulation to it from the Department of Justice (DOJ).

The LTFRB and LTO were organized in the later 1980s, as a single agency performing

both franchising and registration, then, after two years, they were reorganized as separate units

as before under the Ministry (later Department) of Transportation and Communications. The

DOTC provides guidelines and directives (Department Orders or DOs) to the LTFRB and LTO,

which translate them into their specific regulations (Memorandum Circulars in the LTFRB and

issuances of variable names in the LTO) and case decisions or orders. While the main job of LTFRB

is franchising public utility vehicles (PUVs), the single-headed LTO inspects and registers both

public and private motor vehicles and issues licenses to drivers.

The LTFRB is headed by a three-man Board representing law, engineering, and (as chairman)

business, management or other professions (See Chart 1, appended). The old PSC had been

dominated by judges and lawyers. The Boards main task is to promulgate regulations (MCs), grant

and renew franchises and special permits for the operation of buses, jeepneys, taxis, and other

public utility vehicles (PUVs). It also adjudicates cases and issues decisions and orders regardingpassenger fares and freight rates, PUV routes, and conflicts among operators, passengers, and

other stakeholders. In order to guide Board hearings and other quasi-judicial proceedings, it has a

set of Rules of Practice and Procedure for cases brought before the Board, first adopted in the

1930s, then again in 1988, and last revised in 2011 (LTFRB Sept. 1, 2011). No comparable guide for

LTFRB rulemaking has been made, though this is a continuing policy-making task of considerable

consequence.

-------------

*Jacobini describes formal rulemaking as rulemaking on the record and involves a hearing

with opportunity for cross examination and many of the other accoutrements of a court case;indeed it is substantially the same in form as an agency adjudicative proceeding. Informal rule-

making consists of procedural, interpretive, and legislative rules which are formulated according to

the four steps prescribed by the APA: (1) notice by publication of a proposed rule in the Federal

Register, (2) submission of comments by interested parties, (3) agency formulation and publication

of the rule, and (4) further comment (proposed change, acceptance, modification, or negation) by

interested parties. (Jacobini 1991: 41-43).


6/38

6

A critical challenge is to strike a balance between the interests of PUV passengers and

operators with the public interest as the principal criterion. The LTFRBs franchising and other

functions are expected to produce and maintain that balance through its control of the entry,

operation, and exit of PUVs in the public transport system. To qualify for a franchise (Certificate of

Public Convenience or CPC), an applicant operator must show financial capacity to run a viable

PUV service that fills a public need. This used to be easily justified by an endorsement from a

local government official and a presumption of need favoring the applicant, despite the

requirement of a hearing and oppositor. A more quantitative way of establishing need for

additional PUVs and routes was devised in the 1980s through a Route Measure Capacity (RMC)

survey and formula. A CPC may be granted if justified by the RMC numbers generated by this

method.

A Road Transport Planning Division (RTPD) in the DOTC provided planning support for

maintaining the public route network with the RMC method. It used to conduct the required

surveys directly in selected localities and later assisted the LTFRB through an RMC Secretariat set

up by the Board. But the initiative for the surveys eventually shifted to PUV operators, so that the

further development of the route network became incremental rather than systemic (PCI

Philippines & UP PLANADES 2007: 12-3). Besides, the RMC numbers generated became suspect

and were not consistently used. To begin with, it was uncertain whether they were a strict

prerequisite or just a guide for granting CPCs.

The LTFRB and other agencies have been unable to keep a lid on the total number of PUVs,which seemed necessary in Metro Manila where vehicular congestion and an oversupply of

vehicles had long been a serious problem. Though it may be ascribed to wider secular growth

trends, their inability stemmed partly from the deregulation policy of the first Aquino

Administration in the early 1990s and the liberalization measures taken by the DOTC and LTFRB in

the following decade . In the mid-2000s, the DOTC gave the LTFRB a free hand to issue rules and

amend existing departmental policies (DOTC DO 2005-10). Taking advantage of this delegation,

which the chair had requested, the Board more than doubled its output of MCs, from 22 in the

year 2000 to 80 in 2006. This levelled off to 33 in 2010, at which point a new Secretary revoked

the delegation order as inconsistent with the DOTCs mandate as the primary regulatory authority

in the transportation sector.

-----------------

*The martial law regime tried to wean the PSC away from its legalistic tradition by

transferring it in 1972 from the DOJ to the new Department of Transportation and Communication

(Bautista 1979: 302-303). But the role of lawyers has remained strong in the LTFRB, at least as

hearing officers.


7/38

7

The legislative exuberance of the Board at this juncture may be credited to its responsiveness

to changing circumstances, including technological changes. But rudderless in terms of formal or

informal rulemaking guidelines, the LTFRBs rulemaking process was at times haphazard. MCs

were frequently amended, and in some cases retrieved almost as soon as they were issued due to

egregious errors. One MC prescribed a minimum of 6 years for the age of taxi substitutes (MC

2005-02), when what was intended for a maximum (MC 2005-07). As DOTC internal auditors

noted, the process was capricious, bereft of stakeholder consultations, and Board decisions were

made not en banc as required by its charter (IAO/DOTC 2010).* As a result, major policies and

programs were poorly administered, failed, fell short of their goals, or exceeded their limits.

A moratorium on new CPC applications, started in 2000 , for example, was frequently lifted

to authorize thousands of PUVs in Metro Manila and other regions. After being reaffirmed in 2003,

it was lifted several times in 2006 to liberalize the entry of various kinds of PUVs. In 2007, it was

lifted for 10,000+ units of express vans that, despite their point-to-point routes, operated like

taxis; in 2000, for 5,000 taxis in Mega Manila; and at another point, 5,000 more taxis for

returning OFWs wishing to become operators. The auditors also noted that far more CPCs for UV

units (3,637) were once issued than the number authorized (500). The 10,000+ vans were

authorized with RMC numbers of dubious provenance. Despite the consultations, research

inquiries, and evaluation cited by the enabling MCs, no supporting surveys had apparently been

done: uniform numbers were presented for seven of the 13 regions, while they were constant for

the others. (MCs 2007-007, -014 to -027).

The LTFRB has developed an elaborate set of procedures for entry into the PUV system.Applications for new CPC or for renewal, and other major kinds of authorization sought, require a

public hearing by hearing officers (who must be lawyers) and an adversarial process before action

is taken by the Board. Minor permissions do not require a public hearing but must still undergo

processing through at least three of the LTFRBs five staff divisions. Exit facilities include age limits

for CPC validity and vehicle life, dropping of vehicles, and abandonment of CPCs.

But the PUV business seems sufficiently lucrative for most operators to want to stay in the

system, and they can through several ways : extension of CPC validity and vehicle age limit,

--------------

*Any two members can make a decision for the Board under present law, though the chair is

the influentialprimus inter pares. In its antecedent bodies, Board decision-making was sometimes

legally individualistic, sometimes mandatorily collective (Regala 1933: 470).


8/38

8

conversion between classes of service, and substitution of new for dropped units. The LTFRB also

allows the sale and transfer of franchises, appropriation of expired or abandoned CPCs, and the

legalization ofcolorum units. It has a Flexibility Rule that allows out-of-line operations that are

otherwise deemed illegal if done without LTFRBs blessing. Subterfuges have been devised by de

facto cooperators e.g. the kabitsystem whereby a non-CPC-holder can piggyback his units on the

franchise of a CPC-holder. Colorum PUVs (those operating with expired, fake, or without CPCs, or

operating outside their authorized routes or areas without LTFRBs permission) have proved a

tough nut to crack and are a substantial addition to oversupply and congestion. The PUJ colorum

legalization program also served as a cover for accepting new applications (AIO/DOTC 2010: 5-6).

Without minimizing the benefits that its more sensible regulations might have produced,

negative aspects of LTFRBs administrative procedures at staff level should be pointed out. These

include the documentary, verification, and confirmation requirements for applicants that seem to

superfluous. Copies of receipts and certifications from the LTO or BIR are often asked of

applicants but that probably the LTFRB employees should and can ascertain for themselves.

(However, poor records-keeping was another problem uncovered by the DOTC auditors.). The

same goes for the verification of petitions and applications, and verification and confirmation of

franchise validity. Moreover, these requirements often entail the payment of fees and fines at

many points. These could be very substantial, particularly for the conversion of PUVs from one

class to another class of service and for the legalization of colorum units:

P5,000 for PUJ, P7,000 taxi, P15,000 bus Late-filing fees for extension of CPC validity

P20,000Appropriation Fee for acquiring an abandoned or expired CPC

P30,000Compromise Conversion Fee for conversion to AUV/Van Express class

P100,000Amnesty Fee for Conversion from tourist or shuttle illegtal operation toregular bus service

P100,000Amnesty Fee forExtension of Route of provincial buses to metro cities

The foregoing are per-unit charges, and amount to great sums if an application is for an entire

fleet of PUVs. When asked in the mid-2000s whether they were not exorbitant, a chairlady replied

that the LTFRB imposed them on the basis of what the market would bear. Some operators seem

to be willing victims; yet, at one point, some applicants who had already paid the initial

installments of the amnesty fees did not return to pick up their approved LTFRB decisions or

orders, and it had to take steps to find them.

Other sources of LTFRBs problems go beyond rulemaking and rule-application practices, but

deserve mention. The most immediate is its faulty interface with the LTO, which has traded

criticisms with it for PUVs that operate without proper inspection and registration, or have

registered with the LTO without LTFRB confirmation of the validity of their CPCs. This gap has been

bridged through an automatic interconnectivity whereby the LTO cannot register a PUV without

prior LTFRB confirmation. But this electronic solution has been muddled by an ownership battle


9/38

9

within the LTOs IT service provider, whose contract is expiring and will not be renewed by the

DOTC. Moreover, the LTFRBs ability to enforce its regulations has been handicapped also by its

lack of resources and manpower for the purpose.

In Metro Manila, the LTFRB and the LTO have had tenuous if sometimes cooperative relations

with the Metro Manila Development Authority (MMDA). Charged with traffic management as well

as development planning functions, the MMDA has tried to reduce vehicular congestion wholesale

through number-coding where LTFRB has done so in relatively retail fashion. It has tried to put

order in the deployment of buses on EDSA through an Organized Bus Route (OBR) project for city

buses and initiated a move to transfer the terminals of provincial buses operating in Metro Manila

to centralized, intermodal terminals at its periphery. However, the MMDA has been declared by

the courts as lacking charter authority to implement projects, to exercise police power, and to

enact ordinances. (Supreme Court 2007). It has thus been a pro-active but legally vulnerable ally in

the regulation of traffic and transportation.

Improving Rulemaking, Generally

The LTFRB might begin formulating a set of meta-rules for rulemaking with certain basic

principles, policies, and procedures. These should include statements that regulations should

abide by such values as the public interest and the rule of law; should be clear and consistent;

prospective, predictable, and stable; fairly easy to enforce or comply with; should not unduly

burden its objects with fees and fines, sacrifice regulatory purpose for the sake of revenue-

generation; and remember that price regulation can be exclusionary for the poor. (See Salimbier

2002 & 2003)

Rules may be classified into three categories, like those of the U.S. Department of

Transportation (USDOT): legislative, non-legislative (subclasses: interpretative and policy

statements, and management (including personnel) and procedural types. Legislative rules affect

stakeholders directly, and, once promulgated, require publication in the Official Gazette and/or the

U.P. Law Centers National Administrative Register . The LTFRB and LTO, though, do not observe

such distinctions in submit copies to the NAR, even the basic one between internal and external

rules.

There should be provisions for consulting the public, other agencies, and experts on proposedrules. An international organization has outlined nine steps starting with statements about the

initiating events, the need for a rule, its formulation, review by a central office (like the U.S. Office

of Management and Budget) , notice for and review of comments, another round of preparation,

review, and publication of a final rule or a direct final rule. (IFC International n.d.)


10/38

10

Two or three points need to be raised in connection with this outline.

As indicated earlier, the meta-rules above are considered part of informal rulemaking

systems that allow departures from the strictly judicial procedures of hearings, adversarial trials,

and decisions based purely on the record produced in a court of law. Informal procedures such

as pre-trial conferences and summary resolution of cases have been incorporated in the LTFRBs

Rules of Practice, and it has been urged to adopt other reforms of the informal kind in adjudication

(NLTA Bill 2008) but none as yet on rulemaking.

A related point: a gloss on the concept of policy. In PA, we usually take this term to mean a

general rule that encompasses other kinds, including statutes and regulations. But, at least in

administrative law, policy is something less in that it does not have legally binding effect. Thus, in

the USDOTs classification, policy statements merely tell the public how the agency plans to

exercise a discretionary power . (See Rakoff 2000:5 on the recourse to non-legislative guidance

documents in the U.S.). On the other hand, some legal scholars give policy a more important

role in constituting regulations and affording greater latitude in judicial reviews of administrative

regulations. Here executive policy considerations count for more, whereas in other kinds of court

cases they may be deemed irrelevant. (Woll 1963: 188-189).*

Similar weight is given to the factual basis of regulations, which may be brought to bear from

wider sources than courts may typically allow.* This brings to mind the need to strengthen the

factual and technical evidence-base of LTFRB rulemaking. This calls for some planning capacity in

the LTFRB, which does not have a planning unit or personnel, as well as sustained support from the

DOTC. However, more resources and organization-building are probably required for upgrading

and using the database for planning and regulation. ICT resources, such as commercial softwarefor estimating transport demand, are expensive. And it may be hard to completely turn back

the inductive, incremental process of route development led by private PUV operators in the light

of the Aquino Administrations commitment to PPP. (But see the section below on BRT).

Finally, we may note that American legal scholars have explored the possibilities of using ICTs

to enhance consultative processes to better inform rulemaking, increase regulatory compliance

and democratic legitimacy, and reduce costs (Coglianese 2004). For example, electronic docket

systems for rulemaking materials that citizens can access and consult have been installed at the

USDOT and other agency websites (Farina 2010: 104). Different styles of informal rulemaking (e.g.

negotiated rulemaking or Reg Neg) have also been used.

---------------

*According to Professor Woll, the relevant facts in administrative cases are drawn not only

from the adversary process in a court, but from a broad and complex area, and where in addition

a case cannot be disposed of purely on the basis of such facts: Policy, in terms of the public

interest, must be taken into account. (Woll 1963: 189).


11/38

11

However, there are pitfalls in such open systems. Agencies have sometimes received hardly

any comment on proposed rules; at other times, they are deluged by a lot of useless comments. A

device that skips public comment, called direct final rule making, was adopted for proposed rules

deemed non-controversial, but has often been resorted to precisely for proposals that are

expected to be controversial. This practice has been called rulemaking without rules (Kolber

2008) the problem we started with.

Contract Management: PPP

Here we propose to highlight important aspects of contract management in view of the

commitment to PPP by the President and DOTC. No specific case study is presented in this section,

though the one on BRT may be considered a case of PPP-style contracting out as well as regulation.

Contracting between government and private entities has been a major trend that has had its

second or third waves. The Philippine government has always had the option of doing public

works by administration or by contracting out, and the latter has been bolstered by the adoption

of Build-Operate-Transfer or BOT scheme and its variants. PPP projects, however, are supposed

to be typically bigger (than, say, road-building projects that can be segmented into smaller

contracts), longer-term, more complex, and more risky. Moreover, while privatization tends to

shift responsibility to private parties, with PPP government shares the risks and costs with private

partners but retains ultimate responsibility for project outcomes (Phang 2007: 3; Wang 2009: 781-

782).

In assuming this residual responsibility, government should keep in mind at least three

points: First, while PPP appears to be a putative settlement of the issue as to which is a more

efficient producer of public services or more vigilant guardian of the public interest, there remains

a basic conflict or tension between their goals (private profit vs. public welfare). Secondly, PPPs

provide an alternative to unrestricted bureaucratic growth through traditional general

employment contracts, but entail transaction costs as the major burden of government in writing

andmaintaining the integrity of contracts of various sorts with private parties. Transaction costs

in PPPs are likely to be high because almost all infrastructure projects present relatively complex

contracting situations especially if they are large and involve technological innovations (Vining &

Boardman 2008: 151-154). Thirdly, PPPs abroad have not had a very encouraging experience,producing contradictory results regarding their effectiveness. (Hodge & Greve 2007; Hodge

2004).

If government agencies are not pro-active in project planning, aggressive private companies

may take the lead. The Philippines had a boom in PPP infrastructure projects from 1992 to 1999,

but they then declined and most had been initiated through unsolicited proposals rather than


12/38

12

government-sought PPP financing projects (World Bank 2009: 47). A first issue then is whether

the government should accept unsolicited proposals from the private sector. Reformers have

discouraged this as pre-empting the governments initiative to plan projects that assert the

primacy of the public interest. A safeguard here is the Swiss Challenge to open an unsolicited

proposal to competing proposals and to deny compensation to proponents for project and contract

preparation. However, in practice, the Philippine government has remained open to unsolicited

proposals, and it may be hard to rule them out in view of the greater financial and organizational

capacities of big companies to plan large-scale development projects.

Of the stages in contract formulation, the most crucial is probably the analysis and allocation

of the risks involved in PPP projects. Several classifications of risks have been advanced but the key

issue is which risks to assign to government, which to private parties, and on what cost basis.

Government agencies usually assume the burden of political and regulatory risks presented by

the vagaries and dangers of party or leadership turnover in government or unforeseen shocks in

the regulatory system. Difficult problems in project implementation, such as right-of-way

acquisition for road or rail construction, may also be assumed by government. Private parties

usually assume the production and other risks and costs of operational, management, financial,

and market contingencies (input price changes, organizational deficiencies, shortfalls in consumer

demand). (World Bank 2009: 78-79).

Risk- and cost-sharing decisions could be controversial. Consumer resistance to toll increases

on a privately-managed toll road could become a political as well as commercial problem. No

contract can be sufficiently complete to anticipate all future contingencies. Moreover, a

contract may allow for future amendments that can allow government to improve a project but can

also be an avenue for shirking obligations (Hodge 2004). Contract renegotiation and changes canbloat the transaction costs that figure so prominently in contracting-out and PPPs (Vining &

Boardman 2008). They also provide opportunities for corruption. Private partners may wiggle out

of their obligations, while a PPP contract is still in force, and shift a burden back to government.

An infrastructure developer may thus opt out of railway management but hold on to its

commercial land development portions because it is profitable for it to do so. Or, a private

developer may be primarily a construction company that likes to build infrastructure but is averse

to staying on to operate and manage a transit service (Flyvbjerg el al. 2003: 99).

---------------

*The World Bank classifies the private risks as demand, commercial, performance, andfinancial. (World Bank 2009: 78-79). Other authors have used different risk classifications (e.g.

Mishra 2010). Evaluating the French system for contracting out urban transit, Roy and Yvrande-

Billion reduce the risks to two basic types, production and revenue risks, and three cost-sharing

schemes in which private contractor assumes both, or only the production risk, or where the

government assumes both risks and the private manager is risk-free. (Roy & Yvrande-Billon

2007: 3-4).


13/38

13

Private investors fear political risks most. This fear appears to have been raised with the

present Administrations PPP program (Palabrica 8/12/11). Its announced commitment has been

followed a year later by troubling news of its abrogation of existing contracts begun under the

previous Administration and tainted with its corruption scandals. Contracts that are

disadvantageous to the government and the public deserve to be reviewed and rejected.

Nonetheless, this action is likely to scare investors who place great stock in credible

commitments. (Rosario, 7/11/11; Palabrica, 8/12/11). Fears of instability and unreliability may

have been worsened by President Aquinos vaunted appointment of contract breakers in the

leadership of the DOTC in 2011. Even before, the DOTC had been busily reviewing previous

contracts. After Secretary Mar Roxas took over the DOTC, he announced that a rail project already

contracted with the Japanese government had been reconfigured on a hybrid PPP scheme that

would rely more on government and ODA as well as private funds (Calica 9/2/11; PDI 9/30/11).

This apparent retreat, however, seems to have been ignored by President Aquino. Although

criticized for being slow on PPP implementation and for underspending last year, he has

recently earned bragging rights for a 6.4% GDP increase due mostly to government spending.

Contract administrators must be prepared to operate in an agile fashion in such a volatile

political environment. But they have to have firm organizational and professional bases to operate

from. The creation of a Philippine PPP Center has probably given the program a needed

foundation for central planning, management, and regulation.* While positions and units for

contract management may already exist in some departments, however, organizational

development for the function may have lagged behind at lower levels. This is suggested by the

past experience of the Department of National Defense (DND), whose billion-peso modernization

program (started in 1995) should have induced the formation of a strong procurement contracting

system but as of 2000 had not. A DND Circular stipulated procedures for buying weapons andequipment and contract signing, but barely touched on the process of contract execution and

administration, and not even a position of Contracting Officer had been created for the program.

(Montanez 2001: 1).

We need empirical as well as theoretical and technical studies to assess more accurately

the progress and problems of contract management at different levels of government. As for

training and curricular development, cursory Web surfing suggests that some in-service training

courses on the subject have been on offer, and lists of topics and references abound (Garson

2006). But these may need to be digested and reconfigured in PA terms.

-------------

*At a recent meeting, we learned that a major thrust of the Center is to help agencies build

capacity for project development, an effort that would be extended to local governments.

However, we also learned that national transport agencies still lacked the technical capability and

databases needed to assess the validity of private project proposals and resolve competing claims.


14/38

14

Institutional Challenges of Bus Rapid Transit (BRT) Systems

BRTs approximate the advantages of urban railways with less of their large construction,

operating, and management costs and poor financial performance. BRT buses run on dedicated

road lanes along a predetermined route network, are given priority at signalized intersections, and

have well-designed bus stations that allow easy passenger boarding. Fare is collected before

boarding rather than on board. Pairs of big, clean buses in the BRT fleet may be linked

(articulated) and their station stops and headways (waiting times) are precisely synchronized, so

that they can travel faster but more safely and reliably. Great emphasis is given by BRT designers

on the branding the BRT system with corporate names and markings on the buses, stations, and

busway intended to attract patronage.

Related to pre-boarding fare collection is a distinctive institutional feature of BRT. Fare

collection is assigned to an agency separate from the operator of the bus fleet. The operator and

his staff are compensated, not on the basis of fare revenues collected on board, but on

performance criteria previously agreed with the BRT owner (usually a public authority) and

resulting from a competitive bidding or negotiation with private contractors. Aside from the

primary operator(s), others may be invited to bid for peripheral parts of the BRT network (the

feeder routes to the trunk line). The fare collection, compensation, and tendering systems are

intended to promote competition for the market (entire routes) but not in the market

(different bus companies competing on the same routes and thus engaging in penny wars).

BRT systems have been implemented more or less successfully in Latin America, theU.S.Europe, and Asia, and have been seriously proposed here (notably in Cebu City). At least in the

pioneering cities of Latin America, the reforms and innovations they called for have taken a great

deal of time, resources, and political will. They have had to break out ofthe vicious regulatory

cycle in which existing public transportation systems are supposedly trapped (Gomez-Ibanez &

Meyer 1993: 18-19; Gwiliam 2008: 1184-1188).* The good news is that a BRT project developer can

start small , proceed incrementally with different combinations of BRT elements, and build up to a

more comprehensive system (Niles & Jerram 2010).

What can be done depends partly on the initial conditions. The Philippine public transport

system started as private enterprises that came under government regulation and control. The

--------------

*According to this view, a public transport system may start out either as a government

monopoly or an unregulated one dominated by private operators, go through different phases over

time, and eventually return to square one with no improvements in service. (Gomez-Ibanez &

Meyer 1993: 17-19).


15/38

15

Marcos regime (1972-1986) tried to consolidate the mostly private PUV operators into consortia

(bus companies) and cooperatives (jeepneys), and set up and ran its own bus company in Metro

Manila. The latter eventually folded up and, with permissiveness of deregulation policy since the

1990s, the bus consortia broke down and the PUV system was swamped by a multitude of small

and individual operators.* The current system is at best a mixed one where even the urban

railways (LRT and MRT) that have assumed a large share of mass ridership are run separately by the

DOTC and by a private corporation under contract with the government.

As shown earlier, government regulators have found it hard to ride herd on the road

transport system. Although some improvements have been made in Metro Manila circulation

(partly through the MMDAS draconian number-coding that now includes buses), congestion,

oversupply, and reckless driving behavior remain worrisome. PUVs are overcrowded at peak hours,

and underloaded or idle during lulls. PUV drivers take on and let off passengers mid-stream, still

race for fare despite a regulatory shift in the bus drivers compensation, and account for many of

the worst road accidents.

Given this kind of situation, it may be hard to get a radical project like BRT started and

sustained. Yet BRTs have been claimed to be just the sort of thing needed to get over the hump.

One of the principal reasons for BRTs recent success, BRT Planning Guide notes, has been its

ability for ending this vicious cycle tobreak the regulatory logjam (IPDP 2007: 550, 558). It is

no easy challenge, however.

BRT planning may start with the assessments of transport needs, then proceed to

determining which parts of the existing network could be marked out for a busway. This could be

Initially limited to a major corridor for operation by the primary bus operator(s), but futureexpansion with feeder branches to be served by other operators may already be envisioned.

Should the busway be exclusive or closed to other traffic, or should it run in mixed traffic (though

with priority lanes and priority at traffic signals), or perhaps in a combination of exclusive and

mixed-traffic lanes ? Even at this stage, such options could already be controversial and contested;

so could the institutional reforms needed.

----------------

*in 2007, a Mega Manila Public Transport Study reported that the system consists of

about 210 public utility bus (PUB) operators maintaining close to 3,000 units plying 62 routes,excluding about 15 provincial routes, and around 48,400 units of public utility jeepney (PUJ) plying

some 600 routes. There were also about 16,000 UV Express service units. (PCI Philippines & UP

PLANADES 2007: 1-1, 12-1). By 2010, these numbers had grown to 2,281 CPC owners with 16,744

PUB units, 124,146 PUJ franchisees with 134,004 units, and 17,824 taxi owners with 22,612 units.

On average, the CPC holders in Metro Manila had 8.18 PUB units, but the PUJ and taxi owners had

only somewhat more than 1 unit each.


16/38

16

Establishing the institutional structure for BRT is an intensely political process which

subjects the advice given by technical experts and management consultants ultimately to the

decisions of higher levels of government. Decisions at the strategic, tactical, and operational levels

(van de Velde 1999: 148) must be made as to the roles of policymaking, planning and regulatory

agencies, the BRT organization, and how to get existing private operators into the system. A

separate and new corporate organization to operate and manage the BRT system is usually created

by the national or local government sponsoring the project. In Colombia, the city of Bogota

created TransMilenio as the implementing agency for BRT (see Chart 2 appended) (IPDP 2007: 725).

As experience elsewhere shows, these tasks require strong political leadership, technical

knowledge, and intelligence about stakes in the present system, the interests, costs, contractual

obligations, and other matters . What role should be given to the regular agencies in charge of

road-building and transport regulation? In Bogota, the municipal department in charge of route

allocation was not given a seat in the Transmilenios board of directors because it was likely to lose

revenues from the new BRT route assignments. It was brought on board only after the BRT system

was already established. In Indonesia, Transjakarta was placed under the control of the

department of transportation, which showed great reluctance to cut parallel routes in the

Transjakarta corridor (Ibid.: 555).

Getting thousands of private operators to cooperate involved a struggle in Curitiba, Brazil,

that was marred by violence. There the consolidation process took several decades to accomplish,

while in Bogota, the transition was made all at once with the construction of the BRT system. In

order to force tens of thousands of private operators to the negotiating table, however, Bogotasmayor used carrots and sticks and also the intelligence gained from data and modelling about

route profitability. The bidding favored experienced operators but required them to form

companies and forced winners to destroy six old buses for every new bus they needed to buy.

(Ibid.: 556).

On implementation, let us quote IPDPs BRT Planning Guide to make a long story short:

Once the body of the operational design, physical design, and business plan are

complete, a political commitment will be required to move towards construction and

full implementation. The designation of an agency to oversee implementation shouldbe made well before the planning process ends. Also, many contractual agreements

will be required in order to legally release the implementation work. These contracts

will cover areas such as construction, maintenance, and operations. (Ibid.: 718).


17/38

17

At the outset, contract preparation was a major job that Transmilenio attended to. This was

done in cooperation with the city government. But since the latter did not have a legal

department, it had to contract out contract preparation! (Ibid.: 726) It is unclear whether

regulation was part of its functions, but contracting probably served as its functional equivalent

or major tool as far as the private operators were concerned. The operational contracts took a

whole year to prepare before the new BRT system could be launched starting with model

contracts and then with the versions that they negotiated with. (Ibid.: 726). Maintaining the

documents, monitoring compliance, renegotiation, etc. became a continuing job for Transmilenio.

Aside from construction companies for the infrastructure and the private operators for bus

operations, one other important party to be contracted with is the fare operator. This entity

designs, installs, operates and maintains the fare collection system at the BRT stations. The fare

revenues form part of the resources used to compensate the bus operators, but may be

supplemented by tax funds and do not necessarily determine the level of compensation. Instead,

this depends on agreed levels and quality of service , with or without subsidies and guarantees

against operating cost increases or declines in patronage. BRT operators, drivers, and other

contract personnel are thus paid on the basis, not of fare box revenue, but ofother performance

standards: total mileage*, schedules, safety and comfort. The separation of fare collection from

operational management is intended to avoid competition and penny wars on the road.

BRT Projects in the Philippines

Here lies, then, a basic difference with the reform efforts attempted in the Philippines. For

example, in order to reduce PUV competition on the road, the LTFRB has issued an MC shifting thecompensation of drivers and conductors from fare-based commission to regular salary (MC 2012-

001), and other means have been applied or proposed to slow down PUVs (particularly buses), such

as speed limits and speed-limiters. Without complementary institutional changes** like those

-------------

Transmilenio shared revenue risk in a way reasonably evenly divided between the city and

the operating companies. The trunk operators were paid by the bus kilometer regardless of

demand. If the demand turned out to be lower than projected, the operators suffered the loss.

In this case, Transmilenio had the right to reduce the total kilometers to be covered, while the

operators were allowed to extend their concession from 10 years until the average kilometers perbus reaches 850,000. In practice, however, there was usually no shortfall - ridership exceeded

anticipated demand. (Hook 2005: 12).

**A leader of provincial bus operators also pointed out in an interview that the measure is

focused on the compensation of drivers and conductors (who are likely to have their current

incomes reduced by the wage standard of the measure), when the total financial viability of bus

operations should have been attended to. (Yague 6/22/12).


18/38

18

embodied in BRTs, however, such measures are likely to have limited influence on driver behavior

and traffic problems, like the other innovations which have been tried (including bus, jeepney, and

motorcycle lane segregation). Buses with curious names like JAM, Safeway, Lippad, and

Kellen still whizz by, as though nothing has changed.*

BRT projects have, however, been proposed here. A business group has proposed a BRT

busway from the business center of Makati City to the emerging Global City in Taguig City. The

proponents, Ayala Land Inc. and the Makati Commercial Estate Association have presented an

unsolicited BOT project to the DOTC. It seems that it has not taken off. The government, though,

has recently sought expressions of interest in a feasibility study of a BRT project for Metro Manila

(without mentioned the ALI/MACEA proposal). The project in Cebu City probably had an earlier

headstart, has received aid from the World Bank and will likely get funding for implementation.

The BRT will run on an exclusive busway along a 15 km. corridor which may later stretch into

neighboring cities and towns. It is expected to involve 190 buses, 400 drivers, and 300,000 daily

passengers. The BRT has been billed as a PPP project seeking inclusion in the Presidents agenda,

with the infrastructure to be built by the government and the service to be fully run by the private

sector. (Lato 2010).

The institutional challenges to the BRT in Cebu are formidable. According to a World Bank

project information document (PID), the provincial, metropolitan, and local entities *there] do not

have the legal authority to develop road-based public transport. Cebu City does not have a

mandate and formal framework for passenger transport. The metropolitan organization is

designed purely for planning and is not comparable to MMDA (such as it is). A major component

of the BRT plan is the operationalization of the institutional arrangements for ownership,management, and operation of the BRT and its ancillary services. Existing or new agencies are

needed for implementation, procurement, operation and regulatory oversight, requiring legal,

administrative, and procedural innovations. (World Bank 2011: 3, 7. No mention was made in the

PID of the system for fare collection.)

The key risks to the Cebu BRT project, the World Bank PID warns, are at the institutional and

implementation agency levels. These are (i) the perceived high risk of corruption in the transport

sector, (ii) weak capacity and governance, (iii) potential opposition from the informal transport

sector, people to be resettled and proponents of a light rail system for Cebu, and (iv) the lack of

clear institutional arrangements. Another important uncertainty at this stage is the uncertainty asto whether the ultimate borrower will be DoTC or Cebu City. (Ibid.: 7).

--------------

*(See next page for footnote.)


19/38

19

Conclusion

Approaching its topics from an institutionalist perspective, this paper has discussed the

processes and problems of government regulation, with emphasis on rulemaking in the LTFRB; the

important task of contract management in the context of PPP; and the promise and institutional

challenges of BRT systems. We have highlighted the following points:

First, there appears to be a serious lack of basic guidelines or meta-rules for rulemaking in

the LTFRB (and probably in other regulatory agencies as well), and unbridled rulemaking has had

adverse consequences in the regulation of public road transport services. We have thus outlined a

way to fill this gap, though with caveats also derived from American experience with an open,

informal rulemaking system. More research is needed to ascertain the existence and

consequences of the quasi-legislative gap in other agencies.

Second, contract management has become a major administrative task in view of reform

efforts to downsize government but particularly in light of President Aquinos commitment to PPP.

PPP projects have not compiled a good track record abroad as well as at home, with some authors

saying that future assessments should be conducted away from policy cheerleaders. (Hodge &

Greve 2007: 545). PPP policymaking and contract management in the public interest call for

honing political and professional skills in risk analysis and allocation, dealing with unsolicited

proposals, maintaining as well as writing contracts, particularly in a volatile political environment,

and institution-building for contract professionals.

Third, BRTs have been successfully implemented elsewhere to break the regulatory cycle and

improve bus transport, and have been seriously proposed here, particularly in Cebu City. But givenproblematic starting points, BRTs pose great challenges for political leadership and institution-

building as well as for planning, regulation, and PPP-style financing. BRT projects may start small,

but the minimum scale feasible may be swamped by the hurdles on the way. They must be led by

-------------------

*The LTFRB Memorandum Circular (MC 2012-01, approved Dec. 13, 2011) requiring the shift

to a salary-based compensation system for bus drivers and conductors was to take effect fifteen

(15) days following its publication, but a TV report in the evening of June 26, 2012 said that it was

to take effect on July 1, 2012 yet. No wonder those buses were still whizzing by! In any event, my

surmise is that the bus drivers and operators are likely to resist the requirement or find some defacto way to restore the commission system; or, if they (eventually) comply, bus services are likely

to slow down considerably and many passengers will get ignored and left behind.


20/38

20

brave but pragmatic champions who wont lose sight of the public interest in ensuring that they

will bring about better and yet financially viable transit services.

Although long, this paper has just skimmed over its topics. It needs to go deeper into them.

Perhaps I have not said enough about related issues or events, such as when government

regulators fail to do in a big way, such as has happened in the American and British financial

systems, where governments have had to save banks and financial institutions that had grown too

big to fail but not to bail (read Stiglitz 2010). How about institutions that have remained

entrenched and powerful so that citizens have become puny and helpless before them, when they

raise their prices, impose penalties, or inflict other injustices? Or the re-assertion of personalism

and the family in government institutions through political dynasties?

I trust that others will pursue such issues in the frontiers of PA.

REFERENCES

Bautista, Victoria A. Negative Bureaucratic Behavior in the Regulation of Taxicab Businesses:

The Case of the Board of Transportation, Philippine Journal of Public Administration

(PJPA) 23/3&4 (July-Oct. 1979) 296-320.

Baylon, Minerva S. The Political Economy of Regulation in the Philippine Power Industry: The

Case of the Electric Power Industry Reform Act. Quezon City: National College of

Public Administration & Governance, University of the Philippines, 2010.

Carino, Ledivina Vidallon. Regulatory Governance in the Philippines: Lessons for Policy andInstitutional Reform,Regulation, Privatization and Public Sector Reform,

ed. by Paul Cook and Maria Fe Villamejor-Mendoza. Quezon City: National College

of Public Administration & Governance, U.P., 2006. Ch. 1, 1-34.

Cook & Villamejor-Mendoza, eds. Regulation, Privatization 2006.

Coglianese, Cary. E-Rulemaking: Information Technology and Regulatory Policy, Center for

Business and Government, John F. Kennedy School of Government, Harvard

University, 2004.

DOTC DO (Department of Transportation & Communications Department Order) 2005-10.

Flyvbjerg, Bent; Nils Bruzelius, and Werner Rothengatter. Mega Projects and Risk, An

Anatomy of Ambition. Cambridge, UK: Cambridge University Press, 2003.Freiberg, Arie. Re-Stocking the Regulatory Tool-Kit, Regulations in an Age of Crisis. Dublin,

June 17-19, 2010.

Gomez-Ibanez, Jose A., and John R. Meyer. Going Private: The International Experience

with Transport Privatization. Washington, D.C.: The Brookings Institution, 1993.

Gwilliam, Ken. Bus Transport; Is There a Regulatory Cycle? Transport Research

Part A: Policy and Practice 42/9 (Nov. 2008) 1183-1194.


21/38

21

Heady, Ferrel. The New Reform Movement in Regulatory Administration,Public

Administration Review19/2 (Spring 1959) 89-100.

Hodge, Grame H. Risks in Public-Private Partnerships: Shifting, Sharing or Shirking? The Asia

Pacific Journal of Public Administration 26/2 (Dec. 2004) 155-179.

Hood, Christopher. The Tools of Government. London: Macmillan, 1983.

Hook, Walter. Institutional and Regulatory Options for Bus Rapid Transit in Developing

Countries. Lessons from International Experiences January 2005. New York, NY:

Institute for Transportation and Development Policy. 16p. ([email protected])

Hunt, Alan. Governing the city: liberalism and early modern modes of governance, Foucault

and

Political Reason, ed. by Andrew Barry, Thomas Osborne, and Nikolas Rose. London:

Univer-

sity College of London (UCL) Press, 1996. Ch. 8, 167-188.

IAO/DOTC (Internal Audit Office, Department of Transportation and Communications).

Process

Audit, LTFRB Central Office and National Capital Region, IAO Control No. MA-2010-01.

No p.

numbers. Includes a Memorandum from the DOTC Secretary dated Oct. 8, 2010.

IFC International. The Reg Map Informal Rulemaking. Chart published by IFC International,

based

in the U.S. No date.

IPDP (Institute for Planning and Development Policy). Bus Rapid Transit Planning Guide, ed.

by

Lloyd Wright & Walter Hook, June 2007. 836p.

Jacobini, H.B. An Introduction to Comparative Administrative Law. New York: OceanaPublicat-

ions, 1991.

Kolber, Michael. Rulemaking without rules: an empirical study of direct final rulemaking.

The

Free Library by Farlex (from Albany Law Review (Jan. 1, 2009)). 21p.

LTFRB. 2011 Revised Rules of Practice and Procedure before the Land Transportation

Franchising

and Regulatory Board. Approved Sept. 1, 2011, effective Sept. 20, 2011.

Miral, R.E.M., Jr. PPP Policy Reviews: Possible Amendments and Modifications, presented

atan NCPAG/Center for Policy and Executive Development forum, Feb. 14, 2012.

Misra, Gopal. Public Private Partnership (PPP) Projects, The Constructor (02/16/2010) (http:

//theconstructor.org/construction/project/ppp/public-private-partnership)

Misra, Gopal. Risks in PPP Projects, Construction Management, Construction Project,

Construction Risks, Public Private Partnership (PPP), in The Constructor (2011) (http:

Theconstructor.org/construction/const-management/risks-in-ppp-projects)


22/38

22

Montanez, Jaime Frumencio J. The Need for Qualified Contracting Officers in the Armed

Forces

of the Philippines (AFP) Modernization Program, Thesis presented to the Naval Post-

graduate School, United States Navy. Monterey, CA: Dec. 2001.

NLTA (National Land Transportation Authority) Bill, S. No. 2234, 1st Reg. Sess., 14th Congress,

2008.

Introduced by Sen. Antonio F. Trillanes IV.

Negotiated rulemaking, Wikipedia, July 23, 2010

(hhtp://en.wikipedia.org/wiki/Negotiated_

rulemaking)

Niles, John, and Lisa Callaghan Jerram. From Buses to BRT: Case Studies of Incremental BRT

Projects in North America. Mineta Transportation Institute, College of Business, San

Jose

State University, June 2010. 110p.

Noveck, Beth Simone. WIKI Government: How Technology Can Make Government Better,

Dem-

ocracy Stronger, and Citizens More Powerful. Washington, D.C. Brookings Institution

Press, 2009.

Ocampo, Romeo B. Study of Political and Administrative Reforms: Integrated Report,

Philippine

Journal of Public Administration XXII/3&4 (July-Oct. 1978) 350-369.

Ostrom, Elinor. Understanding Institutional Diversity. Princeton, NJ: Princeton University

Press,

2005.

Paul, Samuel. Institutional Development in World Bank Projects, A Cross-Sectoral Review.Work-

ing Papers, Country Economics Department, World Bank, April 1990, WPS 392. 50p.

PCI Philippines & UP PLANADES. Mega Manila Public Transport Study (MMPTS), sponsored by

the DOTC and JICA, 2007.

Phang, Sock-Yong. Urban rail transit PPPs: Survey and risk assessment of recent strategies,

Transport Policy 14/3 (May 2007) 214-231.

Portugal, Ramon Camaclan. Background and Development of the Philippine Administrative

Law,

Ph.D. (Political Science) dissertation submitted to the Graduate School of Syracuse

Univer-sity, Sept. 1958.

Portugal, Ramon C., and Avelino B. Lim. Regulatory Agencies, Public Administration in the

Philip-

Pines, Edwin O. Stene & Associates. Manila: Institute of Public Administration,

University of

the Philippines, 1955. Ch. XIV.


23/38

23

Rakoff, Todd D. The Choice between Formal and Informal Modes of Administrative

Regulation,

American Law Review (Winter 2000) 1-11.

Regala, Roberto. The Development of Public Utility Regulation in the Philippines, Philippine

Law

Journal XII/7 (Jan. 1933) 463-479.

Ricote, Eli. Inclusive Growth through Properly Prepared Projects, PPP: A Backgrounder,

pre-

sented at an NCPAG/Center for Policy and Executive Development forum, Feb. 14,

2012.

Roy, Wiliam, and Anne Yvrande-Billon. Ownership, Contractual Practices and Technical

Efficiency:

The Case of Urban Public Transport in France, Journal of Transport Economics & Policy

41/2 (May 2007)

Ruhl, J.B., and James Salzman. In Defense of Regulatory Peer Review, Washington

University

Law Review 84/1 (2006) 2-61.

Salimbier, J. Paul. Designing Regulatory Systems: A Template for Regulatory Rule-Making

Part

I, Statute Law Review 23/3 (Sept. 2002) 165-190, and - Part II, loc. cit. 24/1 (Feb.

2003)

1-37.

Simpas, Santiago S., and Vivian Mariano. Policy Making under Martial Law, Philippine

Journal of

Public Administration XXII/3&4 (July-Oct. 1978) 223-253.SMEC, SMEC Wins Mass Rapid Transit Project in the Philippines, April 22, 2009.

Stiglitz, Joseph E. Freefall: America, Free Markets, and the Sinking of the World Economy.

New

York: W.W. Norton & Company, 2010.

Strauss, Peter L. Legislation that Isnt Attending to Rulemakings Democracy

Deficit,California

Law Review 98 (2010) 1351-1370.

Supreme Court. G.R. No. 170656 and G.R. No. 170657, decision promulgated Aug. 15, 2007.

U.P. Law Center Office of the National Administrative Register. National Administrative

Register.University of the Philippines Diliman, Quezon City.

USDOT (U.S. Department of Transportation). The Informal Rulemaking Process,

regs.dot.gov/

Informalrulesprocess/htm. Last updated 2/25/2010.

Villamejor-Mendoza. The Institutional Framework and Practice of Electricity Regulation in

the


24/38

24

Philippines, Regulation, Privatization , ed. by Cook and Villamejor-Mendoza, 2006.

Ch. 3,

65-98.

Viloria, Leandro A. Transportation Services, Governmental Services, H.B. Jacobini &

Associates,

1956. Manila: Institute of Public Administration, University of the Philippines, 1956.

Ch. XIII.

Vining, Aidan R., and Anthony E. Boardman. Public-Private Partnerships: Eight Rules for

Govern-

ments, Public Works Management Policy 13 /2 (2008) 149-161.

Wang, Yin. A Broken Fantasy of Public-Private Partnerships, Public Administration Review

69/4

(July-Aug. 2009) 779-782.

Woll, Peter. Administrative Law, the Informal Process. Berkeley, CA: University of California

Press,

1963.

World Bank. Philippines Transport for Growth, An Institutional Assessment of Transport Infra-

Structure. Poverty Reduction and Economic Management, East Asia and Pacific Region,

Feb. 24, 2009.

World Bank. Project Information Document (PID) Concept Stage, Report No.: AB6269, Jan.

24,

2011.

Yague, Alex. Interview, June 22, 2012. Mr. Yague is president of the Provincial Bus Operators

Asso-

ciation of the Philippines (PBOAP).

Newspaper Articles

Bayos, Kris. LTFRB considers forming bus consortium, Manila Bulletin, Aug. 1, 2011.

Bayos, Kris. Outgoing DoTC chief bares projects, Manila Bulletin, June 27, 2011.

Bordadora, Norman. China open to reconfiguring NorthRail project, says Roxas, Philippine

STAR, Sept. 2, 2011.

Calica, Aurea. Phl seeks to rebid NorthRail project, Philippine STAR, Sept. 2, 2011.

Domingo, Ronnel W. Govt earmarks P19.6B for PPP this year, Philippine Daily Inquirer,Feb.

15, 2012.

DOTC unveils hybrid PPP plan for big projects, Philippine Daily Inquirer, Sept. 30, 2011.

Dumlao, Doris C. Makati building owners submit plan for bus rapid transit system in

CBD,

Inquirer Entertainment, Sept. 26, 2011.


25/38

25

Kabiling, Genalyn D., and Kris Bayos. P-Noys paracetamol, Roxas assumes as DoTC head,

Manila Bulletin, July 5, 2011.

Lato, Cris Evert B. Cebu City awaits bus rapid transit system, Inquirer, Sept. 18, 2010.

mcpatdu. Buses can be as effective as trains, says prof, Clean Air Initiative (Sep. 30 2010)

(http: //cleanairinitiative.org/portal/node/6456)

Montecillo, Paolo G. DOTC opts to scrap Stradcom contract, Philippine Daily Inquirer, Feb.

14,

2012.

Montecillo, Paolo G. DOTC open to revised proposal on MRT 3, Philippine Daily Inquirer,

Aug.

10, 2011.

Montecillo, Paolo G. NEDA: Nothing wrong with P12-B Ro-Ro project, Agency disputes find-

Ings of DoTC under de Jesus, Philippine Daily Inquirer, June 13, 2011.

Osias, Jose. Regulatory bodies: are they of any use? letter to the editor, Philippine Daily

Inquirer, Sept. 21, 2011.

Palabrica, Raul J. Risks of arbitration, Philippine Daily Inquirer, Aug. 12, 2011.

PPP program expands to LGUs, Philippine STAR, Aug. 15, 2011.

Punongbayan, Michael. Inter-agency body formed to look into government contracts,

Philip-

pine STAR, July 20, 2011.

Ronda, Rainier Allan. DOTC unaware of NEDA review of RORO deal, Philippine STAR, June

14,

2011.

Rosario, Ben R. Honor foreign contracts, govt told, ACT TEACHERS PARTY-LIST, July 11,

2011.Ubac, Michael Lim. Review of BOT law sought, Philippine Daily Inquirer, Jan. 7, 2011.

REFERENCES/BIBLIOGRAPHY

(This list includes materials not specifically referred to in the paper, but which the reader may

find useful in further investigation of the topics covered.)


26/38

26

Armstrong-Wright, and Sebastien Thiriez. Bus Services, Reducing Costs, Raising Standards,

World Bank Technical Paper Number 68, Urban Transport Series. Washington, D.C.:

The World Bank, 1987. 97p.

Awit, Jujemay G. World Bank: Bus Rapid Transit faces 4 risks, Sun Star Cebu, May 29, 2011.


The Case of the Board of Transportation,Philippine Journal of Public Administration

23/3&4 (July-Oct. 1979) 296-320.

Baylon, Minerva S. The Political Economy of Regulation in the Philippine Power Industry: The

Case of the Electric Power Industry Reform Act. Quezon City: National College of

Public

Administration, University of the Philippines, 2010.

Carino, Ledivina Vidallon. Regulatory Governance in the Philippines: Lessons for Policy and

Institutional Reform, Regulation, Privatization and Public Sector Reform, ed. by Paul

Cook and Maria Fe Villamejor-Mendoza. Quezon City: National College of Public

Administration, U.P., 2006. Ch. 1, 1-34.

Cook & Villamejor-Mendoza, eds. Regulation, Privatization 2006.

Bus rapid transit, Wikipedia (file:///C:/Users/valuedclient/Documents/Bus_rapid_transit,

Wikipedia.htm)

Coglianese, Cary. E-Rulemaking: Information Technology and Regulatory Policy, Center for

Business and Government, John F. Kennedy School of Government, Harvard

University,

2004.

Contract management, Wikipedia (http://en.wikipedia.org/wiki/Contract_management)

(downloaded 2/15/12).Farina, Cynthia R. Achieving the Potential: The Future of Federal E-Rulemaking, Legal

Studies

Research Paper Series, Cornell Law School, 2/21/2010

(http://ssrn.com/abstract=1565027)

Flyvbjerg, Bent; Nils Bruzelius, and Werner Rothengatter. Mega Projects and Risk, An

Anatomy

of Ambition. Cambridge, UK: Cambridge University Press, 2003.

Freiberg, Arie. Re-Stocking the Regulatory Tool-Kit, Regulations in an Age of Crisis. Dublin,

June 17-19, 2010.

Garson, G. David. Partnering, Outsourcing, Contracting, and Procurement, PublicInformation

Technology and E-Governance, Managing the Virtual State. Sudbury, MA: Jones &

Bartlett Publishers, 2006. Ch. 10, 281-311.

Goodsell, Charles T. Six Normative Principles for the Contracting-Out Debate,

Administration &

Society38/6 (Jan. 2007) 669-688.
http://c/Users/valuedhttp://c/Users/valuedhttp://c/Users/valuedhttp://en.wikipedia.org/wiki/Contract_managementhttp://en.wikipedia.org/wiki/Contract_managementhttp://en.wikipedia.org/wiki/Contract_managementhttp://ssrn.com/abstract=1565027http://ssrn.com/abstract=1565027http://ssrn.com/abstract=1565027http://ssrn.com/abstract=1565027http://en.wikipedia.org/wiki/Contract_managementhttp://c/Users/valued


27/38

27

Gomez-Ibanez, Jose A., and John R. Meyer. Going Private: The International Experience with

Transport Privatization. Washington, D.C.: The Brookings Institution, 1993.

Government Procurement Policy Board. Handbook on Philippine Government Procurement.

Fifth Edition. (No publication date).

Gwilliam, Ken. Bus Transport; Is There a Regulatory Cycle? Transportation Research Part A:

Policy and Practice 42/9 (Nov. 2008) 1183-1194.

Haines, Fiona, and Adam Sutton. The engineers dilemma: A Sociological perspective on

juridi-

fication and regulation, Crime, Law & Social Change 39/1 (Jan. 2003) 1-22.

Heady, Ferrel. The New Reform Movement in Regulatory Administration, Public

Administration

Review 19/2 (Spring 1959) 89-100.

Hensher, David A. Bus Transport: Economics, Policy and Planning. Amsterdam, The

Netherlands:

Elsevier, 2007.

Hodge, Grame H. Risks in Public-Private Partnerships: Shifting, Sharing or Shirking? The Asia

Pacific Journal of Public Administration 26/2 (Dec. 2004) 155-179.

Hodge, Grame H., and Carsten Greve. Public-Private Partnerships: An International

Performance

Review, Public Administration Review67/3 (May/June 2007) 545-558.

Hodge, Grame H., and Carsten Greve, eds. The Challenge of Public-Private Partnerships:

Learn-

ing from International Experience. Northampton, MA: Edward Elgar, 2005. 357p.

2005.

Hood, Christopher. The Tools of Government. London: Macmillan, 1983.Hook, Walter. Institutional and Regulatory Options for Bus Rapid Transit in Developing

Countries.

Lessons from International ExperiencesJanuary 2005. New York, NY: Institute for

Transportation and Development Policy. 16p. ([email protected])

Hunt, Alan. Governing the city: liberalism and early modern modes of governance, Foucault

and

Political Reason, ed. by Andrew Barry, Thomas Osborne, and Nikolas Rose. London:

Univer-

sity College of London (UCL) Press, 1996. Ch. 8, 167-188.

IAO/DOTC (Internal Audit Office, Department of Transportation and Communications).Process

Audit, LTFRB Central Office and National Capital Region, IAO Control No. MA-2010-01.

No p.

numbers. Includes a Memorandum from the DOTC Secretary dated Oct. 8, 2010.

IFC International. The Reg Map Informal Rulemaking. Chart published by IFC International,

based
mailto:[email protected]:[email protected]:[email protected]:[email protected]


28/38

28

in the U.S. No date.

IPDP (Institute for Planning and Development Policy). Bus Rapid Transit Planning Guide, ed.

by

Lloyd Wright & Walter Hook, June 2007. 836p.

Jacobini, H.B. An Introduction to Comparative Administrative Law. New York: Oceana

Publicat-

ions, 1991.

Kolber, Michael. Rulemaking without rules: an empirical study of direct final rulemaking.

The

Free Library by Farlex (fromAlbany Law Review(Jan. 1, 2009)). 21p.

LTFRB. 2011 Revised Rules of Practice and Procedure before the Land Transportation

Franchising

and Regulatory Board. Approved Sept. 1, 2011, effective Sept. 20, 2011.

Miral, R.E.M., Jr. PPP Policy Reviews: Possible Amendments and Modifications, presented

at

an NCPAG/Center for Policy and Executive Development forum, Feb. 14, 2012.

Misra, Gopal. Public Private Partnership (PPP) Projects, The Constructor(02/16/2010) (http:

//theconstructor.org/construction/project/ppp/public-private-partnership)

Misra, Gopal. Risks in PPP Projects, Construction Management, Construction Project,

Construction Risks, Public Private Partnership (PPP), in The Constructor(2011) (http:

Theconstructor.org/construction/const-management/risks-in-ppp-projects)

Montanez, Jaime Frumencio J. The Need for Qualified Contracting Officers in the Armed

Forces

of the Philippines (AFP) Modernization Program, Thesis presented to the Naval Post-

graduate School, United States Navy. Monterey, CA: Dec. 2001.NLTA (National Land Transportation Authority) Bill, S. No. 2234, 1

stReg. Sess., 14

thCongress,

2008.

Introduced by Sen. Antonio F. Trillanes IV.

Negotiated rulemaking, Wikipedia, July 23, 2010

(hhtp://en.wikipedia.org/wiki/Negotiated_

rulemaking)

Niles, John, and Lisa Callaghan Jerram. From Buses to BRT: Case Studies of Incremental BRT

Projects in North America. Mineta Transportation Institute, College of Business, San

Jose

State University, June 2010. 110p.Noveck, Beth Simone. WIKI Government: How Technology Can Make Government Better,

Dem-

ocracy Stronger, and Citizens More Powerful. Washington, D.C. Brookings Institution

Press, 2009.

Ocampo, Romeo B. Study of Political and Administrative Reforms: Integrated Report,

Philippine


29/38

29

Journal of Public Administration XXII/3&4 (July-Oct. 1978) 350-369.

Ostrom, Elinor. Understanding Institutional Diversity. Princeton, NJ: Princeton University

Press,

2005.

Paul, Samuel. Institutional Development in World Bank Projects, A Cross-Sectoral Review.

Work-

ing Papers, Country Economics Department, World Bank, April 1990, WPS 392. 50p.

PCI Philippines & UP PLANADES. Mega Manila Public Transport Study(MMPTS), sponsored by

the DOTC and JICA, 2007.

Phang, Sock-Yong. Urban rail transit PPPs: Survey and risk assessment of recent strategies,

Transport Policy14/3 (May 2007) 214-231.

Portugal, Ramon Camaclan. Background and Development of the Philippine Administrative

Law,

Ph.D. (Political Science) dissertation submitted to the Graduate School of Syracuse

Univer-

sity, Sept. 1958.

Portugal, Ramon C., and Avelino B. Lim. Regulatory Agencies, Public Administration in the

Philip-

Pines, Edwin O. Stene & Associates. Manila: Institute of Public Administration,

University of

the Philippines, 1955. Ch. XIV.

Rakoff, Todd D. The Choice between Formal and Informal Modes of Administrative

Regulation,

American Law Review(Winter 2000) 1-11.

Regala, Roberto. The Development of Public Utility Regulation in the Philippines, PhilippineLaw

Journal XII/7 (Jan. 1933) 463-479.

Ricote, Eli. Inclusive Growth through Properly Prepared Projects, PPP: A Backgrounder,

pre-

sented at an NCPAG/Center for Policy and Executive Development forum, Feb. 14,

2012.

Roy, Wiliam, and Anne Yvrande-Billon. Ownership, Contractual Practices and Technical

Efficiency:

The Case of Urban Public Transport in France, Journal of Transport Economics & Policy

41/2 (May 2007)Ruhl, J.B., and James Salzman. In Defense of Regulatory Peer Review, Washington

University

Law Review84/1 (2006) 2-61.

Salimbier, J. Paul. Designing Regulatory Systems: A Template for Regulatory Rule-Making

Part


30/38

30

I, Statute Law Review 23/3 (Sept. 2002) 165-190, and - Part II, loc. cit. 24/1 (Feb.

2003)

1-37.

Simpas, Santiago S., and Vivian Mariano. Policy Making under Martial Law, Philippine

Journal of

Public Administration XXII/3&4 (July-Oct. 1978) 223-253.

SMEC, SMEC Wins Mass Rapid Transit Project in the Philippines, April 22, 2009.

Stiglitz, Joseph E. Freefall: America, Free Markets, and the Sinking of the World Economy.

New

York: W.W. Norton & Company, 2010.

Strauss, Peter L. Legislation that Isnt Attending to Rulemakings Democracy

Deficit,California

Law Review98 (2010) 1351-1370.

Supreme Court. G.R. No. 170656 and G.R. No. 170657, decision promulgated Aug. 15, 2007.

U.P. Law Center Office of the National Administrative Register. National Administrative

Register.

University of the Philippines Diliman, Quezon City.

USDOT (U.S. Department of Transportation). The Informal Rulemaking Process,

regs.dot.gov/

Informalrulesprocess/htm. Last updated 2/25/2010.

Villamejor-Mendoza. The Institutional Framework and Practice of Electricity Regulation in

the

Philippines, Regulation, Privatization , ed. by Cook and Villamejor-Mendoza, 2006.

Ch. 3,

65-98.Viloria, Leandro A. Transportation Services, Governmental Services, H.B. Jacobini &

Associates,

1956. Manila: Institute of Public Administration, University of the Philippines, 1956.

Ch. XIII.

Vining, Aidan R., and Anthony E. Boardman. Public-Private Partnerships: Eight Rules for

Govern-

ments, Public Works Management Policy13 /2 (2008) 149-161.

Wang, Yin. A Broken Fantasy of Public-Private Partnerships, Public Administration Review

69/4

(July-Aug. 2009) 779-782.Woll, Peter. Administrative Law, the Informal Process. Berkeley, CA: University of California

Press,

1963.

World Bank. Philippines Transport for Growth, An Institutional Assessment of Transport Infra-

Structure. Poverty Reduction and Economic Management, East Asia and Pacific Region,

Feb. 24, 2009.


31/38

31

World Bank. Project Information Document (PID) Concept Stage, Report No.: AB6269, Jan.

24,

2011.

Yague, Alex. Interview, June 22, 2012. Mr. Yague is president of the Provincial Bus Operators

Asso-

ciation of the Philippines (PBOAP).

Newspaper Articles

Bayos, Kris. LTFRB considers forming bus consortium, Manila Bulletin, Aug. 1, 2011.

Bayos, Kris. Outgoing DoTC chief bares projects, Manila Bulletin, June 27, 2011.

Bordadora, Norman. Chinaopen to reconfiguring NorthRail project, says Roxas, Philippine

STAR, Sept. 2, 2011.

Calica, Aurea. Phl seeks to rebid NorthRail project, Philippine STAR, Sept. 2, 2011.

Domingo, Ronnel W. Govt earmarks P19.6B for PPP this year, Philippine Daily Inquirer,

Feb.

15, 2012.

DOTC unveils hybrid PPP plan for big projects, Philippine Daily Inquirer, Sept. 30, 2011.

Dumlao, Doris C. Makati building owners submit plan for bus rapid transit system in CBD,

Inquirer Entertainment, Sept. 26, 2011.

Kabiling, Genalyn D., and Kris Bayos. P-Noys paracetamol, Roxas assumes as DoTC head,

Manila Bulletin, July 5, 2011.

Lato, Cris Evert B. Cebu City awaits bus rapid transit system, Inquirer, Sept. 18, 2010.

mcpatdu. Buses can be as effective as trains, says prof, Clean Air Initiative (Sep. 30 2010)(http: //cleanairinitiative.org/portal/node/6456)

Montecillo, Paolo G. DOTC opts to scrap Stradcom contract, Philippine Daily Inquirer, Feb.

14,

2012.

Montecillo, Paolo G. DOTC open to revised proposal on MRT 3, Philippine Daily Inquirer,

Aug.

10, 2011.

Montecillo, Paolo G. NEDA: Nothing wrong with P12-B Ro-Ro project, Agency disputes find-

Ings of DoTC under de Jesus, Philippine Daily Inquirer, June 13, 2011.

Osias, Jose. Regulatory bodies: are they of any use? letter to the editor,Philippine DailyInquirer, Sept. 21, 2011.

Palabrica, Raul J. Risks of arbitration, Philippine Daily Inquirer, Aug. 12, 2011.

PPP program expands to LGUs, Philippine STAR, Aug. 15, 2011.

Punongbayan, Michael. Inter-agency body formed to look into government contracts,

Philip-

pine STAR, July 20, 2011.


32/38

32

Ronda, Rainier Allan. DOTC unaware of NEDA review of RORO deal, Philippine STAR, June

14,

2011.

Rosario, Ben R. Honor foreign contracts, govt told, ACT TEACHERS PARTY-LIST, July 11,

2011.

Ubac, Michael Lim. Review of BOT law sought, Philippine Daily Inquirer, Jan. 7, 2011.

REFERENCES/BIBLIOGRAPHY

(This list includes materials not specifically referred to in the paper, but which the reader may

find useful in further investigation of the topics covered.)

Armstrong-Wright, and Sebastien Thiriez. Bus Services, Reducing Costs, Raising Standards,

World Bank Technical Paper Number 68, Urban Transport Series. Washington, D.C.:

The World Bank, 1987. 97p.

Awit, Jujemay G. World Bank: Bus Rapid Transit faces 4 risks, Sun Star Cebu, May 29, 2011.
