Regulations of Legislative Decree Nº 1012 that approves the Framework Law for the Public- Private Partnerships to create Jobs and issues provisions to speed up private investment promotion processes SUPREME DECREE Nº 146-2008-EF AGREEMENTS: D.S. Nº 020-2009-EF (Exemption to apply the Public-Private Comparison Methodology during the period 2009-2010, to some investment projects Agreement Nº 278-01-2009 (Directive Administration process and Assessment of Private Investment Projects is approved) D.S. Nº 014-2009-MTC, Single Final Additional Provision Agreement Nº 31-11-ESSALUD-2009 (New Investment Promotion Regulations for Investments in Infrastructure Works and Health Services is approved) THE PRESIDENT OF THE REPUBLIC WHEREAS: Legislative Decree Nº 1012 approved the Framework Law for Public Private Partnerships to create Productive Jobs and provides for Regulations to Speed up Private Investment Promotion Processes; Legislative Decree Nº 1016 modified the Third Temporary Additional Provision of Legislative Decree Nº 1012; Within this framework it is necessary to issue the regulations that allow for the application of what is established in Legislative Decree Nº 1012 and its amendment thereto; According to item 8) of Article 118 of the Constitution of Peru and with the Final First Additional Provision of Legislative Decree Nº 1012; With the approving vote of the Council of Ministers; HEREBY DECREES: Article 1.- Approve the Regulations of Legislative Decree Nº 1012, Framework Law for the Public-Private Partnerships to Create Productive Jobs and issues Provisions to Speed Up Private Investment Promotion Processes, same which has Three (3) Titles, Twenty (20) Articles, One (1) Additional Provision and One (1) Additional Repealing Provision, that are part of the present Supreme Decree. Article 2.- The present Supreme Decree will be countersigned by the Ministry of Economy and Finance. Given at the Government House in Lima, on the eighth day of December of 2012 ALAN GARCÍA PÉREZ Constitutional President of the Republic LUIS M. VALDIVIESO M. Ministry of Economy and Finance 03/05/2010 05:38:35 p.m. Page 1
REGULATIONS OF LEGISLATIVE DECREE Nº 1012 THAT APPROVES FRAMEWORK LAW FOR PUBLIC-PRIVATE PARTNERSHIPS TO CREATE PRODUCTIVE JOBS AND PROVIDES REGULATIONS TO SPEED UP PRIVATE INVESTMENT PROMOTION PROCESSES TITLE I GENERAL PROVISIONS Article 1.- Purpose The provision herein will provide regulatory standards and provisions to apply Legislative Decree Nº 1012 that approves Framework Law for Public-Private Partnerships to create productive Jobs and issue regulations to speed up private investment promotion processes. Article 2.- Scope of application and Transparency Principle 2.1 Pursuant to Legislative Decree Nº 1012 modified by Legislative Decree Nº 1016, hereinafter the Law, they are subject to the Regulations herein, all the Institutions that belong to the Nonfinancial Public Sector, pursuant to the Definitions Appendix of Law Nº 27245, Law of Fiscal Responsibility and Transparency, as amended. 2.2 All general references to Institutions in the present Regulations and any other provisions issued within the framework of the Law, will refer to all Institutions in the Non-financial Public Sector. 2.3 The transparency principle to which Article 5 of Legislative Decree Nº 1012 refers to is applied in the framework of Homologized Text of Transparency and Access to Public Information Law approved by Supreme Decree Nº 043-2003-PCM; applicable exceptions are the rights described in that provision, accordingly. apply: Article 3.- Definitions In order to better enforce the Law and the present Regulations the following definitions shall 3.1 Budget Capacity.- Budget capacity shall be construed as financial and budgetary viability of the public institution responsible of the co-finance by the Government. Financial and budgetary viability in the short term refers to an expenses plan in the current fiscal year pursuant to Laws Nº 28112 and 28411, and in the medium and long term to an expense plan in accordance to Law Nº 27245, as amended, and the Multiannual Macroeconomic Framework.. 3.2 Public Private Comparator.- The methodology that compares the net cost at present value and risk adjusted for the public sector, for executing the referenced project, and the cost for the same project executed by a public private partnership. Its numerical expression is called Value for Money. This methodology will be established in the Public Private Comparator Manual, to be approved by Ministerial Resolution from the Ministry of Economy and Finance, within 30 calendar days as of publication of the present provision. This methodology will be applied only to those cases described in item p of item 5.1 of article 5, in a period not exceeding 60 calendar days as of the date of delivery by the Institution of the Assessment Report stated in item 5.1 of article 5. 3.3 Total Cost of Investment.- It is the current value of the estimated investment flows in Project identification or in the last pre-investment study, accordingly. The Total Cost of Investment does not include the operation and maintenance costs. The discount rate to be used to calculate the current value will be one defined in the Public Private Comparator Methodology. 03/05/2010 05:38:35 p.m. Page 2 A
3.4 Total Project Cost.- It is the Total Investment Cost plus the estimated operation and maintenance costs of a Project or a set of projects with similar characteristics expressed at current value, of the first ten (10) days of the project or its lifespan, whichever is shorter. The discount rate to be used to calculate the current value shall be the one defined in the Public Private Comparator Methodology. 3.5 Fiscal responsibility.- To enforce the Law, fiscal responsibility shall be construed as the efficient use of public resources, in accordance to Law Nº 27245, Responsibility and Fiscal Transparency Law, as amended. TITLE II PUBLIC PRIVATE PARTNERSHIPS Article 4.- Guarantee limits for Public-Private Partnerships classification Pursuant to Article 4 of the Law: 4.1 The guarantees referred to in item i, item a of article 4 of the Law shall be considered minimum if they do not exceed 5% of the Total Investment Cost, which do not include the operation and maintenance costs. The methodology for the required calculations will be published by Ministerial Resolution from the Ministry of Economy and Finance; 4.2 To be considered non-financial guarantees with minimum or zero probabilities the probability of using public resources shall not exceed 10% for each of the first five years of project execution. The methodology for the required calculations will be published by Ministerial Resolution from the Ministry of Economy and Finance. 4.3 Should it exceed the limits described in items 4.1 and 4.2 of the present Regulations, then it will be deemed that the guarantees have a significant probability of needing public resources. Article 5.- Incorporation of processes and allocation to the Private Investment Promotion Institutions - OPIP 5.1 To incorporate PPP infrastructure and public service projects to the private investment promotion process, the Institution will prepare and send to the correct OPIP an Assessment report with the following: For all types of Project: a. Name, description and project objective. b. Importance and consistency with local, regional or national priorities, accordingly. c. Classification as a self-sustainable project or co-financed. For self-sustainable projects: d. Diagnosis of the current provision, identifying thr characteristics of demand and the existing offer in terms of coverage and quality. e. Preliminary description of the degree of service to attain. 03/05/2010 05:38:35 p.m. Page 3
f. Investments and estimated operation and maintenance costs. g. Tariff rates. h. Preliminary economic-financial assessment as PPP. i. Preliminary risk allocation. j. Guarantee estimates that might be required. k. Support of guarantee payment capacity, if required. l. Advantages of executing the Project as PPP. m. Preliminary estimates of supervision costs for co-financed projects: system n. Declaration of viability in conformity to the provisions of the National Public Investment o. Information related to items d, e, f, g, h, i, j, k, of the present item that is not included in the approved Pre-investment Study p. Advantages of developing the Project as a PPP, including a quantitative assessment when project cost exceeds 100 000 Tax Units (UIT) of the total project cost and require a co-finance over 30% of said cost. This assessment will be made using the Public Private Comparator Methodology defined in item 3.2 of the Regulations hereto. 5.2 For projects of national scope, the pertaining OPIP will process with a favorable opinion, enclosing the corresponding Promotion Plan project, the Supreme Resolution of incorporation to the private investment promotion process and approval of the Promotion Plan. For self-sustainable projects that require guarantees and co-financed projects, the approval of the Supreme Resolution by the Ministry of Economy and Finance will be performed necessarily prior to the favorable opinion by the pertaining institutions. The requested opinion will be given in fifteen (15) working days as of receipt of the complete request. 5.3 For projects of regional or local scope, the pertaining OPIP will process with a favorable opinion, enclosing the corresponding Promotion Plan project, the Regional Council or Provincial Council agreement of incorporation to the private investment promotion process and approval of the Promotion Plan. For self-sustainable projects that require guarantees and co-financed projects, the favorable vote of the Ministry of Economy and Finance will be necessary. The requested opinion will be given in fifteen (15) working days as of receipt of the complete request. 5.4 The Supreme Resolution or the incorporation agreement, accordingly, will allocate the process to an OPIP, taking into consideration the following: i) The projects with national scope with the conditions listed below will be assigned to PROINVERSION: a. A total investment amount in excess of 15,000 UIT (tax units). b. Multisectorial. 03/05/2010 05:38:35 p.m. Page 4
c. Have a geographical scope covering more than one region. d. The Institution has requested PROINVERSION to manage the process and its Steering Council has accepted the request. ii) National scope projects not included in item i) of item 5.4 will be given to the Investment Committees of the corresponding Ministries iii) Regional Governments will be given those projects within their scope and those projects with a geographical scope encompassing more than one province. ii) Local Governments will be given those projects within their scope, pursuant to article 6 of the Law. 5.5 Se The private investment promotion process will incorporate similar projects or similar set of projects that do not require co-financing or guarantees, but should they do, the total investment amounts must exceed 10,000 UIT (tax units) and contract terms over five (5) years. 5.6 An investment Project may not be executed by a PPP when its only scope is the provision of workforce, offer and equipment installation or public works execution. 5.7 The studies required by the Institution to perform the assessment of an investment project and the analysis of its execution model, under the provisions of this Title, may be made by a private institution pursuant to the legislation in force. This institution may not provide consulting services, whether direct or indirect, to possible participants to private investment promotion processes referred to the same investment project. Failure to fulfill this provision will result in the exclusion of participant and PPP contract nullity when found out after contract has been signed. Article 6.- Self-sustained Public Private Partnerships 6.1 Once the Supreme Resolution has been issued or the incorporation and approval of the corresponding Promotion Plan, the projects to provide infrastructure and public services through PPPs, classified as self-sustainable, as established in item 9.1 of the Law, will continue their development within the framework of the Homologized Text of the Provisions of the Rules with the Force of Law that regulate concession awarding to the private sector of infrastructure public works and public services approved by Supreme Decree Nº 059-96-PCM, of Legislative Decree Nº 674 and other private investment promotion provisions that may be applicable. 6.2 If during any stage of the process OPIP decides that a project is no longer selfsustainable, according to to the provisions and procedures applicable to co-financed PPPs, with prior confirmation from the Institution of its interest in the execution of the Project under the new conditions. Article 7.- Co-financed Public Private Partnerships 7.1 The PPP infrastructure and public service projects classified as co-financed described in tem 9.2 of the Law, shall meet the requirements and procedures established in the National Public Investment System Law, the National Debt System Law and its related regulations and amendments thereto. 7.2 Transfer in use, in usufruct, or under any similar circumstance, infrastructure, or preexisting real-property shall be considered, as long as there is no transfer of property and are directly linked to the project purpose. 03/05/2010 05:38:35 p.m. Page 5
. 7.3 In those cases where project cost exceed 100 000 UIT (tax units) and require a co-finance in excess of 30% of said cost, the Institution shall make a quantitative assessment of the cost-benefit of developing PPP projects, pursuant to item 3.2 of article 3 and item p of item 5.1 of article 5 (*) CORRECTED IN CORRECTIONS1). 7.4 The top highest co-finance amount shall be approved by the OPIP, with the approval from the Ministry of Economy and Finance, prior to approval of the final draft of the contract. Also, it will need the approval from the Ministry of Economy and Finance in what regards to fiscal responsibility and budget capacity. 7.5 The processes will be developed under the Homologized Text of the Provisions of the Rules with the Force of Law that regulate concession awarding to the private sector of infrastructure public works and public services approved by Supreme Decree Nº 059-96-PCM, of Legislative Decree Nº 674 and other private investment promotion provisions that may be applicable. Therefore, the Institution and the pertaining OPIP will enter into a cooperation agreement with PROINVERSION under the applicable legislation. Article 8.- Final draft of Public Private Partnership contract and amendments thereto Pursuant to item 9.3 of the Law and in the terms and conditions established therein, notwithstanding the special provisions applicable to the self-sustainable and co-financed PPPs, correspondingly, the final draft of the contract and the amendments thereto, will require the approval of the pertaining public institution and the Ministry of Economy and Finance, as well as that of the regulating agency and the Office of the National Comptroller General. Article 9.- Procedures and grounds for renegotiating the Public Private Partnership contract Except for those cases connected to material errors or by requirements from allowed creditors linked to the PPP contract financial closure stage, addendums shall not be permitted during at least the first three years as of contract signing date. Once said time period is over, addenda may be added to the PPP contract with prior approval from the authorized Regulating Institution, when they are public service projects under its jurisdiction. Also, approval from the Ministry of Economy and Finance will be needed for amendments altering co-finance or the guarantees. Approvals should be requested simultaneously to the different institutions, meaning they should be requested with a time difference not exceeding two (2) working days. The approvals should be issued with ten (10) working days maximum as of receipt of the opinion/approval request, after which it shall be considered favorable. If the addendum distorts or misinterprets the purpose of the original project or involves an additional amount in excess of 15% of the Total Project PPP Cost, the Institution as long the nature of the Project allows it, will assess the convenience of making a new selection process as an alternative to negotiate an addendum to the contract. (*) (*) Article modified by Article 1 of Supreme Decree N 144-2009-EF, published on June 25,2009, whose text is as follows: Article 9.- Procedure and causes for renegotiating the Public Private Partnership contract During the first three (3) years as of the date of signing the Public Private Partnership contracts, the sectors with jurisdiction may only sign the addenda of said contracts, provided that it is the correction of material errors; requirements from authorized creditors linked to the contract financial closure stage; if it specifies operational aspects for better concession contract execution; or, or the need to advance the investment program is explained chargeable to the retribution established in the contract in favor of the Government and said amendment does not imply any contract change, from self-sustainable to co-financed, nor Government payments established in the contract are raised. 03/05/2010 05:38:35 p.m. Page 6
In any case, the parties shall strive to preserve the nature of the concession; the economic and technical conditions agreed; and, the financial balance for both parties. In order to process any contract modification request, approval from the corresponding Regulating Institution will be needed when it is a matter concerning infrastructure public works projects and public services under its jurisdiction. Also, it will require approval from the Ministry of Economy and Finance when modifications or amendments change the co-finance or the guarantees. The approvals shall be requested simultaneously with a time difference not exceeding two (2) working days to the institutions involved, the approvals should be issued with ten (10) working days maximum as of receipt of the opinion/approval request, after which it shall be considered favorable. Once the time period referred to in the first paragraph of this article is over, if the addendum proposed changes the purpose of original project or if it involves an additional amount over 15% of the Total Public-Private Partnership Project Cost, the Institution, provided that the nature of the project allows it, will assess the convenience of making a new selection process as an alternative to negotiating an addendum to the contract. Article 10.- Arbitration Clauses 10.1 The arbitration clauses to be included in the PPP contracts as established in item 9.6 of article 9 of the Law, will be governed by the following provisions: a. Disputes concerning unrestricted matters by the parties may be brought to arbitration, pursuant to Article 2 of Legislative Decree Nº 1071, Legislative Decree that Regulates Arbitration. Therefore, decisions by the regulating institutions or any other entities made in execution of their administrative jurisdictions given by express provision, whose claim should be resolved by administration may not be resolved by arbitration. b. Must consider de jure arbitration as a mechanism to solve disputes. c. In case of a difference between technical and non-technical disputes, the latter ones may be subjected to arbitration ex aequo et bono. 10.2 The provisions about transference of contract powers will preserve the technical, legal and financial sufficiency required to guarantee a correct PPP operation, keeping in mind the contract execution stage in which the powers transfer happens. 10.3 Should the provisions on economic-finance balance be included, they will specify that re-establishment of same shall be invoked only if it is significantly affected, exclusively due to a change in applicable laws, in the extent that said changes have direct relationship with economicfinancial aspects linked to the variation of income or costs borne by the investor. Article 11.- Terms and tenor of the opinions/approvals for Public-Private Partnerships 11.1 The contracts will establish a specific chapter to consolidate the economic-financial commitments, the guarantees borne by the Government and in general, and the aspects that commit credit or the financial capacity of the Government. The opinions from the Ministry of Economy and Finance and report from the Office of the Comptroller General will refer to, exclusively, the content to that chapter. Also, the opinion of the regulating institution to which item 9.3 of the Law refers to, shall restrict to tariff matters, essential facilities and quality service, which should be in specific chapters in the contract. 03/05/2010 05:38:35 p.m. Page 7
11.2 The term for the Ministry of Economy and Finance to issue an opinion as established in item 9.1 of the Law, as well as what is established in item 9.3 for the Ministry of Economy and Finance and the regulating institution will be no more than 15 (fifteen) working days as of receipt of the documentary support. To that end, these institutions will have one single five-day term as of the date of receipt of the documentary support to request the missing information. 11.3 In the case of amendments to the final draft of the contract, the term for issuing the opinions described in item 9.5 of the Law, will be 10 (ten) working days. 11.4 In those cases established in articles 9.3 and 9.5 of the Law, once the terms have expired, it will be understood that the opinion is favorable. Article 12.- Firm and contingent commitments 12.1 In what concerns what is established in article 11 of Legislative Decree Nº 1012, we must consider the following: a. The Institution has to honor the firm commitments in a PPP, it has the exclusive responsibility of doing the scheduling, prioritization and the consideration of same in its institutional Budget according to the current legislation; b. Firm and contingent commitments are those explicitly included in the Public-Private Partnership concession contracts, in order to take into account the project risks; and c. With Directorial Resolution, the General Office for Economic and Social Affairs (DGAES in Spanish) will approve the methodology to valuate quantifiable contingent liabilities and the income flow stemming from the operation of projects given in concession with PPP contracts. d. 12.2 With Directorial Resolution, the General Office for Economic and Social Affairs (DGAES in Spanish) will approve the methodology to valuate quantifiable contingent liabilities and the income flow stemming from the operation of projects given in concession with PPP contracts. 12.3 With Ministerial Resolution, the Ministry of Economy and Finance will issue the required provisions for specifications or amendments regarding the registry of firm and contingent quantifiable commitments. TITLE III PRIVATE INITIATIVE REGIME Article 13.- Purpose The purpose of the provisions contained in this present title is to regulate treatment of asset investment projects, companies, projects, services, infrastructure public works and public services that are executed because of private initiative, within the scope of the respective jurisdictions of different government levels. Article 14.- Nature of Private Initiatives Private initiatives may not demand financial guarantees from the Government and nonfinancial guarantees will be subject to what is established in sub-item ii, item a), article 4 of the Law. 03/05/2010 05:38:35 p.m. Page 8
Article 15.- Requirements to submit private initiatives in investment projects 15.1 Private initiatives in investment projects will be submitted before the competent OPIP, pursuant to the Regulations herein. 15.2 The minimum content demanded to submit is as follows: a) Name or legal name of applicant with personal information, in addition to the powers of attorney of legal representative. b) Proposal of type of participation of private investment CONCORDANCES: Agreement Nº 278-01-2009, item. b), sub-item 6.2.1, num. VI c) Description of Project, including: (i) Name and type of project, indicating asset, company, service, public infrastructure works and/or Government public services upon which the Project will be developed, as well as references about the office or government level that owns the assets or the legal situation of same; (ii) Goals; (iii) Concrete benefits to be achieved by project execution for the population of the location where it will be developed and, if applicable by the type of project; (iv) preliminary project engineering where necessary technical information regarding the private initiative submitted is included, according to project characteristics; (v) Reasons why the project, subject to approval, is chosen among other alternatives. CONCORDANCES: Agreement Nº 278-01-2009, item. b), sub-item 6.2.1, num. VI d) Scope of Influence of Project. CONCORDANCES: Agreement Nº 278-01-2009, item. b), sub-item 6.2.1, num. VI e) Project economic and financial assessment, taking into consideration the estimated value of the investment, estimated demand, estimated costs, financial plan and other elements that may facilitate the analysis by the OPIP. f) Preliminary assessment of environmental impact and if applicable, the social and environmental mitigation plan. g) Estimated term or effect proposal of the private investment participation contract. h) Financial capacity of applicant and experience in executing similar size projects. i) A sworn statement shall be enclosed stating that the private initiative will not request public co-finance, financial guarantees from the Government or non-financial guarantees with a significant probability of demanding the use of public resources, according to item 4.2 of the provisions herein. CONCORDANCES: Agreement Nº 278-01-2009, item. b), sub-item 8.2, num. VIII 15.3 The private initiatives submitted will not include investment projects that coincide in part or totally with those which the Private Investment Promotion Institutions would have approved the respective Private Investment Promotion Plan. However, in the event said plan had been approved and two hundred forty (240) working days had passed with no call for tenders as per Current Provisions in Private Investment Promotion matters, accordingly defined in Article 4 of Supreme Decree Nº 015-2004-PCM, the OPIP may 03/05/2010 05:38:35 p.m. Page 9
accept processing and assessing the private initiative. 15.4 A sworn statement will be enclosed to the information described in item 15.2 itemizing the expenses effectively incurred in preparing the submitted initiative. Corresponding documentation of the expenses declared will be delivered upon request by the OPIP, without whose assessment there will be no declaration of interest. CONCORDANCES: Agreement Nº 278-01-2009, sub-item 11.3, num. XI Article 16.- Criteria to assess the private initiatives in investment projects When assessing private initiatives, the OPIP will take into account, among other, the following criteria: a) The proponent s financial and technical competence to develop projects of similar size to the one proposed. b) If the investment project is economically and socially profitable. c) If the investment project is not liable of affecting the environment, the landscape of an area declared as a protected wildlife area and/or Cultural Heritage of the Nation. CONCORDANCES: Agreement Nº 278-01-2009, item 6.3.7, num. VI Article 17.- Process of private initiatives in investment projects The process for private initiatives in investment projects will follow the provisions below: 17.1 Once the private initiative has been submitted and admitted for processing the information contained in item b), in sub-items i, ii and iii of item c) and in item d) of item 15.2 of the Provisions herein it will be poste don the OPIP web page, and it will then be assessed and the project declared of interest. 17.2 The OPIP may request additional information to the owner of the initiative and may condition continuing the assessment to the delivery of the requested information within a reasonable time period of thirty (30) working days. Should this not happen, the initiative will be rejected. 17.3 When the private initiatives are under the jurisdiction of the National Government, PROINVERSIÓN will have to request opinion the corresponding sector(s) on the interest and relevance of the project, and, in matters under its jurisdiction, to the corresponding Regulating Institution, plus technical opinion to other agencies. The institutions to which an opinion has been requested, must issue it within twenty (20) working days, under responsibility. The opinion from the corresponding sector or sectors will be binding. In those cases where opinion has been requested to more than one sector, approval from all of them will be needed. The approval of the Ministry of Economy and Finance is necessary in those cases where the initiatives require granting of non-financial guarantees pursuant to the Regulations herein. For private initiatives financed with public service fees, prior to the declaration of interest, there must be the approval of the corresponding regulating institution in those matters under its jurisdiction. 03/05/2010 05:38:35 p.m. Page 10
Should the regulating institution not give its approval or disapproval within the established period of time pursuant to the second paragraph of this item, it will be construe that as approved. 17.4 The OPIP has the right to propose the extensions and/or amendments it considers convenient and/or necessary in the content and design of the submitted private initiative, with the prior opinion from the sector. The OPIP will inform the title holder of the private initiative, in writing, of the extensions and/or amendments proposed so it may express its conformity or disconformity with same; therefore the interested party will have fifteen (15) working days as of the receipt of the notice delivered by OPIP. In case of disconformity from the interested party or if he does not express an opinion within the established period of time, the OPIP will reject the initiative through an express notice. Rejection to the initiative may not be impugned whether judicially or administratively. 17.5 Once the private initiative is submitted, its title holder may not make any substantial amendments or extensions including substitution of title holder of the private initiative as well as the formation of the consortia, if applicable, which may only be proposed until before the declaration of interest, and afterwards will be regulated pursuant to the conditions in case of a Tender or, if the case be, in the direct award contract. 17.6 Once the private initiative is declared of national interest, the OPIP will proceed to notify the interested party of the decision in five (5) working days as of the date of the agreement. The OPIP, for public knowledge, will post the Declaration of Interest in the Official Gazette El Peruano and in another newspaper with nationwide distribution on expense of the requester, as well as on the OPIP web page, in ten (10) calendar days as of the date when the requester pays for the aforementioned costs and delivers the letter of guarantee referred to in Article 15 of Legislative Decree Nº 1012, which should be done in ten (10) calendar days as of communication of declaration of interest. In the event OPIP were not satisfied with the letter of guarantee and payment for the posting mentioned in the preceding paragraph, OPIP will repeal it and the title holder will lose all rights linked to it. CONCORDANCES: Agreement Nº 278-01-2009, item 7.4, num. VII Article 18.- Procedures for selecting investment project execution 18.1 Within the ninety (90) calendar-day period established in Article 16 of Legislative Decree Nº 1012, third parties interested in the same investment project and/or an alternate investment project aimed at a different goal although referred to Government assets or resources matter of the original initiative may appear before the OPIP to express their interest. To this end, pursuant to what is contained in the declaration of interest, the following must be enclosed: (i) the request for declaration of interest in regards to the same investment project or an alternate one according to the model to be included in it, (ii) the corresponding letter of guarantee and (iii) if applicable, the additional documentation demanded by OPIP. 18.2 In the event that during the period of time established in Article 16 of Legislative Decree Nº 1012, interested parties were to show up complying with submitting the documentation requested in the Regulations herein, we will proceed as follows: 03/05/2010 05:38:35 p.m. Page 11
a) Additional appearance of three or more interested parties In the event there were three or more additional interested parties besides the title holder of the initiative, the OPIP will opt for a Special Public Tender or will promote a Comprehensive Project Tender, calling the three interested parties and the proponent for bids. The selection process will be performed as per the tender conditions and the provisions applicable for these matters, and the letter of guarantee will be returned to the Title Holder of the Private Initiative. b) In the event there is one or two additional interested parties besides the title holder of the initiative. In the event there is one or two additional interested parties besides the titleholder of the initiative, the OPIP will opt for a Public Offer where the titleholder of the initiative and interested parties that expressed interest and delivered a letter of guarantee may take part. The Public Offer will be governed by the tender conditions, same which will include the information posted in the declaration of interest and the corresponding administrative conditions. 18.3 In the event the private initiative is under assessment and the OPIP verifies that one or more private initiatives have been admitted for processing regarding: a) The same investment project The OPIP will continue processing the first private initiative admitted for processing. In case this initiative were declared of interest, it will abide by item 17.6 of the Regulations herein, and in the event there were other interested parties, the OPIP will opt for a special public tender, comprehensive Project tender, or public bid mechanism making a call for bids among the third parties interested and the proponent in conformity with item 18.2 of the Regulations herein, returning back the letter of guarantee delivered by the title holder of the Private Initiative (*) CORRECTED IN CORRECTIONS(2). The assessment of the second initiative admitted for processing will remain suspended until the declaration of interest or the rejection of the first initiative admitted for processing is resolved. In case the first private initiative was not declared of interest, the next initiative will be assessed and so on. b) An investment Project that OPIP considers an alternative to the private initiative currently under assessment Duly supported and explained the initiative that offers the Project with higher social profitability, which will be approved by the highest office in OPIP. For initiatives submitted to PROINVERSION, the award of preference will have prior opinion from the sector or sectors involved. The declaration of preference by OPIP will suspend processing and/or assessment of the non-preferred private initiative. If the investment project contained in the private initiative declared preferred is called to a selection process by any of the public offer mechanisms or in case of direct awarding the contract is signed, the suspended private initiative will be rejected. 18.4 For the present provisions, alternate projects will be those that expecting the use of the same resources, find they are not destined to the same objective. The projects aimed at the same objective will be considered as the same investment project, even though they use different technologies. 03/05/2010 05:38:35 p.m. Page 12
18.5 In regards to the right to match established in the fourth paragraph of item a) of Article 16 of Legislative Decree Nº 1012, the title holder of the initiative must meet the requirements demanded in the Conditions, plus having submitted all the required documentation in order to be considered a pre-qualified bidder, as well as a valid technical and economic offer, as established in the Conditions. 18.6 If the awarding of the investment project execution were to be given to the title holder of a proposal different from the one from the author of the private initiative, the expenses incurred in preparing the initiative will be reimbursed pursuant to article 20 of the present Regulations. 18.7 To admit for processing an expression of interest it will need enclosed, as a proof of its seriousness a bank-issued bid bond, which will be unconditional, irrevocable, automatic, joint and several, in favor of the OPIP to which the new initiative or the expression of interest is submitted. To establish the amount of the bid bond we must consider the investment involved in the Project declared of interest. In the aforementioned cases the bid bond will be executed in the event of whomever expressed interest would not sign the contract or comply with submitting a valid economic offer in the public tender called, accordingly. 18.8 In the event that once the declaration of interest is posted, one or more interested third parties submitted alternate projects the OPIP may reject them unless it decides that they are much more beneficial to society than the original initiative. If so, a comprehensive Project tender ought to be called for and an awarding factor should be include in the tender conditions that guarantees competition among the different alternate projects. In any case, the reimbursement of expenses described in article 20 will belong to the title holder of the original initiative. CONCORDANCES: Agreement Nº 278-01-2009, item 10.2, num. X Article 19.- Awarding or direct concession of the investment project If the awarding and/or direct concession were appropriate the following provisions will apply: 19.1 For PROINVERSION, the agreement referred to in Item b) of Article 16 of Legislative Decree Nº 1012 will be approved by its Steering Council. In the case of Regional and Local Governments, this agreement will be adopted by the Regional Council or the Municipal Council, as appropriate. 19.2 The definition period for the final draft of the private investment participation contract will not exceed thirty (30) working days, as of the adoption of the agreement described in preceding item 19.1. This period may be extended up to fifteen (15) additional working days. 19.3 The final draft of the private investment participation contract mentioned in the preceding item will exclusively address those non substantial aspects aimed at making its execution possible, and may not modify the essential elements included in the declaration of interest mentioned in the fifth paragraph of Article 15 of Legislative Decree Nº 1012. 19.4 If the sworn statement mentioned in Item i) of item 15.2 of the regulations hereto were not truthful at any stage of the procedures, the OPIP will stop the process and void any type of approval that may have been given. 03/05/2010 05:38:35 p.m. Page 13
Article 20.-Reimbursement of expenses 20.1 In regards to the reimbursement of expenses effectively incurred by the author of the private initiative while preparing the initiative, the following will be applied: a) The expenses that, at the discretion of OPIP, are reasonable and correctly documented will be acknowledged in the declaration of interest issued by that institution. b) The Conditions for the Selection Procedures, carried out to apply the types of participation of private investment mentioned in Article 6 of Law Nº 28059, must establish that the expenses incurred in preparing the private initiative will be borne by the awarded bidder. Payment constitutes a requirement to be met on the date the contract is signed at the latest and as a preceding condition for its effect, pursuant to the Schedule established in the Conditions for the Selection Procedures. c) Reimbursement will not be applicable in those cases where the selection process is not performed and/or s not concluded due to causes beyond the control of the OPIP. d) Reimbursement will not proceed if the owner of the private initiative does not submit a valid economic offer in the Tender. 20.2 The total amount of the expenses to be reimbursed will not exceed 1% of the reference value calculated for the selection procedure for rendering public services, except for projects whose investment reference value does not exceed an amount similar to one thousand one hundred twenty (1,120) Tax Units (UIT) current at the moment of submitting the initiative, in which case the limit will be previously established in the document approving the initiative, and cannot exceed by 5% the total value of the works and/or the reference value established for rendering of public services. ADDITIONAL PROVISIONS SINGLE.- In order to comply with the Third Final Additional Provision of Legislative Decree Nº 1012 it is hereby ordered that the execution of the transfer of companies in the process of liquidation under the Board of Liquidators in charge of the processes carried out according to Item d) of Article 2 of Private Investment Promotion Law for Government Owned Companies Legislative Decree Nº 674, shall be subject to the following: 1. Once the Supreme Resolution that confirms the Agreement of the Steering Council of PROINVERSION that excludes the companies in process of liquidation under Legislative Decree Nº 674 and dismisses the appointed liquidators, FONAFE will proceed to make the call to General Shareholders Meeting for each of the companies in order to confirm termination the appointment of the members of the Board of Liquidators, agree the appointment of the new liquidators and grant the necessary powers of attorney, pursuant to the General Law of Corporations and FONAFE Directives. 2. The liquidation regime transfer applicable will become official when the former members of the board of liquidators and the liquidators appointed by FONAFE sign a Document, which will include the information and documentation necessary to facilitate the continuity of the liquidation operations, under the new applicable legal framework. 3. The Liquidator(s) of the Closing Companies, are obliged to provide all assistance to the former members of the Boards of Liquidation and/or the appointed Responsible to comply with the following: 03/05/2010 05:38:35 p.m. Page 14
3.1 Prepare and submit to PROINVERSION the White Book and all its Archives, pursuant to the Internal Procedures Manual for the preparing and delivery of the White Book and its Archive Nº 05/2003/DE dated December 14, 2005 and its amendments hereto if so. 3.2 Provide the Institutions and/or Authorities with the Final Report, Management Report and other to which are legally obliged the former liquidators that are members of each of the Boards of Liquidation. ADDITIONAL PROVISIONS REPEAL ONE.- Repeal Ministerial Resolution Nº 496-2007-EF-75 which gives provisions for the quantification and registry of the firm liabilities and quantifiable contingencies, as well as the revenues that stem form the contracts signed within the framework of the private investment promotion processes and concessions. 03/05/2010 05:38:35 p.m. Page 15
1 (Ventana-emergente - Popup) CORRECTIONS Publishing date: 20-12 2008 In item 7.3 of Article; IT READS: Final Notes 7.3) In those cases where project cost exceeds 100 000 UIT (tax units) and require [...] SHOULD READ: 7.3) In those cases where project cost exceeds 100 000 UIT (tax units) of total Project cost and require [...] 2 (Ventana-emergente - Popup) CORRECTIONS Publishing date: 20-12-2008 In item a) of item 18.3 of Article 18; IT READS: a) The same investment project The OPIP will continue processing the first private initiative admitted for processing. In case this initiative was declared of interest, it will abide by item 17.6 of the Article herein and in the event there were [...] SHOULD READ: a) The same investment project The OPIP will continue processing the first private initiative admitted for processing. In case this initiative was declared of interest, it will abide by item 17.6 of the Regulations herein, and in the event there were [...] 03/05/2010 05:38:35 p.m. Page 16